Modesto City Council
November 25, 2025

Replacement Treatment System
Building Facility to House Chlorination Equipment
Employee Restroom and Storage Area
SCADA and Instrumentation Upgrades
Landscaping, Security Fencing, and Irrigation Upgrades
The Grayson Water Infrastructure Project will be constructed at the current Well 69, formerly Well 274, Site; A 0.41 acre parcel on Mary Street (APN 016-034-015).

On March 13, 2018, by Resolution No. 2018-118, Council approved the submittal of grant applications to the Drinking Water State Revolving Fund and State Water Resources Control Board for Planning/Design and Implementation Funding for the Grayson Water Infrastructure Project.

On May 18, 2022, staff was notified by the State Water Resources Control Board that the Grayson Water Infrastructure Project had been awarded $653,200 in Planning/Design and Implementation funding.

On November 1, 2022, by Resolution No. 2022-445, Council approved an Engineering Design Services Agreement with West Yost Associates, of Sacramento, CA, for the Grayson Water Infrastructure Project in the amount of $1,464,918 for the identified scope of services, plus $146,492 in additional services, if needed, for a total amount not to exceed $1,611,410.

The Grayson Water Infrastructure Project is currently in design.

DISCUSSION:

During the design phase of the Grayson Water Infrastructure Improvements Project, it was determined that the existing Well 69 Site would not be large enough to accommodate the necessary improvements.

To support full project buildout, acquiring surplus land in the vicinity of the well site would be necessary. City staff initiated discussions with Stanislaus County staff regarding the purchase of adjacent property, and three areas totaling 37,460 square feet (SF) were identified for potential acquisition:

Area 1 Mary Street
Area 2 Southeast Corner of Laird Street and Mary Street Area 3 South of APN 016-034-015
Associated Right of Way Services, Inc. (ARWS), the City’s On-Call Real Property Consultant, was retained to appraise the parcels. The Appraisal Report, prepared by Valbridge Property Advisors, valued the properties at $3.00 per SF.

Stanislaus County notified the City that Area 1 would require a transfer of jurisdictional control, rather than a transfer of land in fee title; Based on this information the City elected not to pursue #7..
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City Council, November 25, 2025
Purchase and Sale Agreement
Portion of Assessor’s Parcel Number 016-034-014-000
Grayson Water Infrastructure Project

acquisition of Area 1 and adjusting for this change, the total Real Property subject to purchase was reduced to 30,487 SF at a cost of $91,461.

As a condition of the sale, the City has agreed to grant a Road Easement Deed to the County at the location described and depicted in Exhibit 3-1 and 3-2 of the Purchase and Sale Agreement.

FISCAL IMPACT:

Expenses associated with the purchase of this Real Property will be housed in the following Capital Improvement Program Project:
101081 – Grayson System Improvements
Anticipated Land Acquisition Expenditures
Purchase Price of Land $91,461
Estimated Closing Costs $10,000
TOTAL $101,461
Staff has determined that $91,461 is a fair price for the purchase of the property to proceed with completion of the Grayson Water Infrastructure Project as soon as possible, at the lowest overall cost.

A budget adjustment in the amount of $100,000, from Water Fund Reserves, will be necessary to fund this phase of the project.

COMMITTEE RECOMMENDATION:

There has been no Committee action taken on this Item.

CEQA/NEPA REQUIREMENTS:

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

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the purchase of 30,487 square feet of Real Property located at Assessor’s Parcel Number 016-034-014-000, Grayson, CA owned by Stanislaus County for $91,461, plus $10,000 in closing costs, to be used for the Grayson Water Infrastructure Project, and authorizing the City Manager, or his designee, to execute the Purchase and Sale Agreement and all related documents required to complete the transaction.

Resolution approving an Amendment to the Fiscal Year 2025-26 Capital Improvement Program Budget in the amount of $100,000 to fund the Purchase of Real Property for the Grayson Water Infrastructure Improvements Project and authorizing the City Manager, or his designee, to implement the provisions of the Resolution.
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City Council, November 25, 2025
Purchase and Sale Agreement
Portion of Assessor’s Parcel Number 016-034-014-000
Grayson Water Infrastructure Project

Approved by:

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

1. Resolutions (2)

2. Purchase and Sale Agreement

3. Appraisal Report
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11/25/2025/Utilities/EVargas/Item XX 1 2025-XX

MODESTO CITY COUNCIL
RESOLUTION NO. 2025-XX
RESOLUTION APPROVING THE PURCHASE OF 30,487 SQUARE FEET OF REAL PROPERTY LOCATED AT ASSESSOR’S PARCEL NUMBER 016-034- 014-000, GRAYSON, CA OWNED BY STANISLAUS COUNTY FOR $91,461, PLUS $10,000 IN CLOSING COSTS, TO BE USED FOR THE GRAYSON

WATER INFRASTRUCTURE PROJECT, AND AUTHORIZING THE CITY

MANAGER, OR HIS DESIGNEE, TO EXECUTE THE PURCHASE AND SALE

AGREEMENT AND ALL RELATED DOCUMENTS REQUIRED TO

COMPLETE THE TRANSACTION
WHEREAS, the Grayson water service area was acquired from Del Este Water Company in 1995 as part of the overall acquisition of Del Este’s water system; and WHEREAS, as part of an effort to improve service to the customers of Grayson a hydraulic assessment of the Grayson Water System was performed to evaluate the system’s ability to meet the community’s current and build-out demands; and WHEREAS, during the design phase of the Grayson Water Infrastructure Improvements Project, it was determined that the existing Well 69 Site would not be large enough to accommodate the necessary improvements, and WHEREAS, to support full project buildout, acquiring surplus land in the vicinity of the well site would be necessary; and
WHEREAS, City staff initiated discussions with Stanislaus County staff regarding the purchase of adjacent property, and three areas totaling 37,460 square feet (SF) were identified for potential acquisition; and
WHEREAS, Associated Right of Way Services, Inc. (ARWS), the City’s On-Call Real Property Consultant, was retained to appraise the parcels; and WHEREAS, the Appraisal Report, prepared by Valbridge Property Advisors, valued the properties at $3.00 per SF; and
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11/25/2025/Utilities/EVargas/Item XX 2 2025-XX
WHEREAS, the County agreed to sell 30,487 SF of real property for $91,461; and
WHEREAS, as a condition of the sale, the City has agreed to grant a Road Easement Deed to the County at the location described and depicted in Exhibit 3-1 and 3- 2 of the Purchase and Sale Agreement.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes the purchase of 30,487 SF of real property located at Assessor’s Parcel Number 016-034-014-000, Grayson, CA owned by Stanislaus County for $91,461, plus $10,000 in closing costs, to be used for the Grayson Water Infrastructure Project.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized to execute the Purchase and Sale Agreement and Road Easement Deed, in a form approved by the City Attorney, and all related documents required to complete the transaction.
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11/25/2025/Utilities/EVargas/Item XX 3 2025-XX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 25th day of November 2025, by Councilmember _______________, who moved its adoption, which motion being duly seconded by Councilmember _______________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST:

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

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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11/25/2025/Utilities/EVargas/Item X 1 2025-XX

MODESTO CITY COUNCIL
RESOLUTION NO. 2025-XX
RESOLUTION APPROVING AN AMENDMENT TO THE FISCAL YEAR 2025- 26 CAPITAL IMPROVEMENT PROGRAM BUDGET IN THE AMOUNT OF
$100,000 TO FUND THE PURCHASE OF REAL PROPERTY FOR THE

GRAYSON WATER INFRASTRUCTURE IMPROVEMENTS PROJECT AND

AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO IMPLEMENT

THE PROVISIONS OF THE RESOLUTION
WHEREAS, certain budgetary transactions are necessary in the amount of $100,000, in order to fund the purchase of Real Property for the Grayson Water Infrastructure Improvements Project; and
WHEREAS, the Fiscal Year 2025-26 Capital Improvement Program Budget must be amended.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the amendment of the Fiscal Year 2025-26 Capital Improvement Program Budget in the amount of $100,000.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to implement the provisions of this resolution. #7..
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11/25/2025/Utilities/EVargas/Item X 2 2025-XX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 25th day of November 2025, by Councilmember _______________, who moved its adoption, which motion being duly seconded by Councilmember _______________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST:

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

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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PURCHASE AND SALE AGREEMENT

AND ESCROW INSTRUCTIONS
This Purchase and Sale Agreement with Escrow Instructions (“Agreement”) is made this ______ day of ______________________, 2025 (the “Effective Date”), by and between STANISLAUS COUNTY, a political subdivision of the State of California (“Seller”) and the CITY OF MODESTO, a California charter city (“Buyer”). Seller and Buyer may each be referred to herein as a “Party” or collectively as the “Parties”.

RECITALS
WHEREAS, Seller owns that certain real property located in the County of Stanislaus described and depicted in Exhibit 1-1 and 1-2, Assessor’s Parcel Number 016-034-014-000 (“ Parcel 014”); and
WHEREAS, Seller desires to sell and is willing to sell to Buyer, on the terms and conditions herein, fee simple title to a portion of the Parcel 014 (hereafter referred to as the “Property”), described and depicted in Exhibit 2-1 and 2-2. As a condition to the sale, Buyer has agreed to grant a Road Easement Deed to the County at the location described and depicted Exhibit 3-1 and 3-2; and WHEREAS, Buyer desires to buy and is willing to buy from Seller, on the terms and conditions herein, fee simple title in the Property; and
WHEREAS, the creation of the parcel of Property by grant deed (without a parcel map) is authorized under the exemption from the Subdivision Map Act as set forth in Government Code §66426.5; and
WHEREAS, under California’s Surplus Land Act, Government Code §54221(f)(1)(D) defines "exempt surplus land" to include "surplus land that a local agency is transferring to another local, state, or federal agency for the agency's use…." The Seller’s Board of Supervisors has determined that the proposed sale of the Property to another public agency is exempt surplus land because the transferee is the City of Modesto and the Property will be used for water infrastructure improvements that will support the town of Grayson; and WHEREAS, pursuant to Public Resources Code §21065, this Agreement does not constitute approval of a project with a potential to cause a physical change in the environment, but is instead solely a transfer of a real property interest; and
NOW, THEREFORE, Buyer and Seller agree, and Escrow Holder is instructed, as follows:

1. Purchase and Sale. Upon all of the terms and conditions contained in this Agreement, Buyer agrees to purchase from Seller, and Seller agrees to sell to Buyer, the Property.

2. Purchase Price. The purchase price ("Purchase Price") for the Property shall be Ninety One Thousand Four Hundred Sixty One Dollars ($91,461.00). The Purchase Price shall be payable as follows:
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2 2.1 Deposit. Buyer shall deposit into Escrow the sum of Five Thousand Dollars ($5,000.00) in cash or other immediately available funds ("Deposit") within five (5) business days of the Opening of Escrow (as defined below). Subject to Section 5.4, upon delivery of the Approval Notice, the Deposit shall be nonrefundable to Buyer, except in the event of a default by Seller or as otherwise specifically provided in this Agreement, and remain in Escrow until the Close of Escrow until termination of this Agreement or Close of Escrow, when it shall be credited against the Purchase Price.

2.2 Payment of Balance of Purchase Price. The balance of the Purchase Price shall be deposited in Escrow by Buyer in cash or other immediately available funds on or prior to the Close of Escrow.

3. Opening of Escrow. Not later than three (3) business days after the Effective Date, Buyer shall open an escrow ("Escrow") with Cypress Title Corporation, Attn: Debbi Johnson, 1156 Scenic Drive, Suite 100, Modesto, CA 95354 (209)375-8299, [email protected] (referred to herein as the “Title Company” or the “Escrow Holder”).

4. Close of Escrow. The closing of the purchase and sale of the Property shall take place through Escrow on a date that is no later than thirty (30) days after the Decision Date (defined below) unless extended by the Parties by mutual agreement.

5. Buyer's Investigation. Commencing upon the Effective Date and ending at 5:00 p.m. Pacific Time on the date that is sixty (60) days after the Effective Date (the "Decision Date"), Buyer shall conduct the following investigations of the Property:

5.1 Title Matters. After the Effective Date, at Buyer’s expense, Buyer shall cause the Title Company to deliver to Buyer a preliminary title report covering the Property together with copies of all documents referenced therein and a map showing the location of all easements affecting the Property (collectively, the "Title Report") for Buyer's review. Buyer's approval or disapproval of the Title Report shall be subject to the judgment and satisfaction of Buyer. Buyer shall have until twenty (20) days prior to the Decision Date (the “Title Review Deadline”) to notify Seller in writing of any matters set forth in the Title Report to which Buyer objects (the “Buyer’s Title Objection Notice”). Buyer’s failure to provide Seller with Buyer’s Title Objection Notice on or before the Title Review Deadline shall be deemed Buyer’s waiver of the right to object to any matters set forth in the Title Report. Seller shall have ten (10) days following receipt of any Buyer’s Title Objection Notice (“Seller’s Title Response Deadline”) within which to advise Buyer in writing whether it will remove or cure any matter to which Buyer has objected in the Buyer’s Title Notice (“Seller’s Title Response Letter”). Seller’s failure to provide Buyer the Seller’s Title Response Letter by Seller’s Title Response Deadline shall be deemed Seller’s disapproval of the items contained in Buyer’s Title Objection Notice. Buyer’s delivery of an Approval Notice shall be deemed Buyer’s waiver of the right to object to any matters set forth in the Title Report.

5.2 Feasibility Studies. Buyer shall review the condition, use, sale, development or suitability of the Property for Buyer's intended purposes. Buyer's approval or disapproval of such feasibility studies shall be subject to the judgment and satisfaction of Buyer. Buyer's failure to approve such feasibility investigations by delivery of the Approval Notice to Seller and Escrow #7..
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3 Holder on or before the Decision Date shall be deemed Buyer's disapproval. Buyer's delivery of the Approval Notice shall be deemed Buyer's approval of all such matters and a waiver of Buyer's rights under Section 5.4 below. Seller hereby grants to Buyer and its agents and employees a license to enter upon the Property upon twenty-four (24) hours prior notice to Seller for the purpose of conducting feasibility studies and physical examinations of the Property. Buyer shall not permit any liens to attach to the Property by reason of the exercise of Buyer's rights herein. Buyer shall, at its sole cost and expense, fully repair any damage caused by its inspections, tests or studies at the Property and restore the Property to substantially the same condition that existed before any of Buyer's inspections, tests or studies, and shall indemnify, defend and hold Seller harmless from any claims, costs or liability relating to such feasibility studies or physical examinations of the Property.

5.3 Property Documents. Seller shall have no obligation to deliver documents relating to the Property (“Property Documents”), unless Buyer makes a request for specific documents. Buyer's request for and approval or disapproval of the Property Documents shall be subject to the judgment and satisfaction of Buyer.

5.4 Termination Prior to Decision Date. If, on or prior to the Decision Date, (i) Buyer delivers a notice disapproving of the condition of the Title Report described in Section 5.1 above, (ii) Buyer delivers a notice disapproving its investigation of the Property pursuant to Section 5.2 above, (iii) Buyer delivers a notice disapproving the Property Documents pursuant to Section 5.3 above or (iv) fails, for any reason or for no reason, to deliver written notice pursuant to (i) through (iii) above ("Approval Notice") to Seller and Escrow Holder, which failure to timely deliver the Approval Notice remains five (5) days after receipt or written notice from Seller that Buyer has not timely responded, then this Agreement shall automatically terminate, in which event: (a) Escrow Holder shall return the Deposit to Buyer, less Escrow Holder's cancellation fees and expenses; (b) Escrow Holder shall return all documents and instruments to the parties who deposited the same into Escrow; (c) Buyer shall return all Property Documents to Seller; and (d) this Agreement shall terminate and neither party hereto shall have any further obligation or responsibility hereunder or liability of any nature or amount whatsoever to the other party hereunder except as expressly provided in Section 5.2.

6. Conditions to Close of Escrow. The following shall constitute conditions to the Close of Escrow, which conditions may be waived, if not satisfied, only in writing by Buyer and/or Seller, as applicable:

6.1 Title Policy. The Title Company shall issue or be irrevocably committed to issue to Buyer, at Buyer's expense, a standard coverage ALTA owner's policy of title insurance ("Title Policy") in the total amount of the Purchase Price or fair market value, dated as of the Close of Escrow, insuring Buyer as the fee owner of the Property, and showing title to the Property vested in Buyer subject only to:
(a) The printed exceptions and exclusions contained in the Title Policy; (b) Nondelinquent general and special real property taxes, bonds and assessments, which shall be prorated as of the Close of Escrow; #7..
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4 (c) All exceptions shown on the Title Report that are approved in writing by Buyer or deemed approved under the terms of this Agreement.

If Buyer requires an extended ALTA owner's policy, lender's policy, or any endorsements to the Title Policy (other than curative endorsements Seller has elected to provide as provided herein), then Buyer shall make such election in a timely manner so as to not interfere with or delay the Close of Escrow and Buyer shall pay the additional cost of obtaining any extended owner's policy, lender's policy, or endorsements to the extent such endorsements are not required to cure a disapproved title exception; provided same shall not be a condition of closing.

6.2 Approval of Feasibility. Buyer shall have delivered the Approval Notice as provided in Section 5 on or before the Decision Date.

6.3 Seller's Performance and Representations and Warranties. Seller shall have performed all of its obligations under this Agreement. Seller'srepresentations and warranties made in this Agreement shall be true and correct in all material respects as of the Closing Date. Seller shall have provided the Closing Notice and all Conditions Precedent have been satisfied.

6.4 Buyer's Performance and Representations and Warranties. Buyer shall have performed all of its obligations under this Agreement including payment of the Purchase Price.

Buyer's representations and warranties made in this Agreement shall be true and correct in all material respects as of the Closing Date.

6.5 No Material Adverse Change. There shall be no material adverse change in the physical condition of the Property from the condition in which it existed as of the date of this Agreement that would render the Property unsuitable for Buyer’s intended development.

6.6 Exempt Surplus Land. Close of Escrow is expressly conditioned upon the approval by California Department of Housing and Community Development (“HCD”) that the proposed sale of the Property to the City is “exempt surplus land” under the California Surplus Land Act.

6.7 Resolution of Abandonment. Close of Escrow is expressly conditioned upon the approval by the County Board of Supervisors of a final Resolution with the unanimous approval of the Board authorizing the abandonment of the Property pursuant to Government Code Section 25580 et seq. (the County Park Abandonment Law of 1959).

6.8 Effect of Failure of a Condition. The conditions described in this Section 6 are for the benefit of Buyer and Seller and must be satisfied or waived by Buyer and/or Seller, as applicable, on or before the Closing Date. Such conditions may only be waived by the delivery of written notice of such waiver to the other party and Escrow Holder.

6.9 Failure of a Condition and Termination. In the event the Close of Escrow does not occur because any of the conditions to the Close of Escrow set forth in Section 6 are not satisfied or waived by Buyer or Seller (as the case may be), and if the failure of such condition is not caused by the default of either party, then the parties agree that this Agreement and the Escrow shall thereupon be terminated, and except as may otherwise be provided in this Agreement, that:
(i) the Deposit shall be immediately returned to Buyer by Escrow Holder without any further #7..
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5 instructions required by the parties hereunder, and any funds deposited by Buyer into Escrow, together with all interest earned thereon in Escrow less Escrow Holder's cancellation fees and expenses; (ii) Escrow Holder shall return all documents and instruments to the parties who deposited the same into Escrow; and (iii) this Agreement shall terminate and neither party hereto shall have any further obligation or responsibility hereunder or liability of any nature or amount whatsoever to the other party hereunder except as provided in Section 5.2.

7. Representations and Covenants of Seller. Seller hereby represents and warrants to, and covenants with, Buyer as follows:

7.1 Power. Seller is a political subdivision of the State of California. Seller is the sole owner in fee simple of the Property. Seller has the full right, capacity, power, and authority to enter into and carry out the terms of this Agreement.

7.2 Requisite Action. All requisite action has been taken by Seller in connection with the entering into of this Agreement, the execution and delivery of the instruments referenced herein, and the consummation of the transaction contemplated hereby.

7.3 Authority. The individual executing this Agreement and the instruments referenced herein on behalf of Seller has the legal power, right and actual authority to bind Seller to the terms and conditions hereof and thereof.

7.4 Governmental Notices. Seller has not received any written notification from any governmental authority bringing any condemnation actions against the Property, or any part thereof, nor to Seller's knowledge is Seller aware of any condemnation actions being contemplated.

Seller has not received any written notification from any City, County or other governmental authority having jurisdiction over the Property requiring any work to be done on or affecting the Property.

7.5 No Unrecorded Interests. To the best of Seller's knowledge, there are no unrecorded leases, licenses, or other possessory interests in the Property.

7.6 No Litigation. To the best of Seller’s knowledge, there is no litigation or legal proceeding pending or threatened in writing against Seller or the Property that could reasonably be expected to adversely affect Seller's or Buyer's ability to perform their respective obligations hereunder, or Buyer's proposed development of the Property.

7.7 Limitation Period. The representations and warranties shall survive the Closing for a period of one (1) year (the "Limitation Period"). In no event shall Seller be liable to Buyer for any punitive damages based upon any breach of representation or warranty. To the extent applicable, the Limitation Period referred to herein shall apply to known as well as unknown breaches of such warranties or representations. Any action with regard to any claim set forth in this section, such claim must be commenced by Buyer within the Limitation Period. Buyer specifically acknowledges that such limitation of liability represents a material element of the consideration to Seller.

8. Representations and Covenants of Buyer. Buyer hereby represents and warrants to, and covenants with, Seller as follows:
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6 8.1 Power. Buyer is a charter city duly formed and validly existing under the laws of the State of California. Buyer has the full right, capacity, power, and authority to enter into and carry out the terms of this Agreement.

8.2 Requisite Action. All requisite action has been taken by Buyer in connection with the entering into of this Agreement, the execution and delivery of the instruments referenced herein, and the consummation of the transaction contemplated hereby.

8.3 Authority. The individuals executing this Agreement and the instruments referenced herein on behalf of Buyer have the legal power, right and actual authority to bind Buyer to the terms and conditions hereof and thereof.

9. Property Conveyed "As Is"

9.1 No Warranties or Representations by Seller. Except as expressly stated in this Agreement or for material facts known to Seller and not disclosed to Buyer, Seller and its agents, employees, and contractors make no representations or warranties, express or implied, oral or written, past, present, or future, concerning the Property. Without limiting the generality of the foregoing, Seller disclaims any warranties or representations as to: Title (except as provided in the deed); Environmental, geological, soil, flood, drainage, or other physical conditions; Zoning, permitted uses, access, or availability of utilities; Condition or compliance with laws (including zoning, fire, disability, or environmental laws); Presence of hazardous materials or underground tanks; Income, expenses, liens, encumbrances, or claims (except as related to clear title and absence of mechanic’s liens); Merchantability, fitness for a particular purpose, or potential for development; Any other matter affecting the Property's condition, value, or suitability.

9.2 Buyer’s Independent Investigation. Buyer acknowledges it has conducted or will conduct all inspections and investigations it deems necessary regarding the condition of the Property, including physical and environmental matters, and is relying solely on its own review and consultants.

9.3 As-Is Acceptance. Except as expressly stated in this Agreement or the closing documents, Buyer accepts the Property “AS IS, WHERE IS,” with all faults and defects, whether known or unknown, and assumes all risks associated with adverse conditions not discovered by its investigations. Buyer acknowledges that no oral or written statements, representations, or information provided by Seller or its representatives shall be binding unless expressly included in this Agreement. The Purchase Price reflects the "as-is" nature of the sale and all associated risks.

9.4 Material Inducement. Buyer agrees that the disclaimers and “as-is” terms set forth in this Section are a material inducement to Seller’s agreement to sell the Property, and Seller would not have agreed to the transaction without them.

9.5 Post-Closing Mutual Indemnification.
(a) Seller shall indemnify, defend, and hold harmless Buyer, its successors and assigns, and their respective directors, officers, employees, agents, and affiliates ("Buyer Indemnified Parties") from and against any and all claims, demands, liabilities, losses, damages, costs, and expenses (including, without limitation, reasonable attorneys' fees) ("Claims") #7..
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7 arising out of or resulting from any negligence, willful misconduct, or wrongful acts or omissions of Seller related to the Property occurring before the Closing Date. (b) Buyer shall indemnify, defend, and hold harmless Seller, its successors and assigns, and their respective directors, officers, employees, agents, and affiliates ("Seller Indemnified Parties") from and against any and all Claims arising out of or resulting from any negligence, willful misconduct, or wrongful acts or omissions of Buyer related to the Property occurring after the Closing Date.
(c) The indemnity obligations under this Agreement shall survive the closing of the transaction and shall continue in full force and effect for a period of one (1) year after Closing.

10. Escrow Closing Obligations.

10.1 Deliveries by Seller to Escrow Holder. Seller hereby covenants and agrees to deliver to Escrow Holder on or prior to the Closing Date the following instruments and documents, the delivery of each of which shall be a condition to the Close of Escrow for the benefit of Buyer:
(a) Grant Deed. The Grant Deed, duly executed, acknowledged and accepted by Seller, conveying the Property to Buyer.
(b) Other Documents. Such other documentation reasonably required by Buyer, Escrow Holder and/or Title Company to effectuate the Closing contemplated hereunder.

10.2 Deliveries by Buyer to Escrow Holder. Buyer hereby covenants and agrees to deliver to Escrow Holder on or prior to the Closing Date the following, the delivery of each of which shall be a condition to the Close of Escrow for the benefit of Seller:
(a) Road Easement Deed. The Road Easement Deed, duly executed, acknowledged and accepted by Seller (and recorded after the Grant Deed), conveying a Road Easement to Seller.
(b) Funds. The balance of the Purchase Price payable at Closing shall be delivered to Escrow Holder by Buyer in cash or other immediately available funds not later than the business day immediately prior to the Closing Date. (c) Other Documents. Such other documentation reasonably required by Seller, Escrow Holder and/or Title Company to effectuate the Closing contemplated hereunder.

10.3 Disbursements and Other Actions by Escrow Holder. Upon the Close of Escrow, and when all required funds and documents have been deposited into the Escrow, Escrow Holder shall promptly undertake all of the following:
(a) Disburse all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price for the Property.
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8 (b) Cause Seller's Grant Deed for the Property to be recorded in the Official Records of the County.
(c) Cause the Road Easement Deed for the benefit of Seller to be recorded in the Official Records of the County.
(d) Cause the Title Policy described in Section 6.1 above to be delivered to Buyer.

11. Escrow Cancellation. If either party defaults with respect to its obligations hereunder, or if Escrow is not in a condition to close by the agreed Closing Date, Escrow Holder shall continue to comply with the instructions contained herein until a written demand has been made by a party entitled to do so for the cancellation of Escrow. Escrow Holder shall notify the other party of any such demand.

11.1 Charges. If the Close of Escrow fails to occur due to Seller's default, Seller shall pay all Escrow cancellation charges. If the Close of Escrow fails to occur due to Buyer's default, Buyer shall pay all Escrow cancellation charges. If the Close of Escrow fails to occur for any reason other than the foregoing, Buyer all Escrow cancellation charges. "Escrow Cancellation Charges" means all fees, charges and expenses charged by Escrow Holder as well as all charges related to the services of the Title Company in connection with title matters relating to this Escrow.

