Agenda packet — Modesto City Council, February 25, 2025 (part 4 of 6)

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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Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
31 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 are considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The District does not have any deposits with financial institutions as of June 30, 2024.

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

Statement of Net Position – Governmental Activities
Cash and investments $436,640
Total cash and investments $436,640
Deposits with the City
Cash and investment pool $436,640
Total cash and investments $436,640
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 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
32 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 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 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 no delinquent parcels. The District received 100% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2024. #14..
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Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 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 $2,243 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 $303,905 $2,243 $306,148
Total primary government $303,905 $2,243 $306,148
Governmental funds
Major fund’s fund balance:

Special revenue fund $303,106 $2,243 $305,349
Total governmental funds $303,106 $2,243 $305,349
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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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 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 2016-2 The Vintage (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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35 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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36 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 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 2021-1 Woodglen
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 2021-1 Woodglen
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 2021-1 Woodglen
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
Reconciliation of Governmental Funds Balance Sheet to Governmental Activities Statement of Net Position 21
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 22
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to 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..
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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 2021-1 Woodglen (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.

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.
• 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 6-15 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 2021-1 Woodglen
City of Modesto, California
Management's Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
The City of Modesto Community Facilities District Number 2021-1 (Woodglen) (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

Please read this overview in conjunction with your reading of the accompanying basic financial statements.

THE PURPOSE OF THE DISTRICT
The District is a blended component unit of the City of Modesto, California (the City). It is controlled by the City, and the City Council is the District’s governing body. City employees perform most of the duties and functions required of the District, but certain tasks are provided by third parties under contract.

The District’s purpose under California law is to encompass maintenance for landscaped lots, tree pruning, masonry wall maintenance, neighborhood park maintenance, storm drain basin maintenance, and other services including but not limited to litter and debris removal, pruning, staking, fertilizing, plant replacement and restoration, fire and weed control, erosion control, trimming of vegetation, and storm drain system maintenance. Additional information on the District can be found below and in Note 1 to the accompanying financial statements. #14..
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Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
In July 2013, the City Council approved the Woodglen Specific Plan Area that set forth a plan to facilitate 367 single-family residential lots, two open space/storm basin lots, one park lot, and ten landscape lots. Resolution No. 2021-196 was adopted by the City Council on June 1, 2021, stating its intention to establish Community Facilities District No. 2021-1 (Woodglen) and to authorize the levy of a special tax within Woodglen to provide a funding source for maintenance of landscaped lots, tree pruning, masonry wall maintenance, neighborhood park maintenance, storm drain basin maintenance and other services. On July 6, 2021, the City Council through Resolution No. 2021-268 formally declared its formation.

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 $453,739. • Total District revenues were $264,124 and expenses were $82,841.

Funds Basis:
• Capital Projects Fund revenues decreased from $107,547 in the prior year to $46,239 for fiscal year 2024 and expenditures of $0 had no change from the prior year. The decrease in revenues is attributed to the decrease in facilities special taxes as fewer properties had to pay one-time facilities special tax. The Capital Projects Fund balance increased by $46,239 to an ending fund balance of $243,737.
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Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 • Special Revenue Fund revenues of $217,864 were $123,633 more than the prior year primarily due to an increase in maintenance special taxes. Expenditures of $82,841 were $61,032 more than the prior year due to an increase in service expenditures. The Special Revenue Fund balance increased by $135,023 to an ending fund balance of $209,469.

THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.

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

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

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

Governmental activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector. #14..
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Community Facilities District
Number 2021-1 Woodglen
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 amounted to $462,396 offset by total liabilities of $8,657. The District’s net position from governmental activities increased to $453,739 in 2024 from $272,456 in 2023. The District’s net position has restrictions as follows: $243,737 for acquisition or construction and $210,002 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 $458,013 $270,727 $187,286
Assessments receivable 2,888 1,078 1,810
Interest receivable 1,495 651 844
Total assets 462,396 272,456 189,940
Liabilities:

Current and other liabilities 8,657 − 8,657
Net position:

Restricted for:

Capital projects 243,737 197,498 46,239
District maintenance 210,002 74,958 135,044
Total net position $453,739 $272,456 $181,283
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Community Facilities District
Number 2021-1 Woodglen
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 $205,571 and facilities special taxes of $35,672. District expenses of $82,841 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:

Program revenues:

Charges for services $7,699 $- $7,699
General revenues:

Facilities special taxes 35,672 $105,561 (69,889)
Maintenance special taxes 205,571 94,258 111,313
Interest income 8,588 3,184 5,404
Investment earnings (loss) 6,594 (713) 7,307
Total revenues 264,124 202,290 61,834
Expenses:

Community development 82,841 21,809 61,032
Change in net position 181,283 180,481 $802
Net position, beginning of year 272,456 91,975
Net position, end of year $453,739 $272,456
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Community Facilities District
Number 2021-1 Woodglen
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 two funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other longterm amounts.

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

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

Presented on the succeeding pages are the condensed Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2024, and 2023, and the respective changes:
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Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 Balance Sheets – Capital Projects Fund
Description 2024 2023 Change
Assets:

Cash and investments $242,892 $196,999 $45,893
Interest receivable 845 499 346
Total assets $243,737 $197,498 $46,239
Fund Balances:

Restricted for:

Capital projects $243,737 $197,498 $46,239
Total fund balances $243,737 $197,498 $46,239
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Community Facilities District
Number 2021-1 Woodglen
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 $215,121 $73,728 $141,393
Assessments receivable 2,888 1,078 1,810
Interest receivable 650 152 498
Total assets $218,659 $74,958 143,701
Liabilities:

Accounts payable $8,657 $- $8,657
Total liabilities 8,657 - 8,657
Deferred inflow of resources
Unavailable revenues 533 512 21
Total deferred inflow of resources 533 512 21
Fund Balances:

Restricted for:

District maintenance 209,469 74,446 135,023
Total fund balances 209,469 74,446 135,023
Total liabilities, deferred inflow of
resources and fund balances $218,659 $74,958 $143,701
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Community Facilities District
Number 2021-1 Woodglen
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 $46,239 $107,547 $(61,308)
Expenditures - − −
Changes in fund balance 46,239 107,547 $(61,308)
Fund balance, beginning of year 197,498 89,951
Fund balance, end of year $243,737 $197,498
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
Description 2024 2023 Change
Revenues $217,864 $94,231 $123,633
Expenditures 82,841 21,809 61,032
Changes in fund balance 135,023 72,422 $62,601
Fund balance, beginning of year 74,446 2,024
Fund balance, end of year $209,469 $74,446
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Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2024, the District’s governmental funds reported a combined fund balance of $453,206, an increase of $181,262 compared to fiscal year 2023. The Capital Projects Fund realized a $46,239 increase, while the Special Revenue Fund realized a $135,023 increase.

The increase in the fund balances of both funds is primarily due to the collection of special taxes.

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 2021-1 Woodglen
City of Modesto, California

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

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

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

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that 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 2021-1 Woodglen
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2024
ASSETS
Cash and investments $458,013
Assessments receivable 2,888
Interest receivable 1,495
Total Assets 462,396

LIABILITIES
Accounts payable 8,657
Total Liabilities 8,657

NET POSITION
Restricted for:

Capital projects 243,737
District maintenance 210,002
Total Net Position $453,739
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See notes to basic financial statements.
18 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2024
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Charges for
services
Governmental
Activities
Community development $82,841 $7,699 $(75,142)
$82,841 $7,699 (75,142)
General Revenues:

Facilities special taxes 35,672
Maintenance special taxes 205,571
Interest income 8,588
Investment earnings 6,594
Total General Revenues 256,425
Change in Net Position 181,283
Net Position, Beginning of Year 272,456
Net Position, End of Year $453,739
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19 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California

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

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways, storm drainage basin facilities, tree pruning, etc. within the District. #14..
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See notes to basic financial statements.
20 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2024
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $242,892 $215,121 $458,013
Assessments receivable - 2,888 2,888
Interest receivable 845 650 1,495
Total Assets $243,737 $218,659 $462,396

LIABILITIES
Accounts payable $- $8,657 $8,657
Total Liabilities - 8,657 8,657

DEFERRED INFLOW OF RESOURCES
Unavailable revenues - 533 533
Total Deferred Inflow of Resources - 533 533

FUND BALANCES
Restricted for:

Capital projects 243,737 - 243,737
District maintenance - 209,469 209,469
Total Fund Balances 243,737 209,469 453,206
Total Liabilities, Deferred Inflow of
Resources and Fund Balances $243,737 $218,659 $462,396
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- 997 -
See notes to basic financial statements.
21 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Reconciliation of Governmental Funds Balance Sheet to
Governmental Activities Statement of Net Position
June 30, 2024
Total Fund Balances - Governmental Funds $453,206
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. 533
Total Net Position - Governmental Activities $453,739
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- 998 -
See notes to basic financial statements.
22 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2024
Capital
Projects Fund
Special
Revenue Fund Total

REVENUES
Facilities special taxes $35,672 $- $35,672
Maintenance special taxes - 205,550 205,550
Charges for services - 7,699 7,699
Interest income 5,449 3,139 8,588
Change in fair value of investments 5,118 1,476 6,594
Total Revenues 46,239 217,864 264,103

EXPENDITURES
Community development:

Services – professional and other - 76,627 76,627
Utilities - 6,214 6,214
Total Expenditures - 82,841 82,841
Changes in Fund Balances 46,239 135,023 181,262
Fund Balances, Beginning of Year 197,498 74,446 271,944 Fund Balances, End of Year $243,737 $209,469 $453,206
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- 999 -
See notes to basic financial statements.
23 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to Governmental Activities Statement of Activities Year Ended June 30, 2024
Changes in Fund Balances - Governmental Funds $181,262
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. 21 Changes in Net Position - Governmental Activities $181,283 #14..
- 1000 -
See notes to basic financial statements.
24 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual
Year Ended June 30, 2024
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special taxes $70,000 $75,000 $205,550 $130,550 Charges for services - - 7,699 7,699
Interest income - - 3,139 3,139
Change in fair value of
investments - - 1,476 1,476
Total Revenues 70,000 75,000 217,864 142,864

EXPENDITURES
Community development
Services - professional and
other 60,100 74,100 76,627 (2,527)
Utilities 8,000 9,000 6,214 2,786
Total Expenditures 68,100 83,100 82,841 259
Changes in Fund Balance $1,900 $(8,100) 135,023 $143,123 Fund Balance, Beginning of Year 74,446
Fund Balance, End of Year $209,469
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25 Community Facilities District
Number 2021-1 Woodglen
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 2021-1 Woodglen (the District) was formed in July 2021 by a vote of members of the City Council. The District, a separate legal entity, was formed to provide maintenance for landscaped lots, tree pruning, masonry wall maintenance, neighborhood park maintenance, storm drain basin maintenance and other services. The District encompasses property totaling approximately 41.257 acres which will also be subject to levy and collection of special taxes.

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

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

The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items which are not properly included among program revenues, are reported instead as general revenues.
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Community Facilities District
Number 2021-1 Woodglen
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.

Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting.

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

The District reports the following major governmental funds:

The Capital Projects Fund accounts for all financial resources and uses related to acquisition, construction, and formation/annexation activities.
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Community Facilities District
Number 2021-1 Woodglen
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 Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District.

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

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

A cost-of-living adjustment is applied to the special taxes annually. #14..
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Community Facilities District
Number 2021-1 Woodglen
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 $453,206 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 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 2021-1 Woodglen
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 adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the District through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

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

Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.

In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period. #14..
- 1006 -
Community Facilities District
Number 2021-1 Woodglen
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 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.

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 total net position and present it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to those assets' acquisition, construction, or improvement. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that do not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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- 1007 -
Community Facilities District
Number 2021-1 Woodglen
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 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 District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.
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Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
32 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
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.

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 $458,013
Total cash and investments $458,013
Deposits with the City
Cash and investment pool $458,013
Total cash and investments $458,013
Detailed information regarding the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s Annual Comprehensive Financial Report. As of June 30, 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.
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- 1009 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
33 NOTE 3 RESTRICTED FUND BALANCES (CONTINUED)
Restrictions of Fund Balances (Continued)
Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District.

NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that will initiate 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 1 delinquent parcel for a total of $533. The District received 100% of the maintenance special taxes levied during the year ended June 30, 2024. The delinquencies total of $533 at June 30, 2024 is included in assessments receivable on the Statement of Net Position and Balance Sheet.
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- 1010 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2024
34 NOTE 5 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 $(2,527)
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 2021-1 Woodglen (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 entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 8, 2024
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- 1014 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #14..
- 1015 -
City of Modesto, California
Abandoned Vehicle Abatement Program
Annual Financial Report
For the Year Ended June 30, 2024
with Independent Auditor’s Report
#14..
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City of Modesto, California
Abandoned Vehicle Abatement Program
Annual Financial Report
For the Year Ended June 30, 2024
with Independent Auditor’s Report
#14..
- 1017 -
Abandoned Vehicle Abatement Program
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Financial Statements
Statement of Revenues and Costs 5
Notes to Financial Statement 6
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards and the AVA Program Handbook 8
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1 Independent Auditor’s Report
Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statement
Opinion
We have audited the statement of revenues and costs of the City of Modesto, California, (the City) Abandoned Vehicle Abatement Program (the Program), for the year ended June 30, 2024, and the related notes to the financial statement.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the revenues and costs of the Program for the year ended June 30, 2024, in accordance with the cash basis of accounting described in Note 1.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and certain provisions of the Abandoned Vehicle Abatement (AVA) Program Handbook, issued by the California Highway Patrol. Our responsibilities under those standards are further described in the Auditor's responsibilities for the Audit of the Financial Statement section of our report.
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2 We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter – Basis of Accounting
As discussed in Note 2, the financial statement is prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. The Program is intended to present the statement of revenues and costs of the Program. It does not purport to, and does not, present fairly the financial position of the City as of June 30, 2024, the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters.

Responsibilities of Management for the Financial Statement Management is responsible for the preparation and fair presentation of this financial statement in accordance with the cash basis of accounting described in Note 2, and for determining that the cash basis of accounting is an acceptable basis for the preparation of the financial statement in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a financial statement that is free from material misstatement, whether due to fraud or error.
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3 Auditor's Responsibilities for the Audit of the Financial Statement Our objectives are to obtain reasonable assurance about whether the financial statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and certain provisions of the AVA Program Handbook will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statement.

