Agenda packet — Audit Committee, January 21, 2026 (part 2 of 3)

DEFICIENCY OF REVENUES
UNDER EXPENDITURES (2,945,192) (1,583,793) (62,041) 1,521,752 OTHER FINANCING SOURCES (USES):

Transfers in - 391,606 345,090 (46,516)
Transfers out - - (1,723) (1,723)
Total other financing sources - 391,606 343,367 (48,239) CHANGES IN FUND BALANCES (2,945,192) (1,192,187) 281,326 1,473,513 FUND BALANCES, JULY 1 2,604,704 2,604,704 2,604,704 -
FUND BALANCES, JUNE 30 $ (340,488) $ 1,412,517 $ 2,886,030 $ 1,473,513 Budget
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual
Transportation Special Tax Special Revenue Fund
Fiscal Year Ended June 30, 2025
NOTE: The Expenditures by function amounts listed above include the capital outlay expenditures within each department.
127
Variance with
Original Final Actual Final Budget
REVENUES:

Taxes $ 1,500,000 $ 1,500,000 $ 2,138,384 $ 638,384
Licenses and permits - - 1,260 1,260
Intergovernmental 15,522,123 15,651,453 26,022,667 10,371,214 Charges for services 1,391,459 1,391,459 1,867,112 475,653 Interest and rent - 1,700,000 1,890,546 190,546
Net increase in fair value of investments - 1,165,717 1,346,670 180,953 Miscellaneous 10,000 50,000 171,711 121,711
Total revenues 18,423,582 21,458,629 33,438,350 11,979,721 EXPENDITURES:

Current:

Community development 2,197,832 2,874,500 1,569,824 1,304,676 Highways and streets 17,776,735 18,030,845 16,999,520 1,031,325 Debt service:

Principal retirement - 4,074 4,074 -
Interest - 304 304 -
Total expenditures 19,974,567 20,909,723 18,573,722 2,336,001

EXCESS (DEFICIT) OF REVENUES OVER
(UNDER) EXPENDITURES (1,550,985) 548,906 14,864,628 14,315,722 OTHER FINANCING SOURCES (USES):

Transfers in 1,485,453 1,688,922 1,540,205 (148,717)
Transfers out - (6,665,966) (7,014,979) (349,013)
Sale of assets - - 18,002 18,002
Total other financing sources (uses) 1,485,453 (4,977,044) (5,456,772) (479,728) CHANGES IN FUND BALANCE (65,532) (4,428,138) 9,407,856 13,835,994 FUND BALANCE, JULY 1 55,290,002 55,290,002 55,290,002 - FUND BALANCE, JUNE 30 $ 55,224,470 $ 50,861,864 $ 64,697,858 $ 13,835,994 Budget
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City of Modesto
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget (GAAP Basis) and Actual
Cannabis Special Revenue Fund
Fiscal Year Ended June 30, 2025
NOTE: The Expenditures by function amounts listed above include the capital outlay expenditures within each department.
128
Variance with
Original Final Actual Final Budget
REVENUES:

Licenses and permits $ 274,642 $ 274,642 $ 197,804 $ (76,838) Charges for services 12,760 12,760 44,660 31,900
Total revenues 287,402 287,402 242,464 (44,938)
EXPENDITURES:

Current:

Community development 272,609 272,609 211,059 61,550
Total expenditures 272,609 272,609 211,059 61,550

EXCESS OF REVENUES
OVER EXPENDITURES 14,793 14,793 31,405 16,612
CHANGES IN FUND BALANCES 14,793 14,793 31,405 16,612
FUND DEFICITS, JULY 1 (14,822) (14,822) (14,822) -
FUND BALANCES (DEFICITS), JUNE 30 $ (29) $ (29) $ 16,583 $ 16,612 Budget
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City of Modesto
Description of Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2025
129
Enterprise Funds are established to account for activities that render services on a user-charge basis to the general public. Nonmajor Enterprise Funds include:

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

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

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

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

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

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

Abatement and Public Nuisance Fund - To account the activity for expenses and recovery for the cost for both dangerous and unsafe building and property abatements. #5..
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City of Modesto
Combining Statement of Net Position
Nonmajor Enterprise Fund
June 30, 2025
130
Storm
Parking Drain Compost Airport
ASSETS
Current assets:

Cash and investments $ $ 527,810 10,367,748 $ 12,201,290 $ 4,887,151 Receivables:

Accounts, net 37,049 10,454 2,190,923 51,729
Interest 2,139 46,233 78,675 21,823
Utilities, net - 600,675 753,823 -
Leases 54,566 - - 409,574
Prepaid expenses 172 13 1,342 1,969
Due from governments 5,378 4,538 4,836,950 402,293
Inventories - - - -
Total current assets 627,114 11,029,661 20,063,003 5,774,539 Noncurrent assets:

Restricted cash and investments with fiscal agent - - - - Leases receivable 4,540,019 - - 2,335,911
Land and construction in progress 3,131,804 928,317 1,140,000 1,352,142 Other capital assets, net of accumulated depreciation 1,850,241 12,148,632 716,490 6,412,551 Intangible assets, net of accumulated amortization - 12,970 3,852 - Total noncurrent assets 9,522,064 13,089,919 1,860,342 10,100,604 Total assets 10,149,178 24,119,580 21,923,345 15,875,143

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB 46,648 23,972 161,757 -
Deferred pensions 191,758 183,342 1,797,948 191,453
Total deferred outflows of resources 238,406 207,314 1,959,705 191,453

LIABILITIES
Current liabilities:

Accounts payable 32,124 97,819 461,188 30,059
Accrued salaries and benefits 26,813 15,095 191,524 21,097 Interest payable - - 19,138 -
Current portion - leases and SBITA - 4,923 1,462 -
Unearned revenue 12,480 - - -
Total current liabilities 71,417 117,837 673,312 51,156 Noncurrent liabilities:

Advances from other funds - 1,324,704 2,475,600 -
Pollution remediation liability - - 3,170,994 -
Long-term debt:

Leases and SBITA payable - 5,295 1,573 -
Net OPEB liability 142,850 129,360 953,996 -
Net pension liability 958,625 916,556 8,988,208 957,102 Total noncurrent liabilities 1,101,475 2,375,915 15,590,371 957,102 Total liabilities 1,172,892 2,493,752 16,263,683 1,008,258

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB 31,957 29,808 152,366 -
Deferred pensions 726 694 6,805 725
Deferred leases 4,260,354 - - 2,665,521
Total deferred inflows of resources 4,293,037 30,502 159,171 2,666,246

NET POSITION
Net investment in capital assets 4,982,045 13,079,701 1,857,307 7,764,693 Restricted - - - -
Unrestricted (60,390) 8,722,939 5,602,889 4,627,399
Total net position $ $ 4,921,655 21,802,640 $ $ 7,460,196 12,392,092 (Continued)
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City of Modesto
Combining Statement of Net Position
Nonmajor Enterprise Fund (Continued)
June 30, 2025
131
Community Abatement and
Golf Center Public Nuisance Total
ASSETS
Current assets:

Cash and investments $ $ 4,043,762 $ 534,618 $ 925,045 33,487,424 Receivables:

Accounts, net 12,684 58,698 1,470,493 3,832,030
Interest 16,187 - 4,045 169,102
Utilities, net - - - 1,354,498
Leases 42,633 8,379 - 515,152
Prepaid expenses - 123 - 3,619
Due from governments - - - 5,249,159
Inventories 49,674 - - 49,674
Total current assets 4,164,940 601,818 2,399,583 44,660,658 Noncurrent assets:

Restricted cash and investments with fiscal agent 121,033 - - 121,033 Leases receivable 4,340,734 - - 11,216,664
Land and construction in progress 1,779,108 3,667,020 - 11,998,391 Other capital assets, net of accumulated depreciation 846,861 2,395,454 - 24,370,229 Intangible assets, net of accumulated amortization 224,104 - - 240,926 Total noncurrent assets 7,311,840 6,062,474 - 47,947,243 Total assets 11,476,780 6,664,292 2,399,583 92,607,901

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB - 30,332 - 262,709
Deferred pensions - 172,905 - 2,537,406
Total deferred outflows of resources - 203,237 - 2,800,115

LIABILITIES
Current liabilities:

Accounts payable 149,300 43,384 - 813,874
Accrued salaries and benefits 36,649 36,035 - 327,213
Interest payable - - - 19,138
Current portion - leases and SBITA 75,545 - - 81,930
Unearned revenue 325,849 - - 338,329
Total current liabilities 587,343 79,419 - 1,580,484
Noncurrent liabilities:

Advances from other funds - - - 3,800,304
Pollution remediation liability - - - 3,170,994
Long-term debt:

Leases and SBITA payable 228,811 - - 235,679
Net OPEB liability - 128,056 - 1,354,262
Net pension liability - 864,378 - 12,684,869
Total noncurrent liabilities 228,811 992,434 - 21,246,108 Total liabilities 816,154 1,071,853 - 22,826,592

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB - 19,338 - 233,469
Deferred pensions - 654 - 9,604
Deferred leases 4,040,984 2,276 - 10,969,135
Total deferred inflows of resources 4,040,984 22,268 - 11,212,208

NET POSITION
Net investment in capital assets 2,545,717 6,062,474 - 36,291,937 Restricted 121,033 - - 121,033
Unrestricted 3,952,892 (289,066) 2,399,583 24,956,246
Total net position $ $ 6,619,642 $ 5,773,408 $ 2,399,583 61,369,216 (Concluded)
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City of Modesto
Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2025
132
Parking Storm Drain Compost Airport
OPERATING REVENUES:

Charges for services $ $ 1,166,651 $ 6,184,232 16,426,800 $ 782,979 Miscellaneous 298,867 4,196 7,278,969 17,441
Total operating revenues 1,465,518 6,188,428 23,705,769 800,420 OPERATING EXPENSES:

Salaries and wages 631,874 390,536 4,690,663 482,958
Contractual services 312,582 621,268 3,404,914 135,761
Utilities 154,893 37,425 32,028 111,217
Maintenance and supplies 136,809 2,714,170 2,445,008 159,491 Insurance 172,209 16,467 543,839 122,609
Employee benefits 234,964 275,340 2,061,327 251,569
Administration services 492,418 3,004,536 634,564 57,299 Allocated indirect administrative costs 46,511 130,212 264,072 37,514 Depreciation 385,571 442,184 49,443 643,728
Total operating expenses 2,567,831 7,632,138 14,125,858 2,002,146 OPERATING INCOME (LOSS) (1,102,313) (1,443,710) 9,579,911 (1,201,726) NONOPERATING REVENUES (EXPENSES):

Operating grants - - 107,166 431,643
Gain on disposition of capital assets - 30,685 141,798 - Tax revenue - - - 406,150
Tax expense - - - (2,053)
Interest income 199,723 275,036 372,858 176,462
Net increase in fair value of investments 15,971 247,456 212,882 98,176 Rental income 152,034 - - 470,815
Interest expense and amortization - (341) (101) -
Total nonoperating revenues 367,728 552,836 834,603 1,581,193 INCOME (LOSS) BEFORE TRANSFERS (734,585) (890,874) 10,414,514 379,467

TRANSFERS
Transfers in - 700,000 - -
Transfers out - (32,098) (1,280,514) (7,587)
Total transfers - 667,902 (1,280,514) (7,587)
CHANGES IN NET POSITION (734,585) (222,972) 9,134,000 371,880 NET POSITION (DEFICIT), JULY 1 5,656,240 22,025,612 (1,673,804) 12,020,212 NET POSITION, JUNE 30 $ $ 4,921,655 21,802,640 $ $ 7,460,196 12,392,092 (Continued)
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City of Modesto
Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Enterprise Funds (Continued)
Fiscal Year Ended June 30, 2025
133
Community Abatement and
Golf Center Public Nuisance Total
OPERATING REVENUES:

Charges for services $ $ 3,516,586 $ 248,246 $ 656,230 28,981,724 Miscellaneous 5,679 3,344 - 7,608,496
Total operating revenues 3,522,265 251,590 656,230 36,590,220 OPERATING EXPENSES:

Salaries and wages - 775,430 - 6,971,461
Contractual services 2,706,775 261,086 100 7,442,486
Utilities 63,385 272,802 - 671,750
Maintenance and supplies 276,060 140,360 - 5,871,898
Insurance 47,528 83,306 - 985,958
Employee benefits - 228,404 - 3,051,604
Administration services 302,954 64,831 86,303 4,642,905 Allocated indirect administrative costs 47,127 - - 525,436 Depreciation 119,930 43,371 - 1,684,227
Total operating expenses 3,563,759 1,869,590 86,403 31,847,725 OPERATING INCOME (LOSS) (41,494) (1,618,000) 569,827 4,742,495 NONOPERATING REVENUES (EXPENSES):

Operating grants - - - 538,809
Gain on disposition of capital assets - - - 172,483
Tax revenue - - - 406,150
Tax expense - - - (2,053)
Interest income 127,870 3,946 27,843 1,183,738
Net increase in fair value of investments 97,657 - 18,396 690,538 Rental income 131,916 577,592 - 1,332,357
Interest expense and amortization (27,512) - - (27,954) Total nonoperating revenues 329,931 581,538 46,239 4,294,068 INCOME (LOSS) BEFORE TRANSFERS 288,437 (1,036,462) 616,066 9,036,563

TRANSFERS
Transfers in 504,547 1,025,625 1,723 2,231,895
Transfers out - - - (1,320,199)
Total transfers 504,547 1,025,625 1,723 911,696
CHANGES IN NET POSITION 792,984 (10,837) 617,789 9,948,259 NET POSITION (DEFICIT), JULY 1 5,826,658 5,784,245 1,781,794 51,420,957 NET POSITION, JUNE 30 $ $ 6,619,642 $ 5,773,408 $ 2,399,583 61,369,216 (Concluded)
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City of Modesto
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2025
134
Storm
Parking Drain Compost Airport
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 1,533,120 $ 6,212,109 $ 23,891,511 $ 770,805 Payments to suppliers (1,298,831) (6,507,764) (10,577,277) (704,444) Payments to employees (904,200) (718,727) (7,192,546) (728,690) Net cash provided by (used in) operating activities (669,911) (1,014,382) 6,121,688 (662,329)

CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:

Operating grants received - - 107,166 431,643
Taxes received - - - 406,150
Transfers in - 700,000 - -
Transfers out - (32,098) (1,280,514) (7,587)
Advances from/(to) other funds - - (654,200) -
Net cash provided by (used in) noncapital financing
activities - 667,902 (1,827,548) 830,206

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition and construction of capital assets - - - -
Proceeds from sale of capital assets - 18,627 141,802 3 Principal (repayments) collection (319,193) (4,573) (1,360) 239,178 Interest (paid) received - (341) 10,237 -
Net cash provided by (used in) capital and related
financing activities (319,193) 13,713 150,679 239,181
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 198,418 266,506 329,982 167,939
Net increase in the fair value of investments 15,971 247,456 212,882 98,176 Rental income received 349,257 - - 222,094
Net cash provided by investing activities 563,646 513,962 542,864 488,209 Net increase (decrease) in cash and investments (425,458) 181,195 4,987,683 895,267 CASH AND INVESTMENTS, JULY 1 953,268 10,186,553 7,213,607 3,991,884 CASH AND INVESTMENTS, JUNE 30 $ 527,810 $ 10,367,748 $ 12,201,290 $ 4,887,151 RECONCILIATION TO STATEMENT OF NET POSITION:

Cash and investments $ 527,810 $ 10,367,748 $ 12,201,290 $ 4,887,151 Restricted cash and investments with fiscal agent - - - - TOTAL CASH AND INVESTMENTS $ 527,810 $ 10,367,748 $ 12,201,290 $ 4,887,151 (Continued)
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City of Modesto
Combining Statement of Cash Flows
Nonmajor Enterprise Funds (Continued)
Fiscal Year Ended June 30, 2025
135
Community Abatement and
Golf Center Public Nuisance Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 3,275,594 $ 315,319 $ 271,889 $ 36,270,347 Payments to suppliers (3,815,990) (803,492) (160,162) (23,867,960) Payments to employees - (1,017,818) - (10,561,981)
Net cash provided by (used in) operating activities (540,396) (1,505,991) 111,727 1,840,406

CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:

Operating grants received - - - 538,809
Taxes received - - - 406,150
Transfers in 504,547 1,025,625 1,723 2,231,895
Transfers out - - - (1,320,199)
Advances from/(to) other funds - - 52,882 (601,318)
Net cash provided by (used in) noncapital financing
activities 504,547 1,025,625 54,605 1,255,337

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition and construction of capital assets (418,912) - - (418,912) Proceeds from sale of capital assets - - - 160,432
Principal (repayments) collection 416,985 658 - 331,695 Interest (paid) received (27,512) - - (17,616)
Net cash provided by (used in) capital and related
financing activities (29,439) 658 - 55,599
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 123,422 3,946 25,617 1,115,830
Net increase in the fair value of investments 97,657 - 18,396 690,538 Rental income received 131,916 577,592 - 1,280,859
Net cash provided by investing activities 352,995 581,538 44,013 3,087,227 Net increase (decrease) in cash and investments 287,707 101,830 210,345 6,238,569 CASH AND INVESTMENTS, JULY 1 3,877,088 432,788 714,700 27,369,888 CASH AND INVESTMENTS, JUNE 30 $ 4,164,795 $ 534,618 $ 925,045 $ 33,608,457 RECONCILIATION TO STATEMENT OF NET POSITION:

Cash and investments $ 4,043,762 $ 534,618 $ 925,045 $ 33,487,424 Restricted cash and investments with fiscal agent 121,033 - - 121,033 TOTAL CASH AND INVESTMENTS $ 4,164,795 $ 534,618 $ 925,045 $ 33,608,457 (Concluded)
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City of Modesto
Combining Statement of Cash Flows
Nonmajor Enterprise Funds (Continued)
Fiscal Year Ended June 30, 2025
136
Storm
Parking Drain Compost Airport

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

Operating income (loss) $ (1,102,313) $ (1,443,710) $ 9,579,911 $ (1,201,726) Adjustments to reconcile operating income (loss) to
net cash provided (used in) by operating activities:

Depreciation 385,571 442,184 49,443 643,728
Taxes paid - - - (2,053)
Change in assets, liabilities, and deferred resources:
(Increase) decrease:

Accounts receivable 67,602 (4,915) 163,532 (31,827)
Taxes receivable - - - 2,212
Utilities receivable - 28,596 22,210 -
Leases receivable
Due from other governments 2,846 13,614 (4,684,078) (63,068) Inventories - - - -
Prepaid expenses (57) 130 (271) 29
Deferred outflows of resources - OPEB (15,299) (105) (22,347) - Deferred outflows of resources - pensions 102,518 105,208 1,003,673 87,791 Increase (decrease):

Accounts payable (750) 5,260 298,742 16,863
Accrued salaries and benefits 2,072 (2,690) 30,972 7,676 Unearned revenue 12,480 - (42,892) (40,000)
Net OPEB liability 21,627 2,970 38,784 -
Net pension liability (134,396) (155,199) (1,417,778) (80,088) Deferred inflows of resources - OPEB (9,807) (3,742) (23,697) - Deferred inflows of resources - pensions (2,005) (1,983) (19,191) (1,866) Pollution remediation - - 1,144,675 -
Total adjustments 432,402 429,328 (3,458,223) 539,397
Net cash provided (used in) by operating activities $ (669,911) $ (1,014,382) $ 6,121,688 $ (662,329) (Continued)
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City of Modesto
Combining Statement of Cash Flows
Nonmajor Enterprise Funds (Continued)
Fiscal Year Ended June 30, 2025
137
Community Abatement and
Golf Center Public Nuisance Total

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

Operating income (loss) $ (41,494) $ (1,618,000) $ 569,827 $ 4,742,495 Adjustments to reconcile operating income (loss) to
net cash provided (used in) by operating activities:

Depreciation 119,930 43,371 - 1,684,227
Taxes paid - - - (2,053)
Change in assets, liabilities, and deferred resources:
(Increase) decrease:

Accounts receivable 324,228 63,729 (384,341) 198,008
Taxes receivable - - - 2,212
Utilities receivable - - - 50,806
Leases receivable (570,899) - - (570,899)
Due from other governments - - - (4,730,686)
Inventories 3,762 - - 3,762
Prepaid expenses 162,788 261 - 162,880
Deferred outflows of resources - OPEB - (8,661) - (46,412) Deferred outflows of resources - pensions - 85,650 - 1,384,840 Increase (decrease):

Accounts payable 1,001 10,614 (73,659) 258,071
Accrued salaries and benefits 3,962 8,018 - 50,010
Unearned revenue (543,674) - (100) (614,186)
Net OPEB liability - 12,091 - 75,472
Net pension liability - (95,966) - (1,883,427)
Deferred inflows of resources - OPEB - (5,353) - (42,599) Deferred inflows of resources - pensions - (1,745) - (26,790) Pollution remediation - - - 1,144,675
Total adjustments (498,902) 112,009 (458,100) (2,902,089) Net cash provided (used in) by operating activities $ (540,396) $ (1,505,991) $ 111,727 $ 1,840,406 (Concluded)
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City of Modesto
Description of Internal Service Funds
Fiscal Year Ended June 30, 2025
138
Internal Service Funds are established to finance and account for services and commodities furnished by a designated agency of a governmental unit to other departments of the same governmental unit. Since the services and commodities are supplied exclusively to other departments of a governmental jurisdiction, they are distinguishable from those public services which are rendered to the public in general and which are accounted for in General, Special Revenue, or Enterprise Funds. Internal Service Funds include:

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

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

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

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

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

Building Services Fund - To account for the true cost of occupying and maintaining office space, to better reflect the value of that space, and to accumulate amounts for future building repair costs. #5..
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City of Modesto
Combining Statement of Net Position
Internal Service Fund
June 30, 2025
139
Information
Fleet Central and Technology
Management Services Services Insurance
ASSETS
Current assets:

Cash and investments $ $ 675,876 - $ $ 4,617,001 18,196,471 Receivables:

Accounts 12,270 - - 678,581
Interest 9,041 112 21,153 86,509
Leases - - - -
Prepaid expenses 1,898 317,269 1,050,633 7,186
Due from governments 3,250,038 - - -
Inventories 3,833,779 3,664,910 - -
Total current assets 7,782,902 3,982,291 5,688,787 18,968,747 Noncurrent assets:

Restricted assets - cash and investments - - - -
Restricted assets - cash from fiscal agent - - - 580,927 Leases receivable - - - -
Land and construction in progress 7,865,520 - - -
Other capital assets, net of accumulated depreciation 35,082,111 - 2,325,991 - Intangible assets, net of accumulated amortization - - 1,249,292 6,979 Total noncurrent assets 42,947,631 - 3,575,283 587,906
Total assets 50,730,533 3,982,291 9,264,070 19,556,653

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB 97,987 - 181,569 -
Deferred pensions 1,455,551 228,339 1,450,794 187,038
Total deferred outflows of resources 1,553,538 228,339 1,632,363 187,038

LIABILITIES
Current liabilities:

Accounts payable 3,129,948 937,372 246,653 1,157,556
Accrued salaries and benefits 163,759 21,419 143,885 21,182 Interest payable 23,201 138 - 3,412
Due to other funds - 2,837,583 - -
Unearned revenue - - - 35,627
Current portion - compensated absences - - - -
Current portion - claims liability - - - 7,886,993
Current portion - leases and SBITA - - 143,336 -
Total current liabilities 3,316,908 3,796,512 533,874 9,104,770 Noncurrent liabilities:

Compensated absences - - - -
Claims liability - - - 25,309,185
Leases and SBITA - - 263,864 -
Net OPEB liability 509,265 - 645,481 -
Net pension liability 7,276,521 1,141,500 7,252,738 935,033 Total noncurrent liabilities 7,785,786 1,141,500 8,162,083 26,244,218 Total liabilities 11,102,694 4,938,012 8,695,957 35,348,988

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB 109,250 - 224,072 -
Deferred pensions 5,509 865 5,491 708
Deferred leases - - - -
Total deferred inflows of resources 114,759 865 229,563 708

NET POSITION
Net investment in capital assets 42,947,631 - 3,168,083 6,979 Restricted - - - 580,927
Unrestricted (1,881,013) (728,247) (1,197,170) (16,193,911) Total net position $ 41,066,618 $ $ (728,247) $ 1,970,913 (15,606,005) (Continued)
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City of Modesto
Combining Statement of Net Position
Internal Service Fund (Continued)
June 30, 2025
140
Employee
Benefits Building
Management Services Total
ASSETS
Current assets:

Cash and investments $ $ 4,744 $ 2,454,959 25,949,051
Receivables:

Accounts 35,398 - 726,249
Interest 39,148 11,226 167,189
Leases - 5,488 5,488
Prepaid expenses 5,979 115 1,383,080
Due from governments - 20,006 3,270,044
Inventories - - 7,498,689
Total current assets 85,269 2,491,794 38,999,790
Noncurrent assets:

Restricted assets - cash and investments 8,417,921 - 8,417,921 Restricted assets - cash from fiscal agent - - 580,927
Leases receivable - 11,226 11,226
Land and construction in progress - 2,115,215 9,980,735 Other capital assets, net of accumulated depreciation - 1,810,565 39,218,667 Intangible assets, net of accumulated amortization - - 1,256,271 Total noncurrent assets 8,417,921 3,937,006 59,465,747
Total assets 8,503,190 6,428,800 98,465,537

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB - - 279,556
Deferred pensions 62,484 252,259 3,636,465
Total deferred outflows of resources 62,484 252,259 3,916,021

LIABILITIES
Current liabilities:

Accounts payable 41,376 109,128 5,622,033
Accrued salaries and benefits 6,647 29,368 386,260
Interest payable - - 26,751
Due to other funds - - 2,837,583
Unearned revenue - - 35,627
Current portion - compensated absences 6,642,839 - 6,642,839 Current portion - claims liability - - 7,886,993
Current portion - leases and SBITA - - 143,336
Total current liabilities 6,690,862 138,496 23,581,422
Noncurrent liabilities:

Compensated absences 14,433,199 - 14,433,199
Claims liability - - 25,309,185
Leases and SBITA - - 263,864
Net OPEB liability - - 1,154,746
Net pension liability 312,365 1,261,083 18,179,240
Total noncurrent liabilities 14,745,564 1,261,083 59,340,234 Total liabilities 21,436,426 1,399,579 82,921,656

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB - - 333,322
Deferred pensions 236 955 13,764
Deferred leases - 15,768 15,768
Total deferred inflows of resources 236 16,723 362,854

NET POSITION
Net investment in capital assets - 3,925,780 50,048,473 Restricted 8,417,921 - 8,998,848
Unrestricted (21,288,909) 1,338,977 (39,950,273)
Total net position $ (12,870,988) $ $ 5,264,757 19,097,048 (Concluded)
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City of Modesto
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
Fiscal Year Ended June 30, 2025
141
Information
Fleet Central and Technology
Management Services Services Insurance
OPERATING REVENUES:

Charges for services $ 22,598,656 $ 7,927,284 $ 10,984,397 $ 42,931,414 Miscellaneous 37,908 2,367 - 294,771
Total operating revenues 22,636,564 7,929,651 10,984,397 43,226,185 OPERATING EXPENSES:

Salaries and wages 3,685,910 403,488 3,446,100 480,232
Cost of goods sold - 6,712,951 - -
Contractual services 901,704 204,759 1,446,129 1,943,553 Utilities 190,716 - 140,520 1,391
Maintenance and supplies 11,442,011 190,907 3,063,059 276,973 Insurance 466,199 17,251 111,497 29,202,429
Claims - - - 14,505,247
Employee benefits 1,476,344 338,084 1,215,036 281,710
Administration services 617,676 266,429 15,539 147,781
Allocated indirect administrative costs 307,575 - - -
Depreciation 4,015,919 - 1,768,887 21,113
Total operating expenses 23,104,054 8,133,869 11,206,767 46,860,429 OPERATING INCOME (LOSS) (467,490) (204,218) (222,370) (3,634,244) NONOPERATING REVENUES (EXPENSES):

Loss on disposition of capital assets (174,014) - - -
Interest income 66,369 313 160,499 452,231
Net increase (decrease) in fair value of investments (266,580) 505 108,664 238,512 Rental income 37,800 - - -
Interest expense and amortization - - (39,173) (719)
Total nonoperating revenues (expenses) (336,425) 818 229,990 690,024

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
AND TRANSFERS (803,915) (203,400) 7,620 (2,944,220)

CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions 1,843,063 - - -
Transfers in 4,328,657 - - -
Transfers out - (24,000) (144,048) -
Total capital contributions and transfers 6,171,720 (24,000) (144,048) - CHANGES IN NET POSITION 5,367,805 (227,400) (136,428) (2,944,220) NET POSITION (DEFICIT), JULY 1 35,698,813 (500,847) 2,107,341 (12,661,785) Restatements (Note 19) - - - -
NET POSITION (DEFICIT), JUNE 30 $ 41,066,618 $ $ (728,247) 1,970,913 $ (15,606,005) (Continued)
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City of Modesto
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds (Continued)
Fiscal Year Ended June 30, 2025
142
Employee
Benefits Building
Management Services Total
OPERATING REVENUES:

Charges for services $ 40,135,613 $ 4,407,310 $ 128,984,674 Miscellaneous 177,081 18,522 530,649
Total operating revenues 40,312,694 4,425,832 129,515,323 OPERATING EXPENSES:

Salaries and wages 3,213,728 622,213 11,851,671
Cost of goods sold - - 6,712,951
Contractual services 259,797 1,712,364 6,468,306
Utilities 1,241 264,901 598,769
Maintenance and supplies 22,528 999,393 15,994,871
Insurance 3,780 32,038 29,833,194
Claims 3,104 - 14,508,351
Employee benefits 36,174,613 272,173 39,757,960
Administration services 312,674 107,625 1,467,724
Allocated indirect administrative costs - - 307,575
Depreciation - 249,530 6,055,449
Total operating expenses 39,991,465 4,260,237 133,556,821 OPERATING INCOME (LOSS) 321,229 165,595 (4,041,498)
NONOPERATING REVENUES (EXPENSES):

Loss on disposition of capital assets - - (174,014)
Interest income 273,922 76,386 1,029,720
Net increase (decrease) in fair value of investments 187,317 50,599 319,017 Rental income - 5,406 43,206
Interest expense and amortization - - (39,892)
Total nonoperating revenues (expenses) 461,239 132,391 1,178,037

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS
AND TRANSFERS 782,468 297,986 (2,863,461)

CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions - - 1,843,063
Transfers in - - 4,328,657
Transfers out (1,212,508) (56,687) (1,437,243)
Total capital contributions and transfers (1,212,508) (56,687) 4,734,477 CHANGES IN NET POSITION (430,040) 241,299 1,871,016
NET POSITION (DEFICIT), JULY 1 (7,043,290) 5,023,458 22,623,690 Restatements (Note 19) (5,397,658) - (5,397,658)
NET POSITION (DEFICIT), JUNE 30 $ (12,870,988) $ 5,264,757 $ 19,097,048 (Concluded)
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City of Modesto
Combining Statement of Cash Flows
Internal Service Funds
Fiscal Year Ended June 30, 2025
143
Information
Fleet Central and Technology
Management Services Services Insurance
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 22,624,757 $ 7,929,651 $ 10,984,397 $ 47,316,191 Payments to suppliers (13,421,973) (7,208,227) (5,717,414) (43,464,565) Payments to employees (5,531,290) (698,316) (5,070,868) (729,936) Net cash provided by operating activities 3,671,494 23,108 196,115 3,121,690 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Transfers in 4,232,325 - - -
Transfers out - (24,000) (144,048) -
Net cash provided by (used in) noncapital financing activities 4,232,325 (24,000) (144,048) -

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition and construction of capital assets (7,717,008) - (102,089) (28,092) Proceeds from the sale of capital assets 185,888 - - -
Capital contributions received 474,629 - - -
Interest paid - - (39,173) (719)
Net cash used in capital and related financing activities (7,056,491) - (141,262) (28,811) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 57,328 387 155,351 421,141
Net increase (decrease) in the fair value of investments (266,580) 505 108,664 238,512 Rental income received 37,800 - - -
Net cash provided by (used in) investing activities (171,452) 892 264,015 659,653 Net increase in cash and investments 675,876 - 174,820 3,752,532 CASH AND INVESTMENTS, JULY 1 - - 4,442,181 15,024,866
CASH AND INVESTMENTS, JUNE 30 $ 675,876 $ - $ 4,617,001 $ 18,777,398 RECONCILIATION TO STATEMENT OF NET POSITION:

Cash and investments $ 675,876 $ - $ 4,617,001 $ 18,196,471 Restricted cash and investments - - - -
Restricted cash and investments with fiscal agent - - - 580,927 TOTAL CASH AND INVESTMENTS $ 675,876 $ - $ 4,617,001 $ 18,777,398 (Continued)
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City of Modesto
Combining Statement of Cash Flows
Internal Service Funds (Continued)
Fiscal Year Ended June 30, 2025
144
Employee
Benefits Building
Management Services Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 34,879,638 $ 4,422,701 $ 128,157,335 Payments to suppliers (586,915) (3,005,311) (73,404,405) Payments to employees (32,011,979) (976,434) (45,018,823) Net cash provided by operating activities 2,280,744 440,956 9,734,107 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Transfers in - - 4,232,325
Transfers out (1,212,508) (56,687) (1,437,243)
Net cash provided by (used in) noncapital financing activities (1,212,508) (56,687) 2,795,082

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition and construction of capital assets - - (7,847,189) Proceeds from the sale of capital assets - - 185,888
Capital contributions received - - 474,629
Interest paid - - (39,892)
Net cash used in capital and related financing activities - - (7,226,564) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 262,059 72,058 968,324
Net increase (decrease) in the fair value of investments 187,317 50,599 319,017 Rental income received - 10,813 48,613
Net cash provided by (used in) investing activities 449,376 133,470 1,335,954 Net increase in cash and investments 1,517,612 517,739 6,638,579 CASH AND INVESTMENTS, JULY 1 6,905,053 1,937,220 28,309,320 CASH AND INVESTMENTS, JUNE 30 $ 8,422,665 $ 2,454,959 $ 34,947,899 RECONCILIATION TO STATEMENT OF NET POSITION:

Cash and investments $ 4,744 $ 2,454,959 $ 25,949,051
Restricted cash and investments 8,417,921 - 8,417,921
Restricted cash and investments with fiscal agent - - 580,927 TOTAL CASH AND INVESTMENTS $ 8,422,665 $ 2,454,959 $ 34,947,899 (Concluded)
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City of Modesto
Combining Statement of Cash Flows
Internal Service Funds (Continued)
Fiscal Year Ended June 30, 2025
145
Information
Fleet Central and Technology
Management Services Services Insurance

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

Operating income (loss) $ (467,490) $ (204,218) $ (222,370) $ (3,634,244) Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:

Depreciation 4,015,919 - 1,768,887 21,113
(Increase) decrease in:

Accounts receivable (11,807) - - 4,090,006
Due from governments (581,904) - - -
Prepaid expenses 1,915 (315,199) (89,392) 1,635,585
Inventories (567,615) (303,254) - -
Deferred outflows of resources - OPEB (27,080) - (18,655) - Deferred outflows of resources - pensions 816,483 91,380 828,318 76,109 Increase (decrease) in:

Accounts payable 2,033,989 689,016 90,156 (3,746,779)
Accrued salaries and benefits 49,744 (1,836) 13,840 1,389 Interest payable 3,369 138 - (7,393)
Due to other funds (435,590) 115,205 - -
Compensated absences - - - -
OPEB liability 42,757 - 45,027 -
Net pension liability (1,162,435) (46,023) (1,212,510) (42,369) Deferred inflows of resources - OPEB (23,188) - (36,255) - Deferred inflows of resources - pensions (15,573) (2,101) (15,657) (1,734) Deferred inflows of resources - leases
Unearned revenue - - - (5,932)
Lease liability - - (955,274) -
Claims liability - - - 4,735,939
Total adjustments 4,138,984 227,326 418,485 6,755,934
Net cash provided (used) by operating activities $ 3,671,494 $ 23,108 $ 196,115 $ 3,121,690 NONCASH FINANCING ACTIVITIES:

Contributions of capital assets $ 1,464,766 $ - $ - $ - TOTAL NONCASH FINANCING ACTIVITIES $ 1,464,766 $ - $ - $ - (Continued)
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City of Modesto
Combining Statement of Cash Flows
Internal Service Funds (Continued)
Fiscal Year Ended June 30, 2025
146
Employee
Benefits Building
Management Services Total

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

Operating income (loss) $ $ 321,229 $ 165,595 (4,041,498) Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:

Depreciation - 249,530 6,055,449
(Increase) decrease in:

Accounts receivable (35,398) 2,275 4,045,076
Due from governments - 51,841 (530,063)
Prepaid expenses (5,979) (115) 1,226,815
Inventories - - (870,869)
Deferred outflows of resources - OPEB - - (45,735)
Deferred outflows of resources - pensions 33,572 148,624 1,994,486 Increase (decrease) in:

Accounts payable 24,810 53,661 (855,147)
Accrued salaries and benefits (2,622) 5,623 66,138
Interest payable - - (3,886)
Due to other funds - - (320,385)
Compensated absences 1,990,202 - 1,990,202
OPEB liability - - 87,784
Net pension liability (44,415) (227,907) (2,735,659)
Deferred inflows of resources - OPEB - - (59,443)
Deferred inflows of resources - pensions (655) (2,765) (38,485) Deferred inflows of resources - leases (5,406) (5,406)
Unearned revenue - - (5,932)
Lease liability - - (955,274)
Claims liability - - 4,735,939
Total adjustments 1,959,515 275,361 13,775,605
Net cash provided (used) by operating activities $ 2,280,744 $ 440,956 $ 9,734,107 NONCASH FINANCING ACTIVITIES:

Contributions of capital assets $ $ - $ - 1,464,766
TOTAL NONCASH FINANCING ACTIVITIES $ $ - $ - 1,464,766
(Concluded)
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City of Modesto
Description of Private-Purpose Trust Funds and Investment Trust Funds Fiscal Year Ended June 30, 2025
147
Private Purpose Trust Funds account as the fiduciary fund type used by the City to report trust arrangements under which principal and income benefit other governments. Investment Trust Funds account for assets held by the City as an agent for individuals, governmental entities, and non-public organizations.

PRIVATE-PURPOSE TRUST FUNDS
Redevelopment Successor Agency - To account for allocated revenues in amounts necessary to pay the estimated annual installment payments on all enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

Special Districts - To account for collection of special assessment from property owners which are collected and forwarded to trustees for payment to bondholders. The cash and investment of the Special Districts are invested as part of the City’s investment pool.

INVESTMENT TRUST FUNDS
Tuolumne River Regional Park - To account for cash and investments of the Tuolumne River Regional Park, a joint powers agency between the City of Modesto and Stanislaus County. The agency provides financing, development, and maintenance of the Tuolumne River Regional Park facilities. The cash and investments of the Park are invested as part of the City’s investment pool.

Modesto-Ceres Fire Protection Agency - To record and distribute the special assessments for fire protection that were established under the Industrial Fire District. This is a joint powers agency between the Modesto Regional Fire Authority, the City of Ceres, and the Industrial Fire District. Cash and investments of the Agency are invested in the City’s investment pool.
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City of Modesto
Combining Statement of Fiduciary Net Position
Fiduciary Funds – Private–Purpose Trust Funds
June 30, 2025
148
Total
Redevelopment Special Private-Purpose
Successor Agency Districts Trust Funds
ASSETS
Cash and investments $ 236,750 $ 2,660,980 $ 2,897,730
Cash and investments held with fiscal agent - 3,346,988 3,346,988 Interest receivable 2,704 9,823 12,527
Taxes receivable 1,528,103 72,877 1,600,980
Assessments receivable - 24,555,000 24,555,000
Due from primary governments - 26,974 26,974
Total assets 1,767,557 30,672,642 32,440,199

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding - 766,250 766,250
Total deferred outflows of resources - 766,250 766,250

LIABILITIES
Accounts payables and other liabilities 36,315 2,018 38,333 Unearned revenues - 598,347 598,347
Due to local governments 1,192,004 - 1,192,004
Interest payable - 362,600 362,600
Long-term liabilities:

Due within one year 1,344,600 1,391,659 2,736,259
Due in more than one year 9,498,950 23,907,701 33,406,651 Total liabilities 12,071,869 26,262,325 38,334,194

NET POSITION
Restricted for other governments - 5,176,567 5,176,567
Unrestricted (10,304,312) - (10,304,312)
Total net position (deficit) $ (10,304,312) $ 5,176,567 $ (5,127,745)

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City of Modesto
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds – Private-Purpose Trust Funds
Fiscal Year Ended June 30, 2025
149
Total
Redevelopment Special Private-Purpose
Successor Agency Districts Trust Funds
ADDITIONS:

Contributions:

Collections on behalf of other governments:

Special assessments $ $ - 2,204,199 $ 2,204,199
Property taxes 1,801,473 - 1,801,473
Total collections on behalf of other governments 1,801,473 2,204,199 4,005,672 Interest and investment earnings:

Interest earnings 25,174 280,404 305,578
Net increase in fair value of investments 22,212 28,251 50,463 Total interest and investment earnings 47,386 308,655 356,041 Total additions 1,848,859 2,512,854 4,361,713
DEDUCTIONS:

Distribution of property taxes to other taxing entities 148,074 - 148,074 Obligation retirements:

Interest expense - 1,100,892 1,100,892
Trustee fees - 3,760 3,760
City administrative expenses 130,060 51,171 181,231
Other expenses - 73,861 73,861
Total deductions 278,134 1,229,684 1,507,818
Net increase in fiduciary net position 1,570,725 1,283,170 2,853,895 Net position (deficit), July 1 (11,875,037) 3,893,397 (7,981,640) Net position (deficit), June 30 $ (10,304,312) $ 5,176,567 $ (5,127,745) #5..
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City of Modesto
Combining Statement of Fiduciary Net Position
Fiduciary Funds – Investment Trust Funds
June 30, 2025
150
Modesto-Ceres Total
Tuolumne River Fire Protection Investment
Regional Park Agency Trust Funds
ASSETS
Cash and investments $ 2,610,828 $ $ 239,887 2,850,715
Interest receivable 3,138 2,840 5,978
Taxes receivable - 110,846 110,846
Prepaid expenses 229 - 229
Leases receivable 1,108,752 - 1,108,752
Due from governments 265,426 - 265,426
Land and construction in progress 5,634,159 - 5,634,159 Other capital assets, net of accumulated depreciation 5,137,575 - 5,137,575 Total assets 14,760,107 353,573 15,113,680

LIABILITIES
Accounts payables and other liabilities 382,419 353,573 735,992 Total liabilities 382,419 353,573 735,992

DEFERRED INFLOW OF RESOURCES
Leases 1,025,284 - 1,025,284
Total deferred inflow of resources 1,025,284 - 1,025,284

NET POSITION
Restricted for other governments 13,352,404 - 13,352,404 Total net position $ 13,352,404 $ $ - 13,352,404
#5..
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City of Modesto
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds – Investment Trust Funds
Fiscal Year Ended June 30, 2025
151
Modesto-Ceres Total
Tuolumne River Fire Protection Investment
Regional Park Agency Trust Funds
ADDITIONS:

Contributions:

Members investment pool $ 849,312 $ - $ 849,312
Total contributions 849,312 - 849,312
Collections on behalf of other governments:

Special assessments - 254,158 254,158
Property taxes - 464,280 464,280
Grants 1,455,015 - 1,455,015
Other 235,243 43,475 278,718
Total collections on behalf of other governments 1,690,258 761,913 2,452,171 Interest and investment earnings:

Interest and rent earnings 161,521 11,847 173,368
Net increase in fair value of investments 80,398 10,447 90,845 Total interest and investment earnings 241,919 22,294 264,213 Other additions:

Gain on disposition of capital assets 461,074 - 461,074 Total other additions 461,074 - 461,074
Total additions 3,242,563 784,207 4,026,770
DEDUCTIONS:

Distribution of property taxes to other taxing entities - 796,599 796,599 City administrative expenses 170,602 6,411 177,013
Other expenses - 8,540 8,540
Depreciation expense 434,128 - 434,128
Insurance expenses 14,216 2,020 16,236
Operating expenses 1,118,641 - 1,118,641
Total deductions 1,737,587 813,570 2,551,157
SPECIAL ITEMS:

Insurance recoveries 453,744 - 453,744
Recovery of previously written-off capital asset 180,011 - 180,011 Total special items 633,755 - 633,755
Net increase (decrease) in fiduciary net position 2,138,731 (29,363) 2,109,368 Net position, July 1 11,213,673 29,363 11,243,036
Net position, June 30 $ 13,352,404 $ - $ 13,352,404
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STATISTICAL SECTION TAB
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STATISTICAL SECTION
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City of Modesto
Fiscal Year Ended June 30, 2025
152

STATISTICAL SECTION
This part of the Annual Comprehensive Financial Report presents detailed information to aid in understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit. Financial Trends These schedules contain trend information to help the reader understand how the City’s financial performance has changed over time:

1. Net Position by Component

2. Changes in Net Position

3. Fund Balances of Governmental Funds

4. Changes in Fund Balances of Governmental Funds
Revenue Capacity
This schedule gives information on the City’s most significant local revenue source, the water usage charges:

1. Water Utility System - Ten Largest Customers

2. Water revenues by customer class

3. Water rates
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future:

1. Ratio of Outstanding Debt by Type

2. Computation of Direct and Overlapping Debt

3. Computation of Legal Debt Margin

4. Revenue Bond Coverage, Wastewater Revenue Bonds
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place:

1. Demographic and Economic Statistics

2. Principal Employers

3. Principal Property Taxpayers
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs:

1. Full-Time City Government Employees by Function

2. Operating Indicators by Function

3. Capital Asset Statistics by Function/Program
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year.
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City of Modesto
Net Position by Component(1)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
153
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Governmental activities
Net investment in capital assets $ 381,887,289 $ 376,743,556 $ 377,529,238 $ 401,515,805 $ 374,618,780 $ 407,347,307 $ 457,620,157 $ 468,002,326 $ 347,825,273 $ 348,311,958 Restricted (2) 115,619,807 123,851,082 130,192,278 127,885,787 135,818,614 183,357,207 195,793,646 208,472,568 83,916,553 230,262,278 Unrestricted (173,275,294) (191,483,628) (182,197,396) (191,345,565) (206,772,243) (217,114,643) (189,907,446) (187,041,193) (83,427,817) (236,829,097) Total governmental activities net position $ 324,231,802 $ 309,111,010 $ 325,524,120 $ 338,056,027 $ 303,665,151 $ 373,589,871 $ 463,506,357 $ 489,433,701 $ 348,314,009 $ 341,745,139 Business-type activities
Net investment in capital assets $ 539,821,175 $ 555,163,217 $ 571,811,118 $ 607,813,261 $ 647,695,354 $ 648,609,186 $ 687,640,266 $ 589,299,184 $ 628,224,368 $ 682,392,297 Restricted (2) 22,052,595 21,525,961 21,071,542 15,569,107 15,857,655 17,004,338 15,918,799 16,788,942 15,883,497 3,817,595 Unrestricted 92,324,550 113,595,981 130,146,975 148,005,231 138,508,360 178,262,877 115,746,227 241,640,663 229,643,218 223,982,881 Total business-type activities net position $ 654,198,320 $ 690,285,159 $ 723,029,635 $ 771,387,599 $ 802,061,369 $ 843,876,401 $ 819,305,292 $ 847,728,789 $ 873,751,083 $ 910,192,773 Primary government
Net investment in capital assets $ 921,708,464 $ 931,906,773 $ 949,340,356 $ 1,009,329,066 $ 1,022,314,134 $ 1,055,956,493 $ 1,145,260,423 $ 1,057,301,510 $ 976,049,641 $ 1,030,704,255 Restricted (2) 137,672,402 145,377,043 151,263,820 143,454,894 151,676,269 200,361,545 211,712,445 225,261,510 99,800,050 234,079,873 Unrestricted (80,950,744) (77,887,647) (52,050,421) (43,340,334) (68,263,883) (38,851,766) (74,161,219) 54,599,470 146,215,401 (12,846,216) Total primary government net position $ 978,430,122 $ 999,396,169 $ 1,048,553,755 $ 1,109,443,626 $ 1,105,726,520 $ 1,217,466,272 $ 1,282,811,649 $ 1,337,162,490 $ 1,222,065,092 $ 1,251,937,912 Restricted
(1) Accounting standards require that net position be reported in three components in the financial statements: net investment in capital assets; restricted; and unrestricted. Net position is considered restricted when (a) externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. (2) During fiscal year 2024, a correction to construction work in progress in the amount of $138,748,624 was process to correct previously overstated capital assets, when the City determined that a previously recognized asset would be turned over to the California Department of Transportation once the asset was completed, based on a cooperative agreement. ($100)
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$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Net investment in capital assets Restricted Unrestricted #5..
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City of Modesto
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
154
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Expenses
Governmental activities:

General government $ 12,838,583 $ 13,945,824 $ 15,432,617 $ 13,973,768 $ 14,808,371 $ 14,727,031 $ 20,268,611 $ 16,573,945 $ 17,124,132 $ 19,507,887 Community development 12,552,115 15,419,529 17,268,926 15,720,280 25,698,343 30,782,573 20,615,432 28,589,701 49,357,807 50,662,150 Highways and streets 20,149,011 22,481,002 22,997,140 23,937,423 25,858,611 25,863,042 27,463,523 27,337,181 40,587,533 36,489,700 Public works 10,749,465 13,169,149 8,674,538 3,472,405 3,736,696 3,126,390 3,086,419 7,795,895 13,898,622 15,001,365 Parks and recreation 3,493,743 3,947,898 4,456,508 15,680,980 14,725,590 13,750,865 12,439,250 16,227,064 21,298,671 26,118,626 Public safety 86,907,876 104,348,464 120,629,673 111,059,794 140,709,104 129,785,835 121,675,443 147,700,874 169,102,289 184,103,949 Interest on long-term debt 2,691,894 2,500,849 2,510,224 2,402,299 2,302,626 2,039,849 1,954,306 1,719,479 1,276,737 1,122,442 Total governmental activities expenses $ 149,382,687 $ 175,812,715 $ 191,969,626 $ 186,246,949 $ 227,839,341 $ 220,075,585 $ 207,502,984 $ 245,944,139 $ 312,645,791 $ 333,006,119 Business-type activities:

Water $ 59,127,625 $ 63,008,231 $ 56,526,729 $ 62,745,688 $ 69,187,391 $ 68,792,875 $ 73,421,868 $ 77,533,248 $ 89,689,694 $ 92,737,199 Sewer 33,093,921 36,248,877 41,444,220 41,216,914 45,832,671 46,500,454 44,263,767 48,558,199 54,056,910 64,696,457 Other Enterprise Funds(1) 45,630,005 45,977,066 43,273,109 48,115,965 51,408,949 54,972,944 26,000,573 28,102,128 31,958,844 31,940,883 Total business-type activities expenses 137,851,551 145,234,174 141,244,058 152,078,567 166,429,011 170,266,273 143,686,208 154,193,575 175,705,448 189,374,539 Total primary government expenses $ 287,234,238 $ 321,046,889 $ 333,213,684 $ 338,325,516 $ 394,268,352 $ 390,341,858 $ 351,189,192 $ 400,137,714 $ 488,351,239 $ 522,380,658 Program revenues
Governmental activities:

Charges for services:

General government $ 6,539,908 $ 5,082,405 $ 6,544,581 $ 6,387,743 $ 5,973,621 $ 6,237,530 $ 6,572,771 $ 5,945,470 $ 7,216,392 $ 9,458,727 Community development 6,885,850 10,378,999 16,049,727 12,106,237 17,327,298 16,611,118 19,488,129 16,094,070 10,896,436 8,011,784 Highway and streets 1,154,290 1,101,813 758,952 748,319 909,580 651,061 651,082 1,077,458 1,293,908 1,889,103 Public works 5,469,419 5,908,332 1,637,024 2,779,546 2,921,053 2,869,808 2,711,433 3,780,309 4,556,686 5,049,886 Parks and recreation 771,733 1,614,443 2,346,211 2,450,965 3,358,983 2,145,685 2,205,344 2,507,683 2,133,067 2,253,950 Public safety 3,868,346 4,847,914 5,127,433 4,502,546 11,354,045 5,849,193 8,960,454 6,993,295 8,727,941 7,572,030 Operating grants and contributions 3,630,185 5,050,771 5,802,634 6,591,435 16,838,122 12,010,918 15,352,734 19,539,354 15,527,564 16,658,746 Capital grants and contributions 1,708,602 2,117,867 3,062,292 8,831,664 5,894,717 57,825,011 12,835,899 4,174,014 6,838,419 8,827,153 Total government activities program revenues 30,028,333 36,102,544 41,328,854 44,398,455 64,577,419 104,200,324 68,777,846 60,111,653 57,190,413 59,721,379 Business-type activities:

Charges for services:

Water $ 55,992,533 $ 69,075,873 $ 74,842,451 $ 76,806,740 $ 82,796,199 $ 87,713,122 $ 86,231,116 $ 81,863,397 $ 86,165,645 $ 90,925,358 Sewer 47,859,680 49,905,078 52,799,102 57,562,619 58,168,552 63,614,677 65,367,417 64,518,164 68,673,479 71,724,921 Other enterprise funds (1) 21,130,529 22,607,585 23,223,082 24,594,413 22,951,211 23,391,632 22,982,937 28,871,874 29,425,822 36,590,220 Operating grants and contributions 14,153,568 15,975,703 17,858,762 25,668,280 21,780,920 29,310,591 1,644,338 1,263,264 844,097 2,561,079 Capital grants and contributions 4,753,223 19,617,513 7,196,698 5,198,721 546,375 8,672,597 2,452,983 3,310,141 8,018,762 7,222,643 Total business-type activities program revenues 143,889,533 177,181,752 175,920,095 189,830,773 186,243,257 212,702,619 178,678,791 179,826,840 193,127,805 209,024,221 Total primary government program revenues $ 173,917,866 $ 213,284,296 $ 217,248,949 $ 234,229,228 $ 250,820,676 $ 316,902,943 $ 247,456,637 $ 239,938,493 $ 250,318,218 $ 268,745,600 Net (Expense)/Revenue
Governmental activities $ (119,354,354) $ (139,710,171) $ (150,640,772) $ (141,848,494) $ (163,261,922) $ (115,875,261) $ (138,725,138) $ (185,832,486) $ (255,455,378) $ (273,284,740) Business-type activities 6,037,982 31,947,578 34,676,037 37,752,206 19,814,246 42,436,346 34,992,583 25,633,265 18,188,757 19,649,682 Total primary government net expense $ (113,316,372) $ (107,762,593) $ (115,964,735) $ (104,096,288) $ (143,447,676) $ (73,438,915) $ (103,732,555) $ (160,199,221) $ (237,266,621) $ (253,635,058) (continued)
(1) Effective July 1, 2021 bus fund operations seized at the City of Modesto, due to the formation of the regionalized transit agency, Stanislaus Regional Transit Authority (StanRTA). #5..
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City of Modesto
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
155
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
General Revenues and Other Changes in Net Position
Governmental activities:

Taxes:

Utility users tax $ 19,564,921 $ 20,113,023 $ 20,609,874 $ 19,803,859 $ 19,803,218 $ 20,764,694 $ 20,918,653 $ 22,363,013 $ 21,173,728 $ 23,446,327 Property taxes, levied for general purposes (1) 14,552,304 15,384,518 16,356,095 17,316,735 18,113,180 19,106,595 19,757,550 21,893,830 23,046,388 24,284,092 Transient occupancy tax 2,523,087 2,669,484 2,826,160 2,961,406 2,727,061 2,850,229 3,621,190 3,513,477 3,351,194 3,488,165 Franchise tax 6,194,733 6,431,223 6,433,869 6,762,101 6,996,152 7,117,014 7,402,770 8,569,338 7,975,509 7,661,231 Cannabis tax (2) - - - 352,208 3,201,364 5,379,402 4,022,799 3,185,203 3,408,455 3,279,809 Business license tax, levied for general purposes 11,944,291 12,255,062 13,053,199 13,715,997 13,269,468 13,899,554 15,263,225 15,306,957 16,147,087 16,334,395 Business license tax, levied for downtown improvement district 186,123 192,540 189,070 202,014 190,543 225,051 205,995 211,645 209,236 208,399 Special assessments, levied 3,168,260 3,014,768 5,715,030 4,260,281 4,622,697 4,851,750 5,578,262 4,900,860 5,436,061 5,487,466 Grants and contributions not restricted to specific programs:

Sales tax (state appropriation) 29,878,815 30,204,125 31,302,950 31,665,700 30,534,694 35,670,236 40,389,650 39,611,849 38,038,757 36,595,971 Sales tax Measure H(4) - - - - - - - 11,116,219 47,954,202 47,211,026 Motor vehicle license fee 14,548,427 15,385,069 16,206,760 17,057,003 17,977,807 18,855,971 19,881,139 21,194,886 22,537,514 23,850,552 Transportation tax funding 4,533,572 3,968,029 5,672,563 19,002,236 19,438,347 22,501,876 23,404,322 23,171,728 26,795,778 26,022,667 Community facilities district fees 3,829 1,830 274,494 8,432 16,567 14,628 - - - - Other 13,101,149 15,842,047 17,469,209 13,832,686 27,469,638 39,528,038 54,289,046 35,769,198 29,551,761 20,820,173 Unrestricted investment earnings 582,565 362,856 726,199 5,753,083 6,044,156 (287,088) (3,911,830) 3,403,539 10,274,601 23,589,103 Miscellaneous 2,440,696 515,206 818,542 3,421,783 3,660,429 2,184,677 1,643,071 923,411 1,156,335 2,212,563 Transfers (567,177) (1,750,401) (354,287) (1,675,373) 479,917 824,609 21,077,584 66,244 1,975,368 2,223,931 Total government activities 122,655,595 124,589,379 137,299,727 154,440,151 174,545,238 193,487,236 233,543,426 215,201,397 259,031,974 266,715,870 Business-type activities:

Taxes:

Property taxes, generated by and allocated to the airport 206,854 199,124 207,849 201,931 190,995 266,272 212,978 291,711 359,122 406,150 Unrestricted investment earnings 2,247,061 872,935 1,047,604 7,290,802 8,082,331 (192,489) (8,124,559) 2,562,708 13,009,651 16,712,360 Miscellaneous 1,368,761 1,316,801 1,472,809 1,528,727 1,390,820 1,686,667 1,301,658 1,707,204 1,479,611 1,897,429 Settlements - - - - - - - - 3,620,125 -
Transfers, net 567,177 1,750,401 354,287 1,675,373 (479,917) (824,609) (21,077,584) (66,244) (1,975,368) (2,223,931) Special item (3) - - - - - - (19,461,712) - - -
Total business-type activities 4,389,853 4,139,261 3,082,549 10,696,833 9,184,229 935,841 (47,149,219) 4,495,379 16,493,141 16,792,008 Total primary government $ 127,045,448 $ 128,728,640 $ 140,382,276 $ 165,136,984 $ 183,729,467 $ 194,423,077 $ 186,394,207 $ 219,696,776 $ 275,525,115 $ 283,507,878 Change in Net Position
Governmental activities $ 3,301,241 $ (15,120,792) $ (13,341,045) $ 12,591,657 $ 11,283,316 $ 77,611,975 $ 94,818,288 $ 29,368,911 $ 3,576,596 $ (6,568,870) Business-type activities 10,427,835 36,086,839 37,758,586 48,449,039 28,998,475 43,372,187 (12,156,636) 30,128,644 34,681,898 36,441,690 Total primary government $ 13,729,076 $ 20,966,047 $ 24,417,541 $ 61,040,696 $ 40,281,791 $ 120,984,162 $ 82,661,652 $ 59,497,555 $ 38,258,494 $ 29,872,820 (concluded)
(1) Due to the dissolution of the Redevelopment agencies, no tax increments will be reported on the entity-wide statements. (2) During fiscal years 2019 and 2020, Cannabis tax was previously reported as Business license tax levied for general purposes. In fiscal year 2021 financials have been updated to report Cannabis tax as such. (3) Effective July 1, 2021 bus fund operations seized at the City of Modesto, due to the formation of the regionalized transit agency, Stanislaus Regional Transit Authority (StanRTA), resulting in a loss in transfer of operations for the City. (4) Effective April 1, 2023 the City of Modesto sales tax rate increased by 1% to 8.875% approved by City residents as part of Measure H. #5..
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City of Modesto
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
156
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
General Fund
Nonspendable $ 2,647,692 $ 2,515,146 $ 2,881,523 $ 2,723,032 $ 2,503,547 $ 2,388,852 $ 2,341,984 $ 2,092,091 $ 1,976,718 $ 11,445,797 Restricted 2,092,126 1,970,622 2,674,200 2,209,485 2,137,896 3,367,488 8,157,536 8,486,061 10,088,574 1,621,755 Committed 3,000,000 15,800,000 18,397,817 18,397,817 18,397,817 18,397,817 18,397,817 18,397,817 18,397,817 18,397,817 Assigned 6,503,769 4,854,307 1,096,566 509,751 309,114 349,022 579,390 1,149,259 4,535,259 2,679,948 Unassigned(1) 12,822,134 4,509,693 1,695,476 1,742,785 2,407,575 6,395,913 9,942,398 23,445,340 48,060,252 54,106,955 Total General Fund $ 27,065,721 $ 29,649,768 $ 26,745,582 $ 25,582,870 $ 25,755,949 $ 30,899,092 $ 39,419,125 $ 53,570,568 $ 83,058,620 $ 88,252,272 All Other Governmental Funds
Nonspendable $ 86,242 $ 81,007 $ 23,816 $ 13,290 $ 101,173 $ 543,554 $ 32,734 $ 27,828 $ 274,550 $ 242,592 Restricted 80,563,574 85,531,411 91,786,367 89,210,020 104,838,269 111,141,528 114,815,329 124,953,657 170,915,534 192,209,222 Assigned 10,063,058 7,975,865 17,126,893 19,304,837 26,193,552 34,308,329 46,078,354 52,426,693 3,611,105 4,087,997 Unassigned (724,841) (3,156,679) (1,723,380) (2,809,303) (7,112,005) (4,375,860) (5,343,454) (7,072,854) (2,732,506) (5,272,139) Total all other governmental funds $ 89,988,033 $ 90,431,604 $ 107,213,696 $ 105,718,844 $ 124,020,989 $ 141,617,551 $ 155,582,963 $ 170,335,324 $ 172,068,683 $ 191,267,672 The change in total fund balance for the General Fund and other governmental funds is explained in Management's Discussion and Analysis.

Note: The City has elected to show ten years of data for this schedule.

General Fund.
(2) During fiscal year 2024-2025, Non-spendable fund balance increased as compared to prior years due to the prepayment of five (5) firetrucks and two (2) drawn aerials totaling $9.2 million.

Firetrucks and aerials are currently being built and the City expects delivery in the upcoming years. (1) Effective April 1, 2023 the City of Modesto sales tax rate increased by 1% to 8.875% approved by City residents as part of Measure H, this increase to the sales tax increased the unassigned fund balance in #5..
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City of Modesto
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
157
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Revenues
Taxes $ 54,965,459 $ 57,045,850 $ 59,468,267 $ 61,114,320 $ 64,300,986 $ 69,342,539 $ 71,192,182 $ 75,043,463 $ 75,311,597 $ 78,702,418 Licenses and permits 186,624 201,445 153,226 344,855 408,645 473,693 434,118 409,082 399,698 344,834 Intergovernmental 76,317,229 72,069,739 85,629,758 96,174,839 125,072,949 154,356,852 166,804,885 168,444,765 196,139,064 206,581,980 Charges for services 20,429,860 24,454,286 25,467,795 23,226,714 36,147,116 28,378,842 33,744,323 30,208,091 33,848,559 32,280,429 Special assessments levied 3,168,260 3,014,768 5,715,030 4,260,281 4,622,697 4,851,750 5,578,262 4,900,860 5,436,061 5,487,466 Interest and rent 1,297,734 1,402,387 1,574,347 2,219,282 2,018,446 1,320,686 2,191,466 4,113,653 5,468,374 17,462,701 Net increase (decrease) in fair value of investments 102,422 (572,616) (645,593) 1,294,543 1,728,158 (985,713) (4,317,623) (487,727) 3,807,834 4,144,945 Fines and forfeits 904,802 1,263,407 1,127,877 1,143,506 666,120 660,110 832,510 880,252 576,173 1,610,217 Donations and Contribution - - - - - 370,958 44,338 - - - Miscellaneous 2,286,597 516,844 818,542 722,662 989,858 1,392,784 1,461,307 927,525 1,102,519 2,155,068 Total Revenues 159,658,987 159,396,110 179,309,249 190,501,002 235,954,975 260,162,501 277,965,768 284,439,964 322,089,879 348,770,058 Expenditures
Current:

General government 12,414,982 11,542,131 11,837,635 12,262,797 12,028,015 12,483,217 21,110,258 15,483,071 15,228,776 17,949,967 Community development 12,453,678 13,264,050 13,234,820 13,796,154 20,945,194 26,215,559 21,429,140 26,878,953 45,142,072 48,024,246 Highways and streets 8,498,783 9,240,654 8,936,163 10,102,646 11,039,619 12,152,803 16,510,434 14,694,631 26,421,078 23,203,685 Public works 10,393,169 10,919,102 6,509,418 3,017,247 3,035,851 2,635,907 3,215,409 7,359,391 12,711,516 6,975,832 Parks and recreation 3,385,484 3,269,360 3,420,453 13,843,885 11,944,940 11,634,840 12,943,340 15,247,166 19,479,513 24,349,411 Public safety 84,022,670 86,475,891 92,341,706 97,411,634 114,540,829 110,275,920 126,649,307 139,450,451 154,658,970 173,714,370 Capital outlay 19,817,025 21,431,186 19,037,250 38,522,334 38,425,318 51,533,054 50,042,664 30,540,807 10,646,681 23,067,120 Debt service:

Principal retirement 2,345,362 2,535,093 2,849,343 2,562,498 2,734,132 2,931,077 3,362,904 4,210,255 5,598,966 5,504,467 Interest 2,043,278 2,075,202 2,114,488 1,897,384 1,996,806 1,985,927 1,913,046 1,609,215 1,280,380 1,302,044 Other 697,405 430,779 396,686 506,333 307,928 51,814 48,610 113,633 473,170 489,488 Total Expenditures 156,071,836 161,183,448 160,677,962 193,922,912 216,998,632 231,900,118 257,225,112 255,587,573 291,641,122 324,580,630 Excess of revenues over
(under) expenditures 3,587,151 (1,787,338) 18,631,287 (3,421,910) 18,956,343 28,262,383 20,740,656 28,852,391 30,448,757 24,189,428 Other Financing Sources (Uses)
Transfers in 6,960,425 5,559,720 10,707,217 21,496,638 15,292,128 14,249,431 15,993,594 17,408,119 26,873,392 27,968,242 Transfers out (10,572,346) (6,659,759) (13,568,675) (20,760,150) (17,397,619) (15,500,194) (17,677,119) (19,129,521) (29,514,905) (28,635,725) Capital leases and SBITAs 330,947 5,883,756 - - 39,204 - 3,741,926 1,772,045 4,042,674 813,201 Sale of assets 106,582 31,239 154,458 87,608 132,485 1,934 32,551 10,540 53,816 57,495 Total other financing sources (uses) (3,174,392) 4,814,956 (2,707,000) 824,096 (1,933,802) (1,248,829) 2,090,952 61,183 1,454,977 203,213 Change in fund balances 412,759 3,027,618 15,924,287 (2,597,814) 17,022,541 27,013,554 22,831,608 28,913,574 31,903,734 24,392,641 FUND BALANCES, July 1 115,647,600 117,053,754 120,081,372 133,959,278 131,301,714 149,776,938 172,516,643 195,002,088 223,905,892 255,127,303 Restatements 993,395 - (2,046,381) (59,750) 1,452,683 (4,273,849) (346,163) (9,770) (682,323) - FUND BALANCES, June 30 $117,053,754 $120,081,372 $133,959,278 $131,301,714 $149,776,938 $172,516,643 $195,002,088 $223,905,892 $255,127,303 $279,519,944 Debt service as a percentage of
noncapital expenditures (1) 3.22% 3.30% 3.50% 2.87% 2.65% 2.73% 2.55% 2.59% 2.45% 2.26% (1) This calculation includes only principal retirement and interest as debt service #5..
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City of Modesto
Revenue Capacity – Most Significant Local Revenue Source Water Utility System
(Fiscal Year Ended June 30, 2025)
158
Ten Largest Customers of Water Utility System, Year Ended June 30,2025 % of Total % of Total Water Water Sales
Customer Usage (ccf) (1) Usage Sales Revenue Revenue ($) 1) City of Modesto 405,660 1.94% 1.64% $ 1,351,889
2) Modesto City Schools 370,224 1.77% 1.44% 1,184,361
3) Stanislaus Food Products 467,344 2.23% 1.32% 1,091,072 4) Foster Farms 468,665 2.24% 1.25% 1,031,431
5) Sunopta 281,695 1.35% 0.77% 633,982
6) E & J Gallo 186,846 0.89% 0.68% 560,709
7) Stanislaus Housing Authority 142,031 0.68% 0.61% 503,748 8) Yosemite Community College 123,898 0.59% 0.47% 385,716 9) STANCO 84,543 0.40% 0.42% 347,998
10) Modesto Irrigation District 112,562 0.54% 0.41% 333,896 Total Top Ten 2,643,468 12.63% 9.00% $ 7,424,802
Residential - Flat Rates $ 1,542
Commercial, Industrial and Municipal - Metered Rates 82,364,776 Total Flat/Metered Revenues (Water Sales) (2) $ 82,366,318 The average monthly flat rate service charge for residential customers is: $ 69.44 Commercial Accounts: Meter Size
3/4" $ 26.43
1" 38.55
1 1/2" 68.85
2" 105.21
3" 220.35
4" 390.03
6" 796.05
8" 1,462.65
10" 2,311.05
12" 3,038.25
In addition to these minimum charges, commercial accounts are charged $2.11 per 100 cubic feet of water used. (1) "ccf" means "hundred cubic feet"
(2) Water sales only reflect the revenues in the Water Operating Fund and do not include revenue generated from developer fees and fleet replacement revenues.

Source: City of Modesto-Utilities Division
Water Rates and Charges as of July 1, 2024
Water Sales Revenue, Year Ended June 30,2025
#5..
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City of Modesto
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
159
Lease Finance Purchase
Fiscal Loans Revenue Notes Obligations
Year Payable Bonds Payable and Leases Total
2016 $ 500,000 $ 56,305,000 $ 2,568,000 $ 942,057 $ - $ 60,315,057 2017 500,000 54,470,000 2,335,000 6,358,720 - 63,663,720 2018 500,000 52,775,000 2,090,000 5,449,379 - 60,814,379 2019 500,000 50,915,000 1,834,000 5,002,881 - 58,251,881 2020 500,000 48,915,000 1,565,000 4,576,954 - 55,556,954 2021 500,000 46,745,000 1,282,000 4,098,878 - 52,625,878 2022 500,000 44,355,000 985,000 8,021,476 - 53,861,476
2023 500,000 41,770,000 673,000 7,018,112 1,695,502 51,656,614 2024 500,000 38,985,000 345,000 6,210,878 5,136,686 51,177,564 2025 500,000 35,995,000 - 5,339,567 3,512,616 45,347,183 Certificates Reimbursement Finance Purchase Total Percentage Fiscal Loans of Agreement Revenue Obligations Primary of Personal Per Year Payable Participation (2) related to MID (3) Bonds (1)(2)(3) and Leases(4) Total Government Income (1) Capita 2016 125,787,342 $ $ 48,330,053 $ 132,375,084 $ 33,945,516 $ - $ - $ 340,437,995 $ 400,753,052 8.21% 1,891 2017 124,280,500 47,630,552 127,484,358 31,605,936 - - 331,001,346 394,665,066 8.13% 1,859 2018 147,366,700 46,916,049 122,378,632 28,090,694 73,589 - 344,825,664 405,640,043 7.31% 1,894 2019 141,471,062 46,146,545 117,047,906 25,522,898 19,510 - 330,207,921 388,459,802 7.20% 1,807 2020 135,251,891 45,357,043 111,472,183 22,892,869 7,825 - 314,981,811 370,538,765 6.41% 1,696 2021 27,540,402 44,557,540 105,641,454 122,384,268 5,625 - 300,129,289 352,755,167 5.89% 1,613 2022 26,632,391 43,703,037 99,555,726 113,398,481 460,435 - 283,750,070 337,611,546 5.52% 1,550 2023 25,714,883 42,798,534 93,190,000 104,323,170 276,292 165,802 266,468,681 318,125,295 5.02% 1,466 2024 24,787,769 40,024,030 88,915,000 97,054,701 92,317 128,861 251,002,678 302,180,242 4.31% 1,380 2025 23,850,939 37,619,528 84,460,000 89,725,262 2,619,203 89,027 238,363,959 283,711,142 3.95% 1,291 (1) See Demographic and Economic Statistics for personal income and population data. (2) Starting in fiscal year 2016, the amounts presented include net of unamortized premiums or discounts. (3) In fiscal year 2021 the decrease in Loans Payable and increase in Revenue Bonds is due to the issuance of Revenue Bonds to pay off the State Revolving Fund loan for the tertiary treatment plant. (4) In fiscal year 2022 the City adopted GASB Statement No. 87, Leases (5) In fiscal year 2023 the City adopted GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs).

SubscriptionBased IT
Arrangements (5)
Governmental Activities
Business-Type Activities
SubscriptionBased IT
Arrangements
0 50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
400,000,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total Governmental "Total Business"
#5..
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City of Modesto
Computation of Direct and Overlapping Debt
June 30, 2025
160
Percentage Amount
Net Debt Applicable to Applicable to
Jurisdiction Outstanding (1) City of Modesto (2) City of Modesto Direct debt:

City of Modesto $45,347,183 100% $45,347,183
Overlapping General Obligation debt - school districts:

Ceres Unified School District 120,689,256 6.76% 8,157,331 Hart-Ransom Union School District 3,017,135 31.56% 952,070 Modesto Elementary School District (3) 146,253,911 77.23% 112,945,861 Modesto High School District 200,079,139 67.02% 134,102,084 Paradise Elementary School District 120,000 0.00% -
Salida Union Elementary District 12,950,000 29.31% 3,795,117 Stanislaus Union School District 45,365,000 76.20% 34,569,476 Sylvan School District 25,881,178 78.20% 20,239,772
Yosemite Community College District 229,290,110 33.12% 75,934,060 Total overlapping debt 783,645,729 390,695,771
Total direct and overlapping debt $828,992,912 $436,042,954 (1) Gross debt (Principal) outstanding less applicable amounts in debt service funds. (2) Determined by ratio of assessed valuation of property subject to taxation in overlapping portion to valuation of all property subject to taxation in the jurisdiction.
(3) Increase from Modesto Elementary 2018, Measure D & E, General Obligation Bond Series C Note: Source of data for School Districts: Stanislaus County Auditor. #5..
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City of Modesto
Computation of Legal Debt Margin
June 30, 2025
161
Net assessed value (1)(3) $ 22,874,163,771
Plus homeowners' exemption (1)(3) $ 192,554,941
Gross assessed value (1)(3) $ 23,066,718,712
Debt limit - 15% of gross assessed value (2) $ 3,460,007,807 Legal debt margin $ 3,460,007,807
Total Net Debt
Total Net Debt Applicable to the
Applicable Legal Limit as a Percentage
Fiscal Year Debt Limit to Limit Debt Margin of Debt Limit 2016 $ 2,120,160,392 $ $ - 2,120,160,392 0%
2017 2,232,042,092 - 2,232,042,092 0%
2018(4) 2,354,367,851 - 2,354,367,851 0%
2019 2,476,468,235 - 2,476,468,235 0%
2020 2,606,133,716 - 2,606,133,716 0%
2021 2,734,540,136 - 2,734,540,136 0%
2022 2,874,165,127 - 2,874,165,127 0%
2023 3,081,811,386 - 3,081,811,386 0%
2024 3,271,123,737 - 3,271,123,737 0%
2025 3,460,007,807 - 3,460,007,807 0%
(1) Source: Stanislaus County Auditor.
(2) Section 43605 California Government Code.
(3) Figures are based on Stanislaus County.
(4) Fiscal year 2018 was updated after a discussion with Stanislaus County made apparent that the wrong Tax Year was originally pulled from their records.

Note: The City has elected to show ten years worth of data for this schedule. #5..
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City of Modesto
Revenue Bond Coverage
Wastewater Revenue Bonds
Last Ten Fiscal Years
162
Net Revenue Debt
Fiscal Gross Operating Available for Service
Year Revenue (1) Expenses (2) Debt Service Requirements Coverage 2016 50,207,559 25,418,140 24,789,419 4,570,286 5.42
2017 50,907,228 25,212,214 25,695,014 11,311,098 2.27
2018 53,770,230 27,227,948 26,542,282 13,536,703 1.96
2019 62,618,527 27,144,632 35,473,895 11,958,407 2.97
2020 64,094,389 29,019,732 35,074,657 12,706,004 2.76
2021 67,012,041 29,187,910 37,824,131 12,560,711 3.01
2022 65,071,038 32,152,205 32,918,833 12,232,431 2.69
2023 68,423,045 27,468,119 40,954,926 12,246,146 3.34
2024 78,858,367 37,243,977 41,614,390 10,412,754 4.00
2025 80,224,049 45,182,314 35,041,735 10,364,998 3.38
(1) Consists of all receipts of the Sewer fund not dedicated to capital spending purposes and including charges for services, conection fees, interest and rental income.
(2) Reflects total sewer fund operating expenses less depreciation; also includes certain transfers out that are made for operational costs incurred in other funds.

0.00 1.00

2.00 3.00

4.00 5.00

6.00 2016 2017 2018 2019 2020 2021 2022 2023 2024
Coverage
#5..
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City of Modesto
Demographic and Economic Statistics
Last Ten Fiscal Years
163
Total Per Capita Stanislaus City
Fiscal City Personal Personal Unemployment County Population Year (1)(2)(3)(4) Population Income ($) Income ($) Rate (%) Population % of County 2016 211,903 $ 4,880,973,702 $ 23,034 9.10% 540,214 39.23% 2017 212,287 4,856,701,986 22,878 7.80% 541,466 39.21%
2018 214,181 5,549,643,891 25,911 7.20% 549,976 38.94%
2019 215,030 5,396,177,850 25,095 6.50% 554,108 38.81%
2020 218,440 5,779,485,520 26,458 13.30% 550,660 39.67% 2021 218,745 5,984,425,710 27,358 7.60% 552,878 39.56%
2022 217,880 6,111,969,760 28,052 5.20% 552,999 39.40%
2023 216,995 6,335,169,025 29,195 6.50% 551,275 39.36%
2024 218,989 7,017,283,516 32,044 5.20% 551,430 39.71%
2025 219,765 7,187,414,325 32,705 5.40% 551,838 39.82%
(1) The population for 2020 was previously overreported as 222,335 (2) In 2020, unemployment rates increased due to the effects of the novel coronavirus, COVID-19. (3) The population for 2021 was previoulsy overreported as 219,294 based on demographic data reported by California Department of Finance Demographic Research Unit.
(4) The fiscal year 2023-2024 unemployment rate was misstated as 7.10% ; the correct rate is 5.20%

Source: State of California, Department of Finance (population) State of California, Employment Development Department (unemployment rate) U.S. Department of Commerce, Census Bureau (income)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2016201720182019202020212022202320242025
Unemployment Rate (%)
$-
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
$7,000,000,000
$8,000,000,000
20162017
2018201920202021202220232024
2025
Total Personal Income ($)
$20,000
$22,000
$24,000
$26,000
$28,000
$30,000
$32,000
$34,000
2016
2017201820192020202120222023
20242025
Per Capita Personal Income ($)

38.00%

38.25%

38.50%

38.75%

39.00%

39.25%

39.50%

39.75%

40.00%

40.25%

40.50%
2016201720182019
202020212022202320242025
Population % of County
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City of Modesto
Principal Employers
164
2024/25 2016/17
Percentage Percentage
Number of (1) of Total City Number of (1) of Total City Employer Employees Rank Employment Employees Rank Employment Kaiser Permanente Modesto Medical Center 3,800 1 1.52%
E&J Gallo (2) 3,700 2 1.48% 2,000 4 0.87%
Modesto City School 3,200 3 1.28%
Memorial Medical Center 3,018 4 1.21% 2,056 3 0.90%
Doctors Medical 2,600 5 1.04% 2,260 2 0.99%
Modesto Junior College 1,500 6 0.60% 1,007 7 0.44%
City of Modesto 1,456 7 0.58% 1,219 6 0.53%
Stanislaus County Office of Education 1,224 8 0.49%
Save Mart Supermarkets 1,000 9 0.40%
Sylvan Union School District 900 10 0.36%
Gallo Vineyards, Inc 3,000 1 1.31%
Del Monte Foods, Inc 1,500 5 0.65%
Copperidge Winery 1,001 8 0.44%
Community Services Agency 1,000 9 0.44%
Modesto Bee 651 10 0.28%
Subtotal 22,398 8.96% 15,694 6.85%
Total Labor Force 249,500
Total City Population 219,765
Source: Stanislaus Economic Development & Workforce Alliance (1) The number of employees include both part-time and full time. (2) E. & J. Gallo Winery’s employment figures for FY 2023-2024 reflect active full-time and part-time employees within Modesto city limits only.

Prior year data included broader operations, accounting for the variance. #5..
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City of Modesto
Principal Property Taxpayers
165
2024/25 2016/17
Employer
Taxable Assessed
Value Rank
Percentage of
Total City
Taxable
Assessed Value
Taxable Assessed
Value (2) Rank
Percentage of
Total City
Taxable
Assessed Value
Pacific Gas & Electric Company $ 626,897,192 1 2.72% 327,477,112 $ 2 2.20% Frito Lay Inc $ 603,756,840 2 2.62%
E & J Gallo Winery $ 579,256,968 3 2.51% 440,613,920 $ 1 2.96% Gallo Glass Company $ 485,126,397 4 2.10% 291,025,616 $ 4 1.96% G3 Enterprises Inc $ 285,072,479 5 1.24% 124,503,970 $ 9 0.84% Hunt Wesson Foods Inc $ 235,019,499 6 1.02%
California Dairies Inc $ 200,644,877 7 0.87%
Doctors Medical Center $ 193,712,133 8 0.84% 228,032,370 $ 5 1.53% Qr Amz Turlock Propco LLC $ 161,851,232 9 0.70%
Bronco Wine Company $ 161,170,576 10 0.70%
World International (1) $ 22,040,608 3 0.15%
Excel Monte Vista LP $ 138,921,002 6 0.93%
WR Griffin Patterson LLC $ 100,198,114 8 0.67%
Beard Land IMP CO $ 100,970,754 7 0.68%
Fresno Farming LLC $ 102,771,626 10 0.69%
Subtotal $ 3,532,508,193 15.32% 1,876,555,092 $ 12.61%
Total assessed value of $ $ 23,066,718,712 $ 14,880,280,611 Source: Stanislaus Country Treasurer-Tax Collector
Note: Information based on entire Stanislaus County
(1) Formerly World International LLC; should utilize AV in combination with "taxes" paid, if so taxpayer is not in the top 10. Not top 10 in relation to ad valorem taxes.
(2) In fiscal year 2017-2018, the methodology for taxable assessed value was updated. The prior year comparison amounts are also presented using the new methodology.
#5..
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City of Modesto
Full-Time City Government Employees by Function
Last Ten Fiscal Years
166
2016 2017 2018 2019 2020 2021 2022 2023 2024 (2) 2025
Function
General Government 79.00 80.00 90.00 84.00 84.00 85.00 86.00 88.00 91.75 91.75 Community Development 67.00 70.00 81.00 72.00 76.00 69.00 73.00 74.00 91.00 95.00 Public Works and Utilities 107.00 78.00 157.00 56.00 56.00 53.00 63.00 65.00 70.00 70.00 Parks and Recreation 18.50 17.50 17.50 54.75 56.75 51.75 51.75 62.75 66.75 71.75 Public Safety 462.50 490.50 490.50 480.50 510.50 482.00 528.00 557.00 614.50 627.50 Parking 6.00 6.00 6.00 6.00 6.00 7.00 7.00 7.00 7.00 7.00 Water 128.00 134.00 101.00 135.00 136.00 127.00 126.00 127.00 135.00 135.00 Sewer 139.00 157.00 146.80 158.00 158.00 157.00 155.00 156.00 139.00 148.00 Storm Drain 8.00 8.00 2.00 8.00 8.00 8.00 6.00 6.00 6.00 6.00 Compost 61.80 58.80 48.00 57.80 57.80 58.00 63.00 68.00 72.00 75.00 Airport 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Bus(1) 24.00 24.00 16.00 24.00 24.00 24.00 - - - -
Community Center 5.00 11.00 3.00 2.00 2.00 1.00 1.00 1.00 1.00 1.00 Internal Services 82.00 79.00 56.00 81.00 81.00 79.00 108.00 108.00 110.00 122.00 Total 1,193.80 1,219.80 1,220.80 1,225.05 1,262.05 1,207.75 1,273.75 1,325.75 1,410.00 1,456.00 (1) Effective July 1, 2021, bus services at the City of Modesto seized due to the formation of the Stanislaus Regional Transit Authority (StanRTA). (2) As a result of the positive impact of Measure H funding, position allocations were approved for functions throughout the City.

