Agenda packet — Modesto City Council, February 25, 2025 (part 3 of 6)

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. #14..
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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.

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 then 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. #14..
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See notes to basic financial statements.
16 Community Facilities District
Number 2000-2 Coffee Claratina
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $272,580
Assessments receivable 6,463
Interest receivable 867
Total Assets 279,910

LIABILITIES
Accounts payable 8,314
Total Liabilities 8,314

NET POSITION
Restricted for:

District maintenance 271,596
Total Net Position $271,596
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See notes to basic financial statements.
17 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2024
Program
Revenues
Net (Expense)
Revenue and
Change in Net
Position
Functions/Programs Expenses
Operating Grants
and Contributions
Governmental
Activities
Community development $193,014 $− $(193,014)
$193,014 $− (193,014)
General Revenues:

Maintenance special tax 226,088
Interest income 4,758
Investment earnings 3,196
Total General Revenues 234,042
Changes in Net Position 41,028
Net Position, Beginning of
Year, as restated (Note 5) 230,568
Net Position, End of Year $271,596
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
18 FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.

The District determined its fund to be a major fund. That is:

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #14..
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See notes to basic financial statements.
19 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Special
Revenue Fund
ASSETS
Cash and investments $272,580
Assessments receivable 6,463
Interest receivable 867
Total Assets $279,910

LIABILITIES
Accounts payable $8,314
Total Liabilities 8,314

DEFERRED INFLOW OF RESOURCES
Unavailable revenues 3,733
Total Deferred Inflow of Resources 3,733

FUND BALANCE
Restricted for:

District maintenance 267,863
Total Fund Balance 267,863
Total Liabilities, Deferred Inflow of Resources and Fund Balance $279,910 #14..
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See notes to basic financial statements.
20 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Reconciliation of Governmental Fund Balance Sheet to Governmental Activities Statement of Net Position
June 30, 2024
Total Fund Balance - Governmental Fund $267,863
Amounts reported for governmental activities in the Statement of Net Position are different because:

Revenues not available for current-period expenditures are deferred in the Governmental Fund but are considered earned in the Statement of Net Position. 3,733
Total Net Position - Governmental Activities $271,596
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See notes to basic financial statements.
21 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Governmental Fund
Year Ended June 30, 2024
Special Revenue
Fund

REVENUES
Maintenance special tax $224,489
Interest income 4,758
Change in fair value of investments 3,196
Total Revenues 232,443

EXPENDITURES
Community development:

Services - professional and other 155,120
Utilities 37,894
Total Expenditures 193,014
Changes in Fund Balance 39,429
Fund Balance, Beginning of Year, as restated (Note 5) 228,434 Fund Balance, End of Year $267,863
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See notes to basic financial statements.
22 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Reconciliation of Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to Governmental Activities Statement of Activities Year Ended June 30, 2024
Changes in Fund Balance - Governmental Fund $39,429
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. 1,599
Changes in Net Position - Governmental Activities $41,028 #14..
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See notes to basic financial statements.
23 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual Year Ended June 30, 2024
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special tax $220,000 $220,000 $224,489 $4,489 Interest income − − 4,758 4,758
Change in fair value of investments − − 3,196 3,196
Total Revenues 220,000 220,000 232,443 12,443

EXPENDITURES
Community development:

Services - professional and other 161,228 161,228 155,120 6,108 Utilities 54,000 54,000 37,894 16,106
Total Expenditures 215,228 215,228 193,014 22,214
Changes in Fund Balance $4,772 $4,772 39,429 $34,657
Fund Balance, Beginning of Year, as
restated (Note 5) 228,434
Fund Balance, End of Year $267,863
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24 Community Facilities District
Number 2000-2 Coffee-Claratina
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 2000-2 Coffee-Claratina (the District) was formed in October 2000 by a vote of the property owners within the proposed district. The District, a separate legal entity, was formed to set forth a plan of rehabilitation and development for the site, which is located on the south side of Claratina Avenue, bound by Coffee Road on the East, McHenry on the West, and Modesto City limits to the South. Coffee-Claratina is a 170- acre project designated for a maximum of 1,000 residential dwelling units, 40 acres designated “Regional Commercial,” and 15 acres of “Mixed Community Commercial.” In addition, the District is intended to fund the maintenance of the median, bikeway, roundabout, and miscellaneous planting areas, in addition to the funding of maintenance and repair of a storm drain basin and dual-use flood control/recreation facility.

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. #14..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
25 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.

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. #14..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
26 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 fund:

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District.

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 1st and February 1st and are delinquent if not paid by December 10th and April 10th, 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. #14..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. 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 $267,863 of restricted resources as of June 30, 2024.
• 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.
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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.

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

In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the fund equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that 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.

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. #14..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update (Continued)
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.

Statement of Net Position - Governmental Activities:

Cash and investments $272,580
Total cash and investments $272,580
Deposits with the City
Cash and investment pool $272,580
Total cash and investments $272,580
Detailed information regarding 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 BALANCE
Restriction of Fund Balance
Fund balance is presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2024, the restriction included:

Restricted for District Maintenance - the portion of fund balance legally restricted for the maintenance of parkways and open space within the District. #14..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 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 1st following the end of the fiscal year.

At June 30, 2024, the District had 11 parcels that were delinquent for a total of $2,653, none of which were delinquent for more than three consecutive payments.

The District received 99.46% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2024. The delinquencies total of $2,653 at June 30, 2024 is included in assessments receivable on the Statement of Net Position and Balance Sheet. #14..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
34 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 $5,443 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 $225,125 $5,443 $230,568
Total primary government $225,125 $5,443 $230,568
Governmental funds
Major fund’s fund balance:

Special revenue fund $222,991 $5,443 $228,434
Total governmental funds $222,991 $5,443 $228,434
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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35 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 major fund of the City of Modesto Community Facilities District Number 2000-2 Coffee-Claratina (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.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
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36 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 District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
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37 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 #14..
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Community Facilities District
Number 1998-1 Enterprise Business Park
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 1998-1 Enterprise Business Park
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 1998-1 Enterprise Business Park
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 Fund 19
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 20
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 21
Notes to Basic Financial Statements 22
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 30 #14..
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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 1998-1 Enterprise Business Park (the Park), a component unit of the City of Modesto, California, 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 Park’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 Park 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. #14..
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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 Park and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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 Park’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. #14..
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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 Park’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 Park’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 Park’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Park’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Park’s internal control over financial reporting and compliance.

Glendale, California
November 8, 2024
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6 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 1998-1 Enterprise Business Park (the Park) 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 Park 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 PARK
The Park 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 Park’s governing body. City employees perform most of the duties and functions required of the Park, but certain tasks are provided by third parties under contract.

The Park’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the Park. The Park 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 Park can be found below and in Note 1 to the accompanying financial statements.

BACKGROUND AND MANAGEMENT’S DISCUSSION
On April 7, 1997, the City’s Planning Commission approved a vesting tentative map for the Enterprise Business Park subdivision. The project area included two assessors’ parcels and more than 80 acres of property located in the southwestern section of the City. Upon recordation of the final map, the property was subdivided into eight parcels ranging in size from

1.12 to 24.17 acres. The parcels are zoned M-2, a heavy industrial designation allowing for the development of warehouse, distribution, processing, manufacturing, and other related uses. #14..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION (CONTINUED)
In July 1998, the City Council formed the Park and authorized the Park to issue up to $2.05 million in bonds to fund certain street improvements, water and sewer main extensions, and other water, sewer, and storm drainage improvements required to serve the Park. The Bonds were called in full in 2002 and all Park-funded improvements have been completed.

FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• The revenues increased from $1,485 in the prior year to $34,336 for the fiscal year 2024 and expenses increased from $14,356 in the prior year to $17,850 for the fiscal year 2024.

The increase in revenues is attributed to the collection of maintenance special tax, and the increase in expenses is attributed to the increase in activities in community development.

The net position increased by $16,486 to an ending balance of $14,176.

Funds Basis:
• Special Revenue Fund revenues of $34,336 were $32,851 higher than the prior year due to the collection of maintenance special tax, and expenditures of $17,850 were $3,494 higher than the prior year due to the increase in annual overhead direct charges of the City. The Special Revenue Fund balance increased by $16,486 to an ending fund balance of $14,176.
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Community Facilities District
Number 1998-1 Enterprise Business Park
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 Park’s financial activities and financial position.

Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the Park’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 Park as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the Park’s revenues and all its expenses. The Statement of Activities explains in detail the changes in net position for the year.

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

Governmental activities - All the Park’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 Park as a whole, similar to that used by the private sector.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
9 FINANCIAL ACTIVITIES OF THE PARK AS A WHOLE
This analysis focuses on the net position and changes in net position of the Park’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 amounted to $15,006 and total liabilities amounted to $830.

The Park’s net position from governmental activities increased to $14,176 in 2024 from $(2,310) in 2023. All of the Park’s net position is restricted for maintaining infrastructure.

The following summarizes the Statements of Net Position as of June 30, 2024 and 2023:

Statements of Net Position – Governmental Activities
Description 2024 2023 Change
Assets:

Cash and investments $14,959 $- $14,959
Interest receivable 47 - 47
Total assets 15,006 - 15,006
Liabilities:

Current and other liabilities 830 2,310 (1,480)
Net position (deficit):

Restricted for:

Park maintenance 14,176 - 14,176
Unrestricted - (2,310) 2,310
Total net position (deficit) $14,176 ($2,310) $16,486
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The Park’s fiscal year 2024 revenue came primarily from the collection of maintenance special tax of $34,345. Park expenses of $17,850 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
Description 2024 2023 Change
Revenues:

General revenues:

Maintenance special tax $34,345 $1,580 $32,765
Interest income 89 - 89
Investment loss (98) (95) (3)
Total revenues 34,336 1,485 32,851
Expenses:

Community development 17,850 14,356 3,494
Changes in net position 16,486 (12,871) $29,357
Net position (deficit), beginning of year (2,310) 10,561 Net position (deficit), end of year $14,176 ($2,310)
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Community Facilities District
Number 1998-1 Enterprise Business Park
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 Park’s operations in more detail than the governmentwide financial statements and focus primarily on the short-term activities of the Park’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 each of the Park’s most significant funds, called major funds. Major funds present the major activities of the Park for the year and may change from year to year as a result of changes in the pattern of the Park’s activities. The Park’s one fund is presented here as a major fund; its purpose is explained in Note 1 to the financial statements. The Park’s Special Revenue Fund is a governmental fund; financial statements for this fund are prepared on the modified accrual basis of accounting, which means it measures 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 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 Balance Sheets – Special Revenue Fund
Description 2024 2023 Change
Assets:

Cash and investments $14,959 $- $14,959
Interest receivable 47 - 47
Total assets $15,006 $- $15,006
Liabilities:

Accounts payable $830 $644 $ 186
Due to other fund - 1,666 (1,666)
Total liabilities 830 2,310 (1,480)
Fund Balance (deficit):

Restricted for:

Park maintenance 14,176 - 14,176
Unassigned - (2,310) 2,310
Total fund balance 14,176 (2,310) 16,486
Total liabilities and fund balances $15,006 $- $15,006
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Community Facilities District
Number 1998-1 Enterprise Business Park
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
Description 2024 2023 Change
Revenues $34,336 $1,485 $32,851
Expenditures 17,850 14,356 3,494
Changes in fund balance 16,486 (12,871) $29,357
Fund balance (deficit), beginning of year (2,310) 10,561 Fund balance (deficit), end of year $14,176 $(2,310)
THE PARK’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the Park’s governmental fund reported a fund balance of $14,176, an increase of $16,486 compared with last year. This increase was primarily due to revenues exceeding the community development expenditures.

CAPITAL ASSETS
Under GASB Statement No. 34, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, the Park 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 Park is turned over to the City upon completion and acceptance. Accordingly, capital outlay expenditures are reported in both the Park’s fund and government-wide financial statements.

Therefore, the Park reports no long-term capital assets. #14..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 CONTACTING THE PARK’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the Park’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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15 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire Park’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 Park’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 Park’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between Park funds have been eliminated.

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

The Statement of Activities reports increases and decreases in the Park’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the Park’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 Park’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs, are then 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. #14..
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See notes to basic financial statements.
16 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $14,959
Interest receivable 47
Total Assets 15,006

LIABILITIES
Accounts payable 830
Total Liabilities 830

NET POSITION
Restricted for:

Park maintenance 14,176
Total Net Position $14,176
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See notes to basic financial statements.
17 Community Facilities District
Number 1998-1 Enterprise Business Park
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 $17,850 $- ($17,850)
$17,850 $- (17,850)
General Revenues:

Maintenance special tax 34,345
Interest income 89
Investment loss (98)
Total General Revenues 34,336
Changes in Net Position 16,486
Net Position (Deficit), Beginning of Year (2,310)
Net Position, End of Year $14,176
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18 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California

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

The Park determined its fund to be a major fund. That is:

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open spaces within the Park. #14..
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See notes to basic financial statements.
19 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Balance Sheet – Governmental Fund
June 30, 2024
Special Revenue
Fund
ASSETS
Cash and investments $14,959
Interest receivable 47
Total Assets $15,006

LIABILITIES
Accounts payable 830
Total Liabilities 830

FUND BALANCE
Restricted for:

Park maintenance 14,176
Total Fund Balance 14,176
Total Liabilities and Fund Balance $15,006
Note: There were no differences between the Governmental Fund Balance Sheet and the Governmental Activities Statement of Net Position as of June 30, 2024. #14..
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See notes to basic financial statements.
20 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Governmental Fund
Year Ended June 30, 2024
Special Revenue
Fund

REVENUES
Maintenance special tax $34,345
Interest income 89
Change in fair value of investments (98)
Total Revenues 34,336

EXPENDITURES
Community development
Services – professional and other 17,850
Total Expenditures 17,850
Changes in Fund Balance 16,486
Fund Balance (Deficit), Beginning of Year (2,310)
Fund Balance, End of Year $14,176
Note: There were no differences between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance and the Governmental Activities Statement of Activities for the year ended June 30, 2024.
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See notes to basic financial statements.
21 Community Facilities District
Number 1998-1 Enterprise Business Park
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 $- $- $34,345 $34,345
Facilities special tax 15,000 15,000 - (15,000)
Interest income - - 89 89
Change in fair value of
investments - - (98) (98)
Total Revenues 15,000 15,000 34,336 19,336

EXPENDITURES
Community Development
Services - professional and other 22,439 22,439 17,850 4,589 Utilities 550 550 - 550
Total Expenditures 22,989 22,989 17,850 5,139
Changes in Fund Balance ($7,989) ($7,989) 16,486 $24,475 Fund Deficit, Beginning of Year (2,310)
Fund Balance, End of Year $14,176
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22 Community Facilities District
Number 1998-1 Enterprise Business Park
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 1998-1 Enterprise Business Park (the Park) was formed in July 1998 by a vote of the property owners within the proposed Park. The Park, a separate legal entity, was formed to provide a financing mechanism for the purchase, construction, expansion, or rehabilitation of any real or tangible property, including public facilities and infrastructure improvements, necessary to meet increased demands placed upon local agencies as a result of development occurring within the Park. In addition, the Park can fund a variety of public services including maintenance of parks, parkways, and open space.

The Park is the vehicle that will be used to ensure that all landowners within the Park pay their share of the public improvements and services needed. The Park includes two assessor’s parcels and more than 80 acres of property located in the southwestern section of the City of Modesto, California (the City). The property is subdivided into eight parcels ranging in size from

1.12 to 24.17 acres. The parcels have been zoned M-2, which is a heavy industrial designation allowing for the development of warehouse, distribution, processing, manufacturing, and other related uses.

The Park is an integral part of 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.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
23 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 Park. 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.

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. #14..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
24 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 Park 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 Park.

The Park reports the following major governmental fund:

The Special Revenue Fund accounts for all financial resources and uses related to maintenance of parkways and open space within the Park.

Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
25 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the Park 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 Park did not have any 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 Park reported $14,176 in restricted resources as of June 30, 2024.
• Committed - Amounts constrained to specific purposes by the Park itself, using the Park’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 Park 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 Park did not have any committed resources as of June 30, 2024. • Assigned - Amounts the Park intends to use for a specific purpose. Intent can be expressed by the Park at either the highest level of decision-making or by an official or body to which the Park delegates the authority. The Park did not have any assigned resources as of June 30, 2024.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Unassigned - The residual classification for the Park 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 Park did not have any unassigned resources as of June 30, 2024.

The Park 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. The assigned fund balance is established by the Park through the 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 Park’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.

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 Park that applies to a future reporting period. #14..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources (Continued)
In addition to liabilities, the Statements 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 Park that applies to a future reporting period. Deferred inflows reported by the Park consist of unearned deferred assessments that have been billed as of year-end, but not yet collected.

Net Position
Net position represents the residual interest in the Park’s assets and deferred outflows of resources after liabilities and deferred inflows 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 the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
28 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 with no financial impact:

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 Park 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 Park’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 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
29 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash in the City Pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The Park does not have any deposits with financial institutions as of June 30, 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 $14,959
Total cash and investments $14,959
Deposits with the City
Cash and investment pool $14,959
Total cash and investments $14,959
NOTE 3 SUBSEQUENT EVENTS
The Park 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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30 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 major fund of the City of Modesto Community Facilities District Number 1998-1 Enterprise Business Park (the Park), 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 Park’s basic financial statements, and have issued our report thereon dated November 8, 2024.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Park’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Park’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Park’s internal control.
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31 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Park’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
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32 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Park’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’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 #14..
- 568 -
Community Facilities District
Number 2003-1 Fairview Village
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 2003-1 Fairview Village
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 2003-1 Fairview Village
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statement
Statement of Net Position – Governmental Activities 22
Statement of Activities – Governmental Activities 23
Balance Sheet – Governmental Funds 25
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 27
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 28
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 29
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 31
Notes to Basic Financial Statements 32
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 45
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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 2003-1 Fairview Village (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. #14..
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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.

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.

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.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-20 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 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 2003-1 Fairview Village (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.

BACKGROUND AND MANAGEMENT’S DISCUSSION
In 1989, the City adopted the Urban Growth Management Strategy, which requires that any future development within the “Urban Reserve” be planned and annexed as “villages” under the auspices of Specific Plans. This action was seen as necessary to prevent new development from occurring in undeveloped areas prior to there being adequate consideration for public facilities such as roadways, parks, schools, and utility improvements. #14..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 Fairview Village is a proposed planned community with an expected population of 5,000 people living in approximately 2,250 homes. The project is to be developed on a 364-acre site located just outside the southwest edge of the City in Stanislaus County. The Fairview Village Plan Area is essentially square with each edge approximately three-quarters of a mile in length. It is contiguous to the Bret Harte neighborhood on the east and is bounded by the expanded Hatch Road to the north, Carpenter Road to the west, and Whitmore Avenue to the south. The District is designed around a large central neighborhood park and a new elementary school that forms the center of the new community. Fairview Village will also include a secondary elementary school and a commercial center with shops, offices, and apartments.

In December 2003, the City Council formed the District and authorized the District to issue up to $25 million in bonded indebtedness to acquire or construct certain water, storm drain, and sewer system improvements and a bike trail and all appurtenances and appurtenant work in connection therewith. The only qualified voter eligible to vote during the formation of the District was Del Valle Corporation (the Developer), the owner of approximately 81.66 acres. A final map was recorded subdividing the Developer’s 81.66 acres into 382 single-family residential lots.

