Audit Committee
January 21, 2025

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www.modestogov.com
AGENDA
City of Modesto

SPECIAL AUDIT COMMITTEE

COUNCIL WORKSHOP
2001-40 Del Puerto Room
Tenth Street Place, 1010 10th Street
Modesto, California
Tuesday, January 21, 2025 at 4:00 PM
Roll Call: Sue Zwahlen, Chair
David Wright, Vice-Chair
Chris Ricci, Member
Camille Garcia, Public Member
Jennifer Barillas, Public Member
Alternates: Eric Alvarez, Rosa Escutia-Braaton, Nick Bavaro, Jeremiah Williams Council has not delegated directive or final approval authority to the Committees.

Committee actions are recommendations to the full City Council, not final decisions on an issue. * Public Comment will only be in-person. Members of the public who wish to address the Committee, by providing public comment, during the meeting must do so in-person in the 2001-40 Del Puerto Room. As an alternative, members of the public may also provide written public comment submitted via email as indicated in the Submitting Comments by Email instructions on this agenda. Zoom will still be available for viewing and Wordly translation. *Members of the public will be allowed to provide public comment through Zoom if a Committee Member is participating remotely pursuant to the provisions of Assembly Bill 2449.

Effective March 1, 2023, if a technical issue arises with Zoom or the phone dial-in option, the Committee meeting will continue unless the meeting is being held pursuant to the provisions of Assembly Bill 2449. Alternative viewing options are listed below, and the meeting is physically open to the public.
“Wordly” can translate into 25+ different languages! To access written translation during the meeting, please scan the QR Code or click this link https://attend.wordly.ai/join/RJDY-6364.
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"Wordly" puede traducir a más de 25 idiomas diferentes! Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace https://attend.wordly.ai/join/RJDY-6364.

You may observe a livestream of the meeting at http://media.modestogov.com. You may also view or listen to the meeting as indicated below.

THE MEETING CAN BE VIEWED BY ZOOM VIDEO

CONFERENCING OR TELEPHONE
Joining the Committee meeting via Zoom
The City of Modesto is now offering the ability to view Committee meetings via telephonic conferencing via “Zoom” video conferencing computer technology. The meeting may be accessed through the use of Zoom using the following options:
 Enter the following link into an Internet Browser
https://us02web.zoom.us/j/95895497651
 Enter the following link into an Internet Browser https://zoom.us/ and using the Webinar ID: 958 9549 7651
 Passcode: 84326
To use Zoom, please visit: https://zoom.us/ and either sign-up for a free Zoom account or continue as a guest. Once you have downloaded the app onto your mobile device, joined from your web browser, or downloaded the Zoom software on your computer you will be ready for the upcoming Committee meeting.

Joining the Committee meeting via Telephone
If you don’t have a smart phone or computer to access the meeting via Zoom, you can listen by phone, by calling 1-877-853-5257 (Toll Free) or 1-888-475-4499 (Toll Free) and enter the Webinar ID: 958 9549 7651 Passcode: 84326

PUBLIC COMMENTS IN PERSON
Three-minute time limit per speaker.

Only interested persons in the audience may present these matters. Under State law, Committee Members may respond to matters being presented under this item only as follows:
a. Briefly respond to statements made or questions raised. b. Ask a question for clarification.
c. Provide a reference to staff or other resources for factual information. d. Request staff to report back at a subsequent meeting. e. Finally, a Committee Member or the Committee itself may take action to direct staff to place a matter of business on a future agenda.

SUBMITTING COMMENTS BY E-MAIL
Written comments may be submitted via email to: [email protected] (include Agenda Item Number in the subject line). All comments will be shared with the Committee - 2 -
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Members and placed in the record but will not be read aloud during the meeting. Written comments must be received two hours before the meeting.

This Agenda is on file in the City Clerk’s Office, Sixth Floor, 10th Street Place, Posting Board at entry of 10th Street Place, and is available on the City’s Web site at www.modestogov.com.

Materials related to an item on this Agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the Clerk’s office during normal business hours. Such documents are also available online, subject to staff’s ability to post the documents before the meeting, at the following website www.modestogov.com/councilmeetings In accordance with the requirements of Title II of the Americans with Disabilities Act (“ADA”) of 1990, the Fair Employment & Housing Act (“FEHA”), the Rehabilitation Act of 1973 (as amended), Government Code section 11135 and other applicable codes, the City of Modesto (“City”) will not discriminate against individuals on the basis of disability in the City’s services, programs, or activities. For more information, please visit the City of Modesto website at https://www.modestogov.com/865/Americans-with-Disabilities-Act-ADA In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk (209) 577-5396. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting
Any and all of the following agenda items are subject to action by the Modesto City Council.

NEW BUSINESS

1. Consider the Audited Financial Statements and various Audit Reports for Fiscal Year 2023-2024, audited by external auditors Vasquez + Company, LLP. for the City’s Annual Comprehensive Financial Report (ACFR), thirteen Community Facilities Districts (CFDs), Single Audit, Measure H, and various Joint Powers Agencies and forwarding to Council for approval. (Funding Source: Not Applicable)  Motion recommending the Audited Financial Statements and various Audit Reports for Fiscal Year 2023-2024 audited by external auditors Vasquez + Company, LLP. for the City’s Annual Comprehensive Financial Report (ACFR), thirteen Community Facilities Districts (CFDs), Measure H, and various Joint Powers Agencies (JPAs) and forwarding to Council for approval.  Motion recommending the audited Fiscal Year 2023-2024 Federal Single Audit report for the City of Modesto and forwarding to Council for approval.

FINANCE DEPARTMENT; Maria Garnica, 209-577-5249,
[email protected]

2. Consider the Fiscal Year Internal Audit Status Report dated 1-14-25. (Funding Source:

Not Applicable)
 Motion to receive and file the Internal Audit Status Report dated 1-14-25. - 3 -
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CITY AUDITOR; Colleen Rozillis, 206-302-6795, [email protected]

3. Consider the Audit Finding Validation Report dated 1-14-25. (Funding Source: Not Applicable)
 Motion recommending the Audit Finding Validation report dated 1-14-25.

CITY AUDITOR; Colleen Rozillis, 206-302-6795, [email protected]

ADJOURNMENT
Posted pursuant to Government Code Section 54954.2 on the bulletin board at Tenth Street Place on at by
date time signature
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

January 21, 2025
Date: November 25, 2024
TO: Audit Committee
Sue Zwahlen, Chair
David, Wright, Vice-Chair
Chris Ricci Member
Camille Garcia, Public Member
Jennifer Barillas, Public Member
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: Fiscal Year 2023-2024 Audited Financial Statements CONTACT: Maria Garnica, Accounting Manager, [email protected], 209-577-5249 DESCRIPTION:

Consider the Audited Financial Statements and various Audit Reports for Fiscal Year 2023- 2024, audited by external auditors Vasquez + Company, LLP. for the City’s Annual Comprehensive Financial Report (ACFR), thirteen (13) Community Facilities Districts (CFDs), Single Audit, Measure H, and various Joint Powers Agencies 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:

Annual Comprehensive Financial Report and Other Annual Financial Reports The Modesto City Charter requires an annual audit, which shall be presented to the Council, as follows:

SECTION 1306. INDEPENDENT AUDIT.

The Council shall employ, at the beginning of each fiscal year, an independent certified public accountant who, at such time or times as may be specified by the Council, at least annually, shall examine the books, records, inventories, and reports of all officers and employees who receive, handle or disburse public funds and all such other officers and employees and departments as the Council may direct.
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Audit Committee, January 21, 2025
Fiscal Year 2023-2024 Audited Financial Statements

As soon as practicable after the end of the fiscal year, a final audit and report shall be submitted by such accountant to the Council, one (1) copy thereof to be distributed to each member, one (1) to the City Auditor, one (1) to the City Manager and one (1) to the City Attorney respectively, and three (3) additional copies to be placed on file in the office of the City Clerk, where they shall be available for inspection by the general public.

The City’s Annual Comprehensive Financial Report (ACFR), for the Fiscal Year ending June 30, 2024, is an annual report which includes audited financial statements with an external auditor’s opinion on the financial condition and the results of operations for the period under audit. The accounting firm Vasquez + Company, LLP. conducted the Fiscal Year 2023-2024 audit for the City.

Federal Single Audit
The City of Modesto Single Audit report is federally mandated by the provisions of the Federal Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), which requires an audit to be conducted for any non-Federal entity that expends $750,000 or more per year in Federal awards. This audit was conducted by the City’s external auditor, Vasquez + Company, LLP. The main objectives were to ensure a fair presentation of the basic financial statements and the schedule of expenditures of Federal awards. Additionally, objectives also included the audit of the City's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards expended during the fiscal year.

DISCUSSION:

Annual Comprehensive Financial Report (ACFR)
The independent auditors concluded for the ACFR that there was a reasonable basis for rendering an unmodified (clean) opinion and that the statements were fairly presented in accordance with generally accepted accounting principles. In conjunction with this audit, Vasquez + Company, LLP. also performed certain agreed-upon procedures as applied to the Appropriations Limitation (GANN Limit) prescribed by Article XIII-B of the California Constitution.

Copies of these reports are attached.

Community Facilities Districts (CFDs)
In addition, our independent auditors examined the financial statements of thirteen (13) Community Facilities Districts (CFDs) and concluded that there was a reasonable basis for rendering an unmodified (clean) opinion and that the statements were fairly presented in accordance with generally accepted accounting principles. The thirteen (13) CFDs examined include:

1. Community Facilities District Number 1998-2 (Carver-Bangs/Pelandale-Snyder)

2. Community Facilities District Number 2000-2 (Coffee-Claratina)

3. Community Facilities District Number 1998-1 (Enterprise Business Park)

4. Community Facilities District Number 2003-1 (Fairview Village)

5. Community Facilities District Number 2007-2 (Kiernan Business Park West)

6. Community Facilities District Number 1997-1 (North Beyer Park)

7. Community Facilities District Number 2002-1 (Northpointe)

8. Community Facilities District Number 2004-1 (Village One #2) #1..
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Fiscal Year 2023-2024 Audited Financial Statements

9. Community Facilities District Number 1996-1 (Village One)

10. Community Facilities District Number 2016-1 (Kiernan Business Park East #2)

11. Community Facilities District Number 2007-1 (North Beyer #2)

12. Community Facilities District Number 2016-2 (The Vintage)

13. Community Facilities District Number 2021-1 (Woodglen) Joint Powers Agencies (JPAs) and Smaller Programs
The City is the financial administrator for several joint powers agencies (JPAs) which require an independent audit of their financial statements.

The joint powers agencies and mandated audit reports included in this report are:

1. Abandoned Vehicle Abatement (AVA)

2. Modesto-Ceres Fire Protection Agency

3. Tuolumne River Regional Park (TRRP)

4. Transportation Development Agency (TDA)
On November 8, 2022, the Modesto Voters approved Measure H, a one-cent local sales tax for general city services. On November 29, 2022, by Resolution No. 2022-453 The Modesto City Council certified the election results. The City began collecting sales tax revenue in April of 2023, and this sales tax revenue can be used for any general city purposes. Language under this ordinance identifies examples of expenditures that allow the City to proactively develop a plan to improve City services and the quality of life in Modesto, such as funding to address public safety, and homelessness. Additionally, the ordinance also requires an annual financial report be performed by an independent auditor and establishes a Citizen Oversight Board to audit the revenues and expenditures of Measure H to ensure that funds are being spent appropriately by the City and for the purposes approved by the City Council.

Based on the attached Auditors’ Reports, the financial statements for ACFR, GANN Limit, Measure H, CFDs and JPAs were prepared and presented fairly in all material respects.

Federal Single Audit
And finally, the City also directly receives funding from various state and federal agencies that mandate annual audit reports. On an annual basis, the auditors select a number of programs based on specific criteria in accordance with auditing standards which are deemed Major Programs which require auditing. For Fiscal Year 2023-2024, the Major Programs selected were:

Coronavirus State and Local Fiscal Recovery Funds
Highway Planning and Construction
Community Development Block Grants (CDGB)/Entitlement Program Home Investment Parterniship Program (HOME)
As part of the City’s Fiscal Year 2023-2024 Single Audit report, no findings were reported for any of the grant funding received from the various federal agencies.

FISCAL IMPACT:

While the information contained in these reports discloses the financial performance for the City, there is no direct fiscal impact.
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Audit Committee, January 21, 2025
Fiscal Year 2023-2024 Audited Financial Statements

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending the Audited Financial Statements and various Audit Reports for Fiscal Year 2023-2024 audited by external auditors Vasquez + Company, LLP. for the City’s Annual Comprehensive Financial Report (ACFR), thirteen (13) Community Facilities Districts (CFDs), Measure H, and various Joint Powers Agencies (JPAs) and forwarding to Council for approval.

Motion recommending the audited Fiscal Year 2023-2024 Federal Single Audit report for the City of Modesto and forwarding to Council for approval.

Approved by:

DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:

1. Annual Comprehensive Financial Report FY 2023-2024

2. GANN Limit Report FY 2023-2024

3. Community Facilities District Number 1998-2 (Carver-Bangs/Pelandale-Snyder)

4. Community Facilities District Number 2000-2 (Coffee-Claratina)

5. Community Facilities District Number 1998-1 (Enterprise Business Park)

6. Community Facilities District Number 2003-1 (Fairview Village)

7. Community Facilities District Number 2007-2 (Kiernan Business Park West)

8. Community Facilities District Number 1997-1 (North Beyer Park)

9. Community Facilities District Number 2002-1 (Northpointe)

10. Community Facilities District Number 2004-1 (Village One #2)

11. Community Facilities District Number 1996-1 (Village One)

12. Community Facilities District Number 2016-1 (Kiernan Business Park East #2)

13. Community Facilities District Number 2007-1 (North Beyer #2)

14. Community Facilities District Number 2016-2 (The Vintage)

15. Community Facilities District Number 2021-1 (Woodglen)

16. Abandoned Vehicle Abatement (AVA)

17. Modesto-Ceres Fire Protection Agency Financial Statements

18. Tuolumne River Regional Park (TRRP)

19. Transportation Development Agency (TDA)

20. Federal Single Audit Report FY 2023-2024

21. Measure H Audited Report FY 2023-2024
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2023-2024

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 2024
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CITY OF
Modesto, California

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 2024
Prepared By
Finance Department
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City of Modesto
Table of Contents
PAGE

INTRODUCTORY SECTION
Letter of Transmittal i-xxxvi
Certificate of Achievement for Excellence in Financial Reporting (GFOA) xxxvii City of Modesto Organizational Chart xxxviii-xxxix

FINANCIAL SECTION
Independent Auditor’s Report 1-4
Management’s Discussion and Analysis 5-17
Basic Financial Statements
Government-wide Financial Statements:

Statement of Net Position 18
Statement of Activities 19
Fund Financial Statements:

Balance Sheet – Governmental Funds 20
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position – Governmental Activities 21
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 22
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities – Governmental Activities 23
Statement of Net Position – Proprietary Funds 24-25
Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds 26
Statement of Cash Flows – Proprietary Funds 27-28
Statement of Fiduciary Net Position – Fiduciary Funds 29 Statement of Changes in Fiduciary Net Position – Fiduciary Funds 30 Notes to Basic Financial Statements 31-106

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Changes in the Net Pension Liability and Related Ratios 107-108 Schedule of Pension Plan Contributions 109
Schedule of Changes in the OPEB Liability and Related Ratios 110 Schedule of OPEB Contributions 111
Schedule of Revenues, Expenditures and Changes in Fund – Budget (GAAP Basis) and Actual – General Fund 112-113
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual – Operating Grants Special Revenue Fund 114 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual – Housing and Community Development Special Revenue Fund 115
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget (GAAP Basis) and Actual – Transportation Special Tax Special Revenue Fund 116
Notes to Required Supplementary Information 117-118
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City of Modesto
Table of Contents
PAGE

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Nonmajor Governmental Funds:

Description of Nonmajor Governmental Funds 119-120
Combining Balance Sheet 121-123
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 124-126
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual
Local Transportation Special Revenue Fund 127
Traffic Safety Special Revenue Fund 128
Downtown Improvement District Special Revenue Fund 129
Strategic Planning and Development Special Revenue Fund 130 Cannabis Special Revenue Funds 131
Nonmajor Enterprise Funds:

Description of Nonmajor Enterprise Funds 132
Combining Statement of Net Position 133-134
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 135-136
Combining Statement of Cash Flows 137-140
Internal Service Funds
Description of Internal Service Funds 141
Combining Statement of Net Position 142-143
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 144-145
Combining Statement of Cash Flows 146-149
Fiduciary Funds:

Description of Private Purpose Trust Funds and Investment Trust Funds 150 Combining Statement of Fiduciary Net Position Fiduciary Funds – Private Purpose Trust Funds 151
Combining Statement of Changes in Fiduciary Net Position – Fiduciary Funds - Private Purpose Trust Funds 152
Combining Statement of Fiduciary Net Position Fiduciary Funds – Investment Trust Funds 153
Combining Statements of Changes in Fiduciary Net Position – Fiduciary Funds – Investment Trust Funds 154

STATISTICAL SECTION
Description of Statistical Section Contents 155
Financial Trends
Net Position by Component – Last Ten Fiscal Years 156
Changes in Net Position – Last Ten Fiscal Years 157-158 Fund Balances – Governmental Funds – Last Ten Fiscal Years 159 Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years 160 #1..
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City of Modesto
Table of Contents
PAGE

STATISTICAL SECTION (CONTINUED)
Revenue Capacity
Water Utility System 161
Debt Capacity
Ratio of Outstanding Debt by Type – Last Ten Fiscal Years 162 Computation of Direct and Overlapping Debt – Last Ten Fiscal Years 163 Computation of Legal Debt Margin – Last Ten Fiscal Years 164 Revenue Bond Coverage, Wastewater Revenue Bonds –
Last Ten Fiscal Years 165
Demographic and Economic Information:

Demographic and Economic Statistics – Last Ten Fiscal Years 166 Principal Employers – Last Ten Fiscal Years 167
Principal Property Taxpayers – Last Ten Fiscal Years 168 Operating Information
Full-time City Employees by Function – Last Ten Fiscal Years 169 Operating Indicators by Function – Last Ten Fiscal Years 170 Capital Assets Statistics by Function – Last Ten Fiscal Years 171

CONTINUING DISCLOSURE SECTION
Continuing Disclosure Requirements Information 172-183
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INTRODUCTORY TAB
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INTRODUCTORY SECTION
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Department of Finance
P.O. Box 642
Modesto, California 95353
209.577.5369
Modestogov.com
Hearing and Speech Impaired Only
TDD 209.526.9211
December 6, 2024
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Modesto:

We are pleased to present to you the Annual Comprehensive Financial Report (ACFR) for the City of Modesto (the City). The City Charter and Municipal Code require that a complete ACFR, which is comprised of financial statements and reports on the finances of the City, be submitted to the City Council at the end of each fiscal year. This report fulfills that requirement for the year ending on June 30, 2024.

City management assumes full responsibility for the completeness and reliability of the information contained in this report. We believe the data fairly represents the financial position and results of operations of the City. The disclosures necessary to enable the reader to understand the City's financial affairs have been included. The City's accounting system has been developed and maintained with due consideration given to the adequacy of internal controls.

Because the cost of internal controls should not exceed the anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The evaluation of the costs and benefits of a particular control requires estimates and judgments by management.

The Modesto City Charter also requires an annual audit be performed by an independent certified public accountant selected by the Modesto City Council. The accounting firm of Vasquez and Company, LLP was selected in 2023 to perform the City's annual financial audits. The auditors have issued an unmodified (“clean”) opinion on the financial statements for the fiscal year ending on June 30, 2024, which is presented starting on page 1. In addition to meeting the City Charter audit requirements, the audit was also designed to meet the requirements of the Federal Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The auditors’ reports related specifically to the Single Audit will be presented separately at a later date.

Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A is designed to be read in conjunction with this transmittal letter.

City of Modesto Profile
Modesto is located in the heart of California's San Joaquin Valley and is the County Seat of Stanislaus County. It is also the retail, service, and financial center of Stanislaus County and the Northern San Juaquin Valley. The City currently occupies a land area of 37.8 square miles and #1..
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serves a population of 218,989. The City has a diverse economy and population with a strong sense of community pride.

Incorporated as a municipal city in 1884, the City adopted its City Charter on March 12, 1951, with a Council-Manager form of government. The Modesto City Council (Council) is the City’s legislative body and is made up of seven elected officials serving overlapping 4-year terms. The Mayor is elected at-large by the entire City, while the six Councilmembers are elected by district and are limited to two terms.

The Council sets policy and tax rates, approves budgets, and passes ordinances and resolutions, which govern the City. The Council also appoints citizens to advisory boards, committees, and commissions, and appoints the City Manager, City Attorney, City Clerk, and City Auditor. The City Manager is responsible for carrying out Council policy and managing the day-to-day affairs of the City.

The City is a “full-service” city including police and fire; public works; water and sewer; community and economic development; parks and recreation; and cultural and convention visitor services.

The City’s financial reporting entity includes all funds and activities of the City as the primary government and its component units, which are legally separate entities that operate under the auspices of the City and provide services that supplement City services. The City’s component units are blended into the City’s funds because there is a financial benefit/burden relationship when the City or management has operational responsibility over the component unit. These component units are the Modesto Public Financing Authority and the City of Modesto Community Facilities Districts.

The annual operating budget serves as the foundation for the City’s financial planning and control.

The proposed budget is adopted annually prior to July 1 by Council ordinance. The Council’s legally adopted budget level is at the fund level. Throughout the fiscal year, the budget may be modified. The Council has also adopted fiscal policies that delineate the delegated budget control authority to the following parties: Council, the City Manager, and the Budget Manager.

Local Economy
A major center for local commerce, the City attracts thousands for work, shopping, and entertainment. Major employment sectors include bio-industrial, manufacturing, healthcare, education, and retail. Modesto and its surrounding communities contain canneries, packing plants, and warehouses which ship agricultural products across the nation and the world. An active farm-to-table movement has been spearheaded by the area’s large production of nuts, dairy, poultry, and other locally grown products. Modesto plays a pivotal role in a growing, vibrant economy that tops $1 trillion within a 100-mile radius. More growth lies ahead thanks in part to the region’s abundant biomass and leading role in emerging multi-trillion-dollar circular economy initiatives.

The unemployment rate within the county-wide Modesto Statistical Area (MSA) increased during the 2023-2024 fiscal year. As of June 30, 2024, the City’s unemployment rate was recorded at

7.1%, up from the 6.5% rate of a year ago as employers adjusted to higher inflation and interest rates.

According to Zillow, the ZHVI (Zillow Home Value Index) for homes listed in Modesto was $469,124 (as of June 30, 2024), an increase of 10.6% over 2023. CoStar Realty Information stated the average Modesto MSA multifamily unit asking rent was $1,548, up 2.5% from $1,510 #1..
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in 2023. Modesto building permit activity during fiscal year 2023-2024 ended with a total of 4,809 permits issued with a valuation of $260,927,659.

Modesto sits at the center of California’s Central Valley, a strategic spot that makes it a nexus for agriculture and industry. Modesto is a prime and central location for business and has attracted both start-ups and expanding firms. Specialized health care facilities like HealthSouth and Central Valley Specialty Hospital have chosen to expand their services and operations in Modesto. There is also a strong culture of entrepreneurship and innovation. Datapath, a technology management company with headquarters in Modesto, has been recognized by Inc. Magazine as one of the fastest-growing private companies in America. E&J Gallo Winery, also based in Modesto, is the world’s largest privately-owned winery and the leading US exporter of California wines. The Gallo Glass Company is a state-of-the-art glass manufacturer and a leading producer of wine and spirits glass bottles in the US.

New Growth
In April 2021, President Biden signed into law the American Rescue Plan Act (ARPA) a $1.9 trillion emergency relief measure intended to provide relief to address the impact of COVID-19.

Key allocations from the American Rescue Plan have been made available directly from the federal government for the community including direct support for businesses, homeowners, renters, and restaurant/bar owners. This legislation made a historic investment into local governments that includes $45,897,056 available to the City of Modesto to help address the local impact of COVID-19. The $45.89 million is being made available by the U.S Treasury directly to the City in two tranches: 50 percent was made available in May 2021, and the remaining 50 percent was received on June 6, 2022. The deadline to obligate funds is December 31, 2024, and the deadline to expend the funds is December 31, 2026.

The Modesto Forward strategy was approved by Resolution 2021-194 on May 25, 2021, and was later modified by Resolution 2022-104 on February 8, 2022, Resolution 2022-237 on July 12, 2022, Resolution 2023-97 on March 7, 2023, Resolution 2023-254 on June 6, 2023, and Resolution 2024-194 on June 4, 2024. It included various allocations of funding approved by Council identified in the 2021 spending plan, totaling $45.89 million. At the time of this report, $27.6 million of the Spending Plan has been expended and obligated, and $18.3 million is allocated to programs currently in progress.

To arrive at the Year 2 expenditure plan, staff solicited priorities from the public and the Council at the three standing City Council Committees: Economic Development, Safety and Communities, and Finance. Staff also released a 10-question survey intended to gauge the priority areas of the community and received approximately 700 responses to the survey. Key priorities identified in the survey and in the standing committees include the following: housing stability/ homeownership, neighborhood safety, and improvements to roads and sidewalks. The Council and community expressed an interest in continuing many of the pilot initiatives that were launched as part of the 2021 spending plan and expressed a desire to extend the program periods with funds made available from the second allotment of ARPA funds. Throughout fiscal year 2023- 2024, the spending plan has been updated and approved by Council based on reallocating funding to other programs based on the time sensitivity of the ARPA deadlines. City staff continue to monitor and manage these programs to ensure all expenditures comply with the Treasury guidelines.
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ARPA Funds Spending Plan – Economic Vitality
Eligible Category Year Description Allocation
Negative Economic Impact 1 Affordable Housing Trust $ 500,000 Public Health-Negative Economic
Impact 1 Implement workforce development program

500,000
Public Health-Negative Economic
Impact 1 Opportunity Stanislaus

100,000
Public Health-Negative Economic
Impact 1 Small biz support with expansion and retention

610,000
Public Health-Negative Economic
Impact 1 Stanislaus 2030 Initiative

90,000
Negative Economic Impact 1 Support for the Arts

200,000
Negative Economic Impact 1 Relief Across Downtown Card

708,500
Negative Economic Impact 1 Revolving loan for water/sewer connection fees

90,000
Negative Economic Impact 1 Support for Awesome Spot Playground

500,000
Negative Economic Impact 1 Support for Car Museum

500,000
Negative Economic Impact 1 Support for Children’s Museum

500,000
Negative Economic Impact 1 Tuolumne River – Economic Development

575,000
Negative Economic Impact 2 Support for Convention and Visitor's Bureau

250,000
Negative Economic Impact 2 Support for Convention and Visitor's Bureau

250,000
Negative Economic Impact 2 Support for Convention and Visitor's Bureau

250,000
Negative Economic Impact Reall.

Business. Incentives - Expand outside of
Downtown

500,000
Public Health-Negative Economic
Impact Reall. Opportunity Stanislaus (2nd Allocation)

200,000
Negative Economic Impact Reall. Support for Car Museum (2nd Allocation)

350,000
Negative Economic Impact Reall.

Support for Awesome Spot Playground (2nd
Allocation)

600,000
Public Health-Negative Economic
Impact Reall. Support for Central Valley Opportunity Center

25,000
Negative Economic Impact Reall. Support for Gallo Arts Center

25,000
Negative Economic Impact Reall. Support for Gallo Arts Center (2nd Allocation)

25,000
Negative Economic Impact Reall. Support for Modesto Area Partners in Science

50,000
Negative Economic Impact Reall. Support for Modesto Sister Cities

35,000
Negative Economic Impact Reall. Support for State Theatre

75,000
Negative Economic Impact Reall. Dryden Clubhouse Renovation (Design)

400,000
Negative Economic Impact Reall.

First Tee and Boys and Girls Club - Funding
Contribution

500,000
Negative Economic Impact Reall.

Stanislaus County Library - Funding
Contribution

500,000
Total

$8,908,500
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ARPA Funds Spending Plan – Quality of Life
Eligible Category Year Description Allocation
Public Health 1 Emergency Medical Service Equipment $ 600,000 Negative Economic Impact 1 Blight Abatement

465,720
Revenue Replacement 1 Downtown Beautification

700,000
Negative Economic Impact 1 Homeless Support Program

885,722
Revenue Replacement 1 COVID-19 labor expenses

4,190,000
Public Health-Negative Economic
Impact 1 COVID-19 labor expenses

6,054,209
Negative Economic Impact 1 Grants to neighborhoods

120,000
Negative Economic Impact 2 West Modesto Collaborative

43,000
Negative Economic Impact 2 Multifamily Bulky Item Program

180,000
Revenue Replacement 2 Park Improvements (including turf at Mary Grogan)

9,343
Negative Economic Impact 2 Community Assistance Team

400,000
Negative Economic Impact 2 Downtown Streets Team

1,800,000
Negative Economic Impact Reall. Cesar Chavez Renovation Project

3,067,541
Revenue Replacement Reall. Expand Downtown Beautification

500,000
Negative Economic Impact Reall.

Homeless Services (Day Center/Safe Park/Bridge
Housing)

1,514,278
Negative Economic Impact Reall. Martin Luther King Renovation Project - Funding

1,400,000
Total

$21,929,813
ARPA Funds Spending Plan – Governance and Service Delivery Eligible Category Year Description Allocation
Public Health 1
Deferred maintenance- various parks & public
facilities $ 200,000
Revenue Replacement 1
Deferred maintenance- various parks & public
facilities 610,657
Water/Sewer & Broadband
Infrastructure 1
Deferred maintenance- various parks & public
facilities 225,000
Negative Economic Impact 1
Deferred maintenance- various parks & public
facilities 100,000
Revenue Replacement 1 Cybersecurity Mitigation 490,000
Revenue Replacement 1 Discoverer Replacement 500,000
Revenue Replacement 1 Fire Station 1 Deferred Maintenance 2,000,000 Revenue Replacement 1 Forestry Program Enhancements 1,000,000 Negative Economic Impact 2 911 Dispatch Services 63,116 Public Health-Negative Economic
Impact 2 FY22-23 Budget Funding 1,317,160
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ARPA Funds Spending Plan - Governance and Service Delivery (Continued) Eligible Category Year Description Allocation
Premium Pay Reall. Employee Hazard Pay 6,552,810
Public Health-Negative Economic
Impact Reall. FY24-25 Budget Funding 2,000,000
Total $15,058,743
Passage of Measure H, a One-Cent Sales Tax for General City Services On November 8, 2022, the Modesto voters approved Measure H, a one-cent local sales tax for general city services. On November 29, 2022, by Resolution No. 2022-453 the Modesto City Council certified the election results.

With the passage of Measure H, the City began collecting sales tax revenue in April of 2023.

While the sales tax revenue generated by Measure H can be used for any general city purpose, the ordinance language did identify examples of expenditures that allow the City to proactively develop a plan to improve City services and the quality of life in Modesto. The expenditures include:
• Funding to address police patrols, gang, drug, and crime prevention. • Funding to address fire protection, paramedic, and 911 emergency response. • Funding to address homelessness.
• Funding for cleaning up trash and illegal dumping.
• Funding for keeping streets, parks, sidewalks, landscapes, and infrastructure safe, clean, and well-maintained.

As part of the ordinance language that was passed with Measure H, a citizen Oversight Board was created to audit the revenues and expenditures of the new sales tax to ensure that funds are being spent appropriately by the City and for the purposes approved by Council.

Measure H Sales Tax is estimated to bring in an additional amount estimated at over $42.8 million annually. This funding will be critical in the City’s ability to provide improved and sustainable services to the citizens of Modesto.

Impact of Measure H Additional Funding
• Contractor services and additional positions for Forestry. • Citywide facility condition assessment.
• Funding for outside contractors to address curbs, gutter, and sidewalks. • Additional positions for the Fire Department: HazMat Inspector, Emergency Medical Services ( EMS) Captains, and Public Safety Business Services Analyst. • Additional positions for the Police Department: Park Rangers, Blight Abatement Workers, Animal Control Officer, Prevention Police Civilian Supervisor, Lieutenant, Community Service Officers, Civilian Investigators.
• Downtown video camera improvements.
• Playground replacement at eight parks.
• Tennis court lighting upgrades and tennis court resurfacing at five parks. • Restroom replacement at three parks.
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• Concrete repairs for tripping hazards at 12 parks.
• Park security lighting upgrades at four parks.
• Basketball/volleyball court improvements at eleven parks. • Sand volleyball court improvements.
• Synthetic turf replacement at Mary E. Grogan Park.
• Facility renovations at Maddux Youth Center.
• Parking lot improvements at McHenry Mansion.

Entertainment and Tourism
Modesto features vibrant arts, entertainment, sports, and cultural expression. With the Modesto Convention and Visitor’s Bureau and Tourism Marketing District, Modesto is committed to attracting visitors by promoting and marketing Modesto as a convention, sports, tourism, and leisure travel destination. The City provides prime access to major highways and a municipal airport — as well as proximity to abundant lifestyle attractions.

Annually, the community supports some of its treasured events like the Celebration of Lights Parade, Historic Graffiti Cruise Route Parade, Fourth of July Parade, Music in the Plaza, Veteran’s Day Parade, and MoBand summer concert series at Mancini Bowl. Visit Modesto’s Almond Blossom Cruise has attracted attention from tourism blogs and magazines as far away as Great Britain and Japan. It is nice to see visitors return each year to Modesto to enjoy all the wonderful places and events we have to offer.

Some examples of the places and events are:
• Downtown Modesto is home to the world-class Gallo Center for the Arts which brings national and international entertainment, arts, and multicultural programming to the Central Valley region. Downtown, you can experience the Historic Graffiti Cruise Route, the Legends of the Cruise Walk of Fame, and the Classic Community Mural Series celebrating the cruising culture phenomenon born in Modesto and immortalized by native son George Lucas in American Graffiti. Live entertainment is a prominent feature in the Civic Plaza and nearby clubs, and a busy calendar of entertaining and educational events can be experienced just across the street at the Modesto Centre Plaza. • Baseball with the Modesto Nuts baseball team is just minutes from the city center, and golfers enjoy two-highly rated 18-hole courses. Modesto continues to gain recognition for its bike routes and trails, and recently opened a new boat launch site that will increase non-motorized recreational use of the Tuolumne River regional park. • The McHenry Mansion and McHenry Museum anchor the city’s loving preservation of its historical heritage, drawing visitors from all over the world. The iconic State Theatre hosts countless non-profit events and provides an enhanced cinematic experience. Arts live year-round with monthly Art Walks, and seasonal activities including the Spirit of Giving Run, Graffiti Cruise, parades, the Modesto on Ice downtown skating rink, the Victorian Christmas Faire (formerly Dickens Faire), Mod Shop Arts and Crafts Walk, and Porchfest community music stroll bring joy to residents and visitors. Modesto truly offers something great for everyone.
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Our Strategic Priorities
During 2020, the City adopted the 2020-2025 Strategic Plan to incorporate input from newly elected Councilmembers and to reaffirm our strategic priorities. Our priorities bring the City’s vision and values to life in our community and define our overall direction as a city. It also confirms our commitment to our citizens. While the priorities are individually important, they are also interconnected and cannot be addressed in isolation. In addition, they are the basis of our scorecard that measures success and upon which our performance metrics are built. • Quality of Life: Engage partners across the community to ensure the safety, resilience, and attractiveness of Modesto.
• Economic Vitality: Retain and attract residential, commercial, and industrial development to meet the community’s needs today and for the next generation. • Governance and Service Delivery: Build community trust in City government through responsive, transparent, and efficient service delivery.

Long-Term Financial Planning
The City continues to refine its 10-year forecasting model and update estimates and assumptions used to project future operations. At the end of fiscal year 2023-24, General Fund Balance was as follows: Restricted and Nonspendable: $12.1 million; Committed: $18.4 million; Assigned: $4.5 million; and Unassigned: $48.1 million. The Committed Fund Balance allows the City to respond to unplanned circumstances and maintain adequate working capital to meet its cash flow needs.

The City’s long-term maintenance of a stable fund balance is a direct reflection of the Mayor and Council’s leadership and prudent fiscal management. The City will continue to monitor the revenue impacts and monitor the General Fund reserves to address any shortfall during the current fiscal year.

SIGNIFICANT EVENTS / ACCOMPLISHMENTS
Quality of Life
• The Forestry Division resolved 3,069 broken limb issues and completed 13,153 tree pruning activities.
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• The Solid Waste Division recycled 3,597 waste tires and 1,080 mattresses. • The Solid Waste – Blight Abatement Team collected over 266,866 pounds of illegal dumping.
• The City of Modesto Code Enforcement Unit moved from Community & Economic Development (CED) to Modesto Police Department’s (MPD) Area Command Division, enhancing coordination in addressing community needs across various units. Two additional allocations will expand the unit to 7 Code Enforcement Officers. • The Modesto Senior Citizens Center continues to provide a wide array of programming, with over 27,750 participants attending this past year. The facility received an updated security system, the auditorium received a fresh coat of paint and added a new audio/video system to enhance the listening and viewing experience for programs. The Recreation team added new programs such as Chair Volleyball and Modified Functional Aerobics, as well as hosted special events such as Holiday Pie Social and Leap Year Day Pajama Party, National Night Out and Senior Center Month Open House, and completed first senior day trip since COVID.
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• Recreation had over 4,700 participants in their registered programs. This includes camps, adaptive bowling, Friday Night Out, Archery, Dance, Tennis, Crime Scene Investigation (CSI) Camp, driver’s education, swim lessons and soccer. This year we added disc golf to the program roster, along with a toddler music class that filled so quickly a 2nd class was added.

Crime Scene Investigation (CSI) Camp
Dance Class
• In the fiscal year 2023-2024 the Adult Softball Program hosted 154 adult softball teams totaling over 1,800 registered players in men’s, women’s and coed leagues at Beyer and Davis Park.
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• The score board signs at Davis and Beyer softball fields received much needed replacements.
• The Aquatics program was in full force with 2,738 participants for swim lessons, adult water exercise, and certification courses at five different pool locations. • Park’s Recreation and Neighborhood’s held 38 events with over 41,000 participants.

They partnered on an additional 21 events with almost 9,000 participants.

The Department’s holiday events include:
o The Celebration of Lights Parade in downtown Modesto, which entertained an estimated 20,000 spectators with 85 wonderfully decorated float entries celebrating the “Toys, Trains & Candy Canes” theme.

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o The Breakfast with Santa event held in partnership with the North Modesto Kiwanis spread cheer to over 900 participants.

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o The 5K Spirit of Giving Fun Run had around 1,500 participants and raised almost $25,000 for the Leisure Bucks scholarship program.
• The Parks, Recreation and Neighborhoods Department attended 25 events throughout the City with over 14,000 participants to reach out to the community, answer questions and offer programing and resource information and water safety education. • Mary Grogan Park was visited by over 120,000 players and spectators with the 7 fields rented over 2,000 times generating over $330,000 in revenue. #1..
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• The Parks, Recreation and Neighborhoods (PRN) Department coordinated the City’s volunteer efforts at 463 events, including Love Modesto and river trail clean-ups. Overall, there were 3,231 volunteers that provided 19,809 hours of service with a total leveraged value of $739,302.
• The PRN Department increased its website and social media presence utilizing Instagram and Facebook platforms to connect directly with the community and have another form of communication to answer questions.
o Facebook followers increased by 1,179 followers.
o Instagram followers increased by 1,008 followers.
o PRN Homepage Website- 13,302 page views.
o PRN Activity Guide Website- 27,272 page views.
• After School Education and Safety (ASES) program took place at four school sites with a total of 19,977 students for the year. The program has increased to include Expanded Learning Opportunities Programming (ELOP) during winter, spring, and summer breaks.

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• The City of Modesto’s Youth Commission had a busy 2023-2024 term! They partnered with the Parks, Recreation and Neighborhoods Department for community outreach opportunities at their events, participated in the Hope Blooms Love Modesto project, and amended the Commission’s bylaws to expand the number of seats from 9-17 and the term from one to two years. Commissioner Hamza Modan also gave an insightful and informative presentation on Neurodiversity at Hanshaw Middle School. • Maddux Youth Center enriched 6,734 youth for a variety of programs and fun activities including All Sports Camp, After-School Activities, creative projects, homework assistance and fitness/nutrition classes.
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• The Modesto Junior Giants league added softball to their program this year. 10 softball teams with 138 players were added to our existing 38 baseball teams with 594 players, giving us a total of 48 teams this summer. In total, we served around 730 players throughout the season! Junior Giants is a completely free, youth baseball and softball league that focuses on the fundamentals of baseball while teaching children the importance of confidence, integrity, leadership, and teamwork. • The California Violence Intervention & Prevention (CalVIP) Grant added 10 events to the roster with 6 sports events, a block party and 2 movie nights serving over 500 members of the community.
• The McHenry Mansion and McHenry Museum provided 22,166 community members with access to local history during regular business hours, hosted 5,151 for school and group tours, and displayed 8 unique exhibitions. Admission to both the Mansion and Museum is free.
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• In October 2023, The Modesto Fire Department shared plans to work collaboratively with the City of Ceres, Regional Fire Authority, Stanislaus County, and Modesto Junior College (MJC) to expand the training center at the Service Road fire station property with a fourstory training tower. The facility will allow firefighters to practice above ground hose stretching, and practice taking hoses up staircases into units to rescue trapped victims. It will also allow hook companies to practice aerial attacks. The project broke ground in Spring 2024.
• In April 2024, the Modesto Fire Department’s Training Division held a joint Modesto Stanislaus Turlock (MST) Engineer Academy which focused on driving and pumping operations. This academy served as a professional development opportunity to individuals interested in Engineer promotional opportunities and provided tools and knowledge to apply on the Engineer exam.
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• In May 2024, 126 Modesto, Stanislaus, Turlock (MST) employees registered for summer courses as part of the recently approved Instructional Services Agreement (ISA) with Modesto Junior College. Each MST employee who is within the ranks of Firefighter to Battalion Chief is eligible to earn college credits that can be used toward degrees and certificates. By participating in the ISA, the Modesto Fire Department receives reimbursement funds through the State to support training program initiatives. • In June 2024, the City of Modesto and Modesto Fire Department celebrated the appointment of Fire Chief Kevin Wise during his Swearing in Ceremony. #1..
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• Through the City’s Park Partners Program, multiple projects were completed: The Centennial Project at Roosevelt Park with the Modesto Garden Club, First Tee construction of new golf greens, and the Boys and Girls Club’s construction lighting. • The Neece Drive Boat Launch was completed in May 2024 and offers the community access to a non-motorized boat launch with associated access road, parking lot, security lighting, concrete pathways, and overflow parking at Tuolumne River Regional Park. #1..
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• The fence around the Graceada Park Pool was replaced just in time of the Annual Summer Kick-Off party which drew over 600 people to the pool and park.

• With additional funding from Measure H, work on Year 1 of a 5-year plan to address deferred and preventative maintenance began:
o Basketball and volleyball courts were sealed and striped at 11 parks. #1..
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o Concrete repairs were completed at 12 parks.
o The parking lots at Beyer Park, Rose Avenue Park, Sherwood Park and Marshall Park were repaved and restriped.
o Shade canopies at Lakewood Park, Muncy Park, Sipherd Park and Wesson Ranch Park were removed.
o The area of in East La Loma Park which was previous a playground was renovated into a sand volleyball court.
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• Golf rounds for Dryden and Creekside Golf Courses totaled 84,435, a 17% increase over last year.
• New golf cart fleets for Dryden and Creekside resulted in an 18% increase over projected cart revenues for this year.
• New wrought iron fence installed at Dryden was installed along Roselawn Avenue. • Several special events were held in partnership with local groups at both golf courses, including Coffee with a Cop, and the Modesto Gospel Mission’s Toy Drive and Backpack Drive.
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• The 37th Annual City Golf Championship had 20% more participants over last year and the Modesto Cup celebrated its 10th Anniversary.
• Centre Plaza successfully held 193 events – 35 DoubleTree events, 23 City events, and 135 Centre Plaza events. Event highlights include the 209 Night Car Show, Motorcycle Show, Tattoo Convention, Mixed Martial Arts (MMA) Fights, Modesto Chamber of Commerce Annual Awards Soiree, Quinceanera Expo, Economic Development Summit by the City’s Community and Economic Development Department, Cannabis Equity Program Workshops and the return of Edible Extravaganza after a 3-year absence. • The Centre Plaza underwent several renovations, including kitchen and door repairs, a complete LED retrofit of lights in the Grand Lobby, new sound system for Harvest Hall, Arbor Theatre and Grand Lobby.
• Modesto on Ice had a very successful season with the 2nd highest attendance since opening in 2015. More than 1,000 school-aged children skated thanks to discounted rates, early openings, and private ice lessons. This year they continued the Learn to Play Hockey program, hosted over 200 special events, and provided special sessions for many local non-profit organizations.
• Park Operations completed the installation of new drinking fountains with bottle-fillers at 20 park locations, the new Mancini Park sign, and security gate at the dog park. #1..
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• Park Operations completed renovation of the Thurman lighted soccer field at Fairway Park. The Cruizers soccer club resumed practice and games at that site. • Park Operations collaborated with the Modesto Garden Club to celebrate its 100th Anniversary. A time-capsule and new landscaping at Roosevelt Park were installed. #1..
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• Park Operations installed a new volleyball court at East La Loma Park. • Park Operations worked to have the Leo the Lion drinking fountain restored and installed at its new location along the Virginia Corridor.
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• The Planning Division drafted an ordinance update to establish Mixed-Use Pedestrian and Mixed-Use Highway zones to provide additional opportunities for new development of residential and commercial properties to address the City of Modesto’s housing needs.

The new Mixed-Use zones, Mixed-Use Pedestrian (MU-P) and Mixed-Use Highway (MUH), as well as amended Planned Development standards along Sisk Road, McHenry Avenue, Oakdale Road, and Yosemite Boulevard allow for higher density development in the central and northern areas of the City. The rezoning was completed in December 2023.

These identified sites will offer proximity to job opportunities and other commercial resources such as schools and grocery stores.
• On January 25, 2024, the attended the grand opening for the Archway Commons development of 74 affordable housing units for low and very low-income families. This project leveraged state, federal, tax credit, and private funds. • Received an award for a State of California Homekey 3.0 award in the amount of $15,784,562 million dollars for the acquisition and rehab of the Traveler’s Motel into 54 units of permanent supportive housing in partnership with Modesto Homekey LP and is scheduled to be complete in by Spring 2025.
• Partnered with Stanislaus Equity Partners and R3 development for a 9-unit transitional housing project at 225 E. Orangeburg grand opening scheduled in the end of July 2025. • Premier of the Camp2Home docuseries at the State Theater in Downtown Modesto. • Camp2Home program has assisted 381 individuals with job and housing readiness services.
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• Camp2Home has also assisted 11 individuals in obtaining employment and has housed a total of 38 individuals.
• A total of $480,820 was distributed in loans and grants through the City's Homeowner Rehabilitation Program. A total of thirteen (13) eligible households were served through this program. The City assisted eligible households with health and safety repairs including, but not limited to installation of energy efficient windows, energy efficient HVAC systems, re-roof, American with Disabilities (ADA) bathroom improvements, electrical repairs, and ADA ramps. Provided below are before and after images of a Homeowner Repair Program Project.
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Economic Vitality
• The Compost Division processed over 49,240.46 tons of residential and commercial organics into compost.
• The Solid Waste Division collected and recycled 9,522 pounds of California Redemption Value (CRV) keeping it out of the waste stream.
• The Solid Waste Division recycled 658.5 gallons of used oil and 47 used oils filters (July 2023 through May 2024).
• The Streets Division completed 35.9 lane miles of crack seal application and 193.76 lane miles of slurry seal application.
• The Traffic Operations Division replaced 1,842 traffic signs and completed 241,583 square feet of striping for legends and crosswalks.
• The Traffic Electrical Division converted 76 high voltage lights to low voltage light-emitting diode (LED).
• The Traffic Division installed two rectangular rapid flashing beacons (RRFB) at school crosswalks for safer crossings.
• The Traffic Division installed 51 vehicle detection cameras at 15 intersections within the City of Modesto.
• The Traffic Division installed 11 school flashers at 8 schools for safer school zones. • The Community and Economic Development Department initiated a project to create a first ever planning document to provide a roadmap for future development of Southwest Modesto. The Southwest Modesto Plan will serve as a blueprint for future development, with guidance on land use, economic development, transportation, infrastructure, and other issues for the plan area. Three (3) community engagement workshops were conducted in fiscal year 2023-2024 to gain valuable input from community members. #1..
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• The Community and Economic Development Department draft of the City of Modesto’s 2023-2031 Housing Element to the California Department of Housing and Community Development was found in compliance with State Housing Element Law and has been adopted.
• As of June 2024, active development projects in planning and building phases include 2,568 single family dwelling units, 1,086 multifamily units, 142 new business class hotel rooms, 577,000 square feet of new industrial space, 538,000 square feet of new office space, 190,000 square feet of new retail space, and 114 acres of recreational and open space use.
• The Building Safety Division contacted 89 properties including 31 commercial properties under the newly enhanced Vacant Property program.
• Since our Rental Housing Safety Program launched in 2023, Building Safety has registered over 12,624 units. 1,689 code enforcement cases have been initiated. 139 of those cases were tenant-driven complaints and 1,550 were City generated. Additionally, 1,652 inspections have been conducted and completed. 267 units have been brought into compliance by our dedicated Code Enforcement Officers.
• The division worked with Nation’s Giant Burgers to repurpose a vacant bank building to become one of the chain’s most popular stores.
• Economic Development Business Retention and Expansion – developed and released a bilingual online business sentiment survey and worked with a Modesto-based dog toy manufacturer to expand manufacturing.
o The division is in the second phase of an Enhanced Infrastructure Financing District (EIFD) Feasibility Study that begun in 2022. If approved, an EIFD could help accelerate development in alignment with place-based plans including Downtown and Southwest Modesto. An EIFD will help attract private investment, additional grant funding and build a capacity to support bonds. o Secured a CalTrans Clean California grant for beautification and blight reduction in downtown Modesto.
o Provided support for a downtown employee parking program for the Modesto Children’s’ Museum.
o The Economic Development division supported investment in downtown as a regional destination with an occupancy incentive grant to Chinn’s International. • The Community and Economic Development Department implemented the Cannabis Program Providing Local Equity Development Grants and Education (PLEDGE). This program is designed to assist individuals who were previously impacted by cannabis prohibition gain access to business education and grant opportunities to enter the now legal cannabis industry. A six (6) week direct technical assistance workshop held its first session on June 29, 2024.
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• The Utilities Engineering Division’s Wastewater/Storm Engineering group completed the following projects:
o Construction of the Sonoma Trunk Extension and Lift station. This project installed new sewer main on Oakdale Road, Sylvan Avenue and Lydia Way. o Installation of a new sewer trunk on Sutter Avenue to replace the existing undersized trunk addressing the Hydraulic deficiencies. o Construction of a new concrete masonry unit (CMU) building with electrical equipment needed for Jennings Plant operation and a new restroom at Hawn Lift Station.
o Sutter Campus Parking Lot and Security Upgrade.
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o La Loma Sewer Trunk Replacement Phase 1.
o West Trunk Rehabilitation.
o Jennings Well Treatment Improvements.
o Sutter Avenue Strengthen and Replace water mains project replaced approximately 4,500 LF of old, deteriorating existing water mains in the Rouse Avenue/Roselawn Avenue neighborhood.
• The Water Division within the Utilities department completed 57,545 customer service requests, replaced 631 water services due to leaks, repaired 157 water main breaks and replaced 4,250-linear feet of pipe and Completed water meter installation project in December of 2023, ensuring that the City met the January 1, 2025, deadline set by Assembly Bill 2572.
o Completed Strengthen and Replacement projects at Bonita Circle, Yosemite Crossing, La Loma, Highway Village, and Grayson.
o Replaced 96 damaged hydrants out of a system-wide inventory of 8,435. o Exchanged 14,000 water meter registers that were at the end of their useful life. o Facilitated water conservation outreach events at the Modesto Junior College Plant Sale, Earth Day, Love Modesto, Aspire Schools, National Night Out, and Town Hall Meetings
o Conducted 266 Water Wise Consultations with customers and approved 612 rebates for a total of approximately $500,000.
o Collected 7,506 water samples and produced 13.51 billion gallons of safe, clean water.
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o Began sampling for 5th Unregulated Contaminant Monitoring Rule (UCMR-5), which requires monitoring for 29 per- and polyfluoroalkyl substances (PFAS) and lithium in drinking water.
• The City of Modesto Wastewater Division accomplishments included 7,777,200,000 total gallons treated, 4,889,100,000 gallons recycled, 23,252,136 pounds of biochemical oxygen demand (BOD) treated, 3,210,780 pounds of biosolids applied, North Valley Regional Recycled Water Program delivery rate of 90%, 17,062 work orders completed, completed 2,727 customer service calls and cleaned 359 miles of sewer lines. #1..
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Governance and Service Delivery
• Assisted over 900 utility customers in participating in State Low Income Household Water Assistance Program which assists utility customers with one-time payments on past due utility bills for an overall total of $1.2 million.
• Implemented a new grant management software solution, eCivis to manage the research of grant opportunities and the tracking of the lifecycle of each grant. • Human Resources received 2024 Agency of the Year from CalGovHR for excellence in HR programming to include the Professional Development program, the Diversity, Equity, & Inclusion program, and Employee Relations program.
• In partnership with Behavioral Health and Recovery Services (BHRS), MPD added two additional Mental Health Clinicians. Clinicians respond with officers to calls involving individuals in crisis.
• In August of 2023, the Modesto Police Department introduced the Area Command Division, a strategic initiative aimed at fostering comprehensive and thoughtful problemsolving approaches with enduring positive outcomes. This division leverages timely and accurate information to swiftly deploy resources, employing effective tactics and follow-up to ensure favorable results. Under the umbrella of the Area Command Division, a diverse range of units collaboratively address quality of life challenges, enabling the seamless provision of assistance and enforcement as required.
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• The City of Modesto was awarded an Organized Retail Theft grant from the Board of State and Community Corrections (BSCC) worth $6,003,419. The grant will fund Modesto's Retail and Motor Vehicle Theft Program, focusing on community outreach, collaboration with retailers, equipment, and directed enforcement to combat current and emerging trends.
• The addition of Civilian Investigators to our department has proven to be a valuable asset in assisting with investigations and supporting our officers and detectives. Their expertise enhances our investigative capabilities, allowing us to more effectively serve our community.
• The Modesto Police Department experienced significant growth in 2023. We welcomed 44 new dedicated individuals to our team, including Police Officers, Support Specialists, Community Service Officers, Police Cadets, Park Rangers, Animal Control Officers, Property and Evidence Technicians, Civilian Investigators, and Police Recruits. • MPD is continuing to enroll staff in Cultural Relations Community Coaching Series classes. • Modesto's efforts in reducing auto thefts led to a significant improvement in national rankings, dropping to #54 in the latest release by the National Insurance Crime Bureau. • Our collective efforts have resulted in a significant decrease in crime rates across the board. Homicides have decreased by 22%, auto theft by 6%, property crime by 16%, and violent crime by 15%. These impressive statistics highlight the unwavering commitment and hard work of our officers, as well as the strong partnership between law enforcement and the community. Together, we have made our city safer and more secure for all residents.
• The Forestry Division responded to 10,180 forestry service requests and 1,765 GoModesto requests.
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Awards / Acknowledgments
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Modesto for its annual comprehensive financial report for the fiscal year ended June 30, 2023. This was the 41st consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

The Annual Comprehensive Financial Report (ACFR) is the result of the cooperative work of many people. We wish to convey our appreciation to all of the City departments and members of the Finance Department Accounting team who prepared and contributed to its successful completion.

Without their hard work, this report would not be possible.

The City submitted and received for the fourth time the distinguished Budget Presentation Award from GFOA for fiscal year ended June 30, 2024. To receive this prestigious award a government must demonstrate they meet the program criteria and excel as a policy document, financial plan, operations guide, and communication tool.

In addition, the City submitted and received an award from the GFOA for its seventh year for the Popular Annual Financial Report (PAFR) for fiscal year ended June 30, 2023. A PAFR presents financial information in a manner that appeals to the reader, is understandable and shows creativity and usefulness. The PAFR award is valid for one year and the City intends to submit its 2024 PAFR to the GFOA for consideration.
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As a result of receiving the GFOA awards for PAFR, ACFR for fiscal year ended June 30, 2023 and Budget Presentation for fiscal year ended June 30, 2024, the City received GFOA’s Triple Crown Award for the fourth time. The GFOA’s Triple Crown designation recognizes governments who meet the high standards of all three separate award programs. The City will continue to strive to achieve these awards for future fiscal years.