11.2 Default by Seller.
(a) Pre-Closing Seller Default. In the event of a breach or default under this Agreement by the Seller, which breach or default is not remedied within ten (10) days after written notice of such breach or default is given to the Seller and Escrow Holder, Buyer’s sole and exclusive remedies shall be to seek provisional remedies, or specific performance or terminate this Agreement and the Escrow created hereby in which event Buyer shall be entitled to the immediate refund of the Deposit and any other funds deposited by Buyer into Escrow. Notwithstanding the foregoing, if Seller fails to perform any of its obligations prior to the expiration of the Due Diligence Period of which Buyer has actual knowledge or Buyer has actual knowledge of any breach of a representation or warranty made by Seller under the terms of this Agreement, and Buyer has not elected to terminate this Agreement pursuant to Section 5.4, Buyer shall be deemed to have waived such default or breach by Seller. Notwithstanding the foregoing to the contrary, no notice of termination given by Buyer hereunder shall be of any force or effect if Seller cures the default within ten (10) days after Seller's receipt of any such termination notice. Buyer hereby waives any and all right to file or record any lis pendens or any other lien or encumbrance against the Property or to recover from Seller any damages (including, without limitation, any actual direct, indirect, consequential, punitive or other damages). The foregoing sets forth Buyer's sole and exclusive remedies with respect to Seller's default, and Buyer waives any and all other remedies as may be available at law or in equity in connection with such Seller default. The remedies set forth herein shall not limit Buyer' right to recover attorneys' fees and court costs pursuant to this Agreement if it must proceed with legal action to seek provisional remedies or specific performance or to obtain a refund of the Deposit. Further, Buyer acknowledges and agrees that its recourse against Seller under this Agreement for a default or other breach by Seller under #7..
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9 this Agreement occurring prior to or at the Closing is limited to the remedies set forth in Section

10.2 hereof.
(b) Post-Closing Remedy For Seller Default. In connection with any post-Closing remedy which Buyer may have against Seller for any matter, including, without limitation, any matter arising under this Agreement, such remedy shall be limited to only actual costs, losses, expenses and/or damages incurred by Buyer (and in no event shall Buyer be entitled to any consequential or punitive damages).

11.3 Seller's Liquidated Damages if Buyer Defaults. BUYER AND SELLER

AGREE THAT IF THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO THE DEFAULT

OF BUYER AFTER THE DECISION DATE, WHICH BREACH OR DEFAULT IS NOT REMEDIED WITHIN TEN (10) DAYS AFTER WRITTEN NOTICE OF SUCH BREACH OR

DEFAULT IS GIVEN TO BUYER, IT WOULD BE IMPRACTICAL OR EXTREMELY

DIFFICULT TO FIX SELLER'S ACTUAL DAMAGES FOR, AMONG OTHER ITEMS,

TAKING OR HAVING THE PROPERTY OFF THE MARKET, AND BUYER AND SELLER

AGREE THAT ANY OF THE DEPOSIT PLACED INTO ESCROW AND ALL INTEREST

EARNED THEREON IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES IF THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO BUYER'S DEFAULT. IN ADDITION,

BUYER DESIRES TO LIMIT THE AMOUNT OF DAMAGES FOR WHICH BUYER MIGHT

BE LIABLE SHOULD BUYER BREACH THIS AGREEMENT BY FAILING TO CLOSE THE

ESCROW DUE TO A DEFAULT OF BUYER, AND SELLER DESIRES TO AVOID THE

COSTS AND LENGTHY DELAYS THAT WOULD RESULT IF SELLER WERE REQUIRED

TO FILE A LAWSUIT TO COLLECT ITS DAMAGES FOR SUCH A BREACH OF THIS AGREEMENT. THEREFORE, IF THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO

THE DEFAULT OF BUYER, THEN UPON THE WRITTEN DEMAND OF SELLER THIS AGREEMENT AND THE ESCROW SHALL BE TERMINATED AND CANCELLED. IN

SUCH EVENT, (A) ESCROW HOLDER SHALL RETURN ALL DOCUMENTS AND

INSTRUMENTS TO THE PARTIES WHO DEPOSITED SAME, (B) ALL TITLE AND

ESCROW CANCELLATION CHARGES SHALL BE CHARGED TO BUYER, AND (C) SELLER SHALL RETAIN THE DEPOSIT, AS SELLER'S SOLE AND EXCLUSIVE

REMEDY AT LAW AND IN EQUITY, AND ALL INTEREST EARNED THEREON AS LIQUIDATED DAMAGES PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671 AND 1677 FOR BUYER'S FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY.

SELLER'S SOLE AND EXCLUSIVE REMEDY, IN THE EVENT BUYER FAILS TO CLOSE

THE ESCROW DUE TO A DEFAULT OF BUYER AFTER THE DECISION DATE, SHALL

BE LIMITED TO THE RETENTION OF THE DEPOSIT AND ALL INTEREST EARNED

THEREON AND SELLER HEREBY WAIVES ALL OTHER CLAIMS FOR DAMAGES OR

RELIEF AT LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, ANY RIGHTS

TO SPECIFIC PERFORMANCE THAT SELLER MAY HAVE PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1680 OR 3389, OR OTHERWISE). NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION 10.3, ALL PARTIES

AGREE THAT THIS LIQUIDATED DAMAGES PROVISION IS NOT INTENDED AND SHOULD NOT BE DEEMED OR CONSTRUED TO LIMIT IN ANY WAY ANY PARTY’S INDEMNITY OBLIGATIONS AND/OR LIMIT THE SELLER’S ABILITY TO RECOVER ITS ATTORNEY FEES. THE PARTIES HAVE SET FORTH THEIR INITIALS BELOW TO #7..
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10 INDICATE THEIR AGREEMENT WITH THE LIQUIDATED DAMAGES PROVISION CONTAINED IN THIS SECTION.
_______________
Buyer's Initials
_______________
Seller's Initials

12. Costs at Closing

12.1 Escrow and Other Costs. At Closing, Buyer shall pay all of Escrow Holder's escrow fees for the Escrow, the cost of recording the Deed, cost of any documentary transfer taxes, and the cost of the Title Policy and any endorsements to the Title Policy to the extent not required to cure any disapproved exceptions. Buyer and Seller shall each bear their own respective legal costs, if any, outside of Escrow. All other costs or expenses not otherwise provided for in this Agreement shall be apportioned or allocated to Buyer.

12.2 Real Property Taxes and Assessments. All nondelinquent general and special real property taxes, bonds and assessments with respect to the Property, if any, shall be prorated through Escrow between Buyer and Seller as of the Closing based upon the latest available tax bills or tax information using customary escrow procedures. If the regular tax bill or bills for the Property for the fiscal year in which this Escrow closes are not available as of the Closing, Buyer and Seller shall re-prorate all such general and special real property taxes, bonds and assessments for the Property between themselves outside of Escrow based upon the then current fiscal year's regular tax bill or bills within thirty (30) days following the date such regular tax bill or bills are actually received by the parties. Any special assessments, district assessments or any other bonds and assessments with respect to the Property shall not be paid in full by Seller, but the current installment of such bonds and assessments shall be prorated between Buyer and Seller as of the Closing as provided above.

12.3 Supplemental Real Property Taxes. With respect to any supplemental taxes assessed against the Property pursuant to California Revenue and Taxation Code Section 75, et seq., Buyer and Seller hereby agree between themselves that Seller shall be obligated to pay all such supplemental taxes assessed against the Property for any period prior to the Closing, and Buyer shall be obligated to pay all such supplemental taxes assessed against the Property for any period from and after the Closing.

13. No Brokers. Seller and Buyer each represent to the other that there is no brokerage commission, finder's fee or other compensation of any kind due or owing to any person or entity in connection with the transaction covered by this Agreement. Each party agrees to and does hereby indemnify and hold the other harmless from and against any and all costs, liabilities, losses, damages, claims, causes of action or proceedings which may result from any other broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of the indemnifying party in connection with this transaction.

14. Waiver and Consent. Either party may specifically and expressly waive in writing any breach by the other party of any provision of this Agreement, but no such waiver shall constitute a further or continuing waiver of any preceding or succeeding breach of the same or any other provision. The consent by one party to any act by the other for which such consent was #7..
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11 required shall not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or any similar acts in the future. No waiver or consent shall be implied from silence or any failure of a party to act, except as otherwise specified in this Agreement.

15. Survivability. Except as expressly provided otherwise in this Agreement, all covenants of Buyer or Seller which are intended hereunder to be performed in whole or in part after the Closing, and all representations, warranties and indemnities by either party to the other, shall survive the Closing and be binding upon and inure to the benefit of the respective parties hereto and their respective heirs, executors, administrators, successors and assigns.

16. Further Documents and Acts. Each of the parties hereto agrees to cooperate in good faith with each other, and to execute and deliver such further documents and perform such other acts as may be reasonably necessary or appropriate to consummate and carry into effect the transactions contemplated under this Agreement.

17. Miscellaneous.

17.1 Successors and Assigns. Each and all of the covenants and conditions of this Agreement shall inure to the benefit of and shall be binding upon the respective heirs, executors, administrators, successors and assigns of Buyer and Seller. Buyer shall not voluntarily or by operation of law assign or transfer any right, interest or obligation hereunder without the Seller's prior written consent, which consent may not be unreasonably withheld.

17.2 Attorneys' Fees. If any legal action is instituted between Seller, Buyer or Escrow Holder in connection with this Agreement, then the prevailing party shall be entitled to recover from the losing party all of its costs and expenses, including court costs and reasonable attorneys' fees.

17.3 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing (including facsimile and e-mail communications) and shall be (as elected by the person giving such notice) hand delivered by messenger or courier service, sent via facsimile or email with confirming copy by mail, or mailed by United States mail (postage prepaid), registered or certified, return receipt requested, addressed as follows:

If to Buyer:

City of Modesto
1010 10th Street
P.O. Box 642
Modesto, California 95353
Attn: Utilities Director
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12 With a copy to:

City of Modesto
Daniel Haakma
1010 10th Street
P.O. Box 642
Modesto, California 95353
If to Seller:

County of Stanislaus
General Services Agency
Andrew Johnson, GSA Director and Purchasing Agent
1010 10th Street, Suite 5400
Modesto, CA 95354
[email protected]
With a copy to:

County of Stanislaus
General Services Agency
Cody Nelson, Real Property Program Manager
1010 10th Street
Modesto, CA 95354
[email protected]
If to Escrow Holder:

Cypress Title Corporation
Attn: Debbi Johnson
1156 Scenic Drive, Suite 100
Modesto, CA 95354
(209)375-8299
[email protected]
Each notice shall be deemed delivered (1) on the date delivered if by personal delivery, (2) on the date of transmission if by e-mail or facsimile and with confirmed answer back if by facsimile, and (3) seventy-two (72) hours after deposit in the United States mail (postage prepaid) if by registered or certified mail. By giving to the other parties written notice, the parties to this Agreement and their respective successors and assigns shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses and each shall have the right to specify as its address any other address.

17.4 Gender and Name. In this Agreement (unless the context requires otherwise), the masculine, feminine and neuter genders and the singular and the plural shall be deemed to include one another, as appropriate.
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13 17.5 Entire Agreement. This Agreement and its Exhibits constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and the final, complete and exclusive expression of the terms and conditions thereof. All prior agreements, representations, negotiations and understandings of the parties hereto, oral or written, express or implied, are hereby superseded and merged herein.

17.6 Captions. The captions used herein are for convenience only and are not a part of this Agreement and do not in any way limit or amplify the terms and provisions hereof.

17.7 Time of Essence. Time is of the essence of every provision of this Agreement in which time is an element.

17.8 Governing Law. This Agreement and the Exhibits attached hereto have been negotiated and executed in the State of California and shall be governed by and construed in accordance with the laws of the State of California.

17.9 Invalidity of Provision. If any provision of this Agreement as applied to either party or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of the Agreement as a whole.

17.10 Amendments. No addition to or modification of any provision contained in this Agreement shall be effective unless fully set forth in writing by both Buyer and Seller.

17.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.

17.12 Exhibits. All Exhibits to this Agreement are incorporated herein by this reference as though fully set forth in the body hereof.

17.13 Time References. Any references in this Agreement to time for performance of obligations or elapsed time shall mean consecutive calendar days, months, or years, as applicable, unless otherwise explicitly indicated herein. If the day on which Buyer or Seller is required to take any action under the terms of this Agreement is not a business day, such action shall be taken on the next succeeding business day. Whenever notice, approval or disapproval must be given to Escrow Holder and Escrow Holder is closed on the last day for taking such action, then the parties shall have until 5:00 p.m. on the first following day Escrow Holder is open to take such action.

17.14 Construction of Agreement. The agreements contained herein shall not be construed in favor of or against either party, but shall be construed as if both parties prepared this Agreement.
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14 17.15 Agreement Binding Only Upon Execution. The delivery of this Agreement in unexecuted form by Buyer to Seller does not constitute either the agreement of Buyer or an offer by Buyer to purchase the Property upon the terms and conditions set forth herein. [SIGNATURE PAGE ATTACHED]
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15 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

SELLER:

County of Stanislaus
By: _________________
Name: Andrew Johnson
Its: GSA Director and Purchasing Agent
Date: _______________________________
APPROVED AS TO FORM:

STANISLAUS COUNTY COUNSEL
Thomas E. Boze
By:___________________________________
BUYER:

City of Modesto
By: _________________
Name: Joseph P. Lopez
Its: City Manager
Date: _______________________________
APPROVED AS TO FORM:

MODESTO CITY ATTORNEY
Jose M. Sanchez
By:__________________________________
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Order Number: 3710424-00852
Escrow Number:

Page Number: 9
Cypress Title Corporation

LEGAL DESCRIPTION

REAL PROPERTY IN THE CITY OF MODESTO, COUNTY OF STANISLAUS, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

PARCEL B, AS PER PARCEL MAP FILED DECEMBER 21, 1967 IN BOOK 4 OF PARCEL MAPS, AT PAGE 103 STANISLAUS COUNTY RECORDS, SAID PARCEL MAP BEING A PORTION OF RANCHO EL PASCADERO IN SECTION 26 AND 27 TOWNSHIP 4 SOUTH RANCE 7 EAST, MOUNT DIABLO BASE AND

MERIDIAN,
EXCEPTING THEREFROM THAT PORTION AS FOLLOWS:

BEGINNING at the northerly comer of Parcel 'B', as shown on the Parcel Map filed for record in Book 3 of Parcel Maps, at Page 14, Stanislaus County Records, same being a point on the southeasterly rightof-way line of Mary Street; thence coincident with the northwesterly line of said Parcel 'B' (4-PM-103) and said southeasterly right-of-way line of Mary Street, North 69°55'20" East, 35.00 feet; thence leaving last said line and through said Parcel 'B' (4-PM-103) for the following four (4) courses; (1) South 20°04'40" East, 143.32 feet; (2) South 44°41'40" West, 62.60 feet; (3) South 69°55'20" West,

28.37 feet to a southeasterly prolongation of the southwesterly line of said Parcel 'B' (3-PM-14); (4) thence coincident with said prolonged line, North 20°04'40" West, 95.00 feet to the southerly corner of said Parcel 'B' (3-PM-14); thence coincident with the southeasterly line of said Parcel 'B' (3-PM:-14), North 69°55'20" East, 50.00 feet to the easterly corner of said Parcel 'B' (3-PM- 14); thence coincident with the northeasterly of said Parcel 'B' (3-PM-14), North 20°04'40" West, 75.00 feet to the POINT OF BEGINNING, as granted in the deed to the City of Modesto recorded Decemger 14, 2015 as Instrument No. 2015-96392 of Official Records
ALSO EXCEPTING THEREFROM THAT PORTION AS FOLLOWS:

A strip of land 15.00 feet wide, the Northeasterly, Northerly and Northwesterly line of which is described as follows:

BEGINNING at the Northwest corner of Parcel B, as shown on that certain map filed for record in Book 3 of Parcel Maps, at Page 14, Stanis_laus County Records, said Point of Beginning being also a point on the Southerly right-of-way line of Mary Street (66 feet wide); thence along the Southwesterly line of last said Parcel B and the Southwesterly line of that certain property described in Grant Deed to the City of Modesto, filed for record December 14, 2015 as Document No. 2015-0096392, Stanislaus County Records, South 20°04'40" East 170.00 feet; thence along the Southerly and Southeasterly line of said City of Modesto property the following two (2)courses:

1. North 69°55'20" East 28.37 feet;

2. North 44°41'40" East 62.60 feet to the most Easterly corner of said City of Modesto property and the terminus point of this description.

The sidelines of said strip to be extended or shortened to terminate at said Southerly right-of-way line and at a line which bears South 20°04'40" East from said terminus point. Containing 4,137 square feet (0.09 acres), more or less, As granted in the deed to the City of Modesto, recorded September 22, 2020 as Instrument No. 2020-72525 of Official Records
APN: 016-034-014-000
EXHIBIT 1-1
COUNTY

PROPERTY
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Order Number: 3710424-00852
Escrow Number:

Page Number: 10
Cypress Title Corporation
Entire map, if any additional pages
EXHIBIT 1-2 (COUNTY PROPERTY)
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EXHIBIT 2-1
2-2
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Exhibit 2-2
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EXHIBIT 3-1
3-2
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EXHIBIT 3-2
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Appraisal Report
Single-Family Residential Land
Mary Street at Laird Street
Grayson, Stanislaus County, California 95363
Report Date: July 1, 2024
FOR:

Larry Castellanos
Vice President
Associated Right of Way Services, Inc.
1255 Treat Blvd., Suite 815
Walnut Creek, California 94597
Valbridge Property Advisors |
Northern California
1530 The Alameda, Suite 100
San Jose, CA 95126
408.279.1520 phone Valbridge File Number:
408.279.3428 fax CA02-24-0302-000
valbridge.com
Larger Parcel
Acquisition Areas
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA 1530 The Alameda, Suite 100
San Jose, CA 95126
408.279.1520 phone
408.279.3428 fax
valbridge.com
July 1, 2024
Tony Sciarrilli
408.279.1520 ext. 7123
[email protected]
Larry Castellanos
Vice President
Associated Right of Way Services, Inc.
1255 Treat Blvd., Suite 815
Walnut Creek, California 94597
RE: Appraisal Report – For the Modesto Grayson Water Infrastructure Project Single-Family Residential Land
Mary Street at Laird Street
Grayson, Stanislaus County, California 95363
Dear Mr. Castellanos:

In accordance with your request, an appraisal of the above referenced property was performed. This appraisal report sets forth the pertinent data gathered, the techniques employed, and the reasoning leading to the value opinions. This letter of transmittal does not constitute an appraisal report and the rationale behind the value opinion(s) reported cannot be adequately understood without the accompanying appraisal report.

The property, as referenced above, is located along Mary Street at Laird Street, Grayson, Unincorporated Stanislaus County, CA 95363 and is further identified as Assessor Parcel Number (APN) 016-034-014000. The Larger Parcel contains 165,092 square feet or 3.79 acres, based on the Plat Map, and is known as the Grayson United Community Center and Park. The highest and best use of the Larger Parcel is future single-family residential subdivision development.

The analyses, opinions, and conclusions were developed, and this report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation; the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute; and the requirements of our client.

Larry Castellanos with Associated Right of Way Services, Inc. is the client in this assignment and along with the City of Modesto are the only intended users of this appraisal and report, and no others. The intended use is for the acquisition of land by the City of Modesto to expand the City’s well site. The #7..
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Larry Castellanos
Associated Right of Way Services, Inc.
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA value opinions reported herein are subject to the definitions, assumptions, limiting conditions, and certifications contained in this report.

In this appraisal we will estimate the contributory value of three separate part take areas as being a part of the Larger Parcel. This will be done by first valuing the Larger Parcel and then assigning that price per square foot to the area of the acquisition areas. This methodology considers the intended use of the appraisal and is considered to be most appropriate.

The findings and conclusions are further contingent upon the following extraordinary assumptions and/or hypothetical conditions, the use of which might have affected the assignment results:

Extraordinary Assumptions:
• We have assumed that the portion of Mary Street proposed to be acquired can be abandoned, as it does not appear to be an active use.
• Per our client`s request, we have assumed the proposed acquisitions will have no impacts to buildings or other major improvements on the Larger Parcel.

Hypothetical Conditions:
• None
Based on the analysis contained in the following report, our value conclusions are summarized as follows:

Respectfully submitted,
Valbridge Property Advisors | Northern California
Tony M. Sciarrilli
Appraiser
California Certified License #AG3003462
Norman C. Hulberg, MAI
Senior Managing Director
California Certified License #AG003542
Component Area 1 Area 2 Area 3
Value Type Fair Market Value Fair Market Value Fair Market Value Property Rights Appraised Fee Simple Fee Simple Fee Simple Date of Value June 12, 2024 June 12, 2024 June 12, 2024 Market Value $31,000 $74,900 $6,500
Damages $0 $0 $0
Value Conclusions
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SINGLE-FAMILY RESIDENTIAL LAND

TABLE OF CONTENTS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 4 Table of Contents
Cover Page
Letter of Transmittal
Table of Contents......................................................................................................................................................................4 Summary of Salient Facts: Larger Parcel...........................................................................................................................5 Aerial and Front Views.............................................................................................................................................................6 Location Map..............................................................................................................................................................................7 Introduction.................................................................................................................................................................................8 Scope of Work......................................................................................................................................................................... 10 Regional and Market Area Analysis................................................................................................................................. 12 Area and Neighborhood Analysis.................................................................................................................................... 18 Site Description: Larger Parcel .......................................................................................................................................... 24 Acquisition Areas.................................................................................................................................................................... 30 Improvements Description ................................................................................................................................................. 32 Subject Photographs (Dated June 12, 2024) ............................................................................................................... 33 Assessment and Tax Data ................................................................................................................................................... 35 Market Analysis ....................................................................................................................................................................... 36 Highest and Best Use Analysis: Larger Parcel.............................................................................................................. 40 Land Valuation: Larger Parcel............................................................................................................................................ 42 Summary of Valuation – Laird Street at Mary Street, Grayson............................................................................. 60 General Assumptions and Limiting Conditions .......................................................................................................... 61 Certification – Tony Sciarrilli............................................................................................................................................... 65 Certification – Norman C. Hulberg, MAI........................................................................................................................ 66 Addenda .................................................................................................................................................................................... 67 Additional Subject Photographs (Dated June 12, 2024) .................................................................................... 68 Notice of Decision to Appraise Letters ..................................................................................................................... 69 Glossary................................................................................................................................................................................. 75 Qualifications ...................................................................................................................................................................... 82 #7..
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SINGLE-FAMILY RESIDENTIAL LAND

SUMMARY OF SALIENT FACTS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 5 Summary of Salient Facts: Larger Parcel
Property Identification
Property Name Single-Family Residential Land
Property Address Mary Street at Laird Street
Grayson, Stanislaus County, California 95363
Latitude & Longitude 37.561855, -121.17863
Census Tract 33.00
Tax Parcel Number 016-034-014000
Property Owner County of Stanislaus, a political subdivision of the State of California
Site
Zoning Planned Development (PD(272))
FEMA Flood Map No. 06099C0520F
Flood Zone X
Gross Land Area 3.790 acres
Valuation Opinions
Highest & Best Use - As Vacant Future single-family residential subdivision development Reasonable Exposure Time Less than 12 months
Reasonable Marketing Time Less than 12 months
Approach to Value Area 1 Area 2 Area 3
Sales Comparison Approach $31,000 $74,900 $6,500
Component Area 1 Area 2 Area 3
Value Type Fair Market Value Fair Market Value Fair Market Value Property Rights Appraised Fee Simple Fee Simple Fee Simple Date of Value June 12, 2024 June 12, 2024 June 12, 2024 Market Value $31,000 $74,900 $6,500
Damages $0 $0 $0
Value Conclusions
Value Indications
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SINGLE-FAMILY RESIDENTIAL LAND

AERIAL AND FRONT VIEWS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 6 Aerial and Front Views

AERIAL VIEW
GROUND VIEW OF THE LARGER PARCEL (DATED JUNE 12, 2024)
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SINGLE-FAMILY RESIDENTIAL LAND

LOCATION MAP
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 7 Location Map
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SINGLE-FAMILY RESIDENTIAL LAND

INTRODUCTION
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 8 Introduction
Client and Intended Users of the Appraisal
Larry Castellanos with Associated Right of Way Services, Inc. is the client in this assignment and along with the City of Modesto are the only intended users of this appraisal and report.

Intended Use of the Appraisal
The intended use of this report is for the acquisition of land by the City of Modesto to expand the City’s well site.

Real Estate Identification
The property is located along Mary Street at Laird Street, Grayson, Stanislaus County, California 95363.

The property is further identified by the Assessor Parcel Number (APN) 016-034-014000.

Legal Description
Please refer to the addendum for a copy of the legal description of the Larger Parcel.

Use of Real Estate as of the Effective Date of Value
As of the effective date of value, the property was the Grayson United Community Center and Park.

Use of Real Estate as Reflected in this Appraisal
The use that is reflected in the valuation is single-family residential subdivision land.

Ownership of the Property
According to a Preliminary Title Report, title to the property is vested in County of Stanislaus, a political subdivision of the State of California.

History of the Property
Ownership of the property has not changed within the past three years. When appropriate, we have considered and analyzed the known history of the subject in the development of our opinions and conclusions.

Active Listing/Offer/Contract
The property is not listed for sale, and we are unaware of any offers to purchase the property. However, we are aware that the City of Modesto is interested in acquiring a portion of the Larger Parcel to expand their adjacent well site. This appraisal will be used by the City of Modesto to aid them in this acquisition.

Type and Definition of Value
Section 1263.320 of the California Code of Civil Procedures defines fair market value as:
(a) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under #7..
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SINGLE-FAMILY RESIDENTIAL LAND

INTRODUCTION
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 9 no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (b) The fair market value of property taken for which there is no relevant, comparable market is its value on the date of valuation as determined by any method of valuation that is just and equitable.

The “as is” value is the value of the property in its present condition under market conditions prevalent on the date of the appraisal. Please refer to the Glossary in the Addenda section for additional definitions of terms used in this report.

Valuation Scenarios, Property Rights Appraised, and Effective Dates of Value Opinions of value for the property were developed under the following valuation scenarios:

Date of Report
The date of this report is July 1, 2024.

List of Items Requested but Not Provided
• ALTA Land Survey, Easement Map, project description, and legal descriptions of the part take acquisitions
Assumptions and Conditions of the Appraisal
This appraisal assignment and the opinions reported herein are subject to the General Assumptions and Limiting Conditions contained in the report and the following extraordinary assumptions and/or hypothetical conditions, the use of which might have affected the assignment results.

Extraordinary Assumptions
• We have assumed that the portion of Mary Street proposed to be acquired can be abandoned, as it does not appear to be an active use.
• Per our client`s request, we have assumed the proposed acquisitions will have no impacts to buildings or other major improvements on the Larger Parcel.

Hypothetical Conditions
• None
Valuation Scenarios Effective Date of Value
As Is Fair Market Value of the Fee Simple Interest June 12, 2024 #7..
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SCOPE OF WORK
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 10 Scope of Work
The elements addressed in the Scope of Work are (1) the extent to which the subject is identified, (2) the extent to which the property is inspected, (3) the type and extent of data researched, (4) the type and extent of analysis applied, (5) the type of appraisal report prepared, and (6) the inclusion or exclusion of items of non-realty in the development of the value opinion. These items are discussed below.

Extent to Which the Property Was Identified
The three components of the property identification are summarized as follows:
• Legal Characteristics - The property was legally identified via its legal description, Assessor parcel map, and information in the Preliminary Title Report provided by the client. • Economic Characteristics - The property’s economic characteristics were identified via information provided by the client and comparison to properties with similar locational and physical characteristics.
• Physical Characteristics - The property’s physical characteristics were identified via on-site observations by the appraisers.

Extent to Which the Property Was Inspected
Michael Porter, appraiser with Valbridge Property Advisors, viewed the property from the abutting roadways on June 12, 2024.

Type and Extent of Data Researched
The following data was researched and analyzed: (1) market area data, (2) property-specific market data, (3) zoning and land-use data, and (4) current data on comparable listings and transactions.

Professionals familiar with the subject market/property type were also interviewed.

Type and Extent of Analysis Applied (Valuation Methodology) Surrounding land use trends, the condition of any improvements, demand for the subject property, and relevant legal limitations were observed in the process of concluding a highest and best use for the subject. The property was then valued based on the highest and best use conclusion.