In September 2005, the District issued Special Tax Bonds, Series 2005 in the principal amount of $5 million. The majority of the net construction proceeds were used to reimburse the Developer for the District-funded infrastructure it will install pursuant to the Acquisition & Shortfall Agreements entered into with the District. In October 2005, supplemental information concerning the bond issue was distributed to the repositories. This supplemental information advised the bondholders and market of the amendments to the Acquisition & Shortfall Agreement that allow the issuance of certain occupancy permits prior to the completion of the infrastructure projects specified in the Acquisition & Shortfall Agreement. #14..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 Matters related to the Developer’s subdivision located in the District were first memorialized in an Acquisition & Shortfall Agreement between the City and Norman Galas, etc. in December 1997. On January 9, 2003, the Acquisition & Shortfall Agreement was amended and named Del Valle Capital Corporation, Inc., as a party to the Acquisition & Shortfall Agreement. Since that time, two subsequent amendments have occurred, and additional agreements have been executed between the City and the District. The chronology of the agreements related to the Developer’s subdivision follows:
• The Acquisition & Shortfall Agreement between the City and Norman Galas, June Galas, Stanley Galas, and Bonnie K. Galas dated as of September 16, 1997, as amended by the First Amendment to the Acquisition & Shortfall Agreement between the City and Norman Galas, June Galas, Stanley Galas, Bonnie K. Galas, and Del Valle Capital Corporation, Inc., dated as of January 9, 2003, and as further amended by the Second Amendment to the Acquisition & Shortfall Agreement between the City and Norman Galas, June Galas, Stanley Galas, Bonnie K. Galas, and Del Valle Capital Corporation, Inc., dated as of June 10, 2003, and as finally amended by the Third Amendment to the Acquisition & Shortfall Agreement between the City and Norman Galas, June Galas, Stanley Galas, Bonnie K.

Galas, Del Valle Capital Corporation, Inc., dated as of June 22, 2004. • Advanced Funding Agreement for the District dated as of October 28, 2003, Subdivision Agreement, dated as of December 23, 2003, pertaining to Galas Brothers Subdivision Unit No. 1.
• Subdivision Agreement, dated as of December 23, 2003, pertaining to Galas Brothers Subdivision Unit No. 2.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
9 • Agreement to Complete Necessary Infrastructure Prior to Final Inspection or Occupancy, dated as of December 23, 2003, as amended by the Amendment to Agreement dated as of January 25, 2005, and as further amended by the Second Amendment to Agreement dated as of November 9, 2005, and as further amended by the Third Amendment to Agreement dated as of December 14, 2005, and as finally amended by the Fourth Amendment to Agreement, dated as of June 27, 2006.
• Two Acquisition & Shortfall Agreements between the District and Del Valle Homes, each dated as of June 22, 2004.
• Agreement by and between the City, Del Valle Capital Corporation, Inc., D.R. Horton, Inc., and Pulte Home Corporation Regarding the Funding and Construction of Certain Interim Water Improvements in Return for the City’s Issuance of Certain Permits, dated as of September 30, 2005.
• Letter of Agreement between the City and Del Valle Homes dated as of February 2, 2007. • Agreement for the Acceptance of Completed Public Improvements and Partial Release of Security dated June 12, 2007.

On November 25, 2008, the City Council approved a Settlement Agreement and Mutual Release with the Developer. The City agreed to accept the infrastructure improvements remaining to be accepted such as the well, storage, booster pumps, wellhead treatment system, and some in-tract subdivision improvements. In return, the Developer received a gross payment of $1.3 million minus $452,365 that was withheld pursuant to the terms of the Settlement Agreement, of which approximately $99,000 will be utilized by City crews to complete repairs to the accepted infrastructure. The Developer received a net payment of $847,635.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 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 $1,120,053. • Total District revenues were $457,637.
• Total District expenses were $359,115.

Funds Basis:
• Special Revenue Fund revenues of $256,154 were $24,477 higher than the prior year which was primarily due to the increase in maintenance special taxes and expenditures of $198,177 were $955 more than the prior year due to an increase in activities in community development. The Special Revenue Fund balance increased by $57,977 to an ending fund balance of $490,044.
• Debt Service Fund revenues of $361,731 were $37,289 lower than the prior year primarily due to the decrease in facilities special taxes collections. The expenditures of $320,201 were $2,764 higher than the prior year due to an increase in activities in community development. The Debt Service Fund balance increased by $41,530 to an ending fund balance of $575,167.

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. #14..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 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.

As of June 30, 2024, total assets of $4,313,456 and deferred outflow of resources of $89,246 were offset by liabilities of $3,282,649. The District’s net position from governmental activities increased to $1,120,053 in 2024 from $1,021,531 in 2023. All of the District’s net position is restricted as follows: $492,008 for District maintenance and $628,045 for debt service. #14..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 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 $860,003 $772,534 $87,469
Cash and investments with fiscal
agent 205,758 198,752 7,006
Taxes receivable 14,941 9,033 5,908
Assessments receivable 3,230,000 3,395,000 (165,000)
Interest receivable 2,664 1,828 836
Prepaid expenses 90 - 90
Total assets 4,313,456 4,377,147 (63,691)
Deferred outflow of resources:

Deferred loss on refunding of debt 89,246 97,238 (7,992) Total deferred outflow of resources 89,246 97,238 (7,992) Liabilities:

Current and other liabilities 52,649 57,854 (5,205)
Long-term debt 3,230,000 3,395,000 (165,000)
Total liabilities 3,282,649 3,452,854 (170,205)
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 2023
Description 2024 (as restated) Change
Net position:

Restricted for:

District maintenance $492,008 $430,620 $61,388
Debt service 628,045 590,911 37,134
Total net position $1,120,053 $1,021,531 $98,522
FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 revenue came from facilities and maintenance special taxes of $422,837 and investment earnings of $34,800. District expenses of $359,115 were for professional services, utilities, and interest.

The following summarizes the Statements of Activities for the years ended June 30, 2024 and 2023, and the respective changes:
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Statements of Activities – Governmental Activities
2023
Description 2024 (as restated) Change
Revenues:

General revenues:

Facilities and maintenance special taxes $422,837 $458,198 $(35,361) Investment earnings and interest income 34,800 13,690 21,110 Total revenues 457,637 471,888 (14,251)
Expenses:

Community development 215,656 215,526 130
Interest on long-term debt 143,459 150,006 (6,547)
Total expenses 359,115 365,532 (6,417)
Changes in net position 98,522 106,356 $(7,834)
Net position, beginning of year 1,021,531 915,175
Net position, end of year $1,120,053 $1,021,531
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 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 following summarizes the Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance for both the Special Revenue Fund and the Debt Service Fund for the years ended June 30, 2024 and 2023, and the respective changes:
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
16 Balance Sheets – Special Revenue Fund
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $494,675 $440,832 $53,843
Taxes receivable 6,017 3,527 2,490
Interest receivable 1,612 1,101 511
Total assets $502,304 $445,460 $56,844
Liabilities:

Accounts payable $8,359 $11,456 $(3,097)
Total liabilities 8,359 11,456 (3,097)
Deferred inflow of resources:

Unavailable revenues 3,901 1,937 1,964
Total deferred inflows of resources 3,901 1,937 1,964
Fund balance:

Restricted:

District maintenance 490,044 432,067 57,977
Total fund balance 490,044 432,067 57,977
Total liabilities, deferred inflow of
resources, and fund balances $502,304 $445,460 $56,844
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
17 Balance Sheets – Debt Service Fund
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $365,328 $331,702 $33,626
Cash and investments with fiscal agent 205,758 198,752 7,006 Taxes receivable 8,924 5,506 3,418
Assessments receivable 3,230,000 3,395,000 (165,000)
Interest receivable 1,052 727 325
Prepaid expenses 90 - 90
Total assets $3,811,152 $3,931,687 $(120,535)
Liabilities:

Accounts payable $147 $- $147
Total liabilities 147 - 147
Deferred inflow of resources:

Unavailable revenues 3,235,838 3,398,050 (162,212)
Total deferred inflow of resources 3,235,838 3,398,050 (162,212) Fund balances:

Nonspendable 90 - 90
Restricted:

Debt service 575,077 533,637 41,440
Total fund balance 575,167 533,637 41,530
Total liabilities, deferred inflow of
resources and fund balances $3,811,152 $3,931,687 $(120,535) #14..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
18 Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
2023
Description 2024 (as restated) Change
Revenues $256,154 $231,677 $24,477
Expenditures 198,177 197,222 955
Changes in fund balance 57,977 34,455 $23,522
Fund balance, beginning of year 432,067 397,612
Fund balance, end of year $490,044 $432,067
Statements of Revenues, Expenditures, and Changes in Fund Balance – Debt Service Fund
2023
Description 2024 (as restated) Change
Revenues $361,731 $399,020 $(37,289)
Expenditures 320,201 317,437 2,764
Changes in fund balance 41,530 81,583 $(40,053)
Fund balance, beginning of year 533,637 452,054
Fund balance, end of year $575,167 $533,637
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
19 THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental funds reported combined fund balances of $1,065,211, which was a $99,507 increase from fiscal year 2023. The Special Revenue Fund realized a $57,977 increase and the Debt Service Fund realized an increase of $41,530 due to increases in facilities and maintenance special taxes and fair value of investments.

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

DEBT ADMINISTRATION
The District issued Special Tax Bonds, Series 2005 in the principal amount of $5 million in September 2005. Except for approximately $20,000 that was used to reimburse the City’s water fund for work performed by its crews, the proceeds were used to reimburse the Developer for infrastructure it installed pursuant to the Acquisition & Shortfall Agreements entered into between the Developer and the District.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
20 The District issued Refunding Special Tax Bonds, Series 2014 in the principal amount of $4.4 million in December 2014 to refund the outstanding Special Tax Bonds, Series 2005.

The balance of the long-term debt at June 30, 2024, is $3.2 million. Additional details can be found in Note 3 to the financial statements.

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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21 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California

STATEMENT OF NET POSITION AND STATEMENTS 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 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. #14..
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See notes to basic financial statements.
22 Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $860,003
Cash and investments with fiscal agent 205,758
Taxes receivable 14,941
Assessments receivable 3,230,000
Interest receivable 2,664
Prepaid expenses 90
Total Assets 4,313,456

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding of debt 89,246
Total Deferred Outflows of Resources 89,246

LIABILITIES
Accounts payable 8,506
Interest payable 44,143
Long-term debt:

Due within one year 180,000
Due in more than one year 3,050,000
Total Liabilities 3,282,649

NET POSITION
Restricted for:

District maintenance 492,008
Debt service 628,045
Total Net Position $1,120,053
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See notes to basic financial statements.
23 Community Facilities District
Number 2003-1 Fairview Valley
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 &
Contributions
Governmental
Activities
Community development $215,656 $- $(215,656)
Interest on long-term debt 143,459 - (143,459)
$359,115 $- (359,115)
General Revenues:

Facilities and maintenance special taxes 422,837
Investment earnings and interest
income 34,800
Total General Revenues 457,637
Change in Net Position 98,522
Net Position, Beginning of Year,
as restated (Note 6) 1,021,531
Net Position, End of Year $1,120,053
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24 Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District.

The Debt Service Fund accounts for the payment of principal and interest on the 2014 Refunding Special Tax Bonds.
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- 595 -
See notes to basic financial statements.
25 Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Special
Revenue Fund
Debt Service
Fund Total
ASSETS
Cash and investments $494,675 $365,328 $860,003
Cash and investments with
fiscal agent - 205,758 205,758
Taxes receivable 6,017 8,924 14,941
Assessments receivable - 3,230,000 3,230,000
Interest receivable 1,612 1,052 2,664
Prepaid expenses - 90 90
Total Assets $502,304 $3,811,152 $4,313,456

LIABILITIES
Accounts payable $8,359 $147 $8,506
Total Liabilities 8,359 147 8,506

DEFERRED INFLOW OF

RESOURCES
Unavailable revenues 3,901 3,235,838 3,239,739
Total Deferred Inflows of
Resources 3,901 3,235,838 3,239,739
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- 596 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Balance Sheet – Governmental Funds (Continued)
June 30, 2024
See notes to basic financial statements.
26 Special
Revenue Fund
Debt Service
Fund Total

FUND BALANCES
Nonspendable $- $90 $90
Restricted:

District maintenance 490,044 - 490,044
Debt service - 575,077 575,077
Total Fund Balances 490,044 575,167 1,065,211
Total Liabilities, Deferred
Inflow of Resources, and
Fund Balances $502,304 $3,811,152 $4,313,456
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- 597 -
See notes to basic financial statements.
27 Community Facilities District
Number 2003-1 Fairview Valley
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 $1,065,211
Amounts reported for governmental activities in the Statement of Net Position are different because:

Other long-term assets are not available to pay for the current period expenditures and therefore are deferred in the funds. 3,230,000 Revenues not available for current period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position 9,739
Long-term liabilities, and the related deferred loss on refunding, are not due and payable in the current period and therefore are not reported in the funds.

Long-term debt (3,230,000)
Loss on refunding of debt 89,246
Interest payable (44,143)
Total Net Position - Governmental Activities $1,120,053 #14..
- 598 -
See notes to basic financial statements.
28 Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2024
Special
Revenue
Fund
Debt
Service
Fund Total

REVENUES
Facilities and maintenance special taxes $239,108 $343,977 $583,085 Interest income 9,423 15,532 24,955
Change in fair value of investments 7,623 2,222 9,845
Total Revenues 256,154 361,731 617,885

EXPENDITURES
Community development:

Services - professional and other 168,211 17,479 185,690 Utilities 29,966 - 29,966
Debt service:

Principal payments - 165,000 165,000
Interest and fiscal charges - 137,722 137,722
Total Expenditures 198,177 320,201 518,378
Changes in Fund Balances 57,977 41,530 99,507
Fund Balances, Beginning of Year, as restated
(Note 6) 432,067 533,637 965,704
Fund Balances, End of Year $490,044 $575,167 $1,065,211 #14..
- 599 -
See notes to basic financial statements.
29 Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities
Year Ended June 30, 2024
Changes in Fund Balances - Governmental Funds $99,507
Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues previously recognized in the Statement of Activities that did not provide current financial resources and therefore were not reported as revenues in the funds are reported as revenues in the funds this year when received. (165,000)
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. 4,752
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal long-term debt and the payment to refund escrow consume the current financial resources of governmental funds. Neither transaction, however, has any effect on net position:

Repayment of the principal of long-term debt 165,000
(Continued)
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Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities (Continued) Year Ended June 30, 2024
See notes to basic financial statements.
30 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds:

Amortization of deferred loss on refunding $(7,992)
Interest payable 2,255
Changes in Net Position - Governmental Activities $98,522 #14..
- 601 -
See notes to basic financial statements.
31 Community Facilities District
Number 2003-1 Fairview Valley
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
Amounts

REVENUES
Facilities and maintenance special
taxes $220,000 $220,000 $239,108 $19,108
Interest income - - 9,423 9,423
Change in fair value of investments - - 7,623 7,623
Total Revenues 220,000 220,000 256,154 36,154

EXPENDITURES
Community development:

Services - professional and other 173,057 173,057 168,211 4,846 Utilities 44,100 44,100 29,966 14,134
Total Expenditures 217,157 217,157 198,177 18,980
Changes in Fund Balance $2,843 $2,843 57,977 $55,134
Fund Balance, Beginning of Year, as
restated (Note 6) 432,067
Fund Balance, End of Year $490,044
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32 Community Facilities District
Number 2003-1 Fairview Valley
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 2003-1 Fairview Village (the District) was formed in December 2003 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 Plan. The District encompasses approximately 359 gross acres of land located in the southwest area of the City of Modesto, California (the City), the south side of Hatch Road and east of Carpenter Road. The District is expected to yield 383 single-family residential lots, a water well, storm drainage basin, water tank, sewer outfall line, and a portion of the central neighborhood park site and related infrastructure on 81.66 acres located in the northeast portion of the District. The remaining properties with 359 acres are expected to annex to the District in the future, as the area develops.

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.
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- 603 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items which are not properly included among program revenues, are reported instead as general revenues.

Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

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.
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- 604 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) 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 Special Revenue Fund accounts for all financial resources and uses related to maintenance of infrastructure within the District.

The Debt Service Fund accounts for the payment of principal and interest on the 2014 Refunding Special Tax Bonds.

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.

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 reported $90 of nonspendable resources as of June 30, 2024.
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- 606 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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 $1,065,121 of restricted resources as of June 30, 2024. • 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.
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- 607 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
37 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through 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.

Net Position
Net position represents the residual interest in the District’s assets and deferred outflows of resources after liabilities and deferred inflows 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 presented it in three broad components:
• Net investment in capital assets - Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted - Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. #14..
- 608 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
38 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• 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.

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.
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- 609 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
39 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District, with the exception of cash and investments with fiscal agents, are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.

Cash and investment in the City pool are considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form.

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 $860,003
Cash and investments with fiscal agent 205,758
Total cash and investments $1,065,761
Deposits with the City
Cash and investment pool $860,003
Money market fund 205,758
Total cash and investments $1,065,761
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- 610 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
40 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The District is required to disclose investments that represent a concentration of five percent (5%) or more of investments in any one issuer held by individual funds in the securities of issuers other than U.S. Treasury securities, mutual funds, and external investment pools. At June 30, 2024, the Debt Service Fund did not hold any other investments.

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

Detailed information regarding the City’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.
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- 611 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
41 NOTE 3 LONG-TERM DEBT
On December 16, 2014, the District issued Refunding Special Tax Bonds (refunding bonds) with a par amount of $4,420,000 to refund the District’s $4,660,000 outstanding Special Tax Bonds (refunded bonds) issued on September 1, 2005, which were issued primarily to finance various public improvements needed to develop property located within the District. Interest on the refunding bonds is payable semiannually on March 1st and September 1st through September 1, 2035. The refunding bonds were issued with an interest rate of 4.1% and are payable solely from revenues derived from the assessment of annual special taxes to be levied on the taxable property within the District and from certain other funds pledged under the Trust Indenture. The principal payments of these bonds are not subject to acceleration.

Any one or more of the following events shall constitute an “event of default” for these bonds:
(a) Default in the due and punctual payment of the principal of or redemption premium, if any, on any bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise.
(b) Default on the due and punctual payment of the interest on any bond when and as the same shall become due and payable.
(c) Except as described in (a) or (b), default shall be made by the District in the observance of any of the agreements, conditions, or covenants for a period of thirty (30) days after the District shall have been given notice in writing of such default by the Trustee or the owners of twenty-five percent (25%) in aggregate principal amount of the outstanding bonds. #14..
- 612 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
42 NOTE 3 LONG-TERM DEBT (CONTINUED)
The long-term debt activity for the year ended June 30, 2024 was as follows:

Description
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Refunding Special
Tax Bonds $3,395,000 $- $(165,000) $3,230,000 $180,000
Annual debt service requirements for the refunding bonds are shown below:

Year Ended June 30 Principal Interest Total
2025 $180,000 $128,740 $308,740
2026 195,000 121,053 316,053
2027 205,000 112,853 317,853
2028 225,000 104,038 329,038
2029 240,000 94,505 334,505
2030-2034 1,460,000 305,860 1,765,860
2035-2036 725,000 30,238 755,238
$3,230,000 $897,287 $4,127,287
Interest expense for the year ended June 30, 2024 was $143,459. #14..
- 613 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
43 NOTE 4 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:

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

Restricted for Debt Service - the portion of fund balance legally restricted to the payment of principal and interest on long-term liabilities.