Modesto ranked 1st in California and 5th in the Nation for National Night Out, showcasing community engagement and support for this annual event organized by the Modesto Police Department.

The City of Modesto received the two 2023 Helen Putnam Awards for Excellence; The esteemed 2023 Helen Putman Award for Excellence in public safety for its Community health and Assistance Team (CHAT) program and the 2023 Helen Putman Award for Excellence in Housing Programs and innovations for its Youth Navigation Center.

Finally, we would like to express our appreciation to the City Council, City employees, and community for their leadership and support. We look forward to next year’s challenges and opportunities.

Respectfully submitted,
Joseph P. Lopez DeAnna Christensen
City Manager Director of Finance
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FINANCIAL SECTION TAB
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FINANCIAL SECTION
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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
Opinions
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 of Modesto, California (the City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’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, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Modesto, California, as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (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 and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matters
Implementation of a New Accounting Standard
As discussed in Note 1, the City implemented the provisions of Governmental Accounting Standards Board Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62, during the fiscal year ended June 30, 2024. Our opinion is not modified with respect to this matter.
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2 Prior Year Adjustments
As discussed in Note 20 to the financial statements, the 2023 financial statements have been restated to correct misstatements. Our opinion is not modified with respect to this matter.

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 City’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.

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 City’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 City’s ability to continue as a going concern for a reasonable period of time. #1..
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3 We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedule of changes in the net pension liability and related ratios, schedule of pension plan contributions, schedule of changes in the OPEB liability and related ratios, schedule of OPEB contributions, and budgetary comparison information for the General Fund, Operating Grants Special Revenue Fund, Housing and Community Development Special Revenue Fund and Transportation Special Tax Special Revenue Fund, as listed in the table of contents 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 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.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements and budgetary comparison schedules as listed in the table of contents are presented for purposes of additional analysis and are 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 GAAS. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory, statistical and continuing disclosure sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. #1..
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4 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 a report dated December 6, 2024 on our consideration of the City’s internal control over financial reporting and 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 City’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 City’s internal control over financial reporting and compliance.

Glendale, California
December 6, 2024
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
5 This section of the City of Modesto (the City) annual comprehensive financial report presents a discussion and analysis of the City’s financial performance during the fiscal year ended June 30, 2024. Please read it in conjunction with the transmittal letter at the front of this report and the basic financial statements following this section.

FINANCIAL HIGHLIGHTS
• The assets plus deferred outflows of resources of the City exceeded liabilities plus deferred inflows of resources at the close of the 2024 fiscal year by $1,227,462,750 (total net position). Of this amount, $99,800,050 is restricted for a specific purpose (restricted net position), $976,049,641 is net investment in capital assets and $151,613,059 is unrestricted (unrestricted net position). • The City’s total deferred outflows of resources decreased by $12,426,854 as compared to the prior year due to decrease in deferred Other Post Employment Benefits (OPEB) and in accumulated decrease in fair value of hedging derivatives.
• The City’s total deferred inflows of resources decreased by $3,391,268 as compared to the prior year due to a decrease in deferred OPEB and Pensions.
• The City’s total liabilities increased by $10,505,876 as compared to the prior year mainly due to increase in net pension liability due in more than one year.
• The City’s total net position increased by $38,258,494 compared to the prior year. This increase is attributed mainly to an increase in intergovernmental revenue not restricted for specific purposes for $34,014,511 resulting from the increase in sales tax voters approved under Measure H which increased the sales tax rate by 1% with fiscal year 2024 being the first full fiscal year reporting this revenue. • As of June 30, 2024, the City’s governmental funds reported combined fund balances of $225,127,303 an increase of $31,903,734 in comparison with the prior year’s restated amount of $223,223,569 due mainly to revenues generated higher than expenditures incurred during the fiscal year. • As of June 30, 2024, 57.9% of the General fund balance, $48,060,252 is available to meet the City’s current and future needs (General Fund unassigned fund balance). • At the end of the fiscal year, the General Fund balance was $83,058,620 or 43.4% of total General Fund expenditures. Of this, $10,088,574 is the restricted fund balance. The unassigned fund balance of $48,060,252 represents 23.9% of total General Fund outflows. The City Council has adopted a goal of maintaining a General Fund reserve at a minimum level of no less than the average of two months of regular General Fund operating expenditures.
• The City’s total long-term liabilities showed a net decrease of $282,743 in comparison with the prior year.

This decrease was attributed to a reduction in debt from the principal payments made during the fiscal year, net of increase in net pension and OPEB liabilities. #1..
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
6 OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements.

The City’s basic financial statements comprise three components 1) Government-wide financial statements; 2) Fund financial statements and 3) Notes to basic 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 the City finances, in a manner similar to a private-sector business.

The Statement of Net Position presents information on all the City assets and deferred outflows of resources and liabilities and deferred inflow of resources, with the difference between the two 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 City is improving or deteriorating.

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 flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of these government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a portion of their costs through user fees and charges (business-type activities).

The governmental activities of the City include general government, community development, highways and streets, public works, parks and recreation, and public safety. The business-type activities of the City include the Water, Sewer, Parking, Storm Drain, Compost, Airport, Golf, Community Center and Abatement and Public Nuisance operations.

Component units are included in our basic financial statements and consist of legally separate entities for which the City is financially accountable and that have substantially the same board as the City Council, or provide services entirely to the City or the City has operational responsibility for the entities. Examples are the Community Facilities Districts, Redevelopment Successor Agency of the City of Modesto and the Modesto Public Financing Authority.

The government-wide financial statements can be found on pages 18-19 of this report.

Fund Financial Statements are groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate finance-related legal compliance. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds.
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
7 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 near-term 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 the City’s near-term financing requirements.

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 funds balance sheet and the governmental funds statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City reports 18 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, Operating Grants Fund, Housing and Community Development Fund and Transportation Special Tax Fund. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.

The governmental funds financial statements can be found on pages 20-23 of this report.

Proprietary funds are maintained two ways. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Water, Sewer, Parking, Storm Drain, Compost, Airport, Golf, Community Center and Abatement and Public Nuisance operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its Fleet Management, Central Services, Information and Technology Services, Insurance, Employee Benefits Management and Building Services functions. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements with the exception of portions of the compensated absences that have been included within business-type activities. The rest of internal services benefiting business-type functions have been allocated as “internal balances”.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The Water, and Sewer funds are considered to be major funds of the City. The City’s six internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

The proprietary funds financial statements can be found on pages 24-28 of this report.

Fiduciary funds are used to account for resources held for the benefit of parties outside the government.

Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City's own programs. Private Purpose and Investment trust funds account for assets held by the City as an agent for individuals, governmental entities and non-public organizations. The accounting used for fiduciary, private purpose, and investment trust funds is much like that used for proprietary funds.
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
8 The fiduciary fund financial statements can be found on page 29-30 of this report.

Notes to Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found on pages 31-106 of this report.

Required Supplementary Information is also presented. The City adopts an annual appropriated budget.

Budgetary comparison schedules for the General Fund, Operating Grants Fund, Housing and Community Development Fund, and Transportation Special Tax Special Revenue Fund have been provided to demonstrate compliance with this budget. This section also includes the schedules for net pension liability and OPEB.

Required supplementary information can be found on pages 107-118 of this report.

The combining and individual fund statements and schedules referred to earlier provide information for nonmajor governmental, enterprise and internal service funds and are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 119-154 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.

In the case of the City, assets plus deferred outflows exceeded liabilities plus deferred inflows by $1,227,462,750 at the close of the most recent fiscal year.

Statements of Net Position
The largest portion of the City’s net position, $976,049,641 or 79.5%, reflects its investment in capital assets (e.g. land, water rights, buildings, improvements, furnishings and equipment, fare boxes, pipelines, leases – right to use, SBITAs – right to use and infrastructure), less any related debt used to acquire those assets that are still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s net investment in capital assets is reported net of debt and related deferred outflows and inflows, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

Governmental activities Business-type activities Total
2024 2023 2024 2023 2024 2023
(Restated) (Restated) (Restated)
Current and other assets $ 420,559,054 $ 382,040,418 $ 344,726,281 $ 353,837,725 $ 765,285,335 $ 735,878,143 Capital assets 359,164,501 363,586,489 879,750,154 846,935,402 1,238,914,655 1,210,521,891 Total assets 779,723,555 745,626,907 1,224,476,435 1,200,773,127 2,004,199,990 1,946,400,034 Deferred outflows of resources 97,922,459 105,199,286 28,111,506 33,261,533 126,033,965 138,460,819 Current and other liabilities 42,236,341 32,103,449 38,859,123 38,203,396 81,095,464 $70,306,845 Long-term liabilities 466,462,170 452,199,888 325,913,489 340,458,514 792,375,659 792,658,402 Total liabilities 508,698,511 484,303,337 364,772,612 378,661,910 873,471,123 862,965,247 Deferred inflows of resources 15,368,153 16,520,102 13,931,929 16,171,248 29,300,082 32,691,350 Net position:

Net investment in capital assets 347,825,273 329,253,702 628,224,368 578,795,390 976,049,641 908,049,092 Restricted net position 83,916,553 208,584,362 15,883,497 16,788,942 99,800,050 225,373,304 Unrestricted net position (78,162,476) (187,835,310) 229,775,535 243,617,170 151,613,059 55,781,860 Total net position $ 353,579,350 $ 350,002,754 $ 873,883,400 $ 839,201,502 $ 1,227,462,750 $ 1,189,204,256 #1..
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
9 Another significant portion of the City’s net position represents unrestricted net position of $151,613,059 or

12.4%.

The remaining balance of the City’s net position of $99,800,050 or 8.1% represents resources that are subject to external restrictions on how they may be used.

The City’s net position increased by $38,258,494 during the current fiscal year largely due to an increase in intergovernmental revenues not restricted for specific purposes of $34,014,511.

The following table indicates the changes in net position for governmental and business-type activities, as well as comparative data for the prior year:

Statements of Activities
The City’s 2023 financial statements have been restated to correct previously reported balances. Refer to Note 20.

Governmental activities Business-type activities Total
2024 2023 2024 2023 2024 2023
(Restated) (Restated) (Restated)
Revenues:

Program revenues:

Charges for services $ 34,824,430 $ 36,398,285 $ 185,031,346 $ 175,288,339 $ 219,855,776 $ 211,686,624 Operating grants and contributions 15,527,564 19,539,354 844,097 1,263,264 16,371,661 20,802,618 Capital grants and contributions 6,838,419 4,174,014 8,018,762 3,310,141 14,857,181 7,484,155 General revenues:

Taxes 75,311,597 74,361,519 359,122 291,711 75,670,719 74,653,230 Intergovernment revenue not
restricted for specific purposes 164,878,012 130,863,501 - - 164,878,012 130,863,501 Special assessments, levied 5,436,061 4,900,860 - - 5,436,061 4,900,860 Unrestricted investment earnings 10,274,601 3,403,539 13,009,651 2,562,708 23,284,252 5,966,247 Settlements and recoveries - - 3,620,125 - 3,620,125 -
Miscellaneous 1,156,335 923,411 1,479,611 1,707,204 2,635,946 2,630,615 Total revenues 314,247,019 274,564,483 212,362,714 184,423,367 526,609,733 458,987,850 Expenses:

General government 17,124,132 16,573,945 - - 17,124,132 16,573,945 Community development 49,357,807 28,589,701 - - 49,357,807 28,589,701 Highways and streets 40,587,533 27,337,181 - - 40,587,533 27,337,181 Public works 13,898,622 7,795,895 - - 13,898,622 7,795,895 Parks and recreation 21,298,671 16,227,064 - - 21,298,671 16,227,064 Public safety 169,102,289 147,700,874 - - 169,102,289 147,700,874 Interest on long-term debt 1,276,737 1,719,479 - - 1,276,737 1,719,479 Water - - 89,689,694 77,533,248 89,689,694 77,533,248
Sewer - - 54,056,910 48,558,199 54,056,910 48,558,199
Other Enterprise - - 31,958,844 28,102,128 31,958,844 28,102,128 Total expenses 312,645,791 245,944,139 175,705,448 154,193,575 488,351,239 400,137,714 Change in net position before
transfers 1,601,228 28,620,344 36,657,266 30,229,792 38,258,494 58,850,136 Transfers 1,975,368 66,244 (1,975,368) (66,244) - -
Total transfers 1,975,368 66,244 (1,975,368) (66,244) - - Change in net position 3,576,596 28,686,588 34,681,898 30,163,548 38,258,494 58,850,136 Net position - beginning 350,002,754 321,316,166 839,201,502 809,037,954 1,189,204,256 1,130,354,120 Net position - ending $ 353,579,350 $ 350,002,754 $ 873,883,400 $ 839,201,502 $ 1,227,462,750 $ 1,189,204,256 #1..
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
10 Governmental activities. Governmental activities increased the City’s net position by $3,576,596 mainly due to revenues exceeding the expenditures during the fiscal year. Intergovernmental revenue not restricted for specific purposes increased by $34,014,132, this increase in intergovernmental revenues is mainly attributed to the adoption of Measure H, which is a voter’s approved increase to sales tax by 1% which went into effect on April 1, 2023, making fiscal year 2024 the first full fiscal year collecting this additional sales tax revenue.

Total expenses increased compared to the prior year by $66,701,652. This increase is mainly attributed to an increase in salary and benefit costs, along with an increase in hiring of previously vacant positions mainly in public safety and also in areas such as parks, and public works. Additionally, a large increase in expenses can be attributed to increased community development projects such as the Travelers Motel Homekey and HOME 7th Street Village.

Business-type activities. Business-type activities increased the City’s net position by $34,681,898. The increase was mainly attributed to increases in operating and capital grants and contributions in the amount of $4,289,454, an increase in charges for services in the amount of $9,743,007 mainly within the internal service funds and an increase in unrestricted investment earnings in the amount of $10,446,943.

FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The general government functions are contained in the general, special revenue, capital projects, and debt service funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

At June 30, 2024, the City’s governmental funds reported combined fund balances of $225,127,303 an increase of $31,903,734 from the prior year. The total unassigned fund balance for the governmental funds was $45,327,746 which includes a positive $48,060,252 which represents the General Fund unassigned fund balance that is available to meet the City’s current and future needs. The remainder of the fund balance is nonspendable, restricted, committed and assigned to indicate that it is not available for new spending because certain constraints have been placed on the use of the balances. The unassigned fund balance for the General Fund increased by $24,614,912.

The General Fund is the chief operating fund of the City. At June 30, 2024, unassigned fund balance of the General Fund was $48,060,252 while total fund balance was $83,058,620. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 25.1% of total General Fund expenditures, while total fund balance represents 43.4% of that same amount. The prior year ratios were 14.1% and 31.8%, respectively.
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
11 The Operating Grants fund accounts for receipts and disbursements of a variety of Governmental Fund Operating grants. At June 30, 2024, total fund balance was $859,092 this is an decrease of $3,886,897 from prior year.

The Housing and Community Development fund accounts for the grants and funds received to disburse for projects developed and administered under the Housing and Community Development Act. At June 30, 2024, the total fund balance was $27,778,843, a decrease of $5,992,241 from the prior year.

Transportation Special Tax accounts for state-controlled, locally-shared gas tax, 25 year, ½ cent sales tax Measure L, SB-1 (Road Repair and Accountability Act of 2017) monies. At June 30, 2024 total balance was $55,290,002 an increase of $6,091,885 from prior year.

Revenues of governmental funds totaled $322,089,879 in fiscal year 2023-24, which represents an increase of $38,332,238 from fiscal year 2022-23.

Expenditures of governmental funds totaled $291,641,122 in fiscal year 2023-24, representing an increase of $36,053,549 from fiscal year 2022-23.

The following table presents governmental fund revenues from various sources, with comparisons to the prior year:

Revenues Classified by Source – Governmental Funds
• Taxes – Revenues for property and business license taxes came in higher than the prior year due to an ongoing positive upturn in the economy and the increased collection and compliance efforts by the City staff.
• Intergovernmental – Revenues increased by $27,694,678, mainly due to an increase in sales tax revenue collected under the voter’s approved Measure- H effective April 1, 2023, increasing sales tax rate by 1% to 8.875%, making fiscal year 2023-24 the first full year collecting this new revenue source.

As well as an increase in the revenue source for the Stanislaus County county-wide, 25-year, half-cent sales tax increase known as Measure L to assist with the funding for local transportation improvements for the City.
• Charges for Services – Revenues increased by $3,640,468, due primarily to new and ongoing agreements for fire protection and mitigation services with other local jurisdictions.

Increase
(Decrease)
Revenues by Source Amount Percent Amount Percent Amount % Change Taxes $75,311,597 23.4% $74,361,519 26.3% $950,078 1.3% Licenses and permits 399,698 0.1% 409,082 0.1% ($9,384) -2.3% Intergovernmental 196,139,064 60.9% 168,444,386 59.5% $27,694,678 16.4% Charges for services 33,848,559 10.5% 30,208,091 10.6% $3,640,468 12.1% Special assessments 5,436,061 1.7% 4,900,860 1.7% $535,201 10.9% Interest and rent 5,468,374 1.7% 4,113,653 1.4% $1,354,721 32.9% Net increase (decrease) in fair value
of investments 3,807,834 1.2% (487,727) -0.2% $4,295,561 -880.7% Fines and forfeits 576,173 0.2% 880,252 0.3% ($304,079) -34.5% Miscellaneous 1,102,519 0.3% 927,525 0.3% $174,994 18.9% Total $322,089,879 100.0% $283,757,641 100.0% $38,332,238 13.5% FY 2024
FY 2023
(Restated)
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
12 • Interest and rent and net increase in fair value of investments – The increase in interest earned along with the increase in fair market value of the city’s investment portfolio is showing a positive outturn due to the current market conditions and continuous on-going improvements to the City’s investment strategy which has increased our return on investment in the City’s portfolio.

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

Expenditures by Function – Governmental Funds
The following provides an explanation of the expenditures by function that changed significantly over the prior year:
• Community development – Expenditures increased by $18,263,119 or 67.9% over the prior year, mainly due to ongoing large scale community development projects such as the Travelers Motel Homekey and the HOME 7th Street Village projects. Additionally, the total expenditures increased as more projects were undertaken by the City due to increase in grant funding. • Highways and streets – Expenditures increased by $11,726,447 or 79.8% over the prior year due to increased grant funding available to undertake highway and street roads rehabilitation and maintenance projects.
• Public works – Expenditures increase by $5,352,125 or 72.7% over the prior year due to more projects were undertaken by City staff due to increase in available funding. • Parks and recreations – Expenditures increased by $4,232,347 or 27.8% over the prior year due an increase in recreational activities as well as park renovations including basketball and volleyball improvements, restroom replacements and playground replacements. • Public safety – Expenditures increased by $15,208,519 or 10.9% over the prior year mainly due to an increase in services that are provided and equipment purchases, based on grant fund availability that fluctuates year to year depending on grants awarded. Additionally, additional positions for fire department as well as police department were approved based on the positive impact of Measure-H revenues.
• Capital outlay – Expenditures decreased in the amount of $19,894,126 or 65.1% due to large scale multiyear projects, such as the State Route 132, nearing completion during Fiscal Year 2023-24 which resulted in less construction expenditures during this fiscal year as compared to the prior year.

FY 2024 FY 2023
Increase
(Decrease)
Exp by Function Amount Percent Amount Percent Amount % Change General government $15,228,776 5.2% $15,483,071 6.1% ($254,295) -1.6% Community development 45,142,072 15.4% 26,878,953 10.6% $18,263,119 67.9% Highways and streets 26,421,078 9.1% 14,694,631 5.7% $11,726,447 79.8% Public works 12,711,516 4.4% 7,359,391 2.9% $5,352,125 72.7% Parks and recreation 19,479,513 6.7% 15,247,166 6.0% $4,232,347 27.8% Public safety 154,658,970 53.0% 139,450,451 54.6% $15,208,519 10.9% Capital outlay 10,646,681 3.7% 30,540,807 11.9% ($19,894,126) -65.1% Debt Service-principal retirement 5,598,966 1.9% 4,210,255 1.6% $1,388,711 33.0% Debt Service-interest charges 1,280,380 0.4% 1,609,215 0.6% ($328,835) -20.4% Debt Service-other 473,170 0.2% 113,633 - $359,537 316.4% Total $291,641,122 100.0% $255,587,573 100.0% $36,053,549 14.1% #1..
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
13 Other financing sources and uses are presented below to illustrate changes from the prior year:

Transfers - The City uses interfund transfers to: (1) move resources from a fund to other funds that will utilize them in accordance with statutory and budgetary requirements, (2) utilize unrestricted resources collected in the General Fund to help finance various programs and capital projects accounted for in other funds in accordance with budgetary authorization, and (3) move cash to pay debt service to the funds that are responsible for payment as those payments become due.
• The net financing sources (uses) from governmental funds for 2024 were $1,454,977 compared to $61,183 in the prior year. The net transfer is to various City funds including transferring funds from the General Fund, Housing and Community Development fund, Local Transportation fund, Transportation Special Tax fund, Special Fund for Capital Outlays, Parks funds, Community Facilities Districts fund, Capital Facility Fee funds, Fleet Fund, Information Technology Services fund, and Building Services fund, to cover the debt service payments, fleet replacement, funding for capital projects and various transfers to cover City grant matches. The other financing proceeds increased by $2,270,629 due to additional SBITAs and leases in the current year.

The fund balance of the City’s General Fund increased by $30,282,169 after restatement, during the fiscal year. This result is consistent with the City Council’s budgetary direction to reduce spending and identify additional revenue sources that would allow the General Fund to retain an unrestricted reserve that meets the City Council’s adopted reserve requirements level of no less than the average of two months of regular General Fund expenditures.

Proprietary funds. The City’s proprietary fund disclosures provide the same type of information found in the government-wide financial statements, but in more detail.

The following table shows actual revenues, expenses, and results of operations of enterprise funds for the current fiscal year:

FY 2024 FY 2023 Amount Percent
Transfers in $26,873,392 $17,408,119 $9,465,273 54.4%
Transfers out (29,514,905) (19,129,521) (10,385,384) 54.3% Other financing proceeds 4,042,674 1,772,045 2,270,629 128.1% Sale of assets 53,816 10,540 43,276 410.6%
Net financing sources (uses) $1,454,977 $61,183 $1,393,794 2278.1% Increase/(Decrease)
Major Funds Nonmajor Funds
Water Sewer Other Enterprise Total
Operating revenues $86,165,645 $68,673,479 $29,425,822 $184,264,946 Operating expenses (83,471,789) (51,294,194) (31,648,173) (166,414,156) Operating income (loss) 2,693,856 17,379,285 (2,222,351) 17,850,790 Nonoperating revenues (expenses), net 1,318,493 3,996,776 6,902,183 12,217,452 Income before capital contributions
and transfers 4,012,349 21,376,061 4,679,832 30,068,242 Capital contributions and transfers (767,498) 6,487,177 323,715 6,043,394 Changes in net position $3,244,851 $27,863,238 $5,003,547 $36,111,636 #1..
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
14 The Water fund had a rate increase of 4.5% effective October 1, 2023. This rate was approved on August 22, 2023.

The Sewer fund had a rate increase of 3.5% effective July 1, 2023. This rate was approved on April 12, 2022.

A pollution remediation liability was reported for the Water and Sewer fund in the amounts of $2,758,075 and $6,851,797, respectively based on net recoveries the City has received from various settlements.

Additional information regarding these liabilities can be found under Note 17.

GENERAL FUND BUDGETARY HIGHLIGHTS
Budget to actual information for the General Fund is presented as Required Supplementary Information, beginning on page 112 of this report.

While the City Council amended the budget several times through the year, the differences between the original budget and the final amended budget for the General Fund were increased overall mainly due to an increase in intergovernmental revenues. The estimated revenues increased about $43,724,237 while total appropriations increased by $4,918,992. These amendments were to adjust the actual beginning balances and carryovers after closing the prior fiscal year, to reflect adjustments to current estimates based on the periodic monitoring of revenue and expenditures throughout the year and to factor in the much-anticipated increase to sales tax by 1% to a total 8.875% sales tax rate, approved by Citizens on November 2022, under Measure H which went into effect on April 1, 2023.

Revenues came in $3,996,905 more than final estimates. Variances in Franchise Tax $101,234, Property Tax $478,400, and Intergovernmental $2,334,144, were due to an increase in collection efforts, and a quicker recovery from the pandemic than was anticipated and stronger property values.

Expenditures, overall, were $22,292,689 under budget, primarily due to efforts of departments to realize savings, and certain purchases being deferred to future periods as well as positions approved and budgeted but not yet filled.

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital assets
The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2024, amounted to $1,238,914,655 (net of accumulated depreciation). The total increase in the City’s investment in capital assets compared to 2023 was 2.3%.
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
15 Capital assets net of depreciation, for the governmental and business-type activities, are presented below to illustrate changes from the prior year.

Major capital asset events during the current fiscal year included the following:
• Pipelines – Construction of the Sutter Trunk Rehabilitation and Reliability project was completed in fiscal year 2023-24 in the amount of $4.2 million. Water main replacement and strengthening at two locations was completed in fiscal year 2023-24; Highway Village in the amount of $4.2 million and at Sutter Avenue in the amount of $2.6 million.
• Water rights – Depreciation expense for fiscal year 2023-24 in the amount of $11.9 million. • Construction in progress – Ongoing water construction projects related to improvements to the City’s water infrastructure were made during fiscal year 2023-24, ongoing construction of the Jennings water quality control (WQC) entrance, Sutter Trunk, and River Trunk Gravity system, River Sonoma Trunk Exit Lift Street, River Trunk Realignment, River Trunk Shackleford Pump and JM Pike Park Stormwater to Sanitary cross connection. Replacement of aged existing water mains at La Loma – El Vista to Riverside and La Loma Phase 2C mains.

The City’s infrastructure assets are recorded at historical cost in the government-wide financial statements.

Depreciation expense is recorded using the straight-line method, based on estimated useful life of the asset.

Additional information on the City’s capital assets can be found in Note 3 on pages 50-52 of this report.

Additional information on the City’s commitments can be found in Note 20 on page 87-88 of this report.

Increase
Governmental Business-type Total (decrease)
2024 2023 2024 2023 2024 2023 Percent
(Restated) (Restated) (Restated) Change $ Change
Land $ 42,653,318 $ 34,995,346 $ 30,647,169 $ 30,647,169 $ 73,300,487 $ 65,642,515 11.7% $ 7,657,972 Capitalized interest - - 3,465,094 3,969,880 3,465,094 3,969,880 -12.7% (504,786) Buildings 18,622,499 20,264,105 27,458,329 29,115,695 46,080,828 49,379,800 -6.7% (3,298,972) Improvements 54,076,033 57,885,970 225,808,186 243,047,851 279,884,219 300,933,821 -7.0% (21,049,602) Furnishings and
equipment 2,210,388 2,517,365 2,149,527 2,565,952 4,359,915 5,083,317 -14.2% (723,402) Buses & fareboxes 25,103 25,103 - - 25,103 25,103 0.0% - Intangible assets 780,536 1,178,550 3 3 780,539 1,178,553 -33.8% (398,014) Equipment pool 23,787,502 16,825,643 - - 23,787,502 16,825,643 41.4% 6,961,859 Service animals 19,611 27,435 - - 19,611 27,435 -28.5% (7,824) Water rights - - 191,054,232 202,995,122 191,054,232 202,995,122 -5.9% (11,940,890) Streets 143,643,347 153,607,619 - - 143,643,347 153,607,619 -6.5% (9,964,272) Signalization 6,458,205 5,486,212 - - 6,458,205 5,486,212 17.7% 971,993 Bridges 24,421,978 25,163,549 - - 24,421,978 25,163,549 -2.9% (741,571) Pipelines 394,694 400,269 286,149,600 279,380,650 286,544,294 279,780,919 2.4% 6,763,375 Construction in
progress 34,968,291 43,032,372 112,476,491 54,747,440 147,444,782 97,779,812 50.8% 49,664,970 Right-to-use
SBITAS 6,698,754 1,742,623 153,925 194,851 6,852,679 1,937,474 253.7% 4,915,205 Right-to-use Leases
Buildings 219,923 367,428 - - 219,923 367,428 -40.1% (147,505) Equipment pool 1 1 297,335 - 297,336 1 29733500.0% 297,335 Land 184,318 66,899 90,263 270,789 274,581 337,688 -18.7% (63,107) Total $ 359,164,501 $ 363,586,489 $ 879,750,154 $ 846,935,402 $ 1,238,914,655 $ 1,210,521,891 2.3% $ 28,392,764 #1..
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
16 Long-term debt and liabilities
At June 30, 2024, the City had total long-term liabilities outstanding of $345,151,154 net of unamortized discounts and premiums, as compared to $357,666,314 in the prior year. This amount was comprised of $38,985,000 of lease revenue bonds, $40,024,031 of certificates of participation, $97,054,702 of revenue bonds payable, $88,915,000 of reimbursement agreement related to Modesto Irrigation District bonds, $13,688,178 of estimated compensated absences, $28,460,239 of claims liability, $25,287,769 of loans payable, $494,623 of developer advances, $5,787,146 of finance purchase obligations, $843,922 of lease payables, $5,265,544 of SBITAs payables and $345,000 of notes payable.

For the governmental and business activities, the long-term debt decrease was mainly due to the principal payments made during the fiscal year. Additional information on the City’s long-term debt and liabilities can be found in Notes 6-10 on pages 55-77 of this report.

The City maintains a current bond rating for the various bonds listed below.

BONDS Moody’s Rating S & P Rating Fitch Rating
2008 Lease Revenue Bonds Aa3 AA+/A-1 A+
2008 Water Certificates of Participation Aa3 AA/A-1
Wastewater Revenue Bonds, Series 2018A AA
Wastewater Revenue Bonds, Series 2020A AA
Wastewater Revenue Bonds, Series 2020B AA
With the implementation of GASB Statement No. 75 “Accounting and Financial Reporting for Postemployment Benefits Other than Pension, the City’s net OPEB liability due in more than one year as of June 30, 2024 was $19,010,877. Additional information on the City’s net OPEB liability and Pension can be found in Note 20.

With the implementation of GASB Statement No. 87 “Leases”, the City reported lease receivables in the amount of $22,756,298, deferred inflows of resources-leases in the amount of $21,468,499, and lease liability in the amount of $843,922 as of June 30, 2024.

With the implementation of GASB Statement No 96 “Subscription-Based Information Technology Arrangements (SBITAs)”, the City reported SBITA liability in the amount of $5,265,544 as of June 30, 2024.

Economic Factors and Next Year’s Budget and Rates
• Consumer Price Index – Growth in the CPI had been relatively stable during the previous ten year, however, as a result of the COVID pandemic the CPI became volatile. During fiscal year 2024 CPI begin to stabilize but it has not been as low as in prior years before the COVID-19 pandemic, due to factors such as inflation and higher rates approved by the Federal Government. CPI serves as a measure for the growth in the cost for supplies and services used by the City. In the second half of fiscal year ended June 30, 2024, the CPI-Western Urban Index did see a continuous increase up to 2.0%. #1..
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City of Modesto
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2024
17 • Utility Service Charges – Wastewater rates increased by 3.5% for residential, commercial, industrial, and septage sewer and 2.5% for cannery segregation, effective July 1, 2023 to fiscal year 2026-2027. Rate increases were approved by the City Council on April 12, 2022. Water rates increased by 4.5% annually effective October 1, 2023 to fiscal year 2027-2028 were approved by Council on August 22, 2023.

All of these factors were considered in preparing the City’s budget for fiscal year 2023-24.

During the current fiscal year, fund balance in the General Fund increased by $29,488,052, net of prior year adjustments of $794,117, to $83,058,620 which represents 41.2% of total General Fund outflows which exceeds the City’s target value of minimal level of no less than the average of two months of regular general fund operating outflows as unassigned fund. The budget adopted for fiscal year 2023-2024 reflects the Council policy reserve level of a minimum $18,397,817 emergency reserve policy. This amount is reported as part of the committed fund balance.

Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s financial condition. Questions concerning any of the information provided in this report and requests for additional financial information should be addressed to the City of Modesto, Attention:

Finance Department, P.O. Box 642, Modesto, CA 95353.
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BASIC FINANCIAL STATEMENTS
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City of Modesto
Statement of Net Position
June 30, 2024
See Notes to Basic Financial Statements.
18 Governmental Business-type
Activities Activities Total
ASSETS
Cash and cash equivalents $ 149,734,019 $ 277,715,358 $ 427,449,377 Accounts receivable, net 8,028,335 4,228,740 12,257,075 Interest receivable 870,749 1,064,041 1,934,790
Utility billings receivable, net 2,138,789 20,018,406 22,157,195 Taxes receivable 24,221,034 2,213 24,223,247
Leases receivable 9,544,254 13,212,044 22,756,298
Due from governments, net 37,242,508 6,437,369 43,679,877 Due from Successor Agency 1,192,004 - 1,192,004
Prepaid expenses 2,939,400 4,830,694 7,770,094
Internal balances 63,022 (63,022) -
Inventories 6,627,820 53,436 6,681,256
Investments in joint ventures 6,384,785 - 6,384,785
Restricted assets:

Cash and cash equivalents 92,019,352 13,616,233 105,635,585 Cash and cash equivalents with fiscal agent 11,413,113 3,610,769 15,023,882 Due from governments, net 747,227 - 747,227
Reimbursement agreement 11,305,650 - 11,305,650
Notes and loan receivable, net 56,086,993 - 56,086,993
Capital assets:

Land and construction in progress 77,621,609 143,123,660 220,745,269 Other capital assets, net of accumulated depreciation 274,439,896 736,084,971 1,010,524,867 Intangible assets right-of-use, net of accumulated amortization 7,102,996 541,523 7,644,519 Total assets 779,723,555 1,224,476,435 2,004,199,990

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB 3,598,125 1,016,459 4,614,584
Deferred pensions 92,881,187 18,013,968 110,895,155
Loss on refunding - 307,723 307,723
Accumulated decrease in fair value of hedging derivatives 1,443,147 8,773,356 10,216,503 Total deferred outflows of resources 97,922,459 28,111,506 126,033,965 Total assets and deferred outflows of resources 877,646,014 1,252,587,941 2,130,233,955

LIABILITIES
Accounts payable 16,526,544 12,092,220 28,618,764
Accrued salaries and benefits 4,346,453 1,099,352 5,445,805 Approved loans payable 8,404,527 - 8,404,527
Due to fiduciary funds 24,223 - 24,223
Interest payable 47,039 516,628 563,667
Unearned revenue 2,484,385 2,474,112 4,958,497
Refundable deposits 8,960,023 2,267,264 11,227,287
Derivative instrument - interest swap 1,443,147 8,773,356 10,216,503 Pollution remediation liability - 11,636,191 11,636,191 Long-term liabilities:

Due within one year 14,840,854 14,612,133 29,452,987
Due in more than one year 75,886,936 239,811,231 315,698,167 Net OPEB liability due in more than one year 14,429,563 4,581,314 19,010,877 Net pension liability due in more than one year 361,304,817 66,908,811 428,213,628 Total liabilities 508,698,511 364,772,612 873,471,123

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB 4,620,648 1,265,502 5,886,150
Deferred pensions 1,778,283 167,150 1,945,433
Deferred leases 8,969,222 12,499,277 21,468,499
Total deferred inflows of resources 15,368,153 13,931,929 29,300,082 Total liabilities and deferred inflows of resources 524,066,664 378,704,541 902,771,205

NET POSITION
Net investment in capital assets 347,825,273 628,224,368 976,049,641 Restricted for:

Capital projects 792,819 - 792,819
Housing and community development 53,528,085 - 53,528,085 Pollution remediation - 13,616,233 13,616,233
Health and human services 7,915,493 - 7,915,493
Public safety 3,671,213 - 3,671,213
Refundable deposits 7,920,369 2,267,264 10,187,633
General government and support services 10,088,574 - 10,088,574 Unrestricted (78,162,476) 229,775,535 151,613,059
Total net position $ 353,579,350 $ 873,883,400 $ 1,227,462,750 #1..
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City of Modesto
Statement of Activities
Fiscal Year Ended June 30, 2024
See Notes to Basic Financial Statements.
19 Operating Capital
Charges for Grants and Grants and Governmental Business-type Expenses Services Contributions Contributions Activities Activities Total FUNCTIONS/PROGRAMS:

Governmental activities:

General government $ 17,124,132 $ 7,216,392 $ - $ - $ (9,907,740) $ - $ (9,907,740) Community development 49,357,807 10,896,436 8,602,330 58,763 (29,800,278) - (29,800,278) Highways and streets 40,587,533 1,293,908 - 6,670,404 (32,623,221) - (32,623,221) Public works 13,898,622 4,556,686 431,115 9,343 (8,901,478) - (8,901,478) Parks and recreation 21,298,671 2,133,067 365,531 99,909 (18,700,164) - (18,700,164) Public safety 169,102,289 8,727,941 6,128,588 - (154,245,760) - (154,245,760) Interest on long-term debt 1,276,737 - - - (1,276,737) - (1,276,737) Total governmental
activities 312,645,791 34,824,430 15,527,564 6,838,419 (255,455,378) - (255,455,378) Business-type activities:

Water 89,689,694 86,165,645 170,949 220,610 - (3,132,490) (3,132,490) Sewer 54,056,910 69,439,879 77,138 7,855,720 - 23,315,827 23,315,827 Other enterprise 31,958,844 29,425,822 596,010 (57,568) - (1,994,580) (1,994,580) Total business-type
activities 175,705,448 185,031,346 844,097 8,018,762 - 18,188,757 18,188,757 Total $ 488,351,239 $ 219,855,776 $ 16,371,661 $ 14,857,181 (255,455,378) 18,188,757 (237,266,621) General revenues:

Taxes:

Utility users tax 21,173,728 - 21,173,728
Property taxes, levied for general purposes 23,046,388 - 23,046,388 Property taxes, generated by and allocated to the airport - 359,122 359,122 Transient occupancy tax 3,351,194 - 3,351,194
Franchise tax 7,975,509 - 7,975,509
Cannabis tax 3,408,455 - 3,408,455
Business license tax, levied for general purposes 16,147,087 - 16,147,087 Business license tax, levied for downtown improvement district 209,236 - 209,236 Special assessments, levied 5,436,061 - 5,436,061
Intergovernmental revenue:

Sales tax (state appropriation) 38,038,757 - 38,038,757 Sales tax Measure H 47,954,202 - 47,954,202
Motor vehicle license fee 22,537,514 - 22,537,514
Transportation tax funding 26,795,778 - 26,795,778
Other 29,551,761 - 29,551,761
Unrestricted investment earnings and rent 10,274,601 13,009,651 23,284,252 Miscellaneous 1,156,335 1,479,611 2,635,946
Settlements - 3,620,125 3,620,125
Transfers, net 1,975,368 (1,975,368) -
Total general revenues and transfers 259,031,974 16,493,141 275,525,115 Changes in net position 3,576,596 34,681,898 38,258,494 Net position, July 1, as previously reported 489,433,701 847,728,789 1,337,162,490 Prior year adjustments (139,430,947) (8,527,287) (147,958,234) Net position, July 1, as restated 350,002,754 839,201,502 1,189,204,256 Net position, June 30 $ 353,579,350 $ 873,883,400 $ 1,227,462,750

Program Revenues
Net (Expense) Revenue and
Changes in Net Position
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City of Modesto
Balance Sheet
Governmental Funds
June 30, 2024
See Notes to Basic Financial Statements.
20 Housing and
Operating Community Transportation Other Total
General Grants Development Special Tax Governmental Governmental ASSETS
Cash and cash equivalents $ 51,916,300 $ 14,484,636 $ 5,606,697 $ 51,195,035 $ 6,710,161 $ 129,912,829 Receivables:

Accounts, net 2,349,610 76,011 35,387 616,190 179,812 3,257,010 Interest 292,016 16,219 3,797 178,670 274,254 764,956
Utilities, net 2,138,789 - - - - 2,138,789
Taxes 24,021,039 1,308 - - 198,687 24,221,034
Leases 8,060,661 - - - 1,461,472 9,522,133
Due from governments 2,022,208 15,300,103 2,041,211 3,852,481 11,286,524 34,502,527 Due from other funds 3,731,243 - - - - 3,731,243
Due from Successor Agency - - - - 1,192,004 1,192,004
Prepaid expenditures 54,955 129,847 1,563 30,185 112,955 329,505 Restricted assets:

Cash and cash equivalents 5,576,758 - - - 78,557,772 84,134,530 Cash and cash equivalents with
fiscal agent 4,511,816 792,819 - - 5,505,170 10,809,805 Due from governments - - - - 747,227 747,227
Notes receivable, net - - 53,811,544 - 2,275,449 56,086,993 Advances to other funds 1,921,763 - - - - 1,921,763
Total assets $ 106,597,158 $ 30,800,943 $ 61,500,199 $ 55,872,561 $ 108,501,487 $ 363,272,348

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable $ 2,856,989 $ 3,071,326 $ $ 192,388 $ 250,438 3,678,223 $ 10,049,364 Accrued salaries and benefits 3,584,269 186,449 27,208 202,910 25,495 4,026,331 Accrued interest payable - 2,492 9,813 - - 12,305
Approved loans payable - 663,385 7,741,142 - - 8,404,527 Due to other funds - - - - 3,295,652 3,295,652
Due to fiduciary funds - - - - 24,223 24,223
Unearned revenue 372,800 - - 129,211 1,940,815 2,442,826 Refundable deposits 8,875,800 - - - 84,223 8,960,023
Advances from other funds - - - - 740,958 740,958
Total liabilities 15,689,858 3,923,652 7,970,551 582,559 9,789,589 37,956,209 Deferred inflows of resources:

Unavailable revenue 278,790 26,018,199 25,750,805 - 9,192,994 61,240,788 Leases 7,569,890 - - - 1,378,158 8,948,048
Total deferred inflows of resources 7,848,680 26,018,199 25,750,805 - 10,571,152 70,188,836 Fund balances:

Nonspendable 1,976,718 129,847 1,563 30,185 112,955 2,251,268 Restricted 10,088,574 792,819 27,777,280 55,259,817 87,085,618 181,004,108 Committed 18,397,817 - - - - 18,397,817
Assigned 4,535,259 - - - 3,611,105 8,146,364
Unassigned 48,060,252 (63,574) - - (2,668,932) 45,327,746 Total fund balances 83,058,620 859,092 27,778,843 55,290,002 88,140,746 255,127,303 Total liabilities, deferred inflows of
resources, and fund balances $ 106,597,158 $ 30,800,943 $ 61,500,199 $ 55,872,561 $ 108,501,487 $ 363,272,348 #1..
- 87 -
City of Modesto
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2024
See Notes to Basic Financial Statements.
21 Total fund balances - governmental funds $ 255,127,303 Amounts reported for governmental activities in the statement of net position are different because:

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

General capital assets:

Nondepreciable $ 71,152,199
Depreciable 188,714,094
Accumulated depreciation on general capital assets (127,971,397) Lease assets and SBITAS - right-of-use 6,720,467
Accumulated amortization on lease assets, right-of-use (1,928,155) Infrastructure:

Depreciable 586,996,952
Accumulated depreciation on infrastructure (412,078,728) 311,605,432 Other long-term assets are not available to pay for current-period expenditures and, therefore, are not reported in the governmental funds;
Deferred in the governmental funds $ 61,240,788
Reimbursement agreement with Successor Agency 11,305,650 Investments in joint ventures 6,384,785 78,931,223
Derivative instruments:

Rate swaps are not reported in governmental funds. $ (1,443,147) Deferred outflows of resources used to accumulate decreases in fair value of hedging derivatives also are not reported in governmental funds. 1,443,147 - Internal service funds are used by management to charge the costs of activities to individual funds. The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of internal service funds are included in governmental activities in the statement of net position. 26,818,139 Deferred outflows and inflows of resources for pension items in governmental activities are not financial resources and, therefore, are not reported in the governmental funds.

Deferred outflows of resources $ 87,250,236
Deferred inflows of resources (1,726,034) 85,524,202
Deferred outflows and inflows of resources for net OPEB items in governmental activities are not financial resources and, therefore, are not reported in the governmental funds.

Deferred outflows of resources $ 3,364,304
Deferred inflows of resources (4,227,883) (863,579)
Some liabilities, are not due and payable in the current period and therefore are not reported in the funds.

Net pension liability $ (340,389,918)
Net OPEB liability (13,362,601)
Bonds payable, and other long-term debt (49,806,754)
Accrued interest (4,097) (403,563,370)
Net position - governmental activities $ 353,579,350
#1..
- 88 -
City of Modesto
Statements of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Fiscal Year Ended June 30, 2024
See Notes to Basic Financial Statements.
22 Housing and
Operating Community Transportation Other Total
General Grants Development Special Tax Governmental Governmental REVENUES:

Taxes $ 72,810,841 $ 294,108 $ - $ 1,997,412 $ $ 209,236 75,311,597 Licenses and permits 88,123 58,575 - 2,718 250,282 399,698 Intergovernmental 129,442,636 19,333,321 9,017,200 26,795,778 11,550,129 196,139,064 Charges for services 19,613,987 4,649,043 1,462,091 1,626,618 6,496,820 33,848,559 Special assessments levied 378,779 80,823 - - 4,976,459 5,436,061 Interest and rent 388,844 1,474,952 23,547 1,118,885 2,462,146 5,468,374 Net increase in fair value of investments 1,503,184 77,283 18,048 1,029,027 1,180,292 3,807,834 Fines and forfeits 384,225 - - - 191,948 576,173
Miscellaneous 646,091 275,525 - 118,887 62,016 1,102,519 Total revenues 225,256,710 26,243,630 10,520,886 32,689,325 27,379,328 322,089,879 EXPENDITURES:

Current:

General government 14,970,501 258,275 - - - 15,228,776
Community development 6,185,028 18,522,942 12,751,048 1,847,896 5,835,158 45,142,072 Highways and streets - 112,999 - 16,243,596 10,064,483 26,421,078 Public works 5,455,924 993,947 - - 6,261,645 12,711,516 Parks and recreation 16,364,245 670,003 - - 2,445,265 19,479,513 Public safety 142,622,102 11,243,566 - - 793,302 154,658,970 Capital outlay 3,061,670 477,856 - 11,240 7,095,915 10,646,681 Debt service:

Principal retirement 2,050,599 129,116 328,000 3,778 3,087,473 5,598,966 Interest 182,834 305 14,425 392 1,082,424 1,280,380
Other 418,800 - - - 54,370 473,170
Total expenditures 191,311,703 32,409,009 13,093,473 18,106,902 36,720,035 291,641,122

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 33,945,007 (6,165,379) (2,572,587) 14,582,423 (9,340,707) 30,448,757

OTHER FINANCING SOURCES
(USES):

Transfers in 3,509,083 5,338,613 4,417 1,540,205 16,481,074 26,873,392 Transfers out (10,099,889) (3,329,065) (3,424,071) (10,072,498) (2,589,382) (29,514,905) Other financing proceeds - leases
and SBITAs 2,916,392 268,934 - - 857,348 4,042,674
Sale of assets 11,576 - - 41,755 485 53,816

TOTAL OTHER FINANCING
SOURCES (USES) (3,662,838) 2,278,482 (3,419,654) (8,490,538) 14,749,525 1,454,977 CHANGES IN FUND BALANCES 30,282,169 (3,886,897) (5,992,241) 6,091,885 5,408,818 31,903,734 FUND BALANCES, JULY 1,
AS PREVIOUSLY REPORTED 53,570,568 4,731,444 33,771,463 49,198,117 82,634,300 223,905,892 PRIOR PERIOD ADJUSTMENTS (794,117) 14,545 (379) - 97,628 (682,323) FUND BALANCES, JULY 1, AS RESTATED 52,776,451 4,745,989 33,771,084 49,198,117 82,731,928 223,223,569 FUND BALANCES, JUNE 30 $ 83,058,620 $ $ 859,092 27,778,843 $ 55,290,002 $ 88,140,746 $ 255,127,303 #1..
- 89 -
City of Modesto
Reconciliation of the Governmental Funds Statements of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities Fiscal Year Ended June 30, 2024
See Notes to Basic Financial Statements.
23 Net change in fund balances - governmental funds $ 31,903,734 Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlay as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

Capital outlay $ 10,646,681
Depreciation and amortization expense (20,106,262) (9,459,581) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.

Change in unearned revenues $ (8,087,419)
Change in investments in joint ventures (23,974) (8,111,393) Recognition of Successor Agency annual payment for their Reimbursement Agreement receivable associated with long-term debt. (807,650) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position.

Principal retirement 5,598,966
Proceeds of long-term debt (4,042,674)
1,556,292
Some expenses reported in the statement of activities require the use of current financial resources and therefore are not reported as expenditures in governmental funds.