In performing an audit in accordance with GAAS, Government Auditing Standards, and certain provisions of the AVA Program Handbook, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statement, whether due to fraud or error, and design and perform audit procedures responsive to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. 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 statement.

Other Reporting Required by Government Auditing Standards and AVA Program Handbook
In accordance with Government Auditing Standards and certain provisions of the AVA Program Handbook, we have also issued our report dated November 8, 2024, on our consideration of the City’s internal control over the Program’s 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 the Program’s financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over the Program’s financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and certain provisions of the AVA Program Handbook in considering the City’s internal control over the Program’s financial reporting and compliance.

Glendale, California
November 8, 2024
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See notes to financial statement
5 City of Modesto, California
Abandoned Vehicle Abatement Program
Statement of Revenues and Costs
Year Ended June 30, 2024
Revenues received
Registration fees $183,857
Costs disbursed
Personnel 129,855
Services and supplies 33,237
Total Costs Disbursed 163,092
Excess of revenues received over costs disbursed 20,765 Surplus, Beginning of Year 644,653
Surplus, End of Year $665,418
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6 City of Modesto, California
Abandoned Vehicle Abatement Program
Notes to Financial Statement
Year ended June 30, 2024
NOTE 1 GENERAL PROGRAM DESCRIPTION
The Abandoned Vehicle Abatement Program (the Program) is a statewide program administered by the California Highway Patrol (CHP). The City of Modesto, California (the City) administers and operates the local vehicle abatement program pursuant to Section 22710 of the Vehicle Code, Modesto Municipal City Code Section 3-2.1002 et seq., and the Stanislaus Council of Governments (StanCOG) Abandoned Vehicle Program and Plan. Section 9250.7 of the Vehicle Code establishes the funding source for the abatement of abandoned vehicles by a county-based Service Authority (the Authority), pursuant to the provisions of Section 22710 of the Vehicle Code. The Vehicle Code imposes a service fee of one dollar ($1) on vehicles registered to an owner with an address in the County of Stanislaus that established the Authority. This fee is paid to the Department of Motor Vehicles (DMV) at the time of registration or renewal of registration. The DMV, after deducting its administrative costs, at least quarterly transmits the net amount collected to the State Controller’s Office (SCO) for deposit in the Abandoned Vehicle Trust Fund. All money in the fund is continuously appropriated to the SCO for allocation to an Authority that has an approved Program pursuant to Section 22710 of the Vehicle Code, and for payment of the administrative costs of the SCO. StanCOG, the Authority established pursuant to Section 22710 of the Vehicle Code, distributes Program funds to participating entities based on the allocations determined in the Vehicle Abatement Services Agreement. The receipts and costs of the Program are included in the General Fund of the City’s basic financial statements. The financial statement presents the Statement of Revenues and Costs of the Program. It does not purport to, and does not present fairly the financial position of the City of Modesto, California as of June 30, 2024, the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). #14..
- 1024 -
City of Modesto, California
Abandoned Vehicle Abatement Program
Notes to Financial Statement
Year ended June 30, 2024
7 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation
The financial statement is prepared on the method of accounting prescribed by the CHP and the Abandoned Vehicle Abatement (AVA) Program Handbook. The financial statement presents the information requested by the CHP and, therefore, does not purport to reflect the results of operations in accordance with U.S. GAAP.

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

NOTE 3 SUBSEQUENT EVENTS
The City has evaluated events or transactions subsequent to June 30, 2024, to assess the need for potential recognition or disclosure in the financial statement. Such events were evaluated through November 8, 2024, the date the financial statement was available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statement.
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8 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards and the AVA Program Handbook
Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and certain provisions of the Abandoned Vehicle Abatement (AVA) Program Handbook, issued by the California Highway Patrol, the statement of revenues and costs of the City of Modesto, California, (the City), Abandoned Vehicle Abatement Program (the Program) for the year ended June 30, 2024, and the related notes to the financial statement, 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 statement, we considered the City’s internal control over the Program’s financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the Program’s financial statement, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
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9 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Program’s financial statement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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 Program’s financial statement is free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the Program’s financial statement. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the AVA Program Handbook.
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10 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the AVA Program Handbook in considering the City’s internal control and compliance. 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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Modesto-Ceres Fire Protection Agency
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
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Modesto-Ceres Fire Protection Agency
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
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Modesto-Ceres Fire Protection Agency
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 6
Statement of Activities 7
Fund Financial Statements:

Balance Sheet – Governmental Fund 8
Reconciliation of the Governmental Fund Balance Sheet to the Statement of Net Position 9
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 10
Reconciliation of the Governmental Funds Statement of Revenues Expenditures and the Changes in Fund Balances to the Statement of Activities 11 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual – General Fund 12
Notes to Basic Financial Statements 14
Other Information
Schedule of Officers 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 24 #14..
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1 Independent Auditor’s Report
Board of Directors
Modesto-Ceres Fire Protection Agency
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and major fund of the Modesto-Ceres Fire Protection Agency (the Agency) as of and for the year ended June 30, 2024, the budgetary comparison statement for the general fund for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the Agency’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and major fund of the Agency, as of June 30, 2024, and the respective changes in financial position and the budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #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 Agency and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Agency’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Agency’s internal control. Accordingly, no such opinion is expressed.
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4 • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Agency’s ability to continue as a going concern for a reasonable period of time.

Other Information
Management is responsible for the other information included in the annual financial report.

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2024, on our consideration of the Agency’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Agency’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Agency’s internal control over financial reporting and compliance.

Glendale, California
November 8, 2024
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See notes to basic financial statements.
6 Modesto-Ceres Fire Protection Agency
Statement of Net Position
June 30, 2024
Governmental
Activities
ASSETS
Cash and investments $223,263
Interest receivable 1,928
Taxes receivable 123,366
Total Assets 348,557

LIABILITIES
Accounts payable 319,194
Total Liabilities 319,194

NET POSITION
Unrestricted 29,363
Total Net Position $29,363
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See notes to basic financial statements.
7 Modesto-Ceres Fire Protection Agency
Statement of Activities
Year Ended June 30, 2024
Program
Revenues
Net
(Expenses)
Revenues and
Changes in
Net Position
Functions/Programs Expenses
Charges for
Services
Governmental
Activities
Governmental Activities:

Fire and ambulance services $729,778 $- $(729,778)
Total Governmental Activities $729,778 $- (729,778)
General Revenues
Taxes 750,482
Interest 6,942
Investment earnings 558
Total General Revenues 757,982
Changes in Net Position 28,204
Net Position, Beginning of Year 1,159
Net Position, End of Year $29,363
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See notes to basic financial statements.
8 Modesto-Ceres Fire Protection Agency
Balance Sheet – Governmental Fund
Year Ended June 30, 2024
General Fund
ASSETS
Cash and investments $223,263
Interest receivable 1,928
Taxes receivable 123,366
Total Assets $348,557

LIABILITIES, DEFERRED INFLOWS OF RESOURCES

AND FUND BALANCE
Liabilities
Accounts payable $319,194
Total Liabilities 319,194
Deferred Inflows of Resources
Unavailable revenues 28,204
Total Deferred Inflows of Resources 28,204
Fund Balance
Unassigned 1,159
Total Fund Balance 1,159
Total Liabilities, Deferred Inflows of Resources
and Fund Balance $348,557
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See notes to basic financial statements.
9 Modesto-Ceres Fire Protection Agency
Reconciliation of the Governmental Fund Balance Sheet to the Statement of Net Position
Year Ended June 30, 2024
Total Fund Balance - Governmental Fund $1,159
Amounts reported for governmental activities in the Statement of Net Position are different from those reported in the governmental fund because of the following:

Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the
Statement of Net Position.
28,204
Total Net Position - Governmental Activities $29,363
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See notes to basic financial statements.
10 Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes
in Fund Balance – Governmental Fund
Year Ended June 30, 2024
General Fund

REVENUES
Taxes $722,278
Interest 6,942
Change in fair value of investments 558
Total Revenues $729,778

EXPENDITURES
Professional services 5,000
Liability insurance 1,086
City of Modesto - administrative fee 2,885
Other 2,712
Total Expenditures 11,683
Excess of revenues over expenditures 718,095

OTHER FINANCING USES
Distributions to member agencies
City of Modesto (398,902)
City of Ceres (319,193)
Total Other Financing Uses (718,095)
Changes in Fund Balance -
Fund Balance, Beginning of Year 1,159
Fund Balance, End of Year $1,159
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See notes to basic financial statements.
11 Modesto-Ceres Fire Protection Agency
Reconciliation of the Governmental Funds Statement of Revenues Expenditures and the Changes in Fund Balances to the Statement of Activities Year Ended June 30, 2024
Net change in fund balances of the Governmental Funds $- Amounts reported for governmental activities in the Statement of Activities are different from those reported in the
governmental funds because of the following:

Revenues earned in the Statement of Activities in a previous year that did not provide current financial resources in that year were not reported as revenue in the governmental
funds until they provided current financial resources this year. 28,204
Changes in Net Position of Governmental Activities $28,204 #14..
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See notes to basic financial statements.
12 Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes
in Fund Balance – Budget to Actual – General Fund
Year Ended June 30, 2024
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Taxes $662,479 $720,368 $722,278 $1,910
Intergovernmental 13,500 13,500 - (13,500)
Interest 2,577 9,411 6,942 (2,469)
Change in fair value of investments - - 558 558
Total Revenues 678,556 743,279 729,778 (13,501)

EXPENDITURES
Professional services 6,000 6,000 5,000 1,000
Liability insurance 1,300 1,300 1,086 214
City of Modesto - administrative fee 4,500 4,500 2,885 1,615 Other 3,300 3,300 2,712 588
Total Expenditures 15,100 15,100 11,683 3,417
Excess of Revenues Over
Expenditures 663,456 728,179 718,095 (10,084)
(Continued)
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See notes to basic financial statements.
13 Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes
in Fund Balance – Budget to Actual – General Fund (Continued) Year Ended June 30, 2024
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

OTHER FINANCING USES
Distributions to Member Agencies
City of Modesto $(368,550) $(397,004) $(398,902) $(1,898) City of Ceres (294,906) (317,675) (319,193) (1,518)
Total Other Financing Uses (663,456) (714,679) (718,095) (3,416) Changes in Fund Balance $- $13,500 - $(13,500)
Fund Balance, Beginning of Year 1,159
Fund Balance, End of Year $1,159
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14 Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Modesto-Ceres Fire Protection Agency (the Agency) was formed on March 13, 2007 by a joint powers agreement made in accordance with Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (commencing with Section 6500) between the Industrial Fire District (the District), the City of Modesto, and the City of Ceres, for the cities to provide fire protection and administrative services within the District. The Agency operates under the Fire Protection District Law of 1987 and the Health and Safety Code, Sections 13801- 13999.

Funding for the Agency's operation comes from property tax revenues collected by the County of Stanislaus.

Reporting Entity
The Agency’s financial statements include the accounts of all Agency operations. The criteria for including organizations as component units within the Agency’s reporting entity, as set forth in Section 2100 of the Governmental Accounting Standards Board’s (GASB) Codification of Government Accounting and Financial Reporting Standards, include whether:
• The organization is legally separate (can sue and be sued in its own name). • The Agency holds the corporate powers of the organization. • The Agency appoints a voting majority of the organization’s board. • The Agency can impose its will on the organization.
• The organization has the potential to impose a financial benefit/burden on the Agency. • There is fiscal dependency by the organization on the Agency.

Based on the criteria, the Agency has no component units. #14..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
15 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the Agency’s activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are identifiable with a specific function or segment.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied.

Governmental Fund Financial Statements
Governmental fund financial statements (i.e., Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance) are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues susceptible to accrual are property taxes, interest on investments, and intergovernmental revenues.

Property taxes are recorded as revenues in the fiscal year in which they are levied, provided they are collected in the current period or within sixty days thereafter. A one-year availability period is used for all other revenues. Interest in invested funds is recognized when earned.

Intergovernmental revenues that are reimbursements for specific expenditures are recognized when all eligibility requirements are met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting; however, debt service expenditures are recorded only when payment is due.
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
16 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Fund Financial Statements (Continued)
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The Agency reports one major governmental fund:

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

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

Budget
The budget for the General Fund is prepared on a cash and expenditures/encumbrances basis.

Revenues are budgeted in the year receipt is expected; expenditures, which include encumbrances, are budgeted in the year that the applicable warrant requisitions are expected to be issued.
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
17 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Budget (Continued)
Annual budget requests are submitted by the Agency staff to the Agency’s Board of Directors (Agency Board) for review. After a public hearing, a budget is approved by the Agency Board, with a resolution adopting said budget. Copies of the approved budget are sent to all required agencies.

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

Proposition 4
The Proposition 4 Appropriations Limitation for the year ended June 30, 2024, was $1,487,183.

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

In accordance with GASB Statement No. 43, Accounting and Financial Reporting for Certain Investments and External Investment Pools, investments held by the City of Modesto are stated at fair value. The fair value of pooled investments is determined monthly and is based on current market prices received from the securities custodian. The balance available for withdrawal is based on the accounting records maintained by the City of Modesto. #14..
- 1049 -
Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
18 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property Tax
Secured property taxes are attached as an enforceable lien on real property as of the 1st day of January. Taxes are payable in two installments on November 1st and February 1st and become delinquent if not paid before December 10th and April 10th. Unsecured property taxes are billed in one installment, are due March 15th, and become delinquent if not paid on or before August 31st. The County of Stanislaus bills and collects all property taxes and remits to the Agency its share of the 1% property tax allocation.

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

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

Net Position
Net position represents the residual interest in the Agency’s assets 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 equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
19 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 net position that does not meet the definition of “net investment in capital assets” or “restricted” net position.

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

Fund Balance
In the fund financial statements, in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the Agency is bound to honor constraints on how specific amounts can be spent. • Nonspendable - Amounts that are not in spendable form (such as inventory) or are required to be maintained intact. The Agency did not have any nonspendable resources as of June 30, 2024.
• Restricted - Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. The Agency did not have any restricted resources as of June 30, 2024. #14..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
20 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed - Amounts constrained to specific purposes by the Agency itself, using its highest level of decision-making authority, the Agency Board. To be reported as committed, amounts cannot be used for any other purpose unless the Agency Board takes the same highest-level action to remove or change the constraint. The Agency did not have any committed resources as of June 30, 2024.
• Assigned - Amounts the Agency intends to use for a specific purpose. Intent can be expressed by the Agency or by an official or body to which the Agency Board delegates the authority. The Agency did not have any assigned resources as of June 30, 2024. • Unassigned - Amounts that are available for any purpose. The Agency reported $1,159 in unassigned resources as of June 30, 2024.