NOTE 5 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 12 parcels that were delinquent for a total of $7,423, one of which was delinquent for more than three consecutive payments.

The District received 99.12% of the Special Revenue Fund and Debt Service Fund facilities and maintenance special taxes levied during the year ended June 30, 2024. The delinquencies total of $7,423 at June 30, 2024 is included in taxes receivable on the Statement of Net Position and Balance Sheet.
#14..
- 614 -
Community Facilities District
Number 2003-1 Fairview Valley
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
44 NOTE 6 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 $20,274 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 $1,001,257 $20,274 $1,021,531
Total primary government $1,001,257 $20,274 $1,021,531
Governmental funds
Major funds’ fund balances:

Special revenue fund $422,094 $9,973 $432,067
Debt service fund 523,336 10,301 533,637
Total governmental funds $945,430 $20,274 $965,704
NOTE 7 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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- 615 -
45 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 2003-1 Fairview Village (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.

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.
#14..
- 616 -
46 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 District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
- 617 -
47 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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- 618 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #14..
- 619 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
- 620 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
- 621 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
The Basic Financial Statements
Statement of Net Position – Governmental Activities 17
Statement of Activities – Governmental Activities 18
Balance Sheet – Governmental Funds 20
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 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 Governmental Activities 23 Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 24
Notes to Basic Financial Statements 25
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 #14..
- 622 -
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 2007-2 Kiernan Business Park West (the District), a component unit of the City of Modesto, California, 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. #14..
- 623 -
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.

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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- 624 -
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.

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.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-15 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 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 2007-2 Kiernan Business Park West (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 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 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
On April 1, 1997, the City Council approved the Kiernan Business Park Specific Plan that set forth a plan of development for approximately 614 acres that were, at that time, located adjacent to the City’s northern border, east of Highway 99 and south of Kiernan Avenue in a portion of unincorporated Stanislaus County. To date, approximately 250 acres within the Kiernan Business Park Specific Plan have been annexed into the City. Approximately 88 of the City annexed acres will ultimately be included within the District. The Kiernan Business Park Specific Plan is intended to provide for the development of a new business park, commercial and industrial uses that will assist in implementing the City’s long-range objectives to enhance its local economy, generate jobs for residents and create a better job housing balance.

The District was formed by the City Council in September 2007 to generate funding for construction of certain roadway improvements and the ongoing maintenance of landscaped medians, a bike path, well site, storm drainage pump and basin and related facilities.

FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• At June 30, 2024, the District’s net position was $344,251. • At June 30, 2024, total assets were $348,631 while total liabilities were $4,380. • Total District revenues were $124,369 and expenses were $56,458. #14..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS (CONTINUED)
Funds Basis:
• Capital Projects Fund revenues increased by $3,240 due to increases in interest income and the fair value of investments while expenditures of $0 were the same as in the previous year. The Capital Project Fund ending fund balance increased from $72,784 in the prior year to $76,024 in the current year.
• Special Revenue Fund revenues decreased from $131,347 in the prior year to $104,833 for fiscal year 2024 and expenditures increased from $50,183 in the prior year to $56,458 for fiscal year 2024. The decrease in revenue is due to a decrease in the annual maintenance special taxes, and the increase in expenditure is due primarily to an increase in services and utilities expenditures. Special Revenue Fund ending fund balance increased from $203,556 (as restated) in the prior year to $251,931 in the current year.

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. #14..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
9 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
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 and the Statement of Activities present information about the following:

As of June 30, 2024, total assets of $348,631 were offset by liabilities of $4,380. The District’s net position from governmental activities increased to $344,251 in 2024 from $276,340 (as restated) in 2023. The District’s net position has restrictions as follows: $76,024 for the acquisition or construction of infrastructure and $268,227 for District maintenance. #14..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 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 $291,584 $276,949 $14,635
Taxes receivable 56,104 4,623 51,481
Interest receivable 943 646 297
Total assets 348,631 282,218 66,413
Liabilities:

Current and other liabilities 4,380 5,878 (1,498)
Net position:

Restricted for:

Capital projects 76,024 72,784 3,240
District maintenance 268,227 203,556 64,671
Total net position $344,251 $276,340 $67,911
FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 revenue came primarily from maintenance special taxes, which amounted to $113,154, along with investment earnings of $11,215. District expenses of $56,458 were for professional services and utilities.
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 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 taxes $113,154 $129,727 $(16,573)
Investment earnings 11,215 1,620 9,595
Total revenues 124,369 131,347 (6,978)
Expenses:

Community development 56,458 50,183 6,275
Change in net position 67,911 81,164 $(13,253)
Net position, beginning of year 276,340 195,176
Net position, end of year $344,251 $276,340
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 funds. The fund financial statements measure only current revenues and expenditures and fund balance; they exclude capital assets, long-term debt, and other long-term amounts. #14..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 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.

The following summarizes the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund as of and for the years ended June 30, 2024 and 2023, and the respective changes:

Balance Sheets – Capital Projects Fund
Description 2024 2023 Change
Assets:

Cash and investments $76,024 $72,784 $3,240
Total Assets $76,024 $72,784 $3,240
Fund Balances:

Restricted for:

Capital projects $76,024 $72,784 $3,240
Total Fund Balances $76,024 $72,784 $3,240
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 Balance Sheets – Special Revenue Fund
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $215,560 $204,165 $11,395
Taxes receivable 56,104 4,623 51,481
Interest receivable 943 646 297
Total Assets $272,607 $209,434 $63,173
Liabilities:

Accounts payable $4,380 $5,878 $(1,498)
Total Liabilities 4,380 5,878 (1,498)
Deferred inflows of resources:

Unavailable revenues 16,296 - 16,296
Total Deferred Inflows of Resources 16,296 - 16,296
Fund Balances:

Restricted for:

District maintenance 251,931 203,556 48,375
Total Fund Balances 251,131 203,556 48,375
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $272,607 $209,434 $63,173
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Statements of Revenues, Expenditures, and Changes in Fund Balances – Capital Projects Fund
Description 2024 2023 Change
Revenues $3,240 $- $3,240
Expenditures - - -
Changes in fund balances 3,240 - $3,240
Fund balances, beginning of year 72,784 72,784
Fund balances, end of year $76,024 $72,784
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
2023
Description 2024 as restated Change
Revenues $104,833 $131,347 $(26,514)
Expenditures 56,458 50,183 6,275
Changes in fund balances 48,375 81,164 $(32,789)
Fund balances, beginning of year 203,556 122,392
Fund balances, end of year $251,931 $203,556
THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental funds reported combined fund balances of $327,955, an increase of $51,615 from the fiscal year 2023. The Capital Projects Fund realized a $3,240 increase due to interest income and an increase in the fair value of investments, while the Special Revenue Fund realized a $48,375 increase due to annual maintenance special taxes revenues exceeding professional services and utilities expenditures. #14..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 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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16 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting 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 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. #14..
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See notes to basic financial statements.
17 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $291,584
Taxes receivable 56,104
Interest receivable 943
Total Assets 348,631

LIABILITIES
Accounts payable 4,380
Total Liabilities 4,380

NET POSITION
Restricted for:

Capital projects 76,024
District maintenance 268,227
Total Net Position $344,251
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See notes to basic financial statements.
18 Community Facilities District
Number 2007-2 Kiernan Business Park West
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 $56,458 $- $(56,458)
$56,458 $- (56,458)
General Revenues:

Maintenance special taxes 113,154
Investment earnings 11,215
Total General Revenues 124,369
Change in Net Position 67,911
Net Position, Beginning of Year,
as restated (Note 5) 276,340
Net Position, End of Year $344,251
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
19 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. #14..
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See notes to basic financial statements.
20 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $76,024 $215,560 $291,584
Taxes receivable - 56,104 56,104
Interest receivable - 943 943
Total Assets $76,024 $272,607 $348,631

LIABILITIES
Accounts payable $- $4,380 $4,380
Total Liabilities - 4,380 4,380

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 16,296 16,296
Total Deferred Inflows of Resources - 16,296 16,296

FUND BALANCES
Restricted for:

Capital project 76,024 - 76,024
District maintenance - 251,931 251,931
Total Fund Balances 76,024 251,931 327,955
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $76,024 $272,607 $348,631
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See notes to basic financial statements.
21 Community Facilities District
Number 2007-2 Kiernan Business Park West
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 $327,955
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. 16,296
Total Net Position - Governmental Activities $344,251
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See notes to basic financial statements.
22 Community Facilities District
Number 2007-2 Kiernan Business Park West
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 taxes $- $96,858 $96,858
Interest income 1,643 4,327 5,970
Change in fair value of investments 1,597 3,648 5,245
Total Revenues 3,240 104,833 108,073

EXPENDITURES
Community development:

Services – professional and other - 53,622 53,622
Utilities - 2,836 2,836
Total Expenditures - 56,458 56,458
Changes in Fund Balances 3,240 48,375 51,615
Fund Balances, Beginning of Year, as
restated (Note 5) 72,784 203,556 276,340
Fund Balances, End of Year $76,024 $251,931 $327,955
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See notes to basic financial statements.
23 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Year Ended June 30, 2024
Changes in Fund Balances - Governmental Funds $51,615
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. 16,296 Change in Net Position - Governmental Activities $67,911 #14..
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See notes to basic financial statements.
24 Community Facilities District
Number 2007-2 Kiernan Business Park West
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 taxes $95,000 $95,000 $96,858 $1,858 Interest income - - 4,327 4,327
Change in fair value of investments - - 3,648 3,648
Total Revenues 95,000 95,000 108,073 9,833

EXPENDITURES
Community development:

Services - professional and other 59,550 33,759 53,622 (19,863) Utilities 5,200 30,991 2,836 28,155
Total Expenditures 64,750 64,750 56,458 8,292
Changes in Fund Balance $30,250 $30,250 48,375 $18,125
Fund Balance, Beginning of Year, as
restated (Note 5) 203,556
Fund Balance, End of Year $251,931
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25 Community Facilities District
Number 2007-2 Kiernan Business Park West
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 2007-2 Kiernan Business Park West (the District) was formed in October 2007 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 88-acre project, a portion of the KiernanCarver Comprehensive Planning District, and bounded on the North by Kiernan Avenue, on the East by Dale Road, on the South by Bangs Avenue, and on the West by Modesto’s City Limits.

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.
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings and other items 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.

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. #14..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) 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 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.

In addition to liabilities, the Statements 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. #14..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have any 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 $327,955 in restricted resources as of June 30, 2024.
• 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 any 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 any assigned resources as of June 30, 2024.
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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 any unassigned resources as of June 30, 2024.

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

In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the fund equity section on the Statement of Net Position was combined to report the total net position and presented it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. #14..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• 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.

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. #14..
- 653 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
32 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.

Cash 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 $291,584
Total cash and investments $291,584
Deposits with the City
Cash and investment pool $291,584
Total cash and investments $291,584
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.
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 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:

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

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

NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that it 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 30th 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 1st following the end of the fiscal year.

At June 30, 2024, the District had 13 parcels that were delinquent for a total of $16,296. The District received 81.89% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2024. The delinquencies total of $16,296 at June 30, 2024 is included in assessments receivable on the Statement of Net Position and Balance Sheet. #14..
- 655 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
34 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 $19,105 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 $257,235 $19,105 $276,340
Total primary government $257,235 $19,105 $276,340
Governmental funds
Major funds’ fund balances:

Capital projects fund $72,784 $- $72,784
Special revenue fund 184,451 19,105 203,556
Total governmental funds $257,235 $19,105 $276,340
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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35 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 2007-2 Kiernan Business Park West (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.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
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36 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
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37 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 entity’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 #14..
- 660 -
Community Facilities District
Number 1997-1 North Beyer Park
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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- 661 -
Community Facilities District
Number 1997-1 North Beyer Park
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 1997-1 North Beyer Park
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 17
Statement of Activities – Governmental Activities 18
Balance Sheet – Governmental Funds 20
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Funds 21
Statement of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund – Budget and Actual 22
Notes to Basic Financial Statements 23
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 31 #14..
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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 1997-1 North Beyer Park (the District), a component unit of the City of Modesto, California, 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 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. #14..
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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.

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.

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.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-15 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 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 1997-1 North Beyer Park (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 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 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
On November 26, 1996, the City Council of the City approved the North Beyer Park Specific Plan, allowing for a maximum of 1,200 residential units to be developed on 160 acres within the Specific Plan area. In addition, three areas within the Specific Plan were designated “Mixed Use,” two of which were expected to develop as neighborhood commercial shopping centers and the third which was expected to develop as office space. At the same meeting at which the City Council approved the Specific Plan, a residential subdivision was approved for 263 dwelling units to be built on 55 acres within the Specific Plan. One condition of the tentative map of this subdivision required the formation of or annexation into a Mello-Roos Community Facilities District (CFD) to fund the maintenance of parkways and open space within the development.

In order to comply with the condition of the tentative map, in June 1997 the District was formed and authorized to levy a special tax to pay for capital improvements (medians on Coffee and Oakdale Roads) and ongoing maintenance costs. Subsequent development has been annexed to this CFD.

To date, the CFD has been unable to construct the medians. This is because (1) insufficient tax monies have been collected for the construction projects and (2) the medians cannot be installed until the property owners on both sides of Coffee and Oakdale Roads dedicate the necessary right-of-way to construct the full street width. However, the CFD has levied and collected taxes sufficient for the ongoing maintenance expenses. In fact, the CFD has built sufficient reserves that the levy of the annual maintenance tax ceased as of fiscal year 2003- 2004 and is not expected to be reinstated until the authorized improvements have been installed.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• The District’s net position increased by $1,605 in fiscal year 2024. • At June 30, 2024, net position was $51,419.
• Total general revenues were investment earnings of $2,228. • Total expenses were $623.

Funds Basis:
• Capital Projects Fund revenues were $2,000. This is an increase of $1,733 from the prior year. The revenues are attributed to interest earnings and an increase in the fair value of investments.
• Capital Projects Fund ending fund balance increased by $2,000 to $46,403. • Special Revenue Fund revenues of $228 were $224 more than last year. Revenues are attributed to interest earnings and an increase in the fair value of investments. Expenditures of $623 were $4,100 less than the prior year.
• Special Revenue Fund ending fund balance decreased by $395 to $5,016. #14..
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Community Facilities District
Number 1997-1 North Beyer Park
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 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. Formation deposits, special facilities taxes, and annual maintenance assessments support these services. 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. #14..
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Community Facilities District
Number 1997-1 North Beyer Park
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 were $51,419. The District’s net position from governmental activities increased to $ 51,419 in 2024 from $49,814 in 2023. All of the District’s net position is restricted as follows: $46,403 for capital projects and $5,016 for District maintenance. The following summarizes the Statements of Net Position as of June 30, 2024 and 2023:

Statements of Net Position – Governmental Activities
Description 2024 2023 Change
Assets:

Cash and investments $51,239 $49,681 $1,558
Interest receivable 180 133 47
Total assets 51,419 49,814 1,605
Net position:

Restricted for:

Capital projects 46,403 44,404 1,999
District maintenance 5,016 5,410 (394)
Total net position $51,419 $49,814 $1,605
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 recognized investment earnings of $2,228. Community Development expenses decreased by $4,100 due to the decrease in the allocation of salaries and benefits by City employees providing administrative and program services charged to the District.

The following summarizes the Statements of Activities for the years ended June 30, 2024 and 2023:

Statements of Activities – Governmental Activities
Description 2024 2023 Change
Revenues:

General revenues:

Investment earnings $2,228 $271 $1,957
Expenses:

Community development 623 4,723 (4,100)
Changes in net position 1,605 (4,452) $6,057
Net position, beginning of year 49,814 54,266
Net position, end of year $51,419 $49,814
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. #14..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES (CONTINUED) Fund Financial Statements (Continued)
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 purposes are 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.

The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2024 and 2023:

Balance Sheets – Capital Projects Fund
Description 2024 2023 Change
Assets:

Cash and investments $46,242 $44,285 $1,957
Interest receivable 161 118 43
Total assets $46,403 $44,403 $2,000
Fund balances:

Restricted for:

Capital projects $46,403 $44,403 $2,000
Total fund balances $46,403 $44,403 $2,000
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 Balance Sheets – Special Revenue Fund
Description 2024 2023 Change
Assets:

Cash and investments $4,997 $5,396 $(399)
Interest receivable 19 15 4
Total assets $5,016 $5,411 $(395)
Fund balances:

Restricted for:

District maintenance $5,016 $5,411 $(395)
Total fund balances $5,016 $5,411 $(395)
Statements of Revenues, Expenditures, and Changes in Fund Balances – Capital Projects Fund
Description 2024 2023 Change
Revenues $2,000 $267 $1,733
Expenditures - - -
Changes in fund balance 2,000 267 $1,733
Fund balance, beginning of year 44,403 44,136
Fund balance, end of year $46,403 $44,403
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Statement of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
Description 2024 2023 Change
Revenues $228 $4 $224
Expenditures 623 4,723 (4,100)
Changes in fund balance (395) (4,719) $4,324
Fund balance, beginning of year 5,411 10,130
Fund balance, end of year $5,016 $5,411
THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental funds reported combined fund balances of $51,419, which is an increase of $1,605 compared with last year. The Capital Projects Fund had a $2,000 increase in fund balance due to the increase in fair value of investments, while the Special Revenue Fund had a $395 decrease in fund balance due to professional services expenditures exceeding the reported revenues.

Therefore, the District reports no long-term capital assets. #14..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 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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16 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting 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 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. #14..
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See notes to basic financial statements.
17 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $51,239
Interest receivable 180
Total Assets 51,419

NET POSITION
Restricted for:

Capital projects 46,403
District maintenance 5,016
Total Net Position $51,419
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See notes to basic financial statements.
18 Community Facilities District
Number 1997-1 North Beyer Park
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 $623 $- $(623)
$623 $- (623)
General Revenues:

Investment earnings 2,228
Total General Revenues 2,228
Change in Net Position 1,605
Net Position, Beginning of Year 49,814
Net Position, End of Year $51,419
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19 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California

FUND FINANCIAL STATEMENTS
Major funds are defined generally as funds 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. #14..
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See notes to basic financial statements.
20 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $46,242 $4,997 $51,239
Interest receivable 161 19 180
Total Assets $46,403 $5,016 $51,419

FUND BALANCES
Restricted for:

Capital projects $46,403 $- $46,403
District maintenance - 5,016 5,016
Total Fund Balances $46,403 $5,016 $51,419
There are no differences between the Governmental Funds Balance Sheet and the Governmental Activities Statement of Net Position as of June 30, 2024. #14..
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See notes to basic financial statements.
21 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Funds
Year Ended June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total

REVENUES
Interest income $1,024 $115 $1,139
Change in fair value of investments 976 113 1,089
Total Revenues 2,000 228 2,228

EXPENDITURES
Services – professional and other - 623 623
Total Expenditures - 623 623
Changes in fund balances 2,000 (395) 1,605
Fund balances, beginning of year 44,403 5,411 49,814
Fund balances, end of year $46,403 $5,016 $51,419
There are no differences between the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances and the Governmental Activities Statement of Activities for the fiscal year ended June 30, 2024.
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See notes to basic financial statements.
22 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund – Budget and Actual
Year Ended June 30, 2024
Original
Budgeted
Amounts
Final
Budgeted
Amounts Actual
Variance
with Final
Budget

REVENUES
Interest income $- $- $115 $115
Change in fair value of investments - - 113 113
Total Revenues - - 228 228

EXPENDITURES
Services – professional and other 4,756 4,756 623 4,133 Total Expenditures 4,756 4,756 623 4,133
Changes in fund balances $(4,756) $(4,756) (395) $4,361 Fund balances, beginning of year 5,411
Fund balances, end of year $5,016
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23 Community Facilities District
Number 1997-1 North Beyer Park
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 1997-1 North Beyer Park (the District) was formed in June 1997 by a vote of the property owners within the proposed District. The District, a separate legal entity, was formed to provide a funding mechanism for public facilities and services as required by the District Specific Plan. The District is a 160-acre project, the boundaries of which are recorded in Book 2, page 80 of the Book of Assessment District Maps in the Stanislaus County Recorder’s Office.