Change in accrued interest $ 3,643
OPEB expense associated with net OPEB liability 704,539 Pension expense associated with net pension liability (15,038,872) (14,330,690) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of internal service funds is allocated to governmental activities and business-type activities. 2,825,884 Change in net position - governmental activities $ 3,576,596 #1..
- 90 -
City of Modesto
Statement of Net Position
Proprietary Funds
June 30, 2024
See Notes to Basic Financial Statements.
24 Other Total Internal
Water Sewer Enterprise Enterprise Service
ASSETS
Current assets:

Cash and cash equivalents $ 138,446,879 $ 112,103,198 $ 27,165,281 $ 277,715,358 $ 19,821,190 Receivables:

Accounts, net 61,849 136,853 4,030,038 4,228,740 4,771,325 Interest 509,556 453,290 101,196 1,064,042 105,793
Taxes - - 2,212 2,212 -
Utilities, net 10,783,933 7,829,169 1,405,304 20,018,406 - Leases 18,320 259,440 330,025 607,785 5,407
Prepaid expenses 4,644,191 20,004 166,499 4,830,694 2,609,895 Due from governments 179,676 5,739,220 518,473 6,437,369 2,739,981 Due from other funds 2,722,377 - - 2,722,377 -
Inventories - - 53,436 53,436 6,627,820
Total current assets 157,366,781 126,541,174 33,772,464 317,680,419 36,681,411 Noncurrent assets:

Advances to other funds 2,480,000 740,817 52,882 3,273,699 - Restricted cash and cash equivalents 3,629,498 9,986,735 - 13,616,233 7,884,822 Restricted cash and cash equivalents with fiscal agent 2,406,120 1,000,042 204,607 3,610,769 603,308 Leases receivable 1,599,567 225,298 10,779,394 12,604,259 16,714 Land and construction in progress 38,473,676 93,070,504 11,579,480 143,123,660 6,469,410 Other capital assets, net of accumulated depreciation 375,889,723 334,263,778 25,931,470 736,084,971 38,778,975 Intangible assets right-to-use, net of accumulated
amortization 155,849 65,421 320,253 541,523 2,310,684
Total noncurrent assets 424,634,433 439,352,595 48,868,086 912,855,114 56,063,913 Total assets 582,001,214 565,893,769 82,640,550 1,230,535,533 92,745,324

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB 463,905 336,257 216,297 1,016,459 233,821 Deferred pensions 6,901,352 7,190,370 3,922,246 18,013,968 5,630,951 Loss on refunding 285,507 22,216 - 307,723 -
Accumulated decrease in fair value of hedging
derivatives 8,773,356 - - 8,773,356 -
Total deferred outflows of resources 16,424,120 7,548,843 4,138,543 28,111,506 5,864,772 Total assets and deferred outflows of resources $ 598,425,334 $ 573,442,612 $ 86,779,093 $ 1,258,647,039 $ 98,610,096 (Continued)
Enterprise
#1..
- 91 -
City of Modesto
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
See Notes to Basic Financial Statements.
25 Other Total Internal
Water Sewer Enterprise Enterprise Service

LIABILITIES
Current liabilities:

Accounts payable $ 3,288,331 $ 8,248,086 $ 555,803 $ 12,092,220 $ 6,477,180 Accrued salaries and benefits 419,491 402,658 277,203 1,099,352 320,122 Interest payable 10,286 497,542 8,800 516,628 30,637
Due to other funds - - - - 3,157,968
Current portion - compensated absences - - - - 872,970
Current portion - claims liability - - - - 7,290,622
Current portion - long-term debt 6,894,930 7,284,667 - 14,179,597 - Current portion - developer advances 83,942 - - 83,942 - Current portion - leases and SBITAS 109,085 16,929 57,411 183,425 955,275 Unearned revenue 66,971 1,454,626 952,515 2,474,112 41,559 Total current liabilities 10,873,036 17,904,508 1,851,732 30,629,276 19,146,333 Noncurrent liabilities:

Payable from restricted assets -
refundable deposits 1,286,987 980,277 - 2,267,264 -
Advances from other funds - - 4,454,504 4,454,504 -
Compensated absences - - - - 12,815,208
Claims liability - - - - 21,169,617
Derivative instrument - interest swap 8,773,356 - - 8,773,356 - Pollution remediation liability 2,758,075 6,851,797 2,026,319 11,636,191 - Long-term debt:

Reimbursement agreement related to MID debt 84,460,000 - - 84,460,000 - Revenue bonds payable - 90,676,935 - 90,676,935 -
Loans payable 231,704 23,619,235 - 23,850,939 -
Certificates of participation 37,614,031 - - 37,614,031 - Developer advances 410,681 - - 410,681 -
Leases and SBITAs payable 37,931 37,838 298,190 373,959 407,199 Net OPEB liability 1,756,826 1,545,698 1,278,790 4,581,314 1,066,962 Net pension liability 25,633,511 26,707,004 14,568,296 66,908,811 20,914,899 Total noncurrent liabilities 162,963,102 150,418,784 22,626,099 336,007,985 56,373,885 Total liabilities 173,836,138 168,323,292 24,477,831 366,637,261 75,520,218

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB 640,712 348,722 276,068 1,265,502 392,765 Deferred pensions 64,037 66,719 36,394 167,150 52,249
Deferred leases 1,518,167 413,267 10,567,843 12,499,277 21,174 Total deferred inflows of resources 2,222,916 828,708 10,880,305 13,931,929 466,188 Total liabilities and deferred inflows of resources 176,059,054 169,152,000 35,358,136 380,569,190 75,986,406

NET POSITION
Net investment in capital assets 284,962,451 305,786,315 37,475,602 628,224,368 43,885,911 Restricted for pollution remediation 3,629,498 9,986,735 204,607 13,616,233 - Restricted refundable deposits 1,286,987 980,277 - 2,267,264 8,488,130 Unrestricted 132,487,344 87,537,285 13,740,748 233,969,984 (29,750,351) Total net position $ 422,366,280 $ 404,290,612 $ 51,420,957 878,077,849 $ 22,623,690 Adjustment to reflect the consolidation of internal service fund activities (4,194,449) Net position of business-type activities $ 873,883,400
(Concluded)
Enterprise
#1..
- 92 -
City of Modesto
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
Fiscal Year Ended June 30, 2024
See Notes to Basic Financial Statements.
26 Other Total Internal
Water Sewer Enterprise Enterprise Service
OPERATING REVENUES:

Charges for services $ 85,611,214 $ 68,553,854 $ 28,764,321 $ 182,929,389 $ 116,268,038 Miscellaneous 554,431 119,625 661,501 1,335,557 121,866 Total operating revenues 86,165,645 68,673,479 29,425,822 184,264,946 116,389,904 OPERATING EXPENSES:

Salaries and wages 10,925,674 10,186,938 6,486,883 27,599,495 10,930,261 Cost of goods sold - - - - 5,839,850
Contractual services 13,235,756 6,114,149 7,229,552 26,579,457 5,590,977 Utilities 3,061,283 4,093,072 653,803 7,808,158 565,053 Maintenance and supplies 11,172,425 5,374,568 5,842,778 22,389,771 14,624,667 Water purchases 13,805,461 - - 13,805,461 -
Insurance 537,609 1,299,805 758,599 2,596,013 26,259,386 Claims - - - - 11,511,807
Employee benefits 6,229,877 5,962,155 3,870,951 16,062,983 39,349,271 Administration services 1,523,032 2,589,332 4,504,940 8,617,304 1,255,055 Allocated indirect administrative costs 1,491,777 869,645 604,284 2,965,706 406,949 Depreciation 21,488,895 14,804,530 1,696,383 37,989,808 5,653,483 Total operating expenses 83,471,789 51,294,194 31,648,173 166,414,156 121,986,759 OPERATING INCOME (LOSS) 2,693,856 17,379,285 (2,222,351) 17,850,790 (5,596,855)

NONOPERATING REVENUES (EXPENSES)
Operating grants 170,949 77,138 596,010 844,097 -
Gain (loss) on disposition of capital assets 33,608 99,315 111,933 244,856 (28,779) Tax revenue - - 359,122 359,122 -
Tax expense (101,200) (65,313) (2,032) (168,545) -
Interest income 3,340,072 2,745,161 617,380 6,702,613 464,838 Net increase in fair value of investments 3,224,650 2,647,140 435,248 6,307,038 516,123 Connection fees - 766,400 - 766,400 -
Rental income 49,976 (16,353) 1,201,132 1,234,755 41,406 Settlements and recoveries - - 3,620,125 3,620,125 -
Interest expense and amortization (5,397,663) (2,249,316) (33,781) (7,680,760) (60,974) Trustee and letter of credit fees (1,899) (7,396) (2,954) (12,249) - Total nonoperating revenues 1,318,493 3,996,776 6,902,183 12,217,452 932,614

INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 4,012,349 21,376,061 4,679,832 30,068,242 (4,664,241) Capital contributions 220,610 7,855,720 (57,568) 8,018,762 1,443,506 Transfers in 1,078,754 32,891 2,556,790 3,668,435 4,759,194 Transfers out (2,066,862) (1,401,434) (2,175,507) (5,643,803) (142,313) Total contributions and transfers (767,498) 6,487,177 323,715 6,043,394 6,060,387 CHANGES IN NET POSITION 3,244,851 27,863,238 5,003,547 36,111,636 1,396,146 NET POSITION, JULY 1, AS PREVIOUSLY REPORTED 423,522,072 380,588,922 46,382,506 21,227,544 PRIOR YEAR ADJUSTMENTS (4,400,643) (4,161,548) 34,904 - NET POSITION, JULY 1, AS RESTATED 419,121,429 376,427,374 46,417,410 21,227,544 NET POSITION, JUNE 30 $ 422,366,280 $ 404,290,612 $ 51,420,957 $ 22,623,690 Adjustment to reflect the consolidation of internal service funds (1,429,738) Change in net position of business-type activities $ 34,681,898 Enterprise
#1..
- 93 -
City of Modesto
Statement of Cash Flows
Proprietary Funds
Fiscal Year Ended June 30, 2024
See Notes to Basic Financial Statements.
27 Other Total Internal
Water Sewer Enterprise Enterprise Service
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 85,900,649 $ 67,692,734 $ 30,460,366 $ 184,053,749 $ 111,769,813 Payments to suppliers (48,234,458) (21,703,185) (18,524,055) (88,461,698) (64,646,534) Payments to employees (16,250,707) (15,578,467) (9,812,793) (41,641,967) (46,776,962) Net cash provided by (used in) operating activities 21,415,484 30,411,082 2,123,518 53,950,084 346,317

CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:

Operating grants received 170,949 77,138 596,010 844,097 - Taxes received - - 359,122 359,122 -
Settlements and recoveries - - 3,620,125 3,620,125 -
Transfers in 1,078,754 32,891 2,556,790 3,668,435 4,759,194 Transfers out (2,066,862) (1,401,434) (2,175,507) (5,643,803) (142,313) Advances from/to other funds 620,000 455,774 (654,200) 421,574 - Net cash provided by (used in) noncapital financing
activities (197,159) (835,631) 4,302,340 3,269,550 4,616,881

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition and construction of capital assets (24,069,111) (44,060,184) (614,379) (68,743,674) (8,653,466) Advances from/to other funds - - 52,879 52,879 -
Proceeds (loss) from sale of capital assets - - 125,574 125,574 (28,779) Principal repayments of long term debts (7,028,904) (8,574,676) (1,395,879) (16,999,459) (968,707) Repayment of derivative instrument (3,104,389) - - (3,104,389) - Interest paid (5,389,802) (2,256,143) (34,615) (7,680,560) (60,974) Refunding gain 23,791 66,648 - 90,439 -
Trustee and letter of credit fees (1,899) (7,396) (2,954) (12,249) - Capital contributions 220,610 7,855,720 (57,568) 8,018,762 1,443,506 Connection fees for capital purposes - 766,400 - 766,400 - Net cash used in capital and related
financing activities (39,349,704) (46,209,631) (1,926,942) (87,486,277) (8,268,420) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 3,241,520 2,657,746 572,634 6,471,900 441,874 Net increase in the fair value of investments 3,224,650 2,647,140 435,248 6,307,038 516,123 Net increase in the fair value of hedging derivatives 3,104,389 - - 3,104,389 - Rental income received 171,074 459,457 1,191,472 1,822,003 19,285 Net cash provided by investing activities 9,741,633 5,764,343 2,199,354 17,705,330 977,282 Net increase (decrease) in cash and cash equivalents (8,389,746) (10,869,837) 6,698,270 (12,561,313) (2,327,940) CASH AND CASH EQUIVALENTS, JULY 1 152,872,243 133,959,812 20,671,618 307,503,673 30,637,260 CASH AND CASH EQUIVALENTS, JUNE 30 $ 144,482,497 $ 123,089,975 $ 27,369,888 $ 294,942,360 $ 28,309,320 Enterprise
#1..
- 94 -
City of Modesto
Statement of Cash Flows (Continued)
Proprietary Funds
Fiscal Year Ended June 30, 2024
See Notes to Basic Financial Statements.
28 Other Total Internal
Water Sewer Enterprise Enterprise Service

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES:

Operating income (loss) $ 2,693,856 $ 17,379,285 $ (2,222,351) $ 17,850,790 $ (5,596,855) Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:

Depreciation 21,488,895 14,804,530 1,696,383 37,989,808 5,653,483 Taxes paid (101,200) (65,313) (2,032) (168,545) -
Prior Period Adjustment - - 34,904 34,904 -
(Increase) decrease in:

Accounts receivable (31,517) 273,731 (98,125) 144,089 (4,641,264) Taxes receivable - - (323) (323) -
Utilities receivable (233,479) (1,254,476) (77,883) (1,565,838) - Due from governments 654,807 (4,629,703) 394,168 (3,580,728) (1,198,266) Prepaid expenses (2,475,272) (8,362) (8,336) (2,491,970) (1,407,368) Inventories 35,435 - 803 36,238 (2,296,445)
Due from other funds (1,254,740) - - (1,254,740) -
Leases receivable - - 1,175,971 1,175,971 -
Deferred outflows of resources - OPEB 54,821 22,326 31,284 108,431 61,530 Deferred outflows of resources - pensions 637,327 844,866 364,575 1,846,768 98,009 Increase (decrease) in:

Accounts payable 760,530 3,037,976 (325,851) 3,472,655 3,170,496 Accrued salaries and benefits 7,251 13,123 (3,851) 16,523 (5,240) Interest payable - - - - 30,637
Compensated absences - - - - 1,769,025
Deferred inflows of resources - OPEB (176,802) (94,266) (54,130) (325,198) (100,967) Deferred inflows of resources - pensions (49,811) (54,628) (28,347) (132,786) (34,269) Deferred inflows of resources - leases 21,174
Net OPEB liability and deferred resources 8,818 8,416 (5,102) 12,132 (52,819) Net pension liability and deferred resources 430,491 (156,088) 236,761 511,164 1,762,061 Claims liability - - - - 1,421,325
Pollution remediation liability (1,097,781) 310,399 919,581 132,199 - Due to other funds - - - - 1,690,331
Unearned revenue 66,971 (17,408) 95,419 144,982 1,739
Refundable deposits (3,116) (3,326) - (6,442) -
Total adjustments 18,721,628 13,031,797 4,345,869 36,099,294 5,943,172 Net cash provided by operating activities $ 21,415,484 $ 30,411,082 2,123,518 $ 53,950,084 $ 346,317 (Concluded)
Enterprise
#1..
- 95 -
City of Modesto
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2024
See Notes to Basic Financial Statements.
29 Private Purpose Investment
Trust Funds Trust Funds
ASSETS
Cash and cash equivalents $ 1,901,392 $ 2,048,811
Cash and cash equivalents held with fiscal agent 3,192,168 - Interest receivable 6,229 2,515
Taxes receivable 815,316 123,366
Assessments receivable 25,770,000 -
Prepaids 768 -
Leases receivable - 1,153,575
Due from governments 24,223 936,430
Land and construction in progress - 5,335,917
Other capital assets, net of accumulated depreciation - 3,245,692 Total assets 31,710,096 12,846,306

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding 835,585 -
Total assets and deferred outflows of resources 32,545,681 12,846,306

LIABILITIES
Accounts payables and other liabilities 9,407 518,252
Unearned revenues 651,931 -
Due to local governments 1,192,004 -
Interest payable 382,310 -
Long-term liabilities:

Due within one year 2,148,759 -
Due in more than one year 36,142,910 -
Total liabilities 40,527,321 518,252

DEFERRED INFLOW OF RESOURCES
Leases - 1,085,018
Total deferred inflow of resources - 1,085,018
Total liabilities and deferred inflows of resources 40,527,321 1,603,270

NET POSITION
Net investment in capital assets - 8,581,609
Restricted 3,893,397 2,661,427
Unrestricted (11,875,037) -
Total net position (deficit) $ (7,981,640) $ 11,243,036 #1..
- 96 -
City of Modesto
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
Fiscal Year Ended June 30, 2024
See Notes to Basic Financial Statements.
30 Private Purpose Investment
Trust Funds Trust Funds
ADDITIONS:

Contributions:

Members investment pool $ $ - 531,037
Total contributions
Collections on behalf of other governments:

Special assessments 1,584,705 321,274
Property taxes 1,055,512 429,208
Grants - 819,046
Other - 1,087,947
Total collections on behalf of other governments 2,640,217 2,657,475 Interest and investment earnings:

Interest earnings 294,499 84,556
Net increase in fair value of investments 14,751 9,472
Total interest and investment earnings 309,250 94,028
Total additions 2,949,467 3,282,540
DEDUCTIONS:

Distribution of property taxes to other taxing entities 382,603 718,095 Obligation retirements:

Interest expense 1,186,686 -
Trustee fees 3,760 -
City administrative expenses 157,428 173,308
Other expenses 75,863 7,712
Depreciation - 437,904
Insurance - 1,086
Operating expenses - 955,655
Total deductions 1,806,340 2,293,760
Net increase in fiduciary net position 1,143,127 988,780 Net position, July 1, as previously reported (9,130,605) 10,254,256 Prior year adjustment 5,838 -
Net position, July 1, as restated (9,124,767) 10,254,256 Net position (deficit), June 30 $ (7,981,640) $ 11,243,036 #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Financial Reporting Entity
The City of Modesto (the City) was incorporated in 1884 and operates under a CouncilManager form of government as authorized by its charter adopted in 1951. The City Council consists of seven elected members. The following services are provided by the City to its citizens: public safety (fire and police), highways and streets, drinking water, wastewater collection and treatment, storm drainage, recreation, public improvements, community development, planning and zoning, and general administrative services.

These financial statements present the financial status of the City and its component units.

The component units discussed in the following paragraphs are included in the City's reporting entity because the City is financially accountable for their operations.

1. The MPFA (Modesto Public Financing Authority) was established as a separate legal entity whose sole purpose is to provide financing for various City capital projects.

2. The City of Modesto has established several Community Facilities (The Districts) to provide funding and reimbursement mechanisms for public facilities and services required by each District Specific Plan. These Districts are the vehicles used to ensure that all landowners in the Districts contribute to the cost of public improvements. There are currently thirteen active Districts, which are combined for presentation in these financial statements. Individual component unit financial statements are prepared for each District.

Although these component units are legally separate from the City, they are reported on a blended basis as part of the primary government because their boards consist of all seven members of the City Council and operational responsibility. There is an operational responsibility for the City related to these component units and for the MPFA it provides services solely for the City. Component unit financial statements may be obtained from the City's Finance Department.

The Redevelopment Successor Agency (Successor Agency) operates under the auspices of a legislatively formed Oversight Board comprised of representatives of the local agencies that serve the development project area. The Oversight Board, in its fiduciary capacity, has authority over the operations and the timely dissolution of the former Redevelopment Agency (RDA). It is tasked with fulfilling the obligations of the former RDA, and is also responsible for revenue collection, maintaining necessary loan reserves and disposing of excess property. This agency is reported as a private-purpose trust fund based on the generally accepted accounting standards requirement.

The joint ventures and jointly governed organizations described in Note 20 are not considered part of the reporting entity because the City is not financially accountable for their operations.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment, 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 or segment and 2) grants and contributions restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise 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, as are the proprietary fund statements. 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 imposed by the provider have been met. Agency funds have no measurement focus.

Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

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 they are collectible within 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 60 days after the end of the current fiscal period. For grant revenues, the City considers this type of revenue to be available if collected within 180 days. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, principal and interest, compensated absences, claims and judgement expenditures are recorded as fund liabilities when due or when amounts have been accumulated in the debt service funds for payments to be made early in the following year. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Substantially all property taxes, taxpayer-assessed taxes (such as sales and use, utility users, business license, transient occupancy, franchise fees, and gas taxes), interest, special assessments levied, state and federal grants, and charges for current services are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Revenues from licenses, permits, and fines and forfeits are considered to be measurable and available only when cash is received by the City.

The City reports the following major governmental funds:
• The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
• The Operating Grants Fund to account for a variety of governmental fund operating grants, including law enforcement grants.
• The Housing and Community Development Fund to account for various grant funds received from Federal Community Development Block grants to be used for a variety of housing related programs primarily targeted at low-income housing. Additionally, this fund accounts for the City’s revolving fund, which provides housing loans to low-income individuals and accounts for emergency shelter grant revenue received from the Housing and Urban Development Department.
• The Transportation Special Tax Fund to account for state-collected, locally-shared gas tax, 25 year, ½ cent sales tax Measure L, SB-1 (Road Repair and Accountability Act of 2017) monies. This fund may be used for all road and traffic purposes including construction, purchase of rights-of-way, and maintenance.

The City reports the following major proprietary funds:
• The Water Fund accounts for all revenues collected by the City for the purpose of financing the construction, operation, and maintenance of the City water distribution system. Revenues are derived from water service charges and various installation fees. • The Sewer Fund accounts for revenues collected by the City for the purpose of financing the construction, operation, and maintenance of the City sewer system. Revenues include, but are not limited to, sewer service charges and sewer lateral charges. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Additionally, the City reports the following fund types:
• Private Purpose Trust Funds account as the fiduciary fund type used by the City to report trust arrangements under which principal and income benefit other governments.

The fund reports the assets, liabilities, and net position of the Redevelopment Successor Agency. Additionally, the fund also reports the assets, primarily cash and investment, and related liabilities and net position of Special Districts which are used to account for collection of special assessment from property owners which are collected and forwarded to trustees for payment to bondholders.
• Investment Trust Funds account for the assets and investments in the City’s investment pool, of legally separate entities held by the City as an agent of various assessment districts, governmental entities and non-profit organizations. • Internal Service Funds account for fleet management, central services, information and technology services, insurance, employee benefits management, and building services provided to other departments or agencies of the City on a cost-reimbursement basis.

As a general rule, the effect of interfund activity has been eliminated from the governmentwide financial statements. Exceptions to this general rule are exchange or exchange-like transactions between functions of the government. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Proprietary funds distinguish operating revenues and expenses from nonoperating items.

Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations.

The principal operating revenues of the enterprise and internal service funds are charges to customers for sales and services. The Sewer Fund also recognize as non-operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the systems. Operating expenses for enterprise and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
35 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance
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 including the note disclosures. Actual results could differ from those estimates.

Cash and Cash Equivalents
Cash and investments (including restricted assets) held in the City's investment pool are reported as cash and cash equivalents on the statement of net position and balance sheet because funds can spend cash at any time without prior notice or penalty. All investments with fiscal agents are also considered cash equivalents because they are highly liquid and have maturities of 3 months or less at the time of purchase. Investments are stated at fair value. Valuations are obtained based on various levels identified further under Note 2 – Fair Value Measurement and Application.

Restricted Assets - Cash and Cash Equivalents
Refundable deposits which reside in the Trust Deposits of the General Fund are classified as restricted assets – cash and cash equivalents on the governmental funds balance sheet because their use is restricted for repayment of those refundable deposits. Legal or contractual obligations associated with the nonmajor governmental funds have been reported as restricted assets due to the restrictions identified on the revenue sources generated from these funds. Refundable deposits in the Water and Sewer funds are also reported as restricted assets on the proprietary funds statement of net position. In addition, certain proceeds of Water certificates of participation and Sewer revenue bonds are considered restricted assets because their use is limited by applicable debt covenants.

These proceeds are reported as part of “restricted assets – cash and cash equivalents” on the proprietary funds statement of net position. The Employee Benefits Management Fund collects funds which are restricted for future payouts for leave balances due to employees who terminate or retire from the City as well as any severance payouts. These assets are restricted due to management’s designation of assets for future payments for employee uses.

Receivables and Payables
All property taxes are collected and allocated by the County of Stanislaus to the various taxing entities. Property taxes are determined annually as of March 1 and attach as an enforceable lien on real property as of January 1. Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. The City participates in the County "Teeter Plan" method of property tax distribution. Under the Teeter Plan, the County remits property taxes to the City based on assessments, not on collections, according to the following schedule: 55 percent in December, 40 percent in April, and 5 percent at the end of the fiscal year. Property taxes are recognized in governmental funds when it is available and measurable. The City considers property tax as available if it is received within 60 days after year-end.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance (Continued)
Receivables and Payables (Continued)
Revenue from taxpayer-assessed taxes (sales and use, business license, transient occupancy, utility users, gas, and franchise fees) are accrued in the governmental funds when they are both measurable and available. The City considers these revenues available if they are received during the period when settlement of prior fiscal year accounts payable occurs. Historically, the majority of these taxes are received within 60 days after the fiscal year end; therefore, revenue from taxpayer-assessed taxes is accrued if it is received by August 31.

Grant and entitlement revenues are recorded as receivables in the funds when they are susceptible to accrual (i.e., when all eligibility requirements have been met). The corresponding governmental fund revenues are recorded when they become available, with the differences recorded as deferred inflows of resources. The corresponding proprietary fund revenues are recorded as nonoperating revenues when the receivables are recorded.

Some grant and entitlement revenues are not susceptible to accrual, in which case the corresponding revenues are recorded when received. The total amount due from governments for grants, entitlements, and shared receivables and revenues at June 30, 2024 is $43,679,877.

Utility billings receivable are $22,157,195 net of an allowance for doubtful collections of $1,347,243 and include unbilled receivables using actual amounts billed in July for June services for all City funds. City accounts receivable of $12,257,075 are reported net of an allowance for doubtful collections of $865,438 and are based on miscellaneous receivables from the City’s invoice system as well as other receivables accrued at year-end.

The City is a lessee for noncancelable leases of land, buildings, office space, and equipment and recognizes the liability and an intangible right-to-use lease asset at the inception of the lease agreement at the current present value of future payments, in the government-wide and proprietary fund financial statements.

The City is a lessor for noncancelable leases of buildings, hangers, office space and land use and parking spaces. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide, proprietary fund and governmental fund financial statements at the inception of the lease agreement at current present value of all future payments.

The City has Information Technology software contract agreements also known as Subscription Based Information Technology Arrangements (SBITAs) in which the contract conveys control of the right to use another party’s IT software, alone or in combination with a tangible capital asset for a defined period of time in an exchange or exchange like transaction. The City recognizes the liability and non-cancellable right to use of the IT software asset at the inception of the agreement in the government-wide and proprietary fund financial statements.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
37 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance (Continued)
Inventories and Prepaid Expenses/Expenditures
Inventories of material and supplies held by governmental and proprietary funds are stated at average cost. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenses/expenditures. The consumption method is used to record the prepaid expenses/expenditures.

Interfund Balances
Balances representing lending/borrowing transactions between funds outstanding at the end of the fiscal year are reported as either "due from/due to other funds" (amounts due within one year), or "advances to/from other funds" (non-current portions of interfund lending/borrowing transactions). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Advances to other funds and prepaid items are offset by a nonspendable fund balance in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources to indicate that they are not in spendable form.

Capital Assets
Capital assets, which include property, plant and equipment, intangible assets and infrastructure assets (e.g., streets, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets received in a service concession agreement and all other types are recorded at acquisition value as of the date of donation.

The City will capitalize a single group purchase of similar assets that would be significant collectively, even if the individual items are below the capitalization thresholds above. For the purpose of this policy, a group purchase above $100,000 is considered significant.

In the case of the initial capitalization of infrastructure assets reported by governmental activities, the City chose to include them regardless of their acquisition date or amount.

Historical values were estimated.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Interest incurred during the construction phase of capital assets of business-type activities and enterprise funds are not included as part of the capitalized value of the assets constructed. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
38 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance (Continued)
Capital Assets (Continued)
Depreciation is recorded using the straight line method over the estimated useful lives of the assets, which are 75 years for pipelines, 30 years for buildings, 20 years for improvements, 3 to 10 years for buses, 3 to 10 years for furnishings and equipment, 3 to 10 years for vehicles, 3 to 5 years for intangible assets, 30 to 50 years for streets, 20 years for signalization, 30 years for water rights, 5 years for service animals, and 50 years for bridges. Operating expenses include depreciation on all depreciable capital assets.

Leases are recorded as an asset and an obligation at an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term. Noncancellable lease agreements exceeding a 12-month term are recorded as an intangible rightto-use asset with an amortization calculated based on the term of the lease agreement.

Subscription Based Information Technology Arrangements (SBITAs) are recorded as an asset and an obligation at an amount equal to the present value at the beginning of the arrangement term of minimum arrangement payments during the arrangement term. Non-cancellable agreements exceeding a 12-month term are recorded as an intangible right-to-use asset with an amortization calculated based on the term of the agreement.

The City has established a materiality threshold of $10,000 in annual lease payments under GASB 87 and SBITAs under GASB 96 for financial recording and reporting. All leases and SBITAs under $10,000 will be reported as operating activities.

Deferred Outflows and Inflows of Resources
The Governmental Accounting Standards Board (GASB) establishes criteria for recognizing deferred outflows and inflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the government that is applicable to a future reporting period. A deferred inflow of resources is defined as an acquisition of net assets by the government that is applicable to a future reporting period. Refer to Note 19 for a detail listing of the deferred outflows and inflows of resources the City has recognized.

Compensated Absences
All earned vacation, holiday, management leave, bilingual leave and compensating time off, as well as a portion of accumulated sick leave payable upon termination or retirement, are accrued in the Employee Benefits Management Internal Service Fund as compensated absences. Estimated sick leave termination payments have been calculated using the GASB Statement 16 vesting method. Under this method, a liability is accrued for a portion of the sick leave balances of all employees who are currently eligible, or are assumed to become eligible in the future, to receive a payment for sick leave upon termination. As of June 30, 2024, the total estimated liability for all compensated absences, including vacation and sick leave, is $13,688,178.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
39 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance (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 City is bound to honor constraints on how specific amounts can be spent. • Nonspendable fund balance – amounts that cannot be spent because they are either (a) not spendable in form or (b) legally or contractually required to be maintained intact. • Restricted fund balance – 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 provisions or enabling legislation.
• Committed fund balance – amounts that can only be used for specific purposes determined by formal action of the City’s highest level of decision-making authority (City Council) and that remain binding unless removed in the same manner. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period.
• Assigned fund balance – amounts that are constrained by the City’s intent to be used for specific purposes. The intent can be established at either the highest level of decision making, which includes City Council or by an official designated such as the City Manager for such purpose.
• Unassigned fund balance – the residual classification for the City’s General Fund that includes amounts not contained in 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.

The City establishes and modifies or rescinds fund balance commitments by passage of an ordinance. This is typically done through adoption and amendment of the budget. A fund balance commitment is further indicated in the budget as a commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the City through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, followed by the unrestricted committed, assigned, and unassigned resources as they are needed.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
40 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position/Fund Balance (Continued)
Fund Balance Policy
The City believes that sound financial management principles require that sufficient funds be retained by the City to provide a stable financial base at all times. To retain this stable financial base, the City needs to maintain unrestricted fund balance in its City funds sufficient to fund cash flows of the City and to provide financial reserves for unanticipated expenditures and/or revenue shortfalls of an emergency nature. Committed, assigned and unassigned fund balances are considered unrestricted.

The purpose of the City’s fund balance policy is to maintain a prudent level of financial resources to protect against reducing service levels or raising taxes and fees because of temporary revenue shortfalls or unpredicted one-time expenditures.

The City has adopted a policy to achieve and maintain a General Fund reserve at a minimum level of no less than the average of two months of regular General Fund operating expenditures.

Net Position
The governmental and business-type activities in the government-wide financial statements and the proprietary funds in the fund financial statements utilize a net position presentation.

Net position is classified in the following categories:
• Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt (including premiums) and any other capital related liabilities that are debt (including premiums) and any other capital related liabilities that are attributed to the acquisition, construction, or improvement of assets.
• Restricted Net Position – This amount is restricted by external creditors, grants, contributors, or laws or regulations of other governments. • Unrestricted Net Position – This amount is all net position that does not meet the definition of “net investment in capital assets” or “restricted net position”.

Other Significant Accounting Policies
Employee Benefits
The City established the Employee Benefits Management Internal Service Fund to account for all compensated absences and non-insurance benefits. Insurance benefits for current employees are paid from the Insurance Internal Service Fund. The Employee Benefits Management Fund is reimbursed based on actual benefits paid and leave taken, through payroll charges to the City's operating funds. Leave earned but not taken is being funded over a reasonable period of time.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
41 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Other Significant Accounting Policies (Continued)
Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the California Public Employees’ Retirement System (CalPERS) Safety (police and fire) and Miscellaneous (all other) Plans and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, the benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. GASB 68 requires that the reported results must pertain to the liability and asset information within certain defined timeframes. For this report, the following:

Valuation Date: June 30, 2022
Measurement Date: June 30, 2023
Measurement Period: June 30, 2022, to June 30, 2023
Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the net position of the City’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s net position have been determined on the same measurement basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

GASB 75 requires that the reported results must pertain to liability information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date: June 30, 2022
Measurement Date: June 30, 2023
Measurement Period: June 30, 2022, to June 30, 2023
Interfund Transactions
The City transfers resources among funds in the course of normal operations. Interfund services provided and used, such as equipment pool rental, are accounted for as revenues and expenditures or expenses. Transactions to reimburse a fund for expenditures/expenses initially made from it that are applicable to another fund are recorded as expenditures/ expenses in the correct fund and as reductions of expenditures/expenses in the original fund.

All other interfund transactions are reported as transfers. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
42 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) New Accounting Standards
During the year ended June 30, 2024, the City implemented the following GASB new standard. The financial statements included herein apply the requirements and provisions of the standard.

GASB Statement No. 100 - Accounting Changes and Error Corrections. This Statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. The requirements of this statement are effective for reporting periods beginning after June 15, 2023.

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

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

GASB Statement No. 102 – Certain Risk Disclosures. The requirements of this statement are effective for reporting periods beginning after June 15, 2024.

GASB Statement No. 103 – Financial Reporting Model Improvements. The requirements of this statement are effective for reporting periods beginning after June 15, 2025.

GASB Statement No. 104 – Disclosure of Certain Capital Assets. The requirements of this statement are effective for reporting periods beginning after June 15, 2025.

NOTE 2 CASH AND INVESTMENTS
The City maintains a cash and investment pool that is used by all funds. Each fund’s portion of the City’s cash and investment pool is displayed on the balance sheet and proprietary and fiduciary fund statements of net position as “cash and cash equivalents.” Each fund is allocated interest on average monthly cash balances held by the funds throughout the year.

Certain deposits held in trust are displayed on the governmental funds balance sheet and the proprietary funds statement of net position as “restricted assets – cash and cash equivalents.” The City also maintains “cash and cash equivalents with fiscal agent”, which represent monies held by fiscal agents for payment of various City debt and capital projects costs.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
43 NOTE 2 CASH AND INVESTMENTS
The City’s cash and investments are reported as follows:

Investments Authorized by the California Government Code and the City’s Investment Policy The City’s investment policy and the California Government Code allow the City to invest in the following types of instruments, and the table also identifies certain provisions of the California Government Code, or the City’s investment policy where it is more restrictive:

Investment Instrument Summary
Primary Government:

Cash and cash equivalents $ 427,449,377
Restricted cash and cash equivalents 105,635,585
Cash and cash equivalents held with fiscal agent 15,023,882 Private Purpose Trust Funds
Cash and cash equivalents 1,901,392
Cash and cash equivalents held with fiscal agent 3,192,168 Investment Trust Funds
Cash and cash equivalents 2,048,811
Total cash and investments $ 555,251,215
Security Type
Maximum
Maturity
Min Credit
Quality
Authorized
Investment
Limit
Per Issuer
Limit
City Issued Bonds 5 Years None None None
US Treasury Notes/ Bills 5 Years None None None
State of California Securities 5 Years “A” None None
California Municipal Securities 5 Years “A” None None
Other 49 State Municipal Securities 5 Years “A” None None Federal Agencies 5 Years None None None
Banker’s Acceptance (BA) 180 days “A-1” 40% 5%
Commercial Paper 270 days “A-1”/ “A” 40% 5%
Certificates of Deposit 1 Year
FDIC Insured or
Collateralized 20% 5%
Negotiable Certificates of Deposit 5 Years “A” 30% 5%
Repurchase Agreements 90 Days None None 20%
Reverse Repurchase Agreements 92 Days None 20% 5%
Medium Term Notes (MTN) 5 Years “A” 30% 5%
Money Market Fund None “AAAm” 20% 10%
LAIF None None None None
Mortgage and Asset-Backed Securities 5 Year “AA” 20% 5% CAMP None None None None
Supranationals 5 Years “AA” 30% 5%
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
44 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
The City is a voluntary participant in the California Asset Management Program (CAMP).

CAMP is an investment pool offered by the California Asset Management Trust (the Trust).

The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercising the common power of its participants to invest certain proceeds of debt issues and surplus funds.

The Pool’s investments are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code. Security types prohibited include but are not limited to: Investments in inverse floaters, range notes, or interest only strips that are derived from a pool of mortgages. At June 30, 2024, the fair value approximated the City’s cost. At June 30, 2024, these investments range from a maximum maturity of 5 years to some maturity limits of 270 days or less. The City reports its investments in CAMP at the fair value amounts provided by CAMP.

Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City ordinance, bond indentures or State statute.

Custodial Credit Risk – Deposits
The Custodial Credit Risk for Deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover deposits, or will not be able to recover collateral securities that are in the possession of an outside party. The City does not, currently, have a Custodial Credit Risk – Deposits Policy. Under California Government Code Section 53651, depending on specific types of eligible securities, a bank must deposit eligible securities posted as collateral with its Agent having a fair value of 110% to 150% of the City’s cash on deposit. All of the City’s deposits are either insured by the Federal Depository Insurance Corporation (FDIC), collateralized with pledged securities held by Wells Fargo Bank, or by Letters of Credit from the Federal Home Loan Bank of San Francisco.

The City of Modesto has nine (9) deposit accounts at Bank of Montreal (BMO) that are monitored for deposit collateral purposes. As per the CA Government Code, the bank must provide collateral for the collected deposit balances at 110% for securities and 105% for letters of credit coverage. As of June 30, 2024, the City had collected deposit balances of $10,476,518. On this amount, the FDIC insurance coverage was $250,000. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
45 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Custodial Credit Risk – Investments
The Custodial Credit Risk for Investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, the City will not be able to recover the value of investment or collateral securities that are in the possession of an outside party.

The City’s investment policy limits its exposure to custodial credit risk by requiring that all security transactions entered into by the City, including collateral for repurchase agreements, be conducted on a delivery-versus-payment basis. Securities are to be held by a third-party custodian.

The City’s investments consist of pooled investments, dedicated investments, and other funds held by trustees. The dedicated investment funds represent restricted funds and relate to bond proceeds of the Water and Sewer Enterprise Funds, assessment districts (reported under Private Purpose Trust Funds) and the Successor Agency. The other funds held by trustees are made either in accordance with bond covenants and are pledged for payment of principal, interest, and specified capital improvements or in accordance with trust agreements. All investments held by a custodian are in the City’s name excluding the Successor Agency.

Interest Rate Risk
Interest Rate Risk is the risk that interest rates will rise and reduce the fair value of an investment. Long-term fixed-income securities have the greatest amount of interest rate risk, due to their duration, or sensitivity to interest rate changes, being greater.

As of June 30, 2024, the City owned nineteen (19) callable bonds. Of the nineteen (19), eighteen (18) were Corporate bonds, and one is a Municipal bond. Information on those bonds has been provided as follows:

Maturity Date Call Date Call Terms
$ 5,077,342 5/10/2028 4/10/2028 Callable on and any time after 4/10/2028 1,989,945 4/2/2026 4/2/2025 Callable annually after 4/2/2025 3,233,146 1/28/2026 12/28/2025 Callable on and any time after 12/28/2025 2,097,007 11/13/2025 10/13/2025 Callable on and any time after 10/13/2025 3,373,938 9/14/2027 6/14/2027 Callable on and any time after 6/14/2027 2,855,643 8/8/2026 5/8/2026 Callable on and any time after 5/8/2026 2,894,955 2/6/2027 11/6/2026 Callable one-time on 11/6/2026 339,476 1/15/2027 12/15/2026 Callable on and any time after 12/15/2026 1,721,495 3/3/2025 2/3/2025 Callable on and any time after 2/3/2025 1,187,062 4/15/2028 3/15/2028 Callable on and any time after 3/15/2028 2,443,497 11/21/2026 8/21/2026 Callable one-time on 8/21/2026 2,878,171 4/4/2029 3/4/2029 Callable on and any time after 3/4/2029 363,199 3/14/2029 2/14/2029 Callable on and any time after 2/14/2029 5,802,409 9/29/2028 8/29/2028 Callable on and any time after 8/29/2028 4,345,859 12/8/2026 11/8/2026 Callable on and any time after 11/8/2026 4,028,240 5/26/2028 5/26/2027 Callable on 5/26/2027 and any time after if specific conditions are met
1,438,596 2/24/2028 2/24/2027 Callable on and any time after 2/24/2027 5,643,002 8/7/2026 7/7/2026 Callable on and any time after 7/7/2026 704,092 5/15/2025 4/15/2025 Callable on and any time after 4/15/2025 Amount
#1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
46 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Disclosures Related to Credit Risk
Generally, Credit Risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City may from time to time be invested in a security whose rating is downgraded subsequent to the date of purchase. In the event a rating drops below the minimum allowed rating category for that given investment type, the investment advisor shall notify the Finance Director and recommend a plan of action. The City will limit investments in any one non-government issuers, except investment pools to no more than 5% regardless of security type.

The following table summarizes the City’s various investments based on maturity dates and credit ratings:

Moody's
Standard & Investors 12 Months or 13 to 24 25 to 60
Poor's Service Total Less Months Months
Investments Held by City
Short-Term Fixed Deposits AAA Aaa $ $ 715,498 $ - 715,498 $ - US Treasury Bonds and
US Government Sponsored
Agency Securities Not Rated Aaa 222,765,280 35,985,718 87,967,831 98,811,731 US Agencies AA+ Aaa 22,714,388 10,068,120 12,646,268 -
REMIC and Other Government
Paydowns Not Rated Aaa 72,994,774 - - 72,994,774
Commercial Paper Not Rated P-1 10,935,982 10,935,982 - - Corporate Bonds and Notes See Below See Below 70,727,972 6,861,635 7,320,094 56,546,243 Corporate Paydown Securities See Below See Below 29,037,467 - 645,148 28,392,319 Municipal Bonds See Below See Below 3,593,941 1,391,559 2,202,382 - CAMP AAAm Not Rated 50,674,988 50,674,988 - -
Total Investments Held by City $ 484,160,290 $ 116,633,500 $ 110,781,723 $ 256,745,067 Investments Held by Fiscal Agent
Money Market Funds AAAm Aaa-mf $ 3,398,723 $ 3,398,723 $ - $ - CAMP AAAm Not Rated 10,305,511 10,305,511 - -
PARS - OPEB Not Rated Not Rated 1,646,883 1,646,883 - - PARS - Pension Not Rated Not Rated 2,864,933 2,864,933 - - Total Investments Held by Fiscal Agent $ 18,216,050 $ 18,216,050 $ - $ - City of Modesto Banking Accounts and
Cash on Hand A/A-1 A1/P1 52,874,875
Total Cash and Investments $ 555,251,215
Credit Rating Remaining Maturity (in Months)
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
47 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Disclosures Related to Credit Risk (Continued)
The following is a table indicating the credit ratings for the City’s investment in Corporate Bonds and Notes:

The following is a table indicating the credit ratings for the City’s investment in Corporate Paydown Securities:

Amount
Standard &
Poors
Moody's
Investors
Service
$ 5,748,124 AAA Aaa
5,091,996 AA+ Aaa
1,188,658 AA Aa2
3,368,603 AA A1
363,419 AA- Aa3
3,776,625 A+ Aa1
10,001,209 A+ Aa2
13,996,934 A+ Aa3
8,613,851 A+ A1
5,790,458 A A1
5,818,947 A A2
3,434,533 A- A1
3,534,615 Not Rated Not Rated
$ 70,727,972
Amount
Standard &
Poors
Moody's
Investors
Service
$ 7,349,537 AAA Aaa
14,655,345 AAA Not Rated
7,032,585 Not Rated Aaa
$ 29,037,467
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
48 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Disclosures Related to Credit Risk (Continued)
The following is a table indicating the credit ratings for the City's investment in Municipal Bonds:

Concentration of Credit Risk
The City’s investment policy contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer, other than U.S. Treasury securities, mutual funds, and external investment pools that represent 5% or more of total entity-wide investments are as follows at June 30, 2024:

Fair Value Measurement and Application
The Pool categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. These principles recognize a three-tiered fair value hierarchy, of which levels 1 & 2 apply to the City as follows:

Level 1: Valuations are based on quoted prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgement. Examples would be securities with prices derived from the major exchanges.

Level 2: Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data. Examples would be securities with prices derived from market corroborated sources such as indices and yield curves; and matrix pricing, such as for most debt securities.

Amount
Standard &
Poors
Moody's
Investors
Service
$ 97,998 AAA Aa1
703,209 AA Aa2
1,727,586 AA Aa3
590,352 AA- Aa2
474,796 AA- A1
$ 3,593,941
Reported Percent of
Issuer Investment Type Amount Portfolio
Freddie Mac US Government Sponsored Agency Securities $ 75,037,433 17.31% #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
49 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurement and Application (Continued)
US Bank is the custodian of the City’s investments. Fair value is measured by using all assumptions utilized by marketplace participants, including risk assumptions considered by those participants. The measurement of fair value assumes an orderly, hypothetical transaction in the principal market for the asset or liability. However, if the volume and level of market activity for an asset or liability has significantly decreased, and transactions in a particular market are not orderly, other factors are considered in estimating fair value.

Moreover, if no principal market exists, and there are multiple markets, then the most advantageous market is used.

The Pool has the following recurring fair value measurements as of June 30, 2024:

Quoted Prices in Significant Other
Active Markets for Observable
Identical Assets Inputs
(Level 1) (Level 2)
Investments by Fair Value Level
US Treasury Bonds and US Government
Sponsored Agency Securities $ 222,765,280 $ 222,765,280 $ - US Agencies 22,714,388 - 22,714,388
REMICS and Other Government Paydowns 72,994,774 - 72,994,774 Commercial Paper 10,935,982 - 10,935,982
Corporate Bonds and Notes 70,727,972 - 70,727,972
Corporate Paydown Securities 29,037,467 - 29,037,467
Municipal Bonds 3,593,941 - 3,593,941
Total Investments by Fair Value Level $ 432,769,804 $ 222,765,280 $ 210,004,524 Investments Not Subject to Fair Value Hierarchy
CAMP $ 50,674,988
Short-Term Fixed Deposits 715,498
Total Investments Held by City $ 484,160,290
Investments Held by Fiscal Agents
Investments Not Subject to Fair Value Hierarchy
CAMP $ 10,305,511
Money Market Funds 3,398,723
PARS – OPEB 1,646,883
PARS – Pension 2,864,933
Total Investments Held by Fiscal Agents 18,216,050
Grand Total of Investments $ 502,376,340
Fair Value Measurements Using
Investments Held by City
#1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
50 NOTE 3 CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2024 included the restatement of beginning balance of the capital asset notes as a result of the correction to construction in progress from prior years and was as follows:

Beginning
Balance Ending
(Restated) Additions Deletions Balance
Governmental activities:

Capital assets, not being depreciated
and amortized:

Land $ 34,995,346 $ 7,657,972 $ $ - 42,653,318
Construction in progress 43,032,372 13,454,089 (21,518,170) 34,968,291 Total capital assets, not being depreciated
and amortized: 78,027,718 21,112,061 (21,518,170) 77,621,609 Capital assets being depreciated:

Buildings 57,001,281 - - 57,001,281
Improvements other than buildings 142,940,565 1,624,307 - 144,564,872 Furnishings & equipment 15,982,744 302,915 (12,732) 16,272,927 Buses and fareboxes 278,852 - - 278,852
Service animals 65,052 - (8,725) 56,327
Intangible assets 7,974,303 - - 7,974,303
Equipment pool 50,761,283 10,876,373 (2,584,861) 59,052,795 Infrastructure
Streets 522,210,674 481,387 - 522,692,061
Signals 25,329,952 1,478,227 - 26,808,179
Bridges 37,078,565 - - 37,078,565
Pipeline 418,147 - - 418,147
Capital assets being amortized:

SBITAs 2,372,661 6,810,972 - 9,183,633
Right- to-use Leases
Buildings 662,694 - - 662,694
Equipment 17,287 - - 17,287
Land 224,950 199,923 - 424,873
Total capital assets, being depreciated
and amortized: 863,319,010 21,774,104 (2,606,318) 882,486,796 Less accumulated depreciation for:

Buildings (36,737,176) (1,641,606) - (38,378,782)
Improvements (85,054,595) (5,434,244) - (90,488,839)
Furnishings & equipment (13,465,379) (609,215) 12,055 (14,062,539) Buses and fareboxes (253,749) - - (253,749)
Service animals (37,617) (7,044) 7,945 (36,716)
Intangible assets (6,795,753) (398,014) - (7,193,767)
Equipment pool (33,935,640) (3,885,733) 2,556,080 (35,265,293) Infrastructure
Streets (368,603,055) (10,445,659) - (379,048,714)
Signals (19,843,740) (506,234) - (20,349,974)
Bridges (11,915,016) (741,571) - (12,656,587)
Pipelines (17,878) (5,575) - (23,453)
Less accumulated amortization for:

SBITAs (630,038) (1,854,841) - (2,484,879)
Right- to-use Leases
Buildings (295,266) (147,505) - (442,771)
Equipment (17,286) - - (17,286)
Land (158,051) (82,504) - (240,555)
Total accumulated depreciation and amortization (577,760,239) (25,759,745) 2,576,080 (600,943,904) Total capital assets being depreciated
and amortized, net 285,558,771 (3,985,641) (30,238) 281,542,892 Governmental activities capital assets, net $ 363,586,489 $ 17,126,420 $ (21,548,408) $ 359,164,501 #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
51 NOTE 3 CAPITAL ASSETS (CONTINUED)
Depreciation and amortization expenses were charged to functions/programs as follows:

Governmental activities:

General government $ 467,880
Community development 1,386,920
Highways and streets 12,510,785
Public works 390,542
Parks and recreation 598,478
Public safety 4,751,657
Capital assets held by the government’s internal service funds are charged to the various functions based on their usage of the assets 5,653,483 Total depreciation and amortization expense - Governmental activities $ 25,759,745 Beginning
Balance Ending
(Restated) Additions Deletions Balance
Business- type activities:

Capital assets not being depreciated
and amortized:

Land $ 30,647,169 $ $ - - $ 30,647,169
Construction in progress 54,747,440 66,250,409 (8,521,358) 112,476,491 Total capital assets, not being depreciated
and amortized: 85,394,609 66,250,409 (8,521,358) 143,123,660 Capital assets being depreciated:

Capitalized interest 19,496,181 - - 19,496,181
Buildings 95,773,532 - - 95,773,532
Improvements other than buildings 501,593,039 1,131,514 - 502,724,553 Furnishings and equipment 12,765,634 239,333 (190,882) 12,814,085 Intangible assets 403,384 - - 403,384
Water rights 358,226,691 - - 358,226,691
Pipelines 340,793,571 11,342,124 - 352,135,695
Capital assets being amortized:

SBITAs 204,627 - - 204,627
Right- to-use Leases
Land 631,838 - - 631,838
Equipment - 381,064 - 381,064
Total capital assets, being depreciated
and amortized: 1,329,888,497 13,094,035 (190,882) 1,342,791,650 Less accumulated depreciation for:

Capitalized interest (15,526,301) (504,786) - (16,031,087) Buildings (66,657,837) (1,657,366) - (68,315,203)
Improvements other than buildings (258,545,188) (18,371,179) - (276,916,367) Furnishings and equipment (10,199,682) (637,232) 172,356 (10,664,558) Intangible assets (403,381) - - (403,381)
Water rights (155,231,569) (11,940,890) - (167,172,459) Pipelines (61,412,921) (4,573,174) - (65,986,095)
Less accumulated amortization for:

SBITAs (9,776) (40,926) - (50,702)
Right- to-use Leases
Land (361,049) (180,526) - (541,575)
Equipment - (83,729) - (83,729)
Total accumulated depreciation and amortization (568,347,704) (37,989,808) 172,356 (606,165,156) Total capital assets being depreciated
and amortized, net 761,540,793 (24,895,773) (18,526) 736,626,494 Business- type activities capital assets, net $ 846,935,402 $ 41,354,636 $ (8,539,884) $ 879,750,154 #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
52 NOTE 3 CAPITAL ASSETS (CONTINUED)
Business-type activities:

NOTE 4 LEASES AND RECEIVABLE
The City is a lessor for leases of buildings, hangers and office space, land use and parking spaces. The City uses the interest rate contained within the agreements as the discount rate except in cases when the interest rate charged is not provided; in those situations, the City uses the incremental borrowing rate as provided by the California State Controller’s Office or Debt Book.

Payment increases include flat percentage increases and the use of an index (such as the consumer price index). For those leases that have payment increases utilizing an index; they were initially calculated using the index at the measurement period.

The length of the lease period includes any noncancellable period of the lease as well as any extension options that are reasonably certain to be taken.

The City's lease receivable of $22,756,298 was composed of the following:

Governmental Activities
Water $ 21,488,895
Sewer 14,804,530
Parking 385,571
Storm drain 443,440
Compost 54,823
Airport 656,160
Golf 99,205
Community center 57,184
Total depreciation and amortization expense - Business-type activities $ 37,989,808 Building leases - annual payments totaling $34,624 plus interest at

1.5% and annual increases in base payment per CPI. Final payment dates range from 2023 through 2027. $ 39,555
Land use leases (including land use for cell towers) - annual payments totaling $340,366 plus interest at rates ranging from 0.2% to 1.5% and annual increases in base payments per CPI or flat increase. Final payment dates range from 2023 through 2064. 9,504,699 Total Principal Balances - Governmental Activities $ 9,544,254 #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
53 NOTE 4 LEASES AND RECEIVABLE (CONTINUED)
Payments for the lease receivables are expected to be received in the following subsequent years:

Business-Type Activities
Year Ending
June 30 Principal Interest
2025 $ $ 233,477 141,513
2026 222,405 138,103
2027 209,086 134,905
2028 218,070 131,704
2029 224,388 128,389
2030 - 2034 1,330,562 585,815
2035 - 2039 1,593,435 476,690
2040 - 2044 1,845,873 346,400
2045 - 2049 1,370,798 222,751
2050 - 2054 1,161,309 123,941
2055 - 2059 732,383 59,180
2060 - 2064 402,468 7,816
Total $ 9,544,254 $ 2,497,207
Governmental Activities
Buildings, hangers and office space leases - annual payments totaling $430,078 plus interest at rates ranging from 0.2% to 1.5% and annual increases in base payments per CPI or flat increase. Final payment dates range from 2025 through 2053. $ 2,703,122
Land use leases (including land use for cell towers) - annual payments totaling $186,911 plus interest at rates ranging from 0.2% to 1.5% and annual increases in base payments per CPI or flat increase. Final payment dates range from 2023 through 2064. 5,678,281 Parking spaces lease - annual payments totaling $183,757 plus interest at a rate of 1.5% and annual increases in base payments per CPI or flat increase. Final payment date is 2053. 4,830,641 Total Principal Balances - Business-Type Activities $ 13,212,044 #1..
- 120 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
54 NOTE 4 LEASES AND RECEIVABLE (CONTINUED)
Payments for the lease receivables are expected to be received in the following subsequent years:

NOTE 5 NOTES AND LOANS RECEIVABLE
The notes receivable in the Housing and Community Development Fund and Other Governmental Funds of $56,086,993 net of $57,509 allowance for doubtful accounts, consist of loans made for low-income housing rehabilitation, first-time homebuyers, property improvement and small business origination. The loans are collateralized by deeds of trust on the improved properties or business assets, and are generally bearing annual interest at 3 or 5 percent. Some direct loans may be subject to forgiveness, some are interest free and require no repayment of principal until the loans reach maturity, and some are subject to residual receipt payment agreements. Loan terms range from 5 to 55 years.

June 30 Principal Interest
2025 $ $ 607,783 192,961
2026 318,120 186,827
2027 322,881 182,044
2028 310,531 177,247
2029 309,099 172,641
2030 - 2034 1,655,084 790,298
2035 - 2039 1,796,612 662,079
2040 - 2044 2,100,488 516,312
2045 - 2049 2,021,447 359,616
2050 - 2054 2,035,928 204,509
2055 - 2059 1,013,399 94,188
2060 - 2064 720,672 19,684
Total $ 13,212,044 $ 3,558,406

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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
55 NOTE 6 LONG-TERM DEBT
Loans Payable
Governmental Activities:

No-interest loan payable to the Stanislaus County Economic Development Bank loan program, to pay costs incurred by the City for the Kiernan Business Park East Project; loan intended to be repaid when the financing mechanism is established. As of June 30, 2024, no payments have been made to the Stanislaus County Economic Development Bank. According to the agreement, the Project will be completed as of the date the City first issues building permits within the Kiernan Business Park East area. To date, no building permits have been issued. Kiernan Business Park East project revenues, mainly CFD special taxes, have been pledged as collateral. $ 500,000 Business-Type Activities:

Water Enterprise Fund:

Loan payable to State of California Department of Public Health, also known as ARRA Water Grant. This Agreement constitutes funding in the form of a loan with forgiveness of principal made by the State under the provisions of California Safe Drinking Water State Revolving Fund Law of 1997, and the American Recovery and Reinvestment Act of 2009 (ARRA) Public Law 11 1-5. The purpose of the funding is to assist in financing construction of a project, which will enable the City to meet safe drinking water standards or to address other health concerns, herein referred to as the “Project”.

The total amount for the project was $1,136,656, of which 50% was to be repaid as a loan. This original loan amount of $568,328 has a payment term of 20 years at 2.5017% interest rate. Water Enterprise fund revenues have been pledged as collateral.

The following are significant terms that pertain to the ARRA Water Grant. Acceleration Clause: In event of default, State may declare the Supplier's obligations immediately due and payable. Events of Default:
default allows State to alter principal forgiveness, accelerate, terminate further disbursements, file lawsuit. Termination Events: Any funds already disbursed to Supplier under the terms of this Agreement shall be an obligation immediately due and payable to State. $ 261,634 #1..
- 122 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
56 NOTE 6 LONG-TERM DEBT (CONTINUED)
Loans Payable (Continued)
Business-Type Activities (Continued):

Sewer Enterprise Fund:

Loan payable to California State Water Resources Control Board, State Revolving Fund. The Project, commonly known as North Valley Regional Recycled Water Program generally consists of constructing improvements to the City’s existing pump station. The City will then distribute the recycled water to the Del Puerto Water District for agricultural use increasing recycled water supplies by 5.4 billion gallons per year within the first 5 years of operation and 9.9 billion gallons per year at build out. Completion of construction date was established as June 30, 2018. Project completion date was established as December 31, 2018.

The City agrees to repay all project funds at an interest rate of zero percent (0%) per annum and an administrative service charge of one percent (1%) per annum. The total final loan amount was $29,747,008, including $68,857 of approved Construction Period Interest. The loan repayment term is 30 years (final payment due on June 30, 2048) and after an initial payment of $1,104,284, in the fiscal year ending June 30, 2019, the annual principal and interest payment is $1,152,162 beginning in the fiscal year ending June 30, 2020. Sewer Enterprise fund net revenues have been pledged as collateral.

The following are significant terms that pertain to the California State Water Resources Control Board, State Revolving Fund loan payable related to the North Valley Regional Recycled Water Program.

Acceleration and Termination Events Clauses: the City immediately repays to the State Water Board an amount equal to Project Funds disbursed under the Installment Sale Agreement and Grant, accrued interest, penalty assessments, and Additional Payments. In the event of termination, interest shall accrue on all amounts due at the highest legal rate of interest from the date that notice of termination is mailed to the City to the date all monies due have been received by the State Water Board. Events of Default: default allows State Water Resources Control Board to terminate obligation, which results in acceleration. $ 24,526,135 Total Principal Balances - Business-Type Activities $ 24,787,769 #1..
- 123 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
57 NOTE 6 LONG-TERM DEBT (CONTINUED)
Annual debt service requirements to maturity for loans payable are as follows:

Year Ending
June 30 Principal Interest Principal Interest
2025 $ 500,000 $ - $ 936,830 $ 251,620
2026 - - 946,653 241,798
2027 - - 956,584 231,865
2028 - - 966,628 221,823
2029 - - 976,784 211,667
2030-2034 - - 4,966,336 903,339
2035-2039 - - 5,110,095 650,712
2040-2044 - - 5,370,761 390,046
2045-2048 - - 4,557,098 115,449
Total $ 500,000 $ $ - 24,787,769 $ 3,218,319
Governmental Activities Business-Type Activities
Certificates of Participation:

Business-Type Activities:

Water Enterprise Fund:
2008 Water Refunding Revenue Certificates of Participation issued to refund the 2006 issue, to provide funding for construction of new downstream water facilities and various water distribution system improvements in connection with Modesto Irrigation District’s expansion of the regional water treatment plant; variable rate securities maturing October 1, 2036, with interest initially calculated weekly, fluctuating according to market conditions. The Certificates may be converted to a daily, term, flexible, or fixed rate.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
58 NOTE 6 LONG-TERM DEBT (CONTINUED)
Certificates of Participation (Continued):

Business-Type Activities (Continued):

Water Enterprise Fund (Continued):

While the 2008 COPs are in the Weekly Mode, they are subject to optional tender and mandatory tender for purchase. Funds for the payment of the purchase price of 2008 COPs that are tendered for purchase and that are not remarketed by the Remarketing Agent will be available (subject to certain conditions) under a Standby Certificate Purchase Agreement with BMO Bank N.A., dated June 8, 2023 (the “Alternate Liquidity Facility”). The Alternate Liquidity Facility does not support, secure or guarantee the payments of the principal or interest with respect to the 2008 COPs. Subject to the terms and conditions of the Alternate Liquidity Facility, the Alternate Liquidity Facility Provider is to provide funds for the payment of the purchase price on each purchase of 2008 COPS up to $40,090,000 in principal amount (the “Available Principal Commitment”) and $461,310 an amount equal to 35 days’ interest on the Available Principal Commitment at an assumed rate of 12% and accrued interest on 2008 COPs subject to the Weekly Rate tendered or deemed tendered for purchase in the event that remarketing proceeds are not sufficient to pay the purchase price of such 2008 COPs.

The Alternate Liquidity Facility will not provide for the payment of principal and interest on any 2008 COPs other than with respect to the purchase price of the 2008 COPs tendered or deemed tendered and not remarketed. Barring an event of default, any such draws on the Alternate Liquidity Facility will be repaid under the terms of the Reimbursement Agreement. However, the entire balance of the amount drawn shall become due immediately if the 2008 COPs are cancelled or prepaid, are remarketed, or converted to bear interest at a rate other than a daily rate or weekly rate; an alternate credit facility is secured; or an event of default occurs. The Alternate Liquidity Facility expires June 8, 2026 and contains a commitment fee of 0.3%. This replaced a prior agreement with JP Morgan that contained a commitment fee of 0.575%.