There are four primary methods available to develop a land value estimate: (1) sales comparison, (2) land residual method, (3) ground rent capitalization, and (4) subdivision development method (discounted cash flow). While other methods, such as extraction and allocation, are applicable under limited conditions, one or more of these approaches are used in most circumstances to derive an indication of land value.
• Sales Comparison Approach - In the sales comparison approach, value is indicated by recent sales and/or listings of comparable properties in the market, with the appraiser analyzing the impact of material differences in both economic and physical elements between the subject and the comparables.
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SCOPE OF WORK
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 11 • Direct Capitalization: Land Residual Method - The land residual methodology involves estimating the residual net income to the land by deducting from total potential income the portion attributable to the improvements, assuming development of the site at its highest and best use. The residual income is capitalized at an appropriate rate, resulting in an indication of land value.
• Direct Capitalization: Ground Rent Capitalization – A market derived capitalization rate is applied to the net income resulting from a ground lease. This can represent the leased fee or fee simple interest, depending on whether the income potential is reflective of a lease in place or market rental rates.
• Yield Capitalization: Subdivision Development Method – Also known as discounted cash flow analysis (DCF), the methodology is most appropriate for land having multiple lot development in the near term as the highest and best use. The current site value is represented by discounting the anticipated cash flow to a present value, taking into consideration all necessary costs of development, maintenance, administration, and sales throughout the absorption period.

All of these approaches to value were considered. The availability of data and applicability of each approach to value within the context of the characteristics of the property, along with the needs and requirements of the client, were assessed. Based on this assessment, the sales comparison approach was developed. The sales comparison approach is the most relevant approach to appraise land. The specific method and analysis of the approach used is further discussed in the valuation section.

Appraisal Conformity and Report Type
The analyses, opinions, and conclusions were developed and this report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation; the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute; and the requirements of our client. This is an Appraisal Report as defined by the Uniform Standards of Professional Appraisal Practice under Standards Rule 2-2a.

Personal Property/FF&E
All items of non-realty are excluded from this analysis. The opinion of fair market value developed herein is reflective of real estate only.
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REGIONAL AND MARKET AREA ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 12 Regional and Market Area Analysis

REGIONAL MAP
Overview
The property is located in Stanislaus County, which is in the northern portion of the San Joaquin Valley.

The San Joaquin Valley, along with the Sacramento Valley to the north, combine to form the great Central Valley of California, one of the most productive agricultural regions in the world. The area is known for its fertile soils and the agricultural abundance is supported by a temperate Mediterranean climate.

Population
Stanislaus County has seen population growth until 2021, historically from an influx of Bay Area commuters seeking relief from high-priced housing and congestion in the Bay Area. According to the State of California Department of Finance, the population of Stanislaus County as of January 1, 2024, was 548,744, an increase of 0.5% over the previous year. Modesto is the largest city in the county. #7..
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 13 According to ESRI projections, presented below, the county’s population is expected to increase annually 0.03% between 2023 and 2028, while Grayson will decrease approximately 0.06% annually over the same period.

Transportation
State Highway 99, and Interstate Route 5 (I-5), both of which are major north-south arterials, link Stanislaus County to other parts of California. Major east west highways include Highways 120, 108, and 132. In addition to the public transit system (bus service), and Greyhound Bus Lines, the Altamont Commuter Express (ACE) rail has stations in San Joaquin County to the northwest connecting to points in Alameda and Santa Clara counties. Additionally, the Bay Area Rapid Transit (BART) system extends easterly into Dublin, which is only a 60 minute drive west from major cities in Stanislaus County.

The Burlington Northern Santa Fe and Union Pacific Railroads provide freight service, while Amtrak provides passenger rail service for the area. Proximity to the Sacramento/San Joaquin Delta provides direct shipping access to both Sacramento and Stockton deep-water ports. The Modesto City-County Airport is located at the southern edge of the city, and is the largest commercial airport in the county.

There are general aviation airports in Oakdale, Turlock, and Patterson. The nearest international airports are in Sacramento, Fresno and the San Francisco Bay Area.

Employment
Employment has experienced swings in recent years as the local economy has grown and then subsequently softened. Although the area has an economy that has been strongly tied to agriculture, total non-farm employment grew at a much faster pace than farm employment.

The largest employment sector in the county is the healthcare industry, with Emanuel Medical Center and Memorial Medical Center as some of the top employers. The second largest industry is the retail trade sector– E&J Gallo and Bronco Wineries have operations in the area. The third largest is the manufacturing sector. Major manufacturing employers include Del Monte Foods Inc., Frito Lay and Con Agra Foods Inc.

Population
Compound
Annual ∆
Compound
Annual ∆
Area 2020 - 2023 2023 - 2028
United States 331,449,520 335,707,897 0.43% 343,238,675 0.44% California 39,538,223 39,877,642 0.29% 40,140,276 0.13% Modesto, CA (MSA) 552,878 557,562 0.28% 558,525 0.03%
Stanislaus County 552,878 557,562 0.28% 558,525 0.03%
Grayson CDP 1,041 1,030 -0.26% 1,022 -0.06%
Source: ESRI (ArcGIS)
Census
Population
(2020)
Current
Population
(2023)
Projected
Population
(2028)
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 14 Unemployment
The unemployment rate in Stanislaus County is currently greater than the rates of the state and nation.

The County unemployment rate was 7.0% as of April 2024 (most recent available). The State of California was at 4.8% while the Nation was at 3.7% for the same time period.

National Economic Overview
The national economy continues a path of moderate expansion in 2024. The economy’s recovery trajectory post-COVID has been marked by increased demand for labor and wage growth, alongside significant monetary policy adjustments by the Federal Reserve to manage inflation and stabilize financial markets.

Employment by Industry for Stanislaus County - Source: ESRI (ArcGIS) 0% 2% 4% 6% 8% 10% 12% 14% 16%
Agriculture/Forestry/Fishing/Hunting
Mining/Quarrying/Oil & Gas Extraction
Construction
Manufacturing
Wholesale Trade
Retail Trade
Transportation/Warehousing
Utilities
Information
Finance/Insurance
Real Estate/Rental/Leasing
Professional/Scientific/Tech Services
Management of Companies/Enterprises
Admin/Support/Waste Management Services
Educational Services
Health Care/Social Assistance
Arts/entertainment/Recreation
Accommodation/Food Services
Other Services (excl Public Administration)
Public Administration
Unemployment Rates
Area YE 2019 YE 2020 YE 2021 YE 2022 YE 2023 2024¹
United States 3.7% 8.1% 5.3% 3.6% 3.6% 3.7%
California 4.1% 10.1% 7.3% 4.3% 4.8% 4.8%
Modesto, CA (MSA) 6.1% 11.0% 8.3% 5.5% 6.4% 7.0%
Stanislaus County, CA 6.1% 11.0% 8.3% 5.5% 6.4% 7.0%
Modesto city, CA 5.5% 11.1% 8.0% 5.0% 6.0% 6.2%
Source: www.bls.gov data not seasonally adjusted; ¹May - most recent for US, others lag by 1-2 mos.) #7..
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REGIONAL AND MARKET AREA ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 15 The economy experienced various Gross Domestic Product (GDP) growth rates in 2023, with a notable spike of 4.9% in the third quarter, driven largely by consumer spending and government investments.

Overall, for the year, GDP increased by 2.5% in 2023 (from the annual 2022 level). Growth is expected to be moderate, with GDP projected to expand at a slower pace. Economic forecasts by Goldman Sachs and BNY Mellon Wealth Management anticipate a 2% annual GDP growth for 2024.

Employment growth continues to be strong (except for the technology sector). As of April 2024, per the Consumer Price Index – an inflation measure that tracks changes in the prices of consumer goods and services over time, the rate of inflation increased by 4.9% from one year prior, with the rising oil and gas prices contributing to increases in transportation costs and the pricing of consumer staples.

While the rate of inflation has decelerated, it remains elevated and above the Fed’s targeted 2% range.

Interest rate cuts are anticipated in 2024, but their magnitude and timing are uncertain as the Fed continues to monitor the CPI Index.

Federal Funds Rate
Beginning in March 2022, the Fed began raising the interest rate, for the first time in three years, to temper the rapid inflation growth. The initial rate increase was 25 basis points. Because inflation was at an all-time high by mid-2022, at 9.1%, the Fed aggressively raised interest rates throughout 2022 and 2023. Eleven increases to the Federal Funds Rate were made in total during these two years. These measures, alongside the banking sector's challenges, including the collapses of Silicon Valley Bank, Signature Bank, and First Republic Bank, have led to tighter credit conditions.

As of May 2024, the Federal Reserve has maintained the funds rates within the benchmark range of

5.25% to 5.5%. This rate has been held steady since July 2023. One rate cut is expected towards the end of 2024.

Commercial Real Estate (CRE) Loans and Foreclosures
Elevated interest rates have led to an increase in the cost of debt, which in turn has put pressure on new real estate development projects and has partially contributed to a decline in value of commercial real estate. Certain market segments, such as the office sector, are additionally affected by higher vacancies due to remote working.

The CRE sector faces increased risks, particularly in the office and retail segments, where high volumes of refinancing are due soon. Approximately $1.2 trillion of commercial real estate debt is expected to mature in the next two years, with a significant portion held by banks and commercial mortgagebacked securities. This situation is exacerbated by stricter lending standards and a reduction in private equity fundraising, further restricting funding availability for the sector.

Bank Collapses
The banking sector has faced significant turmoil, with the collapses of Silicon Valley Bank, Signature Bank, and First Republic Bank in early 2023. These failures were largely attributed to factors such as poor risk management, lack of investment diversification, and sudden customer withdrawals, particularly within the technology sector. Regulatory bodies and the sale of First Republic Bank to JPMorgan Chase have aimed to restore confidence and stability in the banking sector. #7..
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 16 The California Forecast
The California economy is growing faster than the national economy. Jobs were lost in some sectors and created in others, and some jobs moved out of state because of remote work. Employment sectors with the largest numbers of new jobs were (1) health care and social services; (2) public and private education; (3) construction; (4) leisure and hospitality: and (5) durable goods manufacturing. Ot these, construction and durable goods manufacturing are on average higher wage sectors.

Total statewide unemployment (yearly average rate) for 2023 was at 4.8% and is forecasted to be at

4.5% in 2024, and at 3.8% in 2025. Real income was forecasted to overall decrease by 0.2% in 2023 but increase by 1.2% and 2.0% respectively in 2024 and 2025.

Risks to the forecast, as in the national forecast, are political and geopolitical.

Concluding Remarks
Overall, the U.S. economy is navigating a challenging landscape characterized by elevated inflation, tighter monetary policies, and moderating growth. While the labor market remains strong, concerns over a potential recession linger as the Federal Reserve aims to achieve a soft landing and bring inflation under control without triggering a severe economic downturn.

While the labor market remains resilient, the growth in job creation may slow as the economy seeks a new equilibrium. The transition towards a more balanced economic growth trajectory reflects a cautious optimism among economists and market observers, considering the undercurrents of global geopolitical tensions and domestic policy adjustments. This delicate balance underscores the importance of vigilance and adaptability in economic policy and market strategies as we navigate through the uncertainties of 2024.

In conclusion, the CRE market in 2024 is poised at a critical juncture, with interest rates playing a pivotal role in shaping its direction. Investors and developers are navigating a challenging environment, with higher debt costs, property valuation pressures, and regulatory readiness concerns. However, opportunities for recovery and growth remain, particularly in sectors with strong fundamentals and as the economy potentially shifts towards more favorable conditions later in the year.

Median Household Income
Total median household income for the region is presented in the following table. Overall, the property’s MSA and county compare unfavorably to the state and the country.

Income
2023 Median 2023 Average 2023 Per Capita
Area HH Income HH Income Income
United States $72,233 $104,831 $41,000
California $89,455 $131,660 $45,201
Modesto, CA (MSA) $76,031 $102,886 $32,982
Stanislaus County $76,031 $102,886 $32,982
Grayson CDP $77,066 $88,618 $22,800
Source: ESRI (ArcGIS)
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 17 Conclusions
There remains a significant pricing differential between the Central Valley and the Bay Area and demand for all property types in the Valley is expected to continue. The intrinsic desirability of the region, a diverse economic base, historically strong long-term job and population growth provide strong support for real estate values and their potential for long-term appreciation.

The outlook is still somewhat clouded by the unknowns associated with the lingering effects of inflation and interest rates, and the other economic indicators discussed earlier in this section. Investors have been on the sidelines since mid-2022 and sellers have been unwilling to lower prices in response to higher interest rates. As a result, transaction volumes in most sectors have experienced significant declines after posting strong gains in 2021. The timeline for a return to more typical market conditions remains unknown, but the historic reasons for growth in the region remain the same, and thus the expectation is that normal growth will resume over time. #7..
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AREA AND NEIGHBORHOOD ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 18 Area and Neighborhood Analysis

AREA MAP
The property is located in the small community of Grayson in unincorporated Stanislaus County. The most notable incorporated City in the vicinity of the property is the City of Modesto. We have provided an overview below of the City of Modesto. Much of the immediate area is under the sphere of influence of the City of Modesto.

Overview
As the largest city in the county, Modesto serves as Stanislaus County's retail, government, medical, and employment center. Surrounded by small cities and farmland, Modesto is located approximately 90 miles east of San Francisco, 80 miles south of Sacramento, 110 miles west of Yosemite National Park, and 95 miles northwest of Fresno.

Critical inter-regional links are provided from two major north-south highways (Interstate 5 and Highway 99) and two east-west highways (State Route 108 and 132). These highways, along with a network of local, county, and state routes, provide an efficient road network for the area. Over 90 truck lines serve the area.

The City of Modesto is a slowly growing community with good appeal given the relatively close commuting distance to the Bay Area and Sacramento MSA and the lower cost of living of the region. #7..
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AREA AND NEIGHBORHOOD ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 19 Modesto has a centralized location in the Central Valley region with good freeway access. The local economy is dominated by agriculture; however, there has been increased demand for the region in recent years due to the lower cost of living. The local economy continues to struggle with high unemployment. The residential market is improving, while the commercial markets are still sluggish.

Patterson Overview
Patterson is located in the southwestern portion of Stanislaus County, which is one of the most productive agricultural regions in the world. It is a suburban community surrounded by agricultural parcels. Most residents commute to the Bay Area or other larger population centers in the county.

Patterson was incorporated in 1919 and is the self-described “Apricot Capital of the World.” Patterson is located at the base of the Coast Range Mountains and is the fifth largest city in the county.

Patterson has a fairly centralized location in the Central Valley with good freeway access. The local economy is dominated by agriculture; however, there has been increased demand for the region in recent years due to the lower cost of living. Due to its close proximity to Interstate 5 there has been significant activity in the industrial market over the past several years. It is noteworthy that 1,100 acres to the west of Rogers Road, east of Interstate 5, and south of Zacharias road was annexed in 2013. This area is slated for industrial development.

Grayson Overview
The unincorporated community of Grayson is located approximately 11 miles southwest of the City of Modesto, and six miles north of Patterson, as the crow flies. The area is rural in nature with the predominant land use being agricultural row crop cultivation. Many of the residents in Grayson work in the agricultural industry. The community has seasonal fluctuations in population as an influx of works come to the area during harvest season. The population was 952 at the 2010 census with approximately 250 households.

The outlying community of Grayson has an area of only 2.5 square miles located at the convergence of the San Joaquine and Tuolumne Rivers. The Grayson Community Services District was established in January 1969 to provide street lighting and sewer services. Public water to the community is provided by a nitrate removal treatment plant which is currently in the process of being replaced by the City of Modesto.

Neighborhood Location and Boundaries
The subject neighborhood is located in the community of Grayson. The area is rural in nature. The neighborhood is bounded by San Joaquin River to the north, San Joaquin River to the east, Highway 33 to the south, and Highway 33 to the west.

Transportation Access
Within the immediate area of the subject, transportation access helps define the character of its development. Major travel and commuter routes within the area of the property include Highway 33 and West Grayson Road. Major travel and commuter routes within the larger area include Highway 5, 130, 132, 165, and 99. Access to the area is considered average.

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AREA AND NEIGHBORHOOD ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 20 Demographics
The following table depicts the area demographics in Grayson within a one-, three-, and five-mile radius from the subject.

Neighborhood Demographics
Radius (Miles) 1 Mile 3 Mile 5 Mile
Trade Area (Sq. Mi.) 3.14 28.27 78.54
Trade Density (Pop/Sq. Mi.) 339 72 42
Population
Census Population (2010) 957 1,770 2,964
Census Population (2020) 1,061 2,028 3,193
Current Population (2023) 1,065 2,042 3,266
Projected Population (2028) 1,056 2,020 3,227
Compound Annual Growth
2010 - 2020 1.0% 1.4% 0.7%
2020 - 2023 0.1% 0.2% 0.8%
2023 - 2028 -0.2% -0.2% -0.2%
Households
Census Households (2010) 269 477 854
Census Households (2020) 276 531 934
Current Households (2023) 274 527 928
Projected Households (2028) 272 522 919
Compound Annual Growth
2010 - 2020 0.3% 1.1% 0.9%
2020 - 2023 -0.2% -0.3% -0.2%
2023 - 2028 -0.1% -0.2% -0.2%
Average Household Size (2023) 3.79 3.82 3.48
Source: ESRI (ArcGIS) (Lat: 37.561855, Lon: -121.17863) #7..
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AREA AND NEIGHBORHOOD ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 21 The population is 2,042 within a three-mile radius of the property with a projected annual growth rate of -0.2%. There were 552 housing units within the three-mile radius. Housing is near evenly divided amongst owner and renter occupants.

The median household income was $80,997 within a three-mile radius of the property. The median household income figures suggest residents were within the lower income bracket.

Immediate Area Uses
The below aerial photo exhibits the uses located in the property’s immediate vicinity.

Neighborhood Demographics (cont.)
Radius (Miles) 1 Mile 3 Mile 5 Mile
Trade Area (Sq. Mi.) 3.14 28.27 78.54
Trade Density (Pop/Sq. Mi.) 339 72 42
2023 Housing Units
Median Home Value $481,111 $488,835 $628,205
Median Year Built 1977 1982 1983
Total Housing Units 290 552 967
Owner-Occupied Housing % 45.5% 49.6% 53.2%
Renter-Occupied Housing % 49.0% 45.8% 42.8%
Vacant Housing % 5.5% 4.5% 4.0%
2023 Employment
Total Establishments 5 31 81
Total Employees 30 392 1,085
Average Commute Time n/a n/a n/a
% College Graduates 6.8% 12.2% 13.6%
2023 Income Summary
Median Household Income $77,334 $80,997 $84,178
Average Household Income $88,463 $105,450 $119,275
Avg Spending/Household $24,776 $29,611 $35,793
Per Capita Income $22,756 $30,206 $35,549
Source: ESRI (ArcGIS) (Lat: 37.561855, Lon: -121.17863) #7..
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 22

IMMEDIATE AREA USES
Source: Google Maps
Uses along Grayson Road in the vicinity of the subject are primarily agricultural in nature. Recognized uses in the immediate area of the property include single-family residential use and row crop cultivation. The area also has ranchette type properties, combining agricultural and rural residential uses on up to 10-acre sites. As shown above, the density of uses in the area is sporadic with some vacant land remaining available in the area.

Grayson is a small residential community of around 250 households which is surrounded by row crop agricultural uses. The community abuts the San Joaquin River and wetlands to the east. It is located approximately 11 miles southwest of the City of Modesto, and six miles north of Patterson, as the crow flies. Highway 33 is the main arterial roadway connecting Grayson with Highway 5.

Laird Regional Park is located in the immediate area, to the east of Grayson. This park consists of 97 acres of land, 30 of which have been developed so far for recreational purposes and are open to the public. It is located on Grayson Road about two miles east of the community of Grayson on the San Joaquin River. This park also serves the role of neighborhood park to the nearby communities, featuring picnic facilities, group areas, playing fields, and a large event shelter that is able to be reserved for family reunions, weddings, and parties.
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AREA AND NEIGHBORHOOD ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 23 Analysis and Conclusions
The neighborhood is characterized by having a low intensity of development with primarily agricultural and residential uses. Grayson is viewed as a small farming bedroom community will little new develop having occurred in the past few decades. Access to the area is considered average with Highways 33 and 5 in the vicinity of the property. The future outlook of the neighborhood is positive. #7..
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SITE DESCRIPTION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 24 Site Description: Larger Parcel
The site is located along Mary Street at Laird Street, Grayson, Unincorporated Stanislaus County, CA 95363. The characteristics of the site are summarized as follows:

Site Characteristics
Gross Land Area: 3.79 Acres or 165,092 SF
Usable Land %: 100.0%
Shape: Generally Rectangular
Topography: Level
Drainage: Assumed adequate
Grade: At street grade
Utilities: All public utilities are available to the site Off-Site Improvements: West Grayson Road is an asphalt paved road with no sidewalks, curbs, gutters, or streetlights. This roadway carries one lane of traffic in each direction, northeast and southwest, in the vicinity of the property.

Laird Street is asphalt paved and bifurcates the Larger Parcel running in a north-south direction. There are sidewalks, curbs, and gutters along this two-lane road on the Larger Parcel.

Mary Street is a fully improved roadway with sidewalks, curbs, gutters, and streetlights along the Larger Parcel frontage. This road carries one lane of traffic in each direction, east and west.

Interior or Corner: Corner
Signalized Intersection: No
Street Frontage / Access
Frontage Road Primary Secondary Secondary
Street Name: Grayson Road Laird Street Mary Street
Street Type: Arterial Local Local
Frontage (Linear Ft.): 420 155 1,060
Number of Curb Cuts: 0 0 0
Traffic Count (Cars/Day): 5,649 960 None Available
Flood Zone Data
Flood Map Panel/Number: 06099C0520F
Flood Map Date: 08-24-2021
Portion in Flood Hazard Area: 0.00%
Flood Zone: X
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SITE DESCRIPTION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 25 Flood Zone X includes areas of minimal flood hazard, which are outside a Special Flood Hazard Area and higher than the elevation of the 0.2%-annual-chance flood.

Other Site Conditions
Soil Type: We have not been provided a geotechnical report for the property.

Based on our physical inspection, soil conditions appear stable.

Environmental Issues: A Phase I Environmental Site Report was not provided for review.

We make no representations as to the presence of toxins and hazardous materials on the site. We are appraising the site as if clean. If this is of concern to any reader of this report, it is our recommendation that an environmental report is obtained from the appropriate professionals qualified to issue such opinions.

Easements/Encroachments: We were provided with a Preliminary Title Report from Cypress Title Corporation (document #3710424-00852) dated April 10, 2024. This report references several PG&E public utilities and pipeline easements, a road easement in favor of Del Este Water Company, and a road easement in favor of the City of Modesto.

We did not identify any easements or encumbrances that would materially affect the value of the property, either positively or negatively.

Earthquake Zone: While all of California is prone to earthquakes, the property is not in an Alquist Priolo fault zone.

Adjacent Land Uses
North: Residential
South: Commercial/Retail building, vacant commercial land, and vacant residential land; Agricultural row crop land across West Grayson Road
East: San Joaquin River and wetlands
West: Residential and Agricultural row crop land across River Road Site Ratings
Access: Average
Visibility: Average

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SITE DESCRIPTION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 26 Zoning Designation
Zoning Jurisdiction: Stanislaus County
Zoning Classification: PD(272), Planned Development
General Plan Designation: Low Density Residential
Permitted Uses: A variety of low intensity uses including the existing park and community center and residential use
Zoning Comments
The property is under the jurisdiction of Stanislaus County and is zoned Planned Development which permits the Grayson United Community Center and Park. The General Plan land use designation is Low Density Residential.

According to the Stanislaus County Municipal Code, the Planned Development (P-D) District is generally intended to apply to larger scale, integrated development as a means of providing opportunities for creative and cohesive design concepts. The district is intended to allow modification of requirements established by other districts and diversification in the relationship of different uses, buildings, structures, lot sizes and open spaces, while ensuring compliance with, and implementation of the General Plan. Additional objectives of the P-D District include the provision of development consistent with site characteristics, creation of optimum quantity and use of open space, encouragement of good design, and promotion of compatible uses.

The property is currently used as the Grayson United Community Center and Park, which is allowed under the Planned Development district, according to Shante Ruiz, Staff Services Technician with the Stanislaus County Department of Planning and Community Development.

According to the Stanislaus County General Plan, the Low Density Residential land use designation is intended is to provide appropriate locations and adequate areas for single-family detached homes in either conventional or clustered configurations. Single-family detached dwellings are the predominant housing type in areas so designated and would remain so under this designation. Semi-detached dwellings and manufactured housing would be consistent with this designation.

Alternative Zoning
An alternative zoning consistent with highest and best use applies given the permitted public uses of the Planned Development zoning district.

By their economic nature, social benefits, and public ownership, such as non-profit properties, are not valued by traditional profit motivations and principles, as is property in private-sector ownership. The value(s) of social and/or public benefits are not measured by the private-sector metrics of profit or private benefits inherent in the definition of fair market value or highest and best use. Publicly owned, non-profit properties are, instead, valued on accepted economic methodologies.

Adjacent to the north is a single-family residential neighborhood with Single-Family Residential zoning and Low Density Residential General Plan land use designation. To the south of the subject across West Grayson Road is agricultural row crop land. Therefore, we have considered a low residential use (consistent with the R-1 zoning and Low Density Residential land use designation) appropriate for the #7..
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SITE DESCRIPTION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 27 Larger Parcel. It is reasonably probable that the county would allow rezoning to Single-Family Residential.

According to the Stanislaus County Municipal Code, the Single-Family Residential zoning district is intended for low density residential use. Permitted uses include one single-family dwelling on any one parcel, accessory uses and buildings, crop farming, mobile homes, day cares, duplexes on corner lots, and other conforming uses. The maximum building height is 35 feet. The minimum site area is 5,000 square feet. The maximum building coverage is 40%. The minimum front yard setback is 7 feet, side and rear yards of 5 feet.

Analysis/Comments on Site
The site consists of a single parcel located along the south side of Mary Street in the community of Grayson in unincorporated Stanislaus County. The site has a generally rectangular shape and a corner lot configuration at the intersection of Mary Street and Laird Street. Laird Street bifurcates the Larger Parcel running in a north-south direction. The site has approximately 420 feet of frontage along West Grayson Road, 155 feet of frontage along Laird Street, and 1,060 feet of frontage along Mary Street.

The underlying site contains 165,092 square feet or 3.79 acres. The property zoning is Planned Development, and the General Plan land use designation is Low Density Residential. The property is known as the Grayson United Community Center and Park.
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SITE DESCRIPTION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 28 PARCEL MAP (DATED DECEMBER 21, 1967)
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SITE DESCRIPTION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 29

TAX PLAT (LARGER PARCEL)
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ACQUISITION AREAS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 30 Acquisition Areas
The City of Modesto is proposing to acquire two separate areas on Assessor Parcel Number (APN) 016-034-014 containing 24,970 square feet (Area 2) and 2,170 square feet (Area 3), as well as a 10,320 square foot portion of Mary Street (Area 1) which is currently not in use.

Areas 2 and 3 are vacant land. Area 2 abuts wetlands and the San Joquin River to the east. Area 3 abuts West Grayson Road to the south. Area 1 is also vacant land which originally had been intended to be a portion of Mary Street; we have assumed this area of Mary Street can be abandoned as it does not appear to be in active use. All of these areas are contiguous with the Modesto well site located along Mary Street. The City of Modesto wants to acquire these areas to expand their existing well site.

The map on the following page shows the areas proposed to be acquired. Additionally, the aerial image below shows these three acquisition areas.

ACQUISITION AREA AERIAL MAP
Modesto Well Site
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ACQUISITION AREAS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 31

ACQUISITION AREA MAP
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IMPROVEMENTS DESCRIPTION
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 32 Improvements Description
The Larger Parcel is improved with the Grayson United Community Center & Park. The park and center comprise approximately five acres of land and include a 3,165 square-foot Community Center constructed circa 2004. The center provides a meeting space for local events, recreational programs, after-school and senior programs. The park includes age appropriate play equipment, amphitheater lawn area, barbeques, picnic tables, basketball courts and informal play areas. The United Community Center is currently operated and maintained through community efforts.