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.
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- 686 -
Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
24 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

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.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
25 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) 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.

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 any nonspendable resources as of June 30, 2024.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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 $51,419 in restricted resources as of June 30, 2024.
• 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 any 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 any 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 any unassigned resources as of June 30, 2024.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the District through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

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

In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the fund equity section on the Statement of Net Position was combined to report 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 the acquisition, construction, or improvement of those assets. • Restricted - Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. #14..
- 690 -
Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• Unrestricted - Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

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

Governmental Accounting Standards Update
During the year ended June 30, 2024, the District implemented the following Governmental Accounting Standards Board (GASB) standard with no financial impact:

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. #14..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
29 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.

Cash 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 $51,239
Total cash and investments $51,239
Deposits with the City
Cash and investment pool $51,239
Total cash and investments $51,239
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- 692 -
Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
30 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Detailed information regarding 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:

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

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

NOTE 4 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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31 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 1997-1 North Beyer Park (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 financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 8, 2024.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
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32 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 District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the 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. #14..
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33 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 #14..
- 697 -
Community Facilities District
Number 2002-1 Northpointe
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 2002-1 Northpointe
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 2002-1 Northpointe
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 20
Statement of Activities – Governmental Activities 22
Balance Sheet – Governmental Funds 24
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 25
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 26
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 28
Statement of Revenues Expenditures and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 29
Notes to Basic Financial Statements 31
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 46 #14..
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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 2002-1 Northpointe (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. #14..
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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.

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.

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.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-18 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 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 2002-1 Northpointe (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 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 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
On April 1, 1997, the City Council approved the Kiernan Business Park Specific Plan that set forth a plan of development for approximately 614 acres that were, at that time, located adjacent to the City’s northern border, east of Highway 99 and south of Kiernan Avenue in a portion of unincorporated Stanislaus County. To date, approximately 250 acres within the Kiernan Business Park Specific Plan have been annexed into the City. Approximately 55 of the City-annexed acres are included within the District. The Kiernan Business Park Specific Plan is intended to provide for the development of a new business park, commercial, and industrial uses that will assist in implementing the City’s long-range objectives to enhance its local economy, generate jobs for residents, and create better jobs/housing balance.

The District was formed by the City Council in February 2002 in order to generate funding for landscaping improvements, a variety of maintenance responsibilities (weed control, litter removal, landscape maintenance, and general maintenance and replacement of storm drainage facilities), and improvement and replacement costs necessitated by the development of the projects within the District. The Capital Projects Fund, earmarked to fund the storm drain basin landscape improvements, will be utilized once the final configuration of the storm drain basin has been determined.
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- 707 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 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 $582,786. • Total District revenues were $105,459 and expenses were $38,528.

Funds Basis:
• Capital Projects Fund revenues of $2,001 were $1,734 higher than the prior year due to the increase in interest income and the increase in the fair value of investments. Expenditures of $0 were the same as the previous year. The Capital Projects Fund ending fund balance increased by $2,001, with an ending fund balance of $46,438. • Special Revenue Fund revenues of $103,458 were $13,679 higher than the prior year primarily due to the increases in maintenance special tax, interest income, and fair value of investments in the current year. Expenditures of $55,874 were $21,796 higher than the prior year primarily due to the increase in services expenditures. Other financing sources increased by $18,986 due to the new right-of-use lease contract entered by the City. The special revenue fund balance increased by $66,570 to an ending fund balance of $537,362. #14..
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Community Facilities District
Number 2002-1 Northpointe
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.

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. #14..
- 709 -
Community Facilities District
Number 2002-1 Northpointe
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 $850,948 were offset by liabilities of $18,666 and deferred inflows of resources of $249,496. The District’s net position from governmental activities increased to $582,786 in 2024 from $515,855 (as restated) in 2023. All of the District’s net position is restricted as follows: $46,438 for the acquisition or construction of infrastructure and $536,348 for maintaining that infrastructure.

Presented on the succeeding page is the summary of the Statements of Net Position as of June 30, 2024 and 2023:
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- 710 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 Statements of Net Position – Governmental Activities 2023
Description 2024 (as restated) Change
Assets:

Cash and investments $569,948 $503,508 $66,440
Assessments receivable 980 - 980
Interest receivable 1,943 1,308 635
Right-of-use asset, net of accumulated
amortization 16,394 626 15,768
Lease receivable, current 8,856 7,804 1,052
Lease receivable, noncurrent 252,827 259,524 (6,697)
Total assets 850,948 772,770 78,178
Liabilities:

Current and other liabilities 1,258 1,135 123
Lease liability 17,408 - 17,408
Total liabilities 18,666 1,135 17,531
Deferred inflow of resources:

Leases 249,496 255,780 (6,284)
Total deferred inflows of resources 249,496 255,780 (6,284) Net position:

Net investment in capital assets - 626 (626)
Restricted for:

Capital projects 46,438 44,437 2,001
District maintenance 536,348 470,792 65,556
Total net position $582,786 $515,855 $66,931
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Community Facilities District
Number 2002-1 Northpointe
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 $70,101, interest income and investment earnings of $22,959, and lease revenue of $11,372. District expenses of $38,528 were for professional services and utilities expenses.

Presented below is the summary of 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 $70,101 $70,632 $(531)
Interest income 12,031 7,370 4,661
Investment earnings 10,928 (4,290) 15,218
Interest revenue - leases 1,027 4,344 (3,317)
Lease revenue 11,372 11,990 (618)
Total revenues 105,459 90,046 15,413
Expenses:

Community development 38,528 33,763 4,765
Changes in net position 66,931 56,283 $10,648
Net position, beginning of year 515,855 459,572
Net position, end of year $582,786 $515,855
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Community Facilities District
Number 2002-1 Northpointe
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.

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.
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- 713 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Fund Financial Statements (Continued)
The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund as of and for the years ended June 30, 2024 and 2023, and the respective changes:

Balance Sheets – Capital Projects Fund
Description 2024 2023 Change
Assets:

Cash and investments $46,277 $44,319 $1,958
Interest receivable 161 118 43
Total assets $46,438 $44,437 $2,001
Fund balances:

Restricted for:

Capital projects $46,438 $44,437 $2,001
Total fund balances $46,438 $44,437 $2,001
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- 714 -
Community Facilities District
Number 2002-1 Northpointe
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 investment $523,671 $459,189 $64,482
Assessments receivable 980 - 980
Interest receivable 1,782 1,190 592
Lease receivable 261,683 267,328 (5,645)
Total assets $788,116 $727,707 $60,409
Liabilities:

Accounts payable $1,258 $1,135 $123
Total liabilities 1,258 1,135 123
Deferred inflow of resources:

Leases 249,496 255,780 (6,284)
Total deferred inflow of resources 249,496 255,780 (6,284) Fund balances:

Restricted for:

District maintenance 537,362 470,792 66,570
Total fund balances 537,362 470,792 66,570
Total liabilities, deferred inflow of
resources, and fund balances $788,116 $727,707 $60,409
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Community Facilities District
Number 2002-1 Northpointe
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 $2,001 $267 $1,734
Expenditures - - -
Changes in fund balance 2,001 267 $1,734
Fund balance, beginning of year 44,437 44,170
Fund balance, end of year $46,438 $44,437
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
Description 2024 2023 Change
Revenues $103,458 $89,779 $13,679
Expenditures (55,874) (34,078) (21,796)
Other financing sources 18,986 - 18,986
Changes in fund balance 66,570 55,701 $10,869
Fund balance, beginning of year 470,792 415,091
Fund balance, end of year $537,362 $470,792
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Community Facilities District
Number 2002-1 Northpointe
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 combined fund balances of $583,800, which was a $68,571 increase from fiscal year 2023. The Capital Projects Fund realized a $2,001 increase due to interest income and a change in the fair value of investments, while the Special Revenue Fund realized a $66,570 increase due to revenues exceeding professional services and utilities expenditures.

Therefore, the District reports no long-term capital assets besides the intangible right-of-use asset.

LEASES
Under GASB Statement No. 87, the District is required to record all leases that meet the definition of a lease as defined in GASB Statement No. 87. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-of-use lease asset, and a lessor is required to recognize a lease receivable and deferred inflow of resources. Accordingly, the lease liability of $17,408 and the right-of-use asset, net of accumulated amortization of $16,394 is reported on the government-wide financial statements. The District recognized a lease receivable of $261,683 and a deferred inflow of resources of $249,496 in both the District’s fund and government-wide financial statements as of June 30, 2024. #14..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
18 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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19 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California

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. #14..
- 719 -
See notes to basic financial statements.
20 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $569,948
Assessments receivable 980
Interest receivable 1,943
Right-of-use asset, net of accumulated amortization 16,394 Lease receivable, current 8,856
Lease receivable, noncurrent 252,827
Total Assets 850,948

LIABILITIES
Accounts payable 1,258
Lease liability, current 1,696
Lease liability, noncurrent 15,712
Total Liabilities 18,666
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- 720 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Net Position – Governmental Activities (Continued) June 30, 2024
See notes to basic financial statements.
21 DEFERRED INFLOW OF RESOURCES
Leases $249,496
Total Deferred Inflow of Resources 249,496

NET POSITION
Restricted for:

Capital projects 46,438
District maintenance 536,348
Total Net Position $582,786
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See notes to basic financial statements.
22 Community Facilities District
Number 2002-1 Northpointe
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 $38,528 $- $(38,528)
$38,528 $- (38,528)
General Revenues:

Maintenance special tax 70,101
Interest income 12,031
Investment earnings 10,928
Interest revenue – leases 1,027
Lease revenue 11,372
Total General Revenues 105,459
Changes in Net Position 66,931
Net Position, Beginning of Year, as
restated (Note 7) 515,855
Net Position, End of Year $582,786
#14..
- 722 -
23 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California

FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year. The District determined all its funds to be major funds. They are:

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #14..
- 723 -
See notes to basic financial statements.
24 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $46,277 $523,671 $569,948
Assessment receivable - 980 980
Interest receivable 161 1,782 1,943
Lease receivable - 261,683 261,683
Total Assets $46,438 $788,116 $834,554

LIABILITIES
Accounts payable $- $1,258 $1,258
Total Liabilities − 1,258 1,258

DEFERRED INFLOW OF RESOURCES
Leases − 249,496 249,496
Total Deferred Inflow of Resources − 249,496 249,496

FUND BALANCES
Restricted for:

Capital projects 46,438 - 46,438
District maintenance - 537,362 537,362
Total Fund Balances 46,438 537,362 583,800
Total Liabilities, Deferred Inflow of
Resources and Fund Balances $46,438 $788,116 $834,554
#14..
- 724 -
See notes to basic financial statements.
25 Community Facilities District
Number 2002-1 Northpointe
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 $583,800
Amounts reported for governmental activities in the Statement of Net Position are different because:

Right-of-use asset used in governmental activities are not financial resources and, therefore, are not reported in the funds (net of accumulated amortization $2,592). 16,394
Long-term liabilities are not due in the current period and, therefore are not included in the governmental fund.
(17,408)
Total Net Position - Governmental Activities $582,786
#14..
- 725 -
See notes to basic financial statements.
26 Community Facilities District
Number 2002-1 Northpointe
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 $- $70,101 $70,101
Interest income 1,025 11,006 12,031
Change in fair value of investments 976 9,952 10,928
Interest revenue - leases - 1,027 1,027
Lease revenue - 11,372 11,372
Total Revenues 2,001 103,458 105,459

EXPENDITURES
Community development:

Services – professional and other - 29,338 29,338
Utilities - 5,869 5,869
Capital outlay - 18,986 18,986
Debt service:

Principal retirement - 1,578 1,578
Interest - 103 103
Total Expenditures - 55,874 55,874
Excess of Revenues Over Expenditures 2,001 47,584 49,585 #14..
- 726 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds (Continued) Year Ended June 30, 2024
See notes to basic financial statements.
27 Capital
Projects
Fund
Special
Revenue
Fund Total

OTHER FINANCING SOURCES
Leases $- $18,986 $18,986
Total Other Financing Sources - 18,986 18,986
Changes in Fund Balances 2,001 66,570 68,571
Fund Balances, Beginning of Year, as
restated (Note 7) 44,437 470,792 515,229
Fund Balances, End of Year $46,438 $537,362 $583,800
#14..
- 727 -
See notes to basic financial statements.
28 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities Year Ended June 30, 2024
Changes in Fund Balances - Governmental Funds $68,571
Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the lease is capitalized as a right-ofuse asset along with a corresponding lease liability to reflect the future obligation. The cost of this right-of-use asset is amortized ($1,696) over the life of the lease.

Capital outlay expenditures $18,986
Capital adjustment (1,522)
Amortization expense (1,696) 15,768
The issuance of long-term debt provides current financial resources to governmental funds while the repayments of the principal consume the current financial resources of the governmental funds. Neither transaction, however, has any effect on net position.

Principal retirement 1,578
Leases (18,986) (17,408)
Changes in Net Position – Governmental Activities $66,931 #14..
- 728 -
See notes to basic financial statements.
29 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Revenues Expenditures and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual Year Ended June 30, 2024
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special tax $70,000 $70,000 $70,101 $101
Interest income - - 11,006 11,006
Change in fair value of investments - - 9,952 9,952
Interest revenue - leases - - 1,027 1,027
Lease revenue - - 11,372 11,372
Total Revenues 70,000 70,000 103,458 33,458

EXPENDITURES
Community development:

Services - professional and other 39,778 39,778 29,338 10,440 Utilities 7,000 7,000 5,869 1,131
Capital outlay - - 18,986 (18,986)
Debt service:

Principal retirement - - 1,578 (1,578)
Interest - - 103 (103)
Total Expenditures 46,778 46,778 55,874 (9,096)
Excess of Revenues Over
Expenditures 23,222 23,222 47,584 24,362
#14..
- 729 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Revenues Expenditures and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual (Continued) Year Ended June 30, 2024
See notes to basic financial statements.
30 Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

OTHER FINANCING SOURCES
Leases $- $- $18,986 $18,986
Total Other Financing Sources - - 18,986 18,986
Changes in Fund Balance $23,222 $23,222 66,570 $43,348
Fund Balance, Beginning of Year,
as restated (Note 7) 470,792
Fund Balance, End of Year $537,362
#14..
- 730 -
31 Community Facilities District
Number 2002-1 Northpointe
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 2002-1 Northpointe (the District) was formed in February 2002 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 used to ensure that all landowners in the Specific Plans pay their fair share of the public improvements. The District is a 55-acre project bounded on the East by Highway 99, and by Pelandale Avenue on the South. The District will provide for the development of new business park and industrial uses and includes such tenants as Costco, Lowe’s, and Union Safe Deposit Bank.

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. #14..
- 731 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
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 Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues. The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function.

Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items which are not properly included among program revenues, are reported instead as general revenues.

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. #14..
- 732 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 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.

Lease Receivable
The District’s lease receivable, recorded as a result of implementing GASB 87, Leases, is measured at the present value of lease payments expected to be received during the lease term. There are no variable components under the lease agreement. A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease.

Right-of-Use Asset
The District has recorded the right-of-use lease assets as a result of implementing GASB 87, Leases. The right-of-use assets are initially measured at an amount equal to the initial measurement of the related lease liability plus any lease payments made prior to the lease term, less lease incentives plus ancillary charges necessary to place the lease into service. The rightof-use assets are intangible capital assets and are amortized on a straight-line basis over the life of the related lease.
#14..
- 734 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
35 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Lease Liability
The District’s lease liability is measured at the present value of payments expected to be made by the District during the lease term. As lease payments are made, the District will reduce the liability (the principal portion of payment) and recognize interest expense.

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 any 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 $583,800 in restricted resources as of June 30, 2024.
• 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 any committed resources as of June 30, 2024. #14..
- 735 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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 any 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 any 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. The 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.

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.
#14..
- 736 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
37 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position
Net position represents the residual interest in the District’s assets and deferred outflows of resources after liabilities and deferred inflows 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 and right-of-use assets, net of accumulated depreciation, accumulated amortization and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets.
• Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

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

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.
#14..
- 737 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
38 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources (Continued)
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 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. The deferred inflow of resources reported by the District is from the lease, which is measured at the present value of future lease payments and recognized as revenue over the lease term.

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. #14..
- 738 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
39 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update (Continued)
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.

Cash and investments in the City 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. #14..
- 739 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
40 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash and investments as of June 30, 2024 are classified in the accompanying financial statement as follows:

Statement of Net Position – Governmental Activities
Cash and investments $569,948
Total cash and investments $569,948
Deposits with the City
Cash and investment pool $569,948
Total cash and investments $569,948
Detailed information regarding the City’s pooled cash and investments, including information regarding the fair values 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 LEASE RECEIVABLE
On May 28, 2013, the District, lessor, and Horizon Towers LLC, lessee, entered into a land lease agreement to install, operate, and maintain a communications facility and other improvements. The initial lease term will be for five years with a monthly rental payment of $750 for the first subtenant and $400 for each subsequent subtenant that occupies the premises. The lease agreement will automatically renew for five additional five-year terms (extension term). Monthly rent will increase by 10% at year one of each extension term. #14..
- 740 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
41 NOTE 3 LEASE RECEIVABLE (CONTINUED)
Lease revenue recognized under the lease agreement was $11,372 for the year ended June 30, 2024. Interest revenue recognized under the lease agreement was $1,027 for the year ended June 30, 2024.

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

Year Ending June 30 Principal Interest Total
2025 $8,856 $3,865 $12,721
2026 8,989 3,731 12,720
2027 9,125 3,595 12,720
2028 9,263 3,457 12,720
2029 10,576 3,310 13,886
2030-2034 57,169 14,073 71,242
2035-2039 69,009 9,358 78,367
2040-2044 82,508 3,696 86,204
2045 6,188 19 6,207
$261,683 $45,104 $306,787
#14..
- 741 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
42 NOTE 4 RIGHT-OF-USE ASSET AND LIABILITY
The District has recorded one right-of-use leased asset and liability for leased land. The District entered into a land lease agreement to prevent damage to and stabilize the east side of the Northpointe Basin by controlling the rodent population in and on the lease area. The lease commenced on February 25, 2014, and was terminated on February 28, 2024. A new 10-year lease agreement with an option for two 5-year extensions was entered into by the City following the termination of the old lease agreement. The new lease agreement’s first payment in 2024 will be $1,681 with an annual cost-of-living increase of 3% through the lease term in 2034. The right-of-use leased asset is amortized on a straight-line basis over the terms of the related lease.