Source: City of Modesto
0 100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
2016 2017 2018 2019 2020 2021 2022 2023 2024 (2) 2025

POSITION ALLOCATIONS
Internal Services
Community Center
Bus
Airport
Compost
Storm Drain
Sewer
Water
Parking
Public Safety
Parks and Recreation
Public Works and Utilities
Community Development
General Government
#5..
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City of Modesto
Operating Indicators by Function
167
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Function/Program
Public safety:

Fire:

Fire calls for service 21,135 26,288 28,444 30,341 31,415 30,741 32,618 33,305 33,825 34,375 Primary fire inspections conducted 764 1,060 1,509 2,011 2,687 1,993 2,167 1,818 1,945 2,192 Police:

Communication Center calls answered
Police calls for service 129,439 129,802 194,931 181,430 178,649 165,126 148,710 134,513 138,514 166,007 Law violations: (4)
Part I and Part II crimes 53,609 53,142 53,543 47,141 36,898 33,067 28,204 18,494 20,104 19,646 Physical arrests (adult and juvenile) 12,303 11,760 13,247 12,388 13,302 12,360 10,962 5,611 5,952 8,106 Traffic violations 11,451 15,428 16,930 17,098 16,263 13,767 7,978 6,914 7,538 13,108 Parking violations (12) 6,139 10,841 9,414 7,443 3,781 477 429 1,020 1,010 1,813 Public works
Streets:

Street resurfacing (Slurry Seal lane miles) 4 12 4 8 1 123 118 160 195 177 Potholes repaired (Total # of repairs) (13) 24,059 8,745 25,004 36,709 2,831 21,863 9,230 16,672 11,944 16,990 Crack sealing (lane miles) 37 29 48 29 23 43 32 34 36 49 Airport:

Number of tenant aircraft 173 162 153 167 160 164 156 165 159 157 Number of hangars 119 119 119 119 119 119 119 119 119 119 Number of runways 2 2 2 2 2 2 2 2 2 2
Annual fuel consumption in gallons 443,272 582,602 580,383 631,891 511,928 540,226 647,631 683,330 761,410 689,325 Bus service:(3)
Number of buses 60 59 57 61 61 69 - - - -
Number of routes 21 21 17 17 17 19 - - - -
Total route miles 362 362 245 245 245 338 - - - -
Average weekday number of passengers 12,441 10,523 9,354 8,869 7,475 6,686 - - - - Total number of passengers carried 3,664,689 3,108,307 2,762,922 2,589,049 2,182,079 1,987,698 - - - - Solid waste:

Recyclables processed (tons per year)(6)(7) 56,493 71,155 62,701 60,947 62,617 60,332 17,008 3,409 9,384 9,564 Organic Waste (8) - - - - - - 29,111 20,116 35,400 31,710 Green Waste(2) 58,730 62,859 64,873 66,017 82,866 46,373 14,691 18,932 14,153 16,698 Commercial food waste(5) 845 914 1,550 1,145 1,192 2,783 3,368 - - - Waste tires 4,497 4,931 4,285 4,320 5,089 4,501 4,883 6,236 3,597 4,511 Community development
Building safety & NPU:

Permits issued 4,939 4,973 5,033 4,335 4,146 4,808 4,690 4,790 4,809 4,585 Estimated cost of construction (10) $ 92,768,634 $ 118,527,812 $ 172,595,385 $ 112,433,029 $ 170,765,326 $ 201,953,969 $ 216,000,327 $ 173,801,514 $ 260,927,659 $ 241,208,491 Building Inspections made (11) 23,187 36,158 42,891 39,086 34,218 34,730 21,064 17,720 25,038 34,390 Traffic electrical:

Street lights 13,764 13,764 13,764 13,764 13,764 13,764 13,764 13,764 13,923 13,923 Traffic signals 151 153 155 155 156 156 156 160 159 159 Lighted ped walks 28 28 24 26 26 26 26 34 40 42
Beacons 11 11 3 4 4 4 4 15 16 16
Four way flashers 10 10 5 3 3 3 3 6 8 9
School flashers 23 24 16 13 14 14 14 44 62 81
CCTV 41 41 30 24 24 24 24 24 10 10
Hubs 6 6 2 6 6 6 6 8 8 17
Culture and recreation:

Recreation class participants(1) (9) g y ( g ) 150,091 150,500 154,000 160,656 116,131 28,240 58,426 88,103 132,313 134,735 (1) Fiscal year 2020-2021 Recreation class participants had decreased due the COVID-19 outbreak and classes were suspended. (2) Fiscal year 2021-2022 Yard waste is to be changed to Green Waste and was split into Organic Waste and Green Waste. This was the first year for recording Organic Waste. Fiscal year 2022-2023 Green waste increased due to rain fall. (3) Effective July 1, 2021, the operations of the Bus services seized as the newly regional transit agency, Stanislaus Regional Transit Agency (StanRTA) formed and took over the public transit services within some areas of Stanislaus County. (5) This was a temporary program to resturants and food producers separate from organics collection. Recent State Legislation has removed distinction between food waste and other organic waste. (6) Fiscal year 2022-2023 recycling numbers decreased due to the inaccurate reporting from the haulers and adding a blue recycling container to residents. (7) Beginning 23/24 - data includes hauler and City staff collected recycling (8) Organic waste data includes yard, food, and paper waste and is collected by haulers from residential and commercial customers. (9) Recreational swimming, outreach tabling events, department events and parade, and senior center programming attendance are the main contributing factors. The parade attendance was in correctly reported in FY23 and should have been 12,000 higher. (10) Increase for fiscal year 2023-2024 is mainly due to an increase in labor and materials costs. (11) The increase in inspections is due to larger projects like multifamily developments, proactive follow-up on inactive permits, and the continued expansion of the Rental Housing Safety Program, which now includes daily inspections by two dedicated staff. (12) The increase in parking violations is attributed to a higher number of Community Service Officer's (CSOs), which has expanded enforcement capacity and coverage. (13) The year-over-year increase in pothole repairs is attributed to fluctuations in available manpower, equipment, and volume of service requests from both internal departments and the public.

Additionally, pothole patching is often conducted as part of slurry seal preparation, contributing to the overall repair count.

Source: City of Modesto - Various Departments
(4) Effective January 1, 2021, every law enforcement is now required to use the National Incident Based Reporting System (NIBRS), which has a focus on whether the crime was attempted or completed. Under prior reporting requirements, attempted crimes and completed crimes were reported as crimes. #5..
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City of Modesto
Capital Asset Statistics by Function/Program
168
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Function/Program
Public safety:

Fire stations 11 11 11 11 11 11 11 11 11 11
Police stations 1 1 1 1 1 1 1 1 1 1
Police patrol units 105 104 104 100 105 100 105 105 103 106 Public works
Streets:

Miles of streets (1) 692 692 692 693 693 694 700 700 700 701 Water:

Miles of water mains 887 887 908 908 914 916 914 914 914 918 Fire hydrants 7,845 7,859 7,921 7,974 8,026 8,043 8,077 8,262 8,435 8,506 Storage capacity (gallons) 18,300,000 18,300,000 18,300,000 22,300,000 22,300,000 22,550,000 22,545,000 22,545,000 22,545,000 22,545,000 Wastewater:

Miles of sanitary sewers 639 655 656 656 656 657 650 650 650 649 Miles of storm sewers 183 170 170 170 170 170 165 165 165 164 Number of treatment plants (2) 2 2 2 2 2 2 2 2 2 2
Treatment capacity (millions of gallons) (3) 70 19 19 19 19 19 19 19 19 19 Community services:

City parks 76 76 76 76 76 76 76 76 75 75
City parks acreage 1,240 1,240 1,240 1,240 1,240 1,246 1,246 1,249 1,245 1,245 Playgrounds (4) 58 58 58 58 54 55 55 55 54 54
City trails 6 6 6 6 6 9 9 9 9 9
City trails miles 15 15 16 16 17 17 17 17 17 17
Regional park acreage 375 375 375 375 375 653 653 634 641 641 Regional park facilities:

Golf courses (18 holes) 2 2 2 2 2 2 2 2 2 2
Golf courses (9 holes)(5) 1 1 1 1 1 1 1 - - -
Clubhouse and banquet facility(6)(6) 8 8 8 8 8 8 8 4 4 4 Historic house (3) 3 3 3 3 3 3 3 3 3 3
Museums(7) - - - - - - - 1 1 1
Community gardens 2 1 1 1 1 1 1 1 1 1
Community centers(8) 7 7 7 7 7 7 7 4 4 4
Senior centers 1 1 1 1 1 1 1 1 1 1
Sports centers 1 1 1 1 1 1 1 1 1 1
Performing arts centers 1 1 1 1 1 1 1 1 1 1
Swimming pools 4 1 1 1 1 1 1 1 1 1
Tennis courts 37 37 37 37 37 37 37 33 33 33
Pickleball courts - - - - - - - 12 12 12
Baseball/softball diamonds 24 24 24 24 24 29 29 29 28 28 Soccer/football fields 29 29 29 29 29 31 31 31 31 31
Splash play in Existing parks 10 10 10 9 9 9 9 9 9 9
(1) Information reported from the City's GIS system.
(2) The City has both a Primary and a Secondary treatment facility. (3) In fiscal year 2016-2017 the City implemented a new process and permit. Previous permit was 70 million gallons daily seasonal Oct. through May. Current permit is 19 million gallons daily year round.
(4) In fiscal year 2019-2020 the number of playgrounds was reduced as playgrounds were removed to rebuild. (5) The City closed Muni golf course in fiscal year 2022-2023. (6) The American Legion Hall and Little Legion Hall were damaged due to a fire in fiscal year 2022-2023. There are no plans to repair or use. (7) In fiscal year 2022-2023 the McHenry Museum was recategorized from banquet facility to museum. (8) In fiscal year 2022-2023 the methodology was changed leading to fewer facilities recoginzed as community centers.

Source: City of Modesto - Various Departments
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CONTINUING DISCLOSURE TAB
#5..
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#5..
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CONTINUING DISCLOSURE SECTION
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City of Modesto
Continuing Disclosure Section
169
This part of the Annual Comprehensive Financial Report provides information in order to comply with the City’s contractual commitment established by certain continuing disclosure undertaking of the City, entered into in accordance with Securities and Exchange Commission Rule 15c2-12 (the “Rule”) for the City’s bond obligations listed below. In contrast to the financial section, the continuing disclosure section information is not subject to independent audit.

1. Wastewater Revenue Refunding Bonds, Series 2018A

2. Wastewater Revenue Refunding Bonds, Series 2020A

3. Wastewater Revenue Refunding Bonds, Series 2020B

4. Water Revenue Refinancing Certificates of Participation, 2008 Series A

5. Modesto Irrigation District Financing Authority Domestic Water Project Revenue Bonds, Series 2007F #5..
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City of Modesto
Continuing Disclosure Requirements Information
Fiscal Year Ended June 30, 2025
170
Connection charge information: The Sewer Enterprise imposes connection fees on an on-time basis to new users of the sewer system and to users who significantly expand their usage. The fees have three components:

Capacity charge: $2,643 per Equivalent Dwelling Unit for residential units. Commercial and industrial property charged based on type of business.

Sub-trunk sewer charge: $645 per acre
Connection (lateral) charge: $33 per linear foot of lot frontage adjacent to the sewer line.

Customer Base by Type of Account
Number of % of Total % of Sewer Fee
Category Accounts Accounts Operating Revenue
Residential 59,499 94.9% 59.48%
Commercial 3,104 5.0% 17.18%
Industrial 50 0.1% 23.34%
Total 62,653 100.00% 100.00%
Ten Largest Users of Sewer Facilities, Year Ended June 30,2025 Sewer Fee % of Sewer Fee
User Revenue Operating Revenue
1) Foster Farms $ 2,944,610 4.47%
2) E & J Gallo $ 2,869,240 4.36%
3) Stanislaus Food Products $ 2,786,816 4.23%
4) City of Ceres $ 1,706,494 2.59%
5) Frito Lay, Inc $ 1,302,704 1.98%
6) Sunopta $ 1,264,318 1.92%
7) Del Monte Foods $ 860,563 1.31%
8) Nestle Food Company $ 845,221 1.28%
9) Modesto City Schools $ 394,863 0.60%
10) Memorial Hospital $ 356,618 0.54%
Total (Top Ten Customers) $ 15,331,447 23.28%
Total (All Customers) $ 65,862,904
The average single-family residence monthly sewer charge is: $46.26 Charge
Commercial Group Per 1,000 Gallons Fixed Charge
Group 1 (no food, just toilets or working facilities) $4.12 Group 2 (commercial laundromats, service stations, hotels without food) $5.41 Group 3 (industrial laundromats, hotels with food) $6.74 Group 4 (restaurants, bakeries, auto steam, markets) $8.34 Industrial users pay a minimum account charge of $5.22 with additional charges of: $4006.12 per million gallons of flow, $298.65 per 1,000 pounds of biochemical oxygen demand (BOD), and $556.83 per 1,000 pounds of Total Suspended Solids (TSS).

Industrial users on the Cannery Segregation line pay a minimum account charge of $5.22 with additional charges of: $2,996.74 per million gallons of flow, $19.98 per 1,000 pounds of biochemical oxygen demand (BOD), and $39.36 per 1,000 pounds of Tota Suspended Solids (TSS) while in production during the months of July, August and September.

The Annual Budget of the City of Modesto is available from the City of Modesto Finance Department.

Updates of other required disclosures may be found elsewhere in this report, as follows:

Statement of Revenues, Expenses and Changes in Fund Net Position Page 25 Principal Amount of Bonds and Other Parity Debt Page 50-53 (Note III-C) Historical Debt Service Coverage Page 147
(continued)
Wastewater Revenue Refunding Bonds, Series 2018 A, and
Wastewater Revenue Refunding Bonds, Series 2020 A & B
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Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2025
171
Residential, commercial and industrial rates have increased according to the following approved schedule.

Fiscal Year Percent Increase
2015-16 3.0%
2016-17 6.0%
2017-18 6.0%
2018-19 6.0%
2019-20 6.0%
2020-21 4.0%
2021-22 4.0%
2022-23 3.5%
2023-24 3.5%
2024-25 3.5%
Comparative Monthly Wastewater Service Charges.

The City's residential charges as of July 1, 2024 are set forth below with a comparison to other Central Valley and Northern California cities.

City
Monthly
Residential
Charge
Fresno $ 25.75
Lodi 50.18
Modesto 46.26
Stockton (1) 57.36
Tracy 58.14
Turlock 47.25

WASTEWATER COMPARISON INFORMATION
Ten Year History of Rate Increases

WASTEWATER SYSTEM

CITY OF MODESTO

WASTEWATER SYSTEM
Monthly Sewer Charge Comparison
Residential Service
As of July 1, 2024
(1) The monthly sewer charge for residential services was innacuratelty represented on fiscal year 2023-2024 ACFR for the city of Stockton. The correct number should have been $55.00. (2) The monthly sewer charge for residential services was innacuartely represented on fiscal year 2023-2024 ACFR for the city of Turlock. The correct number should have been $45.47. #5..
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Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2025
172
Comparative Monthly Wastewater Service Charges.
(1) Connection fees are based on the size of the lot & location. (2) Connection fees are based on the size of the water meter.

As of July 1, 2024
Monthly Sewer Charge
Comparison
Residential Service
Wastewater Connection
Fees Comparison
$25.75
2,332.34
2,269.00
2,461.00
City
Fresno (1)
Lodi (2)
Modesto
Stockton
Tracy
Turlock

57.36 58.14

47.25 The City's residential charges as of July 1, 2024 are set forth below with a comparison to other Central Valley and Northern California cities.

WASTEWATER SYSTEM
Sewer Charge Comparisons

CITY OF MODESTO
2,119.00
3,655.00
2,643.00

50.18 46.26
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Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2025
173
Water Revenue Refinancing Certificates of Participation, 2008 Series A Reserve Account Requirement as of June 30, 2025 $ 4,011,410 Surety Policy Value: 2,082,513
Balance in Parity Reserve Account as of June 30, 2025 2,496,142 Shortfall/(Excess) Reserve Coverage: $ (567,245)
Ten Largest Customers of Water Utility System, Year Ended June 30, 2025 % of Total Water Sales % of Total Water
Customer Business Type Usage (ccf ) (1) Usage Revenue ($) Sales Revenue 1) City of Modesto Local Government 405,660 1.94% 1,351,889 $ 1.64% 2) Modesto City Schools Education 370,224 1.77% 1,184,361 1.44% 3) Stanislaus Foods Products Cannery 467,344 2.23% 1,091,072 1.32% 4) Foster Farms Dairy Processor 468,665 2.24% 1,031,431 1.25% 5) Sunopta Cannery 281,695 1.35% 633,982 0.77%
6) E & J Gallo Processor 186,846 0.89% 560,709 0.68%
7) Stanislaus Housing Authority Housing Authority 142,031 0.68% 503,748 0.61% 8) Yosemite Community College Education 123,898 0.59% 385,716 0.47% 9) STANCO Local Government 84,543 0.40% 347,998 0.42%
10) Modesto Irrigation District Power Company 112,562 0.54% 333,896 0.41% Total Top Ten 2,643,468 12.63% 7,424,802 $ 9.01%
Total Flat/Metered Revenues (Water Sales) $ 82,366,318
(1) Grover Landscaping maintains City parks
(2) "ccf" means "hundred cubic feet"
Water Sales Revenue, Year Ended June 30, 2025
Residential - flat rates $ 1,542
Commercial, industrial and municipal - metered rates $ 82,364,776 Total Water Sales $ 82,366,318
The average monthly flat rate service charge for residential customers is:
$ 69.44
Meter Size
3/4" $ 26.43
1" 38.55
1 1/2" 68.85
2" 105.21
3" 220.35
4" 390.03
6" 796.05
8" 1,462.65
10" 2,311.05
12" 3,038.25
In addition to these minimum charges, commercial accounts are charged $2.11 per 100 cubic feet of water used.

The Annual Budget of the City of Modesto is available from the City of Modesto Finance Department. (1)
Current Water Rates as of July 1, 2024 - Commercial Accounts Water sales only reflect the revenues in the Water Operating Fund and do not include revenue generated from developer fees and fleet replacement revenues.
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Continuing Disclosure Requirements Information (Continued) City Water – Historical Debt Service Coverage
Last Ten Fiscal Years
174
2016 (6) 2017 2018 (10) 2019 (11) 2020(13) 2021 2022 (14)(15) 2023 2024 2025 Charges for services $ 51,489,077 $ 63,253,114 $ 68,928,504 $ 71,952,653 $ 76,996,091 $ 80,908,193 $ 79,318,075 $ 76,795,929 $ 80,556,147 $ 85,032,612 Connection charges 935,987 1,435,654 1,661,151 1,081,913 1,904,330 1,559,621 1,194,261 1,337,878 1,731,616 1,599,147 Refunds, damages & recoveries 511,063 57,533 (121,929) 95,591 92,786 (801,155) (4,141,774) 53,974 80,714 87,251 Interest and rental income 535,823 574,899 689,500 999,269 1,086,126 864,989 971,868 890,334 5,469,458 6,678,745 Service credits 3,026,911 3,304,911 3,408,238 3,309,703 3,576,012 3,654,881 3,405,150 2,797,201 3,528,249 4,127,355 Miscellaneous (9) 2,979,500 231,134 1,117,571 1,120,960 1,243,999 1,738,084 1,995,136 1,182,927 1,211,317 1,922,860 Total gross operating revenues $ 59,478,361 $ 68,857,245 $ 75,683,035 $ 78,560,089 $ 84,899,344 $ 87,924,613 $ 82,742,716 $ 83,058,243 $ 92,577,501 $ 99,447,970 Operating expenses (1) (4) $ 38,722,320 $ 35,508,887 $ 35,685,576 $ 38,806,127 $ 39,167,326 $ 42,088,154 $ 47,165,967 $ 47,741,404 $ 53,146,114 $ 60,293,176 Operating transfers (2)(12) 765,954 765,000 1,239,943 3,129,583 2,241,135 3,283,246 689,875 799,091 1,197,857 810,992 Total operating expenses (2) $ 39,488,274 $ 36,273,887 $ 36,925,519 $ 41,935,710 $ 41,408,461 $ 45,371,400 $ 47,855,842 $ 48,540,495 $ 54,343,971 $ 61,104,168 Net operating revenues $ 19,990,087 $ 32,583,358 $ 38,757,516 $ 36,624,379 $ 43,490,883 $ 42,553,213 $ 34,886,874 $ 34,517,748 $ 38,233,530 $ 38,343,802 2008 Revenue Certificates of Participation $ 2,313,857 $ 2,468,593 $ 2,268,298 $ 2,121,410 $ 2,309,687 $ 2,130,448 $ 2,138,850 $ 2,124,040 $ 3,632,022 $ 3,698,625 MID Treatment & Delivery Agreement (3) 10,203,352 10,202,108 10,208,384 10,214,947 10,213,274 10,709,280 9,921,714 9,115,777 8,525,231 8,572,575 CDWR Loan 131,322 - - - - - - - - -
ARRA Grant 36,089 36,084 36,080 37,123 39,350 37,540 37,343 37,756 37,443 38,920 Total debt service $ 12,684,620 $ 12,706,785 $ 12,512,762 $ 12,373,480 $ 12,562,311 $ 12,877,268 $ 12,097,907 $ 11,277,573 $ 12,194,696 $ 12,310,120 Debt service coverage (7) (8) 1.58 2.56 3.10 2.96 3.46 3.30 2.88 3.06 3.14 3.11 (1) Reduced fiscal year 2015- 2016 Operating Expenses as the $131,322 CDWR Loan payment (along with 2 dollars attributed to rounding error) were counted both in Operating Expense and in the debt service section.
(2) Total operating expenses excludes depreciation and amortization, as well as the debt service component under the Treatment and Delivery Agreement. fiscal year 2015-2016 Total operating expense reduced from $39,619,604 to $39,488,274 since the Operating expenses was adjusted (see note 2) (3) Increased fiscal year 2014-2015 2008 Revenue Certificates of Participation from $2,501,891 to $2,531,179 to account for actual expenditure instead of the internal transfer. (5) The sale of the Waterford-Hickman Water System for $2.6 million had a significant impact to the Water Fund debt service calculation. Without the sale of this system Water Fund debt service coverage would have been 1.35. Reduced fiscal year 2015-2016 Operating Expenses as the $131,322 Del Estate Water Company loan payment (along with $2 dollars attributed to rounding error) were counted both in Operating Expense and in the Debt service section.
(6) Del Estate Water Company (CDWR) loan payment for fiscal year 2014-2015 was reduced from $264,719 to $262,692 and fiscal year 2015-2016 reduced from $264,719 to $131,322. Loan repayment was completed in fiscal year 2015-2016.
(7) Fiscal year 2015-2016 Debt service coverage increased from 1.55 to 1.57 and fiscal year 2014-2015 Debt service coverage increased from 1.45 to 1.96 after above stated changes were made. (8) The financial figures reported only reflect net operating revenues in the Water Operating Fund. (9) Fiscal year 2017-2018 Miscellaneous revenues include $1,048,863 of one-time transfer as result of the dissolution of the Central Stores Fund. (10) Fiscal year 2018-2019 Operating Transfers of $3,129,583 includes $2,300,000 in one-time loan to fund 4893 (Carpenter Road Landfill) to be repaid over 6 years. (11) Fiscal year 2019-2020 Miscellaneous revenues include the first, interest-only payment of the fiscal year 2018-2019 Loan from the Water fund to the Carpenter Road Landfill Fund. year 2018-2019.
(13) Fiscal year 2020-2021, Negative refunds, damages, and recoveries is due to large negative change in Fair Market Value. Operating Transfers include a new $1,540,000 loan to the Carpenter Road Landfill. (14) Fiscal year 2021-2022 Negative refunds, damages, and recoveries is due to large negative change in Fair Market Value. Miscellaneous Revenues includes repayment of the Carpenter Road Landfill loan. (15) Fiscal year 2021-2022 MID Treatment & Delivery Agreement was previously reported incorrectly as $10,400,158. This was updated in Fiscal year 2022-2023.

Source: City of Modesto
(4) Reduced fiscal year 2014-2015 Operating expenses from $40,349,338 to $33,773,198. (12) Fiscal year 2019-2020 Operating Transfers of $2,241,135 include $900,000 in one-time loan to fund 4893 (Carpenter Road Landfill). This $900,000 is in addition to the $2,300,000 that was borrowed in fiscal

CITY WATER UTILITY SYSTEM
Historical Debt Service Coverage
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Continuing Disclosure Requirements Information (Continued) City Water Utility System
Projected Operating Results
175
Fiscal Year
Projected 2026
Fiscal Year
Projected 2027
Fiscal Year
Projected 2028
Fiscal Year
Projected 2029
Fiscal Year
Projected 2030
Charges for services $ 86,075,250 $ 89,948,636 $ 93,996,325 $ 96,064,703 $ 96,064,703 Connection charges 1,303,560 1,329,631 1,356,224 1,383,348 1,411,015 Refunds, damages & recoveries 11,730 11,965 12,204 12,448 12,697 Interest and rental income 1,545,000 1,591,350 1,639,091 1,688,263 1,738,911 Service credits 4,741,378 4,836,206 4,932,930 5,031,588 5,132,220 Miscellaneous 59,078 60,259 61,464 62,694 63,947
6-year Loan Repayment from fund 4893
(Carpenter Road Landfill) 663,710 649,140 634,570 634,570 634,570 Total gross operating revenues $ 94,399,706 $ 98,427,187 $ 102,632,808 $ 104,877,614 $ 105,058,063 Operating expenses $ 66,131,723 $ 69,438,309 $ 72,910,224 $ 76,555,736 $ 80,383,522 Operating transfers 765,000 765,000 765,000 765,000 765,000 Total operating expenses $ 66,896,723 $ 70,203,309 $ 73,675,224 $ 77,320,736 $ 81,148,522 Net operating revenues $ 27,502,983 $ 28,223,878 $ 28,957,584 $ 27,556,878 $ 23,909,541 2008 Revenue Certificates of Participation $ 3,828,547 $ 3,375,765 $ 3,424,772 $ 3,424,772 $ 3,424,772 MID Treatment & Delivery Agreement 8,405,500 8,409,206 8,409,207 8,409,208 8,409,209 ARRA Grant 39,117 39,117 39,117 36,600 36,600
Total debt service $ 12,273,164 $ 11,824,088 $ 11,873,096 $ 11,870,580 $ 11,870,581 Debt service coverage 2.24 2.39 2.44 2.32 2.01
Source: City of Modesto.

The City has prepared the following table of projections of operating results of the Water Utility System for the five fiscal years 2026-30. The projected amounts set forth below are based on certain assumptions made by the City. To the extent that actual future conditions vary from those assumed in preparing the projections, the actual results will vary. #5..
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Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2025
176
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Number of Service Accounts 72,825.00 73,135.00 73,423.00 73,591.00 73,897.00 74,094.00 74,356.00 74,527.00 74,776.00 74,795.00 Total Water Production (MG) 15,155.00 15,319.48 16,782.00 16,059.00 17,141.56 17,569.00 17,017.93 15,655.52 15,610.17 16,679.55 Capacity (MGD) (1) 175.20 175.20 168.00 168.20 170.30 135.00 130.00 135.00 135.00 135.00 Peak Daily Distribution (MGD) 74.70 84.25 77.50 83.50 75.14 75.90 73.63 69.99 64.78 72.61 Average Daily Distribution (MGD) 41.52 41.97 45.98 44.00 46.96 48.13 46.62 42.89 42.77 45.70 "MG" means million gallons.
"MGD" means million gallons daily.
(1) Capacity for fiscal year 2020- 2021 was reported using source (wells) and surface water capacity; will be reported this way moving forward. 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Well Water (BG) 9.22 8.63 9.82 5.45 7.71 7.12 8.81 7.68 7.56 7.82

5.02 5.86 6.23 9.86 8.76 9.56 8.21 7.98 8.05 8.86
Total (BG) 14.24 14.49 16.05 15.31 16.47 16.68 17.02 15.66 15.61 16.68 "BG" means billion gallons.

City
Fresno (1)
Lodi (2)
Modesto
Stockton (1)
Tracy (2)
Turlock (1)
(1) Water is metered. Charge varies per meter size.
(2) Water is both metered and flat rate. Charge varies per meter and dwelling size.

CITY WATER UTILITY SYSTEM
Average Monthly Water Rates Comparison
Flat Rate (1" Service)

36.54 CITY WATER UTILITY SYSTEM STATISTICS
(Calendar Years 2016 through 2025)
Surface Water (BG)

CITY WATER UTILITY SYSTEM
Service Area Total Production
(Fiscal Years 2016 through 2025)

43.87 As of July 1, 2024
Flat Rate Typical Home
$17.90

37.03 30.90

69.44 #5..
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Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2025
177
The following table sets forth connection fees for all users except multi-family units by meter size for fiscal year 5/8" meter** $ 2,202
1" meter 3,671
1-1/2" meter 7,341
2" meter 11,746
3" meter 25,695
4" meter 46,250
6" meter 95,437
8" meter 176,191
10" meter 278,970
12" meter 367,065
**NOTE- Single-family residences qualify for the 5/8" connection fee only under the following conditions:

Single story, single-family residences on a lot of 4,000 square feet or less.