The City entered into a 30-year interest rate swap agreement as discussed below. The combination of the variable rate 2008 COPs and the floating rate swap creates a synthetic fixed-rate debt for the City.

The average synthetic fixed-rate was 2.764% for the fiscal year ended June 30, 2024.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
59 NOTE 6 LONG-TERM DEBT (CONTINUED)
The City has pledged all Gross Revenues of the Water Utility System to repay the 2008 Certificates of Participation. The total principal and estimated total interest remaining to be paid on the certificates is $49,228,172. The Water Fund’s principal, interest and other debt service cost paid on certificates for the current year, along with payments for the ARRA loan payable and payments to Modesto Irrigation District under the Treatment and Delivery Agreement, totaled $12,194,696, and net operating revenues of the Fund were $38,233,530, which represented coverage of 314%.

Certificates of Participation (Continued):

Business-Type Activities (Continued):

Water Enterprise Fund (Continued):

The following are significant terms that pertain to the 2008 COPs.

Acceleration Clauses: in the event of late payment, Authority shall accelerate bond payments; in the event of other default, Authority may choose to accelerate bond payments. Events of Default: in the event of nonpayment, insolvency, or loss of bond insurance, the obligation of the Letter of Credit provider shall terminate; in the event of nonpayment of Letter of Credit fees or downgrade of Bonds to below investment grade, the Letter of Credit provider may terminate the Letter of Credit. Termination Events: The termination of the Letter of Credit triggers mandatory tender; termination of swap triggers on-time termination payment. $ 40,090,000
Total Principal Balances - Business-Type Activities 40,090,000 Less:

Unamortized Discount - 2008 Water Refunding Certificates of Participation (65,969)
Total Business-Type Activities - Certificates of Participation $ 40,024,031 #1..
- 126 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
60 NOTE 6 LONG-TERM DEBT (CONTINUED)
Annual debt service requirements to maturity for Certificates of Participation for 2008 Water are as follows:

Year Ending
June 30 Principal Interest
2025 $ 2,410,000 $ 1,282,630
2026 2,515,000 1,199,264
2027 2,595,000 1,113,007
2028 2,705,000 1,026,059
2029 2,810,000 930,070
2030-2034 15,910,000 3,109,274
2035-2037 11,145,000 477,868
Total $ 40,090,000 $ 9,138,172
Business-Type Activities
Lease Revenue Bonds:

Governmental Activities:

Regularly scheduled payments of principal and interest are supported by an irrevocable, direct pay Letter of Credit (the “Credit Facility”) issued by BMO Bank N.A. (previously known as Bank of the West) on June 13, 2019, which replaced a Letter of Credit previously issued by Bank of America, N.A. The Trustee can draw funds under the Credit Facility to pay the purchase price of tendered bonds that are not remarketed. Barring an event of default, any such draws on the Letter of Credit will be paid under the terms of the Reimbursement Agreement. Under the terms of the Reimbursement Agreement, the City will repay the amount drawn in equal quarterly installments of principal plus monthly interest, at the Bank Rate, over a three-year amortization period. However, the entire balance of the amount drawn shall become due immediately if the tendered bonds are remarketed or defeased, or an alternate credit facility is secured, or an event of default occurs. The Credit Facility and Reimbursement Agreement with Bank of the West was established with a commitment fee of 0.375%, this was extended on May 12, 2023 (now as BMO Bank N.A) with a commitment fee of 0.34%.

The combination of the variable rate 2008 bonds and the floating rate swap creates a synthetic fixed-rate debt for the City. The average synthetic fixed-rate was 2.361% for the fiscal year ended June 30, 2024.
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- 127 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
61 NOTE 6 LONG-TERM DEBT (CONTINUED)
Annual debt service requirements to maturity for Lease Revenue Bonds are as follows:

Governmental Activities (Continued):

The following are significant terms that pertain to the 2008 Lease Revenue Bonds. Acceleration Clauses: in the event of late payment, Trustee may accelerate bond payments; in the event of an Event of Default occurring under the Lease Agreement, the Trustee may take whatever action the Authority would be entitled to take, and shall take whatever action the Authority would be required to take, pursuant to the Lease Agreement in order to remedy the default. Events of Default:
in Event of Default, Letter of Credit provider may declare all unpaid amounts drawn under the Letter of Credit and the corresponding Bank Bonds, together with all interest accrued and unpaid thereon, and all other amounts payable to the Letter of Credit provider under the Reimbursement Agreement to be immediately due and payable, without presentment, demand, protest or nay notice of any kind. Termination Events: the termination of Letter of Credit triggers mandatory tender; termination of swap triggers on-time termination payment; in the event that the City files a bankruptcy petition or the City makes a general assignment for the benefit of creditors, all amounts drawn under the Letter of Credit and the corresponding Bank Bonds, together with all interest accrued thereon and all other amounts owed to the Bank under the Reimbursement Agreement shall be immediately due and payable, without notice to the City or the Authority and without presentment, demand, protest or further notice of any kind. $ 38,985,000 Year Ending
June 30 Principal Interest
2025 $ 2,990,000 $ 1,095,087
2026 3,240,000 999,161
2027 3,470,000 896,233
2028 3,730,000 787,758
2029 3,815,000 671,641
2030-2034 21,740,000 1,473,696
Total $ 38,985,000 $ 5,923,576
Governmental Activities
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- 128 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
62 NOTE 6 LONG-TERM DEBT (CONTINUED)
Revenue Bonds
Business-Type Activities:

Sewer Enterprise Fund:

Wastewater Revenue Refunding Bonds, Series 2020 A&B; interest payable on November 1 and May 1; principal is payable in annual installments on each November 1. Principal repayments for the 2020A federally taxable bonds commence November 1, 2021 and pause November 1, 2026, with interest rates from 0.38% to 1.2%. Principal repayments for the 2020B federally tax-exempt bonds commence November 1, 2027 and end November 1, 2030, with interest rates of 5%. Principal repayments for the 2020A federally taxable bonds recommence November 1, 2031 and end November 1, 2036 with interest rates from 2.079% to 2.479%. Payment of principal and interest on the Series 2020 A&B Bonds is secured by a pledge of Net Revenues of the Sewer Enterprise Fund. The Series 2020 A&B Bonds constitute “Parity Debt” under the Indenture.

On October 27, 2020, the City issued the Series 2020 A&B Bonds as a Parity Debt to fully payoff the loan payable to California State Water Resources Control Board, State Revolving Fund. The proceeds were used to repay the loan and cost of issuance in connection with the financing. The loan payable has been fully paid off, the City will realize annual savings of around $510,000 in cash flow with an overall economic gain of 6.61% or $7,056,050 in present value savings.

The original loan was taken out in connection with the Tertiary Treatment Phase 1B Project, generally consisting of constructing a

12.6 million gallon per day tertiary treatment plant. Completion of construction date was established as June 1, 2016, and project completion date was established as December 1, 2016.
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- 129 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
63 NOTE 6 LONG-TERM DEBT (CONTINUED)
Business-Type Activities (Continued):

Sewer Enterprise Fund (Continued):

The following are significant terms that pertain to the Wastewater Revenue Refunding Bonds, Series 2020 A&B. Acceleration Clause:
upon violation by the City of any material provision of the Project Finance Agreement, the State Water Board may terminate agreement by written notice during construction of the Project, or thereafter at any time prior to complete repayment by the City, upon which the City agrees, upon demand, to immediately repay to the State Water Board an amount equal to Installment Payments due under the Project Finance Agreement, including accrued interest, and all penalty assessments due. In the event of termination, interest shall accrue on all amounts due at the highest legal rate of interest from the date that notice of termination is mailed to the Recipient to the date of full repayment by the Recipient. Events of Default: upon violation by the City of any material provision, State Water Board may terminate agreement which triggers acceleration. Termination Events: upon termination of the agreement by the State Water Board, the City agrees to immediately repay to the State Water including accrued interest, and all penalty assessments due. In the event of termination, interest shall accrue on all amounts due at the highest legal rate of interest from the date that notice of termination is mailed to the Recipient to the date of full repayment by the City. $ 78,065,000 Wastewater Revenue Refunding Bonds, Series 2018A; interest payable on November 1 and May 1; principal is payable in annual installments on each November 1, commencing November 1, 2025 and ending November 1, 2036, with interest rates from 4% to 5%. Payment of principal and interest on the Series 2018A Bond is secured by a pledge of Net Revenues of the Sewer Enterprise Fund. The Series 2018A Bond constitutes “Parity Debt” under the Indenture.

On April 19, 2018, the City issued the Series 2018A Bond as a Parity Debt to fully refund the 2006A Wastewater Revenue Bonds. The proceeds were used to refund the 2006A Wastewater Revenue Bonds and pay cost of issuance in connection with the financing. The Series 2006A has been fully redeemed, and the City will realize significant savings from the refunding of the 2006A bonds.
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- 130 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
64 NOTE 6 LONG-TERM DEBT (CONTINUED)
Revenue Bonds (Continued)
Business-Type Activities (Continued):

Sewer Enterprise Fund (Continued):

The following are significant terms that pertain to the Wastewater Revenue Refunding Bonds, Series 2018A. Acceleration Clause: in each and every such case during the continuance of an Event of Default (and subject to any rights granted to any insurer of the Bonds with respect to the enforcement of remedies upon an Event of Default pursuant to a Supplemental Indenture), the Owners of not less than a majority in aggregate amount of Bond Obligation of the Bonds at the time Outstanding shall be entitled, upon notice in writing to the City, to declare the principal of all of the bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in the Indenture or in the Bonds contained to the contrary notwithstanding. Events of Default:
upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bondholders, the Trustee in its discretion may, and upon written request of the Owners of not less than 25% in aggregate amount of Bond Obligation of the Bonds then Outstanding, initiate a lawsuit. $ 11,340,000 Wastewater Revenue Refunding Bond Series 2015 - Direct Placement; interest payable on November 1 and May 1, commencing May 1, 2016.

Principal is payable in annual installments on each November 1, commencing November 1, 2016 and ending November 1, 2024. The Series 2015 Bond shall bear interest at a rate equal to 2.42% per annum; The Series 2015 Bond constitutes “Parity Debt” under the Indenture; Payment of principal and interest on the Series 2015 Bond is secured by a pledge of Net Revenues of the Sewer Enterprise Fund (i.e., 1) all fees and charges received by the City for the services of the Enterprise; 2) all other income and revenue howsoever derived by the City from the ownership; 3) all sums deposited, or required under the Indenture to be deposited, in the Sewer Enterprise Fund; less the amount of Operating Expenses becoming payable during such period). #1..
- 131 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
65 NOTE 6 LONG-TERM DEBT (CONTINUED)
Revenue Bonds (Continued)
Business-Type Activities (Continued):

Sewer Enterprise Fund (Continued):

On October 30, 2015, the City issued the Series 2015 Bond, as a Parity Debt to fully refund the 2005A and partially refund the 2006A Wastewater Revenue Bonds. The proceeds were used to: 1) Refund the Wastewater Revenue Refunding Bonds, Series 2005A, which refinanced the acquisition and construction of improvements to the City’s wastewater enterprise, 2) refund a portion of the Wastewater Revenue Bonds, Series 2006A, and 3) pay cost of issuance in connection with the financing. The Series 2005A Bonds have been fully redeemed and the 2023 and 2024 maturities of Series 2006A Bonds were redeemed. The City will realize significant savings from the refunding of the 2005A and 2006A Bonds.

The following are significant terms that pertain to the Wastewater Revenue Refunding Bond Series 2015 - Direct Placement.

Acceleration Clauses: in each and every such case during the continuance of an Event of Default (and subject to any rights granted to any insurer of the Bonds with respect to the enforcement of remedies upon an Event of Default pursuant to a Supplemental Indenture), the Owners of not less than a majority in the aggregate amount of Bond Obligation of the Bonds at the time Outstanding shall be entitled, upon notice in writing to the City, to declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in the Indenture or in the Bonds contained to the contrary notwithstanding. Events of Default: upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bondholders, the Trustee in its discretion may, upon written request of >25% of bondholders, initiate lawsuit. $ 897,767
Total Principal Balances - Business-Type Activities 90,302,767 Add: Unamortized Bond Premium - 2018A Wastewater Bonds 1,413,109 Unamortized Bond Premium - 2020B Wastewater Bonds 5,338,826 Total Business-Type Activities Revenue Bonds $ 97,054,702 #1..
- 132 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
66 NOTE 6 LONG-TERM DEBT (CONTINUED)
Annual debt service requirements to maturity for the Wastewater Revenue Refunding Bond Series 2015 - Direct Placement are as follows:

Annual debt service requirements to maturity for total Revenue Bonds are as follows:

Year Ending
June 30 Principal Interest
2025 $ $ 897,767 10,862
Business-Type Activities
Year Ending
June 30 Principal Interest
2025 $ 5,480,000 $ 2,811,388
2026 6,240,000 2,743,524
2027 6,350,000 2,637,112
2028 6,570,000 2,411,436
2029 6,910,000 2,074,436
2030-2034 39,275,000 5,632,841
2035-2037 18,580,000 623,860
Total $ 89,405,000 $ 18,934,597
Business-Type Activities
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- 133 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
67 NOTE 6 LONG-TERM DEBT (CONTINUED)
Notes Payable
Governmental Activities:

On March 26, 2015, the City received notice of a public offering to refinance the existing HUD Section 108 Loan note, with an outstanding balance of $2,789,000. The City agreed to refinance the note, as it reduced the interest on the HUD Section 108 Loan, a net savings of approximately $502,908. The public offering date was May 28, 2015.

The terms of the new promissory note include semi-annual payments in August and February through the maturity date of August 1, 2024. The interest rates range from 0.28% through 2.85%. No new security provisions were required, as the Contract for Fixed Rate Note incorporates the previous additional security provisions. Housing revenues are pledged as collateral.

The following are significant terms that pertain to the HUD Section 108 Loan. Acceleration Clause: upon a Default or declaration of Default, the Secretary may accelerate the Note with respect to amounts subject to Optional Redemption. Events of Default: the Secretary may withhold the guarantee of any or all obligations not yet guaranteed on behalf of the Borrower under outstanding commitments, and/or direct the Borrower's financial institution to: refuse to honor any instruments drawn upon, or withdrawals from, the Guaranteed Loan Funds Account or the Loan Repayment Account initiated by the Borrower, and/or refuse to release obligations and assignments by the Borrower from the Guaranteed Loan Funds Investment Account or the Loan Repayment Investment Account. $ 345,000
Year Ending
June 30 Principal Interest
2025 $ $ 345,000 4,916
Governmental Activities
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- 134 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
68 NOTE 6 LONG-TERM DEBT (CONTINUED)
Reimbursement Agreement
Business-Type Activities:

Water Enterprise Fund:

In 1992, the City entered into a treatment and delivery agreement with the Modesto Irrigation District (MID) and the Del Este Water Company (Del Este). The City assumed Del Este’s interest and obligations under the agreement when it acquired Del Este in July 1995. Under the agreement, MID built and operates a surface water treatment plant on the Tuolumne River for the purpose of providing a long-term source of domestic treated water for the City.

MID is the sole owner of the project, and has all management and operations responsibility.

In exchange for the treated water, the City has agreed to pay: all debt service on bonds issued by MID for the construction of the project; a raw water charge as set forth in the agreement; project operation, administration, and maintenance costs; and insurance on the project. Gross revenues of the City's Water Fund are irrevocably pledged for the punctual payment of the MID debt service and all obligations of the City under any parity debt. Current parity debt of the City consists of the 2008 Water Revenue Certificates of Participation and the California Safe Drinking Water Act loan (as described previously). The treatment plant completed all tests and began commercial operations on May 15, 1995, at which time the City began paying for raw water and operations.

The City and MID have agreed upon an expansion of the initial Domestic Water Project facilities beyond the existing design capacity of 36 million gallons per day (“mgd”) to a design capacity of 72 mgd. In June 2007, MID issued $93,190,000 Domestic Water Project revenue bonds pursuant to the terms of the existing treatment and delivery agreement. On August 14, 2013, Modesto Irrigation District Financing Authority refunded the 1998 D Bonds, with 2013 G Bonds. As of June 30, 2024, the 2013 G Bonds are fully repaid and $88,915,000 is outstanding for the 2007 F Bonds. For the 2007 F Bonds, the annual principal payments begin on September 1, 2023 and mature on September 1, 2037 in amounts from $4,275,000 to $11,870,000, with variable interest rates fluctuating according to market conditions.

The following are significant terms that pertain to the 2007 F Bonds. Acceleration Clause: in the event of late payment, Authority shall accelerate bond payments; in the event of other default, Authority may choose to accelerate bond payments. In event of default, Trustee may, with consent of Bond Insurer, and shall, at the direction of Bond Insurer or the owners of >50% of the bonds (with consent of Bond Insurer) accelerate bond payments. Events of Default: in event of default, Trustee may, with consent of Bond Insurer, and shall, at the direction of Bond Insurer or the owners of >50% of the bonds (with consent of Bond Insurer) initiate a lawsuit. Termination Events: the termination of swap triggers a one-time termination payment.
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- 135 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
69 NOTE 6 LONG-TERM DEBT (CONTINUED)
Reimbursement Agreement (Continued)
Business-Type Activities (Continued):

Water Enterprise Fund (Continued):

The City has entered into interest-rate swap agreements for the 2007F bonds to synthetically fix the rates that the City pays at 4.378% and 4.44%. Refer to the Interest Rate Swap agreement section below with more information about the debt schedule.

Annual debt service payments to maturity for the Reimbursement Agreement are as follows:

Interest Rate Swap Agreements
Objective of the swaps - The primary objective of the swaps is to mitigate the effect of fluctuations in variable interest rates by paying a fixed-rate and receiving a floating rate on the swap. Combining a pay-fixed receive-variable rate swap with variable debt results in what is termed “synthetic” fixed-rate debt. It is called synthetic because the economics are similar to fixed-rate fixed-rat debt, but another instrument is involved unlike regular fixed-rate debt.

Each time the City created synthetic debt a comparison and determination were made that the fixed-rate on regular debt would have been higher than the synthetic fixed rate on the swap.

During fiscal year 2007, the City entered into an interest swap agreement in connection with the 2006 Water Revenue Certificates of Participation. This transaction was updated due to the refunding of the 2006 Certificates by the 2008 Water Refunding fixed-rat Revenue Certificates of Participation (COPs). The swap agreement allows the City to create a synthetic on the COPs, protecting it against increases in short-term interest rates.

Year Ending
June 30 Principal Interest
2025 $ 4,455,000 $ 3,604,896
2026 4,650,000 3,417,717
2027 4,885,000 3,216,134
2028 5,105,000 3,009,245
2029 5,340,000 2,778,726
2030-2034 30,605,000 10,192,422
2035-2038 33,875,000 2,824,576
Total $ 88,915,000 $ 29,043,716
Business-Type Activities
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- 136 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
70 NOTE 6 LONG-TERM DEBT (CONTINUED)
Interest Rate Swap Agreements (Continued)
During fiscal year 2008, the City entered into an interest swap agreement in connection with the 2008 Lease Revenue Bonds. The swap agreement allows the City to create a synthetic fixed rate on the Lease Revenue Bonds, protecting it against increases in short-term interest rates. The terms, fair value and credit risk of these swap agreements are disclosed below.

Additionally, in May 2007, the City approved the issuance of revenue bonds by the Modesto Irrigation District Financing Authority related to the financing of Phase 2 of the Domestic Water Treatment and Delivery System of the Modesto Irrigation District. The MID Water Refunding Bonds were issued with an interest swap feature with Bear Sterns, which was subsequently acquired by JP Morgan. Under the agreement between MID and JP Morgan, the City must post collateral when the City’s negative position exceeds the Pledgor’s Threshold of $20 million. This negative position represents the present value of declining interest rates to date from issuance of bonds. In June 2010, the City Council authorized the City to post collateral up to $18 million, which would support a negative position of $38 million.

In July 2010, the City Council increased the City’s authorization to post collateral from $18 million to up to $20 million. Due to the negative position of the revenue bonds being less than the Pledgor’s Threshold of $20 million, at the end of fiscal year 2024, the City did not have any collateral posted.

Terms - The terms, including the counterparty credit rating of the outstanding swaps, as of June 30, 2024 are shown in the table below. The swap agreements contain scheduled reductions to the outstanding notional amounts that are expected to follow scheduled principal reductions in the associated debt issues.
2008 Water
Refunding
Revenue COPs
2008 Lease Revenue
Refunding and Capital
Improvement Bonds
2007 MID Domestic
Water Revenue
Bonds Series 2007F
2007 MID Domestic
Water Revenue
Bonds Series 2007F
Current Notional Amount $ 40,090,000 $ 38,985,000 $ 19,095,000 $ 69,820,000 Effective Date 5/30/2008 8/28/2008 6/26/2007 6/26/2007
Counterparty Bank of America Bank of America JP Morgan Chase Bank JP Morgan Chase Bank Credit Rating (S&P) AA AA+ AA AA
Fixed Rate Paid 3.47% 3.61% 4.38% 4.44%
Variable Rate Received

63.7% of (30-Day
Average SOFR +

0.11448%) + 0.154%

63.7% of (30-Day
Average SOFR +

0.11448%) + 0.154%
67% of 3-Month
LIBOR + 0.58% till
9/1/23, then 67% of 3-
Month CME Term
SOFR + 0.683%
67% of 3-Month
LIBOR + 0.63% till
9/1/23, then 67% of 3-
Month CME Term
SOFR + 0.7335%
Termination Date 10/1/2036 9/1/2033 9/1/2027 9/1/2037
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- 137 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
71 NOTE 6 LONG-TERM DEBT (CONTINUED)
Interest Rate Swap Agreements (Continued)
Based on the swap agreement the City owes interest calculated at a fixed rate to the counterparty (Bank of America and JP Morgan). In return, the counterparty owes the City interest based on the variable rate that approximates the rate required by the associated COPs and lease revenue bonds. Debt principal is not exchanged; it is only the basis on which the swap receipts and payments are calculated.

GASB Statement 53 (GASB 53) addresses the recognition measurement and disclosure of information regarding derivative instruments entered into by state and local governments. All derivatives are to be reported on the statement of net position at fair value and all hedges must be tested for effectiveness to qualify for hedge accounting. The tests are outlined in GASB 53. Depending on the test results, the changes in fair value are either reported on the statement of net position as a deferral or in the statement of activities as investment revenue or loss.

Fair value - Fair value takes into consideration the prevailing interest rate environment, the specific terms and conditions of each transaction and any upfront payments that may have been received. Fair value was estimated using the zero-coupon discounting method, which calculates the future payments required by the swap, assuming that the current forward rates implied by the LIBOR swap yield curve are the market’s best estimate of future spot interest rates. These payments are then discounted using the spot rates implied by the current yield curve for a hypothetical zero-coupon rate bond due on the date of each future net settlement on the swaps.

As of June 30, 2024, the fair value of the swaps was in favor of the counterparty as shown in the following table:

Credit risk - As of June 30, 2024, the City was not exposed to credit risk on the swaps because the swaps had negative fair value. However, if interest rates increase and the fair value becomes positive, the City would be exposed to credit risk. The City will be exposed to interest rate risk only if the counterparty to the swap defaults or if the swap is terminated.

Basis risk - Basis risk is the risk that the interest rate paid by the City to the bondholders on the underlying variable rate bonds temporarily differs from the variable swap rates received from the counterparty. The swaps have basis risk since the City receives a percentage of the LIBOR Index to offset the actual variable bond rates the City pays on the underlying certificates of participation. The City is exposed to basis risk should the floating rate that it receives on the swap be less than the actual variable rate the City pays on the bonds.

Depending on the magnitude and duration of any basis risk shortfall, the expected cost of the basis risk may vary.

Bond Issue Fair Value
2008 Water Refunding Rev. Certificates of Participation $ (1,713,320) 2008 Lease Revenue Bonds $ (1,443,147)
2007 MID Domestic Water Revenue Bonds $ (7,060,036)
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- 138 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
72 NOTE 6 LONG-TERM DEBT (CONTINUED)
Interest Rate Swap Agreements (Continued)
Basis risk (continued) - A portion of this basis risk is tax risk. The City is exposed to tax risk when the relationship between the taxable LIBOR based swaps and tax-exempt variable rate bonds changes as a result of a reduction in federal and state income tax rates. Should the relationship between LIBOR and the underlying tax-exempt variable rate bonds converge the City is exposed to this basis risk.

Termination risk - The City may terminate the swap contracts if the other party fails to perform under the terms of the contracts. The City will be exposed to variable rates if the counterparty defaults or if the swap contract is terminated. A termination of the swap contract may also result in the City’s making or receiving a termination payment based on market interest rates at the time of the termination. If at the time of termination, the swap has a negative fair value, the City would be liable to the counterparty for a payment equal to the swap’s fair value.

Swap payments and associated debt - Using rates as of June 30, 2024, debt service requirements of the 2008 Water Refunding Revenue Certificates of Participation, the 2008 Lease Revenue Refunding Bonds, and the 2007 MID Domestic Water Revenue Bonds, including net swap payments and broker fees, are as shown in the following table assuming current interest rates remain the same for their term. The bond interest payments and net swap payments will vary as interest rates vary.

Net Swap
Payments,
Letter of Credit,
and
Year Ending Remarketing
June 30 Principal Interest Fees Total
2025 $ 9,855,000 $ 6,044,019 $ 229,630 $ 16,128,649
2026 10,405,000 5,674,346 208,014 16,287,360
2027 10,950,000 5,280,130 332,070 16,562,200
2028 11,540,000 4,874,281 300,163 16,714,444
2029 11,965,000 4,427,727 274,232 16,666,959
2030-2034 68,255,000 14,948,857 792,654 83,996,511
2035-2038 45,020,000 3,350,517 43,452 48,413,969
Total $ 167,990,000 $ 44,599,877 $ 2,180,215 $ 214,770,092 Variable-Rate Bonds
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
73 NOTE 6 LONG-TERM DEBT (CONTINUED)
Changes in Long-Term Obligations
Long-term obligations activity for the year ended June 30, 2024, was as follows:

Principal balances are reported on the government-wide and enterprise funds statements of net position, net of unamortized issuance discounts and premiums. Deferred losses on refunding are reported as deferred outflows of resources. Internal service funds predominantly serve the governmental funds. Accordingly, any long-term liabilities for the internal service funds are included as part of the above totals for governmental activities. At year-end, internal service funds obligations Subscription-Base were zero under notes payable.

The compensated absences and claims liability balances relate to the internal service funds, and as such they are liquidated by the internal service funds. The predominant contributors for these internal service funds include the General Fund, Water Fund, and Sewer Fund.

Beginning Ending Due Within
Governmental Activities: Balance Additions Reductions Balance One Year Loans Payable $ 500,000 $ - $ - $ 500,000 $ 500,000
Lease Revenue Bonds 41,770,000 - (2,785,000) 38,985,000 2,990,000 Notes Payable 673,000 - (328,000) 345,000 345,000
Leases Payable 442,812 198,346 (225,763) 415,395 214,244 Finance Purchase Obligations 6,575,300 - (788,154) 5,787,146 808,628 SBITAs 1,695,502 5,880,365 (2,439,180) 5,136,687 1,984,559 Compensated Absences 9,479,101 13,829,203 (12,209,981) 11,098,323 707,801 Claims Liability 27,038,914 12,498,527 (11,077,202) 28,460,239 7,290,622 Total Governmental Activities $ 88,174,629 $ 32,406,441 $ (29,853,280) $ 90,727,790 $ 14,840,854 Business-Type Activities:

Loans Payable $ 25,714,883 $ - $ (927,114) $ 24,787,769 $ 936,830 Certificates of Participation 42,870,000 - (2,780,000) 40,090,000 2,410,000 Unamortized Discount (71,466) - 5,497 (65,969) -
Leases Payable 275,291 381,064 (227,828) 428,527 143,592 Finance Purchase Obligations 1,001 - (1,001) - -
SBITAs 165,802 - (36,945) 128,857 39,833
MID Bonds 93,190,000 - (4,275,000) 88,915,000 4,455,000 Sewer Bonds 94,845,000 - (5,440,000) 89,405,000 5,480,000 Unamortized Premium 7,703,607 - (951,672) 6,751,935 -
Sewer Bonds - Direct Placement 1,774,562 - (876,795) 897,767 897,767 Developer Advances 582,953 - (88,330) 494,623 83,942
Compensated Absences 2,440,052 4,502,826 (4,353,023) 2,589,855 165,169 Total Business-Type Activities $ 269,491,685 $ 4,883,890 $ (19,952,211) $ 254,423,364 $ 14,612,133 #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
74 NOTE 7 FINANCE PURCHASE OBLIGATIONS
Governmental Activities
As of June 30, 2024, the City has three governmental activities finance purchase obligations.

Two with Pierce Manufacturing Inc. for the purchase of Velocity Pumpers and Velocity Tillers valued at $9,625,682, less accumulated depreciation of $4,392,667. The other with Turf Tank for the purchase of one Autonomous Robot valued at $39,204, less accumulated depreciation of $22,762.

The following is a schedule of the future minimum lease payments, as of June 30, 2024:

NOTE 8 LEASES PAYABLE
The City is a lessee for leases of land, buildings and office space, and equipment. The City uses the interest rate charged by the lessor as the discount rate except in cases when the interest rate charged by the lessor is not provided; in those situations, the City uses the incremental borrowing rate as provided by the California State Controller’s Office or Debt Book.

Payment increases include flat percentage increases and the use of an index (such as the consumer price index). For those leases that have payment increases utilizing an index; they were initially calculated using the index at the measurement period.

The length of the lease period includes any noncancellable period of the lease as well as any extension options that are reasonably certain to be taken.

Year Ending June 30 Amount
2025 $ 952,375
2026 945,376
2027 945,376
2028 1,301,045
2029 346,833
2030-2032 1,864,889
Total minimum payments 6,355,894
Less: amount representing interest (568,748)
Present value of minimum payments $ 5,787,146
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
75 NOTE 8 LEASES PAYABLE (CONTINUED)
The City's lease payable of $843,922 was composed of the following:

Annual debt service requirements to maturity for leases payable are as follows:

Governmental Activities
$ 373,505
41,890
Total Principal Balances - Governmental Activities $ 415,395 Buildings and office space leases - annual payments totaling $175,213 plus interest at rates ranging from 0.2% to 0.9% and annual increases in base payments per CPI or flat increase. Final payment dates range from 2023 through 2026.

Land leases - annual payments totaling $43,251 plus interest at 0.9% and annual increases in base payments per CPI. Final payment date range from 2025 through 2034.

Year Ending June 30 Principal Interest
2025 $ 214,244 $ 4,220
2026 116,172 2,431
2027 40,173 1,264
2028 34,521 371
2029 1,928 21
2030-2032 8,357 42
Total $ 415,395 $ 8,349
Governmental Activities
Business-Type Activities
$ 92,113
336,414
Total Principal Balances - Business-Type Activities $ 428,527 Golf carts and pickers - annual payments totaling $78,660 plus interest at rates ranging from 8.18% to 8.71% and annual increases in base payments per CPI or flat increase. Final payment dates is 2028.

Land leases - annual payments totaling $92,313 plus interest at 0.9% and annual increases in base payments per CPI or flat increase. Final payment dates are all in 2025.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
76 NOTE 8 LEASES PAYABLE (CONTINUED)
Annual debt service requirements to maturity for leases payable are as follows:

NOTE 9 SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (SBITAs) As of June 30, 2024, the financial statements include the adoption of GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The primary objective of this statement is to enhance the relevance and consistency of information about governments' subscription activities. This statement establishes a single model for subscription accounting based on the principle that subscriptions are financings of the right to use an underlying asset. Under this Statement, an organization is required to recognize a subscription liability and an intangible right-to-use subscription asset.

The City uses the interest rate charged by the lessor as the discount rate except in cases when the interest rate charged by the lessor is not provided; in those situations, the City uses the incremental borrowing rate provided by Debt Book.

The City's subscription liability of $5,265,543 was composed of the following:

Business-Type Activities
Year Ending June 30 Principal Interest
2025 $ 143,592 $ 27,381
2026 56,124 22,533
2027 61,186 17,471
2028 167,625 2,585
Total $ 428,527 $ 69,970
Governmental Activities
Annual payments range from $986,147 to $2,128,680 with interest at rates ranging from 2.31% - 2.94% and increases based on CPI or flat dollar increases. The value of the right-to-use assets is $6,698,753 net of $9,183,633 with accumulated amortization of $2,484,880. Final payment date ranges from 2026 to 2028. $ 5,136,687
Year Ending June 30 Principal Interest
2025 $ 1,984,559 $ 144,301
2026 1,204,842 87,981
2027 986,916 53,950
2028 960,370 25,773
Total $ 5,136,687 $ 312,005
Governmental Activities
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
77 NOTE 9 SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (SBITAs) (CONTINUED)
NOTE 10 DEVELOPER ADVANCES
The Del Este Water Company (Del Este) entered into various agreements with developers under which infrastructure components were either constructed on behalf of Del Este or cash was advanced to the company to construct the infrastructure. Agreements in existence at the time of the City’s acquisition of Del Este were assumed by the City. The terms of repayment call for no interest, with principal paid over a 40-year period. As of June 30, 2024, the total outstanding balance due under the agreements is $494,623. The total annual payments fluctuate depending on the ending date of each agreement. At June 30, 2024, the amount of $83,942 due during fiscal year 2024 has been reported as “current portion developer advances” on the Water Enterprise Fund statement of net position. The remaining $410,681 of outstanding principal has been reported under noncurrent liabilities, as “developer advances.”
Business-Type Activities
Annual payments range from $42,810 to $47,198 with interest at rates ranging from of 2.30% - 2.88% and increases based on CPI or flat dollar increases. The value of the right to use assets is $153,925 net of $204,627 with accumulated amortization of $50,702. Final payment date ranges from 2027 to 2028. $ 128,857
Year Ending June 30 Principal Interest
2025 $ $ 39,833 2,976
2026 42,893 2,056
2027 46,131 1,065
Total $ $ 128,857 6,097
Business-Type Activities
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
78 NOTE 11 INTERFUND BALANCES
Interfund balances as of June 30, 2024 consist of the following:

All balances reported as “due to/due from” are short-term loans to cover temporary fund cash shortages as of June 30, 2024 and were repaid in fiscal year 2025.

Balances reported as “advance to/from” were for capital projects expenditures and are either in the process of being repaid, or have scheduled repayments in future years.

Due to General Fund:

Other governmental funds $ 3,295,652
Internal Service funds 435,591
Total Due to General Fund: 3,731,243
Due to Water Fund:

Internal Service funds 2,722,377
Total Due to/Due From: $ 6,453,620
Advances from General Fund to:

Other governmental funds $ 597,059
Other enterprise funds 1,324,704
Advances from General Fund 1,921,763
Advances from Water Fund to other enterprise funds 2,480,000 Advances from Sewer Fund to:

Other governmental funds 91,017
Other enterprise funds 649,800
Advances from Sewer Fund 740,817
Advances from other enterprise funds to other governmental funds 52,882 Total Advances from/Advances to $ 5,195,462
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
79 NOTE 12 FUND BALANCE
Detailed classifications of the City’s Fund Balances, as of June 30, 2024, are provided below:

NOTE 13 DEFICIT FUND EQUITY
The Downtown Improvement District has a fund balance deficit of $323, which will be recovered through future taxes collections.

The Cannabis Fund has a fund balance deficit of $14,822, which will be recovered through future licenses and permits collections.

The Capital Grants Fund has a fund balance deficit of $2,619,356, which will be recovered through future grant revenues and local matches covered through the General Fund or other City funds.

The Compost Fund has a net position deficit of $1,673,804, due mainly to other postemployment benefit liability and net pension liability for the employees which reside in this fund, in addition to the pollution remediation liability reported for the Carpenter Landfill and Geer Road Landfill. The remediation funding has been incorporated into the utility fees related to garbage rates to cover the anticipated costs.

The Central Services Fund has a net position deficit of $500,847, which will be recovered through future overhead charges.

Housing and
General Operating Community Transportation Other Total
Fund Grants Development Special Tax Governmental Governmental Nonspendable
Advances to other funds $ 1,921,763 $ - $ - $ - $ - $ 1,921,763 Prepaid Items 54,955 129,847 1,563 30,185 112,955 329,505 Total Nonspendable Fund Balance 1,976,718 129,847 1,563 30,185 112,955 2,251,268 Restricted
Capital Facility Fees - - - - 47,192,309 47,192,309
Cash with Fiscal Agent 4,511,816 792,819 - - 5,505,170 10,809,805 Community Facilities District - - - - 25,426,439 25,426,439 Grants and Donations - - - - 3,545,612 3,545,612
Notes Receivable - - 27,777,280 - 2,275,449 30,052,729
Deposits 5,576,758 - - - - 5,576,758
Traffic Fines - - - - 3,140,639 3,140,639
Transportation Tax Funding - - - 55,259,817 - 55,259,817 Total Restricted Fund Balance 10,088,574 792,819 27,777,280 55,259,817 87,085,618 181,004,108 Committed
General Fund Set-Aside 18,397,817 - - - - 18,397,817
Total Committed Fund Balance 18,397,817 - - - - 18,397,817 Assigned
Encumbrances - Vendor Contracts 4,535,259 - - - - 4,535,259 Successor Redevelopment Housing Agency - - - - 1,046,689 1,046,689 Parks - - - - 24,161 24,161
Strategic Planning and Development - - - - 2,540,255 2,540,255 Total Assigned Fund Balance 4,535,259 - - - 3,611,105 8,146,364 Unassigned - General Fund 48,060,252 - - - - 48,060,252 Unassigned - Special Revenue Funds - (63,574) - - (15,145) (78,719) Unassigned - Capital Project Funds - - - - (2,619,356) (2,619,356) Unassigned - Debt Service Funds - - - - (34,431) (34,431) Total Unassigned Fund Balance 48,060,252 (63,574) - - (2,668,932) 45,327,746 Total Fund Balance $ 83,058,620 $ 859,092 $ 27,778,843 $ 55,290,002 $ 88,140,746 $ 255,127,303 #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
80 NOTE 13 DEFICIT FUND EQUITY (CONTINUED)
The Insurance Fund has a net position deficit of $12,661,785 due mainly to the recognition of settlements that were reached both in the current and prior fiscal year which have been reported as liabilities of the Liability Insurance Fund. Both settlements involved matters that represented city-wide policies and practices and therefore are allocable to all of the funds that make annual contributions to the liability insurance program. The liability insurance program will recover the full amount of the settlement from charges to the funds that participate in the liability insurance program over a period of 5 years based on this methodology being factored into the Internal Service Fund allocation that is distributed to City departments.

The Employee Benefits Management Fund has a net position deficit of $7,043,290. It exists partially because the total compensated absences and other post-employment benefit balance for the employees which reside in this fund previously classified as debt of the governmental funds was included in this fund at its inception several years ago and has never been fully funded. The City is continuing to charge a higher benefit rate to help reduce this deficit. In addition, one-time revenues having to do with employee benefits are deposited to this fund.

NOTE 14 INTERFUND TRANSFERS
The following is a schedule of interfund transfers.

In general, the City uses interfund transfers to (1) move revenues from the funds that collect them to the funds that statute or budget requires to expend them, (2) use unrestricted revenues collected in the General Fund to help finance various programs and capital projects accounted for in other funds in accordance with budgetary authorization, and (3) move cash to debt service funds from the funds responsible for payment as debt service payments become due.

Housing Other Other
General Operating and Urban Transportation Govern- Enterprise Internal Transfers (in) to: Fund Grants Development Special Tax mental Water Sewer Funds Service Total General Fund $ - $ 2,694,550 $ - $ - $ 680,893 $ 65,000 $ 68,640 $ - $ - $ 3,509,083 Operating Grants 1,968,322 - 3,066,706 - 39,305 - - 121,967 142,313 5,338,613 Housing and
Community
Development 4,417 - - - - - - - - 4,417
Transportation
Special Tax 1,540,205 - - - - - - - - 1,540,205
Other Governmental 4,627,939 189,551 357,365 9,443,931 1,862,288 - - - - 16,481,074 Water 104,382 - - - - - 877,604 96,768 - 1,078,754
Sewer - - - - 4,358 12,117 - 16,416 - 32,891
Other Enterprise 1,854,252 - - - 2,538 700,000 - - - 2,556,790 Internal Service 372 444,964 - 628,567 - 1,289,745 455,190 1,940,356 - 4,759,194 Grand Total $ 10,099,889 $ 3,329,065 $ 3,424,071 $ 10,072,498 $ 2,589,382 $ 2,066,862 $ 1,401,434 $ 2,175,507 $ 142,313 $ 35,301,021 Transfers from (out):
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
81 NOTE 15 SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (Bill) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City that previously had reported a redevelopment agency blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the City or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 24, 2012, the City Council elected to become the Successor Agency for the former Redevelopment Agency (RDA) in accordance with the Bill as part of County Resolution number 12-7.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

The Bill directs the State Controller to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

Management believes, in consultation with legal counsel, that the obligations of the former RDA due to the City are valid enforceable obligations payable by the Successor Agency trust under the requirements of the Bill.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011), all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.

After the date of dissolution, as allowed under Section 34176(a) of the Bill, the City elected to retain the housing assets and functions previously performed by the former RDA. The assets and activities for the Successor Agency Housing fund continue to be reported in the City’s governmental fund financial statements. The remaining assets, liabilities, and activities of the dissolved RDA, are reported in the Successor Agency fiduciary fund (private-purpose trust fund) in the financial statements of the City.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
82 NOTE 15 SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT

AGENCY (CONTINUED)
State Senate Bill (SB) 107 was then passed in 2015. This bill included many significant changes to the operation of the Successor Agencies. Among these changes were the Annual Recognized Obligation Payment Schedule (ROPS), the Last and Final ROPS, a single Countywide Oversight Board, and the requirement for the County Auditor-Controller to review the obligation payments made by the Successor Agency. Some of these changes like the County Oversight Board and the requirement for the County Auditor-Controller to review the obligation payments made by the Successor Agency become effective July 1, 2018. The Modesto RDA Successor Agency has complied with all aspects of the changes that are specified in SB 107 and all ROPS starting with the ROPS submitted for the Fiscal Year 2019- 20 period will now be submitted for approval by the Stanislaus Countywide Successor Agency Oversight Board. As of June 30, 2024, one of the obligations under the Successor Agency trust is associated with the 10th Street Place Project:

Annual debt service requirements to maturity are as follows:

The reserves for the Reimbursement Agreement are recorded in the Public Financing Authority debt service fund for the City.

Reimbursement agreement with the City totaling $19,566,862. The original loan is from the City’s 1998 Lease Revenue Bonds and the 2007 Lease Revenue Bonds that pertain to the Successor Agency. On August 28, 2008, the City refinanced the entire outstanding balance of the City’s 1998 Lease Revenue Bonds and the 2007 Lease Revenue Bonds with variable rate 2008 Lease Revenue Bonds. The new balance has been provided as of June 30, 2024 that pertains to the Successor Agency. Additional information related to the 2008 Lease Revenue bonds is provided in Note 6 under the Lease Revenue Bonds - Governmental Activities section. $ 11,305,650
Year Ending
June 30 Principal Interest Total
2025 $ $ 867,100 $ 158,787 1,025,887
2026 939,600 144,878 1,084,478
2027 1,006,300 129,954 1,136,254
2028 1,081,700 114,225 1,195,925
2029 1,106,350 97,388 1,203,738
2030-2034 6,304,600 213,686 6,518,286
Total $ 11,305,650 $ $ 858,918 12,164,568
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
83 NOTE 15 SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT

AGENCY (CONTINUED)
No-interest loan payable to the Stanislaus County Economic Development Bank loan program, for the purpose of funding the Kansas Avenue Business Park Project’s Master Plan costs. The Agency has no obligation to begin repayment until the Project is completed and revenues begin.

Future debt service requirements to maturity for loans payable, as of June 30, 2024, are as follows:

The former RDA also has a few outstanding obligations related to reimbursements for parking expenses with Westland Development Company and payments to the Tenth Street Joint Power Agency for maintenance for common areas in the Tenth Street Place. These amounts are all reported in the Successor Agency in the Fiduciary financial statements under the Private-Purpose Trust Fund.

NOTE 16 APPROVED LOANS PAYABLE
The approved loans payable in the Housing and Community Development and Operating Grants Special Revenue Funds in the amount of $8,404,527 consists of amounts being held for housing projects using funds provided by federal grants and state grants.

NOTE 17 POLLUTION REMEDIATION LIABILITY
The City reported a liability in the Water and Sewer Enterprise funds, which represents the recoveries the City has collected less any remediation and legal costs incurred in pursuit of mitigating damages from the manufacturers of perchlorethylene, or PCE, a common chemical used in the dry-cleaning industry. This chemical has seeped into the groundwater through sewer lines when improperly disposed, and threatens the City’s groundwater supplies. Modesto has been proactive in attempting to recover damages and future cleanup costs from the dry cleaners and their insurers, and has also initiated litigation with the manufacturers. As of June 30, 2024, the City reported a pollution remediation liability from the Water, and Sewer funds in the amount of $2,758,075 and $6,851,797, respectively.

Principal Total
$ - $ -
405,000 405,000
$ 405,000 $ 405,000
Year Ending
June 30
2025
2026
Total
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
84 NOTE 17 POLLUTION REMEDIATION LIABILITY (CONTINUED)
The City also records a liability for two landfill pollution remediation efforts. For the Carpenter Road Landfill Fund, a liability was reported related to the Carpenter Road Landfill which is a 39-acre City owned landfill, located on both the east and west sides of Carpenter Road between Kenneth and Robertson Roads and the Tuolumne River, which was in operation from 1956 to 1968. This landfill precedes Subtitle-D and had no liner or leachate collection or removal system. In 1993, six methane gas monitoring wells were installed. In December 2005, there was a spike in the methane gas level at the landfill’s Northern boundary. The State required the City to determine the cause and develop a mitigation and monitoring plan to ensure the landfill remained in compliance with the state statutes. In November of 2010, a Corrective Action Plan was proposed for the landfill involving a hydrogen releasing compound injection. In October 2014, a revised Corrective Action Plan and post closure maintenance plan was submitted to the Central Valley Regional Water Quality Control Board (CVRWQCB).

In March 2015, a Cleanup and Abatement Order was issued to the City of Modesto for the Carpenter Road Landfill by the California Regional Water Quality Control Board to complete the clean closure correction action plan by January 15, 2017. Construction was to begin in Spring of 2017, however, due to flooding during the Winter of 2016, the groundwater level increased to a level too high to begin construction. The City submitted a request to the CVRWQCB to delay the project until Spring of 2018. The waters receded, the project went out to bid, and was awarded to Pacific States Environmental Contractors in August 2018. A permitting delay pushed the project start but as of September 2021, all waste has been moved from the eastern fill to the western fill, a storm water retention basin is complete, and final, small or cosmetic work is being completed. The City will submit completion and permitting paperwork when the project is complete. Monitoring continued throughout the project on functional gas and groundwater wells. As of June 30, 2024, the City reported a pollution remediation liability from Carpenter Road Landfill Fund in the amount of $218,735.

Staff is hiring HDR Engineering to complete the required reporting and complete the construction that is required by CVRWQCB. HDR Engineering is currently drafting the required reports and waiting for the water board to approve them before starting the necessary work.

For the Geer Road Landfill Mitigation Costs Fund, a liability was reported related to the Geer Road Landfill which is located in Stanislaus County, 8 miles southeast of the City of Modesto on the Tuolumne River. The site is jointly owned by Stanislaus County and the City of Modesto, but was formerly operated by Stanislaus County Department of Environmental Resources. It consists of 168 acres and accepted an estimated 4.5 million tons of waste from 1970 until July of 1990. This landfill precedes Subtitle-D and had no liner or leachate collection or removal system. The landfill closed in 1995 and a geomembrane liner was overlain by vegetative soil. Closure was approved in July 1996, and post closure and correction action requirements, as well as requirements to maintain financial assurances and conduct monitoring, were prescribed in the Waste Discharge Requirements (WDR’s).

Pollution was first identified in 1985 and since that time, several investigations were completed. In 1993, a groundwater extraction and treatment system of 12 extraction wells that pump water to a treatment plant, as well as 34 monitoring wells were installed. The treated water was then released to a leach field where it was recharged to groundwater. The landfill methane gas was monitored by 83 gas probes in and around the landfill connected to a landfill gas flare facility. To cover the potential liability, the City of Modesto established a fee within the Solid Waste rates to collect around $1,100,000 annually. As of June 30, 2024, the City reported a pollution remediation liability from the Geer Road Landfill Mitigation Costs Fund in the amount of $1,807,584.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
85 NOTE 19 DEFERRED INFLOWS/OUTFLOWS OF RESOURCES
Pursuant to GASB Statement No. 63, “Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position”, the City recognized deferred outflows and inflows of resources in the entity-wide and governmental fund statements.

These items are consumption and acquisition of net assets that are applicable to a future reporting period. The General Fund, Operating Grants, Housing and Community Development, and other governmental funds reported deferred inflows of resources in the amount of $7,848,680, $26,018,199, $25,750,805, and $10,571,152 for unavailable resources related to note, grant receivables and lease receivables not meeting the period of availability. Previous financial reporting standards do not include guidance for reporting these in the financial statements, which are distinct from assets and liabilities. The items relate to outflows and inflows for net pension liability (Note 20), OPEB liability (Note 20), swap hedging (Note 6) and loss on refunding.

NOTE 20 OTHER INFORMATION
Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to and illnesses of employees; and natural disasters. The City maintains the Insurance Internal Service Fund to account for and finance its risks of loss. Under this program, the City is self-insured for the following risks up to the maximum amount per claim/occurrence as follows: workers' compensation $750,000; liability $1,000,000. The City purchases commercial insurance for property loss, airport liability, miscellaneous coverage, and for claims in excess of the preceding self-insured limits.

For liability claims, the City is one of thirteen members of the Authority for California Cities Excess Liability (ACCEL) risk pool. This pool covers City claims between $1,000,000 and $10,000,000. The purpose of the pool is to spread the adverse effect of losses among the member agencies and leverages buying power in the commercial insurance market for excess coverage. The City contributes its pro rata share of anticipated losses to the pool.

Should actual losses among participants be greater than anticipated, the City will be assessed its pro rata share of that deficiency. Conversely, if the actual losses are less than anticipated, the City will be refunded its pro rata share of the excess subject to the board approval and current conditions. Commercial insurance, covers claims over $10,000,000 in several excess layers for a total coverage of $60,000,000 per claim. Settled claims have not exceeded this commercial coverage in any of the past five fiscal years. General liability claims are handled by the City’s third-party administrator George Hills Company of Rancho Cordova, CA. and risk management. Litigated claims are defended by the City Attorney. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
86 NOTE 20 OTHER INFORMATION (CONTINUED)
Risk Management (Continued)
All operating funds participate in the program and make payments to the Insurance Fund based on historical cost and/or actuarial estimates of the amounts needed to pay prior and current year claims, and to allow accrual of estimated incurred but not reported claims and allocated loss adjustment expenses. Insurance premiums to commercial insurers are also processed through the Insurance Fund. The total claims liability at June 30, 2024 is $28,460,239 consisting of $18,377,931 workers' compensation, $9,785,715 general liability, $255,462 dental, and $41,131 vision. Workers’ compensation and general liability claims liabilities are estimated on an actuarial basis, and are reported at their net present value using an expected future investment yield assumption of 3% (general liability) and 3% (workers’ compensation). The undiscounted workers’ compensation and liability claims totaled $21,561,923 and $10,353,889 respectively. The actuarial liability for workers’ compensation and general liability were based on 2024 actuarial reports.

The current portion of the total liability claims is estimated to be $7,290,622 and the balance of $21,169,617 is reported as a long-term liability on the statement of net position. Changes in the Insurance Fund claims liability during the fiscal years ended June 30, 2023 through June 30, 2024 were:

Community Facilities Debt Without City Commitment
Special assessment and community facilities districts have been established in various areas of the City to provide improvements to properties located in those districts. Properties are assessed for the cost of the improvements; these assessments are payable solely by the property owners over the term of the debt issued to finance the improvements. The City is not legally obligated to pay these debts or be the purchaser of last resort of foreclosed properties in the special assessment districts, nor is it obligated to advance City funds to repay this debt in the event of default by any property owners. The City functions as an agent for the property owners by collecting assessments and forwarding collections to trustees for payment to bond holders.

At June 30, 2024, the balance of these districts’ outstanding debt was as follows:

Current-Year
Claims Liability
Claims and
Changes Current-Year Claims liability
July 1 in Estimates Claim Payments June 30
2022-23 $ 26,858,298 $ 11,222,656 $ (11,042,040) $ 27,038,914 2023-24 $ 27,038,914 $ 12,928,634 (11,507,309) $ 28,460,239 Debt Issued
Outstanding
Amount
Village One #2 Community Facilities District $ 22,540,000 Fairview Village Community Facilities District $ 3,230,000 #1..
- 153 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
87 NOTE 20 OTHER INFORMATION (CONTINUED)
Conduit Debt Obligations
From time to time, the City has issued revenue bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial, commercial, health care, and multiple-family housing facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from developer payments on the underlying private-sector mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are considered conduit debt obligations and are not reported as liabilities in the accompanying financial statements.

As of June 30, 2024, there was one series of conduit revenue bonds outstanding. The aggregate principal amount payable for these multiple-family housing bond issues, issued in 2002, was $2,600,000.

Commitments And Contingencies
The City is involved in litigation relating to tort claims, workers' compensation claims and other claims such as contract actions and inverse condemnation actions for which the City is self-insured. The City is a defendant in various matters of litigation.

The City receives funding from a number of federal, state and local grant programs, principally the Federal Highway Administration, Community Development Block Grants, and Federal Transit Administration grants. These programs are subject to financial and compliance review by the grantors. Accordingly, the City's compliance with applicable grant requirements will be determined at some future date. Expenditures, if any, which may be disallowed by the granting agencies, cannot be determined at this time. The City does not expect the undeterminable amounts of disallowed expenditures, if any, to materially affect the basic financial statements. Receipt of these federal, state and local grant revenues is not assured in the future.

The City has both operating and capital commitments of $30,974,862 for the City’s governmental funds as of June 30, 2024 for contracts awarded but not completed and other outstanding purchase requisitions and orders. This amount consists of $4,535,259 in the General Fund, $2,092,623 in the Operating Grants Fund, $92 in the Housing and Community Development, and $240,237 in the Transportation Special Tax Fund, and $24,106,651 in other governmental funds. Commitments of the governmental funds are recorded in one of the classifications of fund balance based on the various funding restrictions on the balance sheet. As of June 30, 2024, there are major contracts for the purchase of Utility Trucks and Police Vehicles - $1,081,217 with Western Truck Center, $1,374,631 with Folsom Lake Ford and $1,377,154 with Napa Ford Lincoln. In addition, there is a contract amounting $1,561,400 with St. Francis Electric LLC for the upgrades of traffic signals and $3,869,286 with George Reed Inc.
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- 154 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
88 NOTE 20 OTHER INFORMATION (CONTINUED)
Commitments And Contingencies (Continued)
In the process of completing the work mandated by the Regional Water Control Board, additional waste was discovered in the southern wall of the bank of the Tuolumne River. The City provided this information to the Regional Water Control Board in May of 2021, they asked the City to submit a general plan and schedule to investigate and ultimately address the residual waste materials that were found in the area and appear to be on Army Corps lands. The State completed a review of the report into the additional waste during calendar year 2022 and asked the City to remove the waste. On September 12, 2023, with Resolution number 2023-412, Council approved the City to hire HDR Engineering to complete all the required work by the state. HDR Engineering will be starting their work on November 8, 2023.

A feasibility study will be undertaken to provide guidance to City staff in order to make informed decisions on the future of the City’s composting operations and compliance with SB1383. Necessary improvements are required to ensure compliance with violations received from the regional water board and other areas of concern notifications received from CalRecycle. A consultant will assess what improvements are needed and the City will hire an engineering firm to complete the necessary work. HDR Engineering completed the feasibility study and it was approved by the Council on October 24, 2023. Staff is working on reaching out to engineering firms to start conducting the work.

Joint Ventures and Jointly Governed Organization
Tuolumne River Regional Park
The City participates with Stanislaus County and the City of Ceres in the operation and development of the Tuolumne River Regional Park (TRRP). The governing body consists of 2 members from the County Board of Supervisors, 2 members from the Modesto City Council, and 1 member from the Ceres City Council. The TRRP board prepares the annual budget, which must be approved by both cities' councils and the board of supervisors. Each participant has an equity interest in the capital assets of TRRP based on the percentage of cumulative contributions paid. The City's contribution to TRRP was $272,250 for the fiscal year ended June 30, 2024. As of June 30, 2024, the City's investment in this joint venture was $1,892,768, and is included in governmental activities on the statement of net position.