Right-of-use asset activity related to governmental activities for the year ended June 30, 2024 was as follows:

Beginning
Balance Additions
Deletions/
Adjustments
Ending
Balance
Intangible Assets
Right-of-use land $2,496 $18,986 $(2,496) $18,986
Total intangible assets 2,496 18,986 (2,496) 18,986
Less: Accumulated Amortization (1,870) (1,696) 974 (2,592) Total $626 $17,290 $(1,522) $16,394
The amortization expense charged to the governmental activities for the year ended June 30, 2024 was $1,696.
#14..
- 742 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
43 NOTE 4 RIGHT-OF-USE ASSET AND LIABILITY (CONTINUED)
The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2024, were as follows:

Year Ending June 30 Principal Interest Total
2025 $1,696 $35 $1,731
2026 1,752 31 1,783
2027 1,809 28 1,837
2028 1,868 24 1,892
2029 1,928 21 1,949
2030-2034 1,990 17 2,007
2035-2039 2,054 13 2,067
2040-2044 2,120 9 2,129
2045 2,191 3 2,194
$17,408 $181 $17,589
#14..
- 743 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
44 NOTE 5 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:

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

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

NOTE 6 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2024 was as follows:

Expenditures Amount
Special Revenue Fund:

Capital outlay $(18,986)
Debt service: Principal retirement $(1,578)
Debt service: Interest $(103)
#14..
- 744 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
45 NOTE 7 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 $620 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 $515,235 $620 $515,855
Total primary government $515,235 $620 $515,855
Governmental funds
Major funds’ fund balances:

Capital projects fund $44,437 $- $44,437
Special revenue fund 470,172 620 470,792
Total governmental funds $514,609 $620 $515,229
NOTE 8 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.
#14..
- 745 -
46 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 2002-1 Northpointe (the District), as of and for the year ended June 30, 2024, the budgetary comparison 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.

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.
#14..
- 746 -
47 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 District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
- 747 -
48 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
#14..
- 748 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #14..
- 749 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
- 750 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
- 751 -
Community Facilities District
Number 2004-1 Village One #2
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 23
Statement of Activities – Governmental Activities 25
Balance Sheet – Governmental Funds 27
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 29
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 30
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities Change in Net Position 31
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 33
Notes to Basic Financial Statements 34
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 51 #14..
- 752 -
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 2004-1 Village One #2 (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. #14..
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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.

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.

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.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-21 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 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 2004-1 Village One #2 (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 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 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
The Village One #2 Specific Plan encompasses approximately 1,840 gross acres of land within the City, on which a pedestrian-oriented, mixed-use, planned community is anticipated to be developed. In 1996, the City Council formed the City of Modesto Community Facilities District (CFD) No. 1996-1 to provide funding for the acquisition or construction of certain roads, storm drainage, and park improvements. In 2004, it was determined that the tax rates set forth in CFD No. 1996-1 would be insufficient to fund the required infrastructure; therefore, in early 2004, the City Council formed the District to assist in the financing of the remaining required infrastructure. The District includes a one-time facilities special tax, an annual facilities special tax, and an annual maintenance special tax. The District, in conjunction with CFD No. 1996-1, will provide the funding needed to complete the District-funded core infrastructure needed for the Village One #2 area.

In fiscal year 2023-2024, the District did not have funded infrastructure that was under design, construction or constructed/acquired for the Village One #2 area using tax monies and bond proceeds from the District.

FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• At June 30, 2024, the District’s net position was $20.5 million. • At June 30, 2024, total assets and deferred outflows of resources were $45.3 million while total liabilities and total deferred inflows of resources were $24.8 million. • Total District revenues were $3.7 million, and expenses were $2.0 million. #14..
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS (CONTINUED)
Funds Basis:
• Capital Projects Fund revenues increased from $91K in the prior year to $814K for fiscal year 2024 and expenditures decreased from $477K in the prior year to $66 for fiscal year 2024. The increase in revenues is attributed to the increases in facilities special taxes and fair value of investments, while the decrease in expenditures is attributed to the decrease in activity in the development of capital projects.
• Capital Projects Fund ending fund balance for fiscal year 2024 increased from $14.6 million to $15.4 million. This increase is primarily attributed to the increase in revenues for the year. • Special Revenue Fund revenues increased from $1.2 million in the prior year to $1.4 million for fiscal year 2024 and expenditures increased from $807K in the prior year to $985K for fiscal year 2024. The increase in revenue is due to an increase in the maintenance special taxes, and the increase in expenditure is due primarily to an increase in professional and other contractual services.
• Special Revenue Fund ending fund balance increased from $955K in the prior year to $1.3 million in the current year.
• Debt Service Fund revenues increased by $102K to $2.4 million in the fiscal year 2024 and expenditures increased by $49K for fiscal year 2024. The increase in the revenue is due to an increase in the facilities special taxes, and the increase in expenditure is attributed to the increase in debt service payments as compared to the prior year. • Debt Service Fund ending fund balance increased for fiscal year 2024 from $3.2 million to $3.6 million.
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Community Facilities District
Number 2004-1 Village One #2
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 comprise 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:

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.
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Community Facilities District
Number 2004-1 Village One #2
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 and deferred outflows of resources of $45.3 million were offset by total liabilities and deferred inflows of resources of $24.8 million. The District’s net position from governmental activities increased to $20.5 million in 2024 from $18.9 million in 2023. This increase was due to increases in special tax revenues and fair value of investments.

The District’s net position has restrictions as follows: $15.9 million for acquisition or construction of infrastructure, $3.3 million for debt service, and $1.3 million for District maintenance. #14..
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Community Facilities District
Number 2004-1 Village One #2
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:

Statement of Net Position – Governmental Activities
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $17,958,331 $16,531,716 $1,426,615 Cash and investments with fiscal
agent 2,986,410 3,375,271 (388,861)
Taxes receivable 94,798 94,718 80
Assessments receivable 22,540,000 23,485,000 (945,000)
Interest receivable 60,366 42,677 17,689
Prepaid expenses 624 - 624
Lease receivable, current 10,663 9,888 775
Lease receivable, noncurrent 393,192 403,855 (10,663)
Nondepreciable capital asset 477,126 477,126 -
Total assets $44,521,510 $44,420,251 $101,259
(Continued)
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 2023
Description 2024 (as restated) Change
Deferred outflow of resources:

Deferred loss on refunding $746,339 $807,682 $(61,343)
Total deferred outflow of resources 746,339 807,682 (61,343) Liabilities:

Current and other liabilities 1,059,639 1,616,823 (557,184) Long-term debt 23,351,019 24,362,678 (1,011,659)
Total liabilities 24,410,658 25,979,501 (1,568,843)
Deferred inflow of resources:

Leases 379,523 396,820 (17,297)
Total deferred inflows of resources 379,523 396,820 (17,297) Net position:

Restricted for:

Capital projects 15,886,686 15,072,544 814,142
Debt service 3,265,353 2,823,052 442,301
District maintenance 1,325,629 956,016 369,613
Total net position $20,477,668 $18,851,612 $1,626,056
FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 revenue came primarily from annual facilities and maintenance special taxes, which amounted to $2.8 million along with investment earnings of $848K. District expenses of $2.0 million were primarily for district maintenance including professional services and utilities, and interest on long-term debt.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 The following summarizes the Statements of Activities for the years ended June 30, 2024 and 2023:

Statement of Activities – Governmental Activities
2023
Description 2024 (as restated) Change
Revenues:

Program revenues:

Charges for services $9,500 $- $9,500
General revenues:

Facilities special taxes 1,490,076 $1,338,034 $152,042
Maintenance special taxes 1,285,964 1,211,523 74,441
Investment earnings 847,806 227,727 620,079
Interest income - leases 6,139 11,306 (5,167)
Lease revenue 17,308 17,668 (360)
Total revenues 3,656,793 2,806,258 850,535
Expenses:

Community development 1,010,842 825,265 185,577
Interest on long-term debt 1,019,895 1,065,601 (45,706) Total expenses 2,030,737 1,890,866 139,871
Change in net position 1,626,056 915,392 $710,664
Net position, beginning of year 18,851,612 17,936,220
Net position, end of year $20,477,668 $18,851,612
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 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 three 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 following summarizes the Balance Sheets and the Statements of Revenues, Expenditures, and Changes in Fund Balances for the Capital Projects Fund, the Special Revenue Fund and the Debt Service Fund for the years ended June 30, 2024 and 2023, and the respective changes:
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 Balance Sheets – Capital Project Fund
Description 2024 2023 Change
Assets:

Cash and investments $15,356,305 $15,032,458 $323,847
Interest receivable 53,255 40,086 13,169
Total assets $15,409,560 $15,072,544 $337,016
Liabilities:

Accounts payable $- $477,126 $(477,126)
Total liabilities - 477,126 (477,126)
Fund balances:

Restricted for:

Capital projects 15,409,560 14,595,418 814,142
Total fund balances 15,409,560 14,595,418 814,142
Total liabilities and fund balances $15,409,560 $15,072,544 $337,016 #14..
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
16 Balance Sheets – Special Revenue Fund
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $1,357,034 $1,008,040 $348,994
Taxes receivable 30,951 30,126 825
Interest receivable 4,303 2,261 2,042
Lease receivable 403,855 413,743 (9,888)
Total assets $1,796,143 $1,454,170 $341,973
Liabilities:

Accounts payable $68,705 $80,266 $(11,561)
Total liabilities 68,705 80,266 (11,561)
Deferred inflows of resources:

Leases 379,523 396,820 (17,297)
Unavailable revenues 23,072 22,286 786
Total deferred inflows
of resources 402,595 419,106 (16,511)
Fund balances:

Restricted for:

District maintenance 1,324,843 954,798 370,045
Total fund balances 1,324,843 954,798 370,045
Total liabilities, deferred inflows of
resources and fund balances $1,796,143 $1,454,170 $341,973 #14..
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
17 Balance Sheets – Debt Service Fund
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $1,244,992 $491,218 $753,774
Cash and investments with fiscal agent 2,986,410 3,375,271 (388,861) Taxes receivable 63,847 64,592 (745)
Assessments receivable 22,540,000 23,485,000 (945,000)
Interest receivable 2,808 330 2,478
Prepaid expenses 624 - 624
Total assets $26,838,681 $27,416,411 $(577,730)
Liabilities:

Accounts payable $836 $- $836
Unearned revenues 651,931 705,514 (53,583)
Total liabilities 652,767 705,514 (52,747)
Deferred inflow of resources:

Unavailable revenues 22,590,865 23,532,943 (942,078)
Total deferred inflow of resources 22,590,865 23,532,943 (942,078) Fund balance:

Restricted for:

Debt service 3,595,049 3,177,954 417,095
Total fund balances 3,595,049 3,177,954 417,095
Total deferred inflow of resources and
fund balances $26,838,681 $27,416,411 $(577,730)
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
18 Statements of Revenues, Expenditures, and Changes in Fund Balances – Capital Projects Fund
Description 2024 2023 Change
Revenues $814,208 $90,630 $723,578
Expenditures 66 477,126 (477,060)
Changes in fund balance 814,142 (386,496) $1,200,638
Fund balance, beginning of year 14,595,418 14,981,914
Fund balance, end of year $15,409,560 $14,595,418
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
2023
Description 2024 (as restated) Change
Revenues $1,354,878 $1,245,381 $109,497
Expenditures 984,833 807,494 177,339
Changes in fund balance 370,045 437,887 $(67,842)
Fund balance, beginning of year 954,798 516,911
Fund balance, end of year $1,324,843 $954,798
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
19 Statements of Revenues, Expenditures, and Changes in Fund Balances – Debt Service Fund
2023
Description 2024 (as restated) Change
Revenues $2,428,999 $2,327,331 $101,668
Expenditures 2,011,904 1,963,021 48,883
Changes in fund balance 417,095 364,310 $52,785
Fund balance, beginning of year 3,177,954 2,813,644
Fund balance, end of year $3,595,049 $3,177,954
THE DISTRICT’S FUND FINANCIAL STATEMENTS
The District’s fiscal year 2024 revenues primarily came from facilities special taxes in the amount of $2.4 million and maintenance special taxes in the amount of $1.3 million.

District expenditures of $3.0 million in fiscal year 2024 consisted of $985K in Special Revenue Fund expenditures for maintenance of District facilities and ongoing administrative expenditures and $2.0 million in Debt Service Fund expenditures.

At June 30, 2024, the District’s governmental funds reported combined fund balances of $20.3 million, an increase of $1.6 million compared with last year. This increase was primarily due to a combination of increases in special taxes and fair value of investments and a decrease in activities in the development of capital projects.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
20 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.

The District reports $477K of nondepreciable capital assets related to the construction of a selfstorage facility as of June 30, 2024.

DEBT ADMINISTRATION
The District issued Special Tax Bonds, Series 2006 in the principal amount of $31.1 million in March 2006. The proceeds have been and will continue to be used to reimburse developers for the infrastructure they install pursuant to the Acquisition & Shortfall Agreements entered into between developers and the District as well as to fund authorized facilities installed by the District.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
21 The District issued Refunding Special Tax Bonds, Series 2014 in the principal amount of $29.3 million with a premium of $1.5 million in July 2014 to refund the outstanding Special Tax Bonds, Series 2006.

The balance of the long-term debt at June 30, 2024, is $23.4 million. Additional details can be found in Note 4 to the financial statements.

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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22 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California

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

The 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 change in net position and reconciled with the Statement of Net Position. 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.
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See notes to basic financial statements.
23 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $17,958,331
Cash and investments with fiscal agent 2,986,410
Taxes receivable 94,798
Assessments receivable 22,540,000
Interest receivable 60,366
Prepaid expenses 624
Lease receivable, current 10,663
Lease receivable, noncurrent 393,192
Nondepreciable capital asset 477,126
Total Assets 44,521,510

DEFERRED OUTFLOW OF RESOURCES
Deferred loss on refunding 746,339
Total Deferred Outflow of Resources 746,339

LIABILITIES
Accounts payable 69,541
Unearned revenues 651,931
Interest payable 338,167
Long-term debt:

Due in one year 1,101,659
Due in more than one year 22,249,360
Total Liabilities 24,410,658
(Continued)
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Statement of Net Position – Governmental Activities (Continued) June 30, 2024
See notes to basic financial statements.
24 DEFERRED INFLOW OF RESOURCES
Leases $379,523
Total Deferred Inflow of Resources 379,523

NET POSITION
Restricted for:

Capital projects 15,886,686
Debt service 3,265,353
District maintenance 1,325,629
Total Net Position $20,477,668
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See notes to basic financial statements.
25 Community Facilities District
Number 2004-1 Village One #2
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
Charges for
Services
Governmental
Activities
Community development $1,010,842 $9,500 $(1,001,342)
Interest on long-term debt 1,019,895 - (1,019,895)
$2,030,737 $9,500 (2,021,237)
General Revenues:

Facilities special taxes 1,490,076
Maintenance special taxes 1,285,964
Investment earnings 847,806
Interest income from leases 6,139
Lease revenue 17,308
Total General Revenues 3,647,293
Change in Net Position 1,626,056
Net Position, Beginning of
Year, as restated (Note 8) 18,851,612
Net Position, End of Year $20,477,668
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26 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California

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

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District.

The Debt Service Fund accounts for the payment of principal and interest on the 2014 Refunding Special Tax bonds.
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See notes to basic financial statements.
27 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund
Debt
Service
Fund Total
ASSETS
Cash and investments $15,356,305 $1,357,034 $1,244,992 $17,958,331 Cash and investments with fiscal
agent - - 2,986,410 2,986,410
Taxes receivable - 30,951 63,847 94,798
Assessments receivable - - 22,540,000 22,540,000
Interest receivable 53,255 4,303 2,808 60,366
Prepaid expenses - - 624 624
Lease receivable - 403,855 - 403,855
Total Assets $15,409,560 $1,796,143 $26,838,681 $44,044,384

LIABILITIES
Accounts payable $- $68,705 $836 $69,541
Unearned revenues - - 651,931 651,931
Total Liabilities - 68,705 652,767 721,472

DEFERRED INFLOWS OF

RESOURCES
Leases - 379,523 - 379,523
Unavailable revenues - 23,072 22,590,865 22,613,937
Total Deferred Inflows of
Resources - 402,595 22,590,865 22,993,460
(Continued)
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Balance Sheet – Governmental Funds (Continued)
June 30, 2024
See notes to basic financial statements.
28 Capital
Projects
Fund
Special
Revenue
Fund
Debt
Service
Fund Total

FUND BALANCES
Restricted for:

Capital projects $15,409,560 $- $- $15,409,560
District maintenance - 1,324,843 - 1,324,843
Debt service - - 3,595,049 3,595,049
Total Fund Balances 15,409,560 1,324,843 3,595,049 20,329,452 Total Liabilities, Deferred Inflows
of Resources and Fund Balances $15,409,560 $1,796,143 $26,838,681 $44,044,384 #14..
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See notes to basic financial statements.
29 Community Facilities District
Number 2004-1 Village One #2
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 $20,329,452
Amounts reported for governmental activities in the Statement of Net Position are different because:

Other long-term assets are not available to pay for the current period expenditures and therefore are deferred in the funds. 22,540,000 Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position. 73,937
Capital assets used in governmental activities are not current assets or financial resources and, therefore, are not reported in the governmental funds. 477,126
Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds:

Long-term debt (23,351,019)
Deferred loss on refunding 746,339
Interest payable (338,167)
Total Net Position - Governmental Activities $20,477,668 #14..
- 781 -
See notes to basic financial statements.
30 Community Facilities District
Number 2004-1 Village One #2
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
Debt
Service
Fund Total

REVENUES
Facilities special taxes $156,514 $- $2,275,640 $2,432,154 Maintenance special taxes - 1,285,178 - 1,285,178
Charges for services - 9,500 - 9,500
Interest income 336,506 22,910 162,249 521,665
Interest income from leases - 6,139 - 6,139
Change in fair value of investments 321,188 13,843 (8,890) 326,141 Lease revenue - 17,308 - 17,308
Total Revenues 814,208 1,354,878 2,428,999 4,598,085

EXPENDITURES
Community Development:

Services – professional and other 66 768,077 25,943 794,086 Utilities - 216,756 - 216,756
Debt service:

Principal - - 945,000 945,000
Interest and fiscal charges - - 1,040,961 1,040,961
Total Expenditures 66 984,833 2,011,904 2,996,803
Changes in Fund Balances 814,142 370,045 417,095 1,601,282 Fund Balances, Beginning of Year, as
restated (Note 8) 14,595,418 954,798 3,177,954 18,728,170 Fund Balances, End of Year $15,409,560 $1,324,843 $3,595,049 $20,329,452 #14..
- 782 -
See notes to basic financial statements.
31 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities Change in Net Position
Year Ended June 30, 2024
Changes in Fund Balances - Governmental Funds $1,601,282 Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues previously recognized in the Statement of Activities that did not provide current financial resources and therefore were not reported as revenues in the funds are reported as revenues in the funds when received. (945,000)
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. 3,708 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt and the payment to refund escrow consumes current financial resources of governmental funds.