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

Governmental Accounting Standards Update
During the year ended June 30, 2024, the Agency implemented the following standard with no effect on the financial statements:

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..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
21 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 Agency are pooled with other City of Modesto funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the Agency’s investments as all cash is invested as part of the common cash and investment pool of the City of Modesto. Cash in the City pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The Agency does not have any deposits with financial institutions as of June 30, 2024. #14..
- 1053 -
Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2024
22 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:

Cash and investments $223,263
Total cash and investments $223,263
Summary of Deposits
Cash and investments as of June 30, 2024 consist of the following:

Deposits with City of Modesto:

Cash and investments pool $223,263
Total cash and investments $223,263
Detailed information regarding the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s Annual Comprehensive Financial Report. As of June 30, 2024, the fair value of the Agency’s position in the pool is the same as the value of its pool shares.

NOTE 3 SUBSEQUENT EVENTS
The Agency 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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OTHER INFORMATION
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23 Modesto-Ceres Fire Protection Agency
Schedule of Officers
June 30, 2024
President Doug Dunford - City of Ceres
City Manager
Secretary Juana Lynch – City of Modesto
Executive Assistant
Member Joseph P. Lopez - City of Modesto
City Manager
Member Kevin Wise – City of Modesto
Fire Chief
Member Christopher Perry – City of Ceres
Police Chief
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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
Board of Directors
Modesto-Ceres Fire Protection Agency
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and major fund of the Modesto-Ceres Fire Protection Agency (the Agency), as of and for the year ended June 30, 2024, the budgetary comparison statement for the general fund for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the Agency’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 Agency’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Agency’s internal control.
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25 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Agency’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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

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

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

Glendale, California
November 8, 2024
#14..
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #14..
- 1060 -
Tuolumne River Regional Park
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
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Tuolumne River Regional Park
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
- 1062 -
Tuolumne River Regional Park
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis 6
Basic Financial Statements
Government-Wide Financial Statements:

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

Balance Sheet – Governmental Funds 20
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 21
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 22
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and the Changes in Fund Balances to the
Statement of Activities 24
Notes to Financial Statements 25

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balances – General Fund – Budget and Actual 39
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Tuolumne River Regional Park
Table of Contents
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund – Budget and Actual 41
Note to the Required Supplementary Information 42
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 43 #14..
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1 Independent Auditor’s Report
The Tuolumne River Regional Park Commission,
The Board of Supervisors of the County of Stanislaus, California, and The Honorable Members of the City Councils of Modesto and Ceres, California Tuolumne River Regional Park
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the Tuolumne River Regional Park (the Park) as of and for the year ended June 30, 2024, and the related notes to the 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 each major fund of the Park, as of June 30, 2024, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
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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.

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.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Park’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
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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 Park’s ability to continue as a going concern for a reasonable period of time.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6 - 17 and budgetary comparison information on pages 39 - 42 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate 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 Tuolumne River Regional Park
Management’s Discussion and Analysis
Year Ended June 30, 2024
This section of the annual financial report presents a discussion and analysis of the financial performance of Tuolumne River Regional Park (the Park or TRRP) during the past fiscal year.

Please read it in conjunction with the Park’s financial statements, which follow this section.

FINANCIAL HIGHLIGHTS
The assets of the Park exceeded liabilities and deferred inflows of resources at the close of the 2024 fiscal year by $11,213,673 (net position). Of this amount, $8,581,609 is invested in capital assets, and $2,632,064 (unrestricted net position) may be used to meet ongoing obligations to citizens and creditors.
• Total net position increased by $960,289 from current year activity. • At June 30, 2024, the Park’s funds reported a combined fund balance of $2,377,962, a decrease of $(1,119,182) in comparison with the prior year. • At the end of the fiscal year, the General Fund had a fund balance of $132,357.

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

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

The Statement of Net Position presents information on all assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Park is improving or deteriorating. #14..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
7 The Statement of Activities presents information showing how net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash inflows or outflows in future fiscal periods.

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

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

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

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

Because the focus of governmental funds financial statements is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the longterm impact of the government’s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes #14..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
8 in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

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

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

Notes to Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found on pages 24 through 37 of this report.

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

Required supplementary information can be found on pages 38 through 41 of this report.

Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The net position of the Park was $11,213,673 at the close of fiscal year 2024, compared with $10,253,384 as of June 30, 2023.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
9 Statements of Net Position– Governmental Activities
Description 2024 2023
Assets:

Current and other assets $3,916,140 $4,938,772
Capital assets 8,581,609 6,630,342
Total assets 12,497,749 11,569,114
Liabilities:

Current and other liabilities 199,058 180,338
Total liabilities 199,058 180,338
Deferred inflows of resources:

Leases 1,085,018 1,135,392
Total deferred inflows of resources 1,085,018 1,135,392 Net position:

Net investment in capital assets 8,581,609 6,630,342
Unrestricted 2,632,064 3,623,042
Total net position $11,213,673 $10,253,384
The largest portion of net position, $8,581,609, is made up of the Park’s net investment in capital assets. The Park uses these assets to provide its parks and recreation services; consequently, they are not available for future spending.

Current and other assets decreased by $(1,022,632) or (-20.71%) primarily due to the one-time proceeds from insurance recoveries related to the fire at the American Legion Hall received in fiscal year 2023.

The remaining net position of $2,632,064 is unrestricted. This amount is the balance at yearend which may be used to meet the Park’s ongoing obligations.

The Park’s net position increased by $960,289 during the current fiscal year. #14..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
10 Statements of Activities – Governmental Activities
Description 2024 2023
Revenues:

Program revenues:

Charges for services $2,429 $6,648
Capital grants and contributions 818,765 235,203
Operating grants and contributions 583,900 625,183
General revenues:

Lease revenue 50,374 50,374
Interest income 7,245 -
Interest revenue - leases 17,565 20,166
Investment earnings 8,914 3,000
Other revenue 1,035,079 (520)
Transfers, net - 51,862
Insurance recoveries - 3,316,441
Total revenues 2,524,271 4,308,357
Expenses:

Parks and recreation 1,563,982 1,565,240
Total expenses 1,563,982 1,565,240
Change in net position 960,289 2,743,117
Net position, beginning of year 10,253,384 7,510,267
Net position, end of year $11,213,673 $10,253,384
The 2024 net position increased by $960,289 which is mainly attributable to the increase in funding received from the State of California and the City of Modesto. #14..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
11 FINANCIAL ANALYSIS OF PARK FUNDS
As noted earlier, the Park uses fund accounting to ensure and demonstrate compliance with budgetary decisions.

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

At June 30, 2024, the Park’s governmental funds reported a combined fund balance of $2,377,962, a decrease of $(1,119,182) in comparison with the prior year.

The General Fund is the chief operating fund of the Park. At June 30, 2024, the General Fund had a fund balance of $132,357, a decrease of $(56,094) from the prior year. This decrease can be attributed to the increase in contractual service expenditures incurred by the Park.

General, Special Revenue and Capital Projects funds revenues totaled $2,396,067 in fiscal year 2024, an increase of $1,548,819 or 182.81% from fiscal year 2023. The following table presents the revenues from various sources as well as increases or decreases from the prior year.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
12 Revenues Classified by Source
Governmental Funds
Revenues by Source
2024
Amount
2024
Percent
2023
Amount
2023
Percent
Change
(Amount)
Change
(Percent)
Rents $2,429 0.10% $6,648 0.78% $(4,219) (63.46%)
Contributions by
supporting
agencies 583,900 24.36% 625,183 73.78% (41,283) (6.60%) Intergovernmental 690,561 28.82% 142,397 16.80% 548,164 384.95% Lease revenue 50,374 2.10% 50,374 5.94% 0.00%
Interest income 7,245 0.30% - 0.00% 7,245 100.00%
Interest revenue -
leases 17,565 0.73% 20,166 2.38% (2,601) (12.90%)
Change in fair value
of investments 8,914 0.37% (520) (0.06%) 9,434 (1,814.23%) Other 1,035,079 43.22% 3,000 0.38% 1,032,079 (34,402.63%) $2,396,067 100.00% $847,248 100.00% $1,548,819 182.81%
The increase in revenues is mainly attributable to the increase in contributions of governmental and participating agencies.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
13 The following table presents expenditures by function compared to prior year amounts.

Expenditures by Function
Governmental Funds
Expenditures by
Function
2024
Amount
2024
Percent
2023
Amount
2023
Percent
Change
(Amount)
Change
(Percent)
Parks and
recreation $1,126,078 32.03% $1,106,686 90.78% $19,392 1.75% Capital outlay 2,389,171 67.97% 112,449 9.22% 2,276,722 (2,024.67%) $3,515,249 100.00% $1,219,135 100.00% $2,296,114 188.34% Current expenditures for operations showed an increase, primarily due to increased project expenses for the year. Parks and recreation expenses experienced an increase in expenses for the Park, primarily in tree maintenance and staff time to complete large cleanups of the Park due to the lack of use and/or misuse of the Park.

The current year changes in fund balances as compared to the prior year are presented in the following table:
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
14 Statements of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
Description
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
2024 Total
Governmental
Funds
2023 Total
Governmental
Funds
Revenues $678,952 $28,493 $1,688,622 $2,396,067 $847,248 Expenditures (735,046) (28,493) (2,751,710) (3,515,249) (1,219,135) Excess
(deficiency) of
revenues over
(under)
expenditures (56,094) - (1,063,088) (1,119,182) (371,887) Other financing
sources - - - - 3,558,753
Changes in fund
balances (56,094) - (1,063,088) (1,119,182) 3,186,866
Fund balances,
beginning of year 188,451 - 3,308,693 3,497,144 310,278 Fund balances,
end of year $132,357 $- $2,245,605 $2,377,962 $3,497,144 The fund balance of the Park’s General Fund decreased by $(56,094) during the fiscal year, compared to the final budget anticipated increase of $241,079. A key factor in this decrease was the lower revenue received for rent than anticipated. #14..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
15 GENERAL FUND BUDGETARY HIGHLIGHTS
Actual revenues were higher than final budgetary estimates by $32,055. This is mainly attributable to an increase in rental revenues. Actual expenditures were $190,772 lower than final budgetary estimates with a majority focused on the maintenance of the Park.

CAPITAL ASSETS
The Park’s net investment in capital assets as of June 30, 2024, amounted to $8,581,609 (net of accumulated depreciation). This investment in capital assets includes land, buildings and other improvements, and construction in progress. The investment in capital assets increased by $1,951,267, or 29.43% over the prior year. The major components of this change were:

Capital Asset Activities
Description Amount
Depreciation expense $(437,904)
Capital asset additions 2,389,171
Total $1,951,267
Additional information on the Park’s capital assets can be found in Note 4 on page 36 of this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
In June 2024, the TRRP Commission approved a budget for FY 2024/25 that included an approximate 4.5% increase in the contributions from Stanislaus County and the City of Modesto. This budget does not include a contribution from the City of Ceres.

Due to the July 2022 fire that heavily damaged the American Legion Hall, it was demolished in early 2023. This resulted in the FY 2023/24 budget forecasting significantly less revenue than in prior years. Due to the high cost of maintaining and operating the American Legion Hall, it #14..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
16 was determined that it would not be in the best interest of TRRP to rebuild the American Legion Hall at this time. There was a significant insurance payment of $3,132,570 that was deposited in the TRRP Capital Fund (6710) and will be used to improve/maintain many areas of the Park over the next few years.

During FY 2023-24 and continuing into FY 2024-25 the City of Modesto’s Parks, Recreation, and Neighborhoods Department has continued the process of updating the TRRP Master Plan, previously adopted by the member agencies in December of 2001. The TRRP Master Plan Update will be a critical project to plan for the fiscal and operational sustainability of the TRRP.

The TRRP Master Plan Update is anticipated to be completed by the end of FY 2024-25.

Staff and the Park Commission continue to seek funding from all appropriate grant sources.

During FY 2023-24 staff completed the Neece Drive Boat Launch facility. During FY 2024-25 staff anticipates that three major grant-funded projects will be completed, the Carpenter Road Area (Bellenita) Soccer Complex Phase 2 Project, the TRRP River Pavilion and Learning Theater Project, and the TRRP Area B Picnic Area. All three projects are critical to encouraging positive use of the park and are anticipated to bring in revenue in future fiscal years. No additional grant funding was received for TRRP in the past fiscal year but projects such as the TRRP Riverwalk Trail from Gateway to Neece, the TRRP Riverwalk Trail from Gateway to Legion, and Gateway to Dry Creek Trail Connector are in design and anticipated to complete construction in future years. Furthermore, security cameras had been purchased in FY 2023-

24. The cameras will be installed in the FY 2024-25.

In FY 2023-24, there was one property transaction that was completed: the sale of approximately 4 acres of TRRP property along Robertson Road to the Housing Authority for the development of affordable housing. This sale generated $469,300 of revenue that was deposited into the TRRP General Fund (6700) and is going to be used to help cover operating costs in TRRP.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2024
17 The three agencies that make up the Park’s JPA continue to work collaboratively to ensure that the vision for this urban river corridor becomes a reality and there are ongoing discussions to determine an appropriate level of contribution from the City of Ceres in the future. At this time, the City of Ceres has formally requested to vacate its interest in the Park’s JPA. Should the vacancy be finalized and accepted, it is anticipated that the City of Ceres will be granted their request to vacate by June 30, 2025.