Two-story single family residence on a lot of 4,000 square feet or less, provided the request for such a service accompanied by a report from a licensed professional engineer that certifies that the 5/8" service is adequate to meet the needs of the proposed dwelling.

A 5/8" "service" shall not be allowed for a single-family dwellings of greater than 2 stories on lots less than 4,000 square feet.

Meter Size Connection Fees
2024-2025:

CITY WATER UTILITY SYSTEM
Connection Fees Comparison
Except Multiple Family Units
(Fiscal Year 2024-2025)
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Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2025
178
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 (2)
Revenues
Residential (Flat Rates) $7,320,096 $6,767,446 $5,506,216 $4,385,017 $3,450,868 $2,533,090 $1,414,328 $299,865 $131,904 $1,542 Commercial, Industrial and
Municipal (Metered) 40,242,493 51,960,729 60,113,019 62,933,627 70,175,513 76,169,202 75,068,664 74,488,920 76,370,026 82,364,776 Total Water Sales $47,562,589 $58,728,175 $65,619,235 $67,318,644 $73,626,381 $78,702,292 $76,482,992 $74,788,785 $76,501,930 $82,366,318 Lot Size 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0-5,000 sq. ft. lot $40.81 $47.38 $48.77 $52.97 $56.11 $59.48 $60.66 $60.66 $60.66 $60.66 5,001-7,000 sq. ft. lot 46.38 54.72 56.23 60.89 64.23 68.08 69.44 69.44 69.44 69.44 7,001-11,000 sq. ft. lot 55.04 69.22 70.98 76.52 80.26 85.08 86.78 86.78 86.78 86.78 11,001-17,000 sq. ft. lot 58.43 90.88 93.00 99.87 104.22 110.47 112.68 112.68 112.68 112.68 over 17,000 sq. ft. lot 68.69 101.80 104.10 111.65 116.3 123.28 125.75 125.75 125.75 125.75 (1) Single family residential properties with water meters that are read for billing purposes, are charged the meter water rate. (2) In FY 2025, the City of Modesto completed the conversion to metered billing for the whole City. All residential accounts are now metered.

NOTE: Additional financial information available at www.modestogov.com (Year Ended June 30, 2025)
Sale of Water
The table below sets forth the adopted single family residential flat rates effective each fiscal year

CITY WATER UTILITY SYSTEM
Monthly Single Family Residential Flat Water Rates (1)
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Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2025
179

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Volume-based Rate ($/hcf) $ 1.40 $ 1.79 $ 1.82 $ 1.93 $ 1.98 $ 1.98 $ 2.02 $ 2.02 $ 2.11 $ 2.20 Fixed Monthly Meter Charge
(in addition to volume-based charges)
5/8"-3/4" meter $ 15.03 $ 20.79 $ 21.47 $ 23.34 $ 24.94 $ 24.94 $ 25.44 $ 25.44 $ 26.43 $ 27.62 1" meter 21.33 29.30 30.39 33.48 36.11 36.11 36.83 36.83 38.55 40.28 1-1/2" meter 36.90 50.58 52.71 58.83 64.04 64.04 65.32 65.32 68.85 71.95 2" meter 55.68 76.11 79.49 89.25 97.55 97.55 99.50 99.50 105.21 109.94 3" meter 105.80 156.98 164.30 185.59 203.66 203.66 207.73 207.73 220.35 230.27 4" meter 162.13 276.14 289.28 327.55 360.04 360.04 367.24 367.24 390.03 407.58 6" meter 318.47 561.28 588.33 667.24 734.22 734.22 748.90 748.90 796.05 831.87 8" meter 506.20 1,029.42 1,079.32 1,224.95 1,348.56 1,348.56 1,375.53 1,375.53 1,462.65 1,528.47 10" meter 725.26 1,625.23 1,704.21 1,934.76 2,130.44 2,130.44 2,173.05 2,173.05 2,311.05 2,415.05 12" meter 1,350.92 2,135.93 2,239.84 2,543.16 2,800.62 2,800.62 2,856.63 2,856.63 3,038.25 3,174.97 Note: Additional financial information is available at www.modestogov.com Commercial Accounts

CITY WATER UTILITY SYSTEM
Water Rates and Charges
The following table sets forth the adopted monthly service charge and volume charge for commercial accounts through fiscal year 2024-25. #5..
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Continuing Disclosure Requirements Information (Continued) Fiscal Year Ended June 30, 2025
180
Bonds Moody's Rating Standard & Poor's Rating Fitch Rating 2008 Lease Revenue Bonds Aa3 A+/A-1 AA+
2008 Water Certificates of Participation Aa2 AA/A-1
Wastewater Revenue Bonds, Series 2018A AA
Wastewater Revenue Bonds, Series 2020A AA
Wastewater Revenue Bonds, Series 2020B AA
Sources: www.moodys.com
www.standardandpoors.com
www.Fitchratings.com

BOND RATINGS
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Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit
For the Year Ended June 30, 2025
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Annual Appropriations Limit
Table of Contents
PAGE
Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit 1
Annual Appropriations Limit 4
Notes to Annual Appropriations Limit 5
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1 Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit
Honorable Members of the City Council
City of Modesto, California
We have performed the procedures enumerated below to the accompanying Annual Appropriations Limit of the City of Modesto, California (the City) for the year ended June 30, 2025. The City’s management is responsible for the calculation of the Annual Appropriations Limit.

The City’s management has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. These procedures, which were suggested by the League of California Cities and presented in the publication entitled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution, were performed solely to assist you in meeting the requirements. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
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2 The procedures performed and the associated findings were as follows:

1. We obtained the City’s calculation of the Annual Appropriations Limit for the year ended June 30, 2025 and compared the limit and annual adjustment factors included in that calculation to the limit and annual adjustment factors that were adopted by the resolution of the City Council. We also compared the population and inflation options included in the aforementioned calculation to those that were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of this procedure.

2. For the accompanying Annual Appropriations Limit, we added last year's limit to the total adjustments and compared the resulting amount to this year's limit. We also recalculated the adjustment factor and the adjustment for inflation and population and compared the results with the City’s calculation.

Finding: No exceptions were noted as a result of this procedure.

3. We compared the prior year appropriations limit presented in the accompanying Annual Appropriations Limit to the prior year appropriations limit adopted by the City Council for the prior year.

Finding: No exceptions were noted as a result of this procedure. #5..
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3 We were engaged by the City’s management to perform this agreed-upon procedures engagement and conducted our engagement in accordance with the attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to, and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Annual Appropriations Limit. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

However, this report is a matter of public record, and its distribution is not limited.

Glendale, California
November 12, 2025
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Unaudited; see Independent Accountant’s Report on Agreed-Upon Procedures Applied to Annual Appropriations Limit and Accompanying Notes to Annual Appropriations Limit. 4 City of Modesto
Annual Appropriations Limit
For the Year Ended June 30, 2025
Appropriations limit, fiscal year 2024 $581,968,829
Adjustment factors:

Inflation factor, as adopted 1.0362
Population factor, as adopted 1.0052
Combined factor for fiscal year 2025 1.0416
Annual adjustment in dollars 24,209,904
Appropriations limit, fiscal year 2025, as adopted $606,178,733 #5..
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5 City of Modesto
Notes to Annual Appropriations Limit
Year Ended June 30, 2025
NOTE 1 PURPOSE OF LIMITED PROCEDURES REVIEW
Under Article XIII-B of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIII-B, the annual calculation of the appropriations limit is subject to an agreed-upon procedures review in connection with the annual audit.

NOTE 2 METHOD OF CALCULATION
Under Section 10.5 of Article XIII-B, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.

NOTE 3 INFLATION FACTOR
A California governmental agency may adjust its appropriations limit by either the annual percentage change in the 4th quarter per capita personal income (which percentages are supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change in local nonresidential construction.

The factor adopted by the City for the fiscal year 2025 represents the annual percentage change in the State’s per capita personal income.

NOTE 4 POPULATION FACTOR
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction's own population or the annual percentage change in population in the County where the jurisdiction is located. The factor adopted by the City for the fiscal year 2025 represents the annual percentage change in population of its own jurisdiction.
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City of Modesto
Notes to Annual Appropriations Limit
Year Ended June 30, 2025
6 NOTE 5 OTHER ADJUSTMENTS
A California governmental agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City had no such adjustments for the year ended June 30, 2025.
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 19
Statement of Activities – Governmental Activities 20
Balance Sheet – Governmental Funds 22
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 23
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 24
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 25 Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund Budget and Actual 26
Notes to Basic Financial Statements 27
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 38
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 1998-2 Carver-Bangs/PelandaleSnyder (the District), a component unit of the City of Modesto, California, (the City) as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards.) Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

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

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

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-17 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 1998-2 Carver-Bangs/PelandaleSnyder (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

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

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

The District’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the District. The District is the vehicle that will be used to ensure that all landowners in the Specific Plan area contribute to the cost of the public facilities and services. Additional information on the District can be found below and in Note 1 to the accompanying financial statements.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
The Carver-Bangs Specific Plan (Resolution No. 97-161) was adopted by the City Council on April 1, 1997, and was subsequently amended through Resolution No. 97-633 on November 4, 1997, and Resolution No. 99-442 on September 1, 1999 to allow multifamily development at Pelandale/Prescott and to shift the location of the storm drain. The CarverBangs Specific Plan has been developed under the City’s Village Residential guidelines and should yield approximately 800 single-family residential units. On January 16, 1996, the City Council approved the Pelandale-Snyder Specific Plan (Resolution No. 96-19) and was subsequently amended, with the most recent amendment enacted on August 8, 2000 through Resolution No. 2000-428. The Specific Plan area contains approximately 227 acres designated as single-family residential and approximately 57 acres are designated multi-family residential.

On December 8 1998, the City Council adopted Resolution 98-653 to form the District to provide a funding and reimbursement mechanism for public facilities and services required to serve the Carver-Bangs and Pelandale-Snyder Specific Plan areas in the City and to fund ongoing maintenance costs. Portions of both Specific Plan areas were included within the initial boundaries of the District and the remainder of the property within both Specific Plan areas, excluding a remainder parcel, have been annexed to the District.

As a condition of development, developers are required to install various public improvements that will serve the increased population generated from the projects. Many of these improvements must be provided in the early stages of development and, therefore, the first developers to build within the Specific Plan areas must install the improvements. The District was established as a funding and reimbursement mechanism for many of the improvements.

Up until a few years ago, developers installed most of the improvements. The developers received a cash reimbursement or tax credit equal to the cost of that improvement(s) as set forth in the Public Report adopted in connection with the formation of the District. #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 Over the past several years, the City has designed and overseen the installation of the improvements. Construction of the storm drain pump stations located at the East and West Basins on Prescott Road between Pelandale and Snyder was completed in the summer of 2007 while the Snyder Avenue widening project between Prescott Road and Carver Road commenced in the spring of 2008. The design of the bike trail commenced in 2009.

FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following
Government-Wide:
• At June 30, 2025, the District’s total net position increased to $2,138,111. • Total District revenues were $221,927 and expenses were $135,198.

Fund Basis:
• Capital Projects Fund revenues increased from $71,439 in the prior year to $96,613 for fiscal year 2025 and expenditures of $0 had no change from the prior year. The increase in revenues is attributed to the increase in the fair value of investments and interest income. The Capital Projects Fund increased by $96,613 to an ending fund balance of $1,754,265.
• Special Revenue Fund revenues of $125,144 were $11,450 more than the prior year due to increases in taxes and investment earnings. Expenditures of $135,198 were $27,018 more than the prior year due to an increase in service expenditures. The Special Revenue Fund balance decreased by $10,054 to an ending fund balance of $382,256. #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.

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

Governmental activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector. #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.

As of June 30, 2025, total assets of $2,147,131 were offset by liabilities of $9,020. The District’s net position from governmental activities increased to $2,138,111 in 2025 from $2,051,382 in 2024. The District’s net position has restrictions as follows: $1,754,265 for acquisition or construction and $383,846 for District maintenance.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) The following summarizes the Statements of Net Position as of June 30, 2025 and 2024 and the related changes:

Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $2,135,115 $2,051,050 $84,065
Assessments receivable 2,260 2,501 (241)
Interest receivable 9,756 7,100 2,656
Total assets 2,147,131 2,060,651 86,480
Liabilities
Accounts payable 9,020 9,269 (249)
Total liabilities 9,020 9,269 (249)
Net position
Restricted for:

Capital projects 1,754,265 1,657,652 96,613
District maintenance 383,846 393,730 (9,884)
Total net position $2,138,111 $2,051,382 $86,729
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenue came primarily from maintenance special taxes of $103,366 and investment earnings of $118,561. Facilities special taxes were not collected in fiscal years 2025 and 2024, as these revenues are collected at the time of building permit issuance, and no such development occurred in the District in fiscal years 2025 and 2024.

District expenses of $135,198 were primarily for community development.

The following summarizes the Statements of Activities for the years ended June 30, 2025 and 2024, and the respective changes:

Statements of Activities – Governmental Activities
Description 2025 2024 Change
Revenues
General revenues
Maintenance special taxes $103,366 $97,786 $5,580
Investment earnings 118,561 87,741 30,820
Total revenues 221,927 185,527 36,400
Expenses
Community development 135,198 108,180 27,018
Total expenses 135,198 108,180 27,018
Change in net position 86,729 77,347 $9,382
Net position, beginning of year 2,051,382 1,974,035
Net position, end of year $2,138,111 $2,051,382
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 THE DISTRICT’S FUND FINANCIAL STATEMENTS
The fund financial statements report the District’s operations in more detail than the government-wide financial statements and focus primarily on the short-term activities of the District’s two funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other longterm amounts.

Presented on the succeeding pages is the summarized Balance Sheets and the Statements of Revenues, Expenditures, and Changes in Fund Balance for both the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2025 and 2024, and the respective changes:
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Capital Projects Fund
Description 2025 2024 Change
Assets
Cash and investments $1,746,288 $1,651,908 $94,380
Interest receivable 7,977 5,744 2,233
Total assets $1,754,265 $1,657,652 $96,613
Fund balances
Restricted for:

Capital projects $1,754,265 $1,657,652 $96,613
Total fund balances $1,754,265 $1,657,652 $96,613
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $388,827 $399,142 $(10,315)
Assessments receivable 2,260 2,501 (241)
Interest receivable 1,779 1,356 423
Total assets $392,866 $402,999 $(10,133)
Liabilities
Accounts payable $9,020 $9,269 $(249)
Total liabilities 9,020 9,269 (249)
Deferred inflow of resources
Unavailable revenues 1,590 1,420 170
Total deferred inflows of resources 1,590 1,420 170
Fund balances
Restricted for:

District maintenance 382,256 392,310 (10,054)
Total fund balances 382,256 392,310 (10,054)
Total liabilities, deferred inflow of
resources and fund balances $392,866 $402,999 $(10,133) #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
16 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund
Description 2025 2024 Change
Revenues $96,613 $71,439 $25,174
Expenditures - - -
Net change in fund balance 96,613 71,439 $25,174
Fund balance, beginning of year 1,657,652 1,586,213
Fund balance, end of year $1,754,265 $1,657,652
Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $125,144 $113,694 $11,450
Expenditures 135,198 108,180 27,018
Net change in fund balance (10,054) 5,514 $(15,568)
Fund balance, beginning of year 392,310 386,796
Fund balance, end of year $382,256 $392,310
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
17 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) At June 30, 2025, the District’s governmental funds reported a combined fund balance of $2,136,521, an increase of $86,559 compared to fiscal year 2024. The Capital Projects Fund realized a $96,613 increase, primarily due to increases in interest income and the fair value of investments. The Special Revenue Fund realized a $10,054 decrease due to total expenditures exceeding total revenues reported during the year.

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

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

Box 642, Modesto, California 95353.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
18 STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting as that used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting – the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.

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

This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #5..
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See notes to basic financial statements.
19 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $2,135,115
Assessments receivable 2,260
Interest receivable 9,756
Total Assets 2,147,131

LIABILITIES
Accounts payable 9,020
Total Liabilities 9,020

NET POSITION
Restricted for:

Capital projects 1,754,265
District maintenance 383,846
Total Net Position $2,138,111
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See notes to basic financial statements.
20 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Functions/Programs Expenses
Operating
Grants and
Contributions
Governmental
Activities
Community development $135,198 $- $(135,198)
$135,198 $- (135,198)
General Revenues
Maintenance special taxes 103,366
Investment earnings 118,561
Total General Revenues 221,927
Change in Net Position 86,729
Net Position, Beginning of Year 2,051,382
Net Position, End of Year $2,138,111
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
21 FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #5..
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See notes to basic financial statements.
22 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $1,746,288 $388,827 $2,135,115
Assessments receivable - 2,260 2,260
Interest receivable 7,977 1,779 9,756
Total Assets $1,754,265 $392,866 $2,147,131

LIABILITIES
Accounts payable $- $9,020 $9,020
Total Liabilities - 9,020 9,020

DEFERRED INFLOW OF RESOURCES
Unavailable revenues - 1,590 1,590
Total Deferred Inflow of Resources - 1,590 1,590

FUND BALANCES
Restricted for:

Capital projects 1,754,265 - 1,754,265
District maintenance - 382,256 382,256
Total Fund Balances 1,754,265 382,256 2,136,521
Total Liabilities, Deferred Inflow of
Resources and Fund Balances $1,754,265 $392,866 $2,147,131 #5..
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See notes to basic financial statements.
23 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position
June 30, 2025
Total Fund Balances - Governmental Funds $2,136,521
Amounts reported for governmental activities in the Statement of Net Position are different because:

Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position. 1,590
Total Net Position - Governmental Activities $2,138,111 #5..
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See notes to basic financial statements.
24 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total

REVENUES
Maintenance special taxes $- $103,196 $103,196
Interest income 56,330 12,496 68,826
Change in fair value of investments 40,283 9,452 49,735 Total Revenues 96,613 125,144 221,757

EXPENDITURES
Community development
Services – professional and other - 117,168 117,168
Utilities - 18,030 18,030
Total Expenditures - 135,198 135,198
Net Change in Fund Balances 96,613 (10,054) 86,559
Fund Balances, Beginning of Year 1,657,652 392,310 2,049,962 Fund Balances, End of Year $1,754,265 $382,256 $2,136,521 #5..
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See notes to basic financial statements.
25 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities
Year Ended June 30, 2025
Net Change in Fund Balances - Governmental Funds $86,559 Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the governmental funds. 170 Change in Net Position - Governmental Activities $86,729 #5..
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See notes to basic financial statements.
26 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Budget and Actual
Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special taxes $98,800 $103,300 $103,196 $(104) Interest income - - 12,496 12,496
Change in fair value of investments - - 9,452 9,452
Total Revenues 98,800 103,300 125,144 21,844

EXPENDITURES
Community development
Services - professional and other 111,986 116,486 117,168 (682) Utilities 19,000 19,000 18,030 970
Total Expenditures 130,986 135,486 135,198 288
Net Change in Fund Balance $(32,186) $(32,186) (10,054) $22,132 Fund Balance, Beginning of Year 392,310
Fund Balance, End of Year $382,256
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27 Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 1998-2 Carver-Bangs/Pelandale-Snyder (the District) was formed on December 8, 1998 via Resolution 98-653 by a vote of the property owners within the proposed district. The District, a separate legal entity, was formed to provide a funding and reimbursement mechanism for public facilities and services required by the District Specific Plans. The District is the vehicle that will be used to ensure that all landowners in the District pay their share of the public improvements. The District is a 480-acre project bounded on the East by Carver Road, on the North by Bangs Avenue, on the West by Dale Road, and the Modesto Irrigation District canal and Snyder Avenue on the South. The District is expected to yield 3,413 residential dwelling units at buildout. To date, 1,669 residential units have been constructed, alongside 19.7 acres developed for commercial and industrial use. In addition, 36 acres within the District have been designated for community-serving facilities, including Mary Lou Dietrich Elementary School, McKinney Colony Park, and Big Valley Grace Community Church.

The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements. #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.

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

Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied. #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental funds:

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

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

Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Management’s Use of Estimates (Continued)
These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

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

A cost of living adjustment is applied to the special taxes annually.

Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have nonspendable resources as of June 30, 2025.
• Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. The District reported $2,136,521 of restricted resources as of June 30, 2025. #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed - Amounts constrained to specific purposes by the District itself, using the District’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest-level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. The District did not have committed resources as of June 30, 2025. • Assigned - Amounts the District intends to use for a specific purpose. Intent can be expressed by the District at either the highest level of decision-making or by an official or body to which the District delegates the authority. The District did not have assigned resources as of June 30, 2025.
• Unassigned - The residual classification for the District that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. The District did not have unassigned resources as of June 30, 2025.

The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through the adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the District through the adoption or amendment of the budget or future year budget plan as intended for a specific purpose.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.

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

In addition to liabilities, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that applies to a future reporting period. Deferred inflow of resources reported by the District consists of unearned deferred assessments that have been billed as of year-end, but not yet collected. #5..
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position
Net position represents the residual interest in the District’s assets and deferred outflow of resources after liabilities and deferred inflow of resources are deducted. In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to those assets' acquisition, construction, or improvement. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that do not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2025, the District implemented the following Governmental Accounting Standards Board (GASB) standards with no impact on the financial statements:

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

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

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

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

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

NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
35 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash and investment in the pool are considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The District does not have any deposits with financial institutions as of June 30, 2025.

Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:

Statement of Net Position – Governmental Activities
Cash and investments $2,135,115
Total cash and investments $2,135,115
Deposits with the City
Cash and investment pool $2,135,115
Total cash and investments $2,135,115
Detailed information concerning the City’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s Annual Comprehensive Financial Report. As of June 30, 2025, the fair value of the District’s position in the pool is the same as the value of its pool shares.

NOTE 3 RESTRICTED FUND BALANCES
Restrictions of Fund Balances
Fund balances are all presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2025, restrictions included:
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
36 NOTE 3 RESTRICTED FUND BALANCES
Restrictions of Fund Balances (Continued)
Restricted for Capital Projects - the portion of the fund balance legally restricted for the acquisition, construction, and formation/annexation activities.

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

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

At June 30, 2025, the District had 23 delinquent parcels for a total of $1,590, four of which are delinquent for more than two consecutive payments. The District received 99.04% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2025.

The delinquencies total of $1,590 at June 30, 2025 is included in assessments receivable on the Statement of Net Position and Balance Sheet.
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Community Facilities District
Number 1998-2 Carver-Bangs/Pelandale-Snyder
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
37 NOTE 5 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2025 was as follows:

Expenditures Amount
Special Revenue Fund
Community development
Services - professional and other $(682)
NOTE 6 SUBSEQUENT EVENTS
The District has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 12, 2025, the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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38 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 1998-2 CarverBangs/Pelandale-Snyder (the District), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 12, 2025.

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

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #5..
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40 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 12, 2025
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 16
Statement of Activities – Governmental Activities 17
Balance Sheet – Governmental Fund 19
Reconciliation of Governmental Fund Balance Sheet to Governmental Activities Statement of Net Position 20
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 21
Reconciliation of Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to Governmental Activities Statement of Activities 22 Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 23
Notes to Basic Financial Statements 24
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 35 #5..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and major fund of the City of Modesto Community Facilities District Number 2000-2 Coffee-Claratina (the District), a component unit of the City of Modesto, California, (the City) as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and major fund of the District as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-14 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 2000-2 Coffee-Claratina (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

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

The District’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the District. The District is the vehicle that will be used to ensure that all landowners in the Specific Plan area contribute to the cost of the public facilities and services. Additional information on the District can be found below and in Note 1 to the accompanying financial statements.
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
On June 2, 1998 by Resolution No. 98-294, the City Council approved the Coffee-Claratina Specific Plan that set forth a plan for the development of 170 acres that includes up to 1,000 residential dwelling units, 40 acres of “Regional Commercial” property and 15 acres of “Mixed Community Commercial” development. Since that time two amendments to the Specific Plan have been processed. Resolution No. 99-565 added language to allow mixed uses along Coffee Road and Resolution No. 2005-70 changed the land use designation of approximately ten acres located east of McHenry Avenue and south of Claratina Avenue from Regional Commercial (RC) to Residential (R). The District was formed on December 5, 2000 by Resolution No. 2000-616 to provide a funding source for the maintenance and repair of the storm drain basin and dual-use flood control/recreation facility and for maintenance of median, bikeway, roundabout, and miscellaneous planting areas within the Coffee-Claratina Specific Plan.

FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• At June 30, 2025, the District’s net position increased to $290,220. • Total District revenues were $250,585 and expenses were $231,961.

Fund Basis:
• Special Revenue Fund revenues of $248,569 were $16,126 more than the prior year due to increased maintenance special tax collections. Expenditures of $231,961 were $38,947 more than the prior year due to increases in professional services and utilities expenditures.

The Special Revenue Fund balance increased by $16,608 to an ending fund balance of $284,471.
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.

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

Governmental activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector. #5..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.

As of June 30, 2025, total assets of $299,382 were offset by liabilities of $9,162. The District’s net position from governmental activities increased to $290,220 in 2025 from $271,596 in 2024.

All of the District’s net position is restricted for maintenance.

The following summarizes the Statements of Net Position as of June 30, 2025 and 2024 and the related changes:

Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $291,166 $272,580 $18,586
Assessments receivable 6,958 6,463 495
Interest receivable 1,258 867 391
Total assets 299,382 279,910 19,472
Liabilities
Accounts payable 9,162 8,314 848
Total liabilities 9,162 8,314 848
Net position
Restricted for:

District maintenance 290,220 271,596 18,624
Total net position $290,220 $271,596 $18,624
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenue came primarily from maintenance special taxes of $236,295, and interest income and investment earnings of $14,290. Facilities special tax revenues were not collected in fiscal year 2025, as these revenues are collected at the time of building permit issuance, and no such development occurred in the District in fiscal year 2025.

District expenses of $231,961 were for professional services and utilities.

The following summarizes the Statements of Activities for the years ended June 30, 2025 and 2024, and the respective changes:

Statements of Activities – Governmental Activities
Description 2025 2024 Change
Revenues
General revenues
Maintenance special taxes $236,295 $226,088 $10,207
Interest income 7,842 4,758 3,084
Investment earnings 6,448 3,196 3,252
Total revenues 250,585 234,042 16,543
Expenses
Community development 231,961 193,014 38,947
Total expenditures 231,961 193,014 38,947
Change in net position 18,624 41,028 $(22,404)
Net position, beginning of year 271,596 230,568
Net position, end of year $290,220 $271,596
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 THE DISTRICT’S FUND FINANCIAL STATEMENTS
The fund financial statements report the District’s operations in more detail than the government-wide financial statements and focus primarily on the short-term activities of the District’s special revenue fund. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other long-term amounts.

The fund financial statements provide detailed information about the District’s most significant funds called major funds. Major funds present the major activities of the District for the year and may change from year to year as a result of changes in the pattern of the District’s activities.

All of the District’s funds are presented here as major funds; their purpose is explained in Note 1 to the financial statements. The District’s one fund is a governmental fund; financial statements for this fund are prepared on the modified accrual basis of accounting, which means they measure only current financial resources and uses.

The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balance for the Special Revenue Fund for the years ended June 30, 2025 and 2024, and the respective changes:
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $291,166 $272,580 18,586
Assessments receivable 6,958 6,463 495
Interest receivable 1,258 867 391
Total assets $299,382 $279,910 $19,472
Liabilities
Accounts payable $9,162 $8,314 $848
Total liabilities 9,162 8,314 848
Deferred inflow of resources
Unavailable revenues 5,749 3,733 2,016
Total deferred inflow of
resources 5,749 3,733 2,016
Fund balance
Restricted for:

District maintenance 284,471 267,863 16,608
Total fund balance 284,471 267,863 16,608
Total liabilities, deferred inflow
of resources, and fund
balance $299,382 $279,910 $19,472
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $248,569 $232,443 $16,126
Expenditures 231,961 193,014 38,947
Net change in fund balance 16,608 39,429 $(22,821)
Fund balance, beginning of year 267,863 228,434
Fund balance, end of year $284,471 $267,863
At June 30, 2025, the District’s governmental fund reported a fund balance of $284,471, which was a $16,608 increase from fiscal year 2024. The Special Revenue Fund realized a $16,608 increase primarily due to maintenance special taxes exceeding professional services and utilities.