Neither transaction, however, has any effect on net position:

Repayment of the principal of long-term debt. 945,000
(Continued)
#14..
- 783 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities Change in Net Position (Continued) Year Ended June 30, 2024
See notes to basic financial statements.
32 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds:

Amortization of bond premium $66,659
Amortization of deferred loss on refunding (61,343)
Interest payable 15,750
Change in Net Position - Governmental Activities $1,626,056 #14..
- 784 -
See notes to basic financial statements.
33 Community Facilities District
Number 2004-1 Village One #2
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 taxes $1,200,000 $1,225,000 $1,285,178 $60,178 Charges for services - - 9,500 9,500
Interest income - - 22,910 22,910
Interest income from leases - - 6,139 6,139
Change in fair value of investments - - 13,843 13,843
Lease revenue - - 17,308 17,308
Total Revenues 1,200,000 1,225,000 1,354,878 129,878

EXPENDITURES
Community development:

Services – professional and other 657,570 682,570 768,077 (85,507) Utilities 317,100 318,891 216,756 102,135
Total Expenditures 974,670 1,001,461 984,833 16,628
Excess of Revenues Over Expenditures 225,330 223,539 370,045 146,506 Change in Fund Balance $225,330 $223,539 370,045 $146,506 Fund Balance, Beginning of Year, as
restated (Note 8) 954,798
Fund Balance, End of Year $1,324,843
#14..
- 785 -
34 Community Facilities District
Number 2004-1 Village One #2
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 2004-1 Village One #2 (the District) was formed in April 2004 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 Plan. The District is the vehicle used to ensure that all landowners in the Specific Plan area contribute to the cost of public improvements. The District encompasses approximately 1,840 gross acres of land on which a pedestrian-oriented, mixed-use, planned community is anticipated to be developed. The District is located in the North Eastern portion of the City of Modesto, California (the City), bordered by Sylvan Avenue to the North, Claus Road to the East, Briggsmore to the South, and Oakdale Road to the West.

The District is expected to yield 6,186 residential dwelling units at buildout; in addition to 15 acres of commercial property and 220 acres of industrial property.

The District is an integral part of the City and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City.

A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.

Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
#14..
- 786 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
35 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) 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.

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 to 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. However, principal and interest expenditures are recorded as fund liabilities when due or when amounts have been accumulated in the Debt Service Fund for payments early in the following year.
#14..
- 787 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) 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 maintenance of infrastructure within the District.

The Debt Service Fund accounts for the payment of principal and interest on the 2014 Refunding Special Tax Bonds.

Facilities and Maintenance Special Taxes
The facilities and maintenance special taxes are collected by the County of Stanislaus on the property tax bill. The special taxes are due November 1st and February 1st and are delinquent if not paid by December 10th and April 10th, 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 special taxes 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.
#14..
- 788 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
37 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

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 any 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 $20,329,452 of restricted resources as of June 30, 2024. • 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 any committed resources as of June 30, 2024. #14..
- 789 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
38 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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 any 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 any 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 adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the District through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.
#14..
- 790 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
39 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position
Net position represents the residual interest in the District’s assets and deferred outflows of resources after liabilities and deferred inflows 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 the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

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

Lease Receivable
The District’s lease receivable is measured at the present value of lease payments expected to be received during the lease term. There are no variable components under the lease agreement. A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease.
#14..
- 791 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
40 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period. The deferred outflow of resources reported by the District consists of deferred loss on refunding.

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

GASB Statement No. 100 - Accounting Changes and Error Corrections. The requirements of this statement are effective for reporting periods beginning after June 15, 2023.
#14..
- 792 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
41 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update (Continued)
Released GASB Statements to be implemented in future financial statements are as follows:

GASB Statement No. 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, with the exception of cash and investments with fiscal agents, are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.

Cash and investments in the City 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. #14..
- 793 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
42 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
The District is a voluntary participant in the California Asset Management Program (CAMP), a California Joint Powers Authority that falls under California Government Code Section 53601(p), which is directed by a Board of Trustees that is made up of experienced local government finance directors and treasurers. The District reports its investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share.

Cash and investments as of June 30, 2024 are classified in the accompanying financial statements as follows:

Statement of Net Position - Governmental Activities:

Description Amount
Cash and investments $17,958,331
Cash and investments with fiscal agent 2,986,410
Total cash and investments $20,944,741
Deposits with the City
Cash and investment pool $17,958,331
Deposits with fiscal agents
CAMP 2,986,410
Total cash and investments $20,944,741
#14..
- 794 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
43 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The District is required to disclose investments that represent a concentration of five percent (5%) or more of investments in any one issuer held by individual funds in the securities of issuers other than U.S. Treasury securities, mutual funds, and external investment pools. At June 30, 2024, no investments represented a concentration of five percent (5%) or more of investments in any one issuer held by the District in the securities of issuers other than U.S.

Treasury securities, mutual funds, and external investment pools.

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.
#14..
- 795 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
44 NOTE 3 LEASE RECEIVABLE
On December 16, 2021, the District, lessor, and New Cingular Wireless PSC, LLC, lessee, entered into a land lease agreement to install, operate, and maintain a communication facility and other improvements. The initial term of the lease will be for five years and will automatically be renewed for four additional five-year terms. The lessee will pay the District a base rent of $1,600 with an increase of 3% each year on the anniversary of the rent commencement date, including throughout the extension terms. Upon execution of the agreement, a one-time fee of $10,000 was paid in full by the lessee for the Camera Fee to enable the District to purchase and install a live-feed security camera. Lease revenue recognized under the lease agreement was $9,969 for the year ended June 30, 2024. Interest revenue recognized under the lease agreement was $3,730 for the year ended June 30, 2024.

On July 8, 2014, the District, lessor, and Sacramento-Valley Limited Partnership d/b/a Verizon Wireless, lessee, entered into a land lease agreement in which the lessee is granted the right and option to lease the premises, including a right-of-way for access. The initial term of the lease will be for five years with a total annual rent of $14,000 to be paid by the lessee in equal monthly installments on the first day of the month. The lease will be automatically extended for five additional five-year terms. Annual rent for each additional five-year term will increase by 10% at the beginning of each five-year term. Lease revenue recognized under the lease agreement was $7,328 for the year ended June 30, 2024. Interest revenue recognized under the lease agreement was $2,409 for the year ended June 30, 2024. #14..
- 796 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
45 NOTE 3 LEASE RECEIVABLE (CONTINUED)
Future minimum lease and interest payments to be received are as follows:

Year Ending June 30 Principal Interest Total
2025 $10,663 $5,986 $16,649
2026 11,455 17,275 28,730
2027 11,911 17,555 29,466
2028 12,379 17,842 30,221
2029 12,865 18,139 31,004
2030-2034 75,851 98,996 174,847
2035-2039 95,407 112,161 207,568
2040-2044 118,390 127,162 245,552
2045-2047 54,934 56,130 111,064
$403,855 $471,246 $875,101
NOTE 4 LONG-TERM DEBT
On July 30, 2014, the District issued Refunding Special Tax Bonds (refunding bonds) with a par amount of $29,320,000 to refund the District’s $29,925,000 outstanding Special Tax Bonds (refunded bonds) issued on March 8, 2006, which were issued primarily to finance various public improvements needed to develop property located within the District. Interest on the refunding bonds is payable semiannually on March 1st and September 1st through September 1, 2036. The refunding bonds were issued with interest rates varying from 2% to 5% and are payable solely from revenues derived from the assessment of annual special taxes to be levied on the taxable property within the District and from certain other funds pledged under the Trust Indenture. The principal of these bonds is not subject to acceleration. #14..
- 797 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
46 NOTE 4 LONG-TERM DEBT (CONTINUED)
Any one or more of the following events shall constitute an “event of default” for these bonds:
(a) Default in the due and punctual payment of the principal of or redemption premium, if any, on any bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise.
(b) Default on the due and punctual payment of the interest on any bond when and as the same shall become due and payable.
(c) Except as described in (a) or (b), default shall be made by the District in the observance of any of the agreements, conditions, or covenants for a period of thirty (30) days after the District has been given notice in writing of such default by the Trustee or the owners of twenty-five percent (25%) in aggregate principal amount of the outstanding bonds.

The long-term debt activities for the year ended June 30, 2024 were as follows:

Beginning
Balance Additions Reductions
Ending
Balance
Due
Within
One Year
Refunding Special
Tax Bonds $23,485,000 $- $(945,000) $22,540,000 $1,035,000 Premium on
Refunding Bonds 877,678 - (66,659) 811,019 66,659
Total $24,362,678 $- $(1,011,659) $23,351,019 $1,101,659 #14..
- 798 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
47 NOTE 4 LONG-TERM DEBT (CONTINUED)
Annual debt service requirements for the bonds are shown below:

Year Ending June 30 Principal Interest
2025 $1,035,000 $988,625
2026 1,130,000 934,500
2027 1,230,000 875,500
2028 1,335,000 811,375
2029 1,455,000 741,625
2030-2034 5,105,000 2,646,125
2035-2037 11,250,000 1,125,000
$22,540,000 $8,122,750
Interest expense for the year ended June 30, 2024 was $1,019,895.

NOTE 5 RESTRICTED FUND BALANCES
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:

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

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

Restricted for Debt Service – the portion of fund balance legally restricted to the payment of principal and interest on long-term liabilities.
#14..
- 799 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
48 NOTE 6 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds discussed in Note 4 that it 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 30th 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 1st following the end of the fiscal year. (c) At June 30, 2024, the District had 22 parcels that were delinquent for a total of $73,937, two of which were delinquent for more than three consecutive payments. (d) The District received 99.54% of the Special Revenue Fund and Debt Service Fund facilities and maintenance special taxes levied during the year ended June 30, 2024. The delinquencies total of $73,937 at June 30, 2024 is included in taxes receivable on the Statement of Net Position and Balance Sheet.

NOTE 7 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2024 was as follows:

Expenditures Amount
Special Revenue Fund:

Services - professional and other $(85,507)
#14..
- 800 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
49 NOTE 8 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 $52,761 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 $18,798,851 $52,761 $18,851,612
Total primary government $18,798,851 $52,761 $18,851,612 Governmental funds
Major funds’ fund balances:

Capital projects fund $14,595,418 $- $14,595,418
Special revenue fund 941,801 12,997 954,798
Debt service fund 3,138,190 39,764 3,177,954
Total governmental funds $18,675,409 $52,761 $18,728,170 #14..
- 801 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
50 NOTE 9 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.
#14..
- 802 -
51 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 2004-1 Village One #2 (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.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
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- 803 -
52 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 District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
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53 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 #14..
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Community Facilities District
Number 1996-1 Village One
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 1996-1 Village One
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 1996-1 Village One
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 18
Statement of Activities – Governmental Activities 19
Balance Sheet – Governmental Funds 21
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 22
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 23
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 24
Statement of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund – Budget and Actual 25
Notes to Basic Financial Statements 26
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 #14..
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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 1996-1 Village One (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. #14..
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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.

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.

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.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-16 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 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 1996-1 Village One (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.

BACKGROUND AND MANAGEMENT’S DISCUSSION
In 1989-1990, the City initiated planning of the area now known as Village One. The original Village One plan contemplated a pedestrian-oriented, self-contained neighborhood concept that offered housing to accommodate various income levels. In addition, the original plan called for a number of landscaped areas as well as other amenities. Over the years, substantial revisions to the original plan occurred, including a reconfiguration of streets, a reduction of landscaped areas, and modification of the financing strategy. At the close of fiscal year 2003- #14..
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION (CONTINUED)
2004, the Village One area was based on the Specific Plan, the Infrastructure Financing Plan, and the Facilities Master Plan adopted in April 2003. The 2003 Infrastructure Financing Plan calls for a combination of funding sources, including the City’s Capital Facilities Fees (CFF) program and a Mello-Roos Community Facilities District (CFD).

FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• During the year ended June 30, 2024, the District’s net position increased by $478,000. • Total District revenues were $1,392,322 and expenses were $914,322.

Funds Basis:
• Capital Projects Fund revenues of $36,175 were $35,117 greater than the prior year due to increased facilities special tax collections. The Capital Projects Fund ending fund balance increased by $36,175, with an ending fund balance of $213,686. • Special Revenue Fund revenues of $1,352,437 were $93,337 greater than the prior year due to increased maintenance special tax collections and interest and investment earnings. Its expenditures amounting to $914,322 were $160,236 more than the prior year due to increases in professional services and utilities expenditures. The Special Revenue Fund balance increased by $438,115 to an ending fund balance of $2,222,012. #14..
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Community Facilities District
Number 1996-1 Village One
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.

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

Governmental activities - All the District’s basic services are 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.
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Community Facilities District
Number 1996-1 Village One
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 $2,898,238 were offset by liabilities of $68,751 and deferred inflows of resources of $379,523. The District’s net position from governmental activities increased to $2,449,964 in 2024 from $1,971,964 in 2023. All the District’s net position is restricted as follows: $213,686 for the acquisition of infrastructure and $2,236,278 for maintaining that infrastructure.
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 The following summarizes the Statement of Net Position as of June 30, 2024 and 2023:

Statement of Net Position – Governmental Activities
Description 2024
2023
(as restated) Change
Assets:

Cash and investments $2,459,802 $2,004,501 $455,301
Assessments receivable 26,342 25,733 609
Interest receivable 8,239 4,941 3,298
Lease receivable, current 10,663 9,888 775
Lease receivable, noncurrent 393,192 403,855 (10,663)
Total assets 2,898,238 2,448,918 449,320
Liabilities and deferred inflows of
resources:

Current and other liabilities 68,751 80,134 (11,383)
Deferred inflows of resources - leases 379,523 396,820 (17,297) Net position:

Restricted for:

Capital projects 213,686 177,511 36,175
District maintenance 2,236,278 1,794,453 441,825
Total net position $2,449,964 $1,971,964 $478,000
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 revenues came primarily from special facilities and maintenance taxes of $1,284,846. District expenses of $914,322 were for professional services and utilities.

The following summarizes the Statement of Activities for the years ended June 30, 2024 and 2023, and the respective changes:

Statement of Activities – Governmental Activities
Description 2024
2023
(as restated) Change
Revenues:

General revenues:

Facilities special tax $27,765 $- $27,765
Maintenance special tax 1,257,081 1,219,315 37,766
Investment earnings 84,029 12,948 71,081
Interest revenue - leases 6,139 11,306 (5,167)
Lease revenue 17,308 17,668 (360)
Total revenues 1,392,322 1,261,237 131,085
Expenses:

Community development 914,322 754,086 160,236
Change in net position 478,000 507,151 $(29,151)
Net position, beginning of year 1,971,964 1,464,813
Net position, end of year $2,449,964 $1,971,964
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- 820 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 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 purposes are 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. #14..
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 The following summarizes the Balance Sheets and the Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund as of and for the years ended June 30, 2024 and 2023, and their respective changes:

Balance Sheets – Capital Projects Fund
Description 2024 2023 Change
Assets:

Cash and investments $212,946 $177,040 $35,906
Interest receivable 740 471 269
Total assets $213,686 $177,511 36,175
Fund Balances:

Restricted for:

Capital projects 213,686 177,511 36,175
Total fund balances $213,686 $177,511 $36,175
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Balance Sheets – Special Revenue Fund
Description 2024
2023
(as restated) Change
Assets:

Cash and investments $2,246,856 $1,827,461 $419,395
Assessments receivable 26,342 25,733 609
Interest receivable 7,499 4,470 3,029
Lease receivable 403,855 413,743 (9,888)
Total assets $2,684,552 $2,271,407 $413,145
Liabilities:

Accounts payable $68,751 $80,134 $(11,383)
Total liabilities 68,751 80,134 (11,383)
Deferred inflows of resources:

Unavailable revenues 14,266 10,556 3,710
Leases 379,523 396,820 (17,297)
Total deferred inflows of resources 393,789 407,376 (13,587) Fund balances:

Restricted for:

District maintenance 2,222,012 1,783,897 438,115
Total fund balances 2,222,012 1,783,897 438,115
Total liabilities, deferred inflows of
resources and fund balances $2,684,552 $2,271,407 $413,145 #14..
- 823 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 Statements of Revenues, Expenditures, and Changes in Fund Balances – Capital Projects Fund
Description 2024 2023 Change
Revenues $36,175 $1,058 $35,117
Expenditures - - -
Changes in fund balances 36,175 1,058 $35,117
Fund balances, beginning of year 177,511 176,453
Fund balances, end of year $213,686 $177,511
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
2023
Description 2024 (as restated) Change
Revenues $1,352,437 $1,259,100 $93,337
Expenditures (914,322) (754,086) (160,236)
Changes in fund balances 438,115 505,014 $(66,899)
Fund balances, beginning of year 1,783,897 1,278,883
Fund balances, end of year $2,222,012 $1,783,897
THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental funds reported combined fund balances of $2,435,698, which was a $474,290 increase from fiscal year 2023. The Capital Projects Fund realized a $36,175 increase in 2024, while the Special Revenue Fund realized a $438,115 increase due to revenues being more than the expenditures. #14..
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
16 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.

LEASES
Under GASB Statement No. 87, Leases, the District is required to record all leases that meet the definition of a lease as defined in GASB Statement No. 87. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. Accordingly, the District recognized a lease receivable of $403,855 and a deferred inflow of resources of $379,523 in both the District’s fund and government-wide financial statements as of June 30, 2024.

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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17 Community Facilities District
Number 1996-1 Village One
City of Modesto, California

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

The Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and 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 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. #14..
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See notes to basic financial statements.
18 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $2,459,802
Assessments receivable 26,342
Interest receivable 8,239
Lease receivable, current 10,663
Lease receivable, noncurrent 393,192
Total Assets 2,898,238

LIABILITIES
Accounts payable 68,751
Total Liabilities 68,751

DEFERRED INFLOWS OF RESOURCES
Leases 379,523
Total Deferred Inflows of Resources 379,523

NET POSITION
Restricted for:

Capital projects 213,686
District maintenance 2,236,278
Total Net Position $2,449,964
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See notes to basic financial statements.
19 Community Facilities District
Number 1996-1 Village One
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 $914,322 $- $(914,322)
$914,322 - $(914,322)
General Revenues:

Facilities special taxes 27,765
Maintenance special taxes 1,257,081
Investment earnings 84,029
Interest revenue - leases 6,139
Lease revenue 17,308
Total General Revenues 1,392,322
Change in Net Position 478,000
Net Position, Beginning of Year, as restated (Note 7) 1,971,964 Net Position, End of Year $2,449,964
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20 Community Facilities District
Number 1996-1 Village One
City of Modesto, California

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

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #14..
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See notes to basic financial statements.
21 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $212,946 $2,246,856 $2,459,802
Assessments receivable - 26,342 26,342
Interest receivable 740 7,499 8,239
Lease receivable - 403,855 403,855
Total Assets $213,686 $2,684,552 $2,898,238

LIABILITIES
Accounts payable $- $68,751 $68,751
Total Liabilities - 68,751 68,751

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 14,266 14,266
Leases - 379,523 379,523
Total Deferred Inflows of Resources - 393,789 393,789

FUND BALANCES
Restricted for:

District maintenance - 2,222,012 2,222,012
Capital projects 213,686 - 213,686
Total Fund Balances 213,686 2,222,012 2,435,698
Total Liabilities, Deferred Inflows of
Resources and Fund Balances $213,686 $2,684,552 $2,898,238 #14..
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See notes to basic financial statements.
22 Community Facilities District
Number 1996-1 Village One
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 $2,435,698
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. 14,266
Total Net Position - Governmental Activities $2,449,964 #14..
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See notes to basic financial statements.
23 Community Facilities District
Number 1996-1 Village One
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
Facilities special taxes $ 27,765 $- $27,765
Maintenance special taxes - 1,253,371 1,253,371
Interest income 4,482 43,115 47,597
Change in fair value of investments 3,928 32,504 36,432 Interest revenue - leases - 6,139 6,139
Lease revenue - 17,308 17,308
Total Revenues 36,175 1,352,437 1,388,612

EXPENDITURES
Community development:

Services – professional and other - 707,282 707,282
Utilities - 207,040 207,040
Total Expenditures - 914,322 914,322
Changes in Fund Balances 36,175 438,115 474,290
Fund Balances, Beginning of Year, as
restated (Note 7) 177,511 1,783,897 1,961,408
Fund Balances, End of Year $213,686 $2,222,012 $2,435,698 #14..
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See notes to basic financial statements.
24 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities
Year ended June 30, 2024
Changes in Fund Balances - Governmental Funds $474,290
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. 3,710 Change in Net Position - Governmental Activities $478,000 #14..
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See notes to basic financial statements.
25 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in
Fund Balances – Special Revenue Fund – Budget and Actual Year Ended June 30, 2024
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special taxes $1,200,000 $1,234,000 $1,253,371 $19,371 Interest income - - 43,115 43,115
Change in fair value of investments - - 32,504 32,504
Interest revenue - leases - - 6,139 6,139
Lease revenue - - 17,308 17,308
Total Revenues 1,200,000 1,234,000 1,352,437 118,437

EXPENDITURES
Community development:

Services – professional and other 602,229 636,229 707,282 (71,053) Utilities 293,150 293,150 207,040 86,110
Total Expenditures 895,379 929,379 914,322 15,057
Changes in Fund Balance $304,621 $304,621 438,115 $133,494 Fund Balance, Beginning of Year, as
restated (Note 7) 1,783,897
Fund Balance, End of Year $2,222,012
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26 Community Facilities District
Number 1996-1 Village One
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 1996-1 Village One (the District) was formed in October 1996 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 Plan. The District is the vehicle used to ensure that all landowners in the Specific Plan area contribute to the cost of public improvements. The District encompasses approximately 1,840 gross acres of land. The District is located in the North Eastern portion of the City of Modesto, California (the City), bordered by Sylvan Avenue to the North, Claus Road to the East, Briggsmore to the South, and Oakdale Road to the West. The District is expected to yield 6,186 residential dwelling units at buildout, in addition to 15 acres of commercial property and 220 acres of industrial property.