REQUESTS FOR MORE INFORMATION
This financial report is designed to provide a general overview of the Park’s finances for those interested in its finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Modesto, Accounting Division, P.O. Box 642, Modesto, California 95353. #14..
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See notes to financial statements.
18 Tuolumne River Regional Park
Statement of Net Position
June 30, 2024
Governmental
Activities
ASSETS
Cash and investments $1,825,548
Interest receivable 587
Dues from other governments 936,430
Lease receivable 1,153,575
Capital assets
Nondepreciable 5,335,914
Depreciable, net 3,245,695
Total Assets 12,497,749

LIABILITIES
Accounts payable 199,058
Total Liabilities 199,058

DEFERRED INFLOWS OF RESOURCES
Leases 1,085,018
Total Deferred Inflows of Resources 1,085,018

NET POSITION
Net investment in capital assets 8,581,609
Unrestricted 2,632,064
Total Net Position $11,213,673
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See notes to financial statements.
19 Tuolumne River Regional Park
Statement of Activities
Year Ended June 30, 2024
Program
Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Functions/Programs Expenses
Charges
for
Services
Capital
Grants and
Contributions
Operating
Grants and
Contributions
Governmental
Activities
Governmental activities:

Parks and recreation $1,563,982 $2,429 $818,765 $583,900 $(158,888) Total Governmental
Activities $1,563,982 $2,429 $818,765 $583,900 (158,888) General Revenues
Lease revenue 50,374
Interest income 7,245
Interest revenue -
leases 17,565
Investment earnings 8,914
Other revenue 1,035,079
Changes in Net Position 960,289
Net position, Beginning
of Year 10,253,384
Net Position, end
of Year $11,213,673
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See notes to financial statements.
20 Tuolumne River Regional Park
Balance Sheet – Governmental Funds
June 30, 2024

DESCRIPTION
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Governmental
Funds
ASSETS
Cash and investments $134,614 $5,280 $1,685,654 $1,825,548 Interest receivable 587 - - 587
Due from other governments - - 936,430 936,430
Lease receivable 1,153,575 - - 1,153,575
Total Assets $1,288,776 $5,280 $2,622,084 $3,916,140

LIABILITIES
Accounts payable $70,972 $5,280 $122,806 $199,058
Total Liabilities 70,972 5,280 122,806 199,058

DEFERRED INFLOWS OF

RESOURCES
Unavailable revenues 429 - 253,673 254,102
Leases 1,085,018 - - 1,085,018
Total Deferred Inflows of Resources 1,085,447 - 253,673 1,339,120

FUND BALANCE
Committed - - 2,245,605 2,245,605
Unassigned 132,357 - - 132,357
Total Fund Balances 132,357 - 2,245,605 2,377,962
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $1,288,776 $5,280 $2,622,084 $3,916,140 #14..
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See notes to financial statements.
21 Tuolumne River Regional Park
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2024
Total Fund Balances - Governmental Funds $2,377,962
Amounts reported for governmental activities in the Statement of Net Position are different from those reported in the governmental funds because of the following:

Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position.
254,102
Capital assets used in governmental activities are not current assets or financial resources and, therefore, are not reported in the governmental funds. 8,581,609
Total Net Position - Governmental Activities $11,213,673 #14..
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See notes to financial statements.
22 Tuolumne River Regional Park
Statement of Revenues, Expenditures, and Changes in
Fund Balances – Governmental Funds
Year Ended June 30, 2024

DESCRIPTION
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Governmental
Funds

REVENUES
Rents $2,429 $- $- $2,429
Operating grants and contributions 583,900 - - 583,900
Intergovernmental - 59 690,502 690,561
Lease revenue 50,374 - - 50,374
Interest income 7,245 - - 7,245
Interest revenue - leases 17,565 - - 17,565
Change in fair value of investments 8,914 - - 8,914
Other 8,525 28,434 998,120 1,035,079
Total Revenues 678,952 28,493 1,688,622 2,396,067

EXPENDITURES
Parks and recreation:

Contractual services 712,077 28,434 362,598 1,103,109
Materials and supplies 9,530 - - 9,530
Insurance and taxes 13,439 - - 13,439
Capital outlay - 59 2,389,112 2,389,171
Total Expenditures 735,046 28,493 2,751,710 3,515,249
(Continued)
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Tuolumne River Regional Park
Statement of Revenues, Expenditures, and Changes in
Fund Balances – Governmental Funds (Continued)
Year Ended June 30, 2024
See notes to financial statements.
23 DESCRIPTION
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Governmental
Funds
Changes in Fund Balances $(56,094) $- $(1,063,088) $(1,119,182) Fund Balances, Beginning of Year 188,451 - 3,308,693 3,497,144 Fund Balances, End of Year $132,357 - $2,245,605 $2,377,962 #14..
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See notes to financial statements.
24 Tuolumne River Regional Park
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and the Changes in Fund Balances to the Statement of Activities Year Ended June 30, 2024
Net change in fund balances of the Governmental Funds $(1,119,182) Amounts reported for governmental activities in the Statement of Activities are different from those reported in the governmental funds because of the following:

However, in the Statement of Activities, the costs of those assets are capitalized and allocated over their estimated useful lives and reported as depreciation expense.

Capital outlay expenditures 2,389,171
Depreciation expense (437,904) 1,951,267
Changes in Net Position of Governmental Activities $960,289 #14..
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25 Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Tuolumne River Regional Park (the Park) was founded in 1972 by an agreement between the County of Stanislaus (the County) and the cities of Modesto and Ceres (the Cities). The agreement provides for financing, development, and maintenance of the Park facilities. The Park includes approximately 180 developed and 330 undeveloped acres with group picnic areas, play equipment lots, ballfields, and Legion Hall. Rent is generated from public use of these facilities. The County and Cities provide additional operating funds. The Park is governed by the Tuolumne River Regional Park Commission, which consists of two members of the County’s Board of Supervisors, two members of the City of Modesto’s City Council, and one member of the City of Ceres’ City Council. Financial transactions initiated by the Park are processed and accounted for by the City of Modesto’s financial system.

Reporting Entity
The Park’s financial statements include the accounts of all Park operations. The criteria for including organizations as component units within the Park’s reporting entity, as set forth in Section 2100 of the Governmental Accounting Standards Board’s (GASB) Codification of Government Accounting and Financial Reporting Standards, include whether:
• the Park is legally separate (can sue and be sued in their own name). • the Park holds the corporate powers of the organization. • the Park appoints a voting majority of the organization’s board. • the Park can impose its will on the organization.
• there is fiscal dependency by the organization on the Park based on the criteria that the Park has no component units.
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the Park’s activities. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by contributions, rents, and intergovernmental revenues. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are identifiable with a specific function or segment.

The Statement of Activities demonstrates the degree to which the direct expenses are offset by program revenues. Direct expenses are those that are identifiable with the parks and recreation function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by the parks and recreation function and 2) grants and contributions that are restricted to meeting the operational requirements of the parks and recreation function. Revenues that are not classified as program revenues, including investment earnings and other revenues, are reported as general revenues. Separate financial statements are provided for governmental funds.

Governmental fund financial statements (i.e., Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances) are reported using the current financial resources measurement focus and the modified accrual basis of accounting. #14..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Park considers revenues to be available if they are collected within 180 days of the end of the current fiscal period.

Interest on invested funds is recognized when earned. Intergovernmental revenues that are reimbursements for specific expenditures are recognized when all eligibility requirements are met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.

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

The Park reports three major governmental funds:

The General Fund is the primary operating fund and accounts for all financial resources of the Park.
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
The Special Revenue Fund is used to account for financial resources restricted for specific purposes.

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

The Park adopts annual appropriated budgets for its General and Special Revenue Funds, which are major funds. Budgetary comparison schedules have been provided for these funds to demonstrate compliance with these budgets. The budgetary comparison schedule is presented on a budgetary basis which differs from generally accepted accounting principles in the method of accounting for accruals and encumbrances.

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

Annual budget requests are submitted by the Park’s staff to the Park’s Commission for review.

After the public hearing, a budget is approved by the Park’s Commission, with a resolution adopting said budget. Copies of the approved budget are sent to all member agencies. #14..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Investments
The Park maintains its cash account with the City of Modesto as part of the cash and investment pool. The City of Modesto is restricted by Government Code Section 53635 pursuant to Section 53601 to invest in time deposits, U.S. government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements.

Due From Other Governments
Grant revenues and contributions are recorded as receivables in the funds when they are susceptible to accrual (i.e. when all eligibility requirements have been met and deemed available per the Park’s revenue recognition policies) and not yet received as of year-end. The total amount due from governments for grants and contributions at June 30, 2024 is $936,430.

Management believes all amounts are fully collectible, and as such no allowance has been recorded against the due from other governments balance as of June 30, 2024.

Capital Assets
Capital assets acquired are recorded at cost or estimated cost where cost is not available.

Donated or contributed capital assets are recorded at estimated fair value on the date received.

Capital assets are defined by the Park as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. The costs of normal maintenance and repairs are charged to operations as incurred. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets, as applicable. #14..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets (Continued)
Depreciation of capital assets is computed using the straight-line method applied over the estimated useful lives of the assets as follows:

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

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

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

Deferred inflows reported by the Park consist of unearned deferred assessments that have been billed as of year-end, but not collected and the deferred inflows related to lease receivable.
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Risk Management
The Park is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Park participates in the City of Modesto’s insurance pool to mitigate the risk of loss and contributes its pro-rata share of estimated losses. The City of Modesto’s insurance pool does not maintain separate records for estimated outstanding liabilities, including incurred but not reported claims.

Refer to the City of Modesto’s Annual Comprehensive Financial Report (ACFR) for further information related to the insurance pool. Additional insurance is purchased for special events when certain Park facilities are rented to the public.

Lease Receivable
The Park’s lease receivable is measured at the present value of lease payments expected to be received during the lease term. There are no variable components under the lease agreement. A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease.
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Tuolumne River Regional Park
Notes to 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 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 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.

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

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

Fund Balance
In the fund financial statements, in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental funds report fund balance as nonspendable, restricted, committed, assigned or unassigned based primarily on the extent to which the Park is bound to honor constraints on how specific amounts can be spent. #14..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Nonspendable – Amounts that are not in spendable form (such as inventory) or are required to be maintained intact. The Park did not have any nonspendable resources as of June 30, 2024.
• Restricted – Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. The Park did not have any restricted resources as of June 30, 2024.
• Committed - Amounts constrained to specific purposes by the Park itself, using its highest level of decision-making authority (Park’s Commission). To be reported as committed, amounts cannot be used for any other purpose unless the Park’s Commission takes the same highest-level action to remove or change the constraint. The Park had $2,245,605 as 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 or by an official or body to which the Board of Supervisors delegates authority. The Park did not have any assigned resources as of June 30, 2024. • Unassigned – Amounts that are available for any purpose. $132,357 of the Park’s resources were considered unassigned as of June 30, 2024.

In circumstances when an expenditure is incurred for which restricted, committed, assigned, or unassigned fund balances are available, the Park considers amounts to have been spent first out of restricted funds then committed funds, and finally assigned and unassigned funds, as needed, unless the Park’s Commission has provided otherwise in its commitment or assignment actions.
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2024, the Agency implemented the following standard with no effect on the financial statements:

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 of Modesto funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the Park’s investments as all cash is invested as part of the common cash and investment pool of the City of Modesto. Cash in the City Pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The Park does not have any deposits with financial institutions as of June 30, 2024. #14..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
35 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:

Cash and investments $1,825,548
Total cash and investments $1,825,548
Summary of Deposits
Cash and investments as of June 30, 2024 consist of the following:

Deposits with City of Modesto
Cash and investments pool $1,825,548
Total cash and investments $1,825,548
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s ACFR. As of June 30, 2024, the fair value of the Park’s position in the pool is the same as the value of its pool shares.

NOTE 3 LEASE RECEIVABLE
On December 7, 2020, the Park (the lessor) and Vertical Bridge Development, LLC (the lessee) entered into a land lease agreement for the purpose of erecting, installing, operating, and maintaining radio and communications facilities. The initial lease term will be for five years with a monthly rental payment of $2,000 and $250 for each additional broadband carrier. The lease agreement will automatically renew for five additional five-year terms (extension term). #14..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
36 NOTE 3 LEASE RECEIVABLE (CONTINUED)
Monthly rent will increase by 2% annually on each anniversary of the commencement date.

Lease revenue recognized under the lease agreement was $24,997 for the year ended June 30, 2024. Interest revenue recognized under the lease agreement was $11,064 for the year ended June 30, 2024.

On April 16, 2015, the Park (the lessor) and Sacramento-Valley Limited Partnership, d/b/a Verizon Wireless (the lessee) entered into a land lease agreement for the purpose of constructing, maintaining, repairing, and operating a communications facility. The initial lease term will be for five years with a monthly rental payment of $1,700. The lease agreement will automatically renew for four additional five-year terms (extension term). Monthly rent will increase by 2.5% annually on each anniversary of the commencement date. Lease revenue recognized under the lease agreement was $25,377 for the year ended June 30, 2024. Interest revenue recognized under the lease agreement was $6,501 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 $33,383 $17,077 $50,460
2026 35,024 16,565 51,589
2027 36,718 16,028 52,746
2028 38,466 15,465 53,931
2029 40,269 14,876 55,145
2030-2034 230,253 64,553 294,806
2035-2039 284,034 45,351 329,385
2040-2044 176,499 26,965 203,464
2045-2049 179,890 14,492 194,382
2050-2052 99,039 1,882 100,921
Total $1,153,575 $233,254 $1,386,829
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
37 NOTE 4 CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2024, was as follows:

Description
Beginning
Balance Additions
Deletions/
Adjustments
Ending
Balance
Capital assets, not being depreciated
Land $2,338,116 $- $- $2,338,116
Construction in progress 608,627 2,389,171 - 2,997,798
Total capital assets not being
depreciated 2,946,743 2,389,171 - 5,335,914
Capital assets, being depreciated:

Buildings 135,484 - - 135,484
Improvements 10,441,736 - - 10,441,736
Total capital assets, being depreciated 10,577,220 - - 10,577,220 Less accumulated depreciation for:

Buildings (114,745) (1,425) - (116,170)
Improvements (6,778,876) (436,479) - (7,215,355)
Total accumulated depreciation (6,893,621) (437,904) - (7,331,525) Total capital assets, being
depreciated, net 3,683,599 (437,904) - 3,245,695
Capital assets, net $6,630,342 $1,951,267 $- $8,581,609 Depreciation expense for the year ended June 30, 2024 was $437,904. #14..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2024
38 NOTE 5 RELATED PARTY TRANSACTIONS
The Park reimburses the City of Modesto for administrative and other costs incurred by the City of Modesto on the Park’s behalf. During the 2024 fiscal year, contractual service expenditures included $170,424 of the City of Modesto’s payroll costs that were allocated to the Park.