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

Therefore, the District reports no long-term capital assets. #5..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
15 STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting – the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.

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

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are then deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #5..
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See notes to basic financial statements.
16 Community Facilities District
Number 2000-2 Coffee Claratina
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $291,166
Assessments receivable 6,958
Interest receivable 1,258
Total Assets 299,382

LIABILITIES
Accounts payable 9,162
Total Liabilities 9,162

NET POSITION
Restricted for:

District maintenance 290,220
Total Net Position $290,220
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See notes to basic financial statements.
17 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Change in Net
Position
Functions/Programs Expenses
Operating Grants
and Contributions
Governmental
Activities
Community development $231,961 $- $(231,961)
$231,961 $- (231,961)
General Revenues
Maintenance special taxes 236,295
Interest income 7,842
Investment earnings 6,448
Total General Revenues 250,585
Change in Net Position 18,624
Net Position, Beginning of Year 271,596
Net Position, End of Year $290,220
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
18 FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #5..
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See notes to basic financial statements.
19 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Balance Sheet – Governmental Fund
June 30, 2025
Special
Revenue Fund
ASSETS
Cash and investments $291,166
Assessments receivable 6,958
Interest receivable 1,258
Total Assets $299,382

LIABILITIES
Accounts payable $9,162
Total Liabilities 9,162

DEFERRED INFLOW OF RESOURCES
Unavailable revenues 5,749
Total Deferred Inflow of Resources 5,749

FUND BALANCE
Restricted for:

District maintenance 284,471
Total Fund Balance 284,471
Total Liabilities, Deferred Inflow of Resources, and Fund Balance $299,382 #5..
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See notes to basic financial statements.
20 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Reconciliation of Governmental Fund Balance Sheet to
Governmental Activities Statement of Net Position
June 30, 2025
Total Fund Balance - Governmental Fund $284,471
Amounts reported for governmental activities in the Statement of Net Position are different because:

Revenues not available for current-period expenditures are deferred in the governmental fund but are considered earned in the Statement of Net Position. 5,749
Total Net Position - Governmental Activities $290,220
#5..
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See notes to basic financial statements.
21 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Governmental Fund
Year Ended June 30, 2025
Special Revenue
Fund

REVENUES
Maintenance special taxes $234,279
Interest income 7,842
Change in fair value of investments 6,448
Total Revenues 248,569

EXPENDITURES
Services - professional and other 185,597
Utilities 46,364
Total Expenditures 231,961
Net Change in Fund Balance 16,608
Fund Balance, Beginning of Year 267,863
Fund Balance, End of Year $284,471
#5..
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See notes to basic financial statements.
22 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Reconciliation of Governmental Fund Statement of
Revenues, Expenditures, and Changes in Fund Balance to
Governmental Activities Statement of Activities
Year Ended June 30, 2025
Net Change in Fund Balance - Governmental Fund $16,608
Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the Governmental Funds. 2,016
Change in Net Position - Governmental Activities $18,624 #5..
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See notes to basic financial statements.
23 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual Year Ended June 30, 2025
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special taxes $239,200 $239,200 $234,279 $(4,921) Interest income - - 7,842 7,842
Change in fair value of investments - - 6,448 6,448
Total Revenues 239,200 239,200 248,569 9,369

EXPENDITURES
Community development
Services - professional and other 184,682 184,682 185,597 (915) Utilities 58,000 58,000 46,364 11,636
Total Expenditures 242,682 242,682 231,961 10,721
Net Change in Fund Balance $(3,482) $(3,482) 16,608 $20,090 Fund Balance, Beginning of Year 267,863
Fund Balance, End of Year $284,471
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24 Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 2000-2 Coffee-Claratina (the District) was formed on December 5, 2000 by Resolution No. 2000-616 following a vote of the property owners within the proposed district. The District, a separate legal entity, was formed to set forth a plan of rehabilitation and development for the site, bounded by Claratina Avenue to the north, Coffee Road on the East, McHenry on the West, and Coffee Claratina Park towards the South. The district boundaries proposed a 170-acre project designated for a maximum of 1,000 residential dwelling units, 40 acres designated “Regional Commercial,” and 15 acres of “Mixed Community Commercial”. At this time over 425 parcels have been fully developed. In addition, the District funds the maintenance of the median, bikeway, roundabout, and miscellaneous planting areas, in addition to the funding of maintenance and repair of a storm drain basin and dual-use flood control/recreation facility.

The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements. #5..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
25 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.

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

Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied. #5..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially, all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental fund:

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

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

Maintenance Special Taxes
The maintenance special taxes are collected by the County of Stanislaus on the property tax bill. The special taxes are due November 1st and February 1st and are delinquent if not paid by December 10th and April 10th, respectively. The County of Stanislaus bills and collects the special taxes and remits them to the District. The Rate and Method of Apportionment of Special Tax (RMA), set forth in the District’s Public Report, describes how the tax will be allocated among properties in the District. The Public Report was established during the formation of the District. A cost-of-living adjustment is applied to the special taxes annually. #5..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have nonspendable resources as of June 30, 2025.
• Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. The District reported $284,471 of restricted resources as of June 30, 2025.
• Committed - Amounts constrained to specific purposes by the District itself, using the District’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest-level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. The District did not have committed resources as of June 30, 2025. • Assigned - Amounts the District intends to use for a specific purpose. Intent can be expressed by the District at either the highest level of decision-making or by an official or body to which the District delegates the authority. The District did not have assigned resources as of June 30, 2025.
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Unassigned - The residual classification for the District that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. The District did not have unassigned resources as of June 30, 2025.

The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through the adoption or amendment of the budget.

A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the District through the adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

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

In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that do not meet the definition “net investment in capital assets” or “restricted” net position.

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

Governmental Accounting Standards Update
During the year ended June 30, 2025, the District implemented the following Governmental Accounting Standards Board (GASB) standards with no impact on the financial statements:

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

GASB Statement No. 102 – Certain Risk Disclosures. The requirements of this statement are effective for reporting periods beginning after June 15, 2024. #5..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update (Continued)
Released GASB Statements to be implemented in future financial statements are as follows:

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

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

Cash and investments in the pool are considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The District does not have any deposits with financial institutions as of June 30, 2025. #5..
- 460 -
Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:

Statement of Net Position - Governmental Activities
Cash and investments $291,166
Total cash and investments $291,166
Deposits with the City
Cash and investment pool $291,166
Total cash and investments $291,166
Detailed information regarding the City’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s Annual Comprehensive Financial Report. As of June 30, 2025, the fair value of the District’s position in the pool is the same as the value of its pool shares.

NOTE 3 RESTRICTED FUND BALANCE
Restriction of Fund Balance
Fund balance is presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2025, the restriction included:

Restricted for District Maintenance - the portion of fund balance legally restricted for the maintenance of parkways and open space within the District. #5..
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that will initiate foreclosure proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. (b) All parcels delinquent at June 30 when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1st following the end of the fiscal year.

At June 30, 2025, the District had 6 delinquent parcels for a total of $5,749, three of which were delinquent for more than two consecutive payments. The District received 98.89% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2025.

The delinquencies total of $5,749 at June 30, 2025 is included in assessments receivable on the Statement of Net Position and Balance Sheet.
#5..
- 462 -
Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
34 NOTE 5 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2025 was as follows:

Expenditures Amount
Special Revenue Fund
Community development
Services - professional and other $(915)
NOTE 6 SUBSEQUENT EVENTS
The District has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 12, 2025, the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
#5..
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35 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and major fund of the City of Modesto Community Facilities District Number 2000-2 Coffee-Claratina (the District), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 12, 2025.

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

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #5..
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37 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 12, 2025
#5..
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
- 467 -
Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
#5..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 16
Statement of Activities – Governmental Activities 17
Balance Sheet – Governmental Fund 19
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 20
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 21
Notes to Basic Financial Statements 22
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 30
#5..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and major fund of the City of Modesto Community Facilities District Number 1998-1 Enterprise Business Park (the Park), a component unit of the City of Modesto, California, as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the Park’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and major fund of the Park as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Park and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Park’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. #5..
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Park’s internal control. Accordingly, no such opinion is expressed.
#5..
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4 • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Park’s ability to continue as a going concern for a reasonable period of time.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-14 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the Park’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Park’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Park’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 1998-1 Enterprise Business Park (the Park) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the Park to provide this overview of its financial activities for the fiscal year.

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

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

The Park’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the Park. The Park is the vehicle that will be used to ensure that all landowners in the Specific Plan area contribute to the cost of the public facilities and services.

Additional information on the Park can be found below and in Note 1 to the accompanying financial statements.

BACKGROUND AND MANAGEMENT’S DISCUSSION
On April 7, 1997, by Resolution No. 97-24, the City’s Planning Commission approved a vesting tentative map for the Enterprise Business Park subdivision. The project area included two assessors’ parcels and more than 80 acres of property located in the southwestern section of the City. Upon recordation of the final map, the property was subdivided into eight parcels ranging in size from 1.12 to 24.17 acres.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION (CONTINUED)
The parcels are zoned M-2, a heavy industrial designation allowing for the development of warehouse, distribution, processing, manufacturing, and other related uses. On June 23, 1998, by Resolution No.98-330, the City Council formed the Park and authorized the Park to issue up to $2.05 million in bonds to fund certain street improvements, water and sewer main extensions, and other water, sewer, and storm drainage improvements required to serve the Park. The Bonds were called in full in 2002 and all Park-funded improvements have been completed.

FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• The revenues decreased from $34,336 in the prior year to $15,894 for the fiscal year 2025 and expenses decreased from $17,850 in the prior year to $17,833 for the fiscal year 2025.

The decrease in revenues is attributed to the decrease in the collection of maintenance special taxes, and the decrease in expenses is attributed to the decrease in activities in community development. The net position decreased by $1,939 to an ending balance of $12,237.

Fund Basis:
• Special Revenue Fund revenues of $15,894 were $18,442 lower than the prior year due to the decrease in collection of maintenance special taxes, and expenditures of $17,833 were $17 lower than the prior year due to the decrease in annual overhead direct charges of the City. The Special Revenue Fund balance decreased by $1,939 to an ending fund balance of $12,237.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the Park’s financial activities and financial position.

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

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

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

Governmental activities - All the Park’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the Park as a whole, similar to that used by the private sector.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 FINANCIAL ACTIVITIES OF THE PARK AS A WHOLE
This analysis focuses on the net position and changes in net position of the Park’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.

As of June 30, 2025, total assets amounted to $12,708 and total liabilities amounted to $471.

The Park’s net position from governmental activities decreased to $12,237 in 2025 from $14,176 in 2024. All of the Park’s net position is restricted for maintaining infrastructure.

The following summarizes the Statements of Net Position as of June 30, 2025 and 2024, and respective changes:

Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $12,656 $14,959 $(2,303)
Interest receivable 52 47 5
Total assets 12,708 15,006 (2,298)
Liabilities
Accounts payable 471 830 (359)
Total liabilities 471 830 (359)
Net position
Restricted for:

Park maintenance 12,237 14,176 (1,939)
Total net position $12,237 $14,176 $(1,939)
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The Park’s fiscal year 2025 revenue came primarily from the collection of maintenance special taxes of $15,345. Park expenses of $17,833 were primarily for community development.

The following summarizes the Statements of Activities for the years ended June 30, 2025 and 2024, and the related changes:

Statements of Activities – Governmental Activities
Description 2025 2024 Change
Revenues
General revenues
Maintenance special taxes $15,345 $34,345 $(19,000)
Interest income 293 89 204
Investment earnings (loss) 256 (98) 354
Total revenues 15,894 34,336 (18,442)
Expenses
Community development 17,833 17,850 (17)
Total expenses 17,833 17,850 (17)
Change in net position (1,939) 16,486 $(18,425)
Net position (deficit), beginning of year 14,176 (2,310) Net position, end of year $12,237 $14,176
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 THE PARK’S FUND FINANCIAL STATEMENTS
The fund financial statements report the Park’s operations in more detail than the governmentwide financial statements and focus primarily on the short-term activities of the Park’s special revenue fund. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other long-term amounts.

The fund financial statements provide detailed information about each of the Park’s most significant funds, called major funds. Major funds present the major activities of the Park for the year and may change from year to year as a result of changes in the pattern of the Park’s activities. The Park’s one fund is presented here as a major fund; its purpose is explained in Note 1 to the financial statements. The Park’s Special Revenue Fund is a governmental fund; financial statements for this fund are prepared on the modified accrual basis of accounting, which means it measures only current financial resources and uses.

The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balance for the Special Revenue Fund for the years ended June 30, 2025 and 2024, and the respective changes:
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 THE PARK’S FUND FINANCIAL STATEMENTS (CONTINUED)
Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $12,656 $14,959 (2,303)
Interest receivable 52 47 5
Total assets $12,708 $15,006 (2,298)
Liabilities
Accounts payable $471 $830 (359)
Total liabilities 471 830 (359)
Fund Balance
Restricted:

Park maintenance 12,237 14,176 (1,939)
Total fund balance 12,237 14,176 (1,939)
Total Liabilities and Fund Balances $12,708 $15,006 (2,298) #5..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 THE PARK’S FUND FINANCIAL STATEMENTS (CONTINUED)
Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $15,894 $34,336 $(18,442)
Expenditures 17,833 17,850 (17)
Net change in fund balance (1,939) 16,486 $(18,425)
Fund balance (deficit), beginning of
year 14,176 (2,310)
Fund balance, end of year $12,237 $14,176
At June 30, 2025, the Park’s governmental fund reported a fund balance of $12,237, a decrease of $1,939 compared with last year. This decrease was primarily due to community development expenditures exceeding the revenues.

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

Therefore, the Park reports no long-term capital assets. #5..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 CONTACTING THE PARK’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the Park’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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15 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California

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

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

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

The format of the Statement of Activities presents the Park’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs, are then deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #5..
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See notes to basic financial statements.
16 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $12,656
Interest receivable 52
Total Assets 12,708

LIABILITIES
Accounts payable 471
Total Liabilities 471

NET POSITION
Restricted for:

Park maintenance 12,237
Total Net Position $12,237
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See notes to basic financial statements.
17 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Functions/Programs Expenses
Operating
Grants and
Contributions
Governmental
Activities
Community development $17,833 $- $(17,833)
$17,833 $- (17,833)
General Revenues
Maintenance special tax 15,345
Interest income 293
Investment earnings 256
Total General Revenues 15,894
Change in Net Position (1,939)
Net Position, Beginning of Year 14,176
Net Position, End of Year $12,237
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18 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open spaces within the Park. #5..
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See notes to basic financial statements.
19 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Balance Sheet – Governmental Fund
June 30, 2025
Special
Revenue Fund
ASSETS
Cash and investments $12,656
Interest receivable 52
Total Assets $12,708

LIABILITIES
Accounts payable $471
Total Liabilities 471

FUND BALANCE
Restricted for:

Park maintenance 12,237
Total Fund Balance 12,237
Total Liabilities and Fund Balance $12,708
Note: There were no differences between the Governmental Fund Balance Sheet and the Governmental Activities Statement of Net Position as of June 30, 2025. #5..
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See notes to basic financial statements.
20 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Governmental Fund
Year Ended June 30, 2025
Special
Revenue Fund

REVENUES
Maintenance special taxes $15,345
Interest Income 293
Change in fair value of investments 256
Total Revenues 15,894

EXPENDITURES
Community development
Services – professional and other 17,506
Utilities 327
Total Expenditures 17,833
Net Change in Fund Balance (1,939)
Fund Balance, Beginning of Year 14,176
Fund Balance, End of Year $12,237
Note: There were no differences between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance and the Governmental Activities Statement of Activities for the year ended June 30, 2025.
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See notes to basic financial statements.
21 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with
Amounts

REVENUES
Maintenance special taxes $15,600 $15,600 $15,345 $(255) Interest income - - 293 293
Change in fair value of investments - - 256 256
Total Revenues 15,600 15,600 15,894 294

EXPENDITURES
Community development
Services - professional and other 19,243 19,243 17,506 1,737 Utilities 550 550 327 223
Total Expenditures 19,793 19,793 17,833 1,960
Net Change in Fund Balance $(4,193) $(4,193) (1,939) $2,254 Fund Balance, Beginning of Year 14,176
Fund Balance, End of Year $12,237
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22 Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 1998-1 Enterprise Business Park (the Park) was formed on June 23, 1998, by Resolution No.98-330, following a vote of the property owners within the proposed Park. The Park, a separate legal entity, was formed to provide a financing mechanism for the purchase, construction, expansion, or rehabilitation of any real or tangible property, including public facilities and infrastructure improvements, necessary to meet increased demands placed upon local agencies as a result of development occurring within the Park. In addition, the Park can fund a variety of public services including maintenance of parks, parkways, and open space. The Park is the vehicle that will be used to ensure that all landowners within the Park pay their share of the public improvements and services needed.

The Park includes two assessor’s parcels and more than 80 acres of property located in the southwestern section of the City of Modesto, California (the City). The property is subdivided into eight parcels ranging in size from 1.12 to 24.17 acres. The parcels have been zoned M-2, which is a heavy industrial designation allowing for the development of warehouse, distribution, processing, manufacturing, and other related uses.

The Park is an integral part of the City and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
23 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the Park. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.

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

Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied. #5..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
24 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Park considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are measurable and available only when cash is received by the Park.

The Park reports the following major governmental fund:

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

Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
25 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the Park is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The Park did not have any nonspendable resources as of June 30, 2025.
• Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. The Park reported $12,237 in restricted resources as of June 30, 2025.
• Committed - Amounts constrained to specific purposes by the Park itself, using the Park’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the Park takes the same highest-level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. The Park did not have any committed resources as of June 30, 2025. • Assigned - Amounts the Park intends to use for a specific purpose. Intent can be expressed by the Park at either the highest level of decision-making or by an official or body to which the Park delegates the authority. The Park did not have any assigned resources as of June 30, 2025.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Unassigned - The residual classification for the Park that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. The Park did not have any unassigned resources as of June 30, 2025.

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

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

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

In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the Park that applies to a future reporting period. #5..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources (Continued)
In addition to liabilities, the Statements of Net Position and Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the Park that applies to a future reporting period.

Net Position
Net position represents the residual interest in the Park’s assets and deferred outflows of resources after liabilities and deferred inflows of resources are deducted. In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2025, the Park implemented the following Governmental Accounting Standards Board (GASB) standards with no impact on the financial statements:

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

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

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

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

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

NOTE 2 CASH AND INVESTMENTS
Cash and investments of the Park are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the Park’s investments as all cash is invested as part of the common cash and investment pool of the City.
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
29 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash in the pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The Park does not have any deposits with financial institutions as of June 30, 2025.

Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:

Statement of Net Position- Governmental Activities
Cash and investments $12,656
Total cash and investments $12,656
Deposits with the City
Cash and investment pool $12,656
Total cash and investments $12,656
NOTE 3 SUBSEQUENT EVENTS
The Park has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 12, 2025, the date the financial statements were available to be issued and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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30 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and major fund of the City of Modesto Community Facilities District Number 1998-1 Enterprise Business Park (the Park), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the Park’s basic financial statements, and have issued our report thereon dated November 12, 2025.

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Park’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #5..
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32 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Park’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Park’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 12, 2025
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
With Independent Auditor’s Report
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 21
Statement of Activities – Governmental Activities 22
Balance Sheet – Governmental Funds 24
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 25
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 26
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 27
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 29
Notes to Basic Financial Statements 30
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 43 #5..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2003-1 Fairview Village (the District), a component unit of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-19 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 2003-1 Fairview Village (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

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

The District’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the District. The District is the vehicle that will be used to ensure that all landowners in the Specific Plan area contribute to the cost of the public facilities and services. Additional information on the District can be found below, and in Note 1 to the accompanying financial statements.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
The Fairview Village Specific Plan was adopted on December 12, 1995 by City Council Resolution No. 95-585 and is a proposed planned community with an expected population of 5,000 people living in approximately 2,250 homes. The project area is a 364-acre site located just outside the southwest edge of the City in Stanislaus County. The Fairview Village Plan Area is essentially square with each edge approximately three-quarters of a mile in length. It is contiguous to the Bret Harte neighborhood on the east and is bounded by the expanded Hatch Road to the north, Carpenter Road to the west, and Whitmore Avenue to the south. The District is designed around a large central neighborhood park and a new elementary school that forms the center of the new community. Fairview Village will also include a secondary elementary school and a commercial center with shops, offices, and apartments.

On December 11, 2003, by Resolution No. 2003-660, the City Council formed the District and authorized the District, following a vote of the property owner within the proposed district, up to $25 million in bonded indebtedness to acquire or construct certain water, storm drain, and sewer system improvements and a bike trail and all appurtenances and appurtenant work in connection therewith. A final map was subsequently recorded for the development of 382 single-family residential lots within Fairview Village.

In September 2005, the District issued Special Tax Bonds, Series 2005 in the principal amount of $5 million. The majority of the net construction proceeds were used to reimburse the Developer for the District-funded infrastructure installed pursuant to the Acquisition & Shortfall Agreements entered into with the District. In October 2005, supplemental information concerning the bond issue was distributed to the repositories. This supplemental information advised the bondholders and market of the amendments to the Acquisition & Shortfall Agreement that allow the issuance of certain occupancy permits prior to the completion of the infrastructure projects specified in the Acquisition & Shortfall Agreement. #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 BACKGROUND AND MANAGEMENT’S DISCUSSION (CONTINUED)
Matters related to the Developer’s subdivision located in the District were first memorialized in an Acquisition & Shortfall Agreement between the City and Norman Galas, etc. in December 1997. On January 9, 2003, the Acquisition & Shortfall Agreement was amended and named Del Valle Capital Corporation, Inc., as a party to the Acquisition & Shortfall Agreement. Since that time, two subsequent amendments have occurred, and additional agreements have been executed between the City and the District. The chronology of the agreements related to the Developer’s subdivision follows:
• The Acquisition & Shortfall Agreement between the City and Norman Galas, June Galas, Stanley Galas, and Bonnie K. Galas dated as of September 16, 1997, as amended by the First Amendment to the Acquisition & Shortfall Agreement between the City and Norman Galas, June Galas, Stanley Galas, Bonnie K. Galas, and Del Valle Capital Corporation, Inc., dated as of January 9, 2003, and as further amended by the Second Amendment to the Acquisition & Shortfall Agreement between the City and Norman Galas, June Galas, Stanley Galas, Bonnie K. Galas, and Del Valle Capital Corporation, Inc., dated as of June 10, 2003, and as finally amended by the Third Amendment to the Acquisition & Shortfall Agreement between the City and Norman Galas, June Galas, Stanley Galas, Bonnie K. Galas, Del Valle Capital Corporation, Inc., dated as of June 22, 2004. • Advanced Funding Agreement for the District dated as of October 28, 2003, Subdivision Agreement, dated as of December 23, 2003, pertaining to Galas Brothers Subdivision Unit No. 1.
• Subdivision Agreement, dated as of December 23, 2003, pertaining to Galas Brothers Subdivision Unit No. 2.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 BACKGROUND AND MANAGEMENT’S DISCUSSION (CONTINUED)
• Agreement to Complete Necessary Infrastructure Prior to Final Inspection or Occupancy, dated as of December 23, 2003, as amended by the Amendment to Agreement dated as of January 25, 2005, and as further amended by the Second Amendment to Agreement dated as of November 9, 2005, and as further amended by the Third Amendment to Agreement dated as of December 14, 2005, and as finally amended by the Fourth Amendment to Agreement, dated as of June 27, 2006.
• Two Acquisition & Shortfall Agreements between the District and Del Valle Homes, each dated as of June 22, 2004.
• Agreement by and between the City, Del Valle Capital Corporation, Inc., D.R. Horton, Inc., and Pulte Home Corporation Regarding the Funding and Construction of Certain Interim Water Improvements in Return for the City’s Issuance of Certain Permits, dated as of September 30, 2005.
• Letter of Agreement between the City and Del Valle Homes dated as of February 2, 2007. • Agreement for the Acceptance of Completed Public Improvements and Partial Release of Security dated June 12, 2007.

On November 25, 2008, the City Council approved a Settlement Agreement and Mutual Release with the Developer. The City agreed to accept the infrastructure improvements remaining to be accepted such as the well, storage, booster pumps, wellhead treatment system, and some in-tract subdivision improvements. In return, the Developer received a gross payment of $1.3 million minus $452,365 that was withheld pursuant to the terms of the Settlement Agreement, of which approximately $99,000 will be utilized by City crews to complete repairs to the accepted infrastructure. The Developer received a net payment of $847,635.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide
• At June 30, 2025, the District’s net position increased to $1,235,790. • Total District revenues were $505,795.
• Total District expenses were $390,058.

Fund Basis
• Special Revenue Fund revenues of $289,094 were $32,940 higher than the prior year which was primarily due to the increase in maintenance special taxes and expenditures of $228,676 were $30,499 more than the prior year due to an increase in activities in community development. The Special Revenue Fund balance increased by $60,418 to an ending fund balance of $550,462.
• Debt Service Fund revenues of $394,761 were $33,030 higher than the prior year primarily due to the increase in facilities special taxes collections. The expenditures of $335,850 were $15,649 higher than the prior year due to an increase in activities in community development. The Debt Service Fund balance increased by $58,911 to an ending fund balance of $634,078.

THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position. #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.

Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector.

FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.

As of June 30, 2025, total assets of $4,261,460 and deferred outflow of resources of $81,254 were offset by liabilities of $3,106,924. The District’s net position from governmental activities increased to $1,235,790 in 2025 from $1,120,053 in 2024. All of the District’s net position is restricted as follows: $551,267 for District maintenance and $684,523 for debt service. #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) The following summarizes the Statements of Net Position as of June 30, 2025 and 2024 and related changes:

Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $990,577 $860,003 $130,574
Cash and investments with fiscal agent 198,614 205,758 (7,144) Taxes receivable 18,089 14,941 3,148
Assessments receivable 3,050,000 3,230,000 (180,000)
Interest receivable 4,180 2,664 1,516
Prepaid expenses - 90 (90)
Total assets 4,261,460 4,313,456 (51,996)
Deferred outflow of resources
Loss on refunding of debt 81,254 89,246 (7,992)
Total deferred outflow of resources 81,254 89,246 (7,992) Liabilities
Current and other liabilities 56,924 52,649 4,275
Long-term debt 3,050,000 3,230,000 (180,000)
Total liabilities 3,106,924 3,282,649 (175,725)
Net position
Restricted for:

District maintenance 551,267 492,008 59,259
Debt Service 684,523 628,045 56,478
Total net position $1,235,790 $1,120,053 $115,737
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenue came from facilities and maintenance special taxes of $454,005 and investment earnings of $51,790. District expenses of $390,058 were for professional services, utilities, and interest.

The following summarizes the Statements of Activities for the years ended June 30, 2025 and 2024, and the respective changes:

Statements of Activities – Governmental Activities
Description 2025 2024 Change
Revenues
General revenues
Facilities and maintenance special taxes $454,005 $422,837 $31,168 Investment earnings 51,790 34,800 16,990
Total revenues 505,795 457,637 48,158
Expenses
Community development 253,470 215,656 37,814
Interest on long-term debt 136,588 143,459 (6,871)
Total expenses 390,058 359,115 30,943
Change in net position 115,737 98,522 $17,215
Net position, beginning of year 1,120,053 1,021,531
Net position, end of year $1,235,790 $1,120,053
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS
The fund financial statements report the District’s operations in more detail than the government-wide financial statements and focus primarily on the short-term activities of the District’s two funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other long-term amounts.