Per our client`s request, we have assumed the proposed acquisitions will have no impacts to buildings or other major improvements on the Larger Parcel. We did not observe any improvements on the proposed take areas. The improvements on the Larger Parcel are far away from the take areas and are not impacted.
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SUBJECT PHOTOGRAPHS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 33 Subject Photographs (Dated June 12, 2024)
Acquisition Area 1
Acquisition Area 2
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SUBJECT PHOTOGRAPHS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 34 Acquisition Area 3
End of Mary St. looking towards acquisition area 1 just past Charles Street Additional photos are included in the Addenda.
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ASSESSMENT AND TAX DATA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 35 Assessment and Tax Data
Assessment Methodology
The appraised value for the property is determined by the Stanislaus County assessor. The basis for the property assessment, or taxable value, in the jurisdiction is 100.0% of appraised or market value.

The property is currently under the ownership of County of Stanislaus, a political subdivision of the State of California and is tax exempt. If the property transfers to a third party, non-governmental buyer, the property would be assessed at the current tax rate. #7..
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MARKET ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 36 Market Analysis

MARKET MAP
The property is residential subdivision land in a small agricultural community known as Grayson. As such, an examination of the residential land market is warranted.

Residential Land Market
Residential land values are directly tied to supply and demand of current housing products. Land values vary depending on location, size, permitted uses, and allowable density. Unfortunately, there are no meaningful statistics for residential land values in Stanislaus County and the property submarket of Grayson. We note that median sales prices did stabilize or decrease on a national scale recently due to high interest rates. Stanislaus County and the City of Modesto are both experiencing slow growth and home prices are expected to be stable over the next year.

The table below shows MLS statistics for single-family home median sale price in Stanislaus County and Grayson (95363) between 2019 and 2024 (YTD). These statistics suggest an average annual increase in median home sale prices of ±10% between 2019 and 2022 followed by no change in 2023 which corresponds to rising interest rates and higher borrowing costs. #7..
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MARKET ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 37 Residential land is typically purchased contingent on project approval or with entitlements (tentative or final map) in place. When contingent upon approvals, the risk to a developer is significantly reduced, putting upward pressure on the price. Prices for land purchased without this contingency are typically lower than for land purchased on a contingency. The price differential is especially large as the risk increases. We note that citizen participation in planning activities is very high in certain municipalities; thus, the approval process for residential projects can become political, long and arduous.

Buyer types range from the individual developer to the large-scale national housing developer, depending on the size of the site. Well-located, small sites are still in demand from small local buyers, while national builders are very actively seeking land sites that are over three acres in size. If a property has easy access, no topographic or geologic issues, and has infrastructure available, the property will be in greater demand.

In mid-2022, interest rates began increasing due to inflation. The Federal Reserve was forced to increase the Federal Funds Rate from 0.25% to 4.50% between June and December of 2022 in order to combat inflation. The 10-year Treasury yield followed suit, and the uncertainty regarding interest rates for real estate loans brought commercial lending mostly to a halt. In addition to the lack of capital for new developments, capitalization rates for multi-family projects were also increasing rapidly, and transaction volumes declined dramatically. With the uncertainty and lack of capital, developers put projects on hold and were no longer acquiring sites for new projects. Eventually, the Federal Funds rate was increased to 5.25%-5.50% in December of 2023, and the 10-Year Treasury yield has stabilized in the 4.0% to 4.50% range. As a result of this, capitalization rates increased 100 to 150 basis points between 2022 and the current date, resulting in a loss of financial feasibility for new development.

The increases in the cost of capital and relative lack of commercial loans has resulted in modest declines in land values. With construction costs remaining relatively stable (at elevated levels) from 2022 to today, losses in profitability are being passed through to land sellers. Given this, few land sale transactions are taking place. However, due to the ability of non-profit developers to obtain favorable financing, grants and tax credits, affordable housing developers have remained active in acquiring land. This has moderated declines in value from early 2022 to today. However, The State has a $73B deficit. Rich Truempler of Core Companies told us that of 300 projects submitted to the State for subsidies, only 70 got approved. The governor is now calling for $1.2B in proposed cuts to core affordable housing programs to help balance the 2024-2025 CA budget.

Low-density residential land values in Modesto and surrounding cities are generally in the $2.50 to $5.00+ per square foot range depending on location and entitlements. Oftentimes, residential land is Year Median Sale Price % Change Median Sale Price % Change 2019 $325,000 $378,250
2020 $360,000 10.77% $400,000 5.75%
2021 $425,000 18.06% $490,000 22.50%
2022 $450,000 5.88% $525,000 7.14%
2023 $452,000 0.44% $519,950 -0.96%
2024 YTD $467,100 3.34% $535,850 3.06%
Single-Family Home Median Sale Price
Stanislaus County Grayson (95363)
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MARKET ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 38 valued on the basis of price per unit as opposed to price per square foot, particularly for entitled sites.

Based on this metric, residential land prices in Modesto and surrounding cities currently range between $20,000 to $100,000+ per unit for entitled sites. The range is highly dependent upon density and location.

We have found that there is an inverse relationship between density and price per unit prices.

Residential property values tend to trend along with underlying economic conditions and market conditions for single-family residential uses, which had been faring well over the past few years; however, with interest rates for new home loans rising to 7%+ in October 2022 demand and sale prices had decline. The following graph shows the increasing trend of home prices for San Francisco as taken from the S&P Dow Jones Case-Shiller Home Price Index. However, prices did trend downward starting in May 2022 which corresponds with the federal funds rate increases as the Fed initiated quantitative tightening to curb inflation. More recently, prices have been stable to increasing.

Underlying employment conditions are a barometer of the health of the economy. The chart below from the U.S. Bureau of Labor Statistics shows improvements to the employment market until a steep drop in 2020 corresponding to the Coronavirus pandemic and shelter in place orders. As of the valuation date, employment was on the rise and unemployment was near an all-time low. There is a labor shortage with not enough qualified employees to fill new openings. However, some economists are anticipating a rise in unemployment in 2024 due to monetary policy changes which are expected to slow the economy.
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MARKET ANALYSIS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 39 During the development of this appraisal and in recent past assignments we have spoken with knowledgeable land brokers including Larry Killian (Owner/Broker) with Killian Real Estate, Naomi Valadez (agent) with Craft & Bauer Real Estate Co., Christian Coronel (agent) with NT Real Estate, Kevin Beyer (agent) with HomeSmart PV & Associates, Troy Ross with Century 21, and Danny Stonebarger with PMZ Commercial. Market participants have reported that demand has slowed over the past year for residential development land due to high interest rates and stabilized to downward trending home sale prices.

Mr. Stonebarger opined the value of the Larger Parcel around $3.50 per square foot. Mr. Ross stated residential land values had been $150,000 per acre (or ±3.44 psf); however, the market has softened. All market participants opined that the subject’s Grayson location is inferior to the more developed communities and cities in the Central Valley due to its remote agricultural location and limited commercial amenities.

Overall Market Analysis Conclusion
As of the valuation date, the residential market has slowed down due to high interest rates. Still, investor and developer demand for residential land in the Central Valley is considered fair. Likely, we will continue to see a slowing trend for the Stanislaus County residential market in the near term. #7..
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HIGHEST AND BEST USE
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 40 Highest and Best Use Analysis: Larger Parcel
The Highest and Best Use of a property is the use that is legally permissible, physically possible, and financially feasible which results in the highest value. An opinion of the highest and best use results from consideration of the criteria noted above under the market conditions or likely conditions as of the effective date of value. Determination of highest and best use results from the judgment and analytical skills of the appraiser. It represents an opinion, not a fact. In appraisal practice, the concept of highest and best use represents the premise upon which value is based.

Highest and Best Use As Though Vacant
The primary determinants of the highest and best use as though vacant are (1) Legal permissibility, (2) Physical possibility, (3) Financial feasibility, and (4) Maximum productivity.

Legally Permissible
The site has a Low Density Residential land use designation which controls the general nature of permissible uses and is appropriate for the location and physical elements of the subject property, providing for a consistency of use with the general neighborhood. Single-family detached dwellings are the predominant housing type in areas so designated; however, semi-detached dwellings and manufactured housing are also allowed.

The location of the property is appropriate for the uses allowed, as noted previously, and a change in zoning is unlikely. There are no known easements, encroachments, covenants or other use restrictions that would unduly limit or impede development.

Physically Possible
The physical characteristics of the site are presented in the Site Description and allow for a number of potential uses. Elements such as size, shape, availability of utilities, known hazards (flood, environmental, etc.), and other potential influences were considered. No physical attributes materially limit legally permissible and appropriate development.

Financially Feasible
A review of published yield, rental and occupancy rates suggests that there is an undersupply of residential subdivision land and demand is insufficient to support construction costs and timely absorption of additional inventory in this market. High construction material and labor costs combined with a high interest environment make development not financially feasible at present.

Maximally Productive
Among the financially feasible uses, the use that results in the highest value (the maximally productive use) is the highest and best use. Considering these factors, the maximally productive use as though vacant is for future single-family residential subdivision development.

Highest and Best Use As Though Vacant Conclusion
The conclusion of the highest and best use as though vacant is for future single-family residential subdivision development.
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HIGHEST AND BEST USE
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 41 Highest and Best Use As Improved
The Larger Parcel is improved with a community center building and public park. Since these are public uses, we have omitted the analysis for as improved. We have considered the economic highest and best use in this appraisal, which is single-family residential subdivision development.

Most Probable Buyer
As of the date of value, the most probable buyer of the property is a developer. #7..
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 42 Land Valuation: Larger Parcel
Introduction
To provide a brief valuation overview, we first utilize the sales comparison approach to estimate the current value of the entire 3.79-acre Larger Parcel, then we apply the indicated price per square foot of land to estimate the contributory value of the acquisition areas.

Because the property is vacant land, the cost approach and income approach are not applicable. The only relevant method is the sales comparison approach, which follows.

Sales Comparison Approach
Methodology
Site value is most often estimated using the sales comparison approach. This approach develops an indication of fair market value by analyzing closed sales, listings, or pending sales of properties similar to the subject, focusing on the difference between the subject and the comparables using all appropriate elements of comparison. This approach is based on the principles of supply and demand, balance, externalities, and substitution, or the premise that a buyer would pay no more for a specific property than the cost of obtaining a property with the same quality, utility, and perceived benefits of ownership.

Unit of Comparison
The unit of comparison depends on land use economics and how buyers and sellers use the property.

The unit of comparison in this analysis is price per square foot of land.

Elements of Comparison
Elements of comparison are the characteristics or attributes of properties and transactions that cause the prices of real estate to vary. The primary elements of comparison considered in sales comparison analysis are as follows: (1) property rights conveyed, (2) financing terms, (3) conditions of sale, (4) market conditions, (5) location, and (6) physical characteristics.

Comparable Sales Data
To obtain and verify comparable sales of residential land properties, we conducted a search of public records, field surveys, interviews with knowledgeable real estate professionals in the area, and a review of our internal database. We included several sales in our analysis, as these sales were judged to be the most comparable to develop an indication of fair market value for the Larger Parcel.

The following is a table summarizing each sale comparable and a map illustrating the location of each in relation to the subject. Details of each comparable follow the location map. #7..
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 43

COMPARABLE SALES MAP
Land Sales Summary
Comp. Gross Sales Price Price
No. COE Date Acres Location Zoning Actual Per SF
1 January-21 6.240 919 Old Stockton Road Oakdale R-A $800,000 $2.94 2 September-21 7.260 1200 Hackett Road Ceres PC (49) $1,500,000 $4.74 3 February-21 3.751 3906 Sharon Avenue Modesto SP $800,000 $4.90 4 February-24 1.290 North Claus Road Modesto SP $249,000 $4.43 5 Listing 7.300 Ward Avenue Patterson Ag-10Ac-UT $749,900 $2.36 #7..
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 44 COMPARABLE SALE 1
Property Identification
Property/Sale ID 11151582/1537327
Property Type Agricultural Undeveloped
Address 919 Old Stockton Road
City, State Zip Oakdale, California 95361
County Stanislaus
Latitude/Longitude 37.777074/-120.848316
Tax ID 064-002-027000
Transaction Data
COE Date January 15, 2021
Sale Status Recorded
Grantor Lind Family Trust
Grantee Oakdale Real Estate
Development
Recording Number 4651
Days on Market 326
Sale Price $800,000
Property Description
Gross Acres 6.24
Gross SF 271,814
No. of Units 31
Density (Units/Ac) 4.97
Corner/Interior Corner
Shape Trapezoidal
Use Designation Low Density Residential
Zoning Jurisdiction City of Oakdale
Zoning Code R-A
Zoning Description Residential Agricultural
Indicators
$/Gross SF $2.94
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 45 Remarks X
This property consists of a single parcel of vacant residential land located along the east side of Old Stockton Road in Oakdale. The site has a trapezoidal shape and an interior lot configuration with approximately 450 feet of frontage along Old Stockton Road and an average depth of 600 feet. The property is proximate to the Stanislaus River, and the Oakdale Golf and Country Club.

The underlying site contains 271,814 square feet or 6.26 acres. The property zoning is Residential Agricultural, and the General Plan land use designation is Low Density Residential. The zoning allows 8,000 square foot minimum lot size.

Oakdale Real Estate Development purchased this property in January 2021 from Lind Family Trust. The property sold below the asking price of $1,100,000. The sale price was $800,000 or $2.94 per square foot of land. The buyer is a developer and purchased the property for single-family residential subdivision. There were no approvals at the time of sale.
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 46 COMPARABLE SALE 2
Property Identification
Property/Sale ID 11458760/1765618
Property Type Subdivision-Residential
Address 1200 Hackett Road
City, State Zip Ceres, California 95307
County Stanislaus
Latitude/Longitude 37.587406/-120.977191
Tax ID 086-037-003000, and 086-037-004000
Transaction Data
COE Date September 9, 2021
Sale Status Recorded
Grantor Singh Surgit & Kaur
Ranjeet
Grantee Bright Development
Recording Number 86033
Days on Market 69
Sale Price $1,500,000
Property Description
Gross Acres 7.26
Gross SF 316,246
No. of Units 38
Density (Units/Ac) 5.23
Corner/Interior Interior
Shape Generally Rectangular
Use Designation Low Density Residential
Zoning Jurisdiction City of Ceres
Zoning Code PC (49)
Zoning Description Planned Community
Indicators
$/Gross SF $4.74
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 47 Remarks X
This property consists of two contiguous parcels of residential land located along the south side of Hackett Road in Ceres. The site has an irregular rectangular shape and an interior lot configuration. The site has approximately 390 feet of frontage along Hackett Road and with an average depth of 1,055 feet. There were offsites in place along Hackett Road.

The underlying site contains 316,246 square feet or 7.26 acres. The property zoning is Planned Community, and the General Plan land use designation is Low Density Residential Bright Development purchased this property in September 2021 from Singh Surgit & Kaur Ranjeet. The property sold below the asking price of $1,600,000. The sale price was $1,500,000 or $4.74 per square foot of land. The buyer is a developer. The property was approved for a 38 home subdivision at the time of sale.

There were two existing single-family residences at the time of sale which will be razed. #7..
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SINGLE-FAMILY RESIDENTIAL LAND
LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 48 COMPARABLE SALE 3
Property Identification
Property/Sale ID 11151510/1537279
Property Type Land Other
Address 3906 Sharon Avenue
City, State Zip Modesto, California 95355
County Stanislaus
Latitude/Longitude 37.674296/-120.923423
Tax ID 085-007-009000
Transaction Data
COE Date February 19, 2021
Sale Status Recorded
Grantor Golden Palm Associates
Grantee NRB Investments LLC
Recording Number 17016
Days on Market 103
Sale Price $800,000
Property Description
Gross Acres 3.75
Gross SF 163,394
No. of Units 24
Density (Units/Ac) 6.40
Corner/Interior Interior
Shape Rectangular
Use Designation Residential
Zoning Jurisdiction City of Modesto
Zoning Code SP
Zoning Description Specific Plan
Indicators
$/Gross SF $4.90
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SINGLE-FAMILY RESIDENTIAL LAND
LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 49 Remarks X
This property consists of a single parcel of vacant residential land located along the south side of Sharon Avenue in the City of Modesto. The site has a rectangular shape and an interior lot configuration one parcel west of North Claus Road. The site has approximately 255 feet of frontage along Sharon Avenue and an average depth of 645 feet. There are no offsites in place along the property's Sharon Road frontage.

The underlying site contains 163,394 square feet or 3.75 acres. The property zoning is Specific Plan, and the General Plan land use designation is Residential.

NRB Investments LLC purchased this property in February 2021 from Golden Palm Associates. The property sold below the asking price of $899,000. The sale price was $800,000 or $4.90 per square foot of land. The buyer is a developer and is proposing single-family residential subdivision. There were no approvals in place at the time of sale.
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SINGLE-FAMILY RESIDENTIAL LAND
LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 50 COMPARABLE SALE 4
Property Identification
Property/Sale ID 11458770/1765622
Property Type Subdivision-Residential
Address North Claus Road
City, State Zip Modesto, California 95355
County Stanislaus
Latitude/Longitude 37.672425/-120.921786
Tax ID 085-007-013000
Transaction Data
COE Date February 13, 2024
Sale Status Recorded
Grantor Soledad Zamudio
Grantee Jose Menchaca Garcia
Recording Number 4753
Days on Market 50
Sale Price $249,000
Property Description
Gross Acres 1.29
Gross SF 56,192
No. of Units 7
Density (Units/Ac) 5.43
Corner/Interior Interior
Shape Rectangular
Use Designation Residential
Zoning Jurisdiction City of Modesto
Zoning Code SP
Zoning Description Specific Plan
Indicators
$/Gross SF $4.43
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 51 Remarks X
This property consists of a single parcel of vacant residential land located along the west side of North Claus Road in the City of Modesto. The site has a rectangular shape and an interior lot configuration three parcels North of Merle Avenue. The site has approximately 200 feet of frontage along North Claus Road and an average depth of 290 feet. There are no offsites in place along the property's North Claus Road frontage.

The underlying site contains 56,192 square feet or 1.29 acres. The property zoning is Specific Plan, and the General Plan land use designation is Residential.

Jose Menchaca Garcia purchased this property in February 2024 from Soledad Zamudio. The property sold below near the asking price of $249,500. The sale price was $249,000 or $4.43 per square foot of land. There were no approvals in place at the time of sale. The buyer's plans are not known. #7..
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 52 COMPARABLE SALE 5 (LISTING)
Property Identification
Property/Sale ID 10755433/1765624
Property Type Land
Address Ward Avenue
City, State Zip Patterson, California 95363
County Stanislaus
Latitude/Longitude 37.485937/-121.142410
Tax ID 047-015-013000
Transaction Data
Sale Status Listing
Grantor Rajesh & Rajni Gupta Trust
Grantee Unknown/Buyer
Recording Number Unavailable
Days on Market 22
Asking Price $749,900
Property Description
Gross Acres 7.30
Gross SF 317,988
No. of Units 37
Density (Units/Ac) 5.07
Corner/Interior Interior
Shape Trapezoidal
Use Designation Urban Transition
Zoning Jurisdiction City of Patterson
Zoning Code Ag-10Ac-UT
Zoning Description Agricultural; Urban
Transition
Indicators
$/Gross SF $2.36
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 53 Remarks X
This property consists of a single parcel of vacant low density residential land located along the west side of Ward Avenue in the City of Patterson. The site has a trapezoid shape and an interior lot configuration three parcels north of Ivy Avenue. The site has approximately 335 feet of frontage along Ward Avenue and an average depth of 960 feet. The property abuts a drainage canal to the west.

The underlying site contains 317,988 square feet or 7.30 acres. The property is being annexed into the City of Patterson. The county zoning and General Plan land use designation are Urban Transition. The City of Patterson identifies the site with a Low Density Residential land use designation (up to 5 units per acre).

This property is listed for sale. The asking price is $749,900 or $2.36 per square foot of land. The broker reported two offers well below the asking price. The broker stated that the annexation has been approved and the City is in the process of finalizing the paperwork. The future development plan for the area (Zacharias Master Plan) has a new collector street passing over this property east to west. #7..
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 54 Land Sales Comparison Analysis
When necessary, adjustments were made for differences in various elements of comparison, including property rights conveyed, financing terms, conditions of sale, expenditures made immediately after purchase, market conditions, location, and other physical characteristics. If the element in comparison is considered superior to that of the subject, we applied a negative adjustment. Conversely, a positive adjustment was applied if inferior. A summary of the elements of comparison follows.

Transaction Adjustments
Transaction adjustments include (1) real property rights conveyed, (2) financing terms, (3) conditions of sale, and (4) expenditures made immediately after purchase. These items, which are applied prior to the market conditions and property adjustments, are discussed as follows:

Real Property Rights Conveyed
Real property rights conveyed influence sale prices and must be considered when analyzing a sale comparable. The appraised value and sale comparables all reflect the fee simple interest with no adjustments required.

Financing Terms
The transaction price of one property may differ from that of an identical property due to different financial arrangements. Sales involving financing terms that are not at or near market terms require adjustments for cash equivalency to reflect typical market terms. A cash equivalency procedure discounts the atypical mortgage terms to provide an indication of value at cash equivalent terms.

All of the sale comparables involved typical market terms by which the sellers received cash or its equivalent and the buyers paid cash or tendered typical down payments and obtained conventional financing at market terms for the balance. Therefore, no adjustments for this category are required.

Conditions of Sale
When the conditions of sale are atypical, the result may be a price that is higher or lower than that of a normal transaction. Adjustments for conditions of sale usually reflect the motivations of either a buyer or a seller who is under duress to complete the transaction. Another more typical condition of sale involves the downward adjustment required to a comparable property’s for-sale listing price, which usually reflects the upper limit of value.

Comparable Five is a listing and is downward adjusted. The other sale comparables do not indicate any condition of sale adjustments are warranted for atypical conditions or for-sale listings.

Market Conditions Adjustment
Market conditions change over time because of inflation, deflation, fluctuations in supply and demand, or other factors. Changing market conditions may create a need for adjustment to comparable sale transactions completed during periods of dissimilar market conditions.

Demand for residential land was strong in 2022 but demand dropped in 2023 due to high interest rates, smaller expected returns, high material and labor costs, slow housing price growth, and a lack of funding. We have applied upward adjustment to comparables before March 2022 and then downward adjustments to comparables after March 2022 which corresponds to the start of the federal funds rate increases.
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 55 Property Adjustments
Property adjustments are usually expressed quantitatively as percentages or dollar amounts that reflect the differences in value attributable to the various characteristics of the property. In some instances, however, qualitative adjustments are used. These adjustments are based on locational and physical characteristics and are applied after transaction and market conditions adjustments.

Our reasoning for the property adjustments made to each sale comparable follows. The discussion analyzes each adjustment category deemed applicable to the subject.

Location
Location adjustments may be required when the locational characteristics of a comparable are different from those of the subject. These characteristics can include general neighborhood characteristics, freeway accessibility, street exposure, corner- versus interior-lot location, neighboring properties, view amenities, and other factors.

The site is located along West Grayson Road in unincorporated Stanislaus County in an area known as Grayson which is known as a small agricultural community. Comparables Three and Four have superior locations in Modesto and are downward adjusted. No other adjustments are warranted to the rest of the comparables.

Size
The size adjustment addresses variance in the physical size of the comparables and that of the subject, as a larger parcel typically commands a lower price per unit than a smaller parcel. This inverse relationship is due, in part, to the principle of “economies of scale.” While this is generally true, we also note that a very small site cannot be generally developed at the highest density permitted by zoning, as the site size imposes constraints to development. Additionally, many developers favor larger sites which allow more flexibility in designing a development and can support higher densities.

The site contains 165,092 square feet of land. The comparables range in site size between 56,192 and 317,988 square feet and bracket the subject’s site size. No adjustments are made for size.

Floodplain
The subject is not located within a flood hazard zone. Comparable Five is located in a flood hazard zone and is upward adjusted slightly. None of the other comparables are located within a flood hazard zone and no additional adjustments are made for this category.

Zoning/Density
The highest and best use of sale comparables should be very similar to that of the subjects. When comparables with the same zoning as the subjects are lacking or scarce, parcels with slightly different zoning, but a highest and best use similar to that of the subjects may be used as comparables. These comparables may require an adjustment for differences in utility if the market supports such adjustment.

We have concluded a typical lot size of 7,500 square feet is reasonably probable for the subject based on the zoning in the immediate area, surrounding density, and our discussion with county planning. #7..
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 56 We have used 20 lots for the basis of analysis which considers the semi-rural location. All comparables allow low density single-family residential use of a similar density and no adjustment is warranted.

Approvals
We have appraised the property as unentitled land with no approvals in place, in other words “as is”.

Comparables Two sold with Tentative Map approval and is downward adjusted. No additional adjustment is made to the rest of the comparables.

Offsites (Curbs, Sidewalks, gutters, etc.)
The Larger Parcel has all offsites in place along Mary Street and Laird Street. All comparables, except Comparable Two, do not have offsites in place and are upward adjusted slightly. No other adjustments are warranted for this category.

Other
This adjustment category reflects items not yet adjusted for. A major collector roadway is anticipated to pass through Comparable Five as part of a larger mastered planned development of the area which warrants upward adjustment. No other adjustments are considered necessary.

Summary of Adjustments
Presented on the following page is a summary of the adjustments made to the sale comparables. As noted earlier, these adjustments were based on our market research, best judgment, and experience in the appraisal of similar properties.
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 57 Land Sales Adjustment Grid 1 2 3 4 5
Subject Sale # 1 Sale # 2 Sale # 3 Sale # 4 Sale # 5
Date of Value & COE Date June-24 January-21 September-21 February-21 February-24 Listing Unadjusted Sales Price $800,000 $1,500,000 $800,000 $249,000 $749,900 Gross Square Feet 165,092 271,814 316,246 163,394 56,192 317,988 Unadjusted Sales Price per Gross Sq. Ft. $2.94 $4.74 $4.90 $4.43 $2.36 Transactional Adjustments
Property Rights Conveyed Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Adjusted Sales Price $2.94 $4.74 $4.90 $4.43 $2.36
Financing Terms Conventional Cash Cash Conventional Unknown Adjusted Sales Price $2.94 $4.74 $4.90 $4.43 $2.36
Conditions of Sale Typical Typical Typical Typical Typical Listing Adjustment -
Expenditures after Sale None $0 $0 $0 $0 $0
Market Conditions Adjustments
Elapsed Time from Date of Value 3.41 years 2.76 years 3.31 years 0.33 years 0.00 years Adjustment June-24 - - - - 0.0% 0.0% 0.0% 0.0% 0.0%
Physical Adjustments
Location Mary Street at
Laird Street
919 Old Stockton
Road
1200 Hackett Road 3906 Sharon
Avenue
North Claus Road Ward Avenue
Grayson Oakdale Ceres Modesto Modesto Patterson
Adjustment - -

0.0% 0.0% 0.0% 0.0% 0.0%
Size 165,092 sf 271,814 sf 316,246 sf 163,394 sf 56,192 sf 317,988 sf Adjustment

0.0% 0.0% 0.0% 0.0% 0.0%
Shape/Depth Generally
Rectangular
Trapezoidal Generally
Rectangular
Rectangular Rectangular Trapezoidal
Adjustment

0.0% 0.0% 0.0% 0.0% 0.0%
Frontages (i.e., curbs, sidewalks, etc.) Fontages in place None Fontages in place None None None Adjustment + + + +

0.0% 0.0% 0.0% 0.0% 0.0%
Approvals None None Fully Approved None None None
Adjustment -

0.0% 0.0% 0.0% 0.0% 0.0%
Floodplain X X X X X AO
Adjustment +

0.0% 0.0% 0.0% 0.0% 0.0%
Zoning/Density PD; 5.28 du/ac R-A; 4.97 du/ac PC; 5.23 du/ac SP; 6.40 du/ac SP; 5.25 du/ac UT; 5.00 du/ac Adjustment

0.0% 0.0% 0.0% 0.0% 0.0%
Other Typical None None None None Bifurcated by
Major Collector
Adjustment +
Indicated Adjustment + - - - +
Indicated Price per Gross Sq. Ft. More than $2.94 Less than $4.74 Less than $4.90 Less than $4.43 More than $2.36 #7..
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 58 Sales Comparison Approach Value Indication
Based on the preceding analysis, we have summarized adjustments to the sale comparables on the preceding adjustment grid. These adjustments are based on our market research, best judgment, and experience in the appraisal of similar properties.