The District is an integral part of the City and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City.

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.
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items which are not properly included among program revenues, are reported instead as general revenues.

Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

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. #14..
- 836 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Substantially, all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrued 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.

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that is applicable to a future reporting period. #14..
- 838 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources (Continued)
In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that is applicable to a future reporting period. Deferred inflows of resources reported by the District consist of unearned deferred assessments that have been billed as of year-end, but not yet collected, and the initial recording of the lease receivable.

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 any 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 $2,435,698 in restricted resources as of June 30, 2024. • 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 any committed resources as of June 30, 2024. #14..
- 839 -
Community Facilities District
Number 1996-1 Village One
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)
• 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 any 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 any unassigned resources as of June 30, 2024.

Assigned fund balance is established by the District through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.
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- 840 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
32 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 the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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- 841 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 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. #14..
- 842 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
34 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.

Cash and investments in the City Pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The District does not have any deposits with financial institutions as of June 30, 2024.

Cash and investments as of June 30, 2024 are classified in the accompanying financial statement as follows:

Statement of Net Position – Governmental Activities
Cash and investments $2,459,802
Total cash and investments $2,459,802
Deposits with the City
Cash and investment pool $2,459,802
Total cash and investments $2,459,802
Detailed information regarding 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.
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- 843 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
35 NOTE 3 LEASE RECEIVABLE
On December 16, 2021, the District, lessor, and New Cingular Wireless PSC, LLC, lessee, entered into a land lease agreement to install, operate, and maintain a communication facility and other improvements. The initial term lease will be for five years and will automatically renew for four additional five-year terms. The lessee will pay the District a base rent of $1,600 with an increase of 3% each year on the anniversary of the rent commencement date, including throughout the extension terms. Upon execution of the agreement, a one-time fee of $10,000 was paid in full by the lessee for the Camera Fee to enable the District to purchase and install a live-feed security camera. Lease revenue recognized under the lease agreement was $9,970 for the year ended June 30, 2024. Interest revenue recognized under the lease agreement was $3,729 for the year ended June 30, 2024.

On July 8, 2014, the District, lessor, and Sacramento-Valley Limited Partnership d/b/a Verizon Wireless, lessee, entered into a land lease agreement in which the lessee is granted the right and option to lease the premises, including a right-of-way for access. The initial term of the lease will be for five years with a total annual rent of $14,000 to be paid by the lessee in equal monthly installments on the first day of the month. The lease will be automatically extended for five additional five-year terms. Annual rent for each additional five-year term will increase 10% at the beginning of each five-year term. Lease revenue recognized under the lease agreement was $7,327 for the year ended June 30, 2024. Interest revenue recognized under the lease agreement was $2,410 for the year ended June 30, 2024.
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- 844 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
36 NOTE 3 LEASE RECEIVABLE (CONTINUED)
Future minimum lease and interest payments to be received are as follows:

Year Ending June 30 Principal Interest Total
2025 $10,663 $5,986 $16,648
2026 11,454 5,819 17,274
2027 11,911 5,644 17,555
2028 12,379 5,463 17,842
2029 12,865 5,274 18,139
2030-2034 75,851 23,145 98,996
2035-2039 95,407 16,753 112,160
2040-2044 118,390 8,772 127,162
2045-2047 54,935 1,196 56,131
$403,855 $78,052 $481,907
NOTE 4 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:

Restricted for Capital Projects - the portion of fund balance legally restricted for the acquisition, construction, and formation/annexation activities
Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District. #14..
- 845 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
37 NOTE 5 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that it 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 were delinquent at June 30th 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 1st following the end of the fiscal year.

At June 30, 2024, the District had 64 parcels that were delinquent for a total of $14,266, three of which were delinquent for more than three consecutive payments.

The District received 99.69% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2024. The delinquencies total of $3,687 at June 30, 2024 is included in assessments receivable on the Statement of Net Position and Balance Sheet.

NOTE 6 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2024 was as follows:

Expenditures Amount
Special Revenue Fund:

Services – professional and other $(71,053)
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- 846 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
38 NOTE 7 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 $22,115 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 $1,949,849 $22,115 $1,971,964
Total primary government $1,949,849 $22,115 $1,971,964
Governmental funds
Major funds’ fund balances:

Capital projects fund $177,511 $- $177,511
Special revenue fund 1,761,782 22,115 1,783,897
Total governmental funds $1,939,293 $22,115 $1,961,408
NOTE 8 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 1996-1 Village One (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.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
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40 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 District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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41 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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- 850 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #14..
- 851 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
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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- 852 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
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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- 853 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Table of Contents
PAGES
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 17
Statement of Activities – Governmental Activities 18
Balance Sheet – Governmental Funds 20
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 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 Governmental Activities Statement of Activities 23
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 24
Notes to Basic Financial Statements 25
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 #14..
- 854 -
1 Independent Auditor’s Report
The Honorable Members of the City Council
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 2016-1 Kiernan Business Park East #2 (the District), a component unit of the City of Modesto, California, 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. #14..
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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.

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.

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.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-15 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 District’s internal control over financial reporting and compliance.

Glendale, California
November 8, 2024
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- 859 -
6 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
The City of Modesto Community Facilities District Number 2016-1 Kiernan Business Park East #2 (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.

BACKGROUND AND MANAGEMENT’S DISCUSSION
The Kiernan Business Park Specific Plan Area encompasses approximately 614 acres and is comprised of regional commercial, office, medical campus, mixed-use, and medium highdensity residential and business park land uses. Within this specific plan area, there are three distinct sub-areas: Kiernan Business Park West, Kiernan Business Park South and Kiernan Business Park East #2 (KBP East).
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- 860 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION (CONTINUED)
KBP East covers approximately 160 acres and is bound by Kiernan Avenue to the North, Pelandale Avenue to the South, Dale Road to the West, and American Avenue to the East.

On January 26, 2016, the City formed the City of Modesto Community Facilities District No. 2016-1 (CFD No. 2016-1). The authorized services to be funded by special tax revenues include repair and replacement of parkways, landscaped medians, storm drainage pump and basin facilities, catch basins, manholes, underground infiltration trenches and pipes, landscaped bioswale lots and medians, stormwater treatment devices and filters, shrubs, vines, ground cover, and irrigation systems. The services to be provided include but are not limited to, litter and debris removal, pruning, staking, fertilizing, mowing, plant replacement and restoration, fire and weed control, erosion control, trimming of vegetation, and storm drain system and bioswale maintenance.

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 was $945,008. • Total District’s revenues were $195,714 and expenses were $47,784. • At June 30, 2024, total assets were $949,477 while total liabilities were $4,469. #14..
- 861 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
8 FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS (CONTINUED)
Funds Basis:
• Capital Projects Fund revenues of $14,452 were $12,516 higher than in the prior year due to an increase in the fair value of investments for fiscal year 2024 and expenditures of $0 were the same as the previous year. The Capital Projects Fund ending fund balance was $335,345.
• Special Revenue Fund revenues increased from $169,623 in the prior year to $178,069 for fiscal year 2024 and expenditures increased from $42,559 in the prior year to $47,784 for fiscal year 2024. The increase in revenue is due to an increase in the maintenance special taxes and an increase in the fair value of investments, and the increase in expenditures is due primarily to an increase in community development expenditures. The Special Revenue Fund ending fund balance was $601,840.

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. #14..
- 862 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
9 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
The Statement of Net Position and the Statement of Activities present information about the following:

As of June 30, 2024, total assets of $949,477 were offset by liabilities of $4,469. The District’s net position from governmental activities increased to $945,008 in 2024 from $797,078 (as restated) in 2023. The District’s net position has restrictions as follows: $335,345 for the acquisition or construction of infrastructure and $609,663 for District maintenance. #14..
- 863 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
10 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) 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 $933,900 $788,968 $144,932
Assessments receivable 12,471 12,033 438
Interest receivable 3,106 1,974 1,132
Total assets 949,477 802,975 146,502
Liabilities:

Current and other liabilities 4,469 5,897 (1,428)
Net position:

Restricted for:

Capital projects 335,345 320,893 14,452
District maintenance 609,663 476,185 133,478
Total net position $945,008 $797,078 $147,930
FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 revenues of $195,714 came primarily from maintenance special taxes, which amounted to $159,998 along with investment earnings of $35,716. District expenses of $47,784 were primarily for professional services and utilities expenses.

The following summarizes the Statements of Activities for the years ended June 30, 2024 and 2023, and the respective changes:
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- 864 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
11 FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES (CONTINUED) Statements of Activities – Governmental Activities
2023
Description 2024 (as restated) Change
Revenues:

General revenues:

Maintenance special taxes $159,998 $155,347 $4,651
Investment earnings 35,716 4,515 31,201
Total revenues 195,714 159,862 35,852
Expenses:

Community development 47,784 42,559 5,225
Change in net position 147,930 117,303 $30,627
Net position, beginning of year 797,078 679,775
Net position, end of year $945,008 $797,078
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 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.
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- 865 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
12 FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES (CONTINUED) Fund Financial Statements (Continued)
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 it measures only current financial resources and uses.

The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2024 and 2023, and the respective changes:

Balance Sheets – Capital Projects Fund
Description 2024 2023 Change
Assets:

Cash and investments $334,182 $320,039 $14,143
Interest receivable 1,163 854 309
Total assets $335,345 $320,893 $14,452
Fund balances:

Restricted for:

Capital projects $335,345 $320,893 $14,452
Total fund balances $335,345 $320,893 $14,452
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
13 Balance Sheets – Special Revenue Fund
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $599,718 $468,929 $130,789
Assessments receivable 12,471 12,033 438
Interest receivable 1,943 1,120 823
Total assets $614,132 $482,082 $132,050
Liabilities:

Accounts payable $4,469 $5,897 $(1,428)
Total liabilities 4,469 5,897 (1,428)
Deferred inflows of resources:

Unavailable revenues 7,823 4,630 3,193
Total deferred inflows of resources 7,823 4,630 3,193
Fund balances:

Restricted for:

District maintenance 601,840 471,555 130,285
Total fund balances 601,840 471,555 130,285
Total liabilities, deferred inflows of
resources and fund balances $614,132 $482,082 $132,050
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
14 Statements of Revenues, Expenditures, and Changes in Fund Balances – Capital Projects Fund
Description 2024 2023 Change
Revenues $14,452 $1,936 $12,516
Expenditures - - -
Changes in fund balance 14,452 1,936 $12,516
Fund balance, beginning of year 320,893 318,957
Fund balance, end of year $335,345 $320,893
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
2023
Description 2024 (as restated) Change
Revenues $178,069 $169,623 $8,446
Expenditures 47,784 42,559 5,225
Changes in fund balance 130,285 127,064 $3,221
Fund balance, beginning of year 471,555 344,491
Fund balance, end of year $601,840 $471,555
THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental funds reported combined fund balances of $937,185, an increase of $144,737 compared with last year. This increase was primarily due to increased maintenance special taxes revenues and higher investment earnings. #14..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2024
15 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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16 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting 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 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. #14..
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See notes to basic financial statements.
17 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $933,900
Assessments receivable 12,471
Interest receivable 3,106
Total Assets 949,477

LIABILITIES
Accounts payable 4,469
Total Liabilities 4,469

NET POSITION
Restricted for:

Capital projects 335,345
District maintenance 609,663
Total Net Position $945,008
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See notes to basic financial statements.
18 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
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 $47,784 $- $(47,784)
$47,784 $- (47,784)
General Revenues:

Maintenance special taxes 159,998
Investment earnings 35,716
Total General Revenues 195,714
Change in Net Position 147,930
Net Position, Beginning of Year,
as restated (Note 5) 797,078
Net Position, End of Year $945,008
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19 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California

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

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #14..
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See notes to basic financial statements.
20 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $334,182 $599,718 $933,900
Assessments receivable - 12,471 12,471
Interest receivable 1,163 1,943 3,106
Total Assets $335,345 $614,132 $949,477

LIABILITIES
Accounts payable $- $4,469 $4,469
Total Liabilities - 4,469 4,469

DEFERRED INFLOW OF RESOURCES
Unavailable revenues - 7,823 7,823
Total Deferred Inflow of Resources - 7,823 7,823

FUND BALANCES
Restricted for:

Capital projects 335,345 - 335,345
District maintenance - 601,840 601,840
Total Fund Balances 335,345 601,840 937,185
Total Liabilities, Deferred Inflow of
Resources and Fund Balances $335,345 $614,132 $949,477
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See notes to basic financial statements.
21 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
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 $937,185
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. 7,823
Total Net Position - Governmental Activities $945,008
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See notes to basic financial statements.
22 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
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 taxes $- $156,805 $156,805
Interest income 7,402 11,571 18,973
Change in fair value of investments 7,050 9,693 16,743
Total Revenues 14,452 178,069 192,521

EXPENDITURES
Community development:

Services – professional and other - 46,773 46,773
Utilities - 1,011 1,011
Total Expenditures - 47,784 47,784
Changes in Fund Balances 14,452 130,285 144,737
Fund Balances, Beginning of Year,
as restated (Note 5) 320,893 471,555 792,448
Fund Balances, End of Year $335,345 $601,840 $937,185
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See notes to basic financial statements.
23 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities Year ended June 30, 2024
Changes in Fund Balances - Governmental Funds $144,737
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. 3,193 Changes in Net Position - Governmental Activities $147,930 #14..
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See notes to basic financial statements.
24 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
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 taxes $145,000 $145,000 $156,805 $11,805 Interest income - - 11,571 11,571
Change in fair value of investments - - 9,693 9,693
Total Revenues 145,000 145,000 178,069 33,069

EXPENDITURES
Community development:

Services - professional and other 54,330 54,330 46,773 7,557 Utilities 2,000 2,000 1,011 989
Total Expenditures 56,330 56,330 47,784 8,546
Changes in Fund Balance $88,670 $88,670 130,285 $41,615 Fund Balance, Beginning of Year, as
restated (Note 5) 471,555
Fund Balance, End of Year $601,840
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25 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
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 2016-1 Kiernan Business Park East #2 (the District) was formed in January 2016 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 covers approximately 160 acres and is bound by Kiernan Avenue to the North, Pelandale Avenue to the South, Dale Road to the West, and American Avenue to the East.

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.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items which are not properly included among program revenues, are reported instead as general revenues.

Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

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.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) 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.

In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that is applicable to a future reporting period. #14..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources (Continued)
In addition to liabilities, the Statements of Net Position and Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that is applicable to a future reporting period.

Deferred inflows reported by the District consist of unearned deferred assessments that have been billed as of year-end, but not yet collected.

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 any nonspendable resources as of June 30, 2024.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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 $937,185 in restricted resources as of June 30, 2024.
• 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 any 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 any 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 any 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.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The 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.

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 the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that 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 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
31 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.

Cash in the City Pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The District does not have any deposits with financial institutions as of June 30, 2024.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
32 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
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 $933,900
Total cash and investments $933,900
Deposits with the City
Cash and investment pool $933,900
Total cash and investments $933,900
Detailed information regarding 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.

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

Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District. #14..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that will initiate foreclosures proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 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 4 parcels that were delinquent for a total of $7,823, none of which was delinquent for more than three consecutive payments.

The District received 98.88% of the Special Revenue Fund and maintenance special taxes levied during the year ended June 30, 2024. The delinquencies total of $1,520 at June 30, 2024 is included in assessments receivable on the Statement of Net Position and Balance Sheet.

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 $20,092 for the fiscal year ended June 30, 2023.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
34 NOTE 5 CORRECTIONS OF ERRORS IN PREVIOUSLY ISSUED FINANCIAL

STATEMENTS (CONTINUED)
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 $776,986 $20,092 $797,078
Total primary government $776,986 $20,092 $797,078
Governmental funds
Major funds’ fund balances:

Capital projects fund $320,893 $- $320,893
Special revenue fund 451,463 20,092 471,555
Total governmental funds $772,356 $20,092 $792,448
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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35 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 2016-1 Kiernan Business Park East #2 (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.

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
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37 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 #14..
- 892 -
Community Facilities District
Number 2007-1 North Beyer Park #2
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 2007-1 North Beyer Park #2
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 2007-1 North Beyer Park #2
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 18
Statement of Activities – Governmental Activities 19
Balance Sheet – Governmental Funds 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 Governmental Activities Statement of Activities 23
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 24
Notes to Basic Financial Statements 25
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 36 #14..
- 895 -
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 2007-1 North Beyer Park #2 (the District), a component unit of the City of Modesto, California, 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. #14..
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2 Basis for Opinions
We conducted our audits 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.

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.

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.
• 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.
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4 • 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.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-16 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 District’s internal control over financial reporting and compliance.

Glendale, California
November 8, 2024
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6 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 2007-1 (North Beyer Park #2) (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 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 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
The North Beyer Specific Plan Area encompasses approximately 160 gross acres of land and is comprised of a variety of residential, commercial, and office land uses. On June 24, 1997, Community Facilities District Number 1997-1 (North Beyer Park) (“CFD 1997-1”) was formed and the levy of special taxes was authorized. At this time, approximately 124+/-acres of residential property, representing 464 residential units or lots have already been developed and 15 +/-commercial acres and 26+/-residential acres remain to be developed. CFD 1997-1 was previously formed to fund and maintain the construction and maintenance of the street and landscape medians on Coffee and Oakdale Roads between Claratina and Mable Avenues.