The following summarizes the Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance for both the Special Revenue Fund and the Debt Service Fund for the years ended June 30, 2025 and 2024, and the respective changes:
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $560,059 $494,675 $65,384
Taxes receivable 7,331 6,017 1,314
Interest receivable 2,464 1,612 852
Total assets $569,854 $502,304 $67,550
Liabilities
Accounts payable $14,686 $8,359 $6,327
Total liabilities 14,686 8,359 6,327
Deferred inflow of resources
Unavailable revenues 4,706 3,901 805
Total deferred inflows of resources 4,706 3,901 805
Fund balance
Restricted:

District maintenance 550,462 490,044 60,418
Total fund balance 550,462 490,044 60,418
Total liabilities, deferred inflow of
resources, and fund balance $569,854 $502,304 $67,550
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
16 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Debt Service Fund
Description 2025 2024 Change
Assets
Cash and investments $430,518 $365,328 $65,190
Cash and investments with fiscal agent 198,614 205,758 (7,144) Taxes receivable 10,758 8,924 1,834
Assessments receivable 3,050,000 3,230,000 (180,000)
Interest receivable 1,716 1,052 664
Prepaid expenditures - 90 (90)
Total assets $3,691,606 $3,811,152 $(119,546)
Liabilities
Accounts payable $555 $147 $408
Total liabilities 555 147 408
Deferred inflow of resources
Unavailable revenues 3,056,973 3,235,838 (178,865)
Total deferred inflow of resources 3,056,973 3,235,838 (178,865) Fund balance
Nonspendable - 90 (90)
Restricted for:

Debt service 634,078 575,077 59,011
Total fund balance 634,078 575,167 58,911
Total liabilities, deferred inflow of
resources, and fund balance $3,691,606 $3,811,152 $(119,546) #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
17 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $289,094 $256,154 $32,940
Expenditures (228,676) (198,177) (30,499)
Net change in fund balance 60,418 57,977 $2,441
Fund balance, beginning of year 490,044 432,067
Fund balance, end of year $550,462 $490,044
Statements of Revenues, Expenditures, and Changes in Fund Balance – Debt Service Fund
Description 2025 2024 Change
Revenues $394,761 $361,731 $33,030
Expenditures (335,850) (320,201) (15,649)
Net change in fund balance 58,911 41,530 $17,381
Fund balance, beginning of year 575,167 533,637
Fund balance, end of year $634,078 $575,167
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
18 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) At June 30, 2025, the District’s governmental funds reported combined fund balances of $1,184,540, which was a $119,329 increase from fiscal year 2024. The Special Revenue Fund realized a $60,418 increase and the Debt Service Fund realized an increase of $58,911 due to increases in facilities and maintenance special taxes and fair value of investments.

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

DEBT ADMINISTRATION
The District issued Special Tax Bonds, Series 2005 in the principal amount of $5 million in September 2005. Except for approximately $20,000 that was used to reimburse the City’s water fund for work performed by its crews, the proceeds were used to reimburse the Developer for infrastructure it installed pursuant to the Acquisition & Shortfall Agreements entered into between the Developer and the District.

The District issued Refunding Special Tax Bonds, Series 2014 in the principal amount of $4.4 million in December 2014 to refund the outstanding Special Tax Bonds, Series 2005.

The balance of the long-term debt at June 30, 2025, is $3.05 million. Additional details can be found in Note 3 to the financial statements.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
19 CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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20 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California

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

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #5..
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See notes to basic financial statements.
21 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $990,577
Cash and investments with fiscal agent 198,614
Taxes receivable 18,089
Assessments receivable 3,050,000
Interest receivable 4,180
Total Assets 4,261,460

DEFERRED OUTFLOW OF RESOURCES
Loss on refunding of debt 81,254
Total Deferred Outflow of Resources 81,254

LIABILITIES
Accounts payable 15,241
Interest payable 41,683
Long-term debt:

Due within one year 195,000
Due in more than one year 2,855,000
Total Liabilities 3,106,924

NET POSITION
Restricted for:

District maintenance 551,267
Debt service 684,523
Total Net Position $1,235,790
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See notes to basic financial statements.
22 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Functions/Programs Expenses
Operating
Grants &
Contributions
Governmental
Activities
Community development $253,470 $- $(253,470)
Interest on long-term debt 136,588 - (136,588)
$390,058 $- (390,058)
General Revenues
Facilities and maintenance special taxes 454,005
Investment earnings 51,790
Total General Revenues 505,795
Change in Net Position 115,737
Net Position, Beginning of Year 1,120,053
Net Position, End of Year $1,235,790
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23 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California

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

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

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

The Debt Service Fund accounts for the payment of principal and interest on the 2014 Refunding Special Tax Bonds.
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See notes to basic financial statements.
24 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Special
Revenue
Fund
Debt Service
Fund Total
ASSETS
Cash and investments $560,059 $430,518 $990,577
Cash and investments with fiscal agent - 198,614 198,614 Taxes receivable 7,331 10,758 18,089
Assessments receivable - 3,050,000 3,050,000
Interest receivable 2,464 1,716 4,180
Total Assets $569,854 $3,691,606 $4,261,460

LIABILITIES
Accounts payable $14,686 $555 $15,241
Total Liabilities 14,686 555 15,241

DEFERRED INFLOW OF RESOURCES
Unavailable revenues 4,706 3,056,973 3,061,679
Total Deferred Inflows of
Resources 4,706 3,056,973 3,061,679

FUND BALANCE
Restricted for:

District maintenance 550,462 - 550,462
Debt Services - 634,078 634,078
Total Fund Balances 550,462 634,078 1,184,540
Total Liabilities, Deferred Inflow of
Resources, and Fund Balances $569,854 $3,691,606 $4,261,460 #5..
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See notes to basic financial statements.
25 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Reconciliation of the Governmental Funds Balance Sheet
to the Governmental Activities Statement of Net Position June 30, 2025
Total Fund Balances - Governmental Funds $1,184,540
Amounts reported for governmental activities in the Statement of Net Position are different because:

Other long-term assets are not available to pay for the current period expenditures and therefore are deferred in governmental funds. 3,050,000 Revenues not available for current period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position. 11,679
Long-term liabilities, and the related deferred loss on refunding, are not due and payable in the current period and therefore are not reported in the funds.

Long-term debt (3,050,000)
Deferred loss on refunding of debt 81,254
Interest payable (41,683)
Total Net Position - Governmental Activities $1,235,790 #5..
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See notes to basic financial statements.
26 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2025
Special
Revenue
Fund
Debt
Service
Fund Total

REVENUES
Facilities and maintenance special taxes $260,824 $371,241 $632,065 Interest income 16,105 18,438 34,543
Change in fair value of investments 12,165 5,082 17,247 Total Revenues 289,094 394,761 683,855

EXPENDITURES
Community development
Services - professional and other 189,858 24,794 214,652 Utilities 38,818 - 38,818
Debt service
Principal payments - 180,000 180,000
Interest and fiscal charges - 131,056 131,056
Total Expenditures 228,676 335,850 564,526
Net Change in Fund Balances 60,418 58,911 119,329
Fund Balances, Beginning of Year 490,044 575,167 1,065,211 Fund Balances, End of Year $550,462 $634,078 $1,184,540 #5..
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See notes to basic financial statements.
27 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities
Year Ended June 30, 2025
Net Change in Fund Balances - Governmental Funds $119,329 Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues previously recognized in the Statement of Activities that did not provide current financial resources are reported as revenues in the governmental funds. (180,000)
Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the governmental funds. 1,940
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal long-term debt and the payment to refund escrow consume the current financial resources of governmental funds. Neither transaction, however, has any effect on net position:

Repayment of the principal of long-term debt 180,000
(Continued)
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities (Continued) Year Ended June 30, 2025
See notes to basic financial statements.
28 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds:

Amortization of deferred loss on refunding $(7,992)
Interest payable 2,460
Change in Net Position - Governmental Activities $115,737 #5..
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See notes to basic financial statements.
29 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with
Amounts

REVENUES
Facilities and maintenance special
taxes $249,600 $249,600 $260,824 $11,224
Interest income - - 16,105 16,105
Change in fair value of investments - - 12,165 12,165
Total Revenues 249,600 249,600 289,094 39,494

EXPENDITURES
Community development
Services - professional and other 202,256 202,256 189,858 12,398 Utilities 44,100 44,100 38,818 5,282
Total Expenditures 246,356 246,356 228,676 17,680
Net Change in Fund Balance $3,244 $3,244 60,418 $57,174 Fund Balance, Beginning of Year 490,044
Fund Balance, End of Year $550,462
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30 Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 2003-1 Fairview Village (the District) was formed on December 11, 2003 by Resolution No. 2003-660 following a vote of the property owner within the proposed district. The District, a separate legal entity, was formed to provide a funding and reimbursement mechanism for public facilities and services required by the District Specific Plan. The District encompasses approximately 359 gross acres of land located in the southwest area of the City of Modesto, California (the City), the south side of Hatch Road and east of Carpenter Road. The District is planned to yield 383 single-family residential lots, a water well, storm drainage basin, water tank, sewer outfall line, and a portion of the central neighborhood park site and related infrastructure on 81.66 acres located in the northeast portion of the District. The remaining properties with 359 acres are expected to annex to the District in the future, as the area develops.

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

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

Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items which are not properly included among program revenues, are reported instead as general revenues.

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

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Miscellaneous revenues are considered to be measurable and available only when cash is received by the District. The District reports the following major governmental funds:

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

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

Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable - Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have nonspendable resources as of June 30, 2025.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Restricted - Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. The District reported $1,184,540 of restricted resources as of June 30, 2025. • Committed - Amounts constrained to specific purposes by the District itself, using the District’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest-level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. The District did not have committed resources as of June 30, 2025. • Assigned - Amounts the District intends to use for a specific purpose. Intent can be expressed by the District at either the highest level of decision-making or by an official or body to which the District delegates the authority. The District did not have assigned resources as of June 30, 2025.
• Unassigned - The residual classification for the District that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. The District did not have unassigned resources as of June 30, 2025.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
35 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through the adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the District through the adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

Net Position
Net position represents the residual interest in the District’s assets and deferred outflows of resources after liabilities and deferred inflows of resources are deducted. In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and presented it in three broad components:
• Net investment in capital assets - Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted - Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• Unrestricted - Amount consists of all net position that do not meet the definition “net investment in capital assets” or “restricted” net position.

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

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

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

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

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

GASB Statement No. 104 – Disclosure of Certain Capital Assets. The requirements of this statement are effective for reporting periods beginning after June 15, 2025. #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
37 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District, with the exception of cash and investments with fiscal agents, are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.

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

Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:

Statement of Net Position – Governmental Activities
Cash and investments $990,577
Cash and investments with fiscal agent 198,614
Total cash and investments $1,189,191
Deposits with the City
Cash and investment pool $990,577
Money market fund 198,614
Total cash and investments $1,189,191
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
38 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The District is required to disclose investments that represent a concentration of five percent (5%) or more of investments in any one issuer held by individual funds in the securities of issuers other than U.S. Treasury securities, mutual funds, and external investment pools. At June 30, 2025, the District did not hold any other investments.

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

Detailed information regarding the City’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s Annual Comprehensive Financial Report. As of June 30, 2025, the fair value of the District’s position in the pool is the same as the value of its pool shares.
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
39 NOTE 3 LONG-TERM DEBT
On December 16, 2014, the District issued Refunding Special Tax Bonds (refunding bonds) with a par amount of $4,420,000 to refund the District’s $4,660,000 outstanding Special Tax Bonds (refunded bonds) issued on September 1, 2005, which were issued primarily to finance various public improvements needed to develop property located within the District. Interest on the refunding bonds is payable semiannually on March 1st and September 1st through September 1, 2035. The refunding bonds were issued with an interest rate of 4.1% and are payable solely from revenues derived from the assessment of annual special taxes to be levied on the taxable property within the District and from certain other funds pledged under the Trust Indenture. The principal payments of these bonds are not subject to acceleration.

Any one or more of the following events shall constitute an “event of default” for these bonds:
(a) Default in the due and punctual payment of the principal of or redemption premium, if any, on any bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise.
(b) Default on the due and punctual payment of the interest on any bond when and as the same shall become due and payable.
(c) Except as described in (a) or (b), default shall be made by the District in the observance of any of the agreements, conditions, or covenants for a period of thirty (30) days after the District shall have been given notice in writing of such default by the Trustee or the owners of twenty-five percent (25%) in aggregate principal amount of the outstanding bonds. #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
40 NOTE 3 LONG-TERM DEBT (CONTINUED)
The long-term debt activity for the year ended June 30, 2025 was as follows:

Description
Beginning
Balance Additions Reductions
Ending
Balance
Refunding Special Tax Bonds $3,230,000 $- $(180,000) $3,050,000 Annual debt service requirements for the refunding bonds are shown below:

Year Ending June 30 Principal Interest Total
2026 $195,000 $121,053 $316,053
2027 205,000 112,853 317,853
2028 225,000 104,038 329,038
2029 240,000 94,505 334,505
2030 255,000 84,358 339,358
2031-2035 1,930,000 251,740 2,181,740
$3,050,000 $768,547 $3,818,547
Interest expense for the year ended June 30, 2025 was $136,588.

NOTE 4 RESTRICTED FUND BALANCES
Restrictions of Fund Balances
Fund balances are all presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2025, restrictions included:
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
41 NOTE 4 RESTRICTED FUND BALANCES (CONTINUED)
Restrictions of Fund Balances (Continued)
Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District.

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

NOTE 5 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that will initiate foreclosure proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. (b) All parcels delinquent at June 30 when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1 following the end of the fiscal year.

At June 30, 2025, the District had 6 delinquent parcels for a total of $11,679, one of which was delinquent for more than three consecutive payments. The District received 98.43% of the Special Revenue Fund and Debt Service Fund facilities and maintenance special taxes levied during the year ended June 30, 2025. The delinquencies total of $11,679 at June 30, 2025 is included in taxes receivable on the Statement of Net Position and Balance Sheet. #5..
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Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
42 NOTE 6 SUBSEQUENT EVENTS
The District has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 12, 2025, the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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43 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2003-1 Fairview Village (the District), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 12, 2025.

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #5..
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45 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 12, 2025
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Table of Contents
PAGES
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 17
Statement of Activities – Governmental Activities 18
Balance Sheet – Governmental Funds 20
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 21
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 22
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 23
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 24
Notes to Basic Financial Statements 25
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 34 #5..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2016-1 Kiernan Business Park East #2 (the District), a component unit of the City of Modesto, California, as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-15 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering District’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
The City of Modesto Community Facilities District Number 2016-1 Kiernan Business Park East #2 (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

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

BACKGROUND AND MANAGEMENT’S DISCUSSION
On April 1, 1997, by Resolution No. 97-159, the City Council approved the Kiernan Business Park Specific Plan that set forth a plan of development for approximately 614 acres that were, at that time, located adjacent to the City’s northern border, east of Highway 99 and south of Kiernan Avenue in a portion of unincorporated Stanislaus County. To date, approximately 250 acres within the Kiernan Business Park Specific Plan have been annexed into the City.

Approximately 55 of the City-annexed acres are included within the District. #5..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION (CONTINUED)
The Kiernan Business Park Specific Plan is intended to provide for the development of a new business park, commercial, and industrial uses that will assist in implementing the City’s longrange objectives to enhance its local economy, generate jobs for residents, and create a better jobs/housing balance.

Kiernan Business Park East covers approximately 160 acres and is bound by Kiernan Avenue to the North, Pelandale Avenue to the South, Dale Road to the West, and American Avenue to the East.

On March 8, 2016, by Resolution No. 2016-92, the City Council formed the City of Modesto Community Facilities District No. 2016-1 (CFD No. 2016-1). The authorized services to be funded by special tax revenues include repair and replacement of parkways, landscaped medians, storm drainage pump and basin facilities, catch basins, manholes, underground infiltration trenches and pipes, landscaped bioswale lots and medians, stormwater treatment devices and filters, shrubs, vines, ground cover, and irrigation systems. The services to be provided include, but are not limited to, litter and debris removal, pruning, staking, fertilizing, mowing, plant replacement and restoration, fire and weed control, erosion control, trimming of vegetation, and storm drain system and bioswale maintenance.

FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide:
• At June 30, 2025, the District’s total net position was $1,110,372. • Total District’s revenues were $221,171 and expenses were $55,807. • At June 30, 2025, total assets were $1,114,551 while total liabilities were $4,179. #5..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
8 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS (CONTINUED)
Fund Basis:
• Capital Projects Fund revenues of $19,545 were $5,093 higher than in the prior year due to increases in interest income and fair value of investments for fiscal year 2025, and expenditures of $0 were the same as the previous year. The Capital Projects Fund ending fund balance was $354,890.
• Special Revenue Fund revenues increased from $178,069 in the prior year to $201,372 for fiscal year 2025 and expenditures increased from $47,784 in the prior year to $55,807 for fiscal year 2025. The increase in revenue is due to increases in maintenance special taxes and investment earnings, and the increase in expenditures is due primarily to an increase in community development expenditures. The Special Revenue Fund ending fund balance was $747,405.

The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year. #5..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
9 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
The Statement of Net Position and the Statement of Activities present information about the following:

Governmental activities - All the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector.

As of June 30, 2025, total assets of $1,114,551 were offset by liabilities of $4,179. The District’s net position from governmental activities increased to $1,110,372 in 2025 from $945,008 in 2024. The District’s net position has restrictions as follows: $354,890 for the acquisition or construction of infrastructure and $755,482 for District maintenance. #5..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
10 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) The following summarizes the Statements of Net Position as of June 30, 2025 and 2024 and the related changes:

Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $1,091,311 $933,900 $157,411
Assessments receivable 18,361 12,471 5,890
Interest receivable 4,879 3,106 1,773
Total assets 1,114,551 949,477 165,074
Liabilities
Accounts payable 4,179 4,469 (290)
Total liabilities 4,179 4,469 (290)
Net position
Restricted for:

Capital projects 354,890 335,345 19,545
District maintenance 755,482 609,663 145,819
Total net position $1,110,372 $945,008 $165,364
FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenues of $221,171 came primarily from maintenance special taxes, which amounted to $164,535 along with investment earnings of $56,636. District expenses of $55,807 were primarily for professional services and utilities expenses. #5..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
11 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES (CONTINUED) The following summarizes the Statements of Activities for the years ended June 30, 2025 and 2024, and the respective changes:

Statements of Activities – Governmental Activities
Description 2025 2024 Change
Revenues
General revenues
Maintenance special taxes $164,535 $159,998 $4,537
Investment earnings 56,636 35,716 20,920
Total revenues 221,171 195,714 25,457
Expenses
Community development 55,807 47,784 8,023
Total expenses 55,807 47,784 8,023
Change in net position 165,364 147,930 $17,434
Net position, beginning of year 945,008 797,078
Net position, end of year $1,110,372 $945,008
THE DISTRICT’S FUND FINANCIAL STATEMENTS
The fund financial statements report the District’s operations in more detail than the government-wide financial statements and focus primarily on the short-term activities of the District’s two funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other long-term amounts.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
12 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) The fund financial statements provide detailed information about each of the District’s significant funds, called major funds. Major funds present the major activities of the District for the year and may change from year to year as a result of changes in the pattern of the District’s activities. All of the District’s funds are presented here as major funds; their purpose is explained in Note 1 to the financial statements.

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

The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2025 and 2024, and the respective changes:

Balance Sheets – Capital Projects Fund
Description 2025 2024 Change
Assets
Cash and investments $353,275 $334,182 $19,093
Interest receivable 1,615 1,163 452
Total assets $354,890 $335,345 $19,545
Fund balances
Restricted for:

Capital projects $354,890 $335,345 $19,545
Total fund balances $354,890 $335,345 $19,545
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
13 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $738,036 $599,718 $138,318
Assessments receivable 18,361 12,471 5,890
Interest receivable 3,264 1,943 1,321
Total assets $759,661 $614,132 $145,529
Liabilities
Accounts payable $4,179 $4,469 $(290)
Total liabilities 4,179 4,469 (290)
Deferred inflow of resources
Unavailable revenues 8,077 7,823 254
Total deferred inflows of resources 8,077 7,823 254
Fund balances
Restricted for:

District maintenance 747,405 601,840 145,565
Total fund balances 747,405 601,840 145,565
Total liabilities, deferred inflow
of resources, and fund balances $759,661 $614,132 $145,529 #5..
- 565 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund
Description 2025 2024 Change
Revenues $19,545 $14,452 $5,093
Expenditures - - -
Net change in fund balance 19,545 14,452 $5,093
Fund balance, beginning of year 335,345 320,893
Fund balance, end of year $354,890 $335,345
Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $201,372 $178,069 $23,303
Expenditures 55,807 47,784 8,023
Net change in fund balance 145,565 130,285 $15,280
Fund balance, beginning of year 601,840 471,555
Fund balance, end of year $747,405 $601,840
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year ended June 30, 2025
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) At June 30, 2025, the District’s governmental funds reported combined fund balances of $1,102,295, an increase of $165,110 compared with last year. This increase was primarily due to increased maintenance special taxes revenues and higher investment earnings.

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

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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16 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California

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

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #5..
- 568 -
See notes to basic financial statements.
17 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $1,091,311
Assessments receivable 18,361
Interest receivable 4,879
Total Assets 1,114,551

LIABILITIES
Accounts payable 4,179
Total Liabilities 4,179

NET POSITION
Restricted for:

Capital projects 354,890
District maintenance 755,482
Total Net Position $1,110,372
#5..
- 569 -
See notes to basic financial statements.
18 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Activities – Governmental Activities
Year ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Operating
Grants and
Contributions
Governmental
Activities
Community development $55,807 $- $(55,807)
$55,807 $- (55,807)
General Revenues
Maintenance special taxes 164,535
Investment earnings 56,636
Total General Revenues 221,171
Change in Net Position 165,364
Net Position, Beginning of Year 945,008
Net Position, End of Year $1,110,372
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19 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California

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

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #5..
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See notes to basic financial statements.
20 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $353,275 $738,036 $1,091,311
Assessments receivable - 18,361 18,361
Interest receivable 1,615 3,264 4,879
Total Assets 354,890 759,661 1,114,551

LIABILITIES
Accounts payable $- $4,179 $4,179
Total Liabilities - 4,179 4,179

DEFERRED INFLOW OF RESOURCES
Unavailable revenues - 8,077 8,077
Total Deferred Inflow of Resources - 8,077 8,077

FUND BALANCES
Restricted for:

Capital projects 354,890 - 354,890
District maintenance - 747,405 747,405
Total Fund Balances 354,890 747,405 1,102,295
Total Liabilities, Deferred Inflow of
Resources, and Fund Balances $354,890 $759,661 $1,114,551 #5..
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See notes to basic financial statements.
21 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Reconciliation of the Governmental Funds Balance Sheet
to the Governmental Activities Statement of Net Position June 30, 2025
Total Fund Balances - Governmental Funds $1,102,295
Amounts reported for governmental activities in the Statement of Net Position are different because:

Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position. 8,077
Total Net Position - Governmental Activities $1,110,372 #5..
- 573 -
See notes to basic financial statements.
22 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year ended June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total

REVENUES
Maintenance special taxes $- $164,281 $164,281
Interest income 11,396 21,812 33,208
Change in fair value of investments 8,149 15,279 23,428 Total Revenues 19,545 201,372 220,917

EXPENDITURES
Community development
Services – professional and other - 54,633 54,633
Utilities - 1,174 1,174
Total Expenditures - 55,807 55,807
Net Change in Fund Balances 19,545 145,565 165,110
Fund Balances, Beginning of Year 335,345 601,840 937,185 Fund Balances, End of Year $354,890 $747,405 $1,102,295 #5..
- 574 -
See notes to basic financial statements.
23 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities Year ended June 30, 2025
Net Change in Fund Balances - Governmental Funds $165,110 Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the governmental funds. 254 Change in Net Position - Governmental Activities $165,364 #5..
- 575 -
See notes to basic financial statements.
24 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual
Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special taxes $171,600 $171,600 $164,281 $(7,319) Interest income - - 21,812 21,812
Change in fair value of investments - - 15,279 15,279
Total Revenues 171,600 171,600 201,372 29,772

EXPENDITURES
Community development:

Services - professional and other 59,634 59,634 54,633 5,001 Utilities 2,000 2,000 1,174 826
Total Expenditures 61,634 61,634 55,807 5,827
Net Change in Fund Balance $109,966 $109,966 145,565 $35,599 Fund Balance, Beginning of Year 601,840
Fund Balance, End of Year $747,405
#5..
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25 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 2016-1 Kiernan Business Park East #2 (the District) was formed on March 8, 2016 by City Council Resolution No. 2016-92 following a vote of the property owners within the proposed district. The District, a separate legal entity, was formed to provide a funding and reimbursement mechanism for public facilities and services required by the District Specific Plans. The District is the vehicle that will be used to ensure that all landowners in the District pay their share of the public improvements. The District covers approximately 160 acres and is bound by Kiernan Avenue to the North, Pelandale Avenue to the South, Dale Road to the West, and American Avenue to the East.

Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
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- 577 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items which are not properly included among program revenues, are reported instead as general revenues.

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

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.
#5..
- 578 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) The District reports the following major governmental funds:

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

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

In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that is applicable to a future reporting period. #5..
- 579 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources (Continued)
In addition to liabilities, the Statements of Net Position and Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that is applicable to a future reporting period.

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

A cost of living adjustment is applied to the special taxes annually.

Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have any nonspendable resources as of June 30, 2025.
#5..
- 580 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. The District reported $1,102,295 in restricted resources as of June 30, 2025. • Committed - Amounts constrained to specific purposes by the District itself, using the District’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest-level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. The District did not have any committed resources as of June 30, 2025. • Assigned - Amounts the District intends to use for a specific purpose. Intent can be expressed by the District at either the highest level of decision-making or by an official or body to which the District delegates the authority. The District did not have any assigned resources as of June 30, 2025.
• Unassigned - The residual classification for the District that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. The District did not have any unassigned resources as of June 30, 2025.

The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through the adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts.
#5..
- 581 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The assigned fund balance is established by the District through the adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

Net Position
Net position represents the residual interest in the District’s assets and deferred outflow of resources after liabilities and deferred inflow of resources are deducted. In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that do not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
#5..
- 582 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2025, the District implemented the following Governmental Accounting Standards Board (GASB) standards with no impact on the financial statements:

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

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

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

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

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

Cash in the pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The District does not have any deposits with financial institutions as of June 30, 2025.
#5..
- 583 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:

Statement of Net Position - Governmental Activities:

Cash and investments $1,091,311
Total cash and investments $1,091,311
Deposits with the City
Cash and investment pool $1,091,311
Total cash and investments $1,091,311
Detailed information regarding the City’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s Annual Comprehensive Financial Report. As of June 30, 2025, the fair value of the District’s position in the pool is the same as the value of its pool shares.

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

Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District. #5..
- 584 -
Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that will initiate foreclosures proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. (b) All parcels delinquent at June 30 when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1 following the end of the fiscal year.

At June 30, 2025, the District had 2 parcels that were delinquent for a total of $8,077. The District received 94.99% of the Special Revenue Fund and maintenance special taxes levied during the year ended June 30, 2025. The delinquencies total of $8,077 at June 30, 2025 is included in assessments receivable on the Statement of Net Position and Balance Sheet.

NOTE 5 SUBSEQUENT EVENTS
The District has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 12, 2025, the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
#5..
- 585 -
34 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2016-1 Kiernan Business Park East #2 (the District), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 12, 2025.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
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- 586 -
35 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #5..
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36 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 12, 2025
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- 588 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
- 589 -
Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
#5..
- 590 -
Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 17
Statement of Activities – Governmental Activities 18
Balance Sheet – Governmental Funds 20
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 21
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 22
Notes to Basic Financial Statements 23
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 31 #5..
- 591 -
1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 1997-1 North Beyer Park (the District), a component unit of the City of Modesto, California, as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-15 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 1997-1 North Beyer Park (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

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

On June 24, 1997, by City Council Resolution No. 97-355, the District was formed and authorized to levy a special tax to pay for capital improvements (medians on Coffee and Oakdale Roads) and ongoing maintenance costs. Subsequent development has been annexed to this Community Facilities District (CFD).

To date, the CFD has been unable to construct the medians. This is because (1) insufficient tax monies have been collected for the construction projects, and (2) the medians cannot be installed until the property owners on both sides of Coffee and Oakdale Roads dedicate the necessary right-of-way to construct the full street width. However, the CFD has levied and collected taxes sufficient for the ongoing maintenance expenses. In fact, the CFD has built sufficient reserves that the levy of the annual maintenance tax ceased as of fiscal year 2003- 2004 and is not expected to be reinstated until the authorized improvements have been installed.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide
• The District’s net position decreased by $10,493 in fiscal year 2025. • At June 30, 2025, net position was $40,926.
• Total general revenues were investment earnings of $2,696. • Total expenses were $13,189.

Fund Basis
• Capital Projects Fund revenues were $2,703. This is an increase of $703 from the prior year. The revenues are attributed to interest earnings and the increase in the fair value of investments.
• Capital Projects Fund ending fund balance increased by $2,703 to $49,106. • Special Revenue Fund revenues (losses) of $(7) were $235 lower than last year. Revenues (losses) are attributed to the increase or decrease in the fair value of investments.

Expenditures of $13,189 were $12,566 more than the prior year. • Special Revenue Fund ending fund balance decreased by $13,196 to a deficit of $(8,180). #5..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.

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

Governmental activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. Formation deposits, special facilities taxes, and annual maintenance assessments support these services. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector. #5..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.