From the market data available, five land comparables in competitive market areas which were most comparable to the subject were selected. The unadjusted sale prices for the comparable sales ranged from $2.36 to $4.90 per square foot of land, with an average of $3.87 and a median of $4.43. On a perlot basis, the sales ranged from $20,521 to $39,474 with an average of $31,180 and a median of $33,333.

We adjusted the comparables based on pertinent elements of comparison as discussed earlier and summarized the adjustments in the preceding adjustment grid. On a per-square foot of land basis, the adjusted values ranged from more than $2.36 to less than $4.90. The adjustment upward from $2.36 is less than the downward adjustment from $4.90. We have concluded that $3.00 price per square foot of land is the most appropriate for the Larger Parcel. At 165,092 square feet, the value indication is $495,000.

Based on this analysis, the land value indication is summarized as follows:

We also considered the price per lot method. We concluded that the adjusted sale prices reflect a range from more than $20,521 but less than $39,474. The adjustment upward from $20,521 is substantially less than the adjustment downward from $39,474. We have concluded that the $495,000 estimated above is supported by this method as well.

Acquisition Areas and Value Calculations
As previously stated, the City of Modesto is proposing to acquire two separate areas on APN 016-034- 014 containing 24,970 square feet (Area 2) and 2,170 square feet (Area 3), as well as a 10,320 square foot portion of Mary Street (Area 1) which is currently not in use.

We have determined that there are no damages since the take areas are vacant land at the eastern portion of the Larger Parcel which are not actively used for any purpose other than open space. No improvements are impacted by the taking. The remainder area can still be subdivided and developed with a single-family residential subdivision. In our opinion the overall shape of the Larger Parcel is improved after the taking; however, since there are no damages, we have not valued benefits.

The following table shows the value calculation for the three acquisition areas.

Land Value Conclusion
Reasonable Adjusted Comparable Range
165,092 square feet x $2.75 psf = $454,003
165,092 square feet x $3.50 psf = $577,822
Market Value Opinion (Rounded)
165,092 square feet x $3.00 psf = $495,000
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LAND VALUATION: LARGER PARCEL
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 59 Component Component Component
SF portion of May Street 10,320 24,970 SF portion of APN 016-034-014 SF portion of APN 016-034-014 2,170 $3.00 PSF of land (or $495,000 / 165,092 sf) $3.00 PSF of land (or $495,000 / 165,092 sf) $3.00 PSF of land (or $495,000 / 165,092 sf) $30,960 fee value $74,910 fee value $6,510 value
$0 Value of improvements/ Fencing $0 Value of improvements/ Fencing $0 value of improvements $30,960 Land and improvements $74,910 Land and improvements $6,510 Land and improvements 100% % of rights 100% % of rights 100% % of rights
$30,960 Value of the Part Take $74,910 Value of the Part Take $6,510 Value of the Part Take Area 1 Part Take Area 2 Part Take Area 3 Part Take
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SUMMARY OF VALUATION
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 60 Summary of Valuation – Laird Street at Mary
Street, Grayson
Size (SF) Land Value Total
Value of Larger Parcel 165,092 $3.00 = $495,276
Part Take 1 10,320
Total Part Take 1 10,320 x $3.00 x 100% = $30,960
rights acquired
Part Take 2 24,970
Total Part Take 2 24,970 x $3.00 x 100% = $74,910
rights acquired
Part Take 3 2,170
Total Part Take 3 2,170 x $3.00 x 100% = $6,510
rights acquired
Total Underlying Land Value Being Acquired $112,380
Site Improvements
Total Site Improvements Being Acquired $0
Total Value of Taking (Rounded) $112,400
Value of Remainder - Before Taking $382,876
Value of Remainder - After Taking $382,876
Severance Damages $0
Benefits $0
Total Estimated Just Compensation (Rounded) $112,400
Summary of Valuation - Laird Street at Mary Street, Grayson Date of Valuation: June 12, 2024
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GENERAL ASSUMPTIONS & LIMITING CONDITIONS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 61 General Assumptions and Limiting Conditions
This appraisal is subject to the following general assumptions and limiting conditions:

1. The legal description – if furnished to us – is assumed to be correct.

2. No responsibility is assumed for legal matters, questions of survey or title, soil or subsoil conditions, engineering, availability or capacity of utilities, or other similar technical matters. The appraisal does not constitute a survey of the property appraised. All existing liens and encumbrances have been disregarded and the property is appraised as though free and clear, under responsible ownership and competent management unless otherwise noted.

3. Unless otherwise noted, the appraisal will value the property as though free of contamination.

Valbridge Property Advisors | Northern California will conduct no hazardous materials or contamination inspection of any kind. It is recommended that the client hire an expert if the presence of hazardous materials or contamination poses any concern.

4. The stamps and/or consideration placed on deeds used to indicate sales are in correct relationship to the actual dollar amount of the transaction.

5. Unless otherwise noted, it is assumed there are no encroachments, zoning violations or restrictions existing in the subject property.

6. The appraiser is not required to give testimony or attendance in court by reason of this appraisal, unless previous arrangements have been made.

7. Unless expressly specified in the engagement letter, the fee for this appraisal does not include the attendance or giving of testimony by Appraiser at any court, regulatory or other proceedings, or any conferences or other work in preparation for such proceeding. If any partner or employee of Valbridge Property Advisors | Northern California is asked or required to appear and/or testify at any deposition, trial, or other proceeding about the preparation, conclusions or any other aspect of this assignment, client shall compensate Appraiser for the time spent by the partner or employee in appearing and/or testifying and in preparing to testify according to the Appraiser’s then current hourly rate plus reimbursement of expenses.

8. The values for land and/or improvements, as contained in this report, are constituent parts of the total value reported and neither is (or are) to be used in making a summation appraisal of a combination of values created by another appraiser. Either is invalidated if so used.

9. The dates of value to which the opinions expressed in this report apply are set forth in this report.

We assume no responsibility for economic or physical factors occurring at some point at a later date, which may affect the opinions stated herein. The forecasts, projections, or operating estimates contained herein are based on current market conditions and anticipated short-term supply and demand factors and are subject to change with future conditions. Appraiser is not responsible for determining whether the date of value requested by Client is appropriate for Client’s intended use.

10. The sketches, maps, plats and exhibits in this report are included to assist the reader in visualizing the property. The appraiser has made no survey of the property and assumed no responsibility in connection with such matters.

11. The information, estimates and opinions, which were obtained from sources outside of this office, are considered reliable. However, no liability for them can be assumed by the appraiser. #7..
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GENERAL ASSUMPTIONS & LIMITING CONDITIONS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 62

12. Possession of this report, or a copy thereof, does not carry with it the right of publication. Neither all, nor any part of the content of the report, or copy thereof (including conclusions as to property value, the identity of the appraisers, professional designations, reference to any professional appraisal organization or the firm with which the appraisers are connected), shall be disseminated to the public through advertising, public relations, news, sales, or other media without prior written consent and approval.

13. No claim is intended to be expressed for matters of expertise that would require specialized investigation or knowledge beyond that ordinarily employed by real estate appraisers. We claim no expertise in areas such as, but not limited to, legal, survey, structural, environmental, pest control, mechanical, etc.

14. This appraisal was prepared for the sole and exclusive use of the client for the function outlined herein. Any party who is not the client or intended user identified in the appraisal or engagement letter is not entitled to rely upon the contents of the appraisal without express written consent of Valbridge Property Advisors | Northern California and Client. The Client shall not include partners, affiliates, or relatives of the party addressed herein. The appraiser assumes no obligation, liability or accountability to any third party.

15. Distribution of this report is at the sole discretion of the client, but third-parties not listed as an intended user on the face of the appraisal or the engagement letter may not rely upon the contents of the appraisal. In no event shall client give a third-party a partial copy of the appraisal report. We will make no distribution of the report without the specific direction of the client.

16. This appraisal shall be used only for the function outlined herein, unless expressly authorized by Valbridge Property Advisors | Northern California.

17. This appraisal shall be considered in its entirety. No part thereof shall be used separately or out of context.

18. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures which would render it more or less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover them.

19. We have attempted to reconcile sources of data discovered or provided during the appraisal process, including assessment department data. Ultimately, the measurements that are deemed by us to be the most accurate and/or reliable are used within this report. While the measurements and any accompanying sketches are considered to be reasonably accurate and reliable, we cannot guarantee their accuracy. Should the client desire more precise measurement, they are urged to retain the measurement services of a qualified professional (space planner, architect or building engineer) as an alternative source. If this alternative measurement source reflects or reveals substantial differences with the measurements used within the report, upon request of the client, the appraiser will submit a revised report for an additional fee.

20. In the absence of being provided with a detailed land survey, we have used assessment department data to ascertain the physical dimensions and acreage of the property. Should a survey prove this information to be inaccurate, upon request of the client, the appraiser will submit a revised report for an additional fee.
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GENERAL ASSUMPTIONS & LIMITING CONDITIONS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 63

21. Unless otherwise stated in this report, the value conclusion is predicated on the assumption that the property is free of contamination, environmental impairment or hazardous materials. Unless otherwise stated, the existence of hazardous material was not observed by the appraiser and the appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea-formaldehyde foam insulation or other potentially hazardous materials may affect the value of the property. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required for discovery. The client is urged to retain an expert in this field, if desired.

22. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated, unless specifically stated to the contrary.

23. The data gathered in the course of this assignment (except data furnished by the Client) shall remain the property of the Appraiser. The appraiser will not violate the confidential nature of the appraiserclient relationship by improperly disclosing any confidential information furnished to the appraiser.

Notwithstanding the foregoing, the Appraiser is authorized by the client to disclose all or any portion of the appraisal and related appraisal data to appropriate representatives of the Appraisal Institute if such disclosure is required to enable the appraiser to comply with the Bylaws and Regulations of such Institute now or hereafter in effect.

24. You and Valbridge Property Advisors | Northern California both agree that any dispute over matters in excess of $5,000 will be submitted for resolution by arbitration. This includes fee disputes and any claim of malpractice. The arbitrator shall be mutually selected. If Valbridge Property Advisors | Northern California and the client cannot agree on the arbitrator, the presiding head of the Local County Mediation & Arbitration panel shall select the arbitrator. Such arbitration shall be binding and final. In agreeing to arbitration, we both acknowledge that, by agreeing to binding arbitration, each of us is giving up the right to have the dispute decided in a court of law before a judge or jury.

In the event that the client, or any other party, makes a claim against Valbridge Property Advisors | Northern California or any of its employees in connections with or in any way relating to this assignment, the maximum damages recoverable by such claimant shall be the amount actually received by Valbridge Property Advisors | Northern California for this assignment, and under no circumstances shall any claim for consequential damages be made.

25. Valbridge Property Advisors | Northern California shall have no obligation, liability, or accountability to any third party. Any party who is not the “client” or intended user identified on the face of the appraisal or in the engagement letter is not entitled to rely upon the contents of the appraisal without the express written consent of Valbridge Property Advisors | Northern California. “Client” shall not include partners, affiliates, or relatives of the party named in the engagement letter. Client shall hold Valbridge Property Advisors | Northern California and its employees harmless in the event of any lawsuit brought by any third party, lender, partner, or part-owner in any form of ownership or any other party as a result of this assignment. The client also agrees that in case of lawsuit arising from or in any way involving these appraisal services, client will hold Valbridge Property Advisors | Northern California harmless from and against any liability, loss, cost, or expense incurred or suffered by Valbridge Property Advisors | Northern California in such action, regardless of its outcome.

26. The Valbridge Property Advisors office responsible for the preparation of this report is independently owned and operated by San Francisco Bay Area | Silicon Valley | San Jose. Neither Valbridge Property Advisors, Inc., nor any of its affiliates has been engaged to provide this report.

Valbridge Property Advisors, Inc. does not provide valuation services, and has taken no part in the preparation of this report.
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GENERAL ASSUMPTIONS & LIMITING CONDITIONS
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 64

27. If any claim is filed against any of Valbridge Property Advisors, Inc., a Florida Corporation, its affiliates, officers or employees, or the firm providing this report, in connection with, or in any way arising out of, or relating to, this report, or the engagement of the firm providing this report, then (1) under no circumstances shall such claimant be entitled to consequential, special or other damages, except only for direct compensatory damages, and (2) the maximum amount of such compensatory damages recoverable by such claimant shall be the amount actually received by the firm engaged to provide this report.

28. This report and any associated work files may be subject to evaluation by Valbridge Property Advisors, Inc., or its affiliates, for quality control purposes.

29. Acceptance and/or use of this appraisal report constitutes acceptance of the foregoing general assumptions and limiting conditions.
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CERTIFICATION
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 65 Certification – Tony Sciarrilli
I certify that, to the best of my knowledge and belief:

1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

3. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.

4. The undersigned has not performed services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

5. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

6. My engagement in this assignment was not contingent upon developing or reporting predetermined results.

7. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

8. My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

9. Tony Sciarrilli has not personally inspected the subject property.

10. No one provided significant real property appraisal assistance to the person signing this certification.

11. The reported analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

12. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

13. As of the date of this report, the undersigned has completed the Standards and Ethics Education Requirement for Candidates/Practicing Affiliates of the Appraisal Institute.

Tony M. Sciarrilli
Appraiser
California Certified License #AG3003462
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CERTIFICATION
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 66 Certification – Norman C. Hulberg, MAI
I certify that, to the best of my knowledge and belief:

1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

3. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.

4. The undersigned has not performed services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

5. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

6. My engagement in this assignment was not contingent upon developing or reporting predetermined results.

7. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

8. My analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

9. Norman C. Hulberg did not personally inspect the subject property.

10. No one provided significant real property appraisal assistance to the person signing this certification.

11. The reported analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

12. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

13. As of the date of this report, the undersigned has completed the continuing education program for Designated Members of the Appraisal Institute.

Norman C. Hulberg, MAI
Senior Managing Director
California Certified License #AG003542
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 67 Addenda
Additional Subject Photographs
Notice of Decision to Appraise Letters
Glossary
Qualifications
• Tony Sciarrilli - Appraiser
• Norman C. Hulberg, MAI - Senior Managing Director
Information on Valbridge Property Advisors
Office Locations
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 68 Additional Subject Photographs (Dated June 12, 2024)
Looking across Area 1 towards Mary Street Looking south across Area 2 Looking east across Areas 2 and 3 City of Modesto Well Site Street scene looking southwest along West
Grayson Road (Larger Parcel is across the road)
Street scene looking east along Mary Street from
the Larger Parcel
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 69 Notice of Decision to Appraise Letters
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 70 #7..
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 71 #7..
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 72 #7..
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 73 #7..
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 74 #7..
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ADDENDA
© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 75 Glossary
Definitions are taken from The Dictionary of Real Estate Appraisal, 7th Edition (Dictionary), the Uniform Standards of Professional Appraisal Practice (USPAP), and Building Owners and Managers Association International (BOMA).

Absolute Net Lease
A lease in which the tenant pays all expenses including structural maintenance, building reserves, and
management; often a long-term lease to a credit tenant. (Dictionary)
Amortization
The process of retiring a debt or recovering a capital
investment, typically through scheduled, systematic
repayment of the principal; a program of periodic
contributions to a sinking fund or debt retirement fund. (Dictionary)
As Is Market Value
The estimate of the market value of real property in its current physical condition, use, and zoning as of the
appraisal date. (Interagency Appraisal and Evaluation
Guidelines) Note that the use of the “as is” phrase is
specific to appraisal regulations pursuant to FIRREA
applying to appraisals prepared for regulated lenders in the United States. The concept of an “as is” value is not included in the Standards of Valuation Practice of the
Appraisal Institute, Uniform Standards of Professional
Appraisal Practice, or International Valuation Standards. (Dictionary)
Base Rent
The minimum rent stipulated in a lease. (Dictionary)
Base Year
The year on which escalation clauses in a lease are based. (Dictionary)
Building Common Area
In office buildings, the areas of the building that provide services to building tenants but that are not included in the office area or store area of any specific tenant. These areas may include, but shall not be limited to, main and auxiliary lobbies, atrium spaces at the level of the finished floor, concierge areas or security desks, conference
rooms, lounges or vending areas, food service facilities, health or fitness centers, daycare facilities, locker or shower facilities, mail rooms, fire control rooms, fully enclosed courtyards outside the exterior walls, and
building core and service areas such as fully enclosed
mechanical or equipment rooms. Specifically excluded
from building common area are floor common areas,
parking space, portions of loading docks outside the
building line, and major vertical penetrations. (BOMA)
Building Rentable Area
The sum of all floor rentable areas. Floor rentable area is the result of subtracting from the gross measured area of a floor the major vertical penetrations on that same floor.

It is generally fixed for the life of the building and is rarely affected by changes in corridor size or configuration.
(BOMA)
Bulk Value
The value of multiple units, subdivided plots, or
properties in a portfolio as though sold together in a
single transaction. (Dictionary)
Certificate of Occupancy (COO)
A formal written acknowledgment by an appropriate unit
of local government that a new construction or
renovation project is at the stage where it meets
applicable health and safety codes and is ready for
commercial or residential occupancy. (Dictionary)
Common Area Maintenance (CAM)
The expense of operating and maintaining common
areas; may or may not include management charges and
usually does not include capital expenditures on tenant improvements or other improvements to the property.
(Dictionary)
The amount of money charged to tenants for their shares of maintaining a [shopping] center’s common area. The
charge that a tenant pays for shared services and facilities such as electricity, security, and maintenance of parking lots. Items charged to common area maintenance may
include cleaning services, parking lot sweeping and
maintenance, snow removal, security, [amenities,] and
upkeep. (ICSC – International Council of Shopping
Centers, 4th Ed.)
Condominium
An attached, detached, or stacked unit within or attached to a structure with common areas that are held as tenants in common (an undivided interest) with other owners in
the project. The units can be residential, commercial,
industrial, or parking spaces or boat docks. These units are commonly defined by state laws in their locations.

Because units can be stacked on top of other units, these units can be defined both vertically and horizontally.
(Dictionary)
Conservation Easement
An interest in real estate restricting future land use to preservation, conservation, wildlife habitat, or some
combination of those uses. A conservation easement may
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 76 permit farming, timber harvesting, or other uses of a rural nature as well as some types of conservation-oriented
development to continue, subject to the easement.
(Dictionary)
Contributory Value
A type of value that reflects the amount a property or
component of a property contributes to the value of
another asset or to the property as a whole.

The change in the value of a property as a whole, whether positive or negative, resulting from the addition or
deletion of a property component. Also called deprival
value in some countries. (Dictionary)
Debt Coverage Ratio (DCR)
The ratio of net operating income to annual debt service (DCR = NOI÷Im), which measures the relative ability of a property to meet its debt service out of net operating
income; also called debt service coverage ratio (DSCR). A larger DCR typically indicates a greater ability for a
property to withstand a reduction of income, providing
an improved safety margin for a lender. (Dictionary)
Deed Restriction
A provision written into a deed that limits the use of land.

Deed restrictions usually remain in effect when title
passes to subsequent owners. (Dictionary)
Depreciation
In appraisal, a loss in property value from any cause; the difference between the cost of an improvement on the
effective date of the appraisal and the value of the
improvement on the same date.

In accounting, an allocation of the original cost of an asset, amortizing the cost over the asset’s life; calculated using a variety of standard techniques. (Dictionary)
Disposition Value
The most probable price that a specified interest in
property should bring under the following conditions:

1. Consummation of a sale within a specified time,
which is shorter than the typical exposure time for
such a property in that market.

2. The property is subjected to market conditions
prevailing as of the date of valuation;

3. Both the buyer and seller are acting prudently and
knowledgeably;

4. The seller is under compulsion to sell;

5. The buyer is typically motivated;

6. Both parties are acting in what they consider to be
their best interests;

7. An adequate marketing effort will be made during
the exposure time;

8. Payment will be made in cash in U.S. dollars (or the local currency) or in terms of financial arrangements
comparable thereto; and

9. The price represents the normal consideration for
the property sold, unaffected by special or creative
financing or sales concessions granted by anyone
associated with the sale.

This definition can also be modified to provide for
valuation with specified financing terms. (Dictionary)
Double Net (Net Net) Lease
An alternative term for a type of net lease. In some
markets, a net net lease is defined as a lease in which the tenant is responsible to pay both property taxes and
premiums for insuring the building(s). (Valbridge)
(The market definition of a double net lease varies
depending on the market)
Easement
The right to use another’s land for a stated purpose.
(Dictionary)
EIFS
Exterior Insulation Finishing System. This is a type of exterior wall cladding system. Sometimes referred to as dry-vit.

Effective Date

1. The date on which the appraisal opinion applies.
(SVP)

2. The date to which an appraiser’s analyses, opinions, and conclusions apply; also referred to as date of
value. (USPAP, 2020-2021 ed.)

3. The date that a lease goes into effect. (Dictionary) Effective Gross Income (EGI)
The anticipated income from all operations of the real
estate after an allowance is made for vacancy and
collection losses and an addition is made for any other income. (Dictionary)
Effective Rent
Total base rent, or minimum rent stipulated in a lease, over the specified lease term minus rent concessions; the rent that is effectively paid by a tenant net of financial concessions provided by a landlord. (TIs). (Dictionary) EPDM
Ethylene Propylene Diene Monomer Rubber. A type of
synthetic rubber typically used for roof coverings.

Escalation Clause
A clause in an agreement that provides for the
adjustment of a price or rent based on some event or
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 77 index. e.g., a provision to increase rent if operating
expenses increase; also called escalator clause, expense recovery clause or stop clause. (Dictionary)
Estoppel Certificate
A signed statement by a party (such as a tenant or a
mortgagee) certifying, for another’s benefit, that certain facts are correct, such as that a lease exists, that there are no defaults, and that rent is paid to a certain date.
(Black’s) In real estate, a buyer of rental property typically requests estoppel certificates from existing tenants.

Sometimes referred to as an estoppel letter. (Dictionary) Excess Land
Land that is not needed to serve or support the existing use. The highest and best use of the excess land may or may not be the same as the highest and best use of the
improved parcel. Excess land has the potential to be sold separately and is valued separately. (Dictionary)
Excess Rent
The amount by which contract rent exceeds market rent
at the time of the appraisal; created by a lease favorable to the landlord (lessor) and may reflect unusual
management, unknowledgeable or unusually motivated
parties, a lease execution in an earlier, stronger rental market, or an agreement of the parties. (Dictionary)
Expense Stop
A clause in a lease that limits the landlord’s expense
obligation, which results in the lessee paying operating expenses above a stated level or amount. (Dictionary)
Exposure Time

1. The time a property remains on the market.

2. An opinion, based on supporting market data, of the
length of time that the property interest being
appraised would have been offered on the market
prior to the hypothetical consummation of a sale at
market value on the effective date of the appraisal.
(USPAP, 2020-2021 ed.)
Extraordinary Assumption
An assignment-specific assumption as of the effective
date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

Comment: Uncertain information might include physical,
legal, or economic characteristics of the subject property; or conditions external to the property, such as market
conditions or trends; or the integrity of data used in an analysis. (USPAP)
Fee Simple Estate
Absolute ownership unencumbered by any other interest
or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain,
police power, and escheat. (Dictionary)
Floor Common Area
In an office building, the areas on a floor such as
washrooms, janitorial closets, electrical rooms, telephone rooms, mechanical rooms, elevator lobbies, and public
corridors which are available primarily for the use of
tenants on that floor. In essence, floor common area
represents all of the area on the floor that is common to that respective floor with the exception of those areas that penetrate through the floor, such as the elevator
shaft and stairwell. The significant point to be made is that floor common area is not part of the tenant’s usable area. (BOMA)
Full Service (Gross) Lease
A lease in which the landlord receives stipulated rent and is obligated to pay all of the property’s operating and fixed expenses; also called a full service lease. (Dictionary) Furniture, Fixtures, and Equipment (FF&E)
Business trade fixtures and personal property, exclusive of inventory. (Dictionary)
Going-Concern Value
An outdated label for the market value of all the tangible and intangible assets of an established and operating
business with an indefinite life, as if sold in aggregate; more accurately termed the market value of the going
concern or market value of the total assets of the business. (Dictionary)
Gross Building Area (GBA)

1. Total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the
above-grade area. This includes mezzanines and
basements if and when typically included in the
market area of the type of property involved.

2. Gross leasable area plus all common areas.

3. For residential space, the total area of all floor levels measured from the exterior of the walls and
including the superstructure and substructure
basement; typically does not include garage space.
(Dictionary)
Gross Measured Area
The total area of a building enclosed by the dominant
portion (the portion of the inside finished surface of the permanent outer building wall which is 50 percent or
more of the vertical floor-to-ceiling dimension, at the given point being measured as one moves horizontally
along the wall), excluding parking areas and loading
docks (or portions of same) outside the building line. It is generally not used for leasing purposes and is calculated on a floor by floor basis. (BOMA)
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 78 Gross Up Method
A method of calculating variable operating expenses in
income-producing properties when less than 100%
occupancy is assumed. Expenses reimbursed based on
the amount of occupied space, rather than on the total
building area, are described as “grossed up.” (Dictionary) Gross Sellout Value (Sum of the Retail Values)
The sum of the separate and distinct market value
opinions for each of the units in a condominium,
subdivision development, or portfolio of properties, as of the date of valuation. The aggregate of retail values does not represent the value of all the units as though sold together in a single transaction; it is simply the total of the individual market value conclusions. An appraisal has an effective date, but summing the sale prices of multiple units over an extended period of time will not be the
value on that one day unless the prices are discounted to make the value equivalent to what another developer or
investor would pay for the bulk purchase of the units. Also called the aggregate of the retail values, aggregate retail selling price or sum of the retail values. (Dictionary) Ground Lease
A lease that grants the right to use and occupy land.

Improvements made by the ground lessee typically revert to the ground lessor at the end of the lease term.
(Dictionary)
Ground Rent
The rent paid for the right to use and occupy land
according to the terms of a ground lease; the portion of the total rent allocated to the underlying land.
(Dictionary)
HVAC
Heating, ventilation, air conditioning (HVAC) system. A unit that regulates the temperature and distribution of heat and fresh air throughout a building. (Dictionary)
Highest and Best Use

1. The reasonably probable use of property that results in the highest value. The four criteria that the highest and best use must meet are legal permissibility,
physical possibility, financial feasibility, and
maximum productivity.

2. The use of an asset that maximizes its potential and that is possible, legally permissible, and financially
feasible. The highest and best use may be for
continuation of an asset’s existing use of for some
alternative use. This is determined by the use that a
market participant would have in mind for the asset
when formulating the price that it would be willing
to bid. (IVS)

3. [The] highest and most profitable use for which the
property is adaptable and needed or likely to be
needed in the reasonably near future. (Uniform
Appraisal Standards for Federal Land Acquisitions)
(Dictionary)
Hypothetical Condition

1. A condition that is presumed to be true when it is
known to be false. (SVP)

2. A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser
to exist on the effective date of the assignment
results, but is used for the purpose of analysis.

Comment: Hypothetical conditions are contrary to
known facts about physical, legal, or economic
characteristics of the subject property; or about
conditions external to the property, such as market
conditions or trends; or about the integrity of data used in an analysis. (USPAP)
Insurable Value (Replacement Cost for Insurance
Purposes)
The estimated cost, at current prices as of the effective date of valuation, of a substitute for the building being valued, using modern materials and current standards,
design, and layout for insurance coverage purposes
guaranteeing that damaged property is replaced with
new property (i.e., depreciation is not deducted).
(Dictionary)
Investment Value

1. The value of a property to a particular investor or
class of investors based on the investor’s specific
requirements. Investment value may be different
from market value because it depends on a set of
investment criteria that are not necessarily typical of the market. (Dictionary)

2. The value of an asset to the owner or a prospective
owner given individual investment or operational
objectives (may also be known as worth). (IVS)
Just Compensation
In condemnation, the amount of loss for which a property owner is compensated when his or her property is taken.