Financial statements for TRRP are prepared by the City of Modesto Finance Department.

City-County Capital Improvements and Financing Agency
The City and Stanislaus County formed the City-County Capital Improvements and Financing Agency (Agency) to provide for the design, construction, ownership, operation, management and financing of a City-County administration center located in Modesto’s downtown redevelopment area. The governing body is a commission consisting of two (2) members of the City Council, two (2) members of the County Board of Supervisors, the County Chief Executive Officer, and the City Manager.
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- 155 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
89 NOTE 20 OTHER INFORMATION (CONTINUED)
Joint Ventures and Jointly Governed Organization (Continued) City-County Capital Improvements and Financing Agency (Continued) The commission is responsible for developing an annual budget and determining the annual contribution rates, subject to approval by both the City and the County. The Stanislaus County Auditor Controller was the fiscal administrator during the construction phase, which was final at the end of June 2003. Starting in July 1, 2010 the County Auditor Controller became the fiscal administrator. For the fiscal year ended June 30, 2024, the City’s payments to the Agency were $1,386,242 for operations and capital reserve. The City’s equity interest in the Agency is $4,492,017, equal to its capital asset contributions to date net of depreciation and is reported in governmental activities as investments in joint ventures in the statement of net position. Financial statements of the Agency are prepared by the Stanislaus County Auditor Controller office.

Stanislaus Waste-to-Energy Financing Agency
The City participates with Stanislaus County in the Stanislaus Waste-to-Energy Financing Agency (Agency). The Agency was created to provide financing for a facility that generates power from solid waste. The costs of operating the Agency, if any, are shared equally by the participants. The governing body consists of 2 members each from the County Board of Supervisors and the Modesto City Council. As of June 30, 2024, the City has no equity interest. Stanislaus County Treasurer's office prepares the Agency's financial statements.

Consolidated Emergency Dispatch Agency
The Modesto/Stanislaus Consolidated Emergency Dispatch Agency (the MSCEDA) was created on September 1, 1999, pursuant to a joint exercise of powers agreement between the City of Modesto and the County of Stanislaus. The MSCEDA is administered by a sevenmember commission consisting of one member of the City Council, one member of the County Board of Supervisors, the County Chief Executive Officer, the City Manager, two members from the Dispatch Advisory Board, and one member from the City of Ceres’ City Council or one member selected by the City Council of another participating City. The purpose of the MSCEDA is to consolidate the public safety communications system. The responsibilities of the agency include approval of annual budget, claims, liabilities, and the use of MSCEDA property as collateral. Each participant will contribute sufficient funds to pay for all costs and expenses associated with providing Emergency Dispatch Services. Upon termination of the agreement, assets will be distributed equally to the City and County, unless otherwise approved. The financial statements may be obtained by writing to the Modesto/Stanislaus Consolidated Emergency Dispatch, Office Manager, 3705 Oakdale Road, Modesto, California 95357.
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- 156 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
90 NOTE 20 OTHER INFORMATION (CONTINUED)
Joint Ventures and Jointly Governed Organization (Continued) Consolidated Emergency Dispatch Agency (Continued)
On August 23, 2016, the City of Modesto City Council and County of Stanislaus Board of Supervisors approved to amend section 6.1 of the JPA agreement, allowing for any member of the JPA to terminate the agreement by providing a written notice of intent to terminate to the Commission and all members at least twenty-found (24) months in advance of the desired termination date. On October 12, 2021, Modesto City Council authorized the City Manager to provide the Consolidated Emergency Dispatch Agency Commission with a written notice of intent to terminate the Joint Exercise of Powers Agreement between the City of Modesto and the County of Stanislaus for Emergency Dispatch Services effective January 1, 2024.

The City and County are currently evaluating the best options for the dissolution of the Consolidated Emergency Dispatch Agency.

North County Corridor Transportation Expressway Authority On April 1, 2008, the City Council approved the establishment of a Joint Powers Authority between the County and the cities of Modesto, Oakdale and Riverbank to create the North County Corridor Transportation Expressway Authority (NCCTEA). The purpose of the Authority is to prepare, identify, and adopt a precise alignment, and prepare and certify environmental documents for a route to improve east/west traffic circulation in the County.

The intent of the NCCTEA is to provide a high -capacity high speed east-west roadway to accommodate anticipated traffic growth, alleviate traffic on parallel roads, and to accommodate multi-modal travel. Under the terms of the agreement, the County will incur 40% of the costs of the project while each of the participating cities will be contributing 20%.

The preliminary project development costs will be funded by State Transportation Program and Public Facility Fees. The NCCTEA Board of Directors will be comprised of two directors appointed by the County, and one director from each participating city. The board acts autonomously from the respective member agencies. The County of Stanislaus Public Works Director is designated as the NCCTEA’s manager. Upon completion of the agreement, all assets will be distributed to the respective parties of the agreement as determined by the Board of Directors of the Authority. Financial statements may be obtained by writing to the County of Stanislaus, Public Works Department, 1716 Morgan Road, Modesto, CA 95358. #1..
- 157 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
91 NOTE 20 OTHER INFORMATION (CONTINUED)
Joint Ventures and Jointly Governed Organization (Continued) Stanislaus Animal Services Agency
The Stanislaus Animal Services Agency (SASA) was created October 27, 2009, pursuant to a joint power’s agreement among the cities of Ceres, Hughson, Modesto, Patterson, Waterford, and the County of Stanislaus. SASA is administered by a six-member board comprised of the City Manager of each partner agency, and the Chief Executive Officer of the County. The purpose of SASA is to operate a regional agency providing animal services to their respective communities. The SASA Executive Director is responsible for the annual budget which must be approved by the SASA Board of Directors. Each partner agency will contribute sufficient funds to pay for all costs approved in the budget to provide animal services. Upon termination of the agreement, assets will be distributed in accordance with the joint power’s agreement. The financial statements may be obtained by writing to the Stanislaus Animal Services Agency, Executive Director, 3647 Cornucopia Way, Modesto, CA 95358.

Regional Fire Training Center
The City has entered into an agreement with the Yosemite Community College District (YCCD) and Stanislaus County for the use and management of the regional fire training center at Modesto Junior College. The executive board consists of the YCCD Chancellor, the President of Modesto Junior College, the City Manager of the City of Modesto, and the Chief Executive Officer of Stanislaus County. The YCCD is responsible for accounting and for monitoring the center's budget. All three entities share in the operating costs. Initial construction costs were paid by the YCCD from borrowed funds, with the City and County reimbursing a portion of these costs in exchange for future use of the center. The City has paid its share of the construction costs in full. Title to the constructed asset is held by the YCCD; therefore, the City has no equity interest.

North Valley Regional Recycled Water Program (NVRRWP)
The City participates in the NVRRWP, which was established by the City of Modesto and Del Puerto Water District in November 2014. The purpose of this agreement is to develop, construct, operate and maintain water supply facilities and service. Through this agreement all partner agencies will cooperate and collaborate to use their best efforts regarding the submission of grants, loans and other funding resources to cover future cost related to the design and construction on future projects. At the end of the fiscal year June 30, 2024, the City has no equity interest.
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
92 NOTE 20 OTHER INFORMATION (CONTINUED)
Other Postemployment Benefits (OPEB)
I. Plan Description
In addition to the pension benefits described below under Pension Plans, the City’s singleemployer OPEB Plan provides health care benefits to employees who retire from the City based on certain criteria related to their hired and retirement dates, their employee bargaining unit, and their grandfathered sick leave at retirement.

For employees that retire from the Modesto City Firefighters Association (MCFFA) bargaining unit, the City contributes toward the cost of retiree medical coverage for the retiree's lifetime or until coverage is discontinued. MCFFA is covered by a 1995 resolution with the California Public Employees' Retirement System defining the level of the City's contribution toward the cost of medical plan premiums for employees and retirees to be the minimum employer contribution (MEC). The MEC is $157 in 2024, and $158 in 2025.

All other full-time employees hired before January 1, 2011, are eligible to convert their accumulated grandfathered sick leave towards a contribution for future health care costs at retirement (sick leave conversion). The City has no obligation to pay health insurance allowance for retirees with no grandfathered sick leave. Any employee who retires after January 1, 2017, or retirees who elect the buy-out option, receive a contribution to a Retiree Health Savings Account. Those employees are then removed from the City’s medical plan and ineligible to re-enroll.

II. Employees Covered
As of June 30, 2022 actuarial valuation, the following current and former City employees were covered by the OPEB plan membership:

Active employees 417
Inactive employees 340
Inactive plan members entitled to but not receiving benefits 65 Total 822
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- 159 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
93 NOTE 20 OTHER INFORMATION (CONTINUED)
Other Postemployment Benefits (OPEB) (Continued)
III. Contributions
The OPEB plan and its contribution requirements are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by the agreements between the City and the bargaining units. The annual contribution is based on the actuarially determined contribution. For the fiscal year ended June 30, 2024, the City’s cash contributions were $2,340,023 in payments made by the employer and no estimated subsidy was determined.

The liability for all OPEB activities is primarily liquidated from the Employee Benefits Fund.

IV. Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2022, based on the following actuarial methods and assumptions:

V. Discount Rate
The discount rate used to measure the total OPEB liability was 5.45 percent. The projection of the cash flows used to determine the discount rate assumed that the City contributions will be made at rates equal to the actuarially determined contribution rates. Based on these assumptions, the OPEB City’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries based on the ‘pay as you go’ annual contributions.

Actuarial Assumptions:

Discount Rate 5.45% at June 30, 2023 and 2022
General Inflation 2.5% annually
Salary Increases 3%
Medical Trend Average actual increase for 2025, decreasing to 3.9% by 2075 Mortality, Retirement,
Disability, Termination
CalPERS 2021 Experience Study
Mortality Improvement MacLeod Watts Scale 2022 applied generationally from 2017 #1..
- 160 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
94 NOTE 20 OTHER INFORMATION (CONTINUED)
Other Postemployment Benefits (OPEB) (Continued)
VI. Changes in the Net OPEB Liability
The change in the Net OPEB Liability is as follows:

VII. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the Net OPEB liability of the Plan as of the measurement date, calculated using the discount rate of 5.45 percentage-point percent, as well as what the Net OPEB liability would be if it were calculated using a discount rate that is 1 lower (4.45 percent) or 1 percentage-point higher (6.45 percent) than the current rate:

VIII. Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the Net OPEB liability of the Plan if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:

Total OPEB Fiduciary Net OPEB
Liability Net Position Liability
Balance at June 30, 2023
(Measurement Date June 30, 2022) $ 20,325,417 $ 1,387,315 $ 18,938,102 Changes recognized for the measurement
period:

Service cost 672,081 - 672,081
Interest 1,076,573 - 1,076,573
Changes of Assumptions 906,060 - 906,060
Change Due to Plan Experience - 94,204 (94,204)
Contributions to Section 115 Trust 2,487,735 (2,487,735) Benefit Payments (2,487,735) (2,487,735) -
Net Changes 166,979 94,204 72,775
Balance at June 30, 2024
(Measurement Date June 30, 2023) $ 20,492,396 $ 1,481,519 $ 19,010,877

4.45% 5.45% 6.45%
Net OPEB Liability $ 20,606,610 $ 19,010,877 $ 17,625,032 1% Decrease Discount Rate 1% Increase
Current
Net OPEB Liability $ 17,987,315 $ 19,010,877 $ 20,259,937 1% Decrease Current Trend 1% Increase
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
95 NOTE 20 OTHER INFORMATION (CONTINUED)
Other Postemployment Benefits (OPEB) (Continued)
IX. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the measurement period ended June 30, 2023 (the measurement date), the City incurred an OPEB expense of $1,338,591.

As of June 30, 2024, the City has deferred outflows and deferred inflows of resources related to the Net OPEB liability as follows:

The amounts above are net of outflows and inflows recognized expense in the 2022-2023 measurement period. The amounts above reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2025.

Components of OPEB Expense Total OPEB
Service cost $ 672,081
Interest 1,076,573
Expensed portion of deferred outflows and inflows (410,063) OPEB Expense $ 1,338,591
Contributions subsequent to measurement period $ 2,340,023 $ - Changes of assumptions or other inputs 1,826,423 5,243,134 Difference between actual and expected experience 443,392 643,016 Net difference between projected and actual earnings
on investments 4,746 -
Total $ 4,614,584 $ 5,886,150
Outflows of Inflows of
Deferred Deferred
Resources Resources
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- 162 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
96 NOTE 20 OTHER INFORMATION (CONTINUED)
Other Postemployment Benefits (OPEB) (Continued)
IX. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued)
Other amounts reported as deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

X. Payable to the OPEB Plan
At June 30, 2024, the City had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2024.

Pension Plans
I. Plan Description
All City of Modesto qualified employees are eligible to participate in the City of Modesto separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multi-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by the State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. This report is available online at www.calpers.ca.gov.

The California Legislature passed and the Governor signed the “Public Employees’ Pension Reform Act of 2013” (PEPRA) on September 12, 2012. PEPRA contained a number of provisions intended to reduce future pension obligations. PEPRA primarily affects new pension plan members who are enrolled for the first time after December 2012. Benefit provisions and other requirements are established by State statute.

II. Benefits
Provided The benefits for the Plans are based on members’ years of service, age, final compensation, and benefit formula. Benefits are provided for disability, death, and survivors of eligible members or beneficiaries. Members become fully vested in their retirement benefits earned to date after five years of credited service.

Fiscal Year Ended
June 30
2025 $ (79,737)
2026 (754,559)
2027 (1,125,928)
2028 (1,140,864)
2029 (589,107)
Thereafter 78,606
Deferred outflows/inflows
of resources related to
OPEB expense
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
97 NOTE 20 OTHER INFORMATION (CONTINUED)
Pension Plans (Continued)
II. Benefits (Continued)
The Plans’ provisions and benefits in effect at June 30, 2024 are summarized as follows:

III. Contributions
Section 20814(c) of the California Public Employees Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the measurement period ended June 30, 2023 (the measurement date) for the Plans, the average active employee contribution rate was 7.37% of annual pay for Miscellaneous and 10.14% for Safety and the employer’s contribution rate is 9.49% of annual payroll for Miscellaneous and 22.85% for Safety. The employer contributions made for fiscal year June 30, 2024 was $23.14 million for the Miscellaneous plan and $32.47 million for the Safety plan. Employer contribution rates may change if plan contracts are amended.

The liability for all governmental activities is primarily liquidated from the general fund while the liability for business-type activities is liquidated from the enterprise funds.

Miscellaneous Plan:

Prior to January 17, 2012 to On or after
Hire date January 17, 2012 December 31, 2012 January 1, 2013 Benefit formula 2% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 to 67 50 to 67 52 to 67
Monthly benefits, as a %
of eligible compensation 1.426 to 2.418% 1.092 to 2.418% 1.0 to 2.5% Safety Plan:

Prior to September 11, 2012 On or after
Hire date September 11, 2012 to December 31, 2012 January 1, 2013 Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 to 55 50 to 55 50 to 57
Monthly benefits, as a %
of eligible compensation 3.0% 2.4 to 3.0% 2.0 to 2.7%
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
98 NOTE 20 OTHER INFORMATION (CONTINUED)
Pension Plans (Continued)
IV. Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures.

A summary of principal assumptions and methods used to determine the net pension liability is shown below:

V. Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Miscellaneous and Safety Plans
Actuarial Cost Method Entry-Age Actuarial Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality (1) Derived using CalPERS’ membership data for all funds
The lesser of contract COLA or 2.30% until
Purchasing Power Protection
Post Retirement Benefit Increase Allowance floor on purchasing power applies,

2.30% thereafter
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
99 NOTE 20 OTHER INFORMATION (CONTINUED)
Pension Plans (Continued)
V. Discount Rate (Continued)
The table below reflects long-term real rate of return by asset class as of the target allocation for the June 30, 2023 measurement date. These geometric rates of return are net of administrative expenses.

Assumed
Asset
Asset Class(1) Allocation Real Return (1), (2)
Global Equity - Cap-weighted 30.00 % 4.54 %
Global Equity - Non-Cap-weighted 12.00 3.84
Private Equity 13.00 7.28
Treasury 5.00 0.27
Mortgage-backed Securities 5.00 0.50
Investment Grade Corporates 10.00 1.56
High Yield 5.00 2.27
Emerging Market Debt 5.00 2.48
Private Debt 5.00 3.57
Real Assets 15.00 3.21
Leverage (5.00) (0.59)
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study. #1..
- 166 -
City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
100
NOTE 20 OTHER INFORMATION (CONTINUED)
Pension Plans (Continued)
VI. Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan follows:

Miscellaneous Plan
Balance at June 30, 2022 (1) $ 544,388,228 $ 384,576,486 $ 159,811,742 Changes Recognized for the Measurement Period:

Service Cost 8,762,511 - 8,762,511
Interest on the Total Pension Liability 37,132,493 - 37,132,493 Changes of Assumptions 771,514 - 771,514
Differences between Expected and Actual Experience 4,360,258 - 4,360,258 Contributions - Employer - 16,140,415 (16,140,415)
Contributions - Employees - 3,918,555 (3,918,555)
Net Investment Income - 23,825,399 (23,825,399)
Benefit Payments, including Refunds of Employee
Contributions (31,498,367) (31,498,367) -
Administrative Expense - (282,799) 282,799
Net Change during 2022-23 19,528,409 12,103,203 7,425,206 Balance at June 30, 2023 (1) $ 563,916,637 $ 396,679,689 $ 167,236,948 Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Safety Plan
Balance at June 30, 2022 (1) $ 725,963,389 $ 469,721,145 $ 256,242,244 Changes Recognized for the Measurement Period:

Service Cost 12,967,240 - 12,967,240
Interest on the Total Pension Liability 49,519,367 - 49,519,367 Changes of Benefit Terms 295,867 - 295,867
Differences between Expected and Actual Experience 3,900,247 - 3,900,247 Contributions - Employer - 28,423,970 (28,423,970)
Contributions - Employees - 4,545,810 (4,545,810)
Net Investment Income - 29,323,916 (29,323,916)
Benefit Payments, including Refunds of Employee
Contributions (37,942,281) (37,942,281) -
Administrative Expense - (345,411) 345,411
Net Change during 2022-23 28,740,440 24,006,004 4,734,436 Balance at June 30, 2023 (1) $ 754,703,829 $ 493,727,149 $ 260,976,680 (1) The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary self-insurance and OPEB expense. This may differ from the plan assets reported in the funding actuarial valuation report.

Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
101
NOTE 20 OTHER INFORMATION (CONTINUED)
Pension Plans (Continued)
VII. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.90 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90 percent) or 1 percentage-point higher (7.90 percent) than the current rate:

VIII. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the measurement period ended June 30, 2023 (the measurement date), the City incurred an aggregate pension expense of $65,549,259.

As of June 30, 2023, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Miscellaneous Plan
Plan’s Net Pension Liability/(Asset) $ 238,768,452 $ 167,236,948 $ 108,007,301 Discount Rate - Current Discount Discount Rate
1% (5.90%) Rate (6.90%) +1% (7.90%)
Safety Plan
Plan’s Net Pension Liability/(Asset) $ 364,410,341 $ 260,976,680 $ 176,574,374 Discount Rate - Current Discount Discount Rate
1% (5.90%) Rate (6.90%) +1% (7.90%)
Miscellaneous Plan
Changes of Assumptions $ 6,676,320 $ -
3,266,711 (417,789)
17,992,662 -
Contributions subsequent to the measurement date 17,089,782 - Total $ 45,025,475 $ (417,789)
Net Difference Between Projected and Actual Earnings
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between Expected and Actual Experiences
on Pension Plan Investments
Safety Plan
Change of Assumptions $ 12,124,823 $ -
3,791,558 (1,527,644)
on Pension Plan Investments 22,177,394 -
Contributions subsequent to the measurement date 27,775,905 - Total $ 65,869,680 $ (1,527,644)
of Resources of Resources
Deferred Outflows Deferred Inflows
Differences between Expected and Actual Experiences
Net Difference Between Projected and Actual Earnings
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
102
NOTE 20 OTHER INFORMATION (CONTINUED)
Pension Plans (Continued)
VIII. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The amounts above are net of outflows and inflows recognized expense in the 2022-2023 measurement period. The amounts above reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2025.

Other amounts reported as deferred inflows and outflows of resources related to pensions will be recognized in future pension expense (not including contributions subsequent to the measurement date) as follows:

IX. Payable to the Pension Plan
At June 30, 2024, the City had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2024.

Deferred Compensation
The City has established a deferred compensation plan for all employees. Participation in the plan is voluntary and the Memorandums of Understanding approved by the City Council are the authority for establishing or amending the plans' provisions. Generally, the amount of compensation subject to deferral until retirement, disability, or other termination by a participant may not exceed the legal limits set by the Internal Revenue Code. Amounts withheld by the City under this plan are deposited into a trust account on a pay period basis.

Mission Square Retirement (Formerly ICMA-RC) in accordance with Internal Revenue Code Section 457(b) administers the Deferred Compensation Defined Contribution plans for the City.

The City is obligated to match a percentage of employee contributions based on their years of service as set out in the applicable Memorandum of Association. Matching amounts total

2.5% of the annual salary per participant, per year. As of June 30, 2024, the deferred compensation plan assets were held in a trust account for the sole benefit of the employees and their beneficiaries and, accordingly, have been excluded from the City's reported assets.

The value of the plan as of June 30, 2024 was $170,606,944. $ 9,161,745 $ 11,624,920
4,789,000 7,851,776
13,110,286 16,514,432
456,873 575,003
$ 27,517,904 $ 36,566,131
Fiscal Year Miscellaneous
Ended June 30 Plan Safety Plan
2024
2025
2026
2027
Total
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
103
NOTE 20 OTHER INFORMATION (CONTINUED)
Deficiency Of Expenditures Over Appropriations
For the fiscal year ended June 30, 2024, expenditures exceeded appropriations as follows:

Prior Year Adjustments
Changes to or within the Financial Reporting Entity
Transportation Special Tax and Capital Grants were previously reported as nonmajor and major funds, respectively, in the 2023 ACFR. However, the size criteria for the current year changed the presentation for both funds. The effects of those changes to or within the financial reporting entity are shown in column A below.

Housing and Community Development Special Revenue Fund
Expenditures Amount
Transfers out $ 3,227,274
Downtown Improvement District Special Revenue Fund
Expenditures Amount
Community development $ 297
Strategic Planning and Development Special Revenue Fund Expenditures Amount
Transfers out $ 2,538
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
104
NOTE 20 OTHER INFORMATION (CONTINUED)
Prior Year Adjustments (Continued)
Error Corrections
During the fiscal year 2024, the City determined:
a. that the City will not own the previously recognized Construction Work In Progress (CWIP). The projects were funded by the State and will be turned over to the California Department of Transportation once completed. Therefore, capital assets for governmental activities were overstated by $138,748,624. b. that the previously recognized Construction Work In Progress (CWIP) from prior years were incorrectly capitalized in the previous years. Therefore, capital assets, net of depreciation, for business-type activities were overstated by $10,503,794, respectively.

The business-type activities amount of $10,503,794 is split between Water for $6,342,246 and Sewer for $4,161,548.
c. that the City had to account for prepayments of Modesto Irrigation District Domestic Water debt amounting to $1,941,603. Therefore, the Water and business-type activities were understated by $1,941,603.
d. that the delinquent tax revenues of the Community Facilities Districts in the prior year were not reported. Therefore, revenues were understated in the nonmajor funds and governmental activities by $97,628.
e. that the delinquent tax revenues of the Operating Grants in the prior year were not reported. Therefore, revenues were understated in the nonmajor funds and governmental activities by $14,545.
f. that the Special Districts reported as Fiduciary Funds had understated revenues in the prior year amounting to $5,838.
g. that the housing loan receivable was overstated by $379. Therefore, the Housing and Community Development and government-wide activities were overstated by $379. h. that the fees recorded for the General Fund and Abatement and Public Nuisance were overstated and understated by $794,117 and $34,904, respectively. Therefore, the General Fund and the governmental activities were overstated by $794,117 while the Abatement and Nuisance and business-type activities were understated by $34,904. #1..
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
105
NOTE 20 OTHER INFORMATION (CONTINUED)
Prior Year Adjustments (Continued)
The effects of correcting the above errors are shown in column B below.

NOTE 21 SUBSEQUENT EVENTS
On July 1, 2024, the City Council approved the purchase of a Public Safety Aided Dispatch (CAD) system which will replaced the outdate “Dispatch Now” CAD system. The City is responsible for providing public safety emergency response to the City’s residents, business, and contract agency jurisdictions. The CAD system provides Geographical Information Services (GIS), captures 9-1-1 caller and response information, communicates call details, ad provides key recommendations to the dispatcher to ensure proper and accurate resources are sent to emergency calls for services.

On September 10,2024, the City Council approved the plans and specifications for Cesar E.

Chavez Park Renovation Project, and awarded the construction contract to Harris Builders, Inc. of Hilmar, CA in the amount of $14 million. The renovations include the construction of an aquatics facility, skate plaza, building expansion, basketball court, soccer field, restroom, picnic areas, landscaping, lighting, security cameras, walking paths and other general park amenities.

June 30, 2023 Change to or within
As Previously the Financial Error June 30, 2023
Government-Wide Reported Reporting Entity Corrections As Restated Government Activities $ 489,433,701 $ - $ (139,430,947) $ 350,002,754 Business-Type Activities 847,728,789 - (8,527,287) 839,201,502 Total Primary Government $ 1,337,162,490 $ $ - (147,958,234) $ 1,189,204,256 Governmental Funds
Major Funds:

General $ 53,570,568 $ $ - $ (794,117) 52,776,451
Operating Grants 4,731,444 - 14,545 4,745,989
Housing and Community
Development 33,771,463 - (379) 33,771,084
Transportation Special Tax - 49,198,117 - 49,198,117
Nonmajor Funds:

Capital Grants (4,751,207) - - (4,751,207)
Other nonmajor funds 136,583,624 (49,198,117) 97,628 87,483,135 $ 223,905,892 $ $ - $ (682,323) 223,223,569
Proprietary Funds
Major Funds:

Water $ 423,522,072 $ $ - (4,400,643) $ 419,121,429
Sewer 380,588,922 - (4,161,548) 376,427,374
Nonmajor Funds:

Other Enterprise 46,382,506 - 34,904 46,417,410
Internal Service 21,227,544 - - 21,227,544
$ 871,721,044 $ $ - (8,527,287) $ 863,193,757
Fiduciary Funds
Special Districts $ 3,338,788 $ $ - $ 5,838 3,344,626
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City of Modesto
Notes to Basic Financial Statements
Fiscal Year Ended June 30, 2024
106
NOTE 21 SUBSEQUENT EVENTS (CONTINUED)
On October 22, 2024, the City Council approved the purchase of five (5) Pierce Velocity 1500 GPM Type 1 Fire Engines and two (2) Pierce 107’ Velocity Tractor Drawn Aerial Fire Trucks for a total amount of $9.2 million. The current industry standards’ timelines from point of order to delivery are 48 months to 51 months respective. Because of the extensive lead time on production, the current 2016 fire engine models will exceed the frontline standards for replacement if the replacement engines are not ordered now. The fire engines are the first to respond in most of the emergency calls within the jurisdiction. The community relies heavily on these fire apparatuses deliver critical service responses. #1..
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REQUIRED SUPPLEMENTARY

INFORMATION TAB
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REQUIRED SUPPLEMENTARY INFORMATION
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City of Modesto
Schedule of Changes in the Net Pension Liability and Related Ratios For the Year Ended June 30
Last Ten Fiscal Years *
107
Miscellaneous Plan
Measurement Period 2022-2023 2021-2022 2020-2021 (4) 2019-2020 (4) 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 2013-2014

TOTAL PENSION LIABILITY
Service Cost $ 8,762,511 $ 8,879,438 $ 7,916,536 $ 7,723,070 $ 7,583,252 $ 7,365,767 $ 6,992,542 $ 6,092,179 $ 5,768,082 $ 6,400,912 Interest on Total Pension Liability 37,132,493 35,812,577 34,981,202 33,802,792 32,749,831 31,433,420 30,399,913 29,752,178 28,873,755 28,037,915 Changes of Benefit Terms 771,514 - - - - - - - - -
Changes of Assumptions - 16,213,922 - - - (2,477,241) 24,124,929 - (6,709,358) - Difference Between Expected and Actual Experience 4,360,258 (1,014,629) 1,935,811 (39,916) 3,777,379 2,514,973 (1,956,450) (2,005,545) (3,177,191) - Benefit Payments, Including Refunds of Employee Contributions (31,498,367) (29,773,825) (27,832,629) (26,321,649) (24,951,032) (23,596,900) (22,727,426) (21,686,131) (20,945,229) (20,334,821) Net Change in Total Pension Liability 19,528,409 30,117,483 17,000,920 15,164,297 19,159,430 15,240,019 36,833,508 12,152,681 3,810,059 14,104,006 Total Pension Liability - Beginning 544,388,228 514,270,745 497,269,825 482,105,528 462,946,098 447,706,079 410,872,571 398,719,890 394,909,831 380,805,825 Total Pension Liability - Ending (a) $ 563,916,637 $ 544,388,228 $ 514,270,745 $ 497,269,825 $ 482,105,528 $ 462,946,098 $ 447,706,079 $ 410,872,571 $ 398,719,890 $ 394,909,831

PLAN FIDUCIARY NET POSITION
Contributions - Employer $ 16,140,415 $ 14,557,323 $ 13,607,488 $ 11,857,136 $ 10,158,019 $ 8,553,955 $ 8,382,192 $ 6,920,358 $ 5,632,179 $ 4,654,055 Contributions - Employee 3,918,555 3,811,839 3,732,886 3,522,762 3,479,149 3,393,722 3,396,338 3,349,400 3,061,157 2,853,492 Net Investment Income 23,825,399 (32,153,027) 80,411,612 17,470,077 22,333,423 27,586,156 33,859,910 1,667,540 7,093,159 48,702,803 Benefit Payments, Including Refunds of Employee Contributions (31,498,367) (29,773,825) (27,832,629) (26,321,649) (24,951,032) (23,596,900) (22,727,426) (21,686,131) (20,945,229) (20,334,821) Plan to Plan Resource Movement - - - - - (181) 505 (1,118) (188) - Administrative Expense (282,799) (266,868) (358,459) (497,374) (244,082) (510,454) (450,482) (192,011) (355,544) - Other Miscellaneous Income/(Expense) (1) - - - - 796 (969,360) - - - - Net Change in Fiduciary Net Position 12,103,203 (43,824,558) 69,560,898 6,030,952 10,776,273 14,456,938 22,461,037 (9,941,962) (5,514,466) 35,875,529 Plan Fiduciary Net Position - Beginning (2) 384,576,486 428,401,044 358,840,146 352,809,194 342,032,921 327,575,983 305,114,946 315,056,908 320,571,374 284,695,845 Plan Fiduciary Net Position - Ending (b) 396,679,689 384,576,486 428,401,044 358,840,146 352,809,194 342,032,921 327,575,983 305,114,946 315,056,908 320,571,374 Plan Net Pension Liability - Ending (a) - (b) $ 167,236,948 $ 159,811,742 $ 85,869,701 $ 138,429,679 $ 129,296,334 $ 120,913,177 $ 120,130,096 $ 105,757,625 $ 83,662,982 $ 74,338,457 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 70.34% 70.64% 83.30% 72.16% 73.18% 73.88% 73.17% 74.26% 79.02% 81.18% Covered Payroll (3) $ 54,290,652 $ 53,912,800 $ 54,111,658 $ 52,112,485 $ 50,907,972 $ 49,812,447 $ 46,735,345 $ 45,207,621 $ 41,562,776 $ 44,125,963 Plan Net Pension Liability as a Percentage of Covered Payroll (3) 308.04% 296.43% 158.69% 265.64% 253.98% 242.74% 257.04% 233.94% 201.29% 168.47% NOTES:
(1) During fiscal year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California’s agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75. Additionally, CalPERS employees participate in various State of California agent pension plans and during fiscal year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68). (2) Includes any beginning of year adjustment.
(3) Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal years ended in 2022 and 2023; 2.75% payroll growth assumption for fiscal years ended in 2018 through 2021; 3% payroll growth assumption for fiscal years ended in 2014 through 2017.
(4) Covered Payroll and Plan Net Pension Liability as a Percentage of Covered Payroll were incorrectly reported for 2019-2020 and 2020-2021. In fiscal year 2023 the error was noticed and the amounts were updated accordingly. #1..
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City of Modesto
Schedule of Changes in the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30
Last Ten Fiscal Years *
108
Safety Plan
Measurement Period 2022-2023 2021-2022 2020-2021 (4) 2019-2020 (4) 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 2013-2014

TOTAL PENSION LIABILITY
Service Cost $ 12,967,240 $ 11,971,941 $ 11,100,896 $ 10,961,188 $ 9,984,949 $ 9,648,518 $ 9,298,519 $ 8,193,455 $ 8,633,865 $ 8,970,868 Interest on Total Pension Liability 49,519,367 47,646,679 46,176,343 44,407,891 42,759,837 40,490,329 39,048,366 38,004,835 36,721,112 35,310,732 Changes of Benefit Terms 295,867 - - - - - - - - -
Changes of Assumptions - 25,596,849 - - - (2,434,317) 33,217,275 - (9,188,394) - Difference Between Expected and Actual Experience 3,900,247 (3,225,026) 3,056,480 2,147,305 12,017,379 2,992,729 (3,102,753) (2,184,871) (849,707) - Benefit Payments, Including Refunds of Employee Contributions (37,942,281) (36,401,697) (34,350,284) (33,173,358) (31,487,589) (29,678,588) (28,147,381) (26,911,771) (25,426,619) (24,313,823) Net Change in Total Pension Liability 28,740,440 45,588,746 25,983,435 24,343,026 33,274,576 21,018,671 50,314,026 17,101,648 9,890,257 19,967,777 Total Pension Liability - Beginning 725,963,389 680,374,643 654,391,208 630,048,182 596,773,606 575,754,935 525,440,909 508,339,261 498,449,004 478,481,227 Total Pension Liability - Ending (a) $ 754,703,829 $ 725,963,389 $ 680,374,643 $ 654,391,208 $ 630,048,182 $ 596,773,606 $ 575,754,935 $ 525,440,909 $ 508,339,261 $ 498,449,004

PLAN FIDUCIARY NET POSITION
Contributions - Employer $ 28,423,970 $ 25,211,361 $ 21,650,057 $ 20,241,960 $ 16,758,148 $ 14,809,730 $ 12,812,060 $ 11,137,899 $ 10,210,101 $ 8,963,542 Contributions - Employee 4,545,810 4,262,417 3,864,069 3,770,808 3,402,676 3,400,369 3,165,011 2,962,566 2,800,626 2,939,117 Net Investment Income 29,323,916 (39,469,852) 97,134,657 20,809,917 26,427,421 32,428,941 39,443,735 1,898,536 8,215,387 56,385,743 Benefit Payments, Including Refunds of Employee Contributions (37,942,281) (36,401,697) (34,350,284) (33,173,358) (31,487,589) (29,678,588) (28,147,381) (26,911,771) (25,426,619) (24,313,823) Plan to Plan Resource Movement - - - - - (1,551) (505) 1,118 211 - Administrative Expense (345,411) (321,712) (428,116) (588,586) (287,372) (597,550) (526,677) (224,190) (414,089) - Other Miscellaneous Income/(Expense) (1) - - - - 936 (1,134,757) - - - - Net Change in Fiduciary Net Position 24,006,004 (46,719,483) 87,870,383 11,060,741 14,814,220 19,226,594 26,746,243 (11,135,842) (4,614,383) 43,974,579 Plan Fiduciary Net Position - Beginning (2) 469,721,145 516,440,628 428,570,245 417,509,504 402,695,284 383,468,690 356,722,447 367,858,289 372,472,672 328,498,093 Plan Fiduciary Net Position - Ending (b) 493,727,149 469,721,145 516,440,628 428,570,245 417,509,504 402,695,284 383,468,690 356,722,447 367,858,289 372,472,672 Plan Net Pension Liability - Ending (a) - (b) $ 260,976,680 $ 256,242,244 $ 163,934,015 $ 225,820,963 $ 212,538,678 $ 194,078,322 $ 192,286,245 $ 168,718,462 $ 140,480,972 $ 125,976,332 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 65.42% 64.70% 75.91% 65.49% 66.27% 67.48% 66.60% 67.89% 72.36% 74.73% Covered Payroll (3) $ 39,679,438 $ 36,422,089 $ 37,591,927 $ 36,906,356 $ 33,819,770 $ 32,259,582 $ 30,608,378 $ 30,022,552 $ 31,202,983 $ 31,090,551 Plan Net Pension Liability as a Percentage of Covered Payroll (3) 657.71% 703.54% 436.09% 611.88% 628.45% 601.61% 628.21% 561.97% 450.22% 405.19% NOTES:
(1) During fiscal year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California’s agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75. Additionally, CalPERS employees participate in various State of California agent pension plans and during fiscal year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68). (2) Includes any beginning of year adjustment.
(3) Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal years ended in 2022 and 2023; 2.75% payroll growth assumption for fiscal years ended in 2018 through 2021; 3% payroll growth assumption for fiscal years ended in 2014 through 2017.
(4) Covered Payroll and Plan Net Pension Liability as a Percentage of Covered Payroll were incorrectly reported for 2019-2020 and 2020-2021. In fiscal year 2023 the error was noticed and the amounts were updated accordingly. #1..
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City of Modesto
Schedule of Pension Plan Contributions
Last Ten Fiscal Years *
109
Miscellaneous Plan
Fiscal Year 2023-2024 2022-2023 2021-2022 2020-2021 (4) 2019-2020 (4) 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 Actuarially Determined Contribution (2) $ 17,089,782 $ 15,933,439 $ 14,288,254 $ 13,302,558 $ 11,857,136 $ 10,158,019 $ 8,553,955 $ 8,382,192 $ 6,920,358 $ 5,632,179 Contributions in Relation to the Actuarially Determined Contribution (2) (17,089,782) (16,140,415) (14,557,323) (13,607,488) (11,857,136) (10,158,019) (8,553,955) (8,382,192) (6,920,358) (5,632,179) Contribution Deficiency (Excess) $ - $ (206,976) $ (269,069) $ (304,930) $ - $ - $ - $ - $ - $ - Covered Payroll (3) $ 63,855,553 $ 54,290,652 $ 53,912,800 $ 54,111,658 $ 52,112,485 $ 50,907,972 $ 49,812,447 $ 46,735,345 $ 45,207,621 $ 41,562,776 Contributions as a Percentage of Covered Payroll (3) 26.76% 29.73% 27.00% 25.15% 22.75% 19.95% 17.17% 17.94% 15.31% 13.55% Safety Plan
Fiscal Year 2023-2024 2022-2023 2021-2022 2020-2021 (4) 2019-2020 (4) 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 Actuarially Determined Contribution (2) $ 27,775,905 $ 26,631,905 $ 24,116,232 $ 21,472,516 $ 19,749,458 $ 16,758,148 $ 14,809,730 $ 12,812,060 $ 11,137,889 $ 10,210,101 Contributions in Relation to the Actuarially Determined Contribution (2) (27,775,905) (28,423,970) (25,211,361) (21,650,057) (20,241,960) (16,758,148) (14,809,730) (12,812,060) (11,137,889) (10,210,101) Contribution Deficiency (Excess) $ - $ (1,792,065) $ (1,095,129) $ (177,541) $ (492,502) $ - $ - $ - $ - $ - Covered Payroll (3) $ 46,959,644 $ 39,679,438 $ 36,422,089 $ 37,591,927 $ 36,906,356 $ 33,819,770 $ 32,259,582 $ 30,608,378 $ 30,022,552 $ 31,202,983 Contributions as a Percentage of Covered Payroll (3) 59.14% 71.63% 69.22% 57.59% 54.85% 49.55% 45.91% 41.86% 37.10% 32.72% (1)As prescribed in GASB 68, paragraph 46, the information presented in the Schedule of Plan Contributions should also be determined as of the employer’s most recent fiscal year-end. The employer is responsible for determining this information as prescribed by the standard as this data is not available to CalPERS. (2)Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.
(3)Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal years ended in 2022 and 2023; 2.75% payroll growth assumption for fiscal years ended in 2018 through 2021; 3% payroll growth assumption for fiscal years ended in 2014 through 2017.
(4)Covered Payroll and Contributions as a Percentage of Covered Payroll were incorrectly reported for 2019-2020 and 2020-2021. In fiscal year 2023 the error was noticed and the amounts undated accordingly.

NOTE: There are no assets accumulated in a trust to pay related benefits for the pension plan. #1..
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City of Modesto
Other Postemployment Benefits (OPEB)
Schedule of Changes in the OPEB Liability and Related Ratios Last Ten Fiscal Years *
110
Reporting Period FY 2023-2024 FY 2022-2023 FY 2021-2022 FY 2020-2021 FY 2019-2020 FY 2018-2019 FY 2017-2018 Measurement Date June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Total OPEB liability:

Service cost $ $ 672,081 1,244,957 $ 1,196,410 $ $ 836,292 $ 811,934 $ 963,490 935,427 Interest 1,076,573 635,756 667,183 903,896 1,013,863 1,038,035 892,669 Differences between expected and actual experience - (902,717) - 1,737,964 - (468,009) - Changes of assumptions 906,060 (7,477,125) 129,927 3,430,611 754,247 (1,306,633) (1,600,635) Benefit payments (2,487,735) (2,727,324) (2,869,050) (2,941,351) (3,012,214) (2,733,246) (2,430,468) Net change in total OPEB liability 166,979 (9,226,453) (875,530) 3,967,412 (432,170) (2,506,363) (2,203,007) Total OPEB liability - beginning 20,325,417 29,551,870 30,427,400 26,459,988 26,892,158 29,398,521 31,601,528 Total OPEB liability - ending 20,492,396 20,325,417 29,551,870 30,427,400 26,459,988 26,892,158 29,398,521 OPEB Fiduciary Net Position:

Investment income 94,204 35 - - - - -
Employer contributions 2,487,735 4,114,604 - - - - -
Benefit payments (2,487,735) (2,727,324) - - - - -
Net change in plan fiduciary net position 94,204 1,387,315 - - - - - Fiduciary net position - beginning 1,387,315 - - - - - - Fiduciary net position - ending 1,481,519 1,387,315 - - - - - Net OPEB liability - ending (a) $ 19,010,877 $ 18,938,102 $ 29,551,870 $ 30,427,400 $ 26,459,988 $ 26,892,158 $ 29,398,521 Covered-Employee Payroll $ 54,018,721 $ 52,727,185 $ 52,545,565 $ 54,106,179 $ 50,879,818 $ 49,647,245 $ 55,637,076 Total OPEB liablity as a Percentage of Covered-Employee Payroll 35.19% 35.92% 56.24% 56.24% 52.00% 54.17% 52.84% Notes to Schedule:
*Historical information is required only for measurement periods for which GASB 75 is applicable. Future years’ information will be displayed up to 10 years as information becomes available. *Amounts presented above were determined as of June 30th. Additional years will be presented as they become available. #1..
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City of Modesto
Schedule of OPEB Contributions
Last Ten Fiscal Years *
111
Fiscal Year 2023-2024 2022-2023 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018 2016-2017 Actuarially Determined Contribution (ADC) $ 2,210,205 $ 2,208,621 $ 2,686,307 $ 2,869,050 $ 3,569,890 $ 3,012,214 $ 2,733,246 $ 2,430,468 Contributions in Relation to the ADC (2,340,023) (2,487,735) (4,114,604) (2,869,050) (3,569,890) (3,012,214) (2,733,246) (2,430,468) Contribution Deficiency (Excess) $ (129,818) $ (279,114) $ (1,428,297) $ - $ - $ - $ - $ - Covered-Employee Payroll $ 53,447,711 $ 54,018,720 $ 52,727,185 $ 52,545,565 $ 54,106,179 $ 50,879,818 $ 49,647,245 $ 55,637,076 Contributions as a Percentage of Covered-Employee Payroll 4.38% 4.61% 7.83% 5.46% 6.60% 5.92% 5.51% 4.37% Notes to schedule:

The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2022-23 were as follows for June 30, 2023 measurement date actuarial valuations.

Actuarial Cost Method Entry Age Normal
Discount Rate 5.45% at June 30, 2023 (Bond Buyer 20-Bond Index).

5.45% at June 30, 2022 (Bond Buyer 20-Bond Index).

Asset Valuation Method Market Value
General Inflation 2.5% annually
Salary Increases 3%
Trend Average actual increase for 2024, 6.2% for 2025, decreasing to 3.9% in 2075 Retirement Age 50 to 75
Mortality CalPERS 2021 Experience Study
Mortality Improvement MacLeod Watts Scale 2022
*Historical information is required only for measurement periods for which GASB 75 is applicable. Future years’ information will be displayed up to 10 years as information becomes available. #1..
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City of Modesto
Schedule of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual - General Fund
Fiscal Year Ended June 30, 2024
See Notes to Required Supplementary Information
112
Variance with
Original Final Actual Final Budget
TAXES
Utility users tax $ 21,546,214 $ 21,546,214 $ 21,173,728 $ (372,486) Property tax 22,103,430 22,567,988 23,046,388 478,400
Transient occupancy tax 3,680,000 3,680,000 3,351,194 (328,806) Franchise tax 5,582,755 5,582,755 5,683,989 101,234
Cannabis tax 4,000,000 4,000,000 3,408,455 (591,545)
Business license tax 16,594,603 16,594,603 16,147,087 (447,516) Total taxes 73,507,002 73,971,560 72,810,841 (1,160,719) LICENSES AND PERMITS 628,908 329,196 88,123 (241,073)

INTERGOVERNMENTAL
Sales tax 41,706,191 40,906,191 38,038,757 (2,867,434)
Sales tax Measure H - 42,325,700 47,954,202 5,628,502
Motor vehicle license fees 22,027,453 22,530,767 22,537,514 6,747 State 975,000 975,000 1,476,085 501,085
County 41,821 41,821 34,173 (7,648)
Other intergovernmental 20,329,013 20,329,013 19,401,905 (927,108) Total intergovernmental 85,079,478 127,108,492 129,442,636 2,334,144

CHARGES FOR SERVICES
General government 3,553,835 3,590,570 3,434,528 (156,042) Community development 2,509,266 2,424,402 3,141,654 717,252 Parks and recreation 3,422,432 3,422,432 2,182,346 (1,240,086) Public safety 3,531,123 5,897,129 7,059,442 1,162,313
Indirect cost recovery 3,796,055 3,796,055 3,796,017 (38) Total charges for services 16,812,711 19,130,588 19,613,987 483,399 SPECIAL ASSESSMENT 395,000 395,000 378,779 (16,221)
INTEREST AND RENT 633,779 761,279 388,844 (372,435)

NET INCREASE (DECREASE) IN FAIR VALUE
OF INVESTMENTS (480,973) (1,405,973) 1,503,184 2,909,157 FINES AND FORFEITS 130,024 140,024 384,225 244,201

MISCELLANEOUS
Mandated cost recovery 90,000 90,000 260,413 170,413
Other 739,639 739,639 385,678 (353,961)
Total miscellaneous 829,639 829,639 646,091 (183,548)
Total revenues $ 177,535,568 $ 221,259,805 $ 225,256,710 $ 3,996,905 (Continued)
Budget
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City of Modesto
Schedule of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual - General Fund (Continued) Fiscal Year Ended June 30, 2024
NOTE: The expenditures by function amounts listed above include the capital outlay expenditures within each department.

The notes to required supplementary information are an integral part of this schedule. 113
Variance with
Original Final Actual Final Budget
General government:

City council $ $ 529,830 $ 532,040 $ 508,698 23,342
Human resources 1,984,550 1,989,111 1,912,387 76,724
City manager 3,916,078 3,922,513 3,306,855 615,658
City attorney 2,262,719 2,210,288 2,064,957 145,331
City clerk/auditor 1,667,321 1,672,831 1,298,620 374,211 Finance 6,359,428 6,129,668 5,826,727 302,941
Other 138,648 138,648 70,627 68,021
Total general government 16,858,574 16,595,099 14,988,871 1,606,228 Community development: 7,056,628 6,924,156 6,185,028 739,128 Public works:

Operations and maintenance dept: 5,920,416 6,633,710 5,455,924 1,177,786 Total public works 5,920,416 6,633,710 5,455,924 1,177,786 Parks and recreation:

Administration 856,134 880,868 872,694 8,174
Planning and development 1,674,644 1,677,603 1,338,311 339,292 Convention visitors bureau 885,544 885,544 824,767 60,777 Operations service and maintenance 10,046,321 9,959,896 8,160,657 1,799,239 Facilities 1,918,047 2,019,911 1,555,913 463,998
Recreation division 5,120,589 5,053,275 3,762,193 1,291,082 Total parks and recreation 20,501,279 20,477,097 16,514,535 3,962,562 Public safety:

Fire protection 65,509,824 65,784,982 64,073,877 1,711,105 Police protection 91,112,361 94,482,514 81,441,235 13,041,279 Total public safety 156,622,185 160,267,496 145,515,112 14,752,384 Debt service:

Principal retirement 1,070,083 2,050,599 2,050,599 -
Interest expenditures 182,834 182,834 182,834 -
Other 473,400 473,400 418,800 54,600
Total debt service 1,726,317 2,706,833 2,652,233 54,600 Total expenditures 208,685,400 213,604,392 191,311,703 22,292,689 (31,149,832) 7,655,413 33,945,007 26,289,594

OTHER FINANCING SOURCES AND (USES)
Transfers in 628,640 3,598,292 3,509,083 (89,209)
Transfers out (15,950,735) (26,157,722) (10,099,889) 16,057,833 Other financing proceeds - leases and SBITAs - 2,916,392 2,916,392 - Sale of assets 6,200 6,200 11,576 5,376
TOTAL OTHER FINANCING SOURCES(USES) (15,315,895) (19,636,838) (3,662,838) 15,974,000 CHANGES IN FUND BALANCE (46,465,727) (11,981,425) 30,282,169 42,263,594 FUND BALANCE, JULY 1, AS PREVIOUSLY REPORTED 53,570,568 53,570,568 53,570,568 - PRIOR PERIOD ADJUSTMENTS (794,117) (794,117) (794,117) - FUND BALANCE, JULY 1, AS RESTATED 52,776,451 52,776,451 52,776,451 - FUND BALANCE, JUNE 30 $ $ 6,310,724 40,795,026 $ 83,058,620 $ 42,263,594 (Concluded)
Budget

EXCESS (DEFICIT) OF REVENUES OVER
(UNDER) EXPENDITURES
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City of Modesto
Schedule of Revenues, Expenditures and Changes in Fund Balance Budget (GAAP Basis) and Actual – Operating Grants Special Revenue Fund Fiscal Year Ended June 30, 2024
NOTE: The expenditures by function amounts listed above include the capital outlay expenditures within each department.

The notes to required supplementary information are an integral part of this schedule. 114
Variance with
Original Final Actual Final Budget
REVENUES:

Taxes $ $ 380,000 380,000 $ 294,108 $ (85,892)
Licenses and permits 50,000 50,000 58,575 8,575
Intergovernmental 1,051,609 94,261,697 19,333,321 (74,928,376) Charges for services 6,215,409 6,860,409 4,649,043 (2,211,366) Special assessments 79,688 79,688 80,823 1,135
Interest and rent 100 41,940 1,474,952 1,433,012
Net increase in fair value of investments - - 77,283 77,283 Miscellaneous 97,078 146,561 275,525 128,964
Total revenues 7,873,884 101,820,296 26,243,630 (75,576,666) EXPENDITURES:

Current:

General government 3,051,702 9,029,986 258,275 8,771,711 Community development 8,616,627 22,192,424 18,522,942 3,669,482 Highways and streets 469,096 793,165 112,999 680,166
Public works 1,615,558 1,355,625 993,947 361,678
Parks and recreation 2,067,275 5,826,848 870,162 4,956,686 Public safety 6,529,964 12,110,330 11,521,263 589,067
Debt service:

Principal retirement - 161,994 129,116 32,878
Interest - 305 305 -
Total expenditures 22,350,223 51,470,678 32,409,009 19,061,669

EXCESS (DEFICIT) OF REVENUES OVER (UNDER)
EXPENDITURES (14,476,338) 50,349,618 (6,165,379) (56,514,997) OTHER FINANCING SOURCES (USES):

Transfers in 2,279,606 9,366,143 5,338,613 (4,027,530)
Transfers out (112) (9,027,686) (3,329,065) 5,698,621
Other financing proceeds - 268,934 268,934 -
TOTAL OTHER FINANCING SOURCES (USES) 2,279,494 607,391 2,278,482 1,671,091 CHANGES IN FUND BALANCE (12,196,843) 50,957,009 (3,886,897) (54,843,906) FUND BALANCE, JULY 1, AS PREVIOUSLY REPORTED 4,731,444 4,731,444 4,731,444 - PRIOR PERIOD ADJUSTMENT 14,545 14,545 14,545 -
FUND BALANCE, JULY 1, AS RESTATED 4,745,989 4,745,989 4,745,989 - FUND BALANCE, JUNE 30 $ (7,450,854) $ 55,702,998 $ 859,092 $ (54,843,906) Budget
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual – Housing and Community Development Special Revenue Fund
Fiscal Year Ended June 30, 2024
NOTE: The expenditures by function amounts listed above include the capital outlay expenditures within each department.

The notes to required supplementary information are an integral part of this schedule. 115
Variance with
Original Final Actual Final Budget
REVENUES:

Intergovernmental - federal grants $ 10,875,118 $ 25,811,521 $ 9,017,200 $ (16,794,321) Charges for services 2,328,229 2,328,229 1,462,091 (866,138) Interest and rent - - 23,547 23,547
Net increase in fair value of investments - - 18,048 18,048 Total revenues 13,203,347 28,139,750 10,520,886 (17,618,864) EXPENDITURES:

Current:

Community development 17,166,440 24,811,856 12,751,048 12,060,808 Debt service:

Principal retirement 328,000 328,000 328,000 -
Interest 14,500 14,500 14,425 75
Other 700 700 - 700
Total expenditures 17,509,640 25,155,056 13,093,473 12,061,583

EXCESS (DEFICIT) OF REVENUES OVER (UNDER)
EXPENDITURES (4,306,293) 2,984,694 (2,572,587) (5,557,281) OTHER FINANCING SOURCES (USES):

Transfers in 250,000 3,531,252 4,417 (3,526,835)
Transfers out (750,000) (196,797) (3,424,071) (3,227,274) TOTAL OTHER FINANCING SOURCES (USES) (500,000) 3,334,455 (3,419,654) (6,754,109) CHANGES IN FUND BALANCE (4,806,293) 6,319,149 (5,992,241) (12,311,390) FUND BALANCE, JULY 1, AS PREVIOUSLY REPORTED 33,771,463 33,771,463 33,771,463 - PRIOR PERIOD ADJUSTMENT (379) (379) (379) -
FUND BALANCE, JULY 1, AS RESTATED 33,771,084 33,771,084 33,771,084 - FUND BALANCE, JUNE 30 $ 28,964,791 $ 40,090,233 $ 27,778,843 $ (12,311,390) Budget
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual – Transportation Special Tax Special Revenue Fund Fiscal Year Ended June 30, 2024
NOTE: The expenditures by function amounts listed above include the capital outlay expenditures within each department.