NOTE 6 DEFICIENCIES OF EXPENDITURES OVER APPROPRIATIONS For the year ended June 30, 2024, expenditures exceeded appropriations as follows:

Expenditures Amount
General Fund:

Materials and supplies $(4,530)
Insurance and taxes (676)
Special Revenue Fund:

Capital outlay (59)
NOTE 7 SUBSEQUENT EVENT
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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REQUIRED SUPPLEMENTARY INFORMATION
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39 Tuolumne River Regional Park
Schedule of Revenues, Expenditures, and
Changes in Fund Balances – General Fund – Budget and Actual Year Ended June 30, 2024
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Rents $54,500 $54,500 $2,429 $(52,071)
Operating grants and contributions 583,900 583,900 583,900 - Lease revenue - - 50,374 50,374
Interest income - - 7,245 7,245
Interest revenue - leases - - 17,565 17,565
Change in fair value of investments - - 8,914 8,914
Other - 8,497 8,525 28
Total Revenues 638,400 646,897 678,952 32,055

EXPENDITURES
Parks and recreation:

Contractual services 858,056 908,055 712,077 195,978
Materials and supplies 5,000 5,000 9,530 (4,530)
Insurance and taxes 12,763 12,763 13,439 (676)
Total Expenditures 875,819 925,818 735,046 190,772
Excess (Deficiency) of Revenues Over
(Under) Expenditures (237,419) (278,921) (56,094) 222,827 (Continued)
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Tuolumne River Regional Park
Schedule of Revenues, Expenditures, and
Changes in Fund Balances – General Fund – Budget and Actual (Continued) Year Ended June 30, 2024
40 Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

OTHER FINANCING SOURCES (USES)
Proceeds from sales of capital assets $470,000 $470,000 $- $(470,000) Transfers out 50,000 50,000 - (50,000)
Total Other Financing Sources (Uses) 520,000 520,000 - (520,000) Changes in Fund Balances $282,581 $241,079 (56,094) $(297,173) Fund Balance, Beginning of Year 188,451
Fund Balance, End of Year $132,357
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41 Tuolumne River Regional Park
Schedule 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
Intergovernmental $- $- $59 $59
Other - - 28,434 28,434
Total Revenues - - 28,493 28,493

EXPENDITURES
Parks and recreation:

Contractual services 175,000 592,138 28,434 563,704
Capital outlay - - 59 (59)
Total Expenditures 175,000 592,138 28,493 563,645
Changes in Fund Balances $(175,000) $(592,138) - $592,138 Fund Balance, Beginning of Year -
Fund Balance, End of Year $-
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42 Tuolumne River Regional Park
Note to the Required Supplementary Information
Year Ended June 30, 2024
NOTE 1 BUDGET AND BUDGETARY ACCOUNTING
Tuolumne River Regional Park (the Park) operates under the general laws of the State of California and annually adopts a budget for its General and Special Revenue Funds to be effective July 1 the ensuing fiscal year. The budgets must be approved by each of the legislative bodies of the parties to the joint powers agreement. From the effective date of the budgets, which are adopted and controlled at the fund level, the amounts stated therein as proposed expenditures become appropriations. The Park may amend the budgets by approval from each of the legislative bodies of the parties to the agreement during the fiscal year. The budgets for the General and Special Revenue Funds are prepared on a cash and expenditures/ encumbrance basis. Revenues are budgeted in the year receipt is expected; expenditures, which include encumbrances, are budgeted in the year that the applicable warrant requisitions are expected to be issued. No encumbrances were outstanding as of June 30, 2024, so the actual budgetary-basis expenditures are the same as the actual GAAP-basis expenditures. #14..
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43 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Tuolumne River Regional Park Commission,
The Board of Supervisors of the County of Stanislaus, California, and The Honorable Members of the City Councils of Modesto and Ceres, California Tuolumne River Regional Park
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the Tuolumne River Regional Park (the Park) as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Park’s basic financial statements, and have issued our report thereon dated November 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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44 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 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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45 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Park’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Park’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 8, 2024
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #14..
- 1111 -
City of Modesto, California
Transportation Development Act Funds
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
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City of Modesto, California
Transportation Development Act Funds
Annual Financial Report
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
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City of Modesto
Transportation Development Act Funds
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Fund Financial Statements
Balance Sheet 5
Statement of Revenues, Expenditures, and Changes in Fund Balances 6 Notes to Basic Fund Financial Statements 7
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards and the Transportation Development Act 13
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Transportation Development Act (TDA) Funds of the City of Modesto, California as of and for the year ended June 30, 2024, and the related notes to the basic fund financial statements, as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the TDA Funds of the City of Modesto, California, as of June 30, 2024, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Modesto, California and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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2 Emphasis of Matter
As discussed in Note 1, the financial statements present only the TDA Funds and do not purport to, and do not, present fairly the financial position of the City of Modesto, California, as of June 30, 2024, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Other Matter
Report on Summarized Comparative Information
We have previously audited the financial statements of the TDA Funds of the City of Modesto, California, as of and for the year ended June 30, 2023, and we expressed an unmodified opinion on those statements in our report dated November 17, 2023. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2023, is consistent, in all material respects, with the audited financial statements from which it has been derived.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, #14..
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3 misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Modesto, California’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

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. #14..
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4 Required Supplementary Information
Management has omitted management’s discussion and analysis and budgetary comparison information that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

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

Glendale, California
November 8, 2024
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See notes to basic fund financial statements.
5 City of Modesto
Transportation Development Act Funds
Balance Sheet
June 30, 2024
(With Summarized Prior Year Data for Comparison Purposes Only) NonMotorized
Streets
and
Roads
Total
2024
Total
2023
ASSETS
Cash and investments $1,704,316 $238,273 $1,942,589 $1,706,266 Due from other governments - - - 297,316
Total Assets $1,704,316 $238,273 $1,942,589 $2,003,582

LIABILITIES
Unearned revenue $1,702,540 $238,273 $1,940,813 $2,001,806

FUND BALANCES
Restricted 1,776 - 1,776 1,776
Total Liabilities and Fund
Balances $1,704,316 $238,273 $1,942,589 $2,003,582
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See notes to basic fund financial statements.
6 City of Modesto
Transportation Development Act Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended June 30, 2024
(With Summarized Prior Year Data for Comparison Purposes Only) NonMotorized
Streets
and
Roads
Total
2024
Total
2023

REVENUES
Intergovernmental
Local transportation funds $60,993 $- $60,993 $28,574
Interest 97,913 - 97,913 59,698
Total Revenues 158,906 - 158,906 88,272

EXPENDITURES
Maintenance and supplies - - - -
Total Expenditures - - - -
Excess of Revenues
Over Expenditures 158,906 - 158,906 88,272

OTHER FINANCING USES
Transfer out to other funds of the City (158,906) - (158,906) (88,272) Total Other Financing Uses (158,906) - (158,906) (88,272) Changes in Fund Balances - - - -
Fund Balances, Beginning of the Year 1,776 - 1,776 1,776 Fund Balances, End of Year $1,776 $- $1,776 $1,776
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7 City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Reporting Entity
The City of Modesto, California (the City) accounts for California Transportation Development Act (TDA) monies in the Local Transportation Special Revenue Funds (TDA Funds). These funds are a part of the City and not a separate legal entity. As such, these financial statements only present the fund financial statements and not the government-wide information or financial statements. The TDA Funds are combined and presented as a special revenue fund in the City’s Annual Comprehensive Financial Report (ACFR). These financial statements are intended to reflect only the financial position and changes in financial position of the City’s TDA Funds in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

Basis of Presentation, Basis of Accounting, and Measurement Focus The City’s TDA Funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Intergovernmental and interest revenues are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Under Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, budgetary comparison information is required to be presented for each major special revenue fund with a legally adopted budget. The City is not legally required to adopt a budget for the TDA Funds. Therefore, budget comparison information is not included in these financial statements. #14..
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
8 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) The financial statements include certain prior year summarized comparative information in total but not at the level of detail required for a presentation in accordance with U.S. GAAP.

Accordingly, such information should be read in conjunction with the City’s TDA Funds financial statements for the year ended June 30, 2023, from which the summarized information was derived.

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

The City reports the following TDA Funds:

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

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

Management’s Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
9 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Due from Other Governments/Unearned Revenue
Grants, entitlements, or shared revenues are recorded as receivables and revenues in the TDA Funds when they are received or susceptible to accrual.

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

Capital Outlay
Capital projects funded by the TDA Funds, including infrastructure (roads, curbs, gutters, streets, bridges, sidewalks, drainage systems, lighting systems, rights-of-way, and land related to such assets), are recorded as transfers out to other City funds and capital outlay expenditures of the TDA Funds. These expenditures are capitalized in the City’s governmentwide financial statements as the related capital assets become the property of the City and are maintained by the City.

Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the City is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required, either legally or contractually, to be maintained intact. • Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. #14..
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
10 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed - Amounts constrained to specific purposes by the City, using the highest level of decision-making authority (City Council). To be reported as committed, amounts cannot be used for any other purpose unless the City takes the same highest level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. • Assigned - Amounts the City intends to use for a specific purpose. Intent can be expressed by the City at either the highest level of decision-making authority or by an official or body to which the City delegates the authority. • Unassigned - For the City’s TDA Funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes.

The TDA Funds’ total fund balance as of June 30, 2024 is restricted for programs under Article 3, Section 99234 and Article 8, Section 99400(a) of the TDA.

In circumstances where an expenditure is incurred for which restricted, committed, assigned, or unassigned funds are available for use, it is the City’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed. #14..
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
11 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the TDA Funds are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the TDA Funds’ investments as all cash is invested as part of the common cash and investment pool of the City. Cash in the City Pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The TDA Funds do not have any deposits with financial institutions as of June 30, 2024.

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

Description Amount
Balance Sheet – TDA Funds
Special Revenue Funds
Cash and investments $1,942,589
Total cash and investments $1,942,589
Summary of Deposits
Cash and investments as of June 30, 2024 consist of the following:

Description Amount
Deposit with the City
Cash and investments pool $1,942,589
Total cash and investments $1,942,589
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
12 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s ACFR. As of June 30, 2024, the fair value of the TDA Funds’ position in the pool is the same as the value of its pool shares.

NOTE 3 UNEARNED REVENUE
Unearned revenue for the TDA Funds for the year ended June 30, 2024, was as follows:

NonMotorizedStreets and
Roads Total
Unearned revenue, beginning of year $1,763,533 $238,273 $2,001,806 TDA funds allocated 97,913 - 97,913
TDA funds earned (158,906) - (158,906)
Unearned revenue, end of year $1,702,540 $238,273 $1,940,813 NOTE 4 SUBSEQUENT EVENTS
The City has evaluated events or transactions subsequent to June 30, 2024, to assess the need for potential recognition or disclosure in the financial statement. Such events were evaluated through November 8, 2024, the date the financial statement was available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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13 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standard and the Transportation Development Act
The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the Transportation Development Act (TDA) Funds of the City of Modesto, California (the City), as of and for the year ended June 30, 2024, and the related notes to the basic fund 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 City’s internal control over TDA Funds 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 City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
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14 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s TDA Funds financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s TDA Funds financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the applicable statutes, rules and regulations of the Transportation Development Act, noncompliance with which could have a direct and material effect on the TDA Funds financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the Transportation Development Act. #14..
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15 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the Transportation Development Act in considering the City’s internal control and compliance. 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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City of Modesto, California
Single Audit Report
For the Year Ended June 30, 2024
with Independent Auditor’s Report
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City of Modesto, California
Single Audit Report
For the Year Ended June 30, 2024
with Independent Auditor’s Report
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City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Reports
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 4 Schedule of Expenditures of Federal Awards 9
Notes to Schedule of Expenditures of Federal Awards 22
Schedule of Findings and Questioned Costs 24
Summary Schedule of Prior Audit Findings 28
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1 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Mayor and the Members of the City Council City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Modesto, California (the City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 6, 2024.

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

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #14..
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3 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
December 6, 2024
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4 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
The Honorable Mayor and the Members of the City Council City of Modesto, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Modesto, California’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2024. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal programs for the year ended June 30, 2024.
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5 Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

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

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s federal programs.
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6 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed. #14..
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7 We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

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

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. #14..
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8 The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon, dated December 6, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Glendale, California
December 6, 2024
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See Notes to Schedule of Expenditures of Federal Awards. 9 City of Modesto
Schedule of Expenditures of Federal Awards
Year ended June 30, 2024
Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF INTERIOR
Passed through the California Department of
Parks and Recreation:

Outdoor Recreation Acquisition, Development
and Planning - Ralston Tower Park 15.916 LW-50-028 $10,590 $- TOTAL U.S. DEPARTMENT OF INTERIOR
10,590 -
U.S. DEPARTMENT OF HOMELAND SECURITY
Direct Program:

Staffing for Adequate Fire and Emergency
Response (SAFER) 97.083 EMW-2020-FF01443 1,168,366 -
Passed through the California Governor’s Office
of Emergency Services:

Disasters Grants - Public Assistance
(Presidentially Declared Disasters) 97.036 FEMA-4308-DR-CA 1,309 - (Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 10 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOMELAND SECURITY
(CONTINUED)
TOTAL U.S. DEPARTMENT OF
HOMELAND SECURITY $1,169,675 $-
U.S. DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT
Direct Programs:

CDBG - Entitlement Grants Cluster
Community Development Block Grants
(CDBG)/Entitlement Program 14.218 B-20-MC-060002 9,695 - Community Development Block Grants
(CDBG)/Entitlement Program – CARES
Act 14.218 B-20-MW-060002 99,652 12,188
Community Development Block Grants
(CDBG)/Entitlement Program 14.218 B-21-MC-060002 224,176 - (Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 11 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number
Grant Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT (CONTINUED)
Direct Programs: (Continued)
Community Development Block Grants
(CDBG)/Entitlement Program 14.218 B-22-MC-060002 $1,218,079 $68,293 Community Development Block Grants
(CDBG)/Entitlement Program 14.218 B-23-MC-060002 1,367,082 218,460 Community Development Block Grants
(CDBG)/Entitlement Program – Loan Programs 14.218 4,114,058 - Total CDBG – Entitlement Grants Cluster 7,032,742 298,941 * Emergency Solutions Grant Program 14.231 E-20-MW-060002 623,805 523,558 Emergency Solutions Grant Program 14.231 E-22-MC-060002 52,890 50,061 Emergency Solutions Grant Program 14.231 E-23-MC-060002 130,220 109,111 Total Emergency Solutions Grant Program 806,915 682,730 (Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 12 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT (CONTINUED)
Direct Programs: (Continued)
Home Investment Partnerships Program 14.239 M-16-MC-060207 $54,392 $- Home Investment Partnerships Program 14.239 M-18-MC-060207 246,153 - Home Investment Partnerships Program 14.239 M-19-MC-060207 606,862 - Home Investment Partnerships Program 14.239 M-20-MC-060207 72,166 - Home Investment Partnerships Program 14.239 M-21-MC-060207 81,130 - Home Investment Partnerships Program 14.239 M-21-MP-060207 2,343,856 - Home Investment Partnerships Program 14.239 M-22-MC-060207 111,567 - (Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 13 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT (CONTINUED)
Direct Programs: (Continued)
Home Investment Partnerships Program 14.239 M-23-MC-060207 $8,185 $- Home Investment Partnerships Program –
Loan Programs 14.239 21,038,729 -
Total Home Investment Partnerships Program 24,563,040 - * Economic Development Institute 14.251 B-22-CP-CA-0035 79,180 40,045 TOTAL U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT 32,481,877 1,021,716
(Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 14 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF JUSTICE
Direct Programs:

Public Safety Partnership and Community
Policing Grants 16.710 15JCOPS-21-GG-02447-SPPS $66,445 $- Public Safety Partnership and Community
Policing Grants 16.710 15JCOPS-23-GG-02011-PPSE 35,754 - Total Public Safety Partnership and Community
Policing Grants 102,199 -
Equitable Sharing Program 16.922 65,419 -
(Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 15 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF JUSTICE (CONTINUED)
Passed through the County of Stanislaus:

Edward Byrne Memorial Justice Assistance
Grant 16.738 2020-DJ-BX-0226 $52,565 $-
TOTAL U.S. DEPARTMENT OF JUSTICE 220,183 -
U.S. DEPARTMENT OF TRANSPORTATION
Direct Programs:

Federal Transit Cluster
Transit, Maintenance and Capital Purchases 20.526 CA-2019-002-00 6,568 - Public Safety Partnership and Community
Policing Grants 20.939 693JJ32340542 8,821 -
(Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 16 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Department of
Transportation:

Highway Planning and Construction 20.205 BRLS-5938(167) $21,200 $- Highway Planning and Construction 20.205 TGHPLUL-5059(230) 187,399 - Highway Planning and Construction 20.205 CML-5059(222) 626,345 - Highway Planning and Construction 20.205 ATPL-5059(233) 2,041,737 - Highway Planning and Construction 20.205 CML-5059(258) 160,443 - Highway Planning and Construction 20.205 HSIPL-5059(227) 68,164 - (Continued)
#14..
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 17 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Department of
Transportation: (Continued)
Highway Planning and Construction 20.205 CML-5059(229) $4,608 $- Highway Planning and Construction 20.205 STPL-5059(234) 158,451 - Highway Planning and Construction 20.205 CML-5059(236) 23,405 - Highway Planning and Construction 20.205 HSIPL-5059(237) 493,627 - Highway Planning and Construction 20.205 STPL-5059(242) 2,026,564 - Highway Planning and Construction 20.205 STPL-5059(250) 468,171 - Highway Planning and Construction 20.205 CMLNI-5059(247) 2,505 - (Continued)
#14..
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 18 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Department of
Transportation: (Continued)
Highway Planning and Construction 20.205 CML-5059(262) $1,140 $- Highway Planning and Construction 20.205 CML-5059(261) 1,299 - Highway Planning and Construction 20.205 CML-5059(245) 96,520 - Highway Planning and Construction 20.205 CML-5059(246) 252,645 - Highway Planning and Construction 20.205 STPL-5059(259) 10,276 - Highway Planning and Construction 20.205 CML-5059(260) 17,084 - Highway Planning and Construction 20.205 CML-5059-244 39,841 - (Continued)
#14..
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 19 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Department of
Transportation: (Continued)
Highway Planning and Construction 20.205 CML-5059-256 $17,478 $- Total Highway Planning and Construction 6,718,902 - *
Passed through the California Office of Traffic
Safety:

Highway Safety Cluster
State and Community Highway Safety 20.600 PT24120 81,075 - State and Community Highway Safety 20.600 PS24021 9,262 - State and Community Highway Safety 20.600 PT23045 54,729 - State and Community Highway Safety 20.600 PS23005 431 - Total Highway Safety Cluster 145,497 -
(Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 20 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Office of Traffic
Safety: (Continued)
Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 20.608 PT24120 $176,801 $-
Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 20.608 PT23045 71,892 -
Total Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 248,693 -
TOTAL U.S. DEPARTMENT OF
TRANSPORTATION 7,128,481 -
U.S. DEPARTMENT OF THE TREASURY
Direct Program:

American Rescue Plan Act 21.027 6,507,958 635,000
(Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2024
See Notes to Schedule of Expenditures of Federal Awards. 21 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF THE TREASURY
(CONTINUED)
Passed through State Water Resources Control Board:

California Extended Water and Wastewater
Arrearage Payment Program 21.027 $886,817 $-
TOTAL U.S. DEPARTMENT OF THE TREASURY 7,394,775 635,000 * TOTAL EXPENDITURES OF FEDERAL AWARDS $48,405,581 $1,656,716 * Denotes major program
#14..
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22 City of Modesto
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 2024
NOTE 1 BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (SEFA) presents the activity of all federal financial assistance programs of the City of Modesto, California (the City). For purposes of this schedule, financial awards include federal awards received directly from a federal agency, as well as federal funds received indirectly by the City from a non-federal agency or other organization. Only the portions of program expenditures reimbursable with federal funds are reported in the accompanying schedule. Program expenditures in excess of the maximum reimbursement authorized, if any, or the portion of the program expenditures that were funded with other state, local or other non-federal funds are excluded from the accompanying schedule.

The information in the SEFA is presented in accordance with the requirements of Title 2 U.S.

Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the SEFA presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.

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

The City has elected not to use the 10-percent de minimis indirect cost rate allowed in the Uniform Guidance.
#14..
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City of Modesto
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 2024
23 NOTE 3 RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
Grant expenditure reports for the year ended June 30, 2024, which have been submitted to grantor agencies, will, in some cases, differ from the amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of the year-end accruals.

NOTE 4 RELATIONSHIP TO ANNUAL COMPREHENSIVE FINANCIAL REPORT Amounts reported in the accompanying SEFA agree, in all material respects, to amounts reported within the City’s Annual Comprehensive Financial Report.

NOTE 5 LOANS RECEIVABLE
Loans made with CDBG funds of $4,114,058 and loans made with HOME funds of $21,038,729 are outstanding as of June 30, 2024. During the fiscal year 2023-24, there were no new loans made with CDBG and HOME funds.

The City participates in HOME and CDBG programs that sponsor revolving loan programs which are administered by the City. The funds are returned to the programs upon repayment of the principal and interest. In accordance with 2 CFR section 200.502(b), the value of new loans made, the beginning balance of loans from previous years and any interest subsidy, cash or administrative cost allowance received are included in the SEFA. #14..
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24 City of Modesto
Schedule of Findings and Questioned Costs
Year Ended June 30, 2024
SECTION I – SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor’s report issued on whether the
financial statements audited were prepared
in accordance with GAAP Unmodified
Internal control over financial reporting:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? None reported Noncompliance material to financial
statements noted No
Federal Awards
Internal control over major programs:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? None reported Type of auditor’s report issued on compliance
with respect to major federal programs: Unmodified
Any audit findings disclosed that are required to be reported in accordance with Section 2 CFR 200.516(a)? No
#14..
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City of Modesto
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2024
25 SECTION I – SUMMARY OF AUDITOR'S RESULTS (CONTINUED) Identification of Major Programs:

Assistance Listing Number Name of Federal Program or Cluster

14.218 Community Development Block Grants
(CDBG)/Entitlement Program

14.239 Home Investment Partnerships Program

20.205 Highway Planning and Construction

21.027 Coronavirus State and Local Fiscal
Recovery Funds
Dollar threshold used to distinguish between
Type A and Type B programs $1,452,167
Auditee qualified as a low-risk auditee? Yes
#14..
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City of Modesto
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2024
26 SECTION II – FINANCIAL STATEMENT FINDINGS
There were no financial statement findings noted during the fiscal year ended June 30, 2024. #14..
- 1159 -
City of Modesto
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2024
27 SECTION III – FEDERAL AWARD FINDINGS
There were no federal award findings noted during the fiscal year ended June 30, 2024. #14..
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28 City of Modesto
Summary Schedule of Prior Audit Findings
Year ended June 30, 2024
There were no prior year findings reported during the fiscal year ended June 30, 2023. #14..
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #14..
- 1162 -
City of Modesto
Annual Financial Report
Measure H Fund
of the City of Modesto, California
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
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City of Modesto
Annual Financial Report
Measure H Fund
of the City of Modesto, California
As of and for the Year Ended June 30, 2024
With Independent Auditor’s Report
#14..
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City of Modesto, California
Measure H Fund
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Fund Financial Statements
Balance Sheet 5
Statement of Revenues, Expenditures, and Changes in Fund Balance 6 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 7
Notes to Basic Fund Financial Statements 10
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 16 #14..
- 1165 -
1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of Financial Statements
Opinion
We have audited the accompanying financial statements of the Measure H Fund of the City of Modesto, California, as of and for the year ended June 30, 2024, the budgetary comparison statement for the year ended June 30, 2024 and the related notes to the basic fund financial statements, which collectively comprise the Measure H Fund’s basic fund financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the Measure H Fund of the City of Modesto, California as of June 30, 2024, and the changes in its financial position and budgetary comparison for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As discussed in Note 1, the financial statements present only the Measure H Fund and do not purport to, and do not, present fairly the financial position of the City of Modesto, California, as of June 30, 2024, and the changes in its financial position and budgetary comparison for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. #14..
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3 In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Modesto, California’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Required Supplementary Information
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic fund financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic fund financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic fund financial statements is not affected by this missing information. #14..
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4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2024, on our consideration of the City of Modesto, California’s internal control over Measure H Fund 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 Measure H Fund financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Modesto, California’s internal control over Measure H Fund financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Modesto, California’s internal control over Measure H Fund financial reporting and compliance.

Glendale, California
November 8, 2024
#14..
- 1169 -
See notes to basic fund financial statements.
5 City of Modesto
Measure H Fund
Balance Sheet
June 30, 2024
ASSETS
Cash and investments $33,941,450
Taxes receivable 8,523,038
Interest receivable 126,114
Prepaid expenses 2,167
Total Assets $42,592,769

LIABILITIES
Accounts payable $887,155
Accrued payroll 173,975
Total Liabilities 1,061,130

FUND BALANCE
Nonspendable 2,167
Unassigned 41,529,472
Total Fund Balance 41,531,639
Total Liabilities and Fund Balance $42,592,769
#14..
- 1170 -
See notes to basic fund financial statements.
6 City of Modesto
Measure H
Statement of Revenues, Expenditures, and
Changes in Fund Balance
Year Ended June 30, 2024

REVENUES
Sales tax $47,954,202
Charges for services 119,816
Fines and forfeitures 2,100
Interest income 675,737
Change in fair value of investments 439,943
Miscellaneous 34,900
Total Revenues 49,226,698

EXPENDITURES
General government 456,764
Community development 260,110
Public safety 2,993,155
Parks and recreation 2,645,162
Public works 5,450,729
Total Expenditures 11,805,920
Excess of revenues over expenditures 37,420,778

OTHER FINANCING SOURCES (USES)
Transfers out (6,178,633)
Total Other Financing Sources (Uses) (6,178,633)
Changes in Fund Balance 31,242,145
Fund Balance, Beginning of Year 10,289,494
Fund Balance, End of Year $41,531,639
#14..
- 1171 -
See notes to basic fund financial statements.
7 City of Modesto
Measure H
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual – General Fund Year Ended June 30, 2024
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Sales tax $- $42,325,700 $47,954,202 $5,628,502
Charges for services 135,222 161,243 118,916 (42,327)
Interest income - - 675,737 675,737
Change in fair value of
investments - - 439,943 439,943
Total Revenues 135,222 42,486,943 49,188,798 6,701,855
#14..
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City of Modesto
Measure H
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual – General Fund (Continued) Year Ended June 30, 2024
See notes to basic fund financial statements.
8 Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

EXPENDITURES
General government $785,679 $785,679 $456,764 $328,915
Community development 350,000 350,000 237,173 112,827
Public safety
Fire protection 1,512,976 1,512,976 762,070 750,906
Police protection 4,714,985 4,808,693 1,648,386 3,160,307 Parks and recreation
Operations service and
maintenance 2,872,511 2,872,511 1,491,121 1,381,390
Public works
Streets 5,894,395 6,633,710 5,450,487 1,183,223
Capital outlay 690,900 690,900 - 690,900
Total Expenditures 16,821,446 17,654,469 10,046,001 7,608,468 Excess (deficiency) of
revenues over (under)
expenditures (16,686,224) 24,832,474 39,142,797 14,310,323 #14..
- 1173 -
City of Modesto
Measure H
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual – General Fund (Continued) Year Ended June 30, 2024
See notes to basic fund financial statements.
9 Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

OTHER FINANCING
USES
Transfers out $(8,270,000) $(21,212,202) $(7,900,652) $13,311,550 Total Other Financing Uses (8,270,000) (21,212,202) (7,900,652) 13,311,550 Changes in Fund Balance $(24,956,224) $3,620,272 31,242,145 $27,621,873 Fund Balance, Beginning of
Year 10,289,494
Fund Balance, End of Year $41,531,639
#14..
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10 City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
NOTE 1 GENERAL
On November 8, 2022, the City of Modesto, California (the City) voters approved Measure H, a one-cent sales tax for general City services. Measure H is expected to provide the City an approximately $39 million annually in additional sales tax revenues into its General Fund.

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

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

Measure H Fund is part of the City and not a separate legal entity. As such, these financial statements only present the fund financial statements and not the government-wide information or financial statements. The Measure H Fund is presented as part of the General Fund and the Special Fund for Capital Outlay Capital Projects Fund in the City’s Annual Comprehensive Financial Report (ACFR). These financial statements are intended to reflect only the financial position and changes in financial position of the City’s Measure H Fund in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). #14..
- 1175 -
City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
11 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Measurement Focus, Basis of Accounting and Financial Statement Presentation The accompanying fund financial statements for the Measure H Fund of the City, have been prepared on the modified-accrual basis of accounting. Revenues are recognized when they become “susceptible to accrual,” that is, measurable and available to finance expenditures of the current period. Expenditures are recorded when the liability is incurred.