Just compensation should put the owner in as good a
position pecuniarily as he or she would have been if the property had not been taken. (Dictionary)
Leased Fee Interest
The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires.
(Dictionary)
Leasehold Interest (Leasehold Estate)
The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease. (Dictionary)
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 79 See also Positive Leasehold and Negative Leasehold.

Lessee (Tenant)
One who has the right to occupancy and use of the
property of another for a period of time according to a lease agreement. (Dictionary)
Lessor (Landlord)
One who conveys the rights of occupancy and use to
others under a lease agreement. (Dictionary)
Liquidation Value
The most probable price that a specified interest in
property should bring under the following conditions:

1. Consummation of a sale within a short time period.

2. The property is subjected to market conditions
prevailing as of the date of valuation.

3. Both the buyer and seller are acting prudently and
knowledgeably.

4. The seller is under extreme compulsion to sell.

5. The buyer is typically motivated.

6. Both parties are acting in what they consider to be
their best interests.

7. A normal marketing effort is not possible due to the brief exposure time.

8. Payment will be made in cash in U.S. dollars (or the local currency) or in terms of financial arrangements
comparable thereto.

9. The price represents the normal consideration for
the property sold, unaffected by special or creative
financing or sales concessions granted by anyone
associated with the sale. (Dictionary)
Loan to Value Ratio (LTV)
The ratio between a mortgage loan and the value of the
property pledged as security, usually expressed as a
percentage. (Dictionary)
Major Vertical Penetrations
Stairs, elevator shafts, flues, pipe shafts, vertical ducts, and the like, and their enclosing walls. Atria, lightwells and similar penetrations above the finished floor are included in this definition. Not included, however, are vertical penetrations built for the private use of a tenant
occupying office areas on more than one floor. Structural columns, openings for vertical electric cable or telephone distribution, and openings for plumbing lines are not
considered to be major vertical penetrations. (BOMA)
Market Rent
The most probable rent that a property should bring in a competitive and open market under all the conditions
requisite to a fair lease transaction, the lessee and the lessor each acting prudently and knowledgeably, and
assuming the rent is not affected by undue stimulus.

Implicit in this definition is the execution of a lease as of a specified date under conditions whereby:

1. Lessee and lessor are typically motivated;

2. Both parties are well informed or well advised, and
acting in what they consider their best interests;

3. Payment is made in terms of cash or in terms of
financial arrangements comparable thereto; and

4. The rent reflects specified terms and conditions, such as permitted uses, use restrictions, expense
obligations, duration, concessions, rental
adjustments and revaluations, renewal and purchase
options, and tenant improvements (TIs). (Appraisal
Institute)
Market Value
The following definition of market value is used by
agencies that regulate federally insured financial
institutions in the United States: The most probable price that a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and
knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the
passing of title from seller to buyer under conditions
whereby:

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and
acting in what they consider their own best interests;

3. A reasonable time is allowed for exposure in the
open market;

4. Payment is made in terms of cash in United States
dollars or in terms of financial arrangements
comparable thereto; and

5. The price represents the normal consideration for
the property sold unaffected by special or creative
financing or sales concessions granted by anyone
associated with the sale. (Dictionary; 12 C.F.R. Part

34.42(g); 55 Federal Register 34696, August 24, 1990,
as amended at 57 Federal Register 12202, April 9,
1992; 59 Federal Register 29499, June 7, 1994)
Marketing Time
An opinion of the amount of time it might take to sell a real or personal property interest at the concluded
market value level during the period immediately after
the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion 7 of the Appraisal Standards Board of the Appraisal
Foundation)
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 80 Master Lease

1. A lease in which a part or the entire property is leased to a single entity (the master lessee) in return for a
stipulated rent. The master lessee then subleases the
property to multiple tenants.

2. The first lease in a sandwich lease. (Dictionary)
Modified Gross Lease
A lease in which the landlord receives stipulated rent and is obligated to pay some, but not all, of the property’s operating and fixed expenses. Since assignment of
expenses varies among modified gross leases, expense
responsibility must always be specified. In some markets, a modified gross lease may be called a double net lease, net net lease, partial net lease, or semi-gross lease.
(Dictionary)
Negative Leasehold
A lease situation in which the market rent is less than the contract rent. (Dictionary)
Operating Expense Ratio
The ratio of total operating expenses to effective gross income (TOE/EGI); the complement of the net income
ratio, i.e., OER = 1 – NIR (Dictionary)
Option
A legal contract, typically purchased for a stated
consideration, that permits but does not require the
holder of the option (known as the optionee) to buy, sell, or lease real estate for a stipulated period of time in accordance with specified terms; a unilateral right to
exercise a privilege. (Dictionary)
Partial Interest
Divided or undivided rights in real estate that represent less than the whole, i.e., a fractional interest such as a tenancy in common or easement. (Dictionary)
Pass Through
A tenant’s portion of operating expenses that may be
composed of common area maintenance (CAM), real
property taxes, property insurance, and any other
expenses determined in the lease agreement to be paid
by the tenant. (Dictionary)
Percentage Lease
A lease in which the rent or some portion of the rent
represents a specified percentage of the volume of
business, productivity, or use achieved by the tenant.
(Dictionary)
Positive Leasehold
A lease situation in which the market rent is greater than the contract rent. (Dictionary)
Potential Gross Income (PGI)
The total income attributable to property at full
occupancy before vacancy and operating expenses are
deducted. (Dictionary)
Prospective Opinion of Value
A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is
frequently sought in connection with projects that are
proposed, under construction, or under conversion to a
new use, or those that have not yet achieved sellout or a stabilized level of long-term occupancy. (Dictionary)
Replacement Cost
The estimated cost to construct, at current prices as of a specific date, a substitute for a building or other
improvements, using modern materials and current
standards, design, and layout. (Dictionary)
Reproduction Cost
The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or
replica of the building being appraised, using the same materials, construction standards, design, layout, and
quality of workmanship and embodying all of the
deficiencies, superadequacies, and obsolescence of the
subject building. (Dictionary)
Retrospective Value Opinion
A value opinion effective as of a specified historical date.

The term retrospective does not define a type of value.

Instead, it identifies a value opinion as being effective at some specific prior date. Value as of a historical date is frequently sought in connection with property tax
appeals, damage models, lease renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of
the type of value with this term is appropriate, e.g.,
“retrospective market value opinion.” (Dictionary)
Sandwich Leasehold Estate
The interest held by the sandwich leaseholder when the
property is subleased to another party; a type of
leasehold estate. (Dictionary)
Sublease
An agreement in which the lessee in a prior lease conveys the right of use and occupancy of a property to another, the sublessee, for a specific period of time, which may or may not be coterminous with the underlying lease term.
(Dictionary)
Subordination
A contractual arrangement in which a party with a claim to certain assets agrees to make that claim junior, or
subordinate, to the claims of another party. (Dictionary) #7..
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© 2024 VALBRIDGE PROPERTY ADVISORS | NORTHERN CALIFORNIA PAGE 81 Surplus Land
Land that is not currently needed to support the existing use but cannot be separated from the property and sold
off for another use. Surplus land does not have an
independent highest and best use and may or may not
contribute value to the improved parcel. (Dictionary)
TPO
Thermoplastic polyolefin, a resilient synthetic roof
covering.

Triple Net (Net Net Net) Lease
An alternative term for a type of net lease. In some
markets, a net net net lease is defined as a lease in which the tenant assumes all expenses (fixed and variable) of operating a property except that the landlord is
responsible for structural maintenance, building reserves, and management; also called NNN lease, net net net
lease, or fully net lease. (Dictionary)
(The market definition of a triple net lease varies; in some cases tenants pay for items such as roof repairs, parking lot repairs, and other similar items.)
Usable Area
The measured area of an office area, store area, or
building common area on a floor. The total of all the
usable areas for a floor shall equal floor usable area of that same floor. (BOMA)
Value-in-Use

1. The amount determined by discounting the future
cash flows (including the ultimate proceeds of
disposal) expected to be derived from the use of an
asset at an appropriate rate that allows for the risk of the activities concerned. (FASB Accounting
Standards Codification, Master Glossary)

2. Formerly used in valuation practice as a synonym for contributory value or use value. (Dictionary)
VTAB (Value of the Total Assets of a Business)
The total amount that the real property, tangible personal property, and intangible property assets of a business
would sell for in an asset-based transaction. (Dictionary) #7..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

November 25, 2025
Date: October 27, 2025
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Agreement with Badger Meter for BEACON AMA SaaS for Software, Meter Reading, and Associated Hardware
CONTACT: Manuel Martinez, Water Division Manager, [email protected], 209- 342-4592
DESCRIPTION:

Consider approving an Agreement with Badger Meter, Inc., Milwaukee, WI for BEACON AMA Software as a Service (SaaS), meter reads and associated hardware for a total amount not to exceed $398,194 over five (5) years. (Funding Source: Water Fund) STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2025-2026 Strategic Plan Initiatives, Goal D: Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

In 2006, State Assembly Bill 25721 required urban water suppliers to install water meters on all service connections by the year 2025. The City has contracted with Badger Meter, Inc. (“Badger Meter”) since 2006 for the provision of residential meters, industrial meters, and automated reading equipment.

On June 7, 2016, by Resolution No. 2016-235, Council authorized the Sole Brand purchase of Badger Meter water meters, automated meter readers, and related parts to Badger Meter (formerly National Meter and Automation, Inc.) for an amount not to exceed $3,646,665 over five years.

On January 23, 2018, by Resolution No. 2018-44, Council amended the agreement for the purchase of additional water meters and parts for a new total amount not to exceed $4,100,327 over five years.
1 More information regarding AB2572 can be found here:

Https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=200320040AB2572 #8..
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City Council Meeting, November 25, 2025
Agreement with Badger Meter for BEACON AMA SaaS, Software, Meter Reading, and Associated Hardware

On December 8, 2020, by Resolution No. 2020-528, Council authorized a sole source purchase of BEACON AMA SaaS software and associated hardware from Badger Meter for a two-year agreement (AA# 191196) with three one-year extension options for an annual cost of $63,200 and a total cost not to exceed $289,680 over five years.

On March 8, 2023, the Purchasing Division authorized a First Amendment to the Original Agreement for Contract Year 3 (December 8, 2022 – December 7, 2023). This amendment added Orion cellular service and rates, updated the pricing table, and removed Mobile Data Collection Kits and Trimble Ranger 7 handheld devices.

On December 14, 2023, the Purchasing Division authorized a Second Amendment to extend the agreement for Contract Year 4 (December 8, 2023 – December 7, 2024).

On January 6, 2025, the Purchasing Division authorized a Third Amendment to extend the agreement for Contract Year 5 (December 8, 2024 – December 7, 2025).

The current agreement with Badger Meter, Agreement #191196, expires on December 7, 2025.

DISCUSSION:

On July 1, 2025, the City Manager authorized the Utilities Department to solicit the procurement of BEACON AMA SaaS, meter reads and associated hardware. Per the requirements of Assembly Bill 2572, the City has fully integrated its metering infrastructure on all residential and commercial service connections, including the outlying areas of Del Rio, Empire, Grayson, Salida and Turlock. The BEACON AMA SaaS software suite is a cloud-based software used by staff to collect mobile meter reads and to extract water usage data from installed Badger meters.

This software is also fully integrated with the City’s current utility billing system and is essential to maintain operational efficiency across the Utilities Department (Water Division), the Finance Department (Revenue Collection and Compliance Division), and the communities served by the City.

Modesto Municipal Code Section 8-3.203 generally requires all purchases which meet or exceed $100,000 for material, equipment, or contractual services to follow formal bid procedures.

However, MMC 8-3.204(b) provides that a purchase may be exempted from the City’s formal bidding requirement where the Purchasing Agency’s requirements can be met solely by a single article or process. A new agreement with Badger Meter for BEACON AMA SaaS will ensure continued operational efficiencies, customer transparency, data-driven decision making and expansion capabilities for future growth, as it is currently integrated with other City systems.

Therefore, staff recommends the Agreement for BEACON AMA SaaS, meter reads and associated hardware with Badger Meter should be exempt from the formal bidding procedure in accordance with Modesto Municipal Code 8-3.204(b) because Badger Meter is the Sole Provider of BEACON AMA SaaS.

FISCAL IMPACT:

The anticipated cost of $398,194 will be absorbed within the current Utilities Department, Water Fund: 4100-45055 and 4100-45060. Funds have been budgeted in the current operating budget for Fiscal Year 2025-26.
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City Council Meeting, November 25, 2025
Agreement with Badger Meter for BEACON AMA SaaS, Software, Meter Reading, and Associated Hardware

The proposed agreement includes an overall average price increase of 44%, which includes expanding cellular endpoints from 1,000 up to 2,500 for outlying systems and an annual price increase in contract years three (3) through five (5) for meter reads, annual licensing and login fees for software, and associated hardware.

Current Expenditures:

Five (5) year spend Expenditures
CY 1: 12.08.20 - 12.07.21 $ 48,423
CY 2: 12.08.21 - 12.07.22 $ 70,435
CY 3: 12.08.22 - 12.07.23 $ 48,620
CY 4: 12.08.23 - 12.07.24 $ 39,237
CY 5: 12.08.24 - 12.07.25 $ 16,318
Total (to date) $223,033
Anticipated Expenditures:

Contract Year (CY) CY Totals
Contract Year 1 $ 67,682
Contract Year 2 $ 67,682
Contract Year 3 $ 77,644
Contract Year 4 $ 87,609
Contract Year 5 $ 97,577
New Agreement Request $ 398,194
COMMITTEE RECOMMENDATION:

This item was considered by the Finance Committee at the October 27, 2025, meeting, where it was recommended that it be forwarded to Council.

RECOMMENDED COUNCIL ACTION:

Staff Recommendation:

Resolution approving the Sole Source Agreement with Badger Meter, Inc., Milwaukee, WI for BEACON AMA Software as a Service (SAAS), meter reads and associated hardware for a twoyear Agreement with three one-year extension options, for an estimated annual amount of $67,682 and a total amount not to exceed $398,194 over five (5) years; and authorizing the City Manager, or his designee, to execute the Agreement.
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City Council Meeting, November 25, 2025
Agreement with Badger Meter for BEACON AMA SaaS, Software, Meter Reading, and Associated Hardware

Approved by:

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

1. Resolution – Badger Meter for BEACON AMA SaaS

2. Original Agreement with Badger Meter for BEACON AMA SaaS

3. Exhibit A Badger Meter Quote

4. Exhibit B Badger Meter General Agreement

5. Exhibit C Badger Meter Pricing Terms and Conditions

6. CA Levine Act Disclosure Badger Meter

7. Financial Interest Disclosure Badger Meter

8. Fully Executed Bid Waiver and Sole Source Badger Meter #8..
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11/25/2025/UTL/MMartinez 1

MODESTO CITY COUNCIL
RESOLUTION NO. 2025-XXX

RESOLUTION APPROVING THE SOLE SOURCE AGREEMENT WITH
BADGER METER, INC., MILWAUKEE, WI FOR BEACON AMA SOFTWARE

AS A SERVICE (SAAS), METER READS AND ASSOCIATED HARDWARE

FOR A TWO-YEAR AGREEMENT WITH THREE ONE-YEAR EXTENSION
OPTIONS, FOR AN ESTIMATED ANNUAL AMOUNT OF $67,682 AND A TOTAL AMOUNT NOT TO EXCEED $398,194 OVER FIVE (5) YEARS; AND

AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE

THE AGREEMENT
WHEREAS, in 2006, State Assembly Bill 2572 required urban water suppliers to install water meters on all service connections by the year 2025, and since 2006 the City of Modesto has contracted with Badger Meter, Inc. (“Badger Meter”) for the provision of residential meters, industrial meters, and automated reading equipment; and WHEREAS, on December 8, 2020, by Resolution No. 2020-528, Council authorized a sole source purchase of BEACON AMA Software as a Service (SaaS) and associated hardware from Badger Meter for a two-year agreement (AA# 191196) with three one-year extension options, for an annual cost of $63,200 and a total cost not to exceed $289,680 over five years; and
WHEREAS, on March 8, 2023, the Purchasing Division authorized a First Amendment to the Original Agreement for Contract Year 3, adding Orion cellular service and rates, updating the pricing table and removing Mobile Data Collection Kits and Trimble Ranger 7 handheld devices; and
WHEREAS, on December 14, 2023, the Purchasing Division authorized a Second Amendment to extend the agreement for Contract Year Four, and on January 6, 2025, the Purchasing Division authorized a Third Amendment to extend the agreement for Contract Year Five; and
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11/25/2025/UTL/MMartinez 2
WHEREAS, on July 1, 2025, the City Manager authorized the Utilities Department to solicit the procurement of BEACON AMA SaaS, meter reads and associated hardware. Per the requirements of Assembly Bill 2572, the City has fully integrated its metering infrastructure on all residential and commercial service connections, including the outlying areas of Del Rio, Empire, Grayson, Salida and Turlock. The BEACON AMA SaaS software suite is a cloud-based software used by staff to collect mobile meter reads and to extract water usage data from installed Badger meters; and
WHEREAS, this software is also fully integrated with the City’s current utility billing system and is essential to maintain operational efficiency across the Utilities Department (Water Division), the Finance Department (Revenue Collection and Compliance Division), and the communities served by the City; and WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases which meet or exceed $100,000 for material, equipment, or contractual services to follow formal bid procedures. However, MMC 8-3.204(b) provides that a purchase may be exempted from the City’s formal bidding requirement where the Purchasing Agency’s requirements can be met solely by a single article or process. A new agreement with Badger Meter for BEACON AMA SaaS will ensure continued operational efficiencies, customer transparency, data-driven decision making and expansion capabilities for future growth, as it is currently integrated with other City systems. Therefore, staff recommends the Agreement for BEACON AMA SaaS, meter reads and associated hardware with Badger Meter should be exempt from the formal #8..
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11/25/2025/UTL/MMartinez 3
bidding procedure in accordance with Modesto Municipal Code 8-3.204(b) because Badger Meter is the Sole Provider of BEACON AMA SaaS.

NOW, THEREFORE BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves the Sole Source Agreement with Badger Meter, Inc., Milwaukee, WI for BEACON AMA Software as a Service (SAAS), meter reads and associated hardware for a two-year Agreement with three one-year extension options, for an estimated annual amount of $67,682 and a total amount not to exceed $398,194 over five (5) years.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the agreement in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 25th day of November, 2025, by __________________ who moved its adoption, which motion being duly seconded by __________________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

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

BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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1 ANNUAL AGREEMENT NO 309224

FOR PURCHASE OF BEACON SOFTWARE AS A SERVICE
This agreement, hereinafter called AGREEMENT, made and entered into in the City of Modesto, State of California, this day of , 2025, by and between the City of Modesto, a municipal corporation of the State of California, hereinafter called CITY, and Badger Meter, Inc., a Wisconsin Corporation, hereinafter called CONTRACTOR.

W I T N E S E T H:

WHEREAS, the Modesto City Council adopted Resolution No. 2025- authorizing the Award of Bid and agreement for the Purchase of Beacon Software to CONTRACTOR, attached hereto as Exhibit “A” and made a part hereof, and WHEREAS, the CONTRACTOR is the sole source provider for Beacon Software, and,
WHEREAS, the CITY and CONTRACTOR shall enter into a sole source agreement for the purchase of SERVICES as described in Quotation No. 3776384, attached hereto as Exhibit “B” and made a part hereof (the “Services”).

NOW, THEREFORE, the parties hereto mutually agree as follows:
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2 1. THE SERVICES:
a. CONTRACTOR shall furnish the Services as specified in Exhibit “B”, and in strict accordance with the conditions of the complete AGREEMENT.
b. CONTRACTOR shall maintain proper insurance with the CITY for the duration of the AGREEMENT.
c. CONTRACTOR shall maintain a CITY business license for the duration of the AGREEMENT. d. CONTRACTOR shall furnish said services at the following AGREEMENT rates for an estimated annual amount $67,682. The total amount paid by CITY to CONTRACTOR over the full term of the AGREEMENT shall not exceed $398,194.

2. CITY REPRESENTATIVE:

CITY Representative is: Kenny Thornsberry, Utilities Services Supervisor, 209-342-4575 Purchasing Representative: Armando Fabro, Buyer, 209-577-5420 The CITY Representative is not authorized to commit the CITY to changes in specifications, requirements, or scope of work, changes in price(s), period of performance or delivery date(s) or method of shipment. Changes of a contractual or business nature shall be effective only by written change to the AGREEMENT, issued by the City of Modesto, Purchasing Division, and executed by both parties.

3. CONTRACTOR CONTACT:

Dan Gilliam, Municipal Account Manager, [email protected] Badger Meter Proposals, [email protected]

4. TERM OF AGREEMENT:

The term of the AGREEMENT shall be for a period of two (2) years, with three (3) one-year extension options as mutually agreed to in writing between the parties each, an “Extension Year”, for a total of up to five (5) years.

Year 1: December 8, 2025 through December 7, 2026
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3 Year 2: December 8, 2026 through December 7, 2027
Year 3 (Extension Year): December 8, 2027 through December 7, 2028 Year 4 (Extension Year): December 8, 2028 through December 7, 2029 Year 5 (Extension Year): December 8, 2029 through December 7, 2030 Pricing as set forth in Exhibit B shall remain firm for Year 1 and Year 2 of the AGREEMENT.

Price increases for any subsequent Extension Year following the second year shall be in accordance with the pricing stated for each associated year as stated in Exhibit A. The pricing for each Extension Year shall be effective for the period stated in the table.

5. PAYMENT:

CONTRACTOR shall invoice CITY not less than once per month based on the cost for services performed and reimbursable costs incurred prior to the invoice date. All invoices shall be paid in full the following payment terms within thirty (30) days of the date of the invoice. The CITY is exempt from payment of Federal Excise Tax, and all invoices shall be exclusive of such excise tax.

Invoice to: City of Modesto
Attn: Accounts Payable
P.O. Box 642
Modesto, CA 95353
Email to: [email protected]
At a minimum, invoices shall state the following:
 This AGREEMENT number
 CITY department/division name and address
 Billing period
 Unit price
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4 6. INDEMNITY:

The CONTRACTOR shall hold the CITY, its agents, officials, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of CONTRACTOR, or its agents, officials, officers, employees, or volunteers relating to or during the performance of its obligations under this AGREEMENT, except for claims arising from the willful or active negligence of the City. CONTRACTOR’s obligation to defend, indemnify, and hold the CITY, its agents, officials, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this AGREEMENT for CONTRACTOR to procure and maintain a policy of insurance.

7. VENUE & GOVERNING LAW:

Venue for any dispute or claim arising or related to this AGREEMENT its performance, breach, or interpretation (including issues about its validity or enforceability), shall be exclusively in the Superior Court of Stanislaus County or the United States District Court for the Eastern District of California This AGREEMENT shall be deemed made in, governed by, performed in, and construed and enforced in accordance with the laws of the State of California, without giving effect to its conflicts of laws provisions or principles.

8. ATTORNEYS’ FEES:

If a party to this AGREEMENT brings any action, including an action for declaratory relief, to enforce or interpret the provision of this AGREEMENT, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose. #8..
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5 9. TERMINATION OF SERVICES:

Termination for Default: In the event either party fails to perform under this AGREEMENT or breaches any condition contained herein, the other party shall notify in writing the breaching party of the non-performance. Within 30 days after receipt of notification, the breaching party shall correct any nonperformance to the reasonable satisfaction of the non-breaching party, or such other time as may be identified in the notice. Failure to correct any non-performance shall allow the non-breaching party to terminate this AGREEMENT for cause.

Termination by City for Convenience: The City may also terminate this AGREEMENT the Contractor's performance under the Agreement, either in whole or in part, at its own discretion and without cause upon thirty (30) days prior written notice.

Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the CONTRACTOR shall cease the provision of the Services as directed in the notice of termination as of the termination date.

10. City will pay contractor for services actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to the contractor after termination for convenience shall be limited to amounts due and owing under the agreement at the time of termination. Compliance with all laws:

CONTRACTOR hereby agrees that CONTRACTOR and its subcontractors, if any, in the performance of the SERVICES described herein, will comply with all federal, state, county and municipal laws, rules and regulations which may be applicable to the work herein contracted for, whether now in existence or hereafter adopted.
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6 11. ASSIGNMENT OF RIGHTS:

The CONTRACTOR offers and agrees, and will require all subcontractors and suppliers to agree, to assign to the CITY all rights, title, and interest in and to all causes of action it and they may have under Section 4 of the Clayton Act (15 United States code, Section 15) or under the Cartwright Act (Business and Professions Code, Section 16700 et seq.), arising from the acquisition of goods, services, or materials pursuant to this AGREEMENT or any allowed subcontract. The assignment made by CONTRACTOR and all assignments made by subcontractors and suppliers shall be made and become effective at the time the CITY makes final payment to The CONTRACTOR, without further acknowledgment by the parties (Government Code, Sections 4550-4554).

12. CITY PROCESS/PROCEDURE APPROVALS:

CITY approval of any process or procedure shall not relieve CONTRACTOR of its responsibility to furnish the required SERVICES meeting all specifications contained herein.

13. NOTICES:

Any notice, payment or instrument required or permitted by this AGREEMENT to be given or delivered to either party shall be deemed to have been received when personally delivered, or one calendar week following deposit of the same in any United States Post Office, registered or certified mail, postage prepaid, addressed as follows:

CONTRACTOR: Badger Meter, Inc.

P.O. Box 245036
4545 West Brown Deer Road
Milwaukee, WI 53223
Attn: Legal Department
CITY: City of Modesto
Purchasing Division
P.O. Box 642
Modesto, CA 95353
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7 Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party.

14. SIGNATORY(IES) FOR CONTRACTOR:

Each signatory for CONTRACTOR below warrants and represents that it is legally competent to, and has full authority to, execute the AGREEMENT.

15. QUANTITIES:

No minimum or maximum is guaranteed or implied.

16. FUNDING:

All annual extensions are based upon continuous funding for that purpose by the City Council.

Failure to fund any annual extension shall result in an immediate termination of the AGREEMENT without redress.

17. OTHER GOVERNMENT/PUBLICLY FUNDED AGENCIES:

If mutually agreeable to all parties, the issuance of any resultant contract/purchase order referencing these specifications and modified by mutual agreement between all parties may be extended to other government or publicly funded agencies. It shall be understood that all terms and conditions as specified herein shall apply.

18. NON-DISCRIMINATION:
a. During the performance of this AGREEMENT, CONTRACTOR and any allowed subcontractors shall not unlawfully discriminate against any employee or applicant for employment because of race, color, ancestry, religion, sex, national origin, marital status, age, medical condition (cancer related), physical handicap (including AIDS), sexual orientation, or any other basis prohibited by Federal or California law. Equal employment opportunity extends, but is not limited to recruitment, compensation, benefits, layoff, termination, and all other conditions of employment.

The CONTRACTOR and any allowed subcontractors shall ensure that the evaluation and #8..
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8 treatment of their employees and applicants for employment are free of such discrimination. The CONTRACTOR and any allowed subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Administrative Code, Title 2, and Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900, set forth in Chapter 5 of Division 4 of Title 2 of the California Administrative Code are incorporated into this contract by reference and made a part hereof as if set forth in full.
b. The CONTRACTOR and any allowed subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
c. The CONTRACTOR shall include the nondiscrimination and compliance provisions of this clause in any allowed subcontracts to perform SERVICES.
d. The CONTRACTOR shall permit access by representatives of the Department of Fair Employment and Housing and the CITY upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours’ notice, to such of its books, records, accounts, other sources of information and its facilities as said Department or CITY shall require to ascertain compliance with this AGREEMENT.
e. By executing this AGREEMENT, CONTRACTOR certifies that it shall follow and be in compliance with the Americans with Disabilities Act of 1990, the applicable administrative requirements promulgated in response thereto, and any other applicable Federal laws and #8..
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9 regulations relating to handicap discrimination and participation and will continue to do so for at least the duration of the AGREEMENT and any extensions thereof.