The notes to required supplementary information are an integral part of this schedule. 116
Variance with
Original Final Actual Final Budget
REVENUES:

Taxes $ 1,500,000 $ 1,500,000 $ 1,997,412 $ 497,412
Licenses and permits - - 2,718 2,718
Intergovernmental 24,204,144 26,811,652 26,795,778 (15,874) Charges for services 1,026,892 1,210,787 1,626,618 415,831 Interest and rent - 592,492 1,118,885 526,393
Net (decrease) in fair value of investments - - 1,029,027 1,029,027 Miscellaneous 10,000 10,000 118,887 108,887
Total revenues 26,741,036 30,124,931 32,689,325 2,564,394 EXPENDITURES:

Current:

Community development 2,341,375 2,093,767 1,859,136 234,631 Highways and streets 17,188,136 17,598,806 16,243,596 1,355,210 Debt service:

Principal retirement - 3,778 3,778 -
Interest - 392 392 -
Total expenditures 19,529,511 19,696,744 18,106,902 1,589,842

EXCESS (DEFICIT) OF REVENUES OVER (UNDER)
EXPENDITURES 7,211,525 10,428,187 14,582,423 4,154,236
OTHER FINANCING SOURCES (USES):

Transfers in 1,540,205 1,540,205 1,540,205 -
Transfers out (9,500,700) (14,168,565) (10,072,498) 4,096,067 Sale of assets - - 41,755 41,755
TOTAL OTHER FINANCING SOURCES (USES) (7,960,495) (12,628,360) (8,490,538) 4,137,822 CHANGES IN FUND BALANCE (748,970) (2,200,173) 6,091,885 8,292,058 FUND BALANCE, JULY 1 49,198,117 49,198,117 49,198,117 - FUND BALANCE, JUNE 30 $ 48,449,147 $ 46,997,944 $ 55,290,002 $ 8,292,058 Budget
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City of Modesto
Note to Required Supplementary Information
Fiscal Year Ended June 30, 2024
117
NOTE 1 BUDGETARY INFORMATION
The City follows these procedures annually in establishing the budgetary data reflected in the budgetary comparison schedules for operating, non-capital multi-year, and capital budgets:

1. The City Manager submits to the City Council a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed expenditures and the means of financing them for operating, non-capital multi-year and capital projects.

2. The City Council reviews the proposed budget at specially scheduled sessions, which are open to the public. The Council also conducts a public hearing on all proposed budgets to obtain comments from interested persons.

3. Prior to July 1, the budget is legally adopted through adoption of a resolution. This budget is reported as the Original Budget in the budgetary comparison schedules.

4. During the fiscal year, changes to the Adopted Budget may be authorized, as follows:
a. Authority to approve any adjustment in the amount of $25,000 or less is delegated to the Budget Manager.
b. Authority to approve any adjustment in an amount between $25,000 and $50,000 is delegated to the City Manager.
c. Authority for any budget adjustment more than $50,000 is delegated to the parties described below:
a. Items requiring City Council Action - appropriation of undesignated reserves; appropriation of new revenues; transfers of appropriations between funds (interfund transfers); creation of inter-fund loans; creation of, or increase in, any multiyear appropriation. b. Items delegated to the City Manager - transfer appropriations between departments within a fund; changing any capital equipment appropriation; appropriation of reserves for litigation on a case-by-case basis; appropriation of developer payments not previously budgeted.
c. Items delegated to the Budget Manager - appropriation of grant interest; revise the allocation of Internal Service Fund charges between departments provided that the total allocated amount does not increase; changing any capital improvement budget line item appropriation; make technical budget corrections to implement the intent of Council approved actions and resolutions. #1..
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City of Modesto
Note to Required Supplementary Information
Fiscal Year Ended June 30, 2024
118
NOTE 1 BUDGETARY INFORMATION (CONTINUED)
d. Items delegated to Department Directors - transfer appropriations within a department, within a single fund. Department Directors under this context is only permitted to move existing budget from one appropriation to another within a single department and fund. Department Directors cannot move funds from one department to another or from one fund to another.

5. Formal budgetary accounting is employed as a management tool for all funds. Annual budgets are legally adopted and amended as required for the general, special revenue, enterprise and internal service funds. Project length budgets are adopted for the capital projects funds. All budgets are prepared on a basis consistent with generally accepted accounting principles (GAAP), and budgetary comparisons for the general and major special revenue funds are presented on this basis in the required supplementary information. A debt service payment schedule for the debt service funds is also approved as part of the budget process.

6. Budget amounts are reflected after all authorized amendments and revisions. This budget is reported as the Final Budget in the budgetary comparison schedules.

7. For each legally adopted operating budget, expenditures may not exceed budgeted appropriations at the appropriation unit level. The legal appropriation basis is at the level called "department". A "department" for legal appropriation purposes may be a single organization (e.g., City Attorney), or an entire department having multiple organizations within the same fund (e.g., Operations and Maintenance), or an entire fund (e.g., Downtown Improvement District). All departments and funds completed the year within their legally authorized expenditures. Encumbrance accounting, under which purchase orders, contracts and other commitments are recorded to reserve the applicable appropriations, is employed in the governmental funds.

The City does, however, honor the contracts represented by year-end encumbrances and the subsequent year's appropriations provide authority to complete these transactions.
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COMBINING AND INDIVIDUAL FUND

STATEMENTS AND SCHEDULES TAB
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City of Modesto
Description of Nonmajor Governmental Funds
Fiscal Year Ended June 30, 2024
119

NONMAJOR SPECIAL REVENUE FUNDS
Special Revenue Funds include funds which are restricted as to use by the Federal or State governments, and special purpose funds established by authority of the City Council. Nonmajor Special Revenue Funds include:

Local Transportation Fund - To account for revenues and expenditures of Local Transportation Fund allocations for streets, urban trails, and non-motorized facilities.

Traffic Safety Fund - To account for receipts and expenditures of traffic safety fines.

Downtown Improvement District Fund - To account for the fiscal activities of Business Improvement Area A and Downtown Modesto Community Benefit District of the City of Modesto.

Strategic Planning and Development Fund - Established to provide a funding source for future village planning, general plan update and other large expenses related to planning and development. This fund was originally financed with an apportionment of the PERS rebate related to AB702. Subsequent funding has been provided by transfers from the General Fund. Future funding will be provided by fees imposed on private development.

Cannabis Fund - To account for the collection of annual commercial cannabis permits, cannabis application fees, cannabis grants and any cannabis-related expenses.

NONMAJOR CAPITAL PROJECTS FUNDS
Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. Nonmajor Capital Projects Funds include:

Capital Grants Fund - To account for receipts and disbursements of a variety of Governmental Fund capital grants.

Special Fund for Capital Outlays - To account for capital outlay authorized by the City Council. No monies placed in this fund are to be disbursed except for this purpose unless authorized by a vote of the people.

Parks Fund - To account for a discretionary transfer of General Fund property tax revenue to provide for the development of parks within the City, as directed by the City Council.

Securities For Future Improvements Fund - To account for the collection of impact fees for approved development projects to construct facilities needed for future development.

Community Facilities Districts Fund - To account for the construction of public improvements deemed to benefit properties against which special taxes are levied.

Successor Redevelopment Housing Agency Fund - To account for the housing redevelopment capital projects financed by the Successor Redevelopment Housing Agency of the City of Modesto. #1..
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City of Modesto
Description of Nonmajor Governmental Funds (Continued)
Fiscal Year Ended June 30, 2024
120
Capital Facility Fees Fund - To account for special fees collected on new building permits to be used for construction of certain growth related projects. The fees and related capital projects include police department expansion, fire department expansion, expressway loop, street lights, street improvements, parks, new traffic signals, City downtown, wastewater treatment, public transportation, and air quality improvements. Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes.

Transportation Special Tax Capital Fund - To account for receipts and disbursements of Governmental Fund capital projects funded through locally-shared gas tax, 25 year, ½ cent sales tax Measure L, and SB-1 (Road Repair and Accountability Act of 2017) monies.

NONMAJOR DEBT SERVICE FUND
Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest. Nonmajor Debt Service Fund includes:

Public Financing Authority Fund - To account for payment of debt issued to finance projects authorized by the Modesto Public Financing Authority.
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City of Modesto
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
121
Downtown Strategic
Local Traffic Improvement Planning and Cannabis
Transportation Safety District Development Fund
ASSETS
Cash and cash equivalents $ 1,940,815 $ 118,218 $ 60, $ 137 2,461,611 $ 448,498 Receivables:

Accounts, net - 510 - 527 359
Interest - - - 8,634 -
Taxes - - 53,968 - -
Leases - - - - -
Due from governments - - - 161,956 -
Due from Successor Agency - - - - -
Prepaid expenditures - 109,677 - - -
Restricted assets:

Cash and cash equivalents 1,775 3,099,958 - - -
Cash and cash equivalents with fiscal agent - - - - -
Due from governments - 40,681 - - -
Notes receivable, net - - - 64,449 -
Total assets $ 1,942,590 $ 3,369,044 $ 114,105 $ 2,697,177 $ 448,857

LIABILITIES, DEFERRED INFLOWS OF RESOURCES

AND FUND BALANCES
Liabilities:

Accounts payable $ - $ 112,854 $ 79,349 $ 39,592 $ 26,557 Accrued salaries and benefits - 5,874 - - -
Due to other funds - - 35,079 - -
Due to fiduciary funds - - - - -
Unearned revenue 1,940,815 - - - -
Payable from restricted assets:

Refundable deposits - - - - -
Advances from other funds - - - 52,881 -
Total liabilities 1,940,815 118,728 114,428 92,473 26,557 Deferred inflows of resources:

Unavailable revenue - - - - 437,122
Leases - - - - -
Total deferred inflows of resources - - - - 437,122
Fund balances:

Nonspendable - 109,677 - - -
Restricted 1,775 3,140,639 - 64,449 -
Assigned - - - 2,540,255 -
Unassigned - - (323) - (14,822)
Total fund balances (deficit) 1,775 3,250,316 (323) 2,604,704 (14,822) Total liabilities, deferred inflows of
resources, and fund balances $ 1,942,590 $ 3,369,044 $ 114,105 $ 2,697,177 $ 448,857 (continued)
Special Revenue
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City of Modesto
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30, 2024
122
Special Fund Securities Community
Capital for Capital for Future Facilities
Grants Outlays Parks Improvements Districts
ASSETS
Cash and cash equivalents $ - $ 348,982 $ - $ - $ 297,169 Receivables:

Accounts, net 35,440 - - - 14,179
Interest - 10,293 1,698 - 88,072
Taxes - - - - 144,719
Leases - - 392,079 - 1,069,393
Due from governments 11,124,568 - - - -
Due from Successor Agency - - - - -
Prepaid expenditures - 2,167 - - -
Restricted assets:

Cash and cash equivalents - 2,846,852 497,498 81,046 25,426,439 Cash and cash equivalents with fiscal agent - - - - -
Due from governments - - - - -
Notes receivable, net - - - - -
Total assets $ 11,160,008 $ 3,208,294 $ 891,275 $ 81,046 $ 27,039,971

LIABILITIES, DEFERRED INFLOWS OF RESOURCES

AND FUND BALANCES
Liabilities:

Accounts payable $ 2,598,728 $ 268,258 $ - $ - $ 262,966 Accrued salaries and benefits - - - - 19,621
Due to other funds 3,260,573 - - - -
Due to fiduciary funds - - - - 24,223
Unearned revenue - - - - -
Payable from restricted assets:

Refundable deposits - - - - 84,223
Advances from other funds - 91,017 - - 142,913
Total liabilities 5,859,301 359,275 - - 533,946
Deferred inflows of resources:

Unavailable revenue 7,920,063 - - - 71,044
Leases - - 369,616 - 1,008,542
Total deferred inflows of resources 7,920,063 - 369,616 - 1,079,586 Fund balances:

Nonspendable - 2,167 - - -
Restricted - 2,846,852 497,498 81,046 25,426,439
Assigned - - 24,161 - -
Unassigned (2,619,356) - - - -
Total fund balances (deficit) (2,619,356) 2,849,019 521,659 81,046 25,426,439 Total liabilities, deferred inflows of
resources, and fund balances $ 11,160,008 $ 3,208,294 $ 891,275 $ 81,046 $ 27,039,971 (continued)
Capital Projects
#1..
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City of Modesto
Combining Balance Sheet
Nonmajor Governmental Funds (Continued)
June 30, 2024
123
Debt Service
Successor Capital Transportation Public
Redevelopment Facility Special Tax Financing
Housing Agency Fees Capital Authority Total
ASSETS
Cash and cash equivalents $ - $ 1, $ 033,107 - $ 1,624 $ 6,710,161 Receivables:

Accounts, net - 128,797 - - 179,812
Interest 412 165,145 - - 274,254
Taxes - - - - 198,687
Leases - - - - 1,461,472
Due from governments - - - - 11,286,524
Due from Successor Agency 1,192,004 - - - 1,192,004
Prepaid expenditures - - - 1,111 112,955
Restricted assets:

Cash and cash equivalents 118,441 46,485,763 - - 78,557,772 Cash and cash equivalents with fiscal agent - - - 5,505,170 5,505,170 Due from governments - 706,546 - - 747,227
Notes receivable, net 2,211,000 - - - 2,275,449
Total assets $ 3,521,857 $ 48,519,358 $ - $ 5,507,905 $ 108,501,487

LIABILITIES, DEFERRED INFLOWS OF RESOURCES

AND FUND BALANCES
Liabilities:

Accounts payable $ - $ 253,864 $ - $ 36,055 $ 3,678,223 Accrued salaries and benefits - - - - 25,495
Due to other funds - - - - 3,295,652
Due to fiduciary funds - - - - 24,223
Unearned revenue - - - - 1,940,815
Payable from restricted assets:

Refundable deposits - - - - 84,223
Advances from other funds 145,727 308,420 - - 740,958
Total liabilities 145,727 562,284 - 36,055 9,789,589
Deferred inflows of resources:

Unavailable revenue - 764,765 - - 9,192,994
Leases - - - - 1,378,158
Total deferred inflows of resources - 764,765 - - 10,571,152 Fund balances:

Nonspendable - - - 1,111 112,955
Restricted 2,329,441 47,192,309 - 5,505,170 87,085,618
Assigned 1,046,689 - - - 3,611,105
Unassigned - - - (34,431) (2,668,932)
Total fund balances (deficit) 3,376,130 47,192,309 - 5,471,850 88,140,746 Total liabilities, deferred inflows of
resources, and fund balances $ 3,521,857 $ 48,519,358 $ - $ 5,507,905 $ 108,501,487 (concluded)
Capital Projects
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City of Modesto
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
Fiscal Year Ended June 30, 2024
124
Downtown Strategic
Local Traffic Improvement Planning and Cannabis
Transportation Safety District Development Fund
REVENUES:

Taxes $ - $ - $ 209,236 $ - $ -
Licenses and permits - - - - 250,282
Intergovernmental 60,993 - - - -
Charges for services - 308,517 - 318,962 -
Special assessments levied - - 838,281 - -
Interest and rent 97,913 - - 56,442 -
Net increase (decrease) in fair
value of investments - - - 51,547 -
Fines and forfeits - 191,948 - - -
Miscellaneous - - - - -
Total revenues 158,906 500,465 1,047,517 426,951 250,282 EXPENDITURES:

Current:

Community development - - 1,049,516 159,955 265,104
Highways and streets - - - - -
Public works - - - - -
Parks and recreation 119,604 - - - -
Public safety - 554,374 - - -
Capital outlay:

Community development - - - - -
Highways and streets - - - - -
Public Works - - - - -
Parks and recreation - - - - -
Public safety - 900,488 - - -
Debt service:

Principal retirement - 300,895 - - -
Interest - 4,452 - - -
Other - - - - -
Total expenditures 119,604 1,760,209 1,049,516 159,955 265,104

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 39,302 (1,259,744) (1,999) 266,996 (14,822) OTHER FINANCING SOURCES (USES):

Transfers in - - - 55,920 -
Transfers out (39,302) - - (2,538) -
Other financing proceeds -
leases and SBITAs - 838,362 - - -
Sale of assets - 485 - - -

TOTAL OTHER FINANCING
SOURCES (USES) (39,302) 838,847 - 53,382 -
CHANGES IN FUND BALANCES - (420,897) (1,999) 320,378 (14,822) FUND BALANCES, JULY 1 1,775 3,671,213 1,676 2,284,326 -

PRIOR PERIOD ADJUSTMENTS - - - - -
FUND BALANCES (DEFICIT), JUNE 30 $ 1,775 $ 3,250,316 $ (323) $ 2,604,704 $ (14,822) (continued)
Special Revenue
#1..
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City of Modesto
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds (Continued)
Fiscal Year Ended June 30, 2024
125
Special Fund Securities Community
Capital for Capital for Future Facilities
Grants Outlays Parks Improvements Districts
REVENUES:

Taxes $ - $ - $ - $ - $ -
Licenses and permits - - - - -
Intergovernmental 10,298,883 - - - -
Charges for services - 3,000 1,695 - 926,834
Special assessments levied - - - - 4,138,178
Interest and rent - 65,550 56,948 4,289 602,321
Net increase (decrease) in fair
value of investments - 62,439 12,877 - 490,738
Fines and forfeits - - - - -
Miscellaneous - 34,900 10,231 - -
Total revenues 10,298,883 165,889 81,751 4,289 6,158,071 EXPENDITURES:

Current:

Community development 79,398 366,950 - - 3,885,004
Highways and streets 4,880,203 - - - -
Public works 6,261,645 - - - -
Parks and recreation - 1,172,794 23,116 - -
Public safety - 238,928 - - -
Capital outlay:

Community development 57,490 - - - 66
Highways and streets 1,946,341 473 - - -
Public Works 73,178 - - - -
Parks and recreation 1,199,609 - 282,208 - -
Public safety - - - - -
Debt service:

Principal retirement - - - - 1,578
Interest - - - - 103
Other - - - - -
Total expenditures 14,497,864 1,779,145 305,324 - 3,886,751

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (4,198,981) (1,613,256) (223,573) 4,289 2,271,320 OTHER FINANCING SOURCES (USES):

Transfers in 6,330,832 1,782,019 182,638 - -
Transfers out - (4,358) (39,407) - -
Other financing proceeds -
leases and SBITAs - - - - 18,986
Sale of assets - - - - -

TOTAL OTHER FINANCING
SOURCES (USES) 6,330,832 1,777,661 143,231 - 18,986
CHANGES IN FUND BALANCES 2,131,851 164,405 (80,342) 4,289 2,290,306 FUND BALANCES, JULY 1 (4,751,207) 2,684,614 602,001 76,757 23,038,505 PRIOR PERIOD ADJUSTMENTS - - - - 97,628
FUND BALANCES (DEFICIT), JUNE 30 $ (2,619,356) $ 2,849,019 $ 521,659 $ 81,046 $ 25,426,439 (continued)
Capital Projects
#1..
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City of Modesto
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds (Continued)
Fiscal Year Ended June 30, 2024
126
Debt Service
Successor Capital Transportation Public
Redevelopment Facility Special Tax Financing
Housing Agency Fees Capital Authority Total
REVENUES:

Taxes $ - $ - $ - $ - $ 209,236
Licenses and permits - - - - 250,282
Intergovernmental - - - 1,190,253 11,550,129
Charges for services - 4,937,812 - - 6,496,820
Special assessments levied - - - - 4,976,459
Interest and rent 222,670 1,091,099 - 264,914 2,462,146 Net increase (decrease) in fair
value of investments (235) 562,926 - - 1,180,292
Fines and forfeits - - - - 191,948
Miscellaneous - 16,885 - - 62,016
Total revenues 222,435 6,608,722 - 1,455,167 27,379,328 EXPENDITURES:

Current:

Community development - 16,066 13,165 - 5,835,158
Highways and streets - 571,485 4,612,795 - 10,064,483
Public works - - - - 6,261,645
Parks and recreation - 868,518 261,233 - 2,445,265
Public safety - - - - 793,302
Capital outlay:

Community development - - 16,224 - 73,780
Highways and streets - 2,090,251 406,445 - 4,443,510
Public Works - - - - 73,178
Parks and recreation - 100,250 22,892 - 1,604,959
Public safety - - - - 900,488
Debt service:

Principal retirement - - - 2,785,000 3,087,473
Interest - - - 1,077,869 1,082,424
Other - - - 54,370 54,370
Total expenditures - 3,646,570 5,332,754 3,917,239 36,720,035

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 222,435 2,962,152 (5,332,754) (2,462,072) (9,340,707) OTHER FINANCING SOURCES (USES):

Transfers in - - 5,332,754 2,796,911 16,481,074
Transfers out - (2,503,777) - - (2,589,382)
Other financing proceeds -
leases and SBITAs - - - - 857,348
Sale of assets - - - - 485

TOTAL OTHER FINANCING
SOURCES (USES) - (2,503,777) 5,332,754 2,796,911 14,749,525 CHANGES IN FUND BALANCES 222,435 458,375 - 334,839 5,408,818 FUND BALANCES, JULY 1 3,153,695 46,733,934 - 5,137,011 82,634,300 PRIOR PERIOD ADJUSTMENTS - - - - 97,628
FUND BALANCES (DEFICIT), JUNE 30 $ 3,376,130 $ 47,192,309 $ - $ 5,471,850 $ 88,140,746 (concluded)
Capital Projects
#1..
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual
Local Transportation Special Revenue Fund
Fiscal Year Ended June 30, 2024
NOTE: The Expenditures by function amounts listed above include the capital outlay expenditures within each department.
127
Variance with
Original Final Actual Final Budget
REVENUES:

Intergovernmental $ - $ - $ 60,993 $ 60,993
Interest and rent - - 97,913 97,913
Total revenues - - 158,906 158,906
EXPENDITURES:

Current:

Parks and recreation - 126,066 119,604 6,462
Total expenditures - 126,066 119,604 6,462

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - (126,066) 39,302 165,368
OTHER FINANCING USES:

Transfers out - (1,519,314) (39,302) 1,480,012
CHANGES IN FUND BALANCES - (1,645,380) - 1,645,380
FUND BALANCES, JULY 1 1,775 1,775 1,775 -
FUND BALANCES, JUNE 30 $ 1,775 $ (1,643,605) $ 1,775 $ 1,645,380 Budget
#1..
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual
Traffic Safety Special Revenue Fund
Fiscal Year Ended June 30, 2024
NOTE: The Expenditures by function amounts listed above include the capital outlay expenditures within each department.
128
Variance with
Original Final Actual Final Budget
REVENUES:

Charges for services $ 305,000 $ 305,000 $ 308,517 $ 3,517 Fines and forfeits 170,000 170,000 191,948 21,948
Total revenues 475,000 475,000 500,465 25,465
EXPENDITURES:

Current:

Public safety 841,670 1,992,535 1,454,862 537,673
Debt service:

Principal retirement - 300,895 300,895 -
Interest - 4,452 4,452 -
Total expenditures 841,670 2,297,882 1,760,209 537,673

DEFICIENCY OF REVENUES
UNDER EXPENDITURES (366,670) (1,822,882) (1,259,744) 563,138 OTHER FINANCING SOURCES:

Other financing proceeds - SBITA - 838,362 838,362 -
Sale of assets - - 485 485

TOTAL OTHER FINANCING
SOURCES - 838,362 838,847 485
CHANGES IN FUND BALANCES (366,670) (984,520) (420,897) 563,623 FUND BALANCES, JULY 1 3,671,213 3,671,213 3,671,213 -
FUND BALANCES, JUNE 30 $ 3,304,543 $ 2,686,693 $ 3,250,316 $ 563,623 Budget
#1..
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual
Downtown Improvement District Special Revenue Fund
Fiscal Year Ended June 30, 2024
NOTE: The Expenditures by function amounts listed above include the capital outlay expenditures within each department.
129
Variance with
Original Final Actual Final Budget
REVENUES:

Taxes $ 209,000 $ 209,236 $ 209,236 $ -
Special assessments levied - 839,983 838,281 (1,702)
Total revenues 209,000 1,049,219 1,047,517 (1,702)
EXPENDITURES:

Current:

Community development 210,106 1,049,219 1,049,516 (297) Total expenditures 210,106 1,049,219 1,049,516 (297)

DEFICIENCY OF REVENUES
UNDER EXPENDITURES (1,106) - (1,999) (1,999)
CHANGES IN FUND BALANCES (1,106) - (1,999) (1,999)
FUND BALANCES, JULY 1 1,676 1,676 1,676 -
FUND BALANCES, JUNE 30 $ 570 $ 1,676 $ (323) $ (1,999)
Budget
#1..
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual
Strategic Planning and Development Special Revenue Fund Fiscal Year Ended June 30, 2024
NOTE: The Expenditures by function amounts listed above include the capital outlay expenditures within each department.
130
Variance with
Original Final Actual Final Budget
REVENUES:

Charges for services $ 205,185 $ 190,816 $ 318,962 $ 128,146 Interest and rent - - 56,442 56,442
Net increase in fair
value of investments - - 51,547 51,547
Total revenues 205,185 190,816 426,951 236,135
EXPENDITURES:

Current:

Community development 1,543,769 3,578,037 159,955 3,418,082 Total expenditures 1,543,769 3,578,037 159,955 3,418,082

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,338,584) (3,387,221) 266,996 3,654,217 OTHER FINANCING SOURCES (USES):

Transfers in 236,201 811,721 55,920 (755,801)
Transfers out - - (2,538) (2,538)

TOTAL OTHER FINANCING
SOURCES 236,201 811,721 53,382 (758,339)
CHANGES IN FUND BALANCES (1,102,383) (2,575,500) 320,378 2,895,878 FUND BALANCES, JULY 1 2,284,326 2,284,326 2,284,326 -
FUND BALANCES, JUNE 30 $ 1,181,943 $ (291,174) $ 2,604,704 $ 2,895,878 Budget
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual
Cannabis Special Revenue Fund
Fiscal Year Ended June 30, 2024
NOTE: The Expenditures by function amounts listed above include the capital outlay expenditures within each department.
131
Variance with
Original Final Actual Final Budget
REVENUES:

Licenses and permits $ - $ 299,712 $ 250,282 $ (49,430) Total revenues - 299,712 250,282 (49,430)
EXPENDITURES:

Current:

Community development - 299,697 265,104 34,593
Total expenditures - 299,697 265,104 34,593

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES - 15 (14,822) (14,837)
OTHER FINANCING SOURCES (USES):

Transfers in - 794,117 - (794,117)
CHANGES IN FUND BALANCES - 794,132 (14,822) (808,954)
FUND BALANCES, JULY 1 - - - -
FUND BALANCES, JUNE 30 $ - $ 794,132 $ (14,822) $ (808,954) Budget
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City of Modesto
Description of Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2024
132
Enterprise Funds are established to account for activities that render services on a user-charge basis to the general public. Nonmajor Enterprise Funds include:

Parking Fund - Revenues in this fund consist of charges for off-street parking, downtown parking garage, as well as in-lieu parking fees, parking citations, adjudication and enforcement programs. The revenue is used to develop and maintain parking facilities.

Storm Drain Fund - To account for storm drain improvements, operations and maintenance. The activities of the fund include street cleaning, rock well maintenance, and compliance with Federal and State water quality standards on storm water discharge.

Compost Fund - To account for tip fees charged at the City’s composting facility for processing various compostable materials and the sale of compost product. Excess revenues over expenses are set aside to protect the enterprise against market fluctuations, and to provide for capital improvements to the facility infrastructure.

Airport Fund - To account for all airport operations as stipulated in the City-Stanislaus County agreement of January 1968. Amounts received from the Federal government, State of California, and Stanislaus County, requiring matching amounts by the City, are recorded in this fund and are appropriated to finance approved capital projects.

Golf Fund - Revenues in this fund consist of fees charged for using the City’s golf courses. The revenue is used to improve, operate, and maintain golf courses.

Community Center Fund - Accounted for in this fund are all amounts collected for the purpose of operating and maintaining the Modesto Centre Plaza Community Center. Revenues include room rental, catering fees, ticket sales, and other charges for using the center.

Abatement and Public Nuisance Fund - To account the activity for expenses and recovery for the cost for both dangerous and unsafe building and property abatements. #1..
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City of Modesto
Combining Statement of Net Position
Nonmajor Enterprise Fund
June 30, 2024
133
Storm
Parking Drain Compost Airport
ASSETS
Current assets:

Cash and cash equivalents $ 953,268 $ 10,186,553 $ 7,213,607 $ 3,991,884 Receivables:

Accounts, net 104,651 5,539 2,354,455 19,902
Interest 834 37,703 35,799 13,302
Taxes - - - 2,212
Utilities, net - 629,271 776,033 -
Leases 135,564 - - 123,028
Prepaid expenses 115 143 1,071 1,998
Due from governments 8,224 18,152 152,872 339,225
Inventories - - - -
Total current assets 1,202,656 10,877,361 10,533,837 4,491,551 Noncurrent assets:

Advances to other funds - - - -
Restricted cash and cash equivalents with fiscal agent - - - - Leases receivable 4,656,244 - - 2,373,736
Land and construction in progress 3,131,804 928,317 1,140,000 1,352,142 Other capital assets, net of accumulated depreciation 2,235,812 12,574,059 764,539 7,056,280 Intangible assets right-to-use, net of accumulated amortization - 17,669 5,250 - Total noncurrent assets 10,023,860 13,520,045 1,909,789 10,782,158 Total assets 11,226,516 24,397,406 12,443,626 15,273,709

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB 31,349 23,867 139,410 -
Deferred pensions 294,276 288,550 2,801,621 279,244
Total deferred outflows of resources 325,625 312,417 2,941,031 279,244 Total assets and deferred outflows of resources 11,552,141 24,709,823 15,384,657 15,552,953

LIABILITIES
Current liabilities:

Accounts payable 32,874 92,559 162,446 13,196
Accrued salaries and benefits 24,741 17,785 160,552 13,421 Interest payable - - 8,800 -
Current portion - leases and SBITA - 4,572 1,359 -
Unearned revenue - - 42,892 40,000
Total current liabilities 57,615 114,916 376,049 66,617 Noncurrent liabilities:

Advances from other funds - 1,324,704 3,129,800 -
Pollution remediation liability - - 2,026,319 -
Leases and SBITA payable - 10,219 3,036 -
Net OPEB liability 121,223 126,390 915,212 -
Net pension liability 1,093,021 1,071,755 10,405,986 1,037,190 Total noncurrent liabilities 1,214,244 2,533,068 16,480,353 1,037,190 Total liabilities 1,271,859 2,647,984 16,856,402 1,103,807

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB 41,764 33,550 176,063 -
Deferred pensions 2,731 2,677 25,996 2,591
Deferred leases 4,579,547 - - 2,426,343
Total deferred inflows of resources 4,624,042 36,227 202,059 2,428,934 Total liabilities and deferred inflows of resources 5,895,901 2,684,211 17,058,461 3,532,741

NET POSITION
Net investment in capital assets 5,367,616 13,505,254 1,905,394 8,408,422 Restricted - - - -
Unrestricted 288,624 8,520,358 (3,579,198) 3,611,790
Total net position $ 5,656,240 $ 22,025,612 $ (1,673,804) $ 12,020,212 (Continued)
#1..
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City of Modesto
Combining Statement of Net Position
Nonmajor Enterprise Fund (Continued)
June 30, 2024
134
Community Abatement and
Golf Center Public Nuisance Total
ASSETS
Current assets:

Cash and cash equivalents $ 3,672,481 $ $ 432,788 $ 714,700 27,165,281 Receivables:

Accounts, net 336,912 122,427 1,086,152 4,030,038
Interest 11,739 - 1,819 101,196
Taxes - - - 2,212
Utilities, net - - - 1,405,304
Leases 63,054 8,379 - 330,025
Prepaid expenses 162,788 384 - 166,499
Due from governments - - - 518,473
Inventories 53,436 - - 53,436
Total current assets 4,300,410 563,978 1,802,671 33,772,464 Noncurrent assets:

Advances to other funds - - 52,882 52,882
Restricted cash and cash equivalents with fiscal agent 204,607 - - 204,607 Leases receivable 3,749,414 - - 10,779,394
Land and construction in progress 1,360,197 3,667,020 - 11,579,480 Other capital assets, net of accumulated depreciation 861,955 2,438,825 - 25,931,470 Intangible assets right-to-use, net of accumulated amortization 297,334 - - 320,253 Total noncurrent assets 6,473,507 6,105,845 52,882 48,868,086 Total assets 10,773,917 6,669,823 1,855,553 82,640,550

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB - 21,671 - 216,297
Deferred pensions - 258,555 - 3,922,246
Total deferred outflows of resources - 280,226 - 4,138,543 Total assets and deferred outflows of resources 10,773,917 6,950,049 1,855,553 86,779,093

LIABILITIES
Current liabilities:

Accounts payable 148,299 32,770 73,659 555,803
Accrued salaries and benefits 32,687 28,017 - 277,203
Interest payable - - - 8,800
Current portion - leases and SBITA 51,480 - - 57,411
Unearned revenue 869,523 - 100 952,515
Total current liabilities 1,101,989 60,787 73,759 1,851,732 Noncurrent liabilities:

Advances from other funds - - - 4,454,504
Pollution remediation liability - - - 2,026,319
Leases and SBITA payable 284,935 - - 298,190
Net OPEB liability - 115,965 - 1,278,790
Net pension liability - 960,344 - 14,568,296
Total noncurrent liabilities 284,935 1,076,309 - 22,626,099 Total liabilities 1,386,924 1,137,096 73,759 24,477,831

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB - 24,691 - 276,068
Deferred pensions - 2,399 - 36,394
Deferred leases 3,560,335 1,618 - 10,567,843
Total deferred inflows of resources 3,560,335 28,708 - 10,880,305 Total liabilities and deferred inflows of resources 4,947,259 1,165,804 73,759 35,358,136

NET POSITION
Net investment in capital assets 2,183,071 6,105,845 - 37,475,602 Restricted 204,607 - - 204,607
Unrestricted 3,438,980 (321,600) 1,781,794 13,740,748
Total net position $ 5,826,658 $ 5,784,245 $ 1,781,794 $ 51,420,957 (Concluded)
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City of Modesto
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2024
135
Parking Storm Drain Compost Airport
OPERATING REVENUES:

Charges for services $ 1,216,747 $ 6,274,159 $ 16,640,925 $ 948,663 Miscellaneous 350,517 1,874 292,957 13,023
Total operating revenues 1,567,264 6,276,033 16,933,882 961,686 OPERATING EXPENSES:

Salaries and wages 623,428 337,788 4,395,920 390,866
Contractual services 291,145 769,063 3,069,691 148,817
Utilities 153,315 37,360 34,463 111,233
Maintenance and supplies 139,182 2,332,343 2,676,863 117,214 Insurance 131,151 11,378 474,076 50,941
Employee benefits 297,203 340,216 2,771,736 188,941
Administration services 478,832 2,701,871 676,398 46,310 Allocated indirect administrative costs 43,350 130,482 351,705 28,739 Depreciation 385,571 443,440 54,823 656,160
Total operating expenses 2,543,177 7,103,941 14,505,675 1,739,221 OPERATING INCOME (LOSS) (975,913) (827,908) 2,428,207 (777,535) NONOPERATING REVENUES (EXPENSES):

Operating grants - - 256,785 339,225
Gain (loss) on disposition of capital assets - 58,100 43,985 - Tax revenue - - - 359,122
Tax expense (31) - - (2,001)
Interest income 73,322 240,540 159,447 117,465
Net increase (decrease) in fair value of investments (2,353) 233,301 131,095 67,578 Rental income 157,051 - - 319,847
Settlements and recoveries - - - -
Interest expense and amortization - (440) (131) -
Trustee and letter of credit fees - - - -
Total nonoperating revenues 227,989 531,501 591,181 1,201,236

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
AND TRANSFERS (747,924) (296,407) 3,019,388 423,701
Capital contributions - - (57,568) -
Transfers in 1,027,084 700,000 - -
Transfers out - (1,386,780) (749,482) -
Total capital contributions and transfers 1,027,084 (686,780) (807,050) - CHANGES IN NET POSITION 279,160 (983,187) 2,212,338 423,701 NET POSITION (DEFICIT), JULY 1, AS PREVIOUSLY REPORTED 5,377,080 23,008,799 (3,886,142) 11,596,511

PRIOR PERIOD ADJUSTMENTS - - - -
NET POSITION (DEFICIT), JULY 1, AS RESTATED 5,377,080 23,008,799 (3,886,142) 11,596,511 NET POSITION (DEFICIT), JUNE 30 $ 5,656,240 $ 22,025,612 $ (1,673,804) $ 12,020,212 (Continued)
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City of Modesto
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Nonmajor Enterprise Funds (Continued)
Fiscal Year Ended June 30, 2024
136
Community Abatement and
Golf Center Public Nuisance Total
OPERATING REVENUES:

Charges for services $ 3,162,078 $ 274,052 $ 247,697 $ 28,764,321 Miscellaneous - 3,130 - 661,501
Total operating revenues 3,162,078 277,182 247,697 29,425,822 OPERATING EXPENSES:

Salaries and wages - 738,881 - 6,486,883
Contractual services 2,561,002 274,082 115,752 7,229,552 Utilities 50,189 267,243 - 653,803
Maintenance and supplies 296,539 280,637 - 5,842,778
Insurance 38,804 52,249 - 758,599
Employee benefits - 272,855 - 3,870,951
Administration services 273,646 65,618 262,265 4,504,940 Allocated indirect administrative costs 50,008 - - 604,284 Depreciation 99,205 57,184 - 1,696,383
Total operating expenses 3,369,393 2,008,749 378,017 31,648,173 OPERATING INCOME (LOSS) (207,315) (1,731,567) (130,320) (2,222,351) NONOPERATING REVENUES (EXPENSES):

Operating grants - - - 596,010
Gain (loss) on disposition of capital assets (5,447) 15,295 - 111,933 Tax revenue - - - 359,122
Tax expense - - - (2,032)
Interest income 15,567 249 10,790 617,380
Net increase (decrease) in fair value of investments (4,188) - 9,815 435,248 Rental income 132,212 592,022 - 1,201,132
Settlements and recoveries 3,620,125 - - 3,620,125
Interest expense and amortization (33,210) - - (33,781) Trustee and letter of credit fees (2,954) - - (2,954)
Total nonoperating revenues 3,722,105 607,566 20,605 6,902,183

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
AND TRANSFERS 3,514,790 (1,124,001) (109,715) 4,679,832 Capital contributions - - - (57,568)
Transfers in 366,791 460,377 2,538 2,556,790
Transfers out - (39,245) - (2,175,507)
Total capital contributions and transfers 366,791 421,132 2,538 323,715 CHANGES IN NET POSITION 3,881,581 (702,869) (107,177) 5,003,547 NET POSITION (DEFICIT), JULY 1, AS PREVIOUSLY REPORTED 1,945,077 6,487,114 1,854,067 46,382,506 PRIOR PERIOD ADJUSTMENTS - - 34,904 34,904
NET POSITION (DEFICIT), JULY 1, AS RESTATED 1,945,077 6,487,114 1,888,971 46,417,410 NET POSITION (DEFICIT), JUNE 30 $ 5,826,658 $ 5,784,245 $ 1,781,794 $ 51,420,957 (Concluded)
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City of Modesto
Combining Statement of Cash Flow
Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2024
137
Storm
Parking Drain Compost Airport
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 1,543,331 $ 6,240,976 $ 16,644,053 $ 976,630 Payments to suppliers (1,117,798) (6,141,819) (6,697,349) (555,461) Payments to employees (874,325) (649,528) (6,706,587) (607,085) Net cash provided by (used in) operating activities (448,792) (550,371) 3,240,117 (185,916)

CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:

Operating grants received - - 256,785 339,225
Taxes received - - - 359,122
Transfers in 1,027,084 700,000 - -
Transfers out - (1,386,780) (749,482) -
Advances from/to other funds - - (654,200) -
Settlements and recoveries - - - -
Net cash provided by (used in) noncapital financing
activities 1,027,084 (686,780) (1,146,897) 698,347

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Advances from/to other funds - - - -
Acquisition and construction of capital assets - - - -
Proceeds from sale of capital assets - 58,101 52,177 -
Principal (repayments) collection (157,051) (4,240) (1,259) 115,907 Interest (paid) received (347) (440) 4,923 -
Trustee fees - - - -
Capital contributions - - (57,568) -
Net cash provided by (used in) capital and related
financing activities (157,398) 53,421 (1,727) 115,907
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 73,057 230,688 142,769 111,873
Net increase (decrease) in the fair value of investments (2,353) 233,301 131,095 67,578 Rental income received 290,599 - - 168,383
Net cash provided by investing activities 361,303 463,989 273,864 347,834 Net increase (decrease) in cash and cash equivalents 782,197 (719,741) 2,365,357 976,172 CASH AND CASH EQUIVALENTS, JULY 1 171,071 10,906,294 4,848,250 3,015,712 CASH AND CASH EQUIVALENTS, JUNE 30 $ 953,268 $ 10,186,553 $ 7,213,607 $ 3,991,884 RECONCILIATION TO STATEMENT OF NET POSITION:

Cash and cash equivalents $ 953,268 $ 10,186,553 $ 7,213,607 $ 3,991,884 Restricted cash and cash equivalents with fiscal agent - - - - TOTAL CASH AND CASH EQUIVALENTS $ 953,268 $ 10,186,553 $ 7,213,607 $ 3,991,884 (Continued)
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City of Modesto
Combining Statement of Cash Flow
Nonmajor Enterprise Funds (Continued)
Fiscal Year Ended June 30, 2024
138
Community Abatement and
Golf Center Public Nuisance Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 4,357,117 $ 236,287 $ 461,972 $ 30,460,366 Payments to suppliers (3,208,917) (498,453) (304,258) (18,524,055) Payments to employees - (975,268) - (9,812,793)
Net cash provided by (used in) operating activities 1,148,200 (1,237,434) 157,714 2,123,518

CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:

Operating grants received - - - 596,010
Taxes received - - - 359,122
Transfers in 366,791 460,377 2,538 2,556,790
Transfers out - (39,245) - (2,175,507)
Advances from/to other funds - - - (654,200)
Settlements and recoveries 3,620,125 - - 3,620,125
Net cash provided by (used in) noncapital financing
activities 3,986,916 421,132 2,538 4,302,340

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Advances from/to other funds - - 52,879 52,879
Acquisition and construction of capital assets (614,379) - - (614,379) Proceeds from sale of capital assets - 15,296 - 125,574 Principal (repayments) collection (1,346,463) (2,773) - (1,395,879) Interest (paid) received (38,751) - - (34,615)
Trustee fees (2,954) - - (2,954)
Capital contributions - - - (57,568)
Net cash provided by (used in) capital and related
financing activities (2,002,547) 12,523 52,879 (1,926,942) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 3,828 249 10,170 572,634
Net increase (decrease) in the fair value of investments (4,188) - 9,815 435,248 Rental income received 132,212 600,278 - 1,191,472
Net cash provided by investing activities 131,852 600,527 19,985 2,199,354 Net increase (decrease) in cash and cash equivalents 3,264,421 (203,252) 233,116 6,698,270 CASH AND CASH EQUIVALENTS, JULY 1 612,667 636,040 481,584 20,671,618 CASH AND CASH EQUIVALENTS, JUNE 30 $ 3,877,088 $ 432,788 $ 714,700 $ 27,369,888 RECONCILIATION TO STATEMENT OF NET POSITION:

Cash and cash equivalents $ 3,672,481 $ 432,788 $ 714,700 $ 27,165,281 Restricted cash and cash equivalents with fiscal agent 204,607 - - 204,607 TOTAL CASH AND CASH EQUIVALENTS $ 3,877,088 $ 432,788 $ 714,700 $ 27,369,888 (Concluded)
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City of Modesto
Combining Statement of Cash Flows
Nonmajor Enterprise Funds (Continued)
Fiscal Year Ended June 30, 2024
139
Storm
Parking Drain Compost Airport

RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ (975,913) $ (827,908) $ 2,428,207 $ (777,535) Adjustments to reconcile operating income (loss) to
net cash provided (used in) by operating activities:

Depreciation 385,571 443,440 54,823 656,160
Taxes paid (31) - - (2,001)
Prior year adjustment - - - -
Change in assets, liabilities, and deferred resources:
(Increase) decrease:

Accounts receivable (23,933) (4,332) (242,671) 15,267
Taxes receivable - - - (323)
Utilities receivable - (30,725) (47,158) -
Leases receivable
Due from other governments 93,026 - (87,103) (75,046)
Inventories - - - -
Prepaid expenses 58 (143) 1,864 (1,883)
Deferred outflows of resources - OPEB 2,391 6,635 21,050 - Deferred outflows of resources - pensions 22,301 32,253 232,562 54,822 Increase (decrease):

Accounts payable 26,599 (159,089) (284,968) (7,364)
Accrued salaries and benefits (475) (90) (6,419) (5,913) Unearned revenue - - 42,892 40,000
Net OPEB liability 1,397 (2,483) (4,791) -
Net pension liability 34,654 (742) 262,221 (79,646)
Deferred inflows of resources - OPEB (12,387) (5,019) (30,146) - Deferred inflows of resources - pensions (2,050) (2,168) (19,827) (2,454) Pollution remediation - - 919,581 -
Total adjustments 527,121 277,537 811,910 591,619
Net cash provided (used in) by operating activities $ (448,792) $ (550,371) $ 3,240,117 $ (185,916) (Continued)
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City of Modesto
Combining Statement of Cash Flows
Nonmajor Enterprise Funds (Continued)
Fiscal Year Ended June 30, 2024
140
Community Abatement and
Golf Center Public Nuisance Total

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Operating income (loss) $ (207,315) $ (1,731,567) $ (130,320) $ (2,222,351) Adjustments to reconcile operating income (loss) to
net cash provided (used in) by operating activities:

Depreciation 99,205 57,184 - 1,696,383
Taxes paid - - - (2,032)
Prior year adjustment - - 34,904 34,904
Change in assets, liabilities, and deferred resources:
(Increase) decrease:

Accounts receivable 19,068 (40,895) 179,371 (98,125)
Taxes receivable - - - (323)
Utilities receivable - - - (77,883)
Leases receivable 1,175,971 - - 1,175,971
Due from other governments - 463,291 - 394,168
Inventories 803 - - 803
Prepaid expenses (8,124) (108) - (8,336)
Deferred outflows of resources - OPEB - 1,208 - 31,284
Deferred outflows of resources - pensions - 22,637 - 364,575 Increase (decrease):

Accounts payable 50,539 (25,227) 73,659 (325,851)
Accrued salaries and benefits 5,626 3,420 - (3,851)
Unearned revenue 12,427 - 100 95,419
Net OPEB liability - 775 - (5,102)
Net pension liability - 20,274 - 236,761
Deferred inflows of resources - OPEB - (6,578) - (54,130) Deferred inflows of resources - pensions - (1,848) - (28,347) Pollution remediation - - - 919,581
Total adjustments 1,355,515 494,133 288,034 4,345,869
Net cash provided (used in) by operating activities $ 1,148,200 $ (1,237,434) $ 157,714 $ 2,123,518 (Concluded)
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City of Modesto
Description of Internal Service Funds
Fiscal Year Ended June 30, 2024
141
Internal Service Funds are established to finance and account for services and commodities furnished by a designated agency of a governmental unit to other departments of the same governmental unit. Since the services and commodities are supplied exclusively to other departments of a governmental jurisdiction, they are distinguishable from those public services which are rendered to the public in general and which are accounted for in General, Special Revenue, or Enterprise Funds. Internal Service Funds include:

Fleet Management Fund - To provide the maintenance necessary for the City’s equipment pool, which serves the needs of all City departments.

Central Services Fund - To provide office supplies, various maintenance and construction materials, records storage, and mail services to all City departments.

Information and Technology Services Fund - To finance and account for the replacement, upgrade and maintenance of the City’s network and technology infrastructure, and to develop and implement a coordinated city-wide information technology plan.

Insurance Fund - To finance and account for the City’s insurance and risk management programs.

Employee Benefits Management Fund - To account for all compensated absences and other employee benefits. Insurance benefits for current employees are accounted for in the Insurance Fund.

Building Services Fund - To account for the true cost of occupying and maintaining office space, to better reflect the value of that space, and to accumulate amounts for future building repair costs. #1..
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City of Modesto
Combining Statement of Net Position
Internal Service Fund
June 30, 2024
142
Information
Fleet Central and Technology
Management Services Services Insurance
ASSETS
Current assets:

Cash and cash equivalents $ $ - $ - 4,442,181 $ 13,426,789 Receivables:

Accounts 463 - - 4,768,587
Interest - 186 16,005 55,419
Leases - - - -
Prepaid expenses 3,813 2,070 961,241 1,642,771
Due from governments 2,668,134 - - -
Inventories 3,266,164 3,361,656 - -
Total current assets 5,938,574 3,363,912 5,419,427 19,893,566 Noncurrent assets:

Restricted assets - cash and cash equivalents - - - 994,769 Restricted assets - cash from fiscal agent - - - 603,308 Leases receivable - - - -
Land and construction in progress 4,338,653 - 15,542 -
Other capital assets, net of accumulated depreciation 33,803,025 - 2,915,855 - Intangible assets right-to-use, net of accumulated amortization - - 2,310,684 - Total noncurrent assets 38,141,678 - 5,242,081 1,598,077 Total assets 44,080,252 3,363,912 10,661,508 21,491,643

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB 70,907 - 162,914 -
Deferred pensions 2,272,034 319,719 2,279,112 263,147
Total deferred outflows of resources 2,342,941 319,719 2,442,026 263,147 Total assets and deferred outflows of resources 46,423,193 3,683,631 13,103,534 21,754,790

LIABILITIES
Current liabilities:

Accounts payable 1,095,959 248,356 156,497 4,904,335
Accrued salaries and benefits 114,015 23,255 130,045 19,793 Interest payable 19,832 - - 10,805
Due to other funds 435,590 2,722,378 - -
Unearned revenue - - - 41,559
Current portion - compensated absences - - - -
Current portion - claims liability - - - 7,290,622
Current portion - leases and SBITA - - 955,275 -
Total current liabilities 1,665,396 2,993,989 1,241,817 12,267,114 Noncurrent liabilities:

Compensated absences - - - -
Claims liability - - - 21,169,617
Leases and SBITA - - 407,199 -
Net OPEB liability 466,508 - 600,454 -
Net pension liability 8,438,956 1,187,523 8,465,248 977,402 Total noncurrent liabilities 8,905,464 1,187,523 9,472,901 22,147,019 Total liabilities 10,570,860 4,181,512 10,714,718 34,414,133

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB 132,438 - 260,327 -
Deferred pensions 21,082 2,966 21,148 2,442
Deferred leases - - - -
Total deferred inflows of resources 153,520 2,966 281,475 2,442 Total liabilities and deferred inflows of resources 10,724,380 4,184,478 10,996,193 34,416,575

NET POSITION
Net investment in capital assets 38,141,678 - 1,568,923 - Restricted - - - 1,598,077
Unrestricted (2,442,865) (500,847) 538,418 (14,259,862) Total net position $ 35,698,813 $ $ (500,847) 2,107,341 $ (12,661,785) (Continued)
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City of Modesto
Combining Statement of Net Position
Internal Service Fund (Continued)
June 30, 2024
143
Employee
Benefits Building
Management Services Total
ASSETS
Current assets:

Cash and cash equivalents $ 15,000 $ 1,937,220 $ 19,821,190 Receivables:

Accounts - 2,275 4,771,325
Interest 27,285 6,898 105,793
Leases - 5,407 5,407
Prepaid expenses - - 2,609,895
Due from governments - 71,847 2,739,981
Inventories - - 6,627,820
Total current assets 42,285 2,023,647 36,681,411
Noncurrent assets:

Restricted assets - cash and cash equivalents 6,890,053 - 7,884,822 Restricted assets - cash from fiscal agent - - 603,308
Leases receivable - 16,714 16,714
Land and construction in progress - 2,115,215 6,469,410 Other capital assets, net of accumulated depreciation - 2,060,095 38,778,975 Intangible assets right-to-use, net of accumulated amortization - - 2,310,684 Total noncurrent assets 6,890,053 4,192,024 56,063,913
Total assets 6,932,338 6,215,671 92,745,324

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB - - 233,821
Deferred pensions 96,056 400,883 5,630,951
Total deferred outflows of resources 96,056 400,883 5,864,772 Total assets and deferred outflows of resources 7,028,394 6,616,554 98,610,096

LIABILITIES
Current liabilities:

Accounts payable 16,566 55,467 6,477,180
Accrued salaries and benefits 9,269 23,745 320,122
Interest payable - - 30,637
Due to other funds - - 3,157,968
Unearned revenue - - 41,559
Current portion - compensated absences 872,970 - 872,970 Current portion - claims liability - - 7,290,622
Current portion - leases and SBITA - - 955,275
Total current liabilities 898,805 79,212 19,146,333
Noncurrent liabilities:

Compensated absences 12,815,208 - 12,815,208
Claims liability - - 21,169,617
Leases and SBITA - - 407,199
Net OPEB liability - - 1,066,962
Net pension liability 356,780 1,488,990 20,914,899
Total noncurrent liabilities 13,171,988 1,488,990 56,373,885 Total liabilities 14,070,793 1,568,202 75,520,218

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB - - 392,765
Deferred pensions 891 3,720 52,249
Deferred leases - 21,174 21,174
Total deferred inflows of resources 891 24,894 466,188
Total liabilities and deferred inflows of resources 14,071,684 1,593,096 75,986,406

NET POSITION
Net investment in capital assets - 4,175,310 43,885,911 Restricted 6,890,053 - 8,488,130
Unrestricted (13,933,343) 848,148 (29,750,351)
Total net position $ (7,043,290) $ 5,023,458 $ 22,623,690 (Concluded)
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City of Modesto
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds
Fiscal Year Ended June 30, 2024
144
Information
Fleet Central and Technology
Management Services Services Insurance
OPERATING REVENUES:

Charges for services $ 20,867,391 $ 7,112,447 $ 10,014,802 $ 38,737,862 Miscellaneous 29,645 9 - 67,377
Total operating revenues 20,897,036 7,112,456 10,014,802 38,805,239 OPERATING EXPENSES:

Salaries and wages 3,365,808 373,217 3,275,541 350,278
Cost of goods sold - 5,839,850 - -
Contractual services 939,510 158,167 556,359 1,911,591
Utilities 174,113 - 139,918 876
Maintenance and supplies 11,714,574 154,139 1,682,241 126,525 Insurance 339,856 13,166 95,477 25,779,210
Claims - - - 11,507,309
Employee benefits 3,382,002 355,296 1,668,687 167,460
Administration services 466,061 228,041 6,914 152,375
Allocated indirect administrative costs 406,949 - - -
Depreciation 3,600,148 - 1,775,997 -
Total operating expenses 24,389,021 7,121,876 9,201,134 39,995,624 OPERATING INCOME (LOSS) (3,491,985) (9,420) 813,668 (1,190,385) NONOPERATING REVENUES (EXPENSES):

Loss on disposition of capital assets (28,779) - - -
Interest income (120,921) 1,185 107,776 257,902
Net increase (decrease) in fair value of investments (36,736) 1,411 106,804 246,623 Rental income 36,000 - - -
Interest expense and amortization - - (60,974) -
Total nonoperating revenues (expenses) (150,436) 2,596 153,606 504,525

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
AND TRANSFERS (3,642,421) (6,824) 967,274 (685,860)
Capital contributions 1,443,506 - - -
Transfers in 4,363,890 - 395,304 -
Transfers out - - (142,313) -
Total contributions and transfers 5,807,396 - 252,991 - CHANGES IN NET POSITION 2,164,975 (6,824) 1,220,265 (685,860) NET POSITION (DEFICIT), JULY 1 33,533,838 (494,023) 887,076 (11,975,925) NET POSITION (DEFICIT), JUNE 30 $ 35,698,813 $ $ (500,847) 2,107,341 $ (12,661,785) (Continued)
#1..
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City of Modesto
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds (Continued)
Fiscal Year Ended June 30, 2024
145
Employee
Benefits Building
Management Services Total
OPERATING REVENUES:

Charges for services $ 35,552,141 $ 3,983,395 $ 116,268,038 Miscellaneous 1,561 23,274 121,866
Total operating revenues 35,553,702 4,006,669 116,389,904 OPERATING EXPENSES:

Salaries and wages 3,005,589 559,828 10,930,261
Cost of goods sold - - 5,839,850
Contractual services 236,876 1,788,474 5,590,977
Utilities 1,767 248,379 565,053
Maintenance and supplies 22,357 924,831 14,624,667
Insurance 3,520 28,157 26,259,386
Claims 4,498 - 11,511,807
Employee benefits 33,477,717 298,109 39,349,271
Administration services 306,360 95,304 1,255,055
Allocated indirect administrative costs - - 406,949
Depreciation - 277,338 5,653,483
Total operating expenses 37,058,684 4,220,420 121,986,759 OPERATING INCOME (LOSS) (1,504,982) (213,751) (5,596,855) NONOPERATING REVENUES (EXPENSES):

Loss on disposition of capital assets - - (28,779)
Interest income 173,892 45,004 464,838
Net increase (decrease) in fair value of investments 157,226 40,795 516,123 Rental income - 5,406 41,406
Interest expense and amortization - - (60,974)
Total nonoperating revenues (expenses) 331,118 91,205 932,614

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
AND TRANSFERS (1,173,864) (122,546) (4,664,241)
Capital contributions - - 1,443,506
Transfers in - - 4,759,194
Transfers out - - (142,313)
Total contributions and transfers - - 6,060,387
CHANGES IN NET POSITION (1,173,864) (122,546) 1,396,146 NET POSITION (DEFICIT), JULY 1 (5,869,426) 5,146,004 21,227,544 NET POSITION (DEFICIT), JUNE 30 $ (7,043,290) $ 5,023,458 $ 22,623,690 (Concluded)
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City of Modesto
Combining Statement of Cash Flows
Internal Service Funds
Fiscal Year Ended June 30, 2024
146
Information
Fleet Central and Technology
Management Services Services Insurance
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 20,908,198 $ 7,112,456 $ 10,014,802 $ 34,152,536 Payments to suppliers (15,868,627) (6,474,963) (3,773,846) (34,722,640) Payments to employees (5,083,489) (640,187) (4,835,625) (624,961) Net cash provided by (used in) operating activities (43,918) (2,694) 1,405,331 (1,195,065) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Transfers in 4,363,890 - 395,304 -
Transfers out - - (142,313) -
Net cash provided by (used in) noncapital financing activities 4,363,890 - 252,991 -

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition and construction of capital assets (7,473,242) - (1,180,224) - Loss from sale of capital assets (28,779) - - -
Capital contributions received 1,443,506 - - -
Principal repayments of long-term debts - - (968,707) - Interest paid - - (60,974) -
Capital grants received
Net cash used in capital and related financing activities (6,058,515) - (2,209,905) - CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received (paid) (117,767) 1,283 104,374 247,171 Net increase (decrease) in the fair value of investments (36,736) 1,411 106,804 246,623 Rental income received (paid) 36,000 - - -
Net cash provided by (used in) investing activities (118,503) 2,694 211,178 493,794 Net increase (decrease) in cash and cash equivalents (1,857,046) - (340,405) (701,271) CASH AND CASH EQUIVALENTS, JULY 1 1,857,046 - 4,782,586 15,726,137 CASH AND CASH EQUIVALENTS, JUNE 30 $ - $ - $ 4,442,181 $ 15,024,866 RECONCILIATION TO STATEMENT OF NET POSITION:

Cash and cash equivalents $ - $ - $ 4,442,181 $ 13,426,789 Restricted cash and cash equivalents - - - 994,769
Restricted cash and cash equivalents with fiscal agent - - - 603,308 TOTAL CASH AND CASH EQUIVALENTS $ - $ - $ 4,442,181 $ 15,024,866 (Continued)
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City of Modesto
Combining Statement of Cash Flows
Internal Service Funds (Continued)
Fiscal Year Ended June 30, 2024
147
Employee
Benefits Building
Management Services Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 35,553,702 $ 4,028,118 $ 111,769,812 Payments to suppliers (590,376) (3,216,082) (64,646,534) Payments to employees (34,688,382) (904,318) (46,776,962) Net cash provided by (used in) operating activities 274,944 (92,282) 346,316 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Transfers in - - 4,759,194
Transfers out - - (142,313)
Net cash provided by (used in) noncapital financing activities - - 4,616,881

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition and construction of capital assets - - (8,653,466) Loss from sale of capital assets - - (28,779)
Capital contributions received - - 1,443,506
Principal repayments of long-term debts - - (968,707)
Interest paid - - (60,974)
Capital grants received
Net cash used in capital and related financing activities - - (8,268,420) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received (paid) 163,357 43,457 441,875
Net increase (decrease) in the fair value of investments 157,226 40,795 516,123 Rental income received (paid) - (16,715) 19,285
Net cash provided by (used in) investing activities 320,583 67,537 977,283 Net increase (decrease) in cash and cash equivalents 595,527 (24,745) (2,327,940) CASH AND CASH EQUIVALENTS, JULY 1 6,309,526 1,961,965 30,637,260 CASH AND CASH EQUIVALENTS, JUNE 30 $ 6,905,053 $ 1,937,220 $ 28,309,320 RECONCILIATION TO STATEMENT OF NET POSITION:

Cash and cash equivalents $ 15,000 $ 1,937,220 $ 19,821,190 Restricted cash and cash equivalents 6,890,053 - 7,884,822 Restricted cash and cash equivalents with fiscal agent - - 603,308 TOTAL CASH AND CASH EQUIVALENTS $ 6,905,053 $ 1,937,220 $ 28,309,320 (Concluded)
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City of Modesto
Combining Statement of Cash Flows
Internal Service Funds (Continued)
Fiscal Year Ended June 30, 2024
148
Information
Fleet Central and Technology
Management Services Services Insurance

RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ (3,491,985) $ (9,420) $ 813,668 $ (1,190,385) Adjustments to reconcile operating income (loss) to
net cash provided by/(used in) operating activities:

Depreciation 3,600,148 - 1,775,997 -
(Increase) decrease in:

Accounts receivable 11,162 - - (4,652,703)
Due from governments (1,204,949) - - -
Prepaid expenses (1,410) (1,944) (956,119) (449,768)
Inventories (926,936) (1,369,509) - -
Deferred outflows of resources - OPEB 10,371 - 43,192 - Deferred outflows of resources - pensions (362,804) 12,069 298,669 86,229 Increase (decrease) in:

Accounts payable (145,216) 29,475 (328,435) 3,769,093
Accrued salaries and benefits (4,475) 5,637 (8,383) 2,052 Interest payable 19,832 - - 10,805
Due to other funds 435,590 1,254,741 - -
Compensated absences - - - -
OPEB liability 1,615 - (12,299) -
Net pension liability 2,056,091 78,302 (152,689) (190,618) Deferred inflows of resources - OPEB (33,201) - (50,489) - Deferred inflows of resources - pensions (7,751) (2,045) (17,781) (2,834) Deferred inflows of resources - leases
Unearned revenue - - - 1,739
Claims liability - - - 1,421,325
Total adjustments 3,448,067 6,726 591,663 (4,680)
Net cash provided (used) by operating activities $ (43,918) $ (2,694) $ 1,405,331 $ (1,195,065) (Continued)
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City of Modesto
Combining Statement of Cash Flows
Internal Service Funds (Continued)
Fiscal Year Ended June 30, 2024
149
Employee
Benefits Building
Management Services Total

RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ (1,504,982) $ (213,751) $ (5,596,855) Adjustments to reconcile operating income (loss) to
net cash provided by/(used in) operating activities:

Depreciation - 277,338 5,653,483
(Increase) decrease in:

Accounts receivable - 276 (4,641,265)
Due from governments - 6,683 (1,198,266)
Prepaid expenses 1,873 - (1,407,368)
Inventories - - (2,296,445)
Deferred outflows of resources - OPEB - 7,967 61,530
Deferred outflows of resources - pensions 3,898 59,948 98,009 Increase (decrease) in:

Accounts payable (19,103) (135,318) 3,170,496
Accrued salaries and benefits 2,232 (2,303) (5,240)
Interest payable - - 30,637
Due to other funds - - 1,690,331
Compensated absences 1,769,025 - 1,769,025
OPEB liability - (42,135) (52,819)
Net pension liability 22,619 (51,644) 1,762,061
Deferred inflows of resources - OPEB - (17,277) (100,967) Deferred inflows of resources - pensions (618) (3,240) (34,269) Deferred inflows of resources - leases 21,174 21,174
Unearned revenue - - 1,739
Claims liability - - 1,421,325
Total adjustments 1,779,926 121,469 5,943,171
Net cash provided (used) by operating activities $ 274,944 $ (92,282) $ 346,316 (Concluded)
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City of Modesto
Description of Private Purpose Trust Funds and Investment Trust Funds Fiscal Year Ended June 30, 2024
150
Private Purpose Trust Funds account as the fiduciary fund type used by the City to report trust arrangements under which principal and income benefit other governments. Investment Trust Funds account for assets held by the City as an agent for individuals, governmental entities, and non-public organizations.