On May 8, 2007, the City formed the City of Modesto Community Facilities District Number 2007-1 (CFD No. 2007-1). The authorized services to be funded by special tax revenues include maintenance and repair of parks, landscaped medians, storm drainage basins, and related facilities, including but not limited to, concrete curbs and walks, trees, shrubs, vines, ground cover, turf, lights and irrigation systems. The services to be provided include, but are not limited to, litter and debris removal, graffiti abatement, painting repairs to landscape structures, building maintenance and repairs, pruning, staking, fertilizing, plant replacement and restoration, fire and weed control, erosion control, mowing of lawns, trimming of vegetation, and maintenance, repair and replacement of lighting systems within the parks.

The facilities authorized to be funded by special tax revenues include the installation of the landscaped medians on Oakdale and Coffee Roads, which may but will not necessarily include, concrete curbs and walks, trees, shrubs, ground cover, lights, and irrigation systems. #14..
- 902 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 FISCAL YEAR 2024 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• At June 30, 2024, the District’s net position was $710,695. • For the year ended June 30, 2024, total revenues were $139,365 and total expenses were $85,482.

Funds Basis:
• Capital Projects Fund revenues of $22,669 were $19,637 higher than in the prior year due to an increase in the fair value of investments for fiscal year 2024 and expenditures of $0 were the same as the previous year.
• Special Revenue Fund revenues increased from $106,396 in the prior year to $117,564 for fiscal year 2024 and expenditures increased from $80,103 in the prior year to $85,482 for fiscal year 2024. The increase in revenues is due to an increase in the maintenance special tax, and the increase in expenditures is due primarily to an increase in community development expenditures.

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. #14..
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
9 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
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 and the Statement of Activities present information about the following:

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.
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) As of June 30, 2024, total assets of $719,864 were offset by liabilities of $9,169. The District’s net position from governmental activities increased to $710,695 in 2024 from $656,812 in 2023.

The District’s net position has restrictions as follows: $525,986 for the acquisition or construction of infrastructure and $184,709 for District 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
Asset:

Cash and investments $716,912 $665,199 $51,713
Assessments receivable 503 2,305 (1,802)
Interest receivable 2,449 1,743 706
Total assets 719,864 669,247 50,617
Liabilities:

Current and other liabilities 9,169 12,435 (3,266)
Net position:

Restricted for:

Capital projects 525,986 503,317 22,669
District maintenance 184,709 153,495 31,214
Total net position $710,695 $656,812 $53,883
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 FISCAL YEAR 2023 GOVERNMENTAL ACTIVITIES (CONTINUED) The District’s fiscal year 2024 revenues of $139,365 came primarily from maintenance special tax, which amounted to $110,368 along with investment earnings of $28,997. District expenses of $85,482 were primarily for professional services and utilities expenses.

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 $110,368 $105,596 $4,772
Investment earnings 28,997 3,956 25,041
Total revenues 139,365 109,552 29,813
Expenses:

Community development 85,482 80,103 5,379
Changes in net position 53,883 29,449 $24,434
Net position, beginning of year 656,812 627,363
Net position, end of year $710,695 $656,812
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 FISCAL YEAR 2023 GOVERNMENTAL ACTIVITIES (CONTINUED) 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 following summarizes the Balance Sheets and 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 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 Balance Sheets - Capital Projects Fund
Description 2024 2023 Change
Assets:

Cash and investments $524,162 $ 501,978 $22,184
Interest receivable 1,824 1,139 685
Total assets $525,986 $503,117 $22,869
Fund balances:

Restricted for:

Capital projects $525,986 $503,317 $22,669
Total Fund Balances $525,986 $503,317 $22,669
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Balance Sheets – Special Revenue Fund
2023
Description 2024 as restated Change
Assets:

Cash and investments $192,750 $163,221 $29,529
Assessments receivable 503 2,305 (1,802)
Interest receivable 625 404 221
Total assets $193,878 $165,930 $27,948
Liabilities:

Accounts payable $9,169 $12,435 $(3,266)
Total liabilities 9,169 12,435 (3,266)
Deferred inflows of resources:

Unavailable revenues - 868 (868)
Total deferred inflows of resources - 868 (868)
Fund balances:

Restricted for:

District maintenance 184,709 152,627 32,082
Total fund balances 184,709 152,627 32,082
Total liabilities, deferred inflows of
resources and fund balances $193,878 $165,930 $27,948
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 Statements of Revenues, Expenditures, and Changes in Fund Balances – Capital Projects Fund
Description 2024 2023 Change
Revenues $22,669 $3,032 $19,637
Expenditures - - -
Changes in fund balance 22,669 3,032 $19,637
Fund balance, beginning of year 503,317 500,285
Fund balance, end of year $525,986 $503,317
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
2023
Description 2024 as restated Change
Revenues $117,564 $106,396 $11,168
Expenditures 85,482 80,103 5,379
Changes in fund balance 32,082 26,293 $5,789
Fund balance, beginning of year 152,627 126,334
Fund balance, end of year $184,709 $152,627
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
16 THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental funds reported combined fund balances of $710,695, an increase of $54,751 compared with last year. This increase was primarily due to higher maintenance special tax revenues and investment earnings recognized during the year.

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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17 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California

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. #14..
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See notes to basic financial statements.
18 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $716,912
Assessments receivable 503
Interest receivable 2,449
Total Assets 719,864

LIABILITIES
Accounts payable 9,169
Total Liabilities 9,169

NET POSITION
Restricted for:

Capital projects 525,986
District maintenance 184,709
Total Net Position $710,695
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See notes to basic financial statements.
19 Community Facilities District
Number 2007-1 North Beyer Park #2
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 $85,482 $- $(85,482)
$85,482 $- (85,482)
General Revenues:

Maintenance special tax 110,368
Investment earnings 28,997
Total General Revenues 139,365
Changes in net position 53,883
Net Position, Beginning of Year, as
restated (Note 5) 656,812
Net Position, End of Year $710,695
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20 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California

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

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #14..
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See notes to basic financial statements.
21 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $524,162 $192,750 $716,912
Assessments receivable - 503 503
Interest receivable 1,824 625 2,449
Total Assets $525,986 $193,878 $719,864

LIABILITIES
Accounts payable $- $9,169 $9,169
Total Liabilities - 9,169 9,169

FUND BALANCES
Restricted for:

Capital projects 525,986 - 525,986
District maintenance - 184,709 184,709
Total Fund Balances 525,986 184,709 710,695
Total Liabilities and Fund Balances $525,986 $193,878 $719,864 There are no differences between the Governmental Funds Balance Sheet and the Governmental Activities Statement of Net Position as of June 30, 2024. #14..
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See notes to basic financial statements.
22 Community Facilities District
Number 2007-1 North Beyer Park #2
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 $- $111,236 $111,236
Interest income 11,610 3,571 15,181
Change in fair value of
investments 11,059 2,757 13,816
Total Revenues 22,669 117,564 140,233

EXPENDITURES
Services – professional and other - 72,605 72,605
Utilities - 12,877 12,877
Total Expenditures - 85,482 85,482
Changes in Fund Balances 22,669 32,082 54,751
Fund Balances, Beginning of Year, as
restated (Note 5) 503,317 152,627 655,944
Fund Balances, End of Year $525,986 $184,709 $710,695
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See notes to basic financial statements.
23 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities Year Ended June 30, 2024
Changes in Fund Balances - Governmental Funds $54,751
Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues not available for current-period expenditures are deferred in the governmental fund but are considered earned in the Statement of Activities. (868)
Change in Net Position - Governmental Activities $53,883 #14..
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See notes to basic financial statements.
24 Community Facilities District
Number 2007-1 North Beyer Park #2
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 $110,000 $110,000 $111,236 $1,236 Interest income - - 3,571 3,571
Change in fair value of investments - - 2,757 2,757
Total Revenues 110,000 110,000 117,564 7,564

EXPENDITURES
Community development:

Services - professional and other 82,697 82,697 72,605 10,092 Utilities 22,500 22,500 12,877 9,623
Total Expenditures 105,197 105,197 85,482 19,715
Changes in fund balance $4,803 $4,803 32,082 $27,279
Fund Balance, Beginning of Year, as
restated (Note 5) 152,627
Fund Balance, End of Year $184,709
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25 Community Facilities District
Number 2007-1 North Beyer Park #2
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 2007-1 North Beyer Park #2 (the District) was formed in May 2007 by a vote of the property owners within the proposed District. The District, a separate legal entity, was formed to provide a funding mechanism for public facilities and services as required by the District Specific Plan. The District is a 160-acre project, the boundaries of which are recorded in Book 2, page 80 of the Book of Assessment District Maps in the Stanislaus County Recorder’s Office.

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.
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

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.
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) 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.

A cost-of-living adjustment is applied to the special taxes annually. #14..
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.

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

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

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 any nonspendable resources as of June 30, 2024.
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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 $710,695 in restricted resources as of June 30, 2024.
• 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 any 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 any 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 any unassigned resources as of June 30, 2024.
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- 924 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through 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.

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

In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the fund equity section on the Statement of Net Position was combined to report total net position and present it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. #14..
- 925 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

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

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.
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- 926 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
32 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.

Cash 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 $716,912
Total cash and investments $716,912
Deposits with the City
Cash and investment pool $716,912
Total cash and investments $716,912
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- 927 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Detailed information regarding 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.

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

Restricted for District Maintenance - the portion of fund balance legally restricted for 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 imitated by September 1 following the end of the fiscal year. #14..
- 928 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
34 NOTE 4 DELINQUENCIES AND FORECLOSURES (CONTINUED)
At June 30, 2024, there were no delinquent parcels in the District. The District received 100% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2024.

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 $1,209 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 $655,603 $1,209 $656,812
Total primary government $655,603 $1,209 $656,812
Governmental funds
Major funds’ fund balances:

Capital projects fund $503,317 $- $503,317
Special revenue fund 151,41 1,209 152,627
Total governmental funds $654,735 $1,209 $655,944
#14..
- 929 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
35 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.
#14..
- 930 -
36 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2007-1 North Beyer Park #2 (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.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
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37 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
- 932 -
38 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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
#14..
- 933 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #14..
- 934 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
- 935 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
- 936 -
Community Facilities District
Number 2016-2 The Vintage
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 17
Statement of Activities – Governmental Activities 18
Balance Sheet – Governmental Fund 20
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 21
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to the 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 34 #14..
- 937 -
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 2016-2 The Vintage (the District), a component unit of the City of Modesto, California, 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 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. #14..
- 938 -
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.

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.
#14..
- 939 -
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.

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.
• 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.
#14..
- 940 -
4 • 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.

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.
#14..
- 941 -
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
#14..
- 942 -
6 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 2016-2 The Vintage (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.

BACKGROUND AND MANAGEMENT’S DISCUSSION
On January 26, 2016, the City Council approved the Vintage Specific Plan which set forth a plan of development for approximately 45 acres that were, at that time, located west of Dale Road and north of Vintage Faire Mall.
#14..
- 943 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 The Vintage Specific Plan is intended to provide for the development of 170 single-family residential lots, 6.05 acres of multi-family residential development, and approximately 10 acres for commercial development that will assist in implementing the City’s long-range objectives to enhance its local economy, generate jobs for residents, and create a better jobs-housing balance.

The District was formed by the City Council in January 2016 to generate funding for the construction of certain roadway improvements and the ongoing maintenance of landscaped medians, a bike path, well site, storm drainage pump and basin, and related facilities.

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 was $432,614. • Total District revenues were $181,828 and expenses were $55,362.

Funds Basis:
• Special Revenue Fund revenues increased from $157,503 in the prior year to $182,627 for fiscal year 2024 and expenditures increased from $50,343 in the prior year to $55,362 for fiscal year 2024. The increase in revenues is attributed to an increase in maintenance special taxes and the increase in expenditures is attributed to an increase in activities in community development. The Special Revenue Fund balance increased by $127,265 to an ending balance of $432,614.
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- 944 -
Community Facilities District
Number 2016-2 The Vintage
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.

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

Governmental activities - All 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.
#14..
- 945 -
Community Facilities District
Number 2016-2 The Vintage
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 $438,547 were offset by liabilities of $5,933. The District’s net position from governmental activities increased to $432,614 in 2024 from $306,148 (as restated) in 2023. This increase was due to higher maintenance special taxes revenue and an increase in the fair value of investments. The District’s net position has restrictions as follows: $432,614 for District maintenance.
#14..
- 946 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 The following summarizes the Statements of Net Position as of June 30, 2024 and 2023:

Statements of Net Position – Governmental Activities
Description 2024
2023
(as restated) Change
Assets:

Cash and investments $436,640 $312,162 $124,478
Interest receivable 1,429 768 661
Taxes receivable 478 1,240 (762)
Total assets 438,547 314,170 124,377
Liabilities:

Current and other liabilities 5,933 8,022 (2,089)
Net position:

Restricted for:

District maintenance 432,614 306,148 126,466
Total net position $432,614 $306,148 $126,466
FISCAL YEAR 2024 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2024 revenue came primarily from annual maintenance special taxes of $167,217 and investment earnings of $14,611. District expenses of $55,362 were primarily for community development.
#14..
- 947 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 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 taxes $167,217 $155,378 $11,839
Investment earnings 14,611 2,193 12,418
Total revenues 181,828 157,571 24,257
Expenses:

Community development 55,362 50,343 5,019
Change in net position 126,466 107,228 $19,238
Net position, beginning of year 306,148 198,920
Net position, end of year $432,614 $306,148
#14..
- 948 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 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 fund. The fund financial statements measure only current revenues and expenditures and fund balance; they exclude capital assets, long-term debt, and other long-term amounts.

The fund financial statements provide detailed information about the District’s 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. The District’s one fund is presented here as a major fund; its purpose is explained in Note 1 to the financial statements. The District’s Special Revenue Fund is a governmental fund; financial statements for this fund are prepared on the modified accrual basis of accounting, which means it measures only current financial resources and uses.

The following summarizes the Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance for the Special Revenue Fund as of and for the years ended June 30, 2024 and 2023, and the respective changes:
#14..
- 949 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 Balance Sheet – Special Revenue Fund
2023
Description 2024 (as restated) Change
Assets:

Cash and investments $436,640 $312,162 $124,478
Interest receivable 1,429 768 661
Taxes receivable 478 1,240 (762)
Total assets $438,547 $314,170 $124,377
Liabilities:

Accounts payable $5,933 $8,022 $(2,089)
Total liabilities 5,933 8,022 (2,089)
Deferred inflows of resources:

Unavailable revenues - 799 (799)
Total deferred inflows of resources - 799 (799)
Fund balance:

Restricted for:

District maintenance 432,614 305,349 127,265
Total fund balance 432,614 305,349 127,265
Total liabilities, deferred inflows of
resources, and fund balance $438,547 $314,170 $124,377
#14..
- 950 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Statement of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
2023
Description 2024 (as restated) Change
Revenues $182,627 $157,503 $25,124
Expenditures 55,362 50,343 5,019
Changes in fund balances 127,265 107,160 $20,105
Fund balances, beginning of year 305,349 198,189
Fund balances, end of year $432,614 $305,349
THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental fund reported a fund balance of $432,614, an increase of $127,265 from last year. This increase was primarily due to increased maintenance special taxes revenues and increase in investment earnings.

Therefore, the District reports no long-term capital assets. #14..
- 951 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 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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- 952 -
16 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting 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 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. #14..
- 953 -
See notes to basic financial statements.
17 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $436,640
Interest receivable 1,429
Taxes receivable 478
Total Assets 438,547

LIABILITIES
Accounts payable $5,933
Total Liabilities 5,933

NET POSITION
Restricted for:

District maintenance 432,614
Total Net Position $432,614
#14..
- 954 -
See notes to basic financial statements.
18 Community Facilities District
Number 2016-2 The Vintage
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 $55,362 $- $55,362
$55,362 $- ($55,362)
General Revenues:

Maintenance special taxes 167,217
Investment earnings 14,611
Total General Revenues 181,828
Change in Net Position 126,466
Net Position, Beginning of Year,
as restated (Note 5) 306,148
Net Position, End of Year $432,614
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- 955 -
19 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California

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

The District determined its fund to be a major fund. That is:

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #14..
- 956 -
See notes to basic financial statements.
20 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Balance Sheet – Governmental Fund
June 30, 2024
Special
Revenue Fund
ASSETS
Cash and investments $436,640
Interest receivable 1,429
Taxes receivable 478
Total Assets $438,547

LIABILITIES
Accounts payable $5,933
Total Liabilities 5,933

FUND BALANCE
Restricted for:

District maintenance 432,614
Total Fund Balance 432,614
Total Liabilities and Fund Balance $438,547
There are no differences between the Governmental Fund Balance Sheet and the Governmental Activities Statement of Net Position as of June 30, 2024. #14..
- 957 -
See notes to basic financial statements.
21 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Governmental Fund
Year Ended June 30, 2024
Special
Revenue Fund

REVENUES
Maintenance special taxes $168,016
Interest income 8,185
Change in fair value of investments 6,426
Total Revenues 182,627

EXPENDITURES
Community development:

Services – professional and other 54,395
Utilities 967
Total Expenditures 55,362
Change in Fund Balance 127,265
Fund Balance, Beginning of Year, as restated (Note 5) 305,349 Fund Balance, End of Year $432,614
#14..
- 958 -
See notes to basic financial statements.
22 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to the Governmental Activities Statement of Activities Year Ended June 30, 2024
Changes in Fund Balance - Governmental Fund $127,265
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 fund. (799) Change in Net Position - Governmental Activities $126,466 #14..
- 959 -
See notes to basic financial statements.
23 Community Facilities District
Number 2016-2 The Vintage
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 taxes $147,000 $147,000 $168,016 $21,016 Interest income - - 8,185 8,185
Change in fair value of investments - - 6,426 6,426
Total Revenues 147,000 147,000 182,627 35,627

EXPENDITURES
Community development:

Services - professional and other 67,968 67,968 54,395 13,573 Utilities 3,500 3,500 967 2,533
Total Expenditures 71,468 71,468 55,362 16,106
Changes in Fund Balance $75,532 $75,532 127,265 $51,733 Fund Balance, Beginning of Year, as
restated (Note 5) 305,349
Fund Balance, End of Year $432,614
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- 960 -
24 Community Facilities District
Number 2016-2 The Vintage
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 2016-2 The Vintage (the District) was formed in January 2016 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 45-acre project, west of Dale Road and north of Vintage Faire Mall.

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.
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- 961 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
25 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

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.
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- 962 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental fund:

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District.

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period. #14..
- 963 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources (Continued)
In addition to liabilities, the Statements of Net Position will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that applies to a future reporting period. Deferred inflows reported by the District consist of deferred assessments that have been billed as of year-end but have not yet been collected.

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 any nonspendable resources as of June 30, 2024.
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- 964 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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 $432,614 in restricted resources as of June 30, 2024.
• 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 any 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 any 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 any unassigned resources as of June 30, 2024.
#14..
- 965 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through 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.

Net Position
Net position represents the residual interest in the District’s assets and deferred outflows of resources after liabilities and deferred inflows 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 the acquisition, construction, or improvement of those assets. • Restricted - Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. #14..
- 966 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• Unrestricted - Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

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

Modesto City CouncilFebruary 25, 2025

Modesto City Council
February 25, 2025