19. RECORDS:

All final versions of reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that CONTRACTOR prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the CITY. CONTRACTOR hereby agrees to deliver those documents to the CITY upon termination of the AGREEMENT, and the CITY may use, reuse or otherwise dispose of the documents without CONTRACTOR’s permission. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this AGREEMENT are prepared specifically for the City and are not necessarily suitable for any future or other use.

20. INDEPENDENT CONTRACTOR; NOT AGENT:

At all times during the term of this AGREEMENT, CONTRACTOR shall be an independent contractor and shall not be an employee of CITY. CITY shall have the right to control CONTRACTOR only insofar as the results of CONTRACTOR’s services rendered pursuant to this AGREEMENT. Except as City may specify in writing, CONTRACTOR shall have no authority, express or implied, to act on behalf of CITY in any capacity whatsoever as an agent. CONTRACTOR shall have no authority, express or implied, pursuant to this AGREEMENT to bind City to any obligation whatsoever.

21. DRUG FREE WORKPLACE:

CONTRACTOR certifies that it is following and in compliance with Sections 8350 8355 of Chapter 5.5 of the Government Code, Drug Free Workplace Act whereby each person or organization awarded a contract/purchase order or grant for the procurement of any property or service from any state agency (city) shall certify to the contracting or granting agency that it will provide a drug free workplace. #8..
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10 22. ASSIGNMENT:

Neither this AGREEMENT nor any SERVICES hereunder shall be subcontracted or assigned by CONTRACTOR without the prior written consent of the CITY in each and every instance.

23. WAIVER:

The waiver by any party to this AGREEMENT of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.

24. HEADINGS NOT CONTROLLING:

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this AGREEMENT.

25. MISCELLANEOUS:

Time is of the essence in CONTRACTOR’s performance under each provision of this AGREEMENT.

26. ENTIRE AGREEMENT:

This Agreement and its exhibits contain the entire understanding between CONTRACTOR and CITY. Additional or new terms contained in this AGREEMENT which vary from CONTRACTOR’S bid are controlling and are deemed accepted by CONTRACTOR by performance of any SERVICES or other commencement of performance hereunder. The terms and conditions for the Services currently in place, are attached hereto as Exhibit B (the “General Agreement”), and are incorporated herein. In the event of a conflict between the General Agreement and this AGREEMENT, the General Agreement shall control.

In addition, terms and conditions related to BEACON AMA Mobile and Fixed Network are also attached hereto as Exhibit C and are incorporated herein. All previous bids, offers and communications related to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. No future waiver or exception to any of the terms, conditions, and #8..
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11 provisions of this AGREEMENT shall be considered valid unless specifically agreed to in writing by the parties.

27. PARTIAL INVALIDITY:

If any provision in this AGREEMENT is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.
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12 IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attested by its City Clerk under authority of Resolution No. 2025- , adopted by the Council of the City of Modesto on the day of , 2025 and Badger Meter, Inc. has caused this Agreement to be duly executed. #8..
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13 Exhibit B:

Quotation No. 3776384
See attached.
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14 Exhibit C:

Badger Meter BEACON AMA Managed Solution General Agreement See attached.
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15 Exhibit D:

BEACON SaaS Mobile and Fixed Network Pricing Terms and Conditions See attached.
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Badger Meter Inc.
4545 W Brown Deer Road Milwaukee WI 53223
PO Box 245036 Milwaukee WI 53224-9536
To   Customer ID 00042134

CITY OF MODESTO

ATTN ACCTS PAYABLE
P O BOX 642

MODESTO
California ,  953530642
Revised Date:

Pricing Effective Dates:  12-07-2025  - 12-07-2026
Salesperson Proposal Subject Shipping Terms / INCO Terms Payment Terms 007435 DAN GILLIAM  BEACON SERVICES AND

ASSOCIATED HARDWARE

PREPAY/NO CHARGE

FCA FACTORY
NET 30 DAYS
Description Qty Unit Net Price
USD
Line Totals
USD
BMI Part No.: 68886-301
Customer Part: Year 1 (12/25-12/26)
Description:

BEACON MBL HOSTING SERV UNIT
1   0.040  0.04
BMI Part No.: 68886-301
Customer Part: Year 2 (12/26-12/27)
Description:

BEACON MBL HOSTING SERV UNIT
1   0.040  0.04
BMI Part No.: 68886-301
Customer Part: Year 3 (12/27-12/28)
Description:

BEACON MBL HOSTING SERV UNIT
1   0.050  0.05
BMI Part No.: 68886-301
Customer Part: Year 4 (12/28-12/29)
Description:

BEACON MBL HOSTING SERV UNIT
1   0.060  0.06
BMI Part No.: 68886-301
Customer Part: Year 5 (12/29-12/30)
Description:

BEACON MBL HOSTING SERV UNIT
1   0.070  0.07
BMI Part No.: 68886-104
Customer Part: Year 1 (12/25-12/26)
Description:

ORION CELLULAR LTE SERV UNIT
1   0.680  0.68
BMI Part No.: 68886-104
Customer Part: Year 2 (12/26-12/27)
Description:

ORION CELLULAR LTE SERV UNIT
1   0.680  0.68
BMI Part No.: 68886-104
Customer Part: Year 3 (12/27-12/28)
1   0.690  0.69
Domestic Quotation
Quotation No. 3776384
Thank you for your business!
Estimated ship dates subject to change based upon component availability, as a result of global supply chain constraints, or credit review.

This acknowledgment is made subject to the terms & conditions found on our web-site: https://www.badgermeter.com/terms-and-conditions.

Terms and conditions related to service units, training, and professional services can be found here: https://badgermeter.com/service-units-terms-and-conditions

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Description Qty Unit Net Price
USD
Line Totals
USD
Description:

ORION CELLULAR LTE SERV UNIT
BMI Part No.: 68886-104
Customer Part: Year 4 (12/28-12/29)
Description:

ORION CELLULAR LTE SERV UNIT
1   0.700  0.70
BMI Part No.: 68886-104
Customer Part: Year 5 (12/29-12/30)
Description:

ORION CELLULAR LTE SERV UNIT
1   0.710  0.71
BMI Part No.: 68886-502
Customer Part: Year 1 (12/25-12/26)
Description:

USER LOGIN ANNUAL LICENSE SERVICE UNITS
1   32.000  32.00
BMI Part No.: 68886-502
Customer Part: Year 2 (12/26-12/27)
Description:

USER LOGIN ANNUAL LICENSE SERVICE UNITS
1   32.000  32.00
BMI Part No.: 68886-502
Customer Part: Year 3 (12/27-12/28)
Description:

USER LOGIN ANNUAL LICENSE SERVICE UNITS
1   32.000  32.00
BMI Part No.: 68886-502
Customer Part: Year 4 (12/28-12/29)
Description:

USER LOGIN ANNUAL LICENSE SERVICE UNITS
1   32.000  32.00
BMI Part No.: 68886-502
Customer Part: Year 5 (12/29-12/30)
Description:

USER LOGIN ANNUAL LICENSE SERVICE UNITS
1   32.000  32.00
BMI Part No.: 68886-501
Customer Part: Year 1 (12/25-12/26)
Description:

MOBILE READ MODULE SERVICE UNITS
1   103.500  103.50
BMI Part No.: 68886-501
Customer Part: Year 2 (12/26-12/27)
Description:

MOBILE READ MODULE SERVICE UNITS
1   103.500  103.50
BMI Part No.: 68886-501
Customer Part: Year 3 (12/27-12/28)
Description:

MOBILE READ MODULE SERVICE UNITS
1   108.650  108.65
1   114.050  114.05
Domestic Quotation
Quotation No. 3776384
Thank you for your business!
Estimated ship dates subject to change based upon component availability, as a result of global supply chain constraints, or credit review.

This acknowledgment is made subject to the terms & conditions found on our web-site: https://www.badgermeter.com/terms-and-conditions.

Terms and conditions related to service units, training, and professional services can be found here: https://badgermeter.com/service-units-terms-and-conditions

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Description Qty Unit Net Price
USD
Line Totals
USD
BMI Part No.: 68886-501
Customer Part: Year 4 (12/28-12/29)
Description:

MOBILE READ MODULE SERVICE UNITS
BMI Part No.: 68886-501
Customer Part: Year 5 (12/29-12/30)
Description:

MOBILE READ MODULE SERVICE UNITS
1   119.750  119.75
Notes and Assumptions
If applicable, sales tax and freight, if included on the proposal, is an estimate and will be recalculated based on rates and tax status in effect at the time of invoicing.

To expedite the order entry process, please ensure the following is noted on your purchase order: billing address, shipping address, purchase order number, quantity, price, payment terms, quotation number, and the vendor is listed as Badger Meter, Inc.

Please send all purchase orders to the contact that prepared this quotation for you.

Actual lead time to be provided at time of order.

Badger Meter provides certification files to help manage meter and endpoint inventory and to maintain meter accuracy data. The standard method of delivery for this format is via electronic mail. Any deviations from our standard format, or any custom file formats, will be considered on a time and material basis.

Due to continuous improvements and redesign of Badger Meter products and technology solutions, Badger Meter reserves the right to provide our newest product solutions as an alternative to the proposed products provided they are in conformance with the requirements of the specifications and do not exceed the prices quoted.

Domestic Quotation
Quotation No. 3776384
Thank you for your business!
Estimated ship dates subject to change based upon component availability, as a result of global supply chain constraints, or credit review.

This acknowledgment is made subject to the terms & conditions found on our web-site: https://www.badgermeter.com/terms-and-conditions.

Terms and conditions related to service units, training, and professional services can be found here: https://badgermeter.com/service-units-terms-and-conditions

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Badger Meter: BEACON Advanced Metering Analytics

NEGOTIATED BADGER METER BEACON AMA MANAGED SOLUTION GENERAL

AGREEMENT
("General Agreement")

1. NOTICE TO CUSTOMER: THE PORTAL WHICH YOU ("Customer") ARE ATTEMPTING TO ACCESS IS THE PROPERTY OF BADGER METER, INC. ("Badger Meter"). PRIOR TO ACCESSING THE PORTAL, YOU MUST REVIEW AND AGREE TO COMPLY WITH THE TERMS OF THIS GENERAL AGREEMENT. BY CLICKING "I ACCEPT," YOU ARE YOU ARE REPRESENTING TO BADGER METER THAT YOU HAVE BEEN AUTHORIZED

TO ENTER INTO THIS AGREEMENT ON BEHALF OF CUSTOMER, THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY THE TERMS OF THIS GENERAL AGREEMENT. BY CLICKING "I ACCEPT", YOU ARE ENTERING INTO A LEGALLY BINDING CONTRACT WITH BADGER METER ("ACCEPTANCE") ON BEHALF OF THE CUSTOMER.WE RECOMMEND THAT YOU PRINT AND RETAIN A COPY OF THIS AGREEMENT FOR YOUR RECORDS. This General Agreement is entered into by and between Badger Meter, Inc., a Wisconsin corporation with offices located at 4545 W. Brown Deer Road, Milwaukee, Wisconsin 53223 and Customer.

2. EFFECTIVE DATE. This General Agreement is effective upon Customer's Acceptance of the terms of this General Agreement (the "Effective Date").

3. ACCESS AND USE OF SERVICE. Badger Meter has developed a hosted, on-demand, software service for the BEACON AMA Managed Solution ("Service") via a website ("Portal") which is accessible to its Customers and their end users ("Consumers") to view metering and water usage service information. Upon Badger Meter's Acceptance of the terms of this Starter Agreement, Badger Meter grants to Customer the right to remotely access and use the Service from the Portal for Customer's internal business use and for the benefit of Consumers during the Term. Except for the rights to access and use the Portal and the Service granted to Customer and its Consumers during the Term as defined below, Badger Meter retains all other intellectual property rights related to the Portal and the Service.

4. TERM.

1. For Starter Program Customers

1. Starter Term. The term of this Agreement begins on the Effective Date and continues for a period of four (4) months ("Starter Term") unless earlier terminated in accordance with Section (12) of the Agreement.

2. Master Agreement. If Customer executes the Badger Meter BEACON AMA Managed Solution Master Agreement ("Master Agreement") on or before the expiration of the Starter Term, Customer may continue to utilize the Portal and the Service, pursuant to the Terms of the Master Agreement.

3. If Customer chooses not to execute the Master Agreement on or before the expiration date of the Starter Term, Customer will be invoiced a subscription fee for the Service. If Customer chooses to not pay the subscription fee, Customer and its Consumers will no longer have the right to access or use the Portal or the Service and their access to the Customer Data will be terminated.

2. For Legacy/Non-Utility Deployment Customers

1. Term. The term of this Agreement ("Term") begins on the Effective Date and continues unless earlier terminated in accordance with Section (12) of the Agreement.

2. Master Agreement. If Customer executes the Badger Meter BEACON AMA Managed Solution Master Agreement ("Master Agreement") during the Legacy/Non-Utility Deployment Term, Customer may continue to utilize the Portal and the Service, pursuant to the Terms of the Master Agreement.
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3. If Customer chooses to not pay subscription fee, Customer and its Consumers will no longer have the right to access or use the Portal or the Service and their access to the Customer Data will be terminated.

5. RESTRICTIONS ON RIGHT TO USE THE SERVICE. Customer agrees that neither Customer, its employees and contractors ("Authorized Users") nor those water end users whom Customer has approved as an end-user of the Portal and Service by Customer ("Consumers") will perform any of the following actions when accessing the Portal or utilizing the Service:

1. Sell, license, sublicense, or otherwise permit access by unauthorized third parties to the Portal or the Service.

2. Remove patent, copyright, trademark or other intellectual property markings on the Portal or Service.

3. Copy, disassemble, reverse engineer, or otherwise modify the Portal or Service.

4. Use the Portal or Service in a manner that violates any international, federal, state or local law, rule or regulation.

6. CUSTOMER DATA. Any information provided to Badger Meter by Customer or its Consumers in accessing or using the Portal or the Service, including but not limited to any personally identifiable information ("Customer Content") shall remain the property of Customer. Customer grants Badger Meter the right to host, access, store and use such Customer Content and to provide, maintain and enhance the Portal and the Service. Customer shall remain responsible for complying with all applicable data privacy and security laws related to the Customer Content and represents to Badger Meter that it has obtained consent from the Authorized Consumers to transmit the Customer Content to Badger Meter and to allow Badger Meter to host, access store and use and allow access to the Customer Content.

7. CUSTOMER'S REPRESENTATIONS AND WARRANTIES. Customer represents and warrants to Badger Meter that Customer:

1. Has the right and authority to enter into this Agreement and to meet its legal obligations under this Agreement.

2. Will comply with all applicable international, federal, state and local laws rules and regulations ("Law") related to the performance of its obligations under this Agreement and the use of the Services and will ensure that neither Customer, its employees or agents or the Consumers will access the Portal or the Service in any manner that violates any applicable Law.

3. Will not resell, license, sublicense, assign, transfer or distribute to third parties, access to the Portal or Service.

4. Will not alter, reverse engineer, disassemble, or otherwise modify the Portal, or the Service, or make any derivative work based in whole or in part on the Portal or the Service.

5. Will require that the Consumers comply with Badger Meter's End User Terms and Conditions for use of the Portal and Service as it may be updated from time to time.

8. AS-IS-SERVICE. BADGER METER PROVIDES THE PORTAL AND THE SERVICE TO CUSTOMER AND CONSUMERS ON AS-IS-BASIS. BADGER METER EXPRESSLY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES WITH REGARD TO THE PORTAL AND THE SERVICE, INCLUDING, BUT NOT LIMITED TO, (1)

WARRANTIES CONCERNING THE RELIABILITY, QUALITY, SECURITY, CONDITION, DESIGN, SUITABILITY, INTER-OPERABILITY, AVAILABILITY OR COMPLETENESS OF THE PORTAL OR SERVICE; (2) THE IMPLIED

WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE, OR TITLE; OR (3) IMPLIED WARRANTIES ARISING FROM A COURSE OF DEALING OR FROM INDUSTRY PRACTICE.

9. LIMITATION OF LIABILITY. CAP ON DAMAGES

1. LIMITATIONS OF LIABILITY: IN NO EVENT SHALL BADGER METER BE LIABLE TO CUSTOMER, ITS

EMPLOYEES, AGENTS OR CONSUMERS OR ANY THIRD PARTY FOR ANY CLAIMS, DEMANDS,

ACTIONS, DAMAGES, LOSSES, JUDGMENTS, SETTLEMENTS, COSTS OR EXPENSES, (INCLUDING,

BUT NOT LIMITED TO, ATTORNEYS' FEES AND LITIGATION EXPENSES) RELATED TO THE

PORTAL, THE SERVICE, THE CUSTOMER DATA OR THE SUBJECT MATTER OF THIS AGREEMENT ("CLAIM"). IN NO EVENT SHALL BADGER METER BE LIABLE TO CUSTOMER OR ANY THIRD

PARTY FOR (A) ANY CLAIM FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY THEREOF; (B) ANY CLAIM

RESULTING FROM LOSS OF DATA, BREACH OF CONFIDENTIALITY, LOST REVENUE OR LOST PROFITS; OR (C) ANY OTHER CLAIM ARISING IN CONTRACT, TORT, OR OTHERWISE. ANY CLAIM AGAINST BADGER METER MUST BE BROUGHT NO MORE THAN THREE (3) MONTHS FROM THE DATE THE CLAIM AROSE.
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2. CAP ON DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS

AGREEMENT, BADGER METER'S TOTAL LIABILITY TO CUSTOMER, CONSUMERS OR ANY THIRD

PARTY AGAINST BADGER METER ARISING FROM OR RELATED TO THE PORTAL, THE SERVICE,

THE CUSTOMER DATA OR THE SUBJECT MATTER OF THIS GENERAL AGREEMENT MAY NOT EXCEED THE AMOUNT OF THE CONTRACT.

10. CONFIDENTIALITY.

1. Protection of Confidential Information. The parties agree that any nonpublic information shared between the parties in connection with their performance under this Agreement shall be deemed to be confidential and proprietary, including but not limited to the Customer Content ("Confidential Information"). Each party agrees to hold the other party's Confidential Information in strict confidence and will not copy, reproduce, give, sell, assign, license, market, transfer or otherwise dispose of the Confidential Information to third parties or use the Confidential Information for any purposes whatsoever other than as contemplated by this Agreement, without the other party's prior written consent.

2. Return/Destruction. Within ten (10) days after receiving a request from the Disclosing Party, the Receiving Party agrees to either return to the Disclosing Party tangible and intangible originals and copies of any Confidential Information, as well as any materials developed using the Confidential Information, or destroy the Confidential Information
Traffic Information. All de-identified data generated or collected by Badger Meter through operation of the Portal and the Service is referred to as the "Traffic Data." All Traffic Data shall be the Confidential Information of and owned exclusively by Badger Meter.

3. Third Party Requests for Confidential Information. Neither party may disclose the other party's Confidential Information except as permitted under this Agreement or as otherwise required by law. If a party receives a request for access to the other party's Confidential Information, that party agrees to inform the disclosing party in writing within three (3) business days of receipt of the request unless prohibited by law.

4. Exclusions from Confidential Information. Confidential Information of a party shall not include information which: (i) is in or becomes part of the public domain through no fault of the receiving party; (ii) the receiving party can prove was known to it prior to its receipt from the disclosing party; (iii) is independently developed by the receiving party outside of this Agreement without the use of the disclosing party's information; or (iv) is obtained by the receiving party from a third party which had no obligation of confidentiality to the disclosing party.

5. Equitable Relief. The parties agree that in the event of a breach of this Section 10, money damages may be inadequate. Either party may seek injunctive, declaratory or other equitable relief to prevent a breach of this Section 10.

11. Customer's Indemnification Obligations. Customer agrees to defend, indemnify, and hold harmless Badger Meter as well as its suppliers, affiliates, officers, employees, agents, representatives and customers (the "Badger Meter Parties"), against any Claim related to the access to or use of the Portal or the Service, the Customer Data or the subject matter of this Agreement. Upon receipt of a Claim, Badger Meter will provide prompt written notice to Customer of the Claim for which the Badger Meter Parties seek indemnification. The notice will include a description of the Claim with reasonable detail of the facts giving rise to the Claim. Upon receipt of notice of a Claim, Customer shall be obligated, to assume and control the defense of such Claim at its own expense. Badger Meter may retain its own counsel to cooperate in defending the Claim, at its own expense. The Badger Meter Parties agree to cooperate with Customer in defending the Claim and in making available to Customer all witnesses, records, materials and information in Badger Meter's possession or control to assist in the defense of the Claim as is reasonably requested by Customer. Customer may not settle or compromise any Claim or consent to the entry of any judgment against the Badger Meter Parties unless Badger Meter provides prior written consent and the Badger Meter Parties are given an unconditional written release from all parties with respect to the Claim. In the event Customer fails to defend, indemnify, and hold the Badger Meter Parties harmless, after notice of a request for indemnification, Badger Meter shall be entitled to assume the defense and seek reimbursement from Customer for all Claims.

12. TERMINATION.

1. Badger Meter will have the right to terminate this Agreement prior to the expiration of the Term upon (i) a material breach after providing ten (10) days written notice to Customer and an opportunity to cure; (ii) a violation of Customer's representations and warranties; or (iii) upon an assignment for the benefit of creditors, the appointment of a receiver for its business or assets, or avails itself of, or becomes subject to, any proceeding under any statute of any province, state or country relating to #8..
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insolvency or for the protection of creditor rights or if Customer becomes insolvent or technically bankrupt.

2. Badger Meter will have the right to terminate this Agreement under the Legacy/Non-Utility Program Term upon non-payment of subscription fee by Customer for the Service.

3. Badger Meter will have the right to terminate this Agreement after the expiration of the Starter Term upon non-payment of subscription fee by Customer for the Service.

4. Upon termination of this Agreement, (i) Badger Meter may cease providing access to the Portal and the Service to Customer and its Authorized Users; (ii) Customer and its End Users will have no further right to use the Portal or the Service; (iii) will immediately cease using the Portal and the Service, and will receive no further Services; (iv) the parties will deliver to each other any Confidential Information of the other party in its possession or control and (v) Badger Meter may cease gathering data from Customer's endpoints at 120 days after termination.

5. If Customer desires to reinstate Service after termination, a reinstatement fee will apply.

13. DATA SECURITY AND RECOVERY.

1. Data Transmission Risks. Customer acknowledges that security of transmissions over the Internet or the cellular network cannot be guaranteed. Badger Meter is not responsible for (i) Customer or its Consumer's access to the Internet; (ii) interception or interruptions of communications through the Internet or over the cellular network; or (iii) changes or losses of data through the Internet. In order to protect Customer Content, Badger Meter may suspend Customer, Authorized Users or Consumers use of the Portal or Service immediately, without prior notice, pending an investigation of any potential security breach.

2. Password Protection. Customer agrees to maintain the privacy of usernames and passwords associated with the Portal and Service. Customer shall remain responsible for all activities that occur under Customer's password or Internet account. Customer will immediately notify Badger Meter of any unauthorized use of Customer's password or Internet account or any other breach of security, and ensure that Customer exits from Customer's Internet account at the end of each session. Badger Meter shall not be liable for any damages incurred by Customer, its Consumers or any third party arising from Customer or its Consumer's failure to comply with these security obligations.

3. Third Party Access. To the extent that Customer requests that Badger Meter provide any Customer Content to Consumers or third parties, Customer represents that it has acquired any consents or provided any notices required to transfer such content or information and that such transfer does not violate any Law.

14. GENERAL.

1. Binding Agreement. This Agreement is binding upon and will inure to the benefit of the parties and their respective successors and assigns.

2. Affiliates. This Agreement covers only the employees and agents of Customer. If Customer wishes to have any entity which directly or indirectly controls, is controlled by or is in common control with Customer ("Affiliate") access the Portal and use the Service, Customer's Affiliate must execute a separate agreement with Badger Meter.

3. Assignment. Either party may assign its rights and obligations under this Agreement with the express written consent of the other party, which consent will not be unreasonably withheld or delayed.

Notwithstanding the foregoing, Badger Meter may assign its rights and obligations under this Agreement without the consent of the Customer (i) upon a sale of a majority of its outstanding capital stock to an affiliate or third party; (ii) if it sells all or substantially all of its assets; or (iii) in the event of a similar change of control.

4. No Waiver; Severability. All rights and remedies of the parties are separate and cumulative. The waiver or failure of either party to exercise any right or remedy provided under this Agreement will not be deemed a waiver of any further right or remedy.

5. Savings Clause. The invalidity of any provision of this Agreement shall not affect the validity and binding effect of the remaining provisions.

6. No Third Party Beneficiaries. Nothing express or implied in this Agreement shall confer any rights, remedies, obligations or liabilities whatsoever to third parties.

7. Governing Law. The terms of this Agreement are governed by the laws of the State of Wisconsin, without reference to its conflict of laws principles, the parties consent to the exercise of personal jurisdiction over them by the state and federal courts sitting in Milwaukee, Wisconsin, and waive any objection that they would otherwise have to venue in such courts.

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9. Force Majeure. Neither party shall be liable for any delay due to causes beyond its reasonable control, such as acts of God, natural disasters, strike, work stoppage or other labor dispute, riots, acts of war or terrorism, or any action or restraint by court order or public or governmental authority.

10. Amendment. This Agreement may only be amended by a written document signed by both parties.

11. Entire Agreement. This Agreement constitutes the entire agreement between the parties with regard to its subject matter and supersedes all prior or contemporaneous agreements, discussions, negotiations, representations or proposals, whether written or oral.

12. Privacy Policy: Badger Meter's Privacy Policy, which is found here, is incorporated into the Terms.

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BEACON® AMA Mobile and Fixed Network
Pricing Terms and Conditions
The following Terms & Conditions apply to BEACON® AMA Mobile Solution and BEACON AMA Traditional Fixed Network Solution services sold by Badger Meter, Inc. (“Badger Meter”) or one of its authorized distributors to a utility or non-utility customer (“Customer”) and are in addition to those found at https://www.badgermeter.com/legal-and-compliance/ and as appropriate, the BEACON General Agreement and/or BEACON Master Agreement executed by Customer.

ONE-TIME FEES

BEACON ENGAGEMENTFEE
A one-time BEACON Engagement Fee, invoiced by Badger Meter or one of its authorized distributors, is required for all BEACON AMA Mobile Solution and Traditional Fixed Network Solution deployments. This fee includes setup and activation of Customer’s BEACON AMA portfolio. Billing Integration professional services are separate and an additional fee. Fees charged to a Customer by its utility billing vendor for an interface file are separate and are the responsibility of the Customer.

SERVICE UNITS
Recurring service fees are based on asset type and assessed monthly (“Service Units”). Asset types are identified by unique Service Unit part numbers as represented in this section. Service Units will be invoiced by Badger Meter or one of its authorized distributors.

HOSTING FEE SERVICE UNITS
Customers deploying a BEACON AMA Mobile Solution or Traditional Fixed Network Solution will be assessed Hosting Fee Service Units, which include Customer’s license and access to the BEACON AMA software, software updates, hosting of Customer’s metering data, and technical support. A Hosting Fee Service Unit represents one (1) month of service for an Account in Customer’s BEACON AMA portfolio and will be assessed on the 26th of each month. Service Unit price may vary if purchase increment is changed.

MOBILE: Mobile Hosting Fee Service Units (68886-301) will be assessed monthly, per eligible Mobile Account in Customer’s BEACON AMA portfolio. Any Account which is brought into Customer’s portfolio which is not classified as a Fixed Network or Cellular Account will be classified as a Mobile Account.