PRIVATE PURPOSE TRUST FUNDS
Redevelopment Successor Agency - To account for allocated revenues in amounts necessary to pay the estimated annual installment payments on all enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

Special Districts - To account for collection of special assessment from property owners which are collected and forwarded to trustees for payment to bondholders. The cash and investment of the Special Districts are invested as part of the City’s investment pool.

INVESTMENT TRUST FUNDS
Tuolumne River Regional Park - To account for cash and investments of the Tuolumne River Regional Park, a joint powers agency between the City of Modesto, Stanislaus County and City of Ceres. The agency provides financing, development, and maintenance of the Tuolumne River Regional Park facilities. The cash and investments of the Park are invested as part of the City’s investment pool.

Modesto-Ceres Fire Protection Agency - To record and distribute the special assessments for fire protection that were established under the Industrial Fire District. This is a joint powers agency between the Modesto Regional Fire Authority, the City of Ceres, and the Industrial Fire District. Cash and investments of the Agency are invested in the City’s investment pool.
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City of Modesto
Combining Statement of Fiduciary Net Position
Fiduciary Funds - Private Purpose Trust Funds
June 30, 2024
151
Total
Redevelopment Special Private Purpose
Successor Agency Districts Trust Funds
ASSETS
Cash and cash equivalents $ 291,071 $ 1,610,321 $ 1,901,392 Cash and cash equivalents held with fiscal agent - 3,192,168 3,192,168 Interest receivable 2,369 3,860 6,229
Taxes receivable 742,545 72,771 815,316
Assessments receivable - 25,770,000 25,770,000
Prepaids 54 714 768
Due from primary governments - 24,223 24,223
Total assets 1,036,039 30,674,057 31,710,096
Deferred outflows of resources:

Loss on refunding - 835,585 835,585
Total assets and deferred outflows of resources 1,036,039 31,509,642 32,545,681

LIABILITIES
Accounts payables and other liabilities 8,422 985 9,407 Unearned revenues - 651,931 651,931
Due to local governments 1,192,004 - 1,192,004
Interest payable - 382,310 382,310
Long-term liabilities:

Due within one year 867,100 1,281,659 2,148,759
Due in more than one year 10,843,550 25,299,360 36,142,910 Total liabilities 12,911,076 27,616,245 40,527,321

NET POSITION
Restricted - 3,893,397 3,893,397
Unrestricted (11,875,037) - (11,875,037)
Total net position (deficit) $ (11,875,037) $ 3,893,397 $ (7,981,640) #1..
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City of Modesto
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds - Private Purpose Trust Funds
Fiscal Year Ended June 30, 2024
152
Total
Redevelopment Special Private Purpose
Successor Agency Districts Trust Funds
ADDITIONS:

Collections on behalf of other governments:

Special assessments $ $ - 1,584,705 $ 1,584,705
Property taxes 1,055,512 - 1,055,512
Total collections on behalf of other governments 1,055,512 1,584,705 2,640,217 Interest and investment earnings:

Interest earnings 50,329 244,170 294,499
Net increase (decrease) in fair value of investments 21,419 (6,668) 14,751 Total interest and investment earnings 71,748 237,502 309,250 Total additions 1,127,260 1,822,207 2,949,467
DEDUCTIONS:

Distribution of property taxes to other taxing entities 382,603 - 382,603 Obligation retirements:

Interest expense 29,768 1,156,918 1,186,686
Trustee fees - 3,760 3,760
City administrative expenses 119,203 38,225 157,428
Other expenses 1,330 74,533 75,863
Total deductions 532,904 1,273,436 1,806,340
Net increase in fiduciary net position 594,356 548,771 1,143,127 Net position, July 1, as previously reported (12,469,393) 3,338,788 (9,130,605) Prior year adjustment - 5,838 5,838
Net position, July 1, as restated (12,469,393) 3,344,626 (9,124,767) Net position (deficit), June 30 $ (11,875,037) $ 3,893,397 $ (7,981,640) #1..
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City of Modesto
Combining Statement of Fiduciary Net Position
Fiduciary Funds – Investment Trust Funds
June 30, 2024
153
Modesto-Ceres Total
Tuolumne River Fire Protection Investment
Regional Park Agency Trust Funds
ASSETS
Cash and cash equivalents $ 1,825,548 $ $ 223,263 2,048,811 Interest receivable 587 1,928 2,515
Taxes receivable - 123,366 123,366
Leases receivable 1,153,575 - 1,153,575
Due from governments 936,430 - 936,430
Land and construction in progress 5,335,917 - 5,335,917 Other capital assets, net of accumulated depreciation 3,245,692 - 3,245,692 Total assets 12,497,749 348,557 12,846,306

LIABILITIES
Accounts payables and other liabilities 199,058 319,194 518,252 Total liabilities 199,058 319,194 518,252
Deferred inflow of resources
Leases 1,085,018 - 1,085,018
Total deferred inflow of resources 1,085,018 - 1,085,018

NET POSITION
Net invested in capital assets 8,581,609 - 8,581,609
Unrestricted 2,632,064 29,363 2,661,427
Total net position $ 11,213,673 $ $ 29,363 11,243,036
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City of Modesto
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds – Investment Trust Funds
Fiscal Year Ended June 30, 2024
154
Modesto-Ceres Total
Tuolumne River Fire Protection Investment
Regional Park Agency Trust Funds
ADDITIONS:

Contributions:

Members investment pool $ 531,037 $ - $ 531,037
Total contributions 531,037 - 531,037
Collections on behalf of other governments:

Special assessments - 321,274 321,274
Property taxes - 429,208 429,208
Grants 819,046 - 819,046
Other 1,087,947 - 1,087,947
Total collections on behalf of other governments 1,906,993 750,482 2,657,475 Interest and investment earnings:

Interest and rent earnings 77,613 6,943 84,556
Net increase in fair value of investments 8,914 558 9,472 Total interest and investment earnings 86,527 7,501 94,028 Total additions 2,524,557 757,983 3,282,540
DEDUCTIONS:

Distribution of property taxes to other taxing entities - 718,095 718,095 City administrative expenses 170,423 2,885 173,308
Other expenses - 7,712 7,712
Depreciation expense 437,904 - 437,904
Insurance expenses - 1,086 1,086
Operating expenses 955,655 - 955,655
Total deductions 1,563,982 729,778 2,293,760
Net increase in fiduciary net position 960,575 28,205 988,780 Net position, July 1 10,253,098 1,158 10,254,256
Net position, June 30 $ 11,213,673 $ 29,363 $ 11,243,036 #1..
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STATISTICAL SECTION TAB
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STATISTICAL SECTION
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City of Modesto
Fiscal Year Ended June 30, 2024
155

STATISTICAL SECTION
This part of the Annual Comprehensive Financial Report presents detailed information to aid in understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit. Financial Trends These schedules contain trend information to help the reader understand how the City’s financial performance has changed over time:

1. Net Position by Component

2. Changes in Net Position

3. Fund Balances of Governmental Funds

4. Changes in Fund Balances of Governmental Funds
Revenue Capacity
This schedule gives information on the City’s most significant local revenue source, the water usage charges:

1. Water Utility System - Ten Largest Customers

2. Water revenues by customer class

3. Water rates
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future:

1. Ratio of Outstanding Debt by Type

2. Computation of Direct and Overlapping Debt

3. Computation of Legal Debt Margin

4. Revenue Bond Coverage, Wastewater Revenue Bonds
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place:

1. Demographic and Economic Statistics

2. Principal Employers

3. Principal Property Taxpayers
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs:

1. Full-Time City Government Employees by Function

2. Operating Indicators by Function

3. Capital Asset Statistics by Function/Program
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year.
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City of Modesto
Net Position by Component(1)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
156
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Governmental activities
Net investment in capital assets $ 378,145,625 $ 381,887,289 $ 376,743,556 $ 377,529,238 $ 401,515,805 $ 374,618,780 $ 407,347,307 $ 457,620,157 $ 468,002,326 $ 347,825,273 Restricted (2) 121,105,182 115,619,807 123,851,082 130,192,278 127,885,787 135,818,614 183,357,207 195,793,646 208,472,568 83,916,553 Unrestricted (179,570,210) (173,275,294) (191,483,628) (182,197,396) (191,345,565) (206,772,243) (217,114,643) (189,907,446) (187,041,193) (78,162,476) Total governmental activities net position $ 319,680,597 $ 324,231,802 $ 309,111,010 $ 325,524,120 $ 338,056,027 $ 303,665,151 $ 373,589,871 $ 463,506,357 $ 489,433,701 $ 353,579,350 Business-type activities
Net investment in capital assets $ 527,784,338 $ 539,821,175 $ 555,163,217 $ 571,811,118 $ 607,813,261 $ 647,695,354 $ 648,609,186 $ 687,640,266 $ 589,299,184 $ 628,224,368 Restricted (2) 20,622,619 22,052,595 21,525,961 21,071,542 15,569,107 15,857,655 17,004,338 15,918,799 16,788,942 15,883,497 Unrestricted 99,450,370 92,324,550 113,595,981 130,146,975 148,005,231 138,508,360 178,262,877 115,746,227 241,640,663 229,775,535 Total business-type activities net position $ 647,857,327 $ 654,198,320 $ 690,285,159 $ 723,029,635 $ 771,387,599 $ 802,061,369 $ 843,876,401 $ 819,305,292 $ 847,728,789 $ 873,883,400 Primary government
Net investment in capital assets $ 905,929,963 $ 921,708,464 $ 931,906,773 $ 949,340,356 $ 1,009,329,066 $ 1,022,314,134 $ 1,055,956,493 $ 1,145,260,423 $ 1,057,301,510 $ 976,049,641 Restricted (2) 141,727,801 137,672,402 145,377,043 151,263,820 143,454,894 151,676,269 200,361,545 211,712,445 225,261,510 99,800,050 Unrestricted (80,119,840) (80,950,744) (77,887,647) (52,050,421) (43,340,334) (68,263,883) (38,851,766) (74,161,219) 54,599,470 151,613,059 Total primary government net position $ 967,537,924 $ 978,430,122 $ 999,396,169 $ 1,048,553,755 $ 1,109,443,626 $ 1,105,726,520 $ 1,217,466,272 $ 1,282,811,649 $ 1,337,162,490 $ 1,227,462,750 Restricted
(1) Accounting standards require that net position be reported in three components in the financial statements: net investment in capital assets; restricted; and unrestricted. Net position is considered restricted when (a) externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. (2) Starting in fiscal year 2015, the significant decrease in net position was due to the implementation of GASB 68 related to the City's net pension liability. (3) During fiscal year 2024, a correction to construction work in progress in the amount of $138,748,624 was process to correct previously overstated capital assets, when the City determined that a previously recognized asset would be turned over to the California Department of Transportation once the asset was completed, based on a cooperative agreement. ($100)
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Net investment in capital assets Restricted Unrestricted #1..
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City of Modesto
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
157
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Expenses
Governmental activities:

General government $ 12,085,051 $ 12,838,583 $ 13,945,824 $ 15,432,617 $ 13,973,768 $ 14,808,371 $ 14,727,031 $ 20,268,611 $ 16,573,945 $ 17,124,132 Community development 11,888,475 12,552,115 15,419,529 17,268,926 15,720,280 25,698,343 30,782,573 20,615,432 28,589,701 49,357,807 Highways and streets 21,269,704 20,149,011 22,481,002 22,997,140 23,937,423 25,858,611 25,863,042 27,463,523 27,337,181 40,587,533 Public works 9,810,989 10,749,465 13,169,149 8,674,538 3,472,405 3,736,696 3,126,390 3,086,419 7,795,895 13,898,622 Parks and recreation 4,641,611 3,493,743 3,947,898 4,456,508 15,680,980 14,725,590 13,750,865 12,439,250 16,227,064 21,298,671 Public safety 86,782,741 86,907,876 104,348,464 120,629,673 111,059,794 140,709,104 129,785,835 121,675,443 147,700,874 169,102,289 Interest on long-term debt 3,204,203 2,691,894 2,500,849 2,510,224 2,402,299 2,302,626 2,039,849 1,954,306 1,719,479 1,276,737 Total governmental activities expenses $ 149,682,774 $ 149,382,687 $ 175,812,715 $ 191,969,626 $ 186,246,949 $ 227,839,341 $ 220,075,585 $ 207,502,984 $ 245,944,139 $ 312,645,791 Business-type activities:

Water $ 54,718,239 $ 59,127,625 $ 63,008,231 $ 56,526,729 $ 62,745,688 $ 69,187,391 $ 68,792,875 $ 73,421,868 $ 77,533,248 $ 89,689,694 Sewer 30,281,361 33,093,921 36,248,877 41,444,220 41,216,914 45,832,671 46,500,454 44,263,767 48,558,199 54,056,910 Other Enterprise Funds 38,850,915 45,630,005 45,977,066 43,273,109 48,115,965 51,408,949 54,972,944 26,000,573 28,102,128 31,958,844 Total business-type activities expenses 123,850,515 137,851,551 145,234,174 141,244,058 152,078,567 166,429,011 170,266,273 143,686,208 154,193,575 175,705,448 Total primary government expenses $ 273,533,289 $ 287,234,238 $ 321,046,889 $ 333,213,684 $ 338,325,516 $ 394,268,352 $ 390,341,858 $ 351,189,192 $ 400,137,714 $ 488,351,239 Program revenues
Governmental activities:

Charges for services:

General government $ 5,912,157 $ 6,539,908 $ 5,082,405 $ 6,544,581 $ 6,387,743 $ 5,973,621 $ 6,237,530 $ 6,572,771 $ 5,945,470 $ 7,216,392 Community development 3,385,050 6,885,850 10,378,999 16,049,727 12,106,237 17,327,298 16,611,118 19,488,129 16,094,070 10,896,436 Highway and streets 1,744,505 1,154,290 1,101,813 758,952 748,319 909,580 651,061 651,082 1,077,458 1,293,908 Public works 6,621,704 5,469,419 5,908,332 1,637,024 2,779,546 2,921,053 2,869,808 2,711,433 3,780,309 4,556,686 Parks and recreation 1,344,923 771,733 1,614,443 2,346,211 2,450,965 3,358,983 2,145,685 2,205,344 2,507,683 2,133,067 Public safety 4,218,000 3,868,346 4,847,914 5,127,433 4,502,546 11,354,045 5,849,193 8,960,454 6,993,295 8,727,941 Operating grants and contributions 5,862,566 3,630,185 5,050,771 5,802,634 6,591,435 16,838,122 12,010,918 15,352,734 19,539,354 15,527,564 Capital grants and contributions 5,878,550 1,708,602 2,117,867 3,062,292 8,831,664 5,894,717 57,825,011 12,835,899 4,174,014 6,838,419 Total government activities program revenues 34,967,455 30,028,333 36,102,544 41,328,854 44,398,455 64,577,419 104,200,324 68,777,846 60,111,653 57,190,413 Business-type activities:

Charges for services:

Water $ 59,800,535 $ 55,992,533 $ 69,075,873 $ 74,842,451 $ 76,806,740 $ 82,796,199 $ 87,713,122 $ 86,231,116 $ 81,863,397 $ 86,165,645 Sewer 46,193,997 47,859,680 49,905,078 52,799,102 57,562,619 58,168,552 63,614,677 65,367,417 64,518,164 69,439,879 Other enterprise funds 21,242,091 21,130,529 22,607,585 23,223,082 24,594,413 22,951,211 23,391,632 22,982,937 28,871,874 29,425,822 Operating grants and contributions 14,223,954 14,153,568 15,975,703 17,858,762 25,668,280 21,780,920 29,310,591 1,644,338 1,263,264 844,097 Capital grants and contributions 13,820,127 4,753,223 19,617,513 7,196,698 5,198,721 546,375 8,672,597 2,452,983 3,310,141 8,018,762 Total business-type activities program revenues 155,280,704 143,889,533 177,181,752 175,920,095 189,830,773 186,243,257 212,702,619 178,678,791 179,826,840 193,894,205 Total primary government program revenues $ 190,248,159 $ 173,917,866 $ 213,284,296 $ 217,248,949 $ 234,229,228 $ 250,820,676 $ 316,902,943 $ 247,456,637 $ 239,938,493 $ 251,084,618 Net (Expense)/Revenue
Governmental activities $ (114,715,319) $ (119,354,354) $ (139,710,171) $ (150,640,772) $ (141,848,494) $ (163,261,922) $ (115,875,261) $ (138,725,138) $ (185,832,486) $ (255,455,378) Business-type activities 31,430,189 6,037,982 31,947,578 34,676,037 37,752,206 19,814,246 42,436,346 34,992,583 25,633,265 18,188,757 Total primary government net expense $ (83,285,130) $ (113,316,372) $ (107,762,593) $ (115,964,735) $ (104,096,288) $ (143,447,676) $ (73,438,915) $ (103,732,555) $ (160,199,221) $ (237,266,621) (continued)
#1..
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City of Modesto
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
158
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General Revenues and Other Changes in Net Position
Governmental activities:

Taxes:

Utility users tax $ 19,591,170 $ 19,564,921 $ 20,113,023 $ 20,609,874 $ 19,803,859 $ 19,803,218 $ 20,764,694 $ 20,918,653 $ 22,363,013 $ 21,173,728 Property taxes, levied for general purposes (1) 13,551,827 14,552,304 15,384,518 16,356,095 17,316,735 18,113,180 19,106,595 19,757,550 21,893,830 23,046,388 Transient occupancy tax 2,097,952 2,523,087 2,669,484 2,826,160 2,961,406 2,727,061 2,850,229 3,621,190 3,513,477 3,351,194 Franchise tax 5,768,146 6,194,733 6,431,223 6,433,869 6,762,101 6,996,152 7,117,014 7,402,770 8,569,338 7,975,509 Cannabis tax (5) - - - - 352,208 3,201,364 5,379,402 4,022,799 3,185,203 3,408,455 Business license tax, levied for general purposes 11,421,759 11,944,291 12,255,062 13,053,199 13,715,997 13,269,468 13,899,554 15,263,225 15,306,957 16,147,087 Business license tax, levied for downtown
improvement district 188,247 186,123 192,540 189,070 202,014 190,543 225,051 205,995 211,645 209,236 Special assessments, levied 1,924,623 3,168,260 3,014,768 5,715,030 4,260,281 4,622,697 4,851,750 5,578,262 4,900,860 5,436,061 Grants and contributions not restricted to specific
programs: (4)
Sales tax (state appropriation) 28,437,594 29,878,815 30,204,125 31,302,950 31,665,700 30,534,694 35,670,236 40,389,650 39,611,849 38,038,757 Sales tax Measure H(7) - - - - - - - - 11,116,219 47,954,202 Motor vehicle license fee 13,871,248 14,548,427 15,385,069 16,206,760 17,057,003 17,977,807 18,855,971 19,881,139 21,194,886 22,537,514 Transportation tax funding 5,924,101 4,533,572 3,968,029 5,672,563 19,002,236 19,438,347 22,501,876 23,404,322 23,171,728 26,795,778 Community facilities district fees 4,570,403 3,829 1,830 274,494 8,432 16,567 14,628 - - - Proceeds from Modesto Regional Fire Authority
dissolution 2,500,721 - - - - - - - - -
Other 25,866,105 13,101,149 15,842,047 17,469,209 13,832,686 27,469,638 39,528,038 54,289,046 35,769,198 29,551,761 Unrestricted investment earnings 564,314 582,565 362,856 726,199 5,753,083 6,044,156 (287,088) (3,911,830) 3,403,539 10,274,601 Miscellaneous 2,281,008 2,440,696 515,206 818,542 3,421,783 3,660,429 2,184,677 1,643,071 923,411 1,156,335 Transfers (775,377) (567,177) (1,750,401) (354,287) (1,675,373) 479,917 824,609 21,077,584 66,244 1,975,368 Total government activities 137,783,841 122,655,595 124,589,379 137,299,727 154,440,151 174,545,238 193,487,236 233,543,426 215,201,397 259,031,974 Business-type activities:

Taxes:

Property taxes, generated by and allocated to
the airport 237,546 206,854 199,124 207,849 201,931 190,995 266,272 212,978 291,711 359,122 Unrestricted investment earnings 554,180 2,247,061 872,935 1,047,604 7,290,802 8,082,331 (192,489) (8,124,559) 2,562,708 13,009,651 Miscellaneous 1,214,729 1,368,761 1,316,801 1,472,809 1,528,727 1,390,820 1,686,667 1,301,658 1,707,204 1,479,611 Settlements 13,851 - - - - - - - - 3,620,125
Transfers, net 775,377 567,177 1,750,401 354,287 1,675,373 (479,917) (824,609) (21,077,584) (66,244) (1,975,368) Special item (3) (6) - - - - - - - (19,461,712) - -
Total business-type activities 2,795,683 4,389,853 4,139,261 3,082,549 10,696,833 9,184,229 935,841 (47,149,219) 4,495,379 16,493,141 Total primary government $ 140,579,524 $ 127,045,448 $ 128,728,640 $ 140,382,276 $ 165,136,984 $ 183,729,467 $ 194,423,077 $ 186,394,207 $ 219,696,776 $ 275,525,115 Change in Net Position
Governmental activities $ 23,068,522 $ 3,301,241 $ (15,120,792) $ (13,341,045) $ 12,591,657 $ 11,283,316 $ 77,611,975 $ 94,818,288 $ 29,368,911 $ 3,576,596 Business-type activities 34,225,872 10,427,835 36,086,839 37,758,586 48,449,039 28,998,475 43,372,187 (12,156,636) 30,128,644 34,681,898 Total primary government $ 57,294,394 $ 13,729,076 $ 20,966,047 $ 24,417,541 $ 61,040,696 $ 40,281,791 $ 120,984,162 $ 82,661,652 $ 59,497,555 $ 38,258,494 (1) Due to the dissolution of the Redevelopment agencies, no tax increments will be reported on the entity-wide statements. (3) Starting in fiscal year 2015, the special item related to pollution remediation has been reported as a liability. Any expenses incurred will be accounted for as a reduction to the liability. (4) Starting in fiscal year 2015, general revenues for grants and contributions not restricted to specific programs other related governmental activities were reclassified to provide more specific category revenue types. (5) During fiscal years 2019 and 2020, Cannabis tax was previously reported as Business license tax levied for general purposes. In fiscal year 2021 financials have been updated to report Cannabis tax as such. (6) Effective July 1, 2021 bus fund operations seized at the City of Modesto, due to the formation of the regionalized transit agency, Stanislaus Regional Transit Authority (StanRTA), resulting in a loss in transfer of operations for the City. (7) Effective April 1, 2023 the City of Modesto sales tax rate increased by 1% to 8.875% approved by City residents as part of Measure H. #1..
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City of Modesto
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
159
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General Fund
Nonspendable $ 2,770,844 $ 2,647,692 $ 2,515,146 $ 2,881,523 $ 2,723,032 $ 2,503,547 $ 2,388,852 $ 2,341,984 $ 2,092,091 $ 1,976,718 Restricted 1,341,972 2,092,126 1,970,622 2,674,200 2,209,485 2,137,896 3,367,488 8,157,536 8,486,061 10,088,574 Committed 3,000,000 3,000,000 15,800,000 18,397,817 18,397,817 18,397,817 18,397,817 18,397,817 18,397,817 18,397,817 Assigned 3,119,753 6,503,769 4,854,307 1,096,566 509,751 309,114 349,022 579,390 1,149,259 4,535,259 Unassigned(1) 14,586,931 12,822,134 4,509,693 1,695,476 1,742,785 2,407,575 6,395,913 9,942,398 23,445,340 48,060,252 Total General Fund $ 24,819,500 $ 27,065,721 $ 29,649,768 $ 26,745,582 $ 25,582,870 $ 25,755,949 $ 30,899,092 $ 39,419,125 $ 53,570,568 $ 83,058,620 All Other Governmental Funds
Nonspendable $ 88,057 $ 86,242 $ 81,007 $ 23,816 $ 13,290 $ 101,173 $ 543,554 $ 32,734 $ 27,828 $ 274,550 Restricted 79,643,971 80,563,574 85,531,411 91,786,367 89,210,020 104,838,269 111,141,528 114,815,329 124,953,657 170,915,534 Assigned 14,962,522 10,063,058 7,975,865 17,126,893 19,304,837 26,193,552 34,308,329 46,078,354 52,426,693 3,611,105 Unassigned (3,866,450) (724,841) (3,156,679) (1,723,380) (2,809,303) (7,112,005) (4,375,860) (5,343,454) (7,072,854) (2,732,506) Total all other governmental funds $ 90,828,100 $ 89,988,033 $ 90,431,604 $ 107,213,696 $ 105,718,844 $ 124,020,989 $ 141,617,551 $ 155,582,963 $ 170,335,324 $ 172,068,683 The change in total fund balance for the General Fund and other governmental funds is explained in Management's Discussion and Analysis.

Note: The City has elected to show ten years of data for this schedule.

General Fund.
(1) Effective April 1, 2023 the City of Modesto sales tax rate increased by 1% to 8.875% approved by City residents as part of Measure H, this increase to the sales tax increased the unassigned fund balance in #1..
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City of Modesto
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
160
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Revenues
Taxes $ 52,619,101 $ 54,965,459 $ 57,045,850 $ 59,468,267 $ 61,114,320 $ 64,300,986 $ 69,342,539 $ 71,192,182 $ 75,043,463 $ 75,311,597 Licenses and permits 149,888 186,624 201,445 153,226 344,855 408,645 473,693 434,118 409,082 399,698 Intergovernmental 88,906,770 76,317,229 72,069,739 85,629,758 96,174,839 125,072,949 154,356,852 166,804,885 168,444,765 196,139,064 Charges for services 22,337,357 20,429,860 24,454,286 25,467,795 23,226,714 36,147,116 28,378,842 33,744,323 30,208,091 33,848,559 Special assessments levied 1,924,623 3,168,260 3,014,768 5,715,030 4,260,281 4,622,697 4,851,750 5,578,262 4,900,860 5,436,061 Interest and rent 957,846 1,297,734 1,402,387 1,574,347 2,219,282 2,018,446 1,320,686 2,191,466 4,113,653 5,468,374 Net increase (decrease) in fair value of investments (320,398) 102,422 (572,616) (645,593) 1,294,543 1,728,158 (985,713) (4,317,623) (487,727) 3,807,834 Fines and forfeits 1,171,076 904,802 1,263,407 1,127,877 1,143,506 666,120 660,110 832,510 880,252 576,173 Donations and Contribution - - - - - - 370,958 44,338 - - Miscellaneous 2,784,295 2,286,597 516,844 818,542 722,662 989,858 1,392,784 1,461,307 927,525 1,102,519 Total Revenues 170,530,558 159,658,987 159,396,110 179,309,249 190,501,002 235,954,975 260,162,501 277,965,768 284,439,964 322,089,879 Expenditures
Current:

General government 11,334,202 12,414,982 11,542,131 11,837,635 12,262,797 12,028,015 12,483,217 21,110,258 15,483,071 15,228,776 Community development 11,511,154 12,453,678 13,264,050 13,234,820 13,796,154 20,945,194 26,215,559 21,429,140 26,878,953 45,142,072 Highways and streets 9,672,790 8,498,783 9,240,654 8,936,163 10,102,646 11,039,619 12,152,803 16,510,434 14,694,631 26,421,078 Public works 9,228,780 10,393,169 10,919,102 6,509,418 3,017,247 3,035,851 2,635,907 3,215,409 7,359,391 12,711,516 Parks and recreation 4,212,301 3,385,484 3,269,360 3,420,453 13,843,885 11,944,940 11,634,840 12,943,340 15,247,166 19,479,513 Public safety 81,353,131 84,022,670 86,475,891 92,341,706 97,411,634 114,540,829 110,275,920 126,649,307 139,450,451 154,658,970 Capital outlay 30,339,677 19,817,025 21,431,186 19,037,250 38,522,334 38,425,318 51,533,054 50,042,664 30,540,807 10,646,681 Debt service:

Principal retirement 1,789,335 2,345,362 2,535,093 2,849,343 2,562,498 2,734,132 2,931,077 3,362,904 4,210,255 5,598,966 Interest 2,417,840 2,043,278 2,075,202 2,114,488 1,897,384 1,996,806 1,985,927 1,913,046 1,609,215 1,280,380 Other 783,264 697,405 430,779 396,686 506,333 307,928 51,814 48,610 113,633 473,170 Total Expenditures 162,642,474 156,071,836 161,183,448 160,677,962 193,922,912 216,998,632 231,900,118 257,225,112 255,587,573 291,641,122 Excess of revenues over
(under) expenditures 7,888,084 3,587,151 (1,787,338) 18,631,287 (3,421,910) 18,956,343 28,262,383 20,740,656 28,852,391 30,448,757 Other Financing Sources (Uses)
Transfers in 8,157,278 6,960,425 5,559,720 10,707,217 21,496,638 15,292,128 14,249,431 15,993,594 17,408,119 26,873,392 Transfers out (10,682,539) (10,572,346) (6,659,759) (13,568,675) (20,760,150) (17,397,619) (15,500,194) (17,677,119) (19,129,521) (29,514,905) Capital leases 1,070,472 330,947 5,883,756 - - 39,204 - 3,741,926 1,772,045 4,042,674 Sale of assets 94,489 106,582 31,239 154,458 87,608 132,485 1,934 32,551 10,540 53,816 Total other financing sources (uses) (1,360,300) (3,174,392) 4,814,956 (2,707,000) 824,096 (1,933,802) (1,248,829) 2,090,952 61,183 1,454,977 Change in fund balances 6,527,784 412,759 3,027,618 15,924,287 (2,597,814) 17,022,541 27,013,554 22,831,608 28,913,574 31,903,734 FUND BALANCES, July 1 97,635,248 115,647,600 117,053,754 120,081,372 133,959,278 131,301,714 149,776,938 172,516,643 195,002,088 223,905,892 PRIOR PERIOD ADJUSTMENTS 11,484,568 993,395 - (2,046,381) (59,750) 1,452,683 (4,273,849) (346,163) (9,770) (682,323) FUND BALANCES, June 30 $115,647,600 $117,053,754 $120,081,372 $133,959,278 $131,301,714 $149,776,938 $172,516,643 $195,002,088 $223,905,892 $255,127,303 Debt service as a percentage of
noncapital expenditures (1) 3.18% 3.22% 3.30% 3.50% 2.87% 2.65% 2.73% 2.55% 2.59% 2.45% (1) This calculation includes only principal retirement and interest as debt service #1..
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City of Modesto
Revenue Capacity – Most Significant Local Revenue Source Water Utility System
(Fiscal Year Ended June 30, 2024)
161
Ten Largest Customers of Water Utility System, Year Ended June 30,2024 % of Total % of Total Water Water Sales
Customer Usage (ccf) (1) Usage Sales Revenue Revenue ($) 1) City of Modesto 338,160 1.62% 1.51% $ 1,156,454
2) Modesto City Schools 355,548 1.70% 1.43% 1,097,667
3) Stanislaus Food Products 445,941 2.13% 1.29% 984,918 4) Foster Farms 446,845 2.14% 1.25% 952,705
5) Sunopta 262,838 1.26% 0.75% 575,047
6) Stanislaus Housing Authority 142,978 0.68% 0.63% 483,718 7) Modesto Irrigation District 126,768 0.61% 0.46% 351,389 8) E & J Gallo 89,632 0.43% 0.43% 332,581
9) Yosemite Community College 100,091 0.48% 0.42% 323,055 10) STANCO 78,568 0.38% 0.42% 322,769
Total Top Ten 2,387,369 11.43% 8.59% $ 6,580,303
Residential - Flat Rates $ 131,904
Commercial, Industrial and Municipal - Metered Rates 76,370,026 Total Flat/Metered Revenues (Water Sales) (2) $ 76,501,930 The average monthly flat rate service charge for residential customers is: $ 69.44 Commercial Accounts: Meter Size
3/4" $ 25.44
1" 36.83
1 1/2" 65.32
2" 99.50
3" 207.73
4" 367.24
6" 748.90
8" 1,375.53
10" 2,173.05
12" 2,856.63
In addition to these minimum charges, commercial accounts are charged $2.02 per 100 cubic feet of water used. (1) "ccf" means "hundred cubic feet"
(2) Water sales only reflect the revenues in the Water Operating Fund and do not include revenue generated from developer fees and fleet replacement revenues.

Source: City of Modesto-Utilities Division
Water Rates and Charges as of July 1, 2023
Water Sales Revenue, Year Ended June 30,2024
#1..
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City of Modesto
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
162
Lease Finance Purchase
Fiscal Loans Revenue Notes Obligations
Year Payable Bonds Payable and Leases(6) Total
2015 $ 500,000 $ 57,970,000 $ 2,789,000 $ 1,070,472 $ - $ 62,329,472 2016 500,000 56,305,000 2,568,000 942,057 - 60,315,057
2017 500,000 54,470,000 2,335,000 6,358,720 - 63,663,720 2018 500,000 52,775,000 2,090,000 5,449,379 - 60,814,379 2019 500,000 50,915,000 1,834,000 5,002,881 - 58,251,881 2020 500,000 48,915,000 1,565,000 4,576,954 - 55,556,954 2021 500,000 46,745,000 1,282,000 4,098,878 - 52,625,878 2022 500,000 44,355,000 985,000 8,021,476 - 53,861,476
2023 500,000 41,770,000 673,000 7,018,112 1,695,502 51,656,614 2024 500,000 38,985,000 345,000 6,202,541 5,136,687 51,169,228 Certificates Reimbursement Finance Purchase Total Percentage Fiscal Loans of Agreement Revenue Obligations Primary of Personal Per Year Payable (2)(5) Participation (5) related to MID (3)(5) Bonds (2)(3)(4)(5) and Leases(6) Total Government Income (1) Capita (1) 2015 117,690,257 $ $ 48,989,556 $ 137,055,810 $ 39,057,561 $ - $ - $ 342,793,184 $ 405,122,656 8.63% 1,937 2016 125,787,342 48,330,053 132,375,084 33,945,516 - - 340,437,995 400,753,052 8.21% 1,891 2017 124,280,500 47,630,552 127,484,358 31,605,936 - - 331,001,346 394,665,066 8.13% 1,859 2018 147,366,700 46,916,049 122,378,632 28,090,694 73,589 - 344,825,664 405,640,043 7.31% 1,894 2019 141,471,062 46,146,545 117,047,906 25,522,898 19,510 - 330,207,921 388,459,802 7.20% 1,807 2020 135,251,891 45,357,043 111,472,183 22,892,869 7,825 - 314,981,811 370,538,765 6.41% 1,696 2021 27,540,402 44,557,540 105,641,454 122,384,268 5,625 - 300,129,289 352,755,167 5.89% 1,613 2022 26,632,391 43,703,037 99,555,726 113,398,481 460,435 - 283,750,070 337,611,546 5.52% 1,550 2023 25,714,883 42,798,534 93,190,000 104,323,170 276,292 165,802 266,468,681 318,125,295 5.02% 1,466 2024 24,787,769 40,024,031 88,915,000 97,054,702 428,527 128,857 251,338,886 302,508,114 4.31% 1,381 (1) See Demographic and Economic Statistics for personal income and population data. (2) Until fiscal year 2015, the MID Treatment and Delivery issued by MID on behalf of the City was reported as a City liability under Revenue Bonds. (3) In fiscal year 2015, the Reimbursement agreement with MID was reclassified from revenue bonds payable to reimbursement agreement related to MID since this long-term debt is listed under MID but is the City's liability due to nature of the treatment and delivery agreement. (4) Starting in fiscal year 2016, the amounts presented include net of unamortized premiums or discounts. (5) In fiscal year 2021 the decrease in Loans Payable and increase in Revenue Bonds is due to the issuance of Revenue Bonds to pay off the State Revolving Fund loan for the tertiary treatment plant.
(6) In fiscal year 2022 the City adopted GASB Statement No. 87, Leases (7) In fiscal year 2023 the City adopted GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs).

SubscriptionBased IT
Arrangements (7)
Governmental Activities
Business-Type Activities
SubscriptionBased IT
Arrangements (7)
0 50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
400,000,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total Governmental Total Business
#1..
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City of Modesto
Computation of Direct and Overlapping Debt
June 30, 2024
163
Percentage Amount
Net Debt Applicable to Applicable to
Jurisdiction Outstanding (1) City of Modesto (2) City of Modesto Direct debt:

City of Modesto $ 51,169,228 100% $ 51,169,228
Overlapping General Obligation debt - school districts:

Ceres Unified School District 82,000,224 5.77% 4,730,031 Hart-Ransom Union School District 3,157,421 31.25% 986,583 Modesto Elementary School District (3) 119,279,242 76.93% 91,765,439 Modesto High School District 97,181,415 67.44% 65,541,457 Paradise Elementary School District 170,000 0.00% -
Salida Union Elementary District 10,745,000 29.62% 3,182,397 Stanislaus Union School District 37,510,000 76.33% 28,631,695 Sylvan School District 27,496,581 78.49% 21,581,891
Yosemite Community College District 241,492,297 33.19% 80,161,410 Total overlapping debt 619,032,180 296,580,903
Total direct and overlapping debt $ 670,201,408 $ 347,750,131 (1) Gross debt outstanding less applicable amounts in debt service funds. (2) Determined by ratio of assessed valuation of property subject to taxation in overlapping portion to valuation of all property subject to taxation in the jurisdiction.
(3) Increase from Modesto Elementary 2018, Measure D & E, General Obligation Bond Series C Note: Source of data for School Districts: Stanislaus County Auditor. #1..
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City of Modesto
Computation of Legal Debt Margin
June 30, 2024
164
Net assessed value (1)(3) $ 21,613,272,723
Plus homeowners' exemption (1)(3) 194,218,860
Gross assessed value (1)(3) $ 21,807,491,583
Debt limit - 15% of gross assessed value (2) $ 3,271,123,737 Legal debt margin $ 3,271,123,737
Total Net Debt
Total Net Debt Applicable to the
Applicable Legal Limit as a Percentage
Fiscal Year Debt Limit to Limit Debt Margin of Debt Limit 2015 $ 2,017,621,335 $ $ - 2,017,621,335 0%
2016 2,120,160,392 - 2,120,160,392 0%
2017 2,232,042,092 - 2,232,042,092 0%
2018(4) 2,354,367,851 - 2,354,367,851 0%
2019 2,476,468,235 - 2,476,468,235 0%
2020 2,606,133,716 - 2,606,133,716 0%
2021 2,734,540,136 - 2,734,540,136 0%
2022 2,874,165,127 - 2,874,165,127 0%
2023 3,081,811,386 - 3,081,811,386 0%
2024 3,271,123,737 - 3,271,123,737 0%
(1) Source: Stanislaus County Auditor.
(2) Section 43605 California Government Code.
(3) Figures are based on Stanislaus County.
(4) Fiscal year 2018 was updated after a discussion with Stanislaus County made apparent that the wrong Tax Year was originally pulled from their records.

Note: The City has elected to show ten years worth of data for this schedule. #1..
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City of Modesto
Revenue Bond Coverage
Wastewater Revenue Bonds
Last Ten Fiscal Years
165
Net Revenue Debt
Fiscal Gross Operating Available for Service
Year Revenue (1) Expenses (2) Debt Service Requirements Coverage 2015 $ 46,853,368 $ 21,207,025 $ 25,646,343 $ 4,150,322 6.18 2016 50,207,559 25,418,140 24,789,419 4,570,286 5.42
2017 50,907,228 25,212,214 25,695,014 11,311,098 2.27
2018 53,770,230 27,227,948 26,542,282 13,536,703 1.96
2019 62,618,527 27,144,632 35,473,895 11,958,407 2.97
2020 64,094,389 29,019,732 35,074,657 12,706,004 2.76
2021 67,012,041 29,187,910 37,824,131 12,560,711 3.01
2022 65,071,038 32,152,205 32,918,833 12,232,431 2.69
2023 70,164,131 32,058,383 38,105,748 12,246,146 3.11
2024 83,111,642 47,780,913 35,330,729 10,421,473 3.39
(1) Consists of all receipts of the Sewer fund not dedicated to capital spending purposes and including charges for services, connection fees, interest and rental income.
(2) Reflects total sewer fund operating expenses less depreciation; also includes certain transfers out that are made for operational costs incurred in other funds.

0.00 1.00

2.00 3.00

4.00 5.00

6.00 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Coverage
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City of Modesto
Demographic and Economic Statistics
Last Ten Fiscal Years
166
Total Per Capita Stanislaus City
Fiscal City Personal Personal Unemployment County Population Year (1)(2)(3) Population Income ($) Income ($) Rate (%) Population % of County 2015 209,186 $ 4,693,924,654 $ 22,439 9.30% 532,297 39.30% 2016 211,903 4,880,973,702 23,034 9.10% 540,214 39.23%
2017 212,287 4,856,701,986 22,878 7.80% 541,466 39.21%
2018 214,181 5,549,643,891 25,911 7.20% 549,976 38.94%
2019 215,030 5,396,177,850 25,095 6.50% 554,108 38.81%
2020 218,440 5,779,485,520 26,458 13.30% 550,660 39.67% 2021 218,745 5,984,425,710 27,358 7.60% 552,878 39.56%
2022 217,880 6,111,969,760 28,052 5.20% 552,999 39.40%
2023 216,995 6,335,169,025 29,195 6.50% 551,275 39.36%
2024 218,989 7,017,283,516 32,044 7.10% 551,430 39.71%
(1) The population for 2020 was previously overreported as 222,335 (2) In 2020, unemployment rates increased due to the effects of the novel coronavirus, COVID-19. (3) The population for 2021 was previously overreported as 219,294 based on demographic data reported by California Department of Finance Demographic Research Unit.

Source: State of California, Department of Finance (population) State of California, Employment Development Department (unemployment rate) U.S. Department of Commerce, Census Bureau (income)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2015201620172018201920202021202220232024
Unemployment Rate (%)
$-
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
$7,000,000,000
$8,000,000,000
2015201620172018201920202021202220232024
Total Personal Income ($)
$20,000
$22,000
$24,000
$26,000
$28,000
$30,000
$32,000
$34,000
2015201620172018201920202021202220232024
Per Capita Personal Income ($)

38.00%

38.25%

38.50%

38.75%

39.00%

39.25%

39.50%

39.75%

40.00%

40.25%

40.50%
2015201620172018201920202021202220232024
Population % of County
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City of Modesto
Principal Employers
167
2023/24 2015/16
Percentage Percentage
Number of (1) of Total City Number of (1) of Total City Employer Employees Rank Employment Employees Rank Employment E & J Gallo Winery 7,000 1 6.39% 3,000 2 1.44%
Modesto City Schools 3,200 2 2.92% 3,500 1 1.53%
Doctors Medical Center 2,600 3 2.37% 2,600 3 1.13%
Memorial Medical Ctr 2,000 4 1.82% 2,300 4 1.00%
Del Monte Foods Inc 1,200 5 1.09% 2,200 5 0.96%
Frito Lay 1,200 6 1.09%
Modesto Junior College 1,200 7 1.09% 1,582 8 0.69%
City of Modesto 1,008 8 0.92% 900 9 0.39%
Sylvan Union School District 800 9 0.73%
Save Mart Supermarkets 800 10 0.73%
Subtotal 21,008 19.15% 16,082 7.14%
Total Labor Force 109,600
Total City Population 218,989
Source: Stanislaus Economic Development & Workforce Alliance (1) The number of employees include both part-time and full time. #1..
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City of Modesto
Principal Property Taxpayers
168
2023/24 2015/16
Employer
Taxable Assessed
Value Rank
Percentage of
Total City
Taxable
Assessed Value
Taxable Assessed
Value Rank
Percentage of
Total City
Taxable
Assessed Value
Pacific Gas & Electric Company $ 571,835,893 1 2.62% 281,159,695 $ 1 1.99% E & J Gallo Winery 562,252,695 2 2.58% 341,819,330 4 2.42% Gallo Glass Company 497,437,030 3 2.28% 290,999,571 3 2.06% Frito Lay Inc 447,139,680 4 2.05%
Hunt Wesson Foods Inc 214,919,104 5 0.99% 118,965,168 8 0.84% G3 Enterprises Inc 198,573,481 6 0.91%
Doctors Medical Center 192,150,655 7 0.88% 254,451,297 6 1.80% California Dairies Inc 187,014,601 8 0.86%
Blue Diamond Growers 152,721,427 9 0.70%
Bronco Wine Company 142,189,773 10 0.65% 139,843,806 5 0.99% World International (1) 21,622,479 2 0.15%
WW Grainger, Inc 96,619,996 9 0.68%
Subtotal $ 3,166,234,339 14.52% 1,545,481,342 $ 10.93%
Total assessed value of $ $ 21,807,491,583 $ 14,134,402,614 (1) Formerly World International LLC; should utilize AV in combination with "taxes" paid, if so taxpayer is not in the top 10.

Not top 10 in relation to ad valorem taxes.

Source: Stanislaus Country Treasurer-Tax Collector
Note: Information based on entire Stanislaus County
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City of Modesto
Full-Time City Government Employees by Function
Last Ten Fiscal Years
169
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (2)
Function
General Government 112.10 79.00 80.00 90.00 84.00 84.00 85.00 86.00 88.00 91.75 Community Development 60.75 67.00 70.00 81.00 72.00 76.00 69.00 73.00 74.00 91.00 Public Works and Utilities 83.00 107.00 78.00 157.00 56.00 56.00 53.00 63.00 65.00 70.00 Parks and Recreation 16.50 18.50 17.50 17.50 54.75 56.75 51.75 51.75 62.75 66.75 Public Safety 456.50 462.50 490.50 490.50 480.50 510.50 482.00 528.00 557.00 614.50 Parking 7.00 6.00 6.00 6.00 6.00 6.00 7.00 7.00 7.00 7.00 Water 126.00 128.00 134.00 101.00 135.00 136.00 127.00 126.00 127.00 135.00 Sewer 139.00 139.00 157.00 146.80 158.00 158.00 157.00 155.00 156.00 139.00 Storm Drain 9.00 8.00 8.00 2.00 8.00 8.00 8.00 6.00 6.00 6.00 Compost 57.80 61.80 58.80 48.00 57.80 57.80 58.00 63.00 68.00 72.00 Airport 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Bus(1) 23.00 24.00 24.00 16.00 24.00 24.00 24.00 - - -
Community Center 6.00 5.00 11.00 3.00 2.00 2.00 1.00 1.00 1.00 1.00 Internal Services 76.00 82.00 79.00 56.00 81.00 81.00 79.00 108.00 108.00 110.00 Total 1,178.65 1,193.80 1,219.80 1,220.80 1,225.05 1,262.05 1,207.75 1,273.75 1,325.75 1,410.00 (1) Effective July 1, 2021, bus services at the City of Modesto seized due to the formation of the Stanislaus Regional Transit Authority (StanRTA). (2) As a result of the positive impact of Measure H funding, position allocations were approved for functions throughout the City.