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

Budget
The City is required by its Charter to adopt an annual budget. On or before the first day of June each year, the City Manager shall submit to the City Council a proposed budget for all departments. The said budget shall include estimates for all revenues and expenditures for the ensuing year. From the effective date of the budget, the amounts stated therein, as proposed expenditures become appropriations to various City departments. The City adopts annual appropriated budgets for its General and Special Revenue Funds, which are major funds. A budgetary comparison statement has been provided for this fund to demonstrate compliance with the budget. The budgetary comparison statement is presented on a budgetary basis which differs from U.S. GAAP in the method of accounting for accruals and encumbrances. #14..
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City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
12 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Investments
In order to maximize the flexibility of its investment program and to aid in cash budgeting, the City pools the cash of all funds, except for monies deposited with fiscal agents in accordance with related bond indentures. The cash and investments balance in each fund represents the fund’s equity share of the City’s cash and investment pool, as the City places no restrictions on the deposit account for the participating funds.

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

Fund Balance
In the fund financial statements, in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental funds report fund balance as nonspendable, restricted, committed, assigned or unassigned based primarily on the extent to which the City is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required to be maintained intact. The Measure H Fund has nonspendable fund balance of $2,167 as of June 30, 2024.
• Restricted – Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. The Measure H Fund did not have any restricted resources as of June 30, 2024.
#14..
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City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
13 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed – Amounts constrained to specific purposes by the City, using its highest level of decision-making authority (City Council). To be reported as committed, amounts cannot be used for any other purpose unless the City Council takes the same highestlevel action to remove or change the constraint. The Measure H Fund did not have any committed resources as of June 30, 2024.
• Assigned – Amounts the Measure H Fund intends to use for a specific purpose. Intent can be expressed by the Measure H Fund or by an official or body to which the City Council delegates the authority. The Measure H Fund did not have any assigned resources as of June 30, 2024.
• Unassigned – Amounts that are available for any purpose. The Measure H Fund unassigned resources as of June 30, 2024 amounted to $41,529,472.

The Measure H Fund establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through the adoption and amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved contracts. The assigned fund balance is established by the City through the adoption or amendment of the budget or future year budget plan as intended for a specific purpose. The City’s policy is to first apply restricted, committed or assigned resources when an expense is incurred for purposes for which restricted, committed or assigned and unassigned fund balances are available. #14..
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City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
14 NOTE 3 CASH AND INVESTMENTS
Unspent funds received for the Measure H Fund are pooled with the City’s other cash and investments. The Measure H Fund’s share of the interest earned from the cash and investment pool is allocated monthly based on each fund’s respective average monthly cash balance.

Credit quality ratings are not available for Measure H Fund’s investments as all cash is invested as part of the common cash and investment pool of the City. Cash in the City Pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The Measure H Fund 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:

Balance Sheet:

Cash and investments $33,941,450
Total cash and investments $33,941,450
Summary of Deposits
Cash and investments as of June 30, 2024 consist of the following:

Deposits with City of Modesto:

Cash and investments pool $33,941,450
Total cash and investments $33,941,450
#14..
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City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2024
15 NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s ACFR. As of June 30, 2024, the fair value of the Measure H Fund’s position in the pool is the same as the value of its pool shares.

NOTE 4 SUBSEQUENT EVENTS
The City has evaluated events or transactions subsequent to June 30, 2024, to assess the need for potential recognition or disclosure in the financial statement. Such events were evaluated through November 8, 2024, the date the financial statement was available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
#14..
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16 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the Measure H Fund of the City of Modesto, California (the City) as of and for the year ended June 30, 2024, the budgetary comparison statement for the year then ended June 30, 2024 and the related notes to the basic fund financial statements, which collectively comprise the Measure H Fund’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 City’s internal control over Measure H Fund 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 City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. #14..
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17 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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

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

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

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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PRESENTATION TO THE

AUDIT COMMITTEE OF

THE CITY OF MODESTO,

CALIFORNIA
January 21, 2025
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1 Introduction
Audit Team 2
Scope of Services 3
Independence 4
Summary of Audit Results 5
Financial Statements Audit 6
Single Audit 7
Financial Reporting Highlights 8
Required Communications to the Oversight Committee 11
New Accounting Pronouncements – Effective in Future Years 16 Questions 18
Contact Information 19
/ Table of Contents
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2 / Audit Team
Cristy Canieda
Engagement Partner
Rhoda Dollaga
Audit Senior Manager
Linda Narciso
Quality Control Partner
Ela Lavilla
Audit Senior
Germaine Sakiwat
Audit Senior
Shannah Gorgonia
Audit Senior
City of Modesto Engagement Team
Regine Enrile
Audit Associate
Jessa Sarimo
Audit Senior
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3 The Financial Statements Audit
/ Scope of Services
• City’s basic financial statements
• City’s IT General Controls
• City’s 13 Community Facilities Districts
• City’s Measure H Fund
• City’s Transportation Development Act
Funds
• City’s Abandoned Vehicle Abatement
Program
• Tuolumne River Regional Park
• Modesto-Ceres Fire Protection Agency
Consultation
Audit of Major Federal Grant
Programs in accordance with
the Uniform Guidance
The Single Audit
Year-Round Consultation
on Financial and
Accounting Matters
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4 / Independence
There are no relationships between any
of our representatives and the City that,
in our professional judgment, may
reasonably be thought to bear on
independence.

Vasquez & Company LLP meets the
independence requirements of the
AICPA and the Government Auditing
Standards as it relates to the City.
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5 / Summary of Audit
Results
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6 / Financial Statements Audit
Unmodified Opinions on Financial Statements
§ The financial statements present fairly, in all material respects, the City’s financial position and changes in net position.
§ The supplemental combining financial statements and supplemental schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Internal Control over Financial Reporting
§ No material weaknesses and significant deficiencies were noted on internal control over financial reporting.
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7 1 Major Programs 2 Classification 3 Results
• No financial statements findings.
• No federal awards findings.
• No prior year financial statements and
federal awards findings.
• The City is classified as a “Low-Risk
Auditee” based on the Federallyprescribed criteria.
• ALN 14.218 – Community Development
Block Grants (CDBG)/Entitlement Program
($7.0 million including $4.1 million balance
of loans from previous years)
• ALN 14.239 – HOME Investment
Partnerships Program ($24.6 million
including $21.0 million balance of loans
from previous years)
• ALN 20.205 – Highway Planning and
Construction ($6.7 million)
• ALN 21.027 - Coronavirus State and Local
Fiscal Recovery Funds
($7.4 million)
The major programs covered 94.4% of total
federal expenditures of $48.4 million.
/ Single Audit #14..
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8 / Financial Reporting Highlights –
Government-wide
• The City’s overall net position increased by $38.26 million from $1.19 billion at June 30, 2023, as restated, to $1.23 billion as of June 30, 2024. (ACFR p. 19) • The City’s unrestricted net position increased by $95.83 million from $55.78 million at June 30, 2023, as restated, to $151.61 million as of June 30, 2024. (ACFR p. 8) Overall Net
Position
• City-wide expenses increased to $488.35 million in FY 2024 from $400.14 million in FY 2023, an increase of $88.21 million. (ACFR p. 9)
Unrestricted
Deficit in
Net Position
• The City determined certain corrections in the previously issued 2023 financial statements which required restatement of the 2023 net position from $1.34 billion to $1.19 billion or to decrease it by $150 million. This includes the overstatement of capital assets amounting to $149.25 million related to the construction of State Route 132 which will not be owned by the City upon completion. (ACFR p. 104)
City-wide
Expenses
Prior Year
Adjustments/
Restatement
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9 ØThe City reported the following Net Pension and Net OPEB liabilities at June 30, 2024:
• Net Pension liability - $428.21 million (2023 - $416.05 million) (ACFR p. 100) • Net OPEB Liability - $19.01 million (2023 - $18.94 million) (ACFR p. 94) • Governmental Fund expenditures increased in 2023-24. (ACFR p. 12) • Governmental Fund expenditures 2023-24 $291.64 million • Governmental Fund expenditures 2022-23 $255.59 million Net Pension and
OPEB Liability
• The City’s General Fund total fund balance increased by $30.28 million during the year from the restated amount of $52.78 million in 2023 to $83.06 million at the end of 2024. This is $42.26 million higher than the projected General Fund end of the fiscal year fund balance of $40.80 million. (ACFR p. 113) Governmental
Fund
Expenditures
General Fund
Total Fund
Balance
/ Financial Reporting Highlights –
Fund Level
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10 • The Enterprise Funds generated net revenues before contributions and operating transfers of $30.07 million.
• Water generated a net income of $4.01 million before contributions and operating transfers.
• Sewer generated a net income of $21.38 million before contributions and operating transfers.
• Nonmajor Enterprise Funds generated a net income of $4.68 million before contributions and operating transfers.
• The Internal Service Funds reported a net position of $22.62 million, which was an increase of $1.39 million from $21.23 million in FY 2023.

Enterprise
Funds
Internal Service
Funds
/ Financial Reporting Highlights –
Fund Level, continued
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11 / Required Communications
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12 Auditor’s Responsibility Our responsibilities have been described in our engagement letter dated March 7, 2024.

Planned scope and timing of
the audit We have issued a separate communication regarding scope and timing of our audit.

Adoption of, or change in
Accounting Policies
Management has the primary responsibility for the accounting principles used, their consistency, application and clarity. During the fiscal year ended June 30, 2024, the City implemented GASB Statement No. 100 – Accounting Changes and Error Corrections. The implementation of this Statement has resulted in the restatement of beginning fund balances and net position and additional note disclosure to the financial statements.

Significant Accounting
Policies
We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Unusual
Transactions We did not identify any significant unusual transactions. / Required Communications
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13 Audit Adjustments
Audit adjustments, other than those that are clearly trivial, proposed by us and recorded by the City. We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.

Disagreements with
Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the financial statements.

Consultations with Other
Accountants
We are not aware of any consultations by management with other accountants about accounting or auditing matters.

Significant Issues Discussed
With Management
No significant issues arising from the audit were discussed or the subject of correspondence with management.

Significant Difficulties
Encountered in Performing
the Audit
We did not encounter any significant difficulties in dealing with management during the audit.
/ Required Communications, continued
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14 Significant Matters That
Required Consultation
We did not encounter any difficult or contentious matters that required consultation outside the engagement team and that are, in our professional judgment, significant and relevant to your responsibility to oversee the financial reporting process.

Shared Responsibilities for
Independence
Independence is a joint responsibility and is managed most effectively when management, City Council, and audit firms work together in considering compliance with American Institute of Certified Public Accountants (AICPA) and Government Accountability Office (GAO) independence rules. AICPA and GAO rules require independence both in mind and in appearance when providing audit and other attestation services. Vasquez ensures that the AICPA and GAO’s General Requirements for performing non-attest services are adhered to and included in all letters of engagement. Vasquez maintains a system of quality control over compliance with independence rules and firm policies.

Conditions of Retention No significant issues were discussed, or subject to correspondence, with management prior to retention.

Irregularities, Fraud or Illegal
Acts
No irregularities, fraud or illegal acts came to our attention as a result of our audit procedures.

Significant Written
Communication Between
Management and Our Firm
The most significant written communications between management and our firm were the Letter of Comments to Management and the Management Representation Letter. / Required Communications, continued
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15 Summary of Significant Accounting Estimate
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events and certain assumptions about future events. The following describes the significant accounting estimates reflected in the City’s June 30, 2024 financial statements.  The estimated useful lives of the City’s capital assets were based on management’s best estimate and prevailing practices in the local government sector.  Net pension/ other postemployment benefits (OPEB) liabilities were actuarially calculated based on certain assumptions disclosed in notes to the financial statements.  Investments’ fair market values were obtained from the fiscal agents, the pension and OPEB trustees, the investment custodian and the bond trustees and based on amortized cost and observable inputs.
 The fair values of interest rate swaps were estimated by PFM using the future net settlement payments required by the swap, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates,
 The City’s receivables are stated at the amounts collectible based on the results of the City’s evaluations.
 Claim payables are estimated when a loss has occurred and the amount of the loss can be reasonably estimated and include an amount for claims that have been incurred, but not reported as of the end of the year.
• The net present values of the future leases and subscription payments are calculated based on the estimated incremental borrowing rates and investment rate of returns for the City. / Required Communications, continued
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16 / New Accounting
Pronouncements
Effective in Future Years
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17 / New Accounting Pronouncements –
Effective in Future Years
The Governmental Accounting Standards Board (GASB) has issued several pronouncements that have effective dates that may impact future financial presentations.

To be implemented in
FY 2025
• GASB 101 – Compensated Absences
• GASB 102 – Certain Risk Disclosures
To be implemented in
FY 2026
GASB 103 – Financial Reporting Model
GASB 104 – Disclosure of Certain Capital Assets
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18 Questions
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Vasquez + Company LLP has over 50 years of
experience in performing audit, tax, accounting, and
consulting services for all types of nonprofit
organizations, governmental entities, and private
companies. We are the largest minority-controlled
accounting firm in the United States and the only
one to have global operations and certified as MBE
with the Supplier Clearinghouse for the Utility
Supplier Diversity Program of the California Public
Utilities Commission.

We are clients of the RSM Professional Services+
Practice. As a client, we have access to the
Professional Services+ Collaborative, a globally
connected community that provides access to an
ecosystem of capabilities, collaboration and
camaraderie to help professional services firms
grow and thrive in a rapidly changing business
environment. As a participant in the PS+
Collaborative, we have the opportunity to interact
and share best practices with other professional
services firms across the U.S. and Canada.
/ Contact Information
19 www.vasquez.cpa
Cristy Canieda, CPA, CGMA
O: +1.213.873.1720
[email protected]
Rhoda Dollaga, CPA
O: +1.213.873.1746
[email protected]
Los Angeles \ San Diego \ Irvine \ Sacramento \ Fresno \ Phoenix \ Las Vegas \ Manila, PH
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20 Thank you for your
time and attention!
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City of Modesto, California
Required Communication to the City Council
Year Ended June 30, 2024
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January 9, 2025
The Honorable Mayor and the Members of the City Council City of Modesto
1010 Tenth Street, Suite 6600
Modesto, CA 95354
Dear Ladies and Gentlemen:

We are pleased to present this report related to our audit of the basic financial statements of the City of Modesto, California’s (the City) as of and for the year ended June 30, 2024. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for the City’s financial reporting process.