FIXED NETWORK: Fixed Network Hosting Fee Service Units (68886-201) will be assessed monthly, per eligible Fixed Network Account in Customer’s portfolio. An Account will be classified as a Fixed Network Account the first time a fixed network message is heard by a gateway.

FIXED NETWORK GATEWAY CELLULAR COMMUNICATION FEE SERVICEUNITS Cellular gateway backhaul communication Service Units (68886-601) will be assessed quarterly based on cumulative number of cellular backhaul gateways shipped to Customer. A cellular gateway backhaul communication Service Unit represents one (1) month of backhaul service for a gateway shipped to Customer and will be assessed quarterly. Service Units for backhaul communications are available for purchase in multiples of three (3) Service Units and each gateway will consume three (3) Service Units per quarterly invoicing period.

EyeOnWater® CONSUMER ENGAGEMENT SERVICEUNITS
An optional annual EyeOnWater® License is available for BEACON AMA Traditional Fixed Network Solutions. The annual license includes software licensing, setup and activation of EyeOnWater consumer engagement module for fixed network accounts in Customer’s BEACON AMA portfolio. An EyeOnWater Service Unit represents one (1) month of Customer access to EyeOnWater consumer engagement tools and will be assessed in multiples of twelve (12) EyeOnWater Service Units (68886-401). EyeOnWater license may be added by a utility at any time. Customer is required to have appropriate data fields provided from billing software to support EyeOnWater. Fees charged to a Customer by its utility billing vendor for interface file are separate and are the responsibility of the Customer.

BEA-FM-01939-EN-06 (March 2021)
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BEACON AMA FIELD APPLICATION SUITE – MOBILE READ MODULE SERVICE UNITS An annual BEACON AMA Field Application Suite-Mobile Read Module license is required. This license includes Customer access to the BEACON AMA mobile meter reading software system, software updates, and technical support.

A Mobile Read Module License Service Unit represents one (1) month of Customer access to the BEACON AMA Field Application SuiteMobile Read Module, including BEACON AMA Field Director, ORION® Mobile Read software and ORION Endpoint Utility software, and will be assessed in multiples of twelve (12) Mobile Read Module License Service Units (68886-501).

BEACON AMA FIELD APPLICATION SUITE – MOBILE READ MODULE USER LOGIN SERVICE UNITS An annual BEACON AMA Field Application Suite-Mobile Read Module User Login license is required for each Customer User Login for the BEACON AMA mobile meter reading software suite. User Login License includes access to the BEACON AMA Field Application Suite-Mobile Read Module.

A Mobile Read Module User Login License Service Unit represents one (1) month of Customer user access to BEACON AMA Field Director or ORION® Mobile Read software and will be assessed in multiples of twelve (12) Mobile Read Module User Login License Service Units (68886-502).

SERVICE UNIT PRICING AND PAYMENT
Customer will be required to submit a PO to Badger Meter or one of its authorized distributors for applicable Service Units. Initial Service Unit pricing will be held for the first 12-month term, then subject to change thereafter.

Service Units may be purchased in Customer-defined increments except where minimum multiple purchase increments have been stated. Reorder increments will be established at time of initial purchase and may be modified at a later date. Service Unit price may vary if purchase increment is changed.

Service Unit pricing is Net to Customer and will be invoiced by Badger Meter or one of its authorized distributors based on Customerdefined Service Unit purchase increments or minimum multiple purchase increments as noted. Service Unit part numbers are denoted as 68886 and have been included in this document for cross reference with Customer pricing proposal.

Service Units will be consumed on a monthly basis, as applicable to each asset type.

Service Units are non-refundable and non-transferable to another entity without Badger Meter approval.

Service Units may be converted to like-valued, or higher, Service Units of a different asset type with Badger Meter approval.

Service Units expire ten (10) years from date of purchase. Expired Service Units will be forfeited unless converted prior to expiration.

Upon termination of a Customer’s BEACON AMA services, for whatever cause, unused Service Units will be forfeited if not converted to Badger Meter future purchase credit within ninety (90) days.

Failure to renew services at term expiration, or pay for services invoiced by Badger Meter or one of its authorized distributors, may result in termination of services and limited access to Customer’s BEACON AMA portfolio at the discretion of Badger Meter.

SMART WATER IS: BADGER METER
BEACON, EyeOnWater and ORION are registered trademarks of Badger Meter, Inc. Other trademarks appearing in this document are the property of their respective entities. Due to continuous research, product improvements and enhancements, Badger Meter reservesthe right to change product orsystem specifications without notice, except to the extent an outstanding contractual obligation exists. ©2021 Badger Meter, Inc. All rightsreserved.
www.badgermeter.com
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California Levine Act Disclosure
California Government Code Section 84308, also known as the "Levine Act", prohibits City “officers” from participating in any action related to a license, permit, or other entitlement for use (a “proceeding”) if such member accepts, solicits, or directs political contributions from a party to the proceeding or their agent totaling more than $500 while the proceeding is pending before the agency, and for twelve (12) months following the date a decision concerning the proceeding has been made. The Levine Act also requires disclosure of such contribution by a party to the proceeding.

Section 84308(a)(4) of the Levine Act defines an "officer" as follows: “Officer” means any elected or appointed officer of an agency, any alternate to an elected or appointed officer of an agency, and any candidate for elective office in an agency. The term “officer” is further defined 2 Cal. Code Regs. Section 18438.1, which states:

An officer of an agency includes only those persons who make, participate in making, or in any way attempt to use their official position to influence a decision in the license, permit, or entitlement for use proceeding, or who exercise authority or budgetary control over the agency of officers who may do so, and:
(1) Serve in an elected position, including an official appointed to an elected position due to an interim vacancy or an election otherwise canceled because the official was the sole candidate for the position; (2) Serve as a member of a board or commission;
(3) Serve as the chief executive of a state agency, or county, city or district of any kind; or (4)Have decision making authority with respect to the proceeding involving a license, permit, or other entitlement for use and is also a candidate for elected office or has been a candidate for elective office in the 12 months prior to the proceeding.

A list of Modesto City Council Board Members can be found online at: Modesto City Council https://modestogov.com/706/Council-Members (modestogov.com). The party making this certification is responsible for determining whether a recipient of a political contribution is a City officer prior to answering the following questions:

1. Have you, your company, or any agent on behalf of you or your company, made any political contributions of more than $500 to any City officer, in the twelve (12) months preceding the date of the submission of your proposals or the anticipated date of any Council action related to this contract?
___ YES If yes, please identify the Council Member(s):
___ NO

2. Do you, or your company, or any agent on behalf of you or your company, anticipate or plan to make any political contribution of more than $500 to any City officer in the twelve (12) months following any Council action related to this contract?
___ YES If yes, please identify the Council Member(s):
___ NO
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Answering YES to either of the questions above does not preclude the City of Modesto from awarding a contract to your firm or taking any subsequent action related to the contract. It may, however, preclude the identified City officer from participating in any actions related to such contract.

HEREBY CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT.
_________________ _____________________________
Date Signature of authorized individual

_____________________________
Company/Applicant Name
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FINANCIAL INTEREST DISCLOSURE
Any contract award therewith will require approval by a majority vote of the City of Modesto’s City Council.

In order to have full transparency in any City of Modesto commercial actions, the City Council may not approve an agreement between the City and the Vendor until all person with a direct or indirect financial interest of greater than $2,000 in the Vendor are identified by name.

Vendor must therefore complete this Financial Interest Disclosure Form, listing by name all parties that have a material financial interest in the agreement, contract or development right.

PLEASE NOTE, any Council action that requires a Financial Interest Disclosure cannot be considered by the City Council until the required reporting is made. That means that City Council agenda items without the disclosure will be removed from the Council agenda.

Financial Interest Disclosure to City of Modesto
The Vendor shall identify any person with a financial interest in the Vendor by name, below.

For the purposes of this disclosure, a “Financial Interest” shall have the meaning contained in Modesto Municipal Code section 2-10.02.

Persons having an aggregate economic interest in the Vendor less than two thousand dollars ($2,000.00) at all times prior to final Council action of the proposed contract are not required to be listed on the Financial Interest Disclosure.

Notwithstanding the foregoing, a Financial Interest Disclosure is not required for a Vendor meeting the financial criteria for listing on the New York or the Pacific Stock exchanges unless it is reasonably foreseeable that a City Council decision will increase or decrease that entity's gross revenues or expenses by one million dollars ($1,000,000) or more and the requirements of Modesto Municipal Code Section 2-10.03(h) are satisfied.

It is the legal obligation of all applicants for approval of an agreement or of an application for development rights to verify in writing, under penalty of perjury, that the identity of each person having a material financial interest in the Vendor is true, correct and complete. By signing below, the applicant understands that this information is provided under penalty of perjury, and that intentionally supplying misinformation or deception may result in either invalidation of the agreement or application, or criminal prosecution for misdemeanor violation of the Modesto Municipal Code, or both. Negligent provision of misinformation shall be grounds for invalidation. In accordance with the Modesto Municipal Code, each applicant has a continuing obligation to maintain the truth, accuracy and completeness of the financial interest disclosure information provided below until after final consideration by the City Council of any matter arising out of or relating to the agreement or application.
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Print Names of Persons Having a Financial Interest in Vendor Receiving this Agreement:

First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
By signing this document, I agree to the information contained within.

Bidder Company Name:

Name of Vendor Signatory:

Signature of Vendor Representative:
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Revised /2025
Bid Waiver Approval Form
Supplier Name: Amount of Bid Waiver Request:

Supplier Contact: Supplier Phone No:

Are Federal Funds being utilized for portion of purchase? Yes No A bid waiver is required for any procurement commitment greater than $ 3,500 where a minimum of three bids are not obtained.

Justification for waiving the competitive bid requirements is limited to the following (provide detailed information in the comments section of form):

Reason for Bid Waiver - Check Box:

Sole Source - The item/service is unique in its specifications such that only one vendor is qualified to provide the good or service (Formal bidding exception under MMC 8-3.204(b)) – SOLE SOURCE LETTER ATTACHMENT REQUIRED OEM - Original Equipment Manufacturer / Distributor - OEM LETTER

ATTACHMENT REQUIRED
Inflexible time constraints preclude the bidding process - Exigent or emergency circumstances (Formal bidding exception under MMC 8-3.204 (c)) The incumbent's cost, delivery and quality can be compared to a previous quote/bid obtained within the last six months, for the same or similar item/service (Total purchase must be less than $100,000)
Professional Services defined under MMC 8-3.103 (Formal bidding exception under MMC 8-3.204 (a)) – staff should make effort to solicit at least three informal proposals.

Single Bid/Proposal – More than one supplier could provide the goods or service, but only one supplier provided bid/proposal for solicitation.

Amendment – Extending agreement for no more than one year to allow the City to complete formal bidding process for new agreement (MMC 8-3.204 (e)).

Amendment – Amending the goods or services under the existing agreement to include similar types of goods and services (MMC 8-3.204 (f)) Requisition No: Department:

Project Description:

The purchase of any item utilizing any Federal Funding must comply with current applicable Circular #8..
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Revised /2025
Other (requires detailed comments)

NEW TECHNOLOGY PURCHASES
Does the new technology meet the criteria to be reviewed by the Technology Steering and Alignment Committee (TSAC)? Yes ____ No ____
If yes, was it approved by this committee? Yes ____ No ____ Approval Name Signature Date
Requestor
Division Manager
Department Director
Chief Information Officeri
Buyer
Purchasing Manager
Director of Finance
i Information technology (IT) purchases will require Chief Information Officer Signature Buyer Comments:
(insert required text field in Adobe)
Comments
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

November 25, 2025
Date: September 30, 2025
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Fiscal Year 2024-25 Annual Report of Funds Held for Future Improvements CONTACT: Edgar Garcia, Community Development Manager
[email protected], 209-577-5211
DESCRIPTION:

Hearing to consider accepting the Fiscal Year 2024-25 Annual Report of Funds Held for Future Improvements and making findings related to each security on file. (Funding Source: Developer Deposits)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City of Modesto’s 2025-2026 Strategic Plan, Goal D:

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

BACKGROUND:

California Government Code section 66000 allows a local jurisdiction to collect impact fees as a condition of approval of a development project in order to construct facilities needed to serve future development. These fees must have the proper nexus to any project on which they are imposed and may only be used for the purchase, construction, expansion, rehabilitation, or acquisition of public facilities.

Annual reporting of fees collected by a local agency is required by Government Code section 66006.1 The impact fees collected must be segregated from general funds and other funds containing fees collected for other improvements. Interest on each fee fund or account must be credited to that fund or account and be used only for the purpose for which the fee was collected. California Government Code section 66006(b) further requires that a local agency make the following information available to the public for each separate fee fund on an annual basis and that the local agency review that information at a public meeting. A public hearing notice was posted in the Modesto Bee fifteen days prior to the public hearing in accordance with applicable law. State of California law also requires the annual report to include certain information for the prior fiscal year and to be made available within 180 days after the last day of 1 CA Government Code Section 66006
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City Council, November 25, 2025
Fiscal Year 2024-25 Annual Report of Funds Held for Future Improvements

each fiscal year2. The following information is required to be made available to the public as a part of the annual reporting requirements of the Mitigation Fee Act:
 A brief description of the type of fee in the account or fund.  The amount of the fee.
 The beginning and ending balance of the account or fund.  The amount of the fees collected, and the interest earned.  An identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees.  An identification of an approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement, and the public improvement remains incomplete.
 An identification of each public improvement identified in a previous report and whether construction began on the approximate date noted in the previous report.  For a project identified for which construction did not commence by the approximate date provided in the previous report, the reason for the delay and a revised approximate date that the local agency will commence construction.
 A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid, and the rate of interest that the account or fund will receive on the loan.  The amount of refunds made pursuant to subdivision, the number of persons or entities identified to receive those refunds, and any allocations pursuant to subdivision (f) of Section 66001.

Agencies that collect impact fees are also subject to making the following findings pursuant to California Government Code Section 66001(d)(1)3:
 Identify the purpose to which the fee is to be put.
 Demonstrate a reasonable relationship between the fee and the purpose for which it is charged.
 Identify all sources and amounts of funding anticipated to complete financing in incomplete improvements identified in paragraph (2) of subdivision (a).  Designate the approximate dates on which the funding referred to above is expected to be deposited into the appropriate account or fund.

DISCUSSION:

Over the years, the City has collected impact fees as a condition of approval for multiple development projects. These funds are designed for specific future improvements. On occasion, these future improvements are not able to be constructed in the year in which the fees were collected and therefore, the City must retain these funds.

Currently, the City is retaining funds deposited for the following three projects:
#1 1024 Florence Avenue – Fuentes Construction
2 The City of Modesto’s Fiscal Year ends on June 30th
.
3 While these findings are only required to be made every five years, the City has incorporated these additional findings into the overall annual report.
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City Council, November 25, 2025
Fiscal Year 2024-25 Annual Report of Funds Held for Future Improvements

On January 14, 2000, the City issued a building permit for the construction of a new single-family dwelling located at 1024 Florence Avenue. At that time, City sewer service was not available. As a condition of approval, the applicant was required to deposit a security for future improvements along its property including connection to the City sewer system, once available, and installation of curb, gutter, and sidewalk improvements. On March 8, 2001, based on a cost estimate approved by the City Engineer at that time, a deposit in the amount of $2,500 was made into the City’s Trust Account.

City sewer service continues to not be available in this area and therefore, connection cannot be made. The funds on deposit will remain in the Trust Account until City sewer service is available.

Pursuant to the section 66001(d) reporting requirements:
 This fee’s purpose is to fund the eventual connection to City sewer lines and installation of curb, gutter, and sidewalk improvements for this residence.  This fee has a reasonable relationship to the purpose for which it was charged as it was a onetime fee for the eventual sewer connection and curb, gutter, and sidewalk improvements.
 The source of funding for this project will be from this deposit only.  Funds have been deposited in the appropriate account with the monies held in Fund 3510 – Securities for Future Improvements and are further accounted for in Project No. 100782 – Florence Avenue Improvements.
#2 Shadow Creek Apartments (3055 Floyd Avenue) – American Home Builders On April 19, 2004, the Planning Commission, by Resolution No. 2004-21, approved a Final Development Plan for a 232-unit apartment complex on property located near the northeast corner of Floyd and Roselle Avenues. As a condition of approval, the applicant was required to deposit a security for the construction of its portion of the Beta Street extension on the north side of the property. (The additional funds for the Beta Street extension will be provided by the adjacent property when development occurs.) An Agreement for Contribution to Future Street Improvements was executed on September 2, 2005, between the developer, American Home Builders, and the City of Modesto. On September 2, 2005, based on cost estimates approved by the City Engineer at the time, a deposit in the amount of $29,393.72 was made into the City’s Trust Account.

Development has not yet occurred on the adjacent property; therefore, the additional funds required for the construction of the Beta Street extension are not yet available.

The deposit made by the developer in 2005 will remain in the Trust Account until development occurs on the adjacent property.

Pursuant to the section 66001(d) reporting requirements:
 This fee’s purpose is to fund the construction of the extension of Beta Street.  This fee has a reasonable relationship to the purpose for which it was charged as it was a onetime fee charged for the specific purpose of constructing the extension of Beta Street.
 The sources of funding for this project will be this deposit along with additional funding from the adjacent property when it is developed. #9..
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City Council, November 25, 2025
Fiscal Year 2024-25 Annual Report of Funds Held for Future Improvements

Funds have been deposited in the appropriate account with the monies being held in Fund 3510 – Securities for Future Improvements and are further
#3 Walgreens Pharmacy (3019 Floyd Avenue) – Best Modesto Partners On March 3, 2008, the Planning Commission, by Resolution No. 2008-19, approved a Final Development Plan for the Walgreens Pharmacy located on the north side of Floyd Avenue and on the east side of Roselle Avenue. The existing driveway on Roselle Avenue provides access to the site; however, the driveway is located in a bus turnout and does not meet the 350-foot required distance from the intersection. The project was approved with the existing driveway in its current location until development of the property to the north occurs. The applicant entered into a Reciprocal Access Agreement with the City and, as a condition of approval, deposited funds for future improvements.

Future improvements include the construction of the new on-site driveway and the reconstruction of the bus turnout and the off-site driveway access.

Development has not yet occurred on the property to the north. On September 30, 2008, Best Modesto Partners deposited $27,165 into the City’s Trust Account. The funds will remain in the Trust Account until development occurs on the neighboring parcel.

Pursuant to the section 66001(d) reporting requirements:
 This fee’s purpose is to fund the construction of the new on-site driveway and the reconstruction of the bus turnout and the off-site driveway access.  This fee has a reasonable relationship to the purpose for which it was charged as it was a onetime fee charged for the construction of the identified improvements.  The sources of funding for this project will be this deposit along with additional funding from the adjacent property when it is developed.  Funds have been deposited in the appropriate account with the monies being held in Fund 3510 - Securities for Future Improvements and are further accounted for in Project No. 100784 – Floyd Avenue Walgreens.

Table 1 details the original deposit amounts for the above-mentioned projects, the total interest accrued to-date, the ending balance as of June 30, 2025, the total percentage of the improvement cost funded by the fee, as well as the estimated construction start and end dates, as required by California Government Code section 66006(b). Additionally, no refunds were issued to any persons or entities during the fiscal year. The below projects will be funded by the developer and have no estimated construction timeline to date.

Table 1: Developer Deposits as of June 30, 2025
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City Council, November 25, 2025
Fiscal Year 2024-25 Annual Report of Funds Held for Future Improvements

FISCAL IMPACT:

The future improvement projects are funded by a developer deposit held as a condition of approval. There is no General Fund impact.

COMMITTEE RECOMMENDATION:

This item is not required to be reviewed by Council Committee because it is an annual report.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution accepting the Fiscal Year 2024-25 Annual Report of Funds Held for Future Improvements and making findings related to each security on file.

Approved by:

Jessica Hill, Director of Community and
Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. Resolution
Date of
Deposit
Provided
By Description
Original
Deposit
Amount
Interest
Accrued to
Date
End
Balance
(Includes
Interest)
Amount
of
Interfund
Transfers
or Loans
% Funded
by
Developer
Estimated
Construction
Start and
End FY
3/8/2001 Fuentes
Construction
Frontage
Improvements at
1024 Florence
$ 2,500.00 $ 894.43 $3,394.43 $0 100% Unknown
6/20/2005
American
Home
Builders
Construction of Beta
Street on the north
side of the Shadow
Creek Apartments
$ 29,393.72 $15,560.73 $44,954.45 $0 100% Unknown
9/30/2008
BestModesto
Partners
On-Site Driveway
Improvements for
future reciprocal
access way at the
Walgreens located
on the corner of
Floyd & Roselle and
Bus Turnout
Reconstruction
$ 27,165.00 $9,110.11 $36,275.11 $0 100% Unknown

TOTAL SECURITIES ON
FILE
$ 59,058.72 $ 25,565.27 $ 84,623.99 $0
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11/25/2025/CEDD/EGarcia/Item XX 1 2025-

MODESTO CITY COUNCIL
RESOLUTION NO. 2025-XX
RESOLUTION ACCEPTING THE FISCAL YEAR 2024-25 ANNUAL REPORT

OF FUNDS HELD FOR FUTURE IMPROVEMENTS AND MAKING FINDINGS

RELATED TO EACH SECURITY ON FILE
WHEREAS, California Government Code Sections 66000 and 66006 require that the City make certain information available to the public and findings relating to the necessity of collecting fees for new development; and
WHEREAS, the City is collecting impact fees as security for future improvements that will be needed as a condition of approval for new development; and WHEREAS, $2,500 in impact fees were paid by Fuentes Construction on March 8, 2001, as a condition of approval for Project #100782 located at 1024 Florence Avenue for future improvements including connection to the City sewer system and the installation of curb, gutter and sidewalk improvements, which has accrued $894.43 in interest to date for a total end balance of $3,394.43; and WHEREAS, $29,393.72 in impact fees were collected from American Home Builders as a condition of approval for Project #100783 located at 3055 Floyd Avenue on September 2, 2005, for future improvements including the expansion of Beta Street to the north of the property, which has accrued $15,560.73 in interest to date for a total end balance of $44,954.45; and
WHEREAS, $27,165 in impact fees were collected from Best Modesto Partners on September 30, 2008, as a condition of approval for Project #100784 located at 3019 Floyd Avenue, Modesto, for future improvements including the construction of an on-site driveway and the reconstruction of the nearby bus turnout and off-site driveway, which has accrued $9,110.11 in interest to date for a total end balance of $36,275.11; and #9..
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11/25/2025/CEDD/EGarcia/Item XX 2 2025-
WHEREAS, the revenue anticipated for the full development of infrastructure improvements required for these projects have not been fully collected to complete the financing of said improvements; and
WHEREAS, it has been determined by staff that the impact fees collected for all three projects should be retained until additional funding can be obtained; and WHEREAS, it is presently anticipated that there will be no regular sources of funding to develop the required improvements apart from impact fees collected from neighboring properties; and
WHEREAS, sewer connection cannot be made to City sewer service as it continues to not be available in the area near 1024 Florence Avenue and, therefore, the funds on deposit will remain in the Trust Account until City sewer service is available; and
WHEREAS, the timing for the future improvements including the expansion of Beta Street to the north of the property located at 3055 Floyd Avenue, Modesto, is not yet known, but there is still a need, and therefore, fees should still be retained for these purposes; and
WHEREAS, the timing for the future improvements including the construction of an on-site driveway and the reconstruction of the nearby bus turnout and off-site driveway located at 3019 Floyd Avenue, Modesto, is not yet known, but there is still a need, and therefore, fees should still be retained for these purposes; and WHEREAS, the anticipated dates for the full collection of fees is unknown at this time as impact fees are based on development activity which is not controlled by the City; and
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11/25/2025/CEDD/EGarcia/Item XX 3 2025-
WHEREAS, a public hearing notice was posted in the Modesto Bee fifteen days prior to the public hearing in accordance with Government Code Section 66002; and WHEREAS, a public hearing at the City Council in the Tenth Street Place Chambers located at 1010 Tenth Street, Modesto, California was set for December 2, 2025, to enable the public to have the opportunity to comment on the impact fees collected.

NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto that it hereby accepts the Fiscal Year 2024-25 Annual Report of Funds Held for Future Improvements and making findings related to each security on file. #9..
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11/25/2025/CEDD/EGarcia/Item XX 4 2025-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 25th day of November, 2025, by Councilmember_____, who moved its adoption, which motion being duly seconded by Councilmember_____, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers: Name, Name, Name, Name, Name, Name, Mayor Name
NOES: Councilmembers: None
ABSENT: Councilmembers: None
ATTEST: ______________________________

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

BY: __________________________________
JOSE M. SANCHEZ, City Attorney
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

November 25, 2025
Date: October 14, 2025
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Capital Facilities Fees Annual Report for Fiscal Year 2024-25 CONTACT: Sean M. Rando, Infrastructure Financing Program Supervisor [email protected] , 209-577-5211
DESCRIPTION:

Hearing to consider accepting the Capital Facilities Fees Annual Report for Fiscal Year 2024-25 and making findings related to each of the fee categories. (Funding Source: Capital Facilities Fees)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City of Modesto’s 2025-2026 Strategic Plan, Goal D:

Provide Safe, Efficient, and Reliable Infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

California Government Code section 66000 et seq., allows a local jurisdiction to establish an impact fee to mitigate the impacts of new development and must have the proper nexus to any project on which they are imposed. These fees may be used for the purchase, construction, expansion, rehabilitation, or acquisition of public facilities, and must be consistent with the adopted fee program, which is typically updated every five years.

Annual reporting of a local agency’s impact fee program is required by Government Code section 660061. The impact fees collected must be segregated from general and other funds containing fees collected for other improvements. Interest on each impact fee fund or account must be credited to that fund or account and be used only for the purpose for which the impact fee was collected. Government Code section 66006(b) further requires that a local agency make the following information available to the public for each separate impact fee fund on an annual basis and that the local agency review that information at a public meeting. A fifteen-day public hearing notice was posted in the Modesto Bee in accordance with applicable law. The law also 1 Mitigation Fee Act- Government Code Section 66006
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City Council, November 25, 2025
Capital Facilities Fees Annual Report for Fiscal Year 2024-25

requires the annual report include the following information for the prior fiscal year and be made available within 180 days after the last day of each fiscal year:
 Describe the type of impact fee in the account or fund.  Identify the amount of the impact fee.
 Provide the beginning and ending balance of the account or fund.  Provide the amount of impact fees collected and interest earned.  Identify each public improvement on which impact fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with the impact fee.  Identify an approximate date by which the construction of the public improvement will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement and the public improvement remains incomplete.
 Describe each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned impact fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan.  Provide the amount of refunds made due to sufficient funds being collected to complete financing on incomplete public improvements, and the amount of reallocation of impact funds made to administrative costs of refunding unexpended revenues exceeding the amount to be refunded.

California Government Code Section 66001(d) requires a local agency make all the following findings every fifth year with respect to that portion of the account remaining unexpended, whether committed or uncommitted:
 Identify the purpose to which the fee is to be put.
 Demonstrate a reasonable relationship between the fee and the purpose for which it is charged.
 Identify all sources and amounts of funding anticipated to complete financing in incomplete improvements.
 Designate the approximate dates on which the funding is expected to be deposited into the appropriate account or fund.
 In any action imposing a fee as a condition of approval of a development project by a local agency, the local agency shall determine how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed.

The California Government Code Section 66002 requires that local agencies that have developed a fee program to adopt a Capital Improvement Plan (CIP) indicating the approximate location, size, and timing of projects, plus an estimate for the cost of all facilities or improvements to be financed by fees.

The five-year CIP strives to reflect the goals and policies established by the General Plan by systematically planning, scheduling, managing, monitoring, and financing capital projects to ensure cost-effectiveness and conformity with established policies and adopted Specific Plans.

The CIP guides the funding and construction of all public improvements constructed by the City, including roads, wastewater treatment facilities and lines, water lines, and parks. The CIP #10..
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City Council, November 25, 2025
Capital Facilities Fees Annual Report for Fiscal Year 2024-25