Source: City of Modesto
0 100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (2)

POSITION ALLOCATIONS
Internal Services
Community Center
Bus
Airport
Compost
Storm Drain
Sewer
Water
Parking
Public Safety
Parks and Recreation
Public Works and Utilities
Community Development
General Government
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City of Modesto
Operating Indicators by Function
170
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Function/Program
Public safety:

Fire:

Fire calls for service 24,712 21,135 26,288 28,444 30,341 31,415 30,741 32,618 33,305 33,825 Primary fire inspections conducted 1,050 764 1,060 1,509 2,011 2,687 1,993 2,167 1,818 1,945 Police:

Communication Center calls answered
Police calls for service 122,270 129,439 129,802 194,931 181,430 178,649 165,126 148,710 134,513 138,514 Law violations: (4)
Part I and Part II crimes 50,729 53,609 53,142 53,543 47,141 36,898 33,067 28,204 18,494 20,104 Physical arrests (adult and juvenile) 18,634 12,303 11,760 13,247 12,388 13,302 12,360 10,962 5,611 5,952 Traffic violations 12,700 11,451 15,428 16,930 17,098 16,263 13,767 7,978 6,914 7,538 Parking violations 5,493 6,139 10,841 9,414 7,443 3,781 477 429 1,020 1,010 Public works
Streets:

Street resurfacing (Slurry Seal lane miles) 8 4 12 4 8 1 123 118 160 195 Potholes repaired (Total # of repairs) 14,515 24,059 8,745 25,004 36,709 2,831 21,863 9,230 16,672 11,944 Water utility customer repaired (sq. ft) 611 - - - - - - - - - Crack sealing (lane miles) 12 37 29 48 29 23 43 32 34 36 Airport:

Number of tenant aircraft 162 173 162 153 167 160 164 156 165 159 Number of hangars 119 119 119 119 119 119 119 119 119 119 Number of runways 2 2 2 2 2 2 2 2 2 2
Annual fuel consumption in gallons 582,473 443,272 582,602 580,383 631,891 511,928 540,226 647,631 683,330 761,410 Bus service:(3)
Number of buses 56 60 59 57 61 61 69 - - -
Number of routes 21 21 21 17 17 17 19 - - -
Total route miles 362 362 362 245 245 245 338 - - -
Average weekday number of passengers 11,598 12,441 10,523 9,354 8,869 7,475 6,686 - - - Total number of passengers carried 3,416,314 3,664,689 3,108,307 2,762,922 2,589,049 2,182,079 1,987,698 - - - Solid waste:

Recyclables processed (tons per year)(6)(7) 55,020 56,493 71,155 62,701 60,947 62,617 60,332 17,008 3,409 9,384 Organic Waste (8) - - - - - - - 29,111 20,116 35,400
Green Waste(2) 48,832 58,730 62,859 64,873 66,017 82,866 46,373 14,691 18,932 14,153 Commercial food waste(5) 817 845 914 1,550 1,145 1,192 2,783 3,368 - - Waste tires 4,152 4,497 4,931 4,285 4,320 5,089 4,501 4,883 6,236 3,597 Community development
Building safety & NPU:

Permits issued 4,511 4,939 4,973 5,033 4,335 4,146 4,808 4,690 4,790 4,809 Estimated cost of construction (10) $ 137,453,763 $ 92,768,634 $ 118,527,812 $ 172,595,385 $ 112,433,029 $ 170,765,326 $ 201,953,969 $ 216,000,327 $ 173,801,514 $ 260,927,659 Building Inspections made 31,571 23,187 36,158 42,891 39,086 34,218 34,730 21,064 17,720 25,038 Traffic electrical:

Street lights 13,764 13,764 13,764 13,764 13,764 13,764 13,764 13,764 13,764 13,923 Traffic signals 147 151 153 155 155 156 156 156 160 159 Lighted ped walks 28 28 28 24 26 26 26 26 34 40
Beacons 11 11 11 3 4 4 4 4 15 16
Four way flashers 10 10 10 5 3 3 3 3 6 8
School flashers 22 23 24 16 13 14 14 14 44 62
CCTV 41 41 41 30 24 24 24 24 24 10
Hubs 6 6 6 2 6 6 6 6 8 8
Culture and recreation:

Recreation class participants(1) (9) 151,323 150,091 150,500 154,000 160,656 116,131 28,240 58,426 88,103 132,313 (1) Fiscal year 2020-2021 Recreation class participants had decreased due the COVID-19 outbreak and classes were suspended. (2) Fiscal year 2021-2022 Yard waste is to be changed to Green Waste and was split into Organic Waste and Green Waste. This was the first year for recording Organic Waste. Fiscal year 2022-2023 Green waste increased due to rain fall. (3) Effective July 1, 2021, the operations of the Bus services seized as the newly regional transit agency, Stanislaus Regional Transit Agency (StanRTA) formed and took over the public transit services within some areas of Stanislaus County. (5) This was a temporary program to restaurants and food producers separate from organics collection. Recent State Legislation has removed distinction between food waste and other organic waste. (6) Fiscal year 2022-2023 recycling numbers decreased due to the inaccurate reporting from the haulers and adding a blue recycling container to residents. (7) Beginning 23/24 - data includes hauler and City staff collected recycling (8) Organic waste data includes yard, food, and paper waste and is collected by haulers from residential and commercial customers. (9) Recreational swimming, outreach tabling events, department events and parade, and senior center programming attendance are the main contributing factors. The parade attendance was in correctly reported in FY23 and should have been 12,000 higher. (10) Increase for fiscal year 2023-2024 is mainly due to an increase in labor and materials costs.

Source: City of Modesto - Various Departments
(4) Effective January 1, 2021, every law enforcement is now required to use the National Incident Based Reporting System (NIBRS), which has a focus on whether the crime was attempted or completed. Under prior reporting requirements, attempted crimes and completed crimes were reported as crimes.
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City of Modesto
Capital Asset Statistics by Function/Program
171
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Function/Program
Public safety:

Fire stations 11 11 11 11 11 11 11 11 11 11
Police stations 1 1 1 1 1 1 1 1 1 1
Police patrol units 105 105 104 104 100 105 100 105 105 103 Public works
Streets:

Miles of streets (1) 691 692 692 692 693 693 694 700 700 700 Water:

Miles of water mains 914 887 887 908 908 914 916 914 914 914 Fire hydrants 7,748 7,845 7,859 7,921 7,974 8,026 8,043 8,077 8,262 8,435 Storage capacity (gallons) 12,300,000 18,300,000 18,300,000 18,300,000 22,300,000 22,300,000 22,550,000 22,545,000 22,545,000 22,545,000 Wastewater:

Miles of sanitary sewers 639 639 655 656 656 656 657 650 650 650 Miles of storm sewers 183 183 170 170 170 170 170 165 165 165 Number of treatment plants (2) 2 2 2 2 2 2 2 2 2 2
Treatment capacity (millions of gallons) (4) 70 70 19 19 19 19 19 19 19 19 Community services:

City parks (10) 76 76 76 76 76 76 76 76 76 75
City parks acreage 1,110 1,240 1,240 1,240 1,240 1,240 1,246 1,246 1,249 1,245 Playgrounds (6) 58 58 58 58 58 54 55 55 55 54
City trails 6 6 6 6 6 6 9 9 9 9
City trails miles 15 15 15 16 16 17 17 17 17 17
Regional park acreage 375 375 375 375 375 375 653 653 634 641 Regional park facilities:

Golf courses (18 holes) 2 2 2 2 2 2 2 2 2 2
Golf courses (9 holes)(6) 1 1 1 1 1 1 1 1 - -
Clubhouse and banquet facility(7)(7) 8 8 8 8 8 8 8 8 4 4 Historic house (3) 4 3 3 3 3 3 3 3 3 3
Museums(8) - - - - - - - - 1 1
Community gardens 2 2 1 1 1 1 1 1 1 1
Community centers(9) 7 7 7 7 7 7 7 7 4 4
Senior centers 1 1 1 1 1 1 1 1 1 1
Sports centers 1 1 1 1 1 1 1 1 1 1
Performing arts centers 1 1 1 1 1 1 1 1 1 1
Swimming pools 4 4 1 1 1 1 1 1 1 1
Tennis courts 37 37 37 37 37 37 37 37 33 33
Pickleball courts - - - - - - - - 12 12
Baseball/softball diamonds 24 24 24 24 24 24 29 29 29 28 Soccer/football fields 29 29 29 29 29 29 31 31 31 31
Splash play in Existing parks 10 10 10 10 9 9 9 9 9 9
(1) Information reported from the City's GIS system.
(2) The City has both a Primary and a Secondary treatment facility. (3) In fiscal year 2015-2016 the number of historic houses was reduced by one due to the Crismon House burning down. There are no plans to rebuild. (4) In fiscal year 2016-2017 the City implemented a new process and permit. Previous permit was 70 million gallons daily seasonal Oct. through May. Current permit is 19 million gallons daily year round. (5) In fiscal year 2019-2020 the number of playgrounds was reduced as playgrounds were removed to rebuild. (6) The City closed Muni golf course in fiscal year 2022-2023. (7) The American Legion Hall and Little Legion Hall were damaged due to a fire in fiscal year 2022-2023. There are no plans to repair or use. (8) In fiscal year 2022-2023 the McHenry Museum was recategorized from banquet facility to museum. (9) In fiscal year 2022-2023 the methodology was changed leading to fewer facilities recognized as community centers. (10) In fiscal year 2023-2024, the City completed a land swap agreement with E. & J. Gallo Winery in which the winery acquired Beard Brok Park and the City gained 13 acres of land which will eventually be developed into a trail which will connect parks along Dry Creek to Tuolumne River Regional Park.

Source: City of Modesto - Various Departments
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CONTINUING DISCLOSURE TAB
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CONTINUING DISCLOSURE SECTION
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City of Modesto
Continuing Disclosure Section
172
This part of the Annual Comprehensive Financial Report provides information in order to comply with the City’s contractual commitment established by certain continuing disclosure undertaking of the City, entered into in accordance with Securities and Exchange Commission Rule 15c2-12 (the “Rule”) for the City’s bond obligations listed below. In contrast to the financial section, the continuing disclosure section information is not subject to independent audit.

1. Wastewater Revenue Refunding Bonds, Series 2018A

2. Wastewater Revenue Refunding Bonds, Series 2020A

3. Wastewater Revenue Refunding Bonds, Series 2020B

4. Water Revenue Refinancing Certificates of Participation, 2008 Series A

5. Modesto Irrigation District Financing Authority Domestic Water Project Refunding Revenue Bonds, Series 2013G

6. Modesto Irrigation District Financing Authority Domestic Water Project Revenue Bonds, Series 2007F #1..
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City of Modesto
Continuing Disclosure Requirements Information
Fiscal Year Ended June 30, 2024
173
Connection charge information: The Sewer Enterprise imposes connection fees on an on-time basis to new users of the sewer system and to users who significantly expand their usage. The fees have three components:

Capacity charge: $2,643 per Equivalent Dwelling Unit for residential units. Commercial and industrial property charged based on type of business.

Sub-trunk sewer charge: $645 per acre
Connection (lateral) charge: $33 per linear foot of lot frontage adjacent to the sewer line.

Customer Base by Type of Account
Number of % of Total % of Sewer Fee
Category Accounts Accounts Operating Revenue
Residential 59,449 94.7% 60.66%
Commercial 3,254 5.2% 17.23%
Industrial 51 0.1% 22.11%
Total 62,754 100.00% 100.00%
Ten Largest Users of Sewer Facilities, Year Ended June 30,2024 Sewer Fee % of Sewer Fee
User Revenue Operating Revenue
1) E & J Gallo $ 2,888,176 4.68%
2) Foster Farms 2,377,370 3.85%
3) Stanislaus Food Products 2,350,378 3.81%
4) Frito-Lay, Inc 1,624,862 2.63%
5) City of Ceres 1,510,293 2.45%
6) Del Monte Foods 1,120,757 1.82%
7) Sunopta 1,086,259 1.76%
8) Paleteria 531,717 0.86%
9) Nestle Food Company 484,613 0.79%
10) Rizo Lopez Foods 468,895 0.76%
Total (Top Ten Customers) $ 14,443,320 23.41%
Total (All Customers) $ 61,710,629
The average single-family residence monthly sewer charge is: $44.69 Charge
Commercial Group Per 1,000 Gallons Fixed Charge
Group 1 (no food, just toilets or working facilities) $3.98 $5.04 Group 2 (commercial laundromats, service stations, hotels without food) $5.23 $5.04 Group 3 (industrial laundromats, hotels with food) $6.51 $5.04 Group 4 (restaurants, bakeries, auto steam, markets) $8.06 $5.04 Industrial users pay a minimum account charge of $5.04 with additional charges of: $3,870.65per million gallons of flow, $288.55 per 1,000 pounds of excess biochemical oxygen demand (BOD), and $538.00 per 1,000 pounds of Total Suspended Solids (TSS).

Industrial users on the Cannery Segregation line pay a minimum account charge of $5.04 with additional charges of:
$2,923.65 per million gallons of flow, $19.49 per 1,000 pounds of biochemical oxygen demand (BOD), and $38.40 per 1,000 pounds of Total Suspended Solids (TSS) while in production during the months of July, August and September.

The Annual Budget of the City of Modesto is available from the City of Modesto Finance Department.

Updates of other required disclosures may be found elsewhere in this report, as follows:

Statement of Revenues, Expenses and Changes in Fund Net Position Page 26 Principal Amount of Bonds and Other Parity Debt Page 62-65 (Note 6) Historical Debt Service Coverage Page 177
(continued)
Wastewater Revenue Refunding Bonds, Series 2015,
Wastewater Revenue Refunding Bonds, Series 2018 A, and
Wastewater Revenue Refunding Bonds, Series 2020 A & B
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City of Modesto
Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2024
174
Residential, commercial and industrial rates have increased according to the following approved schedule.

Fiscal Year Percent Increase
2014-15 2.0%
2015-16 3.0%
2016-17 6.0%
2017-18 6.0%
2018-19 6.0%
2019-20 6.0%
2020-21 4.0%
2021-22 4.0%
2022-23 3.5%
2023-24 3.5%
Comparative Monthly Wastewater Service Charges.

The City's residential charges as of July 1, 2023 are set forth below with a comparison to other Central Valley and Northern California cities.

Monthly
Residential
City Charge
Fresno $ 25.75
Lodi 49.00
Modesto 44.69
Stockton 50.77
Tracy 53.34
Turlock 28.95
City Connection Fee
Fresno (1) $ 2,119.00
Lodi (2) 3,548.00
Modesto 2,643.00
Stockton 2,264.41
Tracy 2,267.00
Turlock 2,461.00
(1) Connection fees are based on the size of the lot & location. (2) Connection fees are based on the size of the water meter.

As of July 1, 2023

WASTEWATER COMPARISON INFORMATION
Ten Year History of Rate Increases

WASTEWATER SYSTEM

CITY OF MODESTO

CITY OF MODESTO

WASTEWATER SYSTEM
Monthly Sewer Charge Comparison
Residential Service
As of July 1, 2023

CITY OF MODESTO

WASTEWATER SYSTEM
Wastewater Connection Fees Comparison
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City of Modesto
Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2024
175
Residential, commercial and industrial rates have increased according to the following approved schedule.

Fiscal Year Percent Increase
2014-15 2.0%
2015-16 3.0%
2016-17 6.0%
2017-18 6.0%
2018-19 6.0%
2019-20 6.0%
2020-21 4.0%
2021-22 4.0%
2022-23 3.5%
2023-24 3.5%
Comparative Monthly Wastewater Service Charges.

The City's residential charges as of July 1, 2023 are set forth below with a comparison to other Central Valley and Northern California cities.
(1) Connection fees are based on the size of the lot & location. (2) Connection fees are based on the size of the water meter.

WASTEWATER COMPARISON INFORMATION
As of July 1, 2023
Monthly Sewer Charge
Comparison
Residential Service
Wastewater
Connection Fees
Comparison
$25.75
2,264.41
2,267.00
2,461.00
City
Fresno (1)
Lodi (2)
Modesto
Stockton
Tracy
Turlock

50.77 53.34

28.95 CITY OF MODESTO

WASTEWATER SYSTEM
Ten Year History of Rate Increases

WASTEWATER SYSTEM
Sewer Charge Comparisons

CITY OF MODESTO
2,119.00
3,548.00
2,643.00

49.00 44.69
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City of Modesto
Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2024
176
Water Revenue Refinancing Certificates of Participation, 2008 Series A Reserve Account Requirement as of June 30, 2024 $ 4,011,410 Surety Policy Value: 2,082,513
Balance in Parity Reserve Account as of June 30, 2024 2,258,104 Shortfall/(Excess) Reserve Coverage: $ (329,207)
Ten Largest Customers of Water Utility System, Year Ended June 30, 2024 % of Total Water Sales % of Total Water
Customer Business Type Usage (ccf ) (1) Usage Revenue ($) Sales Revenue 1) City of Modesto Local Government 338,160 1.62% 1,156,454 $ 1.51% 2) Modesto City Schools Education 355,548 1.70% 1,097,667 1.43% 3) Stanislaus Food Products Cannery 445,941 2.13% 984,918 1.29% 4) Foster Farms Dairy Processor 446,845 2.14% 952,705 1.25% 5) Sunopta Cannery 262,838 1.26% 575,047 0.75%
6) Stanislaus Housing Authority Housing Authority 142,978 0.68% 483,718 0.63% 7) Modesto Irrigation District Power Company 126,768 0.61% 351,389 0.46% 8) E & J Gallo Winery Processor 89,632 0.43% 332,581 0.43% 9) Yosemite Community College Education 100,091 0.48% 323,055 0.42% 10) STANCO Local Government 78,568 0.38% 322,769 0.42%
Total Top Ten 2,387,369 11.43% 6,580,303 $ 8.59%
Total Flat/Metered Revenues (Water Sales) $ 76,501,930
(1) Grover Landscaping maintains City parks
(2) "ccf" means "hundred cubic feet"
Water Sales Revenue, Year Ended June 30, 2024
Residential - flat rates
Commercial, industrial and municipal - metered rates $ 131,904 Total Water Sales 76,370,026
$ 76,501,930
The average monthly flat rate service charge for residential customers is:
$ 69.44
Meter Size
3/4" $ 25.44
1" 36.83
1 1/2" 65.32
2" 99.50
3" 207.73
4" 367.24
6" 748.90
8" 1,375.53
10" 2,173.05
12" 2,856.63
In addition to these minimum charges, commercial accounts are charged $2.02 per 100 cubic feet of water used.

The Annual Budget of the City of Modesto is available from the City of Modesto Finance Department. (1) Water sales only reflect the revenues in the Water Operating Fund and do not include revenue generated from developer fees and fleet replacement revenues.

Current Water Rates as of July 1, 2023 - Commercial Accounts #1..
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City of Modesto
Continuing Disclosure Requirements Information (Continued) City Water – Historical Debt Service Coverage
Last Ten Fiscal Years
177
2015 (5) 2016 (6) 2017 2018 (10) 2019 (11) 2020(13) 2021 2022 (14)(15) 2023 2024 Charges for services $ 54,779,417 $ 51,489,077 $ 63,253,114 $ 68,928,504 $ 71,952,653 $ 76,996,091 $ 80,908,193 $ 79,318,075 $ 76,795,929 $ 80,556,147 Connection charges 1,024,626 935,987 1,435,654 1,661,151 1,081,913 1,904,330 1,559,621 1,194,261 1,337,878 1,731,616 Refunds, damages & recoveries 20,988 511,063 57,533 (121,929) 95,591 92,786 (801,155) (4,141,774) 53,974 80,714 Interest and rental income 353,305 535,823 574,899 689,500 999,269 1,086,126 864,989 971,868 890,334 5,469,458 Service credits 3,033,487 3,026,911 3,304,911 3,408,238 3,309,703 3,576,012 3,654,881 3,405,150 2,797,201 3,528,249 Miscellaneous (9) 365,808 2,979,500 231,134 1,117,571 1,120,960 1,243,999 1,738,084 1,995,136 1,182,927 1,211,317 Total gross operating revenues $ 59,577,631 $ 59,478,361 $ 68,857,245 $ 75,683,035 $ 78,560,089 $ 84,899,344 $ 87,924,613 $ 82,742,716 $ 83,058,243 $ 92,577,501 Operating expenses (1) (4) $ 33,773,198 $ 38,722,320 $ 35,508,887 $ 35,685,576 $ 38,806,127 $ 39,167,326 $ 42,088,154 $ 47,165,967 $ 47,741,404 $ 53,146,114 Operating transfers (2)(12) 765,000 765,954 765,000 1,239,943 3,129,583 2,241,135 3,283,246 689,875 799,091 1,197,857 Total operating expenses (2) $ 34,538,198 $ 39,488,274 $ 36,273,887 $ 36,925,519 $ 41,935,710 $ 41,408,461 $ 45,371,400 $ 47,855,842 $ 48,540,495 $ 54,343,971 Net operating revenues $ 25,039,433 $ 19,990,087 $ 32,583,358 $ 38,757,516 $ 36,624,379 $ 43,490,883 $ 42,553,213 $ 34,886,874 $ 34,517,748 $ 38,233,530 2008 Revenue Certificates of Participation $ 2,531,179 $ 2,313,857 $ 2,468,593 $ 2,268,298 $ 2,121,410 $ 2,309,687 $ 2,130,448 $ 2,138,850 $ 2,124,040 $ 3,632,022 MID Treatment & Delivery Agreement (3) 9,930,040 10,203,352 10,202,108 10,208,384 10,214,947 10,213,274 10,709,280 9,921,714 9,115,777 8,525,231 CDWR Loan 262,692 131,322 - - - - - - - -
ARRA Grant 36,095 36,089 36,084 36,080 37,123 39,350 37,540 37,343 37,756 37,443 Total debt service $ 12,760,006 $ 12,684,620 $ 12,706,785 $ 12,512,762 $ 12,373,480 $ 12,562,311 $ 12,877,268 $ 12,097,907 $ 11,277,573 $ 12,194,696 Debt service coverage (7) (8) 1.96 1.58 2.56 3.10 2.96 3.46 3.30 2.88 3.06 3.14 (1) Reduced fiscal year 2015- 2016 Operating Expenses as the $131,322 CDWR Loan payment (along with 2 dollars attributed to rounding error) were counted both in Operating Expense and in the debt service section.
(2) Total operating expenses excludes depreciation and amortization, as well as the debt service component under the Treatment and Delivery Agreement. fiscal year 2015-2016 Total operating expense reduced from $39,619,604 to $39,488,274 since the Operating expenses was adjusted (see note 2) (3) Increased fiscal year 2014-2015 2008 Revenue Certificates of Participation from $2,501,891 to $2,531,179 to account for actual expenditure instead of the internal transfer. (5) The sale of the Waterford-Hickman Water System for $2.6 million had a significant impact to the Water Fund debt service calculation. Without the sale of this system Water Fund debt service coverage would have been 1.35. Reduced fiscal year 2015-2016 Operating Expenses as the $131,322 Del Estate Water Company loan payment (along with $2 dollars attributed to rounding error) were counted both in Operating Expense and in the Debt service section.
(6) Del Estate Water Company (CDWR) loan payment for fiscal year 2014-2015 was reduced from $264,719 to $262,692 and fiscal year 2015-2016 reduced from $264,719 to $131,322. Loan repayment was completed in fiscal year 2015-2016.
(7) Fiscal year 2015-2016 Debt service coverage increased from 1.55 to 1.57 and fiscal year 2014-2015 Debt service coverage increased from 1.45 to 1.96 after above stated changes were made. (8) The financial figures reported only reflect net operating revenues in the Water Operating Fund. (9) Fiscal year 2017-2018 Miscellaneous revenues include $1,048,863 of one-time transfer as result of the dissolution of the Central Stores Fund. (10) Fiscal year 2018-2019 Operating Transfers of $3,129,583 includes $2,300,000 in one-time loan to fund 4893 (Carpenter Road Landfill) to be repaid over 6 years. (11) Fiscal year 2019-2020 Miscellaneous revenues include the first, interest-only payment of the fiscal year 2018-2019 Loan from the Water fund to the Carpenter Road Landfill Fund. year 2018-2019.
(13) Fiscal year 2020-2021, Negative refunds, damages, and recoveries is due to large negative change in Fair Market Value. Operating Transfers include a new $1,540,000 loan to the Carpenter Road Landfill. (14) Fiscal year 2021-2022 Negative refunds, damages, and recoveries is due to large negative change in Fair Market Value. Miscellaneous Revenues includes repayment of the Carpenter Road Landfill loan. (15) Fiscal year 2021-2022 MID Treatment & Delivery Agreement was previously reported incorrectly as $10,400,158. This was updated in Fiscal year 2022-2023.

Source: City of Modesto
(4) Reduced fiscal year 2014-2015 Operating expenses from $40,349,338 to $33,773,198. (12) Fiscal year 2019-2020 Operating Transfers of $2,241,135 include $900,000 in one-time loan to fund 4893 (Carpenter Road Landfill). This $900,000 is in addition to the $2,300,000 that was borrowed in fiscal Historical Debt Service Coverage

CITY WATER UTILITY SYSTEM
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City of Modesto
Continuing Disclosure Requirements Information (Continued) City Water Utility System
Projected Operating Results
178
Fiscal Year
Projected 2025
Fiscal Year
Projected 2026
Fiscal Year
Projected 2027
Fiscal Year
Projected 2028
Fiscal Year
Projected 2029
Charges for services $ 87,753,248 $ 91,702,144 $ 95,828,740 $ 100,141,034 $ 96,064,703 Connection charges 1,244,910 1,269,808 1,295,204 1,321,108 1,383,348 Refunds, damages & recoveries 11,730 11,964 12,203 12,447 12,447 Interest and rental income 513,383 505,953 538,322 518,502 720,767 Service credits 3,167,325 3,230,671 3,295,285 3,361,191 4,525,166 Miscellaneous - - - - 17,231
6-year Loan Repayment from fund 4893
(Carpenter Road Landfill) 678,280 663,710 649,140 634,570 634,570 Total gross operating revenues $ 93,368,876 $ 97,384,250 $ 101,618,894 $ 105,988,852 $ 103,358,232 Operating expenses $ 60,472,925 $ 63,496,571 $ 66,671,400 $ 70,004,971 $ 73,222,021 Operating transfers 765,000 765,000 765,000 765,000 765,000 Total operating expenses $ 61,237,925 $ 64,261,571 $ 67,436,400 $ 70,769,971 $ 73,987,021 Net operating revenues $ 32,130,951 $ 33,122,679 $ 34,182,494 $ 35,218,881 $ 29,371,211 2008 Revenue Certificates of Participation $ 4,240,014 $ 4,240,014 $ 4,240,014 $ 4,240,014 $ 3,603,860.00 MID Treatment & Delivery Agreement 8,409,205 8,409,205 8,409,205 8,409,206 8,316,756 ARRA Grant 36,600 36,600 36,600 36,600 37,451
Total debt service $ 12,685,819 $ 12,685,819 $ 12,685,819 $ 12,685,820 $ 11,958,067.00 Debt service coverage 2.53 2.61 2.69 2.78 2.46
Source: City of Modesto.

The City has prepared the following table of projections of operating results of the Water Utility System for the five fiscal years 2024-28. The projected amounts set forth below are based on certain assumptions made by the City. To the extent that actual future conditions vary from those assumed in preparing the projections, the actual results will vary. #1..
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City of Modesto
Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2024
179
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Number of Service Accounts 74,665.00 72,825.00 73,135.00 73,423.00 73,591.00 73,897.00 74,094.00 74,356.00 74,527.00 74,776.00 Total Water Production (MG) 17,692.00 15,155.00 15,319.48 16,782.00 16,059.00 17,141.56 17,569.00 17,017.93 15,655.52 15,610.17 Capacity (MGD) (1) 175.20 175.20 175.20 168.00 168.20 170.30 135.00 130.00 135.00 135.00 Peak Daily Distribution (MGD) 84.60 74.70 84.25 77.50 83.50 75.14 75.90 73.63 69.99 64.78 Average Daily Distribution (MGD) 48.47 41.52 41.97 45.98 44.00 46.96 48.13 46.62 42.89 42.77 "MG" means million gallons.
"MGD" means million gallons daily.
(1) Capacity for fiscal year 2020-2021 was reported using source (wells) and surface water capacity; will be reported this way moving forward. 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Well Water (BG) 10.63 9.22 8.63 9.82 5.45 7.71 7.12 8.81 7.68 7.56

5.85 5.02 5.86 6.23 9.86 8.76 9.56 8.21 7.98 8.05
Total (BG) 16.48 14.24 14.49 16.05 15.31 16.47 16.68 17.02 15.66 15.61 "BG" means billion gallons.

City
Fresno (1)
Lodi (2)
Modesto
Stockton (1)
Tracy (2)
Turlock (1)
(1) Water is metered. Charge varies per meter size.
(2) Water is both metered and flat rate. Charge varies per meter and dwelling size.

CITY WATER UTILITY SYSTEM
Average Monthly Water Rates Comparison
Flat Rate (1" Service)

36.54 CITY WATER UTILITY SYSTEM STATISTICS
(Calendar Years 2015 through 2024)
Surface Water (BG)

CITY WATER UTILITY SYSTEM
Service Area Total Production
(Fiscal Years 2015 through 2024)
105.00
As of July 1, 2023
Flat Rate Typical
$17.90

36.45 30.90

69.44 #1..
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City of Modesto
Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2024
180
5/8" meter** $ 2,022
1" meter 3,671
1-1/2" meter 7,341
2" meter 11,746
3" meter 25,695
4" meter 46,250
6" meter 95,437
8" meter 176,191
10" meter 278,970
12" meter 367,065
**NOTE: Single-family residences qualify for the 5/8" connection fee only under the following conditions:

Single story, single-family residences on a lot of 4,000 square feet or less.

Meter Size Connection Fees
Connection Fees Comparison
Except Multiple Family Units

CITY WATER UTILITY SYSTEM
(Fiscal Year 2023-2024)
Two-story single family residence on a lot of 4,000 square feet or less, provided the request for such a service accompanied by a report from a licensed professional engineer that certifies that the 5/8" service is adequate to meet the needs of the proposed dwelling.

A 5/8" "service" shall not be allowed for a single-family dwellings of greater than 2 stories on lots less than 4,000 square feet.

The following table sets forth connection fees for all users except multi-family units by meter size for fiscal year 2023-2024:
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City of Modesto
Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2024
181
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Revenues
Residential (Flat Rates) $9,037,477 $7,320,096 $6,767,446 $5,506,216 $4,385,017 $3,450,868 $2,533,090 $1,414,328 $299,865 $131,904 Commercial, Industrial and
Municipal (Metered) 43,118,855 40,242,493 51,960,729 60,113,019 62,933,627 70,175,513 76,169,202 75,068,664 74,488,920 76,370,026 Total Water Sales $52,156,332 $47,562,589 $58,728,175 $65,619,235 $67,318,644 $73,626,381 $78,702,292 $76,482,992 $74,788,785 $76,501,930 Lot Size 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0-5,000 sq. ft. lot $40.81 $40.81 $47.38 $48.77 $52.97 $56.11 $59.48 $60.66 $60.66 $60.66 5,001-7,000 sq. ft. lot 46.38 46.38 54.72 56.23 60.89 64.23 68.08 69.44 69.44 69.44 7,001-11,000 sq. ft. lot 55.04 55.04 69.22 70.98 76.52 80.26 85.08 86.78 86.78 86.78 11,001-17,000 sq. ft. lot 58.43 58.43 90.88 93.00 99.87 104.22 110.47 112.68 112.68 112.68 over 17,000 sq. ft. lot 68.69 68.69 101.80 104.10 111.65 116.3 123.28 125.75 125.75 125.75 (1) Single family residential properties with water meters that are read for billing purposes, are charged the meter water rate. (Year Ended June 30, 2024)
Sale of Water
The table below sets forth the adopted single family residential flat rates effective each fiscal year

CITY WATER UTILITY SYSTEM
Monthly Single Family Residential Flat Water Rates (1)
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City of Modesto
Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2024
182

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Volume-based Rate ($/hcf) $ 1.40 $ 1.40 $ 1.79 $ 1.82 $ 1.93 $ 1.98 $ 1.98 $ 2.02 $ 2.02 $ 2.11 Fixed Monthly Meter Charge
(in addition to volume-based charges)
5/8"-3/4" meter $ 15.03 $ 15.03 $ 20.79 $ 21.47 $ 23.34 $ 24.94 $ 24.94 $ 25.44 $ 25.44 $ 26.43 1" meter 21.33 21.33 29.30 30.39 33.48 36.11 36.11 36.83 36.83 38.55 1-1/2" meter 36.90 36.90 50.58 52.71 58.83 64.04 64.04 65.32 65.32 68.85 2" meter 55.68 55.68 76.11 79.49 89.25 97.55 97.55 99.50 99.50 105.21 3" meter 105.80 105.80 156.98 164.30 185.59 203.66 203.66 207.73 207.73 220.35 4" meter 162.13 162.13 276.14 289.28 327.55 360.04 360.04 367.24 367.24 390.03 6" meter 318.47 318.47 561.28 588.33 667.24 734.22 734.22 748.90 748.90 796.05 8" meter 506.20 506.20 1,029.42 1,079.32 1,224.95 1,348.56 1,348.56 1,375.53 1,375.53 1,462.65 10" meter 725.26 725.26 1,625.23 1,704.21 1,934.76 2,130.44 2,130.44 2,173.05 2,173.05 2,311.05 12" meter 1,350.92 1,350.92 2,135.93 2,239.84 2,543.16 2,800.62 2,800.62 2,856.63 2,856.63 3,038.25 Commercial Accounts

CITY WATER UTILITY SYSTEM
Water Rates and Charges
The following table sets forth the adopted monthly service charge and volume charge for commercial accounts through fiscal year 2023-24. #1..
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City of Modesto
Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2024
183

BOND RATINGS
Bonds Moody's Rating Standard & Poor's Rating Fitch Rating 2008 Lease Revenue Bonds Aa3 AA+/A-1 A+
2008 Water Certificates of Participation Aa3 AA/A-1
Wastewater Revenue Bonds, Series 2018A AA
Wastewater Revenue Bonds, Series 2020A AA
Wastewater Revenue Bonds, Series 2020B AA
Sources: www.moodys.com
www.standardandpoors.com
www.Fitchratings.com
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City of Modesto
Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit
For the Year Ended June 30, 2024
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City of Modesto
Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit
For the Year Ended June 30, 2024
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City of Modesto
Annual Appropriations Limit
Table of Contents
PAGE
Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit 1
Annual Appropriations Limit 4
Notes to Annual Appropriations Limit 5
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1 Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit
Honorable Members of the City Council
City of Modesto, California
We have performed the procedures enumerated below to the accompanying calculation of the Annual Appropriations Limit of the City of Modesto, California (the City) for the year ended June 30, 2024. The City’s management is responsible for the calculation of the Annual Appropriations Limit.

The City’s management has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. These procedures, which were suggested by the League of California Cities and presented in the publication entitled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution, were performed solely to assist you in meeting the requirements. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
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2 The procedures performed and the associated findings were as follows:

1. We obtained the City’s calculation of the Annual Appropriations Limit for the year ended June 30, 2024 and compared the limit and annual adjustment factors included in that calculation to the limit and annual adjustment factors that were adopted by the resolution of the City Council. We also compared the population and inflation options included in the aforementioned calculation to those that were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of this procedure.

2. For the accompanying Annual Appropriations Limit, we added last year's limit to the total adjustments and compared the resulting amount to this year's limit. We also recalculated the adjustment factor and the adjustment for inflation and population and compared the results with the City’s calculation.

Finding: No exceptions were noted as a result of this procedure.

3. We compared the prior year appropriations limit presented in the accompanying Annual Appropriations Limit to the prior year appropriations limit adopted by the City Council for the prior year.

Finding: No exceptions were noted as a result of this procedure. #1..
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3 We were engaged by the City’s management to perform this agreed-upon procedures engagement and conducted our engagement in accordance with the attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to, and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Annual Appropriations Limit. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

However, this report is a matter of public record, and its distribution is not limited.

Glendale, California
November 8, 2024
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Unaudited; see Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit and Accompanying Notes to Annual Appropriations Limit. 4 City of Modesto
Annual Appropriations Limit
For the Year Ended June 30, 2024
Appropriations Limit, Fiscal Year 2023 $558,994,169
Adjustment Factors:

Inflation factor, as adopted 1.0444
Population factor, as adopted 0.9968
Calculation of factor FY 23-24 1.0411
Annual adjustment in dollars 22,974,660
Appropriations limit, fiscal year 2024, as adopted $581,968,829 #1..
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5 City of Modesto
Notes to Annual Appropriations Limit
Year Ended June 30, 2024
NOTE 1 PURPOSE OF LIMITED PROCEDURES REVIEW
Under Article XIII-B of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIII-B, the annual calculation of the appropriations limit is subject to an agreed-upon procedures review in connection with the annual audit.

NOTE 2 METHOD OF CALCULATION
Under Section 10.5 of Article XIII-B, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.

NOTE 3 INFLATION FACTOR
A California governmental agency may adjust its appropriations limit by either the annual percentage change in the 4th quarter per capita personal income (which percentages are supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction.

The factor adopted by the City for the fiscal year 2024 represents the annual percentage change in the State’s per capita personal income.

NOTE 4 POPULATION FACTOR
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction's own population or the annual percentage change in population in the County where the jurisdiction is located. The factor adopted by the City for the fiscal year 2024 represents the annual percentage change in population of its own jurisdiction.
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City of Modesto
Notes to Annual Appropriations Limit (Continued)
Year Ended June 30, 2024
6 NOTE 5 OTHER ADJUSTMENTS
A California governmental agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City had no such adjustments for the year ended June 30, 2024.
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 19
Statement of Activities – Governmental Activities 20
Balance Sheet – Governmental Funds 22
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 23
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 24
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Governmental Activities Statement of Activities 25
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 26
Notes to Basic Financial Statements 27
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 39 #1..
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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
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 1998-2 Carver-Bangs/PelandaleSnyder (the District), a component unit of the City of Modesto, California, (the City) as of and for the year ended June 30, 2024, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the District’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 each major fund of the District as of June 30, 2024, and the respective changes in financial position, and the 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. #1..
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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 District 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 District’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 District’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 District’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-17 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 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.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2024, on our consideration of the District’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 District’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 District’s internal control over financial reporting and compliance.

Glendale, California
November 8, 2024
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6 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 1998-2 Carver-Bangs/PelandaleSnyder (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

Please read this overview in conjunction with your reading of the accompanying basic financial statements.

THE PURPOSE OF THE DISTRICT
The District is a blended component unit of the City of Modesto, California (the City). It is controlled by the City, and the City Council is the District’s governing body. City employees perform most of the duties and functions required of the District, but certain tasks are provided by third parties under contract.

The District’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the District. The District is the vehicle that will be used to ensure that all landowners in the Specific Plan area contribute to the cost of the public facilities and services. Additional information on the District can be found below and in Note 1 to the accompanying financial statements.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
The Carver-Bangs Specific Plan (Resolution No. 97-161) was adopted by the City Council on April 1, 1997, and was subsequently amended on November 4, 1997 (Resolution No. 97-633).

The Carver-Bangs Specific Plan has been developed under the City’s Village Residential guidelines and should yield approximately 800 single-family residential units. On January 16, 1996, the City Council approved the Pelandale-Snyder Specific Plan (Resolution No. 95-16) and amended the Pelandale-Snyder Specific Plan on March 18, 1997 (Resolutions 97-136 and 97-139). The Specific Plan area contains approximately 227 acres designated as single-family residential and approximately 57 acres are designated multi-family residential.

In December 1998, the City formed the District to provide a funding and reimbursement mechanism for public facilities and services required to serve the Carver-Bangs and PelandaleSnyder Specific Plan areas in the City and to fund ongoing maintenance costs. Portions of both Specific Plan areas were included within the initial boundaries of the District and the remainder of the property within both Specific Plan areas, excluding a remainder parcel, have been annexed to the District.

As a condition of development, developers are required to install various public improvements that will serve the increased population generated from the projects. Many of these improvements must be provided in the early stages of development and, therefore, the first developer(s) to build within the Specific Plan areas must install the improvements. The District was established as a funding/reimbursement for many of the improvements. Up until a few years ago, developers installed most of the improvements. The developers received a cash reimbursement or tax credit equal to the cost of that improvement(s) as set forth in the Public Report adopted in connection with the formation of the District. #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 Over the past several years, the City has designed and overseen the installation of the improvements. Construction of the storm drain pump stations located at the East and West Basins on Prescott Road between Pelandale and Snyder was completed in the summer of 2007 while the Snyder Avenue widening project between Prescott Road and Carver Road commenced in the spring of 2008. The design of the bike trail commenced in 2009.

FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following
Government-Wide:
• At June 30, 2024, the District’s total net position increased to $2,051,382. • Total District revenues were $185,527 and expenses were $108,180.

Funds Basis:
• Capital Projects Fund revenues increased from $9,529 in the prior year to $71,439 for fiscal year 2024 and expenditures of $0 had no change from the prior year. The increase in revenues is attributed to the increase in the fair value of investments and interest income. The Capital Projects Fund increased by $71,439 to an ending fund balance of $1,657,652.
• Special Revenue Fund revenues of $113,694 were $16,262 more than the prior year due to an increase in the fair value of investments and interest income. Expenditures of $108,180 were $4,260 more than the prior year due to an increase in service expenditures. The Special Revenue Fund balance increased by $5,514 to an ending fund balance of $392,310.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
9 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.

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. #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 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, 2024, total assets of $2,060,651 were offset by liabilities of $9,269. The District’s net position from governmental activities increased to $2,051,382 in 2024 from $1,974,035 (as restated) in 2023. The District’s net position has restrictions as follows: $1,657,652 for acquisition or construction and $393,730 for District maintenance. #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 The following summarizes the Statements of Net Position as of June 30, 2024 and 2023:

Statements of Net Position – Governmental Activities
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $2,051,050 $1,977,543 $73,507
Assessments receivable 2,501 2,106 395
Interest receivable 7,100 5,241 1,859
Total assets 2,060,651 1,984,890 75,761
Liabilities:

Current and other liabilities 9,269 10,855 (1,586)
Net position:

Restricted for:

Capital projects 1,657,652 1,586,213 71,439
District maintenance 393,730 387,822 5,908
Total net position $2,051,382 $1,974,035 $77,347
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 revenue came primarily from maintenance special tax of $97,786 and investment earnings of $87,741. Facilities special tax revenue was not collected in fiscal years 2024 and 2023, as these revenues are collected at the time of building permit issuance, and no such development occurred in the District in fiscal years 2024 and 2023. District expenses of $108,180 were primarily for community development.

The following summarizes the Statements of Activities for the years ended June 30, 2024 and 2023, and the respective changes:

Statements of Activities – Governmental Activities
2023
Description 2024 (as restated) Change
Revenues:

General revenues:

Maintenance special tax $97,786 $95,531 $2,255
Investment earnings 87,741 11,793 75,948
Total revenues 185,527 107,324 $78,203
Expenses:

Community development 108,180 103,920 4,260
Changes in net position 77,347 3,404 $73,943
Net position, beginning of year 1,974,035 1,970,631
Net position, end of year $2,051,382 $1,974,035
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 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 of 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 pages is the summarized Balance Sheets and the Statements of Revenues, Expenditures, and Changes in Fund Balance for both the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2024 and 2023, and the respective changes:
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Balance Sheets – Capital Projects Fund
Description 2024 2023 Change
Assets:

Cash and investments $1,651,908 $1,581,997 $69,911
Interest receivable 5,744 4,216 1,528
Total assets $1,657,652 $1,586,213 $71,439
Fund balances:

Restricted for:

Capital projects $1,657,652 $1,586,213 $71,439
Total fund balances $1,657,652 $1,586,213 $71,439
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 Balance Sheets – Special Revenue Fund
2023
Description 2024 as restated Change
Assets:

Cash and investments $399,142 $395,546 $3,596
Assessments receivable 2,501 2,106 395
Interest receivable 1,356 1,025 331
Total assets $402,999 $398,677 $4,322
Liabilities:

Accounts payable $9,269 $10,855 $(1,586)
Total liabilities 9,269 10,855 (1,586)
Deferred inflow of resources:

Unavailable revenues 1,420 1,026 394
Total deferred inflows of resources 1,420 1,026 394
Fund balances:

Restricted for:

District maintenance 392,310 386,796 5,514
Total fund balances 392,310 386,796 5,514
Total liabilities, deferred inflow of
resources and fund balances $402,999 $398,677 $4,322
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
16 Statements of Revenues, Expenditures, and Changes in Fund Balances – Capital Projects Fund
Description 2024 2023 Change
Revenues $71,439 $9,529 $61,910
Expenditures - - -
Changes in fund balance 71,439 9,529 $61,910
Fund balance, beginning of year 1,586,213 1,576,684
Fund balance, end of year $1,657,652 $1,586,213
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
2023
Description 2024 as restated Change
Revenues $113,694 $97,432 $16,262
Expenditures 108,180 103,920 4,260
Changes in fund balance 5,514 (6,488) $12,002
Fund balance, beginning of year 386,796 393,284
Fund balance, end of year $392,310 $386,796
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
17 THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental funds reported a combined fund balance of $2,049,962, an increase of $76,953 compared to fiscal year 2023. The Capital Projects Fund realized a $71,439 increase, primarily due to interest income and an increase in the fair value of investments. The Special Revenue Fund realized a $5,514 increase due to total revenues exceeding total expenditures reported during the year.

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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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
18 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 are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that 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. #1..
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See notes to basic financial statements.
19 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $2,051,050
Assessments receivable 2,501
Interest receivable 7,100
Total Assets 2,060,651

LIABILITIES
Accounts payable 9,269
Total Liabilities 9,269

NET POSITION
Restricted for:

Capital projects 1,657,652
District maintenance 393,730
Total Net Position $2,051,382
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See notes to basic financial statements.
20 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2024
Program
Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Functions/Programs Expenses
Operating
Grants and
Contributions
Governmental
Activities
Community development $108,180 $- $(108,180)
$108,180 $- (108,180)
General Revenues:

Maintenance special tax 97,786
Investment earnings 87,741
Total General Revenues 185,527
Changes in Net Position 77,347
Net Position, Beginning of Year, as
restated (Note 5) 1,974,035
Net Position, End of Year $2,051,382
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
21 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 the maintenance of parkways and open space within the District. #1..
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See notes to basic financial statements.
22 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $1,651,908 $399,142 $2,051,050
Assessments receivable - 2,501 2,501
Interest receivable 5,744 1,356 7,100
Total Assets $1,657,652 $402,999 $2,060,651

LIABILITIES
Accounts payable $- $9,269 $9,269
Total Liabilities - 9,269 9,269

DEFERRED INFLOW OF RESOURCES
Unavailable revenues - 1,420 1,420
Total Deferred Inflow of Resources - 1,420 1,420

FUND BALANCES
Restricted for:

Capital projects 1,657,652 - 1,657,652
District maintenance - 392,310 392,310
Total Fund Balances 1,657,652 392,310 2,049,962
Total Liabilities, Deferred Inflow of
Resources and Fund Balances $1,657,652 $402,999 $2,060,651 #1..
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See notes to basic financial statements.
23 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position
June 30, 2024
Total Fund Balances - Governmental Funds $2,049,962
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. 1,420
Total Net Position - Governmental Activities $2,051,382 #1..
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See notes to basic financial statements.
24 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total

REVENUES
Maintenance special tax $- $97,392 $97,392
Interest income 36,588 8,500 45,088
Change in fair value of investments 34,851 7,802 42,653 Total Revenues 71,439 113,694 185,133

EXPENDITURES
Community development:

Services – professional and other - 92,760 92,760
Utilities - 15,420 15,420
Total Expenditures - 108,180 108,180
Changes in Fund Balances 71,439 5,514 76,953
Fund Balances, Beginning of Year, as
restated (Note 5) 1,586,213 386,796 1,973,009
Fund Balances, End of Year $1,657,652 $392,310 $2,049,962 #1..
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See notes to basic financial statements.
25 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the
Governmental Activities Statement of Activities
Year Ended June 30, 2024
Changes in Fund Balances - Governmental Funds $76,953
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. 394 Changes in Net Position - Governmental Activities $77,347 #1..
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See notes to basic financial statements.
26 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual
Year Ended June 30, 2024
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special tax $100,000 $100,000 $97,392 $(2,608) Interest income - - 8,500 8,500
Change in fair value of investments - - 7,802 7,802
Total Revenues 100,000 100,000 113,694 13,694

EXPENDITURES
Community development:

Services - professional and other 112,326 112,326 92,760 19,566 Utilities 17,000 17,000 15,420 1,580
Total Expenditures 129,326 129,326 108,180 21,146
Changes in Fund Balance $(29,326) $(29,326) 5,514 $34,840 Fund Balance, Beginning of Year, as
restated (Note 5) 386,796
Fund Balance, End of Year $392,310
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27 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 1998-2 Carver-Bangs/Pelandale-Snyder (the District) was formed in December 1998 by a vote of the property owners within the proposed district. The District, a separate legal entity, was formed to provide a funding and reimbursement mechanism for public facilities and services required by the District Specific Plans. The District is the vehicle that will be used to ensure that all landowners in the District pay their share of the public improvements. The District is a proposed 480-acre project bounded on the East by Carver Road, on the North by Bangs Avenue, on the West by Dale Road, and the Modesto Irrigation District canal and Snyder Avenue on the South. The District is expected to yield 3,413 residential dwelling units at buildout; in addition, 36 acres of the District will be used for an elementary school site, a City park, and a church.

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. #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 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 that are not properly included among program revenues, are reported instead 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.

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. #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) 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.

The Special Revenue Fund accounts for all financial resources and uses related to the 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.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Management’s Use of Estimates (Continued)
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.

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. The District did not have nonspendable resources as of June 30, 2024.
• 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. The District reported $2,049,962 of restricted resources as of June 30, 2024. #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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. The District did not have committed resources as of June 30, 2024. • 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. The District did not have assigned resources as of June 30, 2024.
• 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. The District did not have unassigned resources as of June 30, 2024.

The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through the 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 the adoption or amendment of the budget or future year budget plan as intended for a specific purpose.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
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 applies 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 applies to a future reporting period. Deferred inflow of resources reported by the District consists of unearned deferred assessments that have been billed as of year-end, but not yet collected. #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position
Net position represents the residual interest in the District’s assets and deferred outflow of resources after liabilities and deferred inflow of resources 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:
• 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 do 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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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2024, the District implemented the following Governmental Accounting Standards Board (GASB) standard. The financial statements included herein apply the requirements and provisions of the standard.

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

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

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

GASB Statement No. 102 – Certain Risk Disclosures. The requirements of this statement are effective for reporting periods beginning after June 15, 2024.

GASB Statement No. 103 – Financial Reporting Model Improvements. The requirements of this statement are effective for reporting periods beginning after June 15, 2025.

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.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
35 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash and investment in the City’s pool are 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, 2024.

Cash and investments as of June 30, 2024 are classified in the accompanying financial statements as follows:

Statement of Net Position – Governmental Activities
Cash and investments $2,051,050
Total cash and investments $2,051,050
Deposits with the City
Cash and investment pool $2,051,050
Total cash and investments $2,051,050
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 Annual Comprehensive Financial Report. As of June 30, 2024, the fair value of the District’s position in the pool is the same as the value of its pool shares.

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, 2024, restrictions included:
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
36 NOTE 3 RESTRICTED FUND BALANCES
Restrictions of Fund Balances (Continued)
Restricted for Capital Projects - the portion of the fund balance legally restricted for the acquisition, construction, and formation/annexation activities.

Restricted for District Maintenance - the portion of the fund balance legally restricted for the 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 foreclosure 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 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, 2024, the District had 51 parcels that were delinquent for a total of $835, three of which were delinquent for more than three consecutive payments.

The District received 99.71% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2024. The delinquencies total of $835 at June 30, 2024 is included in assessments receivable on the Statement of Net Position and Balance Sheet. #1..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
37 NOTE 5 CORRECTIONS OF ERRORS IN PREVIOUSLY ISSUED FINANCIAL

STATEMENTS
During the fiscal year 2024, the City determined that delinquent tax revenues in the prior years were not reported. Therefore, the revenues were understated by $3,831 for the fiscal year ended June 30, 2023.

The effects of correcting the errors are shown in the table below.

June 30, 2023,
as previously
reported
Error
corrections
June 30, 2023,
as restated
Government-wide
Governmental activities net
position $1,970,204 $3,831 $1,974,035
Total primary government $1,970,204 $3,831 $1,974,035
Governmental funds
Major funds’ fund balances:

Capital projects fund $1,586,213 $- $1,586,213
Special revenue fund 382,965 3,831 386,796
Total governmental funds $1,969,178 $3,831 $1,973,009
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
38 NOTE 6 SUBSEQUENT EVENTS
The District has evaluated events or transactions subsequent to June 30, 2024, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 8, 2024, the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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39 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 1998-2 CarverBangs/Pelandale-Snyder (the District), as of and for the year ended June 30, 2024, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 8, 2024.
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40 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.

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. #1..
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41 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.

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 District’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 District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 8, 2024
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #1..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 16
Statement of Activities – Governmental Activities 17
Balance Sheet – Governmental Funds 19
Reconciliation of Governmental Fund Balance Sheet to
Governmental Activities Statement of Net Position 20
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 21
Reconciliation of Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to Governmental Activities
Statement of Activities 22
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 23
Notes to Basic Financial Statements 24
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 35 #1..
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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
Opinions
We have audited the financial statements of the governmental activities and major fund of the City of Modesto Community Facilities District Number 2000-2 Coffee-Claratina (the District), a component unit of the City of Modesto, California, (the City) as of and for the year ended June 30, 2024, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the District’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 District as of June 30, 2024, and the respective changes in financial position, and the 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. #1..
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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 District 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 District’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 District’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 District’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-14 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 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.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2024, on our consideration of the District’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 District’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 District’s internal control over financial reporting and compliance.

Glendale, California
November 8, 2024
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6 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 2000-2 Coffee-Claratina (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

Please read this overview in conjunction with your reading of the accompanying basic financial statements.

THE PURPOSE OF THE DISTRICT
The District is a blended component unit of the City of Modesto, California (the City). It is controlled by the City, and the City Council is the District’s governing body. City employees perform most of the duties and functions required of the District, but certain tasks are provided by third parties under contract.

The District’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the District. The District is the vehicle that will be used to ensure that all landowners in the Specific Plan area contribute to the cost of the public facilities and services. Additional information on the District can be found below and in Note 1 to the accompanying financial statements.
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
In November 1999, the City Council approved the Coffee-Claratina Specific Plan that set forth a plan for the development of 170 acres that includes up to 1,000 residential dwelling units, 40 acres of “Regional Commercial” property and 15 acres of “Mixed Community Commercial” development. The District was formed in December 2000 to provide a funding source for the maintenance and repair of the storm drain basin and dual-use flood control/recreation facility and for maintenance of median, bikeway, roundabout, and miscellaneous planting areas within the Coffee-Claratina Specific Plan.

FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• At June 30, 2024, the District’s net position increased to $271,596. • Total District revenues were $234,042 and expenses were $193,014.

Fund Basis:
• Special Revenue Fund revenues of $232,443 were $7,426 more than the prior year due to increased maintenance special tax collections. Expenditures of $193,014 were $5,889 more than the prior year due to an increase in professional service and utilities expenditures. The Special Revenue Fund balance increased by $39,429 to an ending fund balance of $267,863.
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.

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. #1..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
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, 2024, total assets of $279,910 were offset by liabilities of $8,314. The District’s net position from governmental activities increased to $271,596 in 2024 from $230,568 (as restated) in 2023. All of the District’s net position is restricted for maintenance.

The following summarizes the Statements of Net Position as of June 30, 2024 and 2023:

Statements of Net Position – Governmental Activities
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $272,580 $233,593 $38,987
Assessments receivable 6,463 5,379 1,084
Interest receivable 867 557 310
Total assets 279,910 239,529 40,381
Liabilities:

Current and other liabilities 8,314 8,961 (647)
Net position:

Restricted for:

District maintenance 271,596 230,568 41,028
Total net position $271,596 $230,568 $41,028
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 revenue came primarily from maintenance special taxes of $226,088 and investment earnings of $7,954. Facilities special tax revenue was not collected in fiscal year 2024, as these revenues are collected at the time of building permit issuance, and no such development occurred in the District in fiscal year 2024. District expenses of $193,014 were for professional services and utilities.

The following summarizes the Statements of Activities for the years ended June 30, 2024 and 2023, and the respective changes:

Statements of Activities – Governmental Activities
2023
Description 2024 (as restated) Change
Revenues:

General revenues:

Maintenance special tax $226,088 $225,153 $935
Interest income 4,758 2,820 1,938
Investment earnings (loss) 3,196 (1,668) 4,864
Total revenues 234,042 226,305 7,737
Expenses:

Community development 193,014 187,125 5,889
Change in net position 41,028 39,180 $1,848
Net position, beginning of year 230,568 191,388
Net position, end of year $271,596 $230,568
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
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 special revenue fund. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other long-term amounts.

The fund financial statements provide detailed information about 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. The District’s one fund is a governmental fund; financial statements for this fund are prepared on the modified accrual basis of accounting, which means they measure only current financial resources and uses.

The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balance for the Special Revenue Fund for the years ended June 30, 2024 and 2023, and the respective changes:
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 Balance Sheets – Special Revenue Fund
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $272,580 $233,593 $38,987
Assessments receivable 6,463 5,379 1,084
Interest receivable 867 557 310
Total assets $279,910 $239,529 $40,381
Liabilities:

Accounts payable $8,314 $8,961 $(647)
Total liabilities 8,314 8,961 (647)
Deferred inflow of resources:

Unavailable revenues 3,733 2,134 1,599
Total deferred inflow of
resources 3,733 2,134 1,599
Fund balance:

Restricted for:

District maintenance 267,863 228,434 39,429
Total fund balance 267,863 228,434 39,429
Total liabilities, deferred inflow
of resources, and fund
balance $279,910 $239,529 $40,381
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
2023
Description 2024 (as restated) Change
Revenues $232,443 $225,017 $7,426
Expenditures 193,014 187,125 5,889
Changes in fund balance 39,429 37,892 $1,537
Fund balance, beginning of year 228,434 190,542
Fund balance, end of year $267,863 $228,434
THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental fund reported a fund balance of $267,863, which was a $39,429 increase from fiscal year 2023. The Special Revenue Fund realized a $39,429 increase primarily due to maintenance special tax exceeding professional services and utilities.

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. #1..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 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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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
15 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 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.