This report is intended solely for the information and use of the City Council and management. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to continue to be of service to the City.

Very truly yours,
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TABLE OF CONTENTS

PAGE
Required Communications 1
Summary of Significant Accounting Estimates 4
Exhibits
Exhibit A – Significant Written Communication Between Management and Our Firm –  Management Representation Letters 6
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1 REQUIRED COMMUNICATIONS
The following required communications summarize our responsibilities regarding the financial statement audit as well as observations from our audit that are significant and relevant to your responsibility to oversee the financial and related compliance reporting process.

Our Responsibilities
Our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States have been described to you in our engagement letter dated March 7, 2024. Our audit of the basic financial statements does not relieve management or you of your responsibilities, which are also described in that letter.

Overview of the Planned Scope and Timing of the Financial Statement Audit We have issued a separate communication dated March 7, 2024 regarding the planned scope and timing of our audit and identified significant risks.

Accounting Policies and Practices
Preferability of Accounting Policies and Practices
Under accounting principles generally accepted in the United States of America, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice.

Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting policies used by the City. The following is a description of significant accounting policies or their application that were either initially implemented or changed during the year:
 During the fiscal year ended June 30, 2024, the City adopted new accounting guidance by implementing the provisions of GASB Statement No. 100, Accounting Changes and Error Corrections, which defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity and describes the transactions or other events that constitute those changes. The implementation of this statement has resulted in additional disclosures related to the correction of prior year account balances and restating the beginning net position and fund balances of both government-wide and fund-level financial statements, respectively.

Significant Accounting Policies
We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Unusual Transactions
We did not identify any significant unusual transactions.

Management’s Judgments and Accounting Estimates
Summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates is in the attached Summary of Significant Accounting Estimates.
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2 Accounting Policies and Practices (Continued)
Emphasis-of-Matters Paragraph
During the year, the City implemented a new accounting standard and determined that a previously capitalized construction project would not be owned by the City amounting to $149 million. A prior year adjustment of the financial statements was made accordingly.

In light of these matters, we included an emphasis-of-matters paragraph in the auditor’s report. Below are the paragraphs included in the auditor’s report.

Emphasis of Matters
Implementation of a New Accounting Standard
As discussed in Note 1, the City implemented the provisions of Governmental Accounting Standards Board Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62, during the fiscal year ended June 30, 2024. Our opinion is not modified with respect to this matter.

Prior Year Adjustments
As discussed in Note 20 to the financial statements, the 2023 financial statements have been restated to correct misstatements. Our opinion is not modified with respect to this matter.

Audit Adjustments and Uncorrected Misstatement
There were no proposed audit adjustments made to the original trial balance presented to us to begin our audit. We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.

Other Information Included in Annual Reports
Our responsibility for other information included in annual reports is to read the information and consider whether its content or the manner of its presentation is materially inconsistent with the financial information covered by our auditor’s report, whether it contains a material misstatement of fact or whether the other information is otherwise misleading. We read the City’s introductory, statistical and continuing disclosure sections and did not identify material inconsistencies.

Observations About the Audit Process
Disagreements With Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the basic financial statements.

Consultations With Other Accountants
We are also not aware of any consultations management had with other accountants about accounting or auditing matters.

Significant Issues Discussed With Management
No significant issues arising from the audit were discussed or were the subject of correspondence with management.

Significant Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit. #14..
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3 Observations About the Audit Process (Continued)
Significant Matters that Required Consultation
We did not encounter any difficult or contentious matters that required consultation outside the engagement team and that are, in our professional judgment, significant and relevant to your responsibility to oversee the financial reporting process.

Shared Responsibilities for Independence
Independence is a joint responsibility and is managed most effectively when management, audit committees (or their equivalents), and audit firms work together in considering compliance with American Institute of Certified Public Accountants (AICPA) and Government Accountability Office (GAO) independence rules. For Vasquez & Company LLP (Vasquez) to fulfill its professional responsibility to maintain and monitor independence, management, the City Council, and Vasquez each play an important role.

Our Responsibilities
 AICPA and GAO rules require independence both in mind and in appearance when providing audit and other attestation services. Vasquez is to ensure that the AICPA and GAO’s General Requirements for performing non-attest services are adhered to and included in all letters of engagement.  Maintain a system of quality control over compliance with independence rules and firm policies.

The City’s Responsibilities
 Timely inform Vasquez, before the effective date of transactions or other business changes, of the following:
− New affiliates, City Council members, officers, directors, or persons in financial reporting and compliance oversight roles.
− Changes in the organization structure or the reporting entity impacting affiliates such as related entities, investments, joint ventures, component units, and jointly governed organizations.  Provide necessary affiliate information such as new or updated structure charts, as well as financial information required to perform materiality calculations needed for making affiliate determinations.  Understand and conclude on the permissibility, prior to the City and its affiliates, City Council members, officers, directors, or persons in a decision-making capacity, engaging in business relationships with Vasquez.
 Not entering into arrangements of nonaudit services resulting in Vasquez being involved in making management decisions on behalf of the City.
 Not entering into relationships resulting in Vasquez, Vasquez covered persons or their close family members, temporarily or permanently acting as an officer, director, or person in an accounting, financial reporting or compliance oversight role at the City.

Significant Written Communication Between Management and Our Firm The most significant written communication between our firm and management was the Management Representation Letters attached, as Exhibit A.
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4 SUMMARY OF SIGNIFICANT ACCOUNTING ESTIMATES
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events and certain assumptions about future events. You may wish to monitor throughout the year the process used to determine and record these accounting estimates. The following describes the significant accounting estimates reflected in the City’s June 30, 2024 financial statements.
 The estimated useful lives of the City’s capital assets were based on management’s best estimate and prevailing practices in the local government sector.  Net pension/ other postemployment benefits (OPEB) liabilities were actuarially calculated based on certain assumptions disclosed in Note 20 to the financial statements.  The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the CalPERS Plans is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures.
 The City’s total OPEB liability was measured as of June 30, 2023 and the OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation as of June 30, 2022.  Estimated fair values for investments are obtained from quoted market prices where available.  The fair values of interest rate swaps were estimated by PFM using the future net settlement payments required by the swap, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates.
 Collectability of receivables and provision for uncollectible accounts are based on management’s estimates and historical experience.
 Claims liabilities are estimated when a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities also include an amount for claims that have been incurred but not reported as of the end of the year.
 The City is a lessor for certain lease contracts and recognizes lease receivables and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease receivable. Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) the lease term, and (3) lease receipts. (1) The City uses the investment rate of return as the discount rate. (2) The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.
(3) Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee.
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5 SUMMARY OF SIGNIFICANT ACCOUNTING ESTIMATES (CONTINUED)  The City recognizes lease and SBITA liabilities for lease contracts and SBITAs, respectively, with a lease term greater than one year in the government-wide financial statements. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease and SBITA liabilities. Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease and subscription payments to present value, (2) the lease and subscription terms, and (3) lease and subscription payments. (1) The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases and SBITAs. (2) The lease and subscription terms include the noncancelable period of the lease and subscription, respectively, plus any option periods that are likely to be exercised. (3) Lease and subscription payments included in the measurement of the lease and subscription liabilities, respectively, are composed of fixed payments that the City is reasonably certain to exercise.
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Significant Written Communication Between
Management and Our Firm
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.. ).
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-

CITY OF

MODESTO

CALIFORNIA
December 6, 2024
Vasquez and Company LLP
655 N Central Avenue, Suite 1550
Glendale, CA 93215
Finance Department
Accounting Division
P.O. Box 642
Modesto, California 95354
209.577.5387
[email protected]
This representation letter is provided in connection with your audits of the basic financial statements of the City of Modesto, California (the City), as of and for the year ended June 30, 2024, for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

We confirm, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves, that as of December 6, 2024:

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated March 7, 2024, for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP.

2. We acknowledge our responsibility 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.

3. We acknowledge our responsibility for the design, implementation and maintenance of controls to prevent and detect fraud.

4. The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of U.S. GAAP, and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take.

5. The methods, assumptions and data used to measure accounting estimates are as follows, and result in estimates that are appropriate for financial statement measurements and disclosure purposes and have been consistently selected and applied in making the estimate: (1) investments' fair market values were obtained from the fiscal agents, from the pension and OPEB trustees, investment custodian and the bond trustees and based on amortized cost and observable inputs, (2) the City's receivables are stated at the amounts collectible based on the results of the City's evaluations, (3) the estimated useful lives of the City's capital assets were based on management's best estimate and prevailing practices in the local government sector, (4) claim payables are estimated when a loss has occurred and the amount of the loss can be reasonably estimated and include an amount for claims that have been incurred, but not reported as of the end of the year, (5) the fair value of interest rate swaps were estimated by PFM using the future net settlement payments required by the swap, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates, and (6) the net present values of the future leases and subscription payments are calculated based on the estimated incremental borrowing rates and investment rate of returns for the City. Significant judgments made in making the estimates have taken into account all relevant information of which we are aware.

Exhibit A – Management Representation Letters
6 #14..
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Vasquez and Company LLP
December 6, 2024

Page 2 ends

Appropriate specialized skills or expertise have been applied in making the estimate. The assumptions listed above properly reflect our intent and ability to carry out the specific courses of action previously communicated to you on behalf of the City. All disclosures related to the estimates, including disclosures describing estimation uncertainty, are complete and reasonable in the context of U.S.

GAAP. No subsequent events have occurred that would require adjustment to the estimate and related disclosures included in the financial statements.

6. Related-party transactions have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S.

GAAP. Types of related party transactions engaged in by the City include:
a. Those with component units for which the City is accountable. b. Those with other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.
c. Those with joint ventures in which the City has an interest. d. Those with jointly governed organizations in which the City participates. e. lnterfund transactions, including interfund accounts and advances receivable and payable, sale and purchase transactions, interfund transfers, long-term loans, leasing arrangements and guarantees.

7. All funds that meet the quantitative criteria in GASB Statement No. 34; Basic Financial Statementsand Management's Discussion and Analysis-for State and Local Governments, as amended, and No. 37, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments: Omnibus-an amendment of GASB Statements No. 21 and No. 34, for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users.

8. The financial statements properly classify all funds and activities in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, as amended.

9. The City followed either its established accounting policy regarding which resources (that is, restricted, committed, assigned or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available or followed paragraph 18 of GASB Statement No. 54 to determine the fund balance classifications for financial reporting purposes.

10. The financial statements include all fiduciary activities required by GASB Statement No. 84, Fiduciary Activities, as amended.

11. All events subsequent to the date of the financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed.

12. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.

Exhibit A – Management Representation Letters 7
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Vasquez and Company LLP
December 6, 2024

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13. Management has followed applicable laws and regulations in adopting, approving and amending budgets.

14. In the engagement letter dated March 7, 2024, we requested that you draft the financial statements in connection with your audit.

With respect to this service:
a. We have made all management decisions and performed all management functions; b. We assigned an appropriate individual to oversee the services; c. We evaluated the adequacy and results of the services performed, and made an informed judgment on the results of the services performed;
d. We have accepted responsibility for the results of the services; and e. We have accepted responsibility for all significant judgments and decisions that were made.

15. Risk disclosures associated with deposit and investment securities and derivative transactions are presented in accordance with GASB requirements.

16. Provisions for uncollectible receivables have been properly identified and recorded.

17. Capital assets, including infrastructure, intangible assets, and right-of-use assets are properly capitalized, reported and, if applicable, depreciated.

18. During the fiscal year 2024, the City determined certain corrections in the previously issued 2023 financial statements that include overstatement of capital assets amounting to $149 million which pertain to capital projects that will not be owned by the City upon completion.

19. The government properly separated information in debt disclosures related to direct borrowings and direct placements of debt from other debt and disclosed any unused lines of credit, collateral pledged to secure debt, terms in the debt agreements related to significant default or termination events with finance-related consequences and significant subjective acceleration clauses in accordance with GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements.

20. Components of net position (net investment in capital assets, restricted, and unrestricted) and classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved.

21. Revenues are appropriately classified in the statement of activities within program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.

22. Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis.

23. lnterfund, internal, and intra-entity activity and balances have been appropriately classified and reported.

Exhibit A – Management Representation Letters 8
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December 6, 2024

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24. The City's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available and appropriately disclosed and that net position is properly recognized under the policy.

25. The City does not have tax abatement agreements that are required to be disclosed under GASB Statement No. 77, Tax Abatement Disclosures.

26. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, or to special assessment bond holders, which is not disclosed in the financial statements.

27. We have complied with all aspects of laws, regulations and provisions of contracts and agreements that would have a material effect on the financial statements in the event of noncompliance.

28. We have reviewed GASB Statement No. 100, Accounting Changes and Error Corrections-an amendment of GASB Statement No. 62, effective for the fiscal year ending June 30, 2024, and we believe that the implementation is appropriate.

29. We have no knowledge of any uncorrected misstatements in the financial statements.

30. We have requested an unsecured electronic copy of the auditor's report and basic financial statements and agree that the auditor's report and basic financial statements will not be modified in any manner.

Information Provided

31. We have provided you with:
a. Access to all information of which we are aware that is relevant to the preparation and fair presentation of the basic financial statements such as records, documentation and other matters. b. Additional information that you have requested from us for the purpose of the audits. c. Unrestricted access to persons within the City from whom you determined it necessary to obtain audit evidence.
d. Minutes of the meetings of the City Council, or summaries of actions of recent meetings for which minutes have not yet been prepared.

32. All transactions have been recorded in the accounting records and are reflected in the basic financial statements.

33. It is our responsibility to establish and maintain internal control over financial reporting. One of the components of an entity's system of internal control is risk assessment. We hereby represent that our risk assessment process includes identification and assessment of risks of material misstatement due to fraud. We have shared with you our fraud risk assessment, including a description of the risks, our assessment of the magnitude and likelihood of misstatements arising from those risks, and the controls that we have designed and implemented in response to those risks.

34. We have no knowledge of allegations of fraud or suspected fraud affecting the City's basic financial statements involving:
a. Management.

Exhibit A – Management Representation Letters 9
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Vasquez and Company LLP
December 6, 2024

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Modesto City CouncilFebruary 25, 2025

Modesto City Council
February 25, 2025