As of June 30, 2025, total assets were $40,962. The District’s net position from governmental activities decreased to $40,926 in 2025 from $51,419 in 2024. All of the District’s net position is classified as follows: $49,106 is restricted for capital projects and a deficit of $(8,180) is unrestricted. The following summarizes the Statements of Net Position as of June 30, 2025 and 2024 and related changes:

Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $40,740 $51,239 $(10,499)
Interest receivable 222 180 42
Total assets 40,962 51,419 (10,457)
Liabilities
Interest payable 36 - 36
Total liabilities 36 - 36
Net position
Restricted for:

Capital projects 49,106 46,403 2,703
District maintenance - 5,016 (5,016)
Unrestricted (8,180) - (8,180)
Total net position $40,926 $51,419 $(10,493)
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 recognized investment earnings of $2,696. Community Development expenses increased by $12,566 due to the increase in the allocation of salaries and benefits by City employees providing administrative and program services charged to the District.

The following summarizes the Statements of Activities for the years ended June 30, 2025 and 2024 and the related changes:

Statements of Activities – Governmental Activities
Description 2025 2024 Change
Revenues
General revenues
Investment earnings $2,696 $2,228 $468
Total revenues 2,696 2,228 468
Expenses
Community development 13,189 623 12,566
Total expenses 13,189 623 12,566
Changes in net position (10,493) 1,605 $(12,098)
Net position, beginning of year 51,419 49,814
Net position, end of year $40,926 $51,419
THE DISTRICT’S FUND FINANCIAL STATEMENTS
The fund financial statements report the District’s operations in more detail than the government-wide financial statements and focus primarily on the short-term activities of the District’s two funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other longterm amounts. #5..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) The fund financial statements provide detailed information about each of the District’s most significant funds, called major funds. Major funds present the major activities of the District for the year and may change from year to year as a result of changes in the pattern of the District’s activities. All of the District’s funds are presented here as major funds; their purposes are explained in Note 1 to the financial statements. All of the District’s funds are governmental funds; financial statements for these funds are prepared on the modified accrual basis of accounting, which means they measure only current financial resources and uses.

The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2025 and 2024, and the respective changes:

Balance Sheets – Capital Projects Fund
Description 2025 2024 Change
Assets
Cash and investments $40,740 $46,242 $(5,502)
Interest receivable 222 161 61
Due from other funds 8,144 - 8,144
Total assets $49,106 $46,403 $2,703
Fund balances
Restricted for:

Capital projects $49,106 $46,403 $2,703
Total fund balances $49,106 $46,403 $2,703
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $- $4,997 $(4,997)
Interest receivable - 19 (19)
Total assets $- $5,016 $(5,016)
Liabilities
Interest payable $36 $- $36
Due to other funds 8,144 - 8,144
Total liabilities 8,180 - 8,180
Fund balances
Restricted for:

District maintenance - 5,016 (5,016)
Unassigned (8,180) - (8,180)
Total fund balances (deficit) $(8,180) $5,016 $(13,196) #5..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund
Description 2025 2024 Change
Revenues $2,703 $2,000 $703
Expenditures - - -
Net change in fund balance 2,703 2,000 $703
Fund balance, beginning of year 46,403 44,403
Fund balance, end of year $49,106 $46,403
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues (losses) $(7) $228 $(235)
Expenditures 13,189 623 12,566
Net change in fund balance (13,196) (395) $(12,801)
Fund balance, beginning of year 5,016 5,411
Fund balance (deficit), end of year $(8,180) $5,016
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) At June 30, 2025, the District’s governmental funds reported combined fund balances of $40,926, which is a decrease of $10,493 from last year. The Capital Projects Fund had a $2,703 increase in fund balance due to the increase in fair value of investments, while the Special Revenue Fund had a $13,196 decrease in fund balance due to community development expenditures exceeding the reported revenues.

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

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

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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16 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California

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

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #5..
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See notes to basic financial statements.
17 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $40,740
Interest receivable 222
Total Assets 40,962

LIABILITIES
Interest payable 36
Total Liabilities 36

NET POSITION
Restricted for:

Capital projects 49,106
Unrestricted (8,180)
Total Net Position $40,926
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- 608 -
See notes to basic financial statements.
18 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functional/Programs Expenses
Operating
Grants and
Contributions
Governmental
Activities
Community development $13,189 $- $(13,189)
$13,189 $- (13,189)
General Revenue
Investment earnings 2,696
Total General Revenues 2,696
Change in Net Position (10,493)
Net Position, Beginning of Year 51,419
Net Position, End of Year $40,926
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19 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California

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

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #5..
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See notes to basic financial statements.
20 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects Fund
Special
Revenue Fund Total
ASSETS
Cash and investments $40,740 $- $40,740
Interest receivable 222 - 222
Due from other funds 8,144 - 8,144
Total Assets $49,106 $- $49,106

LIABILITIES
Interest payable $- $36 $36
Due to other funds - 8,144 8,144
Total Liabilities $- $8,180 $8,180

FUND BALANCES
Restricted for:

Capital projects $49,106 $- $49,106
Unassigned - (8,180) (8,180)
Total Fund Balances (Deficit) 49,106 (8,180) 40,926
Total Liabilities
and Fund Balances $49,106 $- $49,106
There are no differences between the Governmental Funds Balance Sheet and the Governmental Activities Statement of Net Position as of June 30, 2025. #5..
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See notes to basic financial statements.
21 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2025
Capital
Projects Fund
Special
Revenue Fund Total

REVENUES
Interest income $1,576 $- $1,576
Change in fair value
of investments 1,127 (7) 1,120
Total Revenues $2,703 $(7) $2,696

EXPENDITURES
Community development
Services – professional and other - 13,189 13,189
Total Expenditures - 13,189 13,189
Net change in fund balances 2,703 (13,196) (10,493)
Fund balances, beginning of year 46,403 5,016 51,419
Fund balances (deficit), end of year $49,106 $(8,180) $40,926 There are no differences between the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances and the Governmental Activities Statement of Activities for the fiscal year ended June 30, 2025.
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See notes to basic financial statements.
22 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual
Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Change in fair value of investments $- $- $(7) $(7)
Total Revenues - - (7) (7)

EXPENDITURES
Community development
Services – professional and other 12,998 12,998 13,189 (191) Total Expenditures 12,998 12,998 13,189 (191)
Net Change in Fund Balance $(12,998) $(12,998) (13,196) $(198) Fund balance, beginning of year 5,016
Fund deficit, end of year $(8,180)
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23 Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 1997-1 North Beyer Park (the District) was formed on June 24, 1997 by City Council Resolution No. 97-355 following a vote of the property owners within the proposed District. The District, a separate legal entity, was formed to provide a funding mechanism for public facilities and services as required by the District Specific Plan.

The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings and other items that are not properly included among program revenues are reported instead as general revenues.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
24 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
25 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) The District reports the following major governmental funds:

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

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

Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable - Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have any nonspendable resources as of June 30, 2025.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Restricted - Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. The District reported $49,106 in restricted resources as of June 30, 2025 that is legally restricted for the acquisition, construction, and formation/annexation activities. • Committed - Amounts constrained to specific purposes by the District itself, using the District’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest-level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. The District did not have any committed resources as of June 30, 2025. • Assigned - Amounts the District intends to use for a specific purpose. Intent can be expressed by the District at either the highest level of decision-making or by an official or body to which the District delegates the authority. The District did not have any assigned resources as of June 30, 2025.
• Unassigned - The residual classification for the District that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. The District reported $(8,180) in unassigned resources as of June 30, 2025.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the District through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

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

In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
• Net investment in capital assets - Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted - Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. #5..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• Unrestricted - Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

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

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

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

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

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

GASB Statement No. 104 – Disclosure of Certain Capital Assets. The requirements of this statement are effective for reporting periods beginning after June 15, 2025. #5..
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
29 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.

Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:

Statement of Net Position – Governmental Activities
Cash and investments $40,740
Total cash and investments $40,740
Deposits with the City
Cash and investment pool $40,740
Total cash and investments $40,740
Detailed information regarding the City’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s Annual Comprehensive Financial Report. As of June 30, 2025, the fair value of the District’s position in the pool is the same as the value of its pool shares.
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- 620 -
Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
30 NOTE 3 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2025 was as follows:

Expenditures Amount
Special Revenue Fund
Community development
Services – professional and other $(191)
NOTE 4 RESTRICTED FUND BALANCES
Restrictions of Fund Balances
There are fund balances that are presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2025, restrictions included:

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

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

NOTE 5 SUBSEQUENT EVENTS
The District has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 12, 2025, the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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31 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 1997-1 North Beyer Park (the District), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 12, 2025.

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

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #5..
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33 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 12, 2025
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
With Independent Auditor’s Report
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 20
Statement of Activities – Governmental Activities 21
Balance Sheet – Governmental Funds 23
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 24
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 25
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 26
Statement of Revenues, Expenditures and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 27
Notes to Basic Financial Statements 28
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 42 #5..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2002-1 Northpointe (the District), a component unit of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-18 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 2002-1 Northpointe (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

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

Approximately 55 of the City-annexed acres are included within the District. The Kiernan Business Park Specific Plan is intended to provide for the development of a new business park, commercial, and industrial uses that will assist in implementing the City’s long-range objectives to enhance its local economy, generate jobs for residents, and create better jobs/housing balance.

The District was formed by the City Council on February 26, 2002, by Resolution 2002-96 in order to generate funding for landscaping improvements, a variety of maintenance responsibilities (weed control, litter removal, landscape maintenance, and general maintenance and replacement of storm drainage facilities), and improvement and replacement costs necessitated by the development of the projects within the District. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide
• At June 30, 2025, the District’s net position increased to $660,265. • Total District revenues were $120,026 and expenses were $42,548.

Fund Basis
• Capital Projects Fund revenues of $2,708 were $707 higher than the prior year due to the increase in interest income and the increase in the fair value of investments. Expenditures of $0 were the same as the previous year. The Capital Projects Fund ending fund balance increased by $2,708 to an ending fund balance of $49,146. • Special Revenue Fund revenues of $117,319 were $13,861 higher than the prior year primarily due to the increases in maintenance special taxes, interest income, and fair value of investments in the current year. Expenditures of $42,548 were $13,326 lower than the prior year primarily due to the decrease in services expenditures. The special revenue fund balance increased by $74,771 to an ending fund balance of $612,133. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.

Governmental Activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.

As of June 30, 2025, total assets of $910,246 were offset by liabilities of $16,998 and deferred inflows of resources of $232,983. The District’s net position from governmental activities increased to $660,265 in 2025 from $582,786 in 2024. All of the District’s net position is restricted as follows: $49,146 for the acquisition or construction of infrastructure and $611,119 for District maintenance.

Presented on the succeeding page is the summary of the Statements of Net Position as of June 30, 2025 and 2024 and the related changes.
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $643,815 $569,948 $73,867
Prepaid expenses 172 - 172
Interest receivable 2,895 1,943 952
Assessments receivable - 980 (980)
Lease receivable 248,666 261,683 (13,017)
Right-of-use asset, net of accumulated
amortization 14,698 16,394 (1,696)
Total assets 910,246 850,948 59,298
Liabilities
Accounts payable 1,286 1,258 28
Lease liability, due within one year 1,754 1,696 58
Lease liability, due in more than one year 13,958 15,712 (1,754) Total liabilities 16,998 18,666 (1,668)
Deferred inflow of resources
Leases 232,983 249,496 (16,513)
Total deferred inflow of resources 232,983 249,496 (16,513) Net position
Restricted for:

Capital projects 49,146 46,438 2,708
District maintenance 611,119 536,348 74,771
Total net position $660,265 $582,786 $77,479
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenue came primarily from maintenance special taxes of $70,147, interest income and investment earnings of $34,030, and lease revenue of $12,051.

District expenses of $42,548 were for professional services and utilities expenses.

Presented below is the summary of the Statements of Activities for the years ended June 30, 2025 and 2024, and the respective changes:

Statements of Activities – Governmental Activities
Description 2025 2024 Change
Revenues
General revenues
Maintenance special taxes $70,147 $70,101 $46
Interest income 19,876 12,031 7,844
Investment earnings 14,154 10,928 3,226
Interest revenue - lease 3,799 1,027 2,772
Lease revenue 12,051 11,372 679
Total revenues 120,026 105,459 14,567
Expenses
Community development 42,548 38,528 4,020
Total expenses 42,548 38,528 4,020
Net change in net position 77,478 66,931 $10,547
Net position, beginning of year 582,786 515,855
Net position, end of year $660,265 $582,786
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 THE DISTRICT’S FUND FINANCIAL STATEMENTS
The fund financial statements report the District’s operations in more detail than the government-wide financial statements and focus primarily on the short-term activities of the District’s two funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other longterm amounts.

All of the District’s funds are governmental funds; financial statements for these funds are prepared on the modified accrual basis of accounting, which means they measure only current financial resources and uses.
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund as of and for the years ended June 30, 2025 and 2024, and the respective changes:

Balance Sheets – Capital Projects Fund
Description 2025 2024 Change
Assets
Cash and investments $48,923 $46,277 $2,646
Interest receivable 223 161 62
Total assets $49,146 $46,438 $2,708
Fund balances
Restricted for:

Capital projects $49,146 $46,438 $2,708
Total fund balances $49,146 $46,438 $2,708
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets - Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $594,892 $523,671 $71,221
Assessments receivable - 980 (980)
Interest receivable 2,672 1,782 890
Prepaid expenditures 172 - 172
Lease receivable 248,666 261,683 (13,017)
Total assets $ 846,402 $ 788,116 $58,286
Liabilities
Accounts payable $1,286 $1,258 $28
Total liabilities 1,286 1,258 28
Deferred inflow of resources
Leases 232,983 249,496 (16,513)
Total deferred inflow of resources 232,983 249,496 (16,513) Fund balances
Nonspendable 172 - 172
Restricted for:

District maintenance 611,961 537,362 74,599
Total fund balances 612,133 537,362 74,771
Total liabilities, deferred inflow of
resources, and fund balances $846,402 $788,116 $58,286
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
16 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund
Description 2025 2024 Change
Revenues $2,708 $2,001 $707
Expenditures - - -
Net change in fund balance 2,708 2,001 $707
Fund balance, beginning of year 46,438 44,437
Fund balance, end of year $49,146 $46,438
Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $117,319 $103,458 $13,861
Expenditures (42,548) (55,874) 13,326
Other financing sources - 18,986 (18,986)
Net change in fund balance 74,771 66,570 $8,201
Fund balance, beginning of year 537,362 470,792
Fund balance, end of year $612,133 $537,362
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
17 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) At June 30, 2025, the District’s governmental funds reported combined fund balances of $661,279, which was a $77,479 increase from fiscal year 2024. The Capital Projects Fund realized a $2,708 increase due to higher interest income and a positive change in the fair value of investments, while the Special Revenue Fund realized a $74,771 increase due to revenues exceeding professional services and utilities expenditures.

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

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

LEASES
Under GASB Statement No. 87, the District is required to record all leases that meet the definition of a lease as defined in GASB Statement No. 87. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-of-use lease asset, and a lessor is required to recognize a lease receivable and deferred inflow of resources. Accordingly, the lease liability of $15,712 and the right-of-use asset, net of accumulated amortization of $14,698, are reported on the government-wide financial statements. The District recognized a lease receivable of $248,666 and a deferred inflow of resources of $232,983 in both the District’s fund and government-wide financial statements as of June 30, 2025. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
18 CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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19 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California

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

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #5..
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See notes to basic financial statements.
20 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $643,815
Interest receivable 2,895
Prepaid expenses 172
Lease receivable 248,666
Right-of-use asset, net of accumulated amortization 14,698 Total Assets 910,246

LIABILITIES
Accounts payable 1,286
Lease liability, due within one year 1,754
Lease liability, due in more than one year 13,958
Total Liabilities 16,998

DEFERRED INFLOW OF RESOURCES
Leases 232,983
Total Deferred Inflow of Resources 232,983

NET POSITION
Restricted for:

Capital projects 49,146
District maintenance 611,119
Total Net Position $660,265
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See notes to basic financial statements.
21 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Operating
Grants and
Contributions
Governmental
Activities
Community development $42,548 $ - $(42,548)
$42,548 $ - (42,548)
General Revenues
Maintenance special taxes 70,147
Interest income 19,876
Investment earnings 14,154
Interest revenue – lease 3,799
Lease revenue 12,051
Total General Revenues 120,027
Change in Net Position 77,479
Net Position, Beginning of Year 582,786
Net Position, End of Year $660,265
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22 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California

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

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

The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #5..
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See notes to basic financial statements.
23 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $48,923 $594,892 $643,815
Interest receivable 223 2,672 2,895
Prepaid expenditures - 172 172
Lease receivable - 248,666 248,666
Total Assets $49,146 $846,402 $895,548

LIABILITIES
Accounts payable $ - $1,286 $1,286
Total Liabilities - 1,286 1,286

DEFERRED INFLOW OF RESOURCES
Leases - 232,983 232,983
Total Deferred Inflow of Resources - 232,983 232,983

FUND BALANCES
Nonspendable - 172 172
Restricted for:

Capital projects 49,146 - 49,146
District maintenance - 611,961 611,961
Total Fund Balances 49,146 612,133 661,279
Total Liabilities, Deferred Inflow of
Resources, and Fund Balances $49,146 $846,402 $895,548
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See notes to basic financial statements.
24 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Reconciliation of the Governmental Funds
Balance Sheet to the Governmental Activities
Statement of Net Position
June 30, 2025
Total Fund Balances - Governmental Funds $661,279
Amounts reported for governmental activities in the Statement of Net Position are different because:

Right-of-use asset, net of accumulated amortization of $1,696, used in governmental activities are not current financial resources and therefore, is not reported in the governmental funds. 14,698 Long-term liabilities are not due in the current period and therefore, are not included in the governmental funds. (15,712)
Total Net Position - Governmental Activities $660,265
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See notes to basic financial statements.
25 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total

REVENUES
Maintenance special taxes $ - $70,147 $70,147
Interest income 1,579 18,297 19,876
Change in fair value of investments 1,129 13,025 14,154 Interest revenue - lease - 3,799 3,799
Lease revenue - 12,051 12,051
Total Revenues 2,708 117,319 120,027

EXPENDITURES
Community development
Services – professional and other - 34,217 34,217
Utilities - 6,600 6,600
Debt service
Principal retirement - 1,696 1,696
Interest - 35 35
Total Expenditures - 42,548 42,548
Excess of Revenues Over Expenditures 2,708 74,771 77,479 Net Change in Fund Balances 2,708 74,771 77,479
Fund Balances, Beginning of Year 46,438 537,362 583,800 Fund Balances, End of Year $49,146 $612,133 $661,279
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See notes to basic financial statements.
26 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Reconciliation of the Governmental Funds
Statement of Revenues, Expenditures, and
Changes in Fund Balances to the
Governmental Activities Statement of Activities
Year Ended June 30, 2025
Net change in Fund Balances - Governmental Funds $77,479 Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the lease is capitalized as a right-of-use asset, along with a corresponding lease liability to reflect the future obligation.

The cost of this right-of-use asset is amortized by $1,696 over the life of the lease. (1,696)
The issuance of long-term debt provides current financial resources to governmental funds while the repayments of the principal consume the current financial resources of the governmental funds. Neither transaction, however, has any effect on net position. 1,696 Change in Net Position – Governmental Activities $77,479 #5..
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See notes to basic financial statements.
27 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Statement of Revenues, Expenditures and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual Year Ended June 30, 2025
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special taxes $72,800 $72,800 $70,147 $(2,653) Interest income - - 18,297 18,297
Change in fair value of investments - - 13,025 13,025
Interest revenue - lease - - 3,799 3,799
Lease revenue - - 12,051 12,051
Total Revenues 72,800 72,800 117,319 44,519

EXPENDITURES
Community development
Services - professional and other 40,839 40,839 34,217 6,622 Utilities 7,000 7,000 6,600 400
Debt service
Principal retirement - - 1,696 (1,696)
Interest - - 35 (35)
Total Expenditures 47,839 47,839 42,548 5,291
Excess of Revenues Over
Expenditures 24,961 24,961 74,771 49,810
Net Change in Fund Balance $24,961 $24,961 74,771 $49,810 Fund Balance, Beginning of Year 537,362
Fund Balance, End of Year $612,133
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28 Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 2002-1 Northpointe (the District) was formed on February 26, 2002, by the City Council Resolution No. 2002-96 following a vote of the property owners within the proposed District. The District, a separate legal entity, was formed to provide a funding and reimbursement mechanism for public facilities and services required by the District Specific Plans. The District is the vehicle used to ensure that all landowners in the Specific Plans pay their fair share of the public improvements. The District is a 55-acre project bounded on the East by Highway 99, and by Pelandale Avenue on the South. The District provided funding for the development of new business park and industrial uses and includes such tenants as Costco, Lowe’s, and now Savemart.

The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues. The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function.

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

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

Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental funds:

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

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

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

Right-of-use Asset
The District has recorded the right-of-use lease asset as a result of implementing GASB 87, Leases. The right-of-use asset is initially measured at an amount equal to the initial measurement of the related lease liability plus any lease payments made prior to the lease term, less lease incentives and plus ancillary charges necessary to place the lease into service. The right-of-use asset is an intangible capital asset and is amortized on a straight-line basis over the life of the related lease.
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Lease Liability
The District’s lease liability is measured at the present value of payments expected to be made by the District during the lease term. As lease payments are made, the District will reduce the liability (the principal portion of payment) and recognize interest expense.

Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District reported $172 in nonspendable resources as of June 30, 2025.
• Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. The District reported $661,107 in restricted resources as of June 30, 2025.
• Committed – Amounts constrained to specific purposes by the District itself, using the District’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest-level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. The District did not have any committed resources as of June 30, 2025. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Assigned – Amounts the District intends to use for a specific purpose. Intent can be expressed by the District at either the highest level of decision-making or by an official or body to which the District delegates the authority. The District did not have any assigned resources as of June 30, 2025.
• Unassigned – The residual classification for the District that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. The District did not have any unassigned resources as of June 30, 2025.

The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through the adoption or amendment of the budget.

A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. The assigned fund balance is established by the District through the adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position
Net position represents the residual interest in the District’s assets and deferred outflows of resources after liabilities and deferred inflows of resources are deducted. In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure and right-of-use assets, net of accumulated depreciation, accumulated amortization and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets.
• Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
35 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.

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

GASB Statement No. 102 – Certain Risk Disclosures. The requirements of this statement are effective for reporting periods beginning after June 15, 2024. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update (Continued)
Released GASB Statements to be implemented in future financial statements are as follows:

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

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

Cash and investments in the pool are considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The District does not have any deposits with financial institutions as of June 30, 2025. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
37 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash and investments as of June 30, 2025 are classified in the accompanying financial statement as follows:

Statement of Net Position – Governmental Activities
Cash and investments $643,815
Total cash and investments $643,815
Deposits with the City
Cash and investment pool $643,815
Total cash and investments $643,815
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s Annual Comprehensive Financial Report. As of June 30, 2025, the fair value of the District’s position in the pool is the same as the value of its pool shares.

NOTE 3 LEASE RECEIVABLE
On May 28, 2013, the District, lessor, and Horizon Towers LLC, lessee, entered into a land lease agreement to install, operate, and maintain a communications facility and other improvements. The initial lease term is for five years with a monthly rental payment of $750 for the first subtenant and $400 for each subsequent subtenant that occupies the premises. The lease agreement will automatically renew for five additional five-year terms (extension term).

Monthly rent will increase by 10% at year one of each extension term. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
38 NOTE 3 LEASE RECEIVABLE (CONTINUED)
Lease revenue recognized under the lease agreement was $12,051 for the year ended June 30, 2025. Interest revenue recognized under the lease agreement was $3,799 for the year ended June 30, 2025.

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

Year Ending June 30 Principal Interest Total
2026 $8,883 $3,669 $12,552
2027 9,017 3,535 12,552
2028 9,153 3,399 12,552
2029 10,238 3,256 13,494
2030 10,710 3,097 13,807
2031-2035 58,473 12,980 71,453
2036-2040 70,433 8,165 78,598
2041-2045 71,759 2,445 74,204
$248,666 $40,546 $289,212
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
39 NOTE 4 RIGHT-OF-USE ASSET AND LIABILITY
The District has recorded a right-of-use asset and liability on a leased land. The District entered into a land lease agreement to prevent damage to and stabilize the east side of the Northpointe Basin by controlling the rodent population in and on the lease area. The lease commenced on February 25, 2014, and was terminated on February 28, 2024. A new 10-year lease agreement with an option for two 5-year extensions was entered into by the City following the termination of the old lease agreement. The new lease agreement’s first payment in 2024 was $1,681 with an annual cost-of-living increase of 3% through the lease term in 2034. The right-of-use asset is amortized on a straight-line basis over the terms of the related lease.

Right-of-use asset activity related to governmental activities for the year ended June 30, 2025 was as follows:

Beginning
Balance Additions
Deletions/
Adjustments
Ending
Balance
Intangible Assets
Right-of-use land $18,986 $ - $ - $18,986
Less: accumulated amortization (2,592) (1,696) - (4,288) Total $16,394 $(1,696) $ - $14,698
The amortization expense charged to the governmental activities for the year ended June 30, 2025 was $1,696.
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
40 NOTE 4 RIGHT-OF-USE ASSET AND LIABILITY (CONTINUED)
The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2025, were as follows:

Year Ending June 30 Principal Interest Total
2026 $1,754 $31 $1,785
2027 1,809 28 1,837
2028 1,868 24 1,892
2029 1,928 21 1,949
2030 1,990 17 2,007
2031-2034 6,363 26 6,389
$15,712 $147 $15,859
NOTE 5 RESTRICTED FUND BALANCES
Restrictions of Fund Balances
There are fund balances that are presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2025, restrictions included:

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

Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District. #5..
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Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
41 NOTE 6 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2025 was as follows:

Expenditures Amount
Special Revenue Fund
Debt service
Interest $(35)
Principal retirement $(1,696)
NOTE 7 SUBSEQUENT EVENTS
The District has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 12, 2025, the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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42 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards
The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2002-1 Northpointe (the District), as of and for the year ended June 30, 2025, the budgetary comparison for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 12, 2025.

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

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #5..
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44 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 12, 2025
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 23
Statement of Activities – Governmental Activities 25
Balance Sheet – Governmental Funds 27
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 29
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 30
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 31 Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 33
Notes to Basic Financial Statements 34
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 50 #5..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2004-1 Village One #2 (the District), a component unit of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-21 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 2004-1 Village One #2 (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

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

The District’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the District. The District is the vehicle that will be used to ensure that all landowners in the Specific Plan area contribute to the cost of the public facilities and services. Additional information on the District can be found below and in Note 1 to the accompanying financial statements.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
In October of 1989, the City initiated planning of the area now known as Village One. The original Village One Specific Plan, adopted by the City Council on October 16, 1990 via Resolution No. 90-828A, contemplated a pedestrian-oriented, self-contained neighborhood concept that offered housing to accommodate various income levels. In addition, the original plan called for a number of landscaped areas, parks, as well as other amenities. Over the years, substantial revisions to the original plan occurred, including a reconfiguration of streets, a reduction of landscaped areas, and modification of the financing strategy. At the close of fiscal year 2003-2004, the Village One area was based on the Specific Plan, the Infrastructure Financing Plan, and the Facilities Master Plan adopted in April 2003.

On October 8, 1996 by Resolution No. 96-544, the City Council formed the City of Modesto Community Facilities District (CFD) No. 1996-1 to provide funding for the acquisition or construction of certain roads, storm drainage, and park improvements. In 2004, it was determined that the tax rates set forth in CFD No. 1996-1 would be insufficient to fund the required infrastructure. Therefore, on April 6, 2004 by Resolution No. 2004-199, the City Council formed CFD No. 2004-1 (Village One #2) to assist in the financing of the remaining required infrastructure to support the Village One Specific Plan Area. The District includes a one-time facilities special tax, an annual facilities special tax, and an annual maintenance special tax. The District, in conjunction with CFD No. 1996-1, will provide the funding needed to complete the District-funded core infrastructure needed for the area. The District was also authorized to issue debt in the form of land secured CFD bonds which are covered in more detail in the debt administration section of these financial statements.

In fiscal year 2024-2025, the District did not have funded infrastructure that was under design, construction or constructed/acquired for the Village One #2 area using tax monies and bond proceeds from the District.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide
• At June 30, 2025, the District’s net position was $23.0 million. • At June 30, 2025, total assets and deferred outflow of resources were $46.6 million while total liabilities and total deferred inflow of resources were $23.6 million. • Total District revenues were $4.6 million, and expenses were $2.0 million.

Fund Basis
• Capital Projects Fund revenues increased from $814K in the prior year to $1.0 million for fiscal year 2025 and expenditures decreased from $66 in the prior year to $0 for fiscal year 2025. The increase in revenues is attributed to the increases in facilities special taxes and fair value of investments, while the decrease in expenditures is attributed to the decrease in activity in the development of capital projects.
• Capital Projects Fund ending fund balance for fiscal year 2025 increased from $15.4 million to $16.4 million. This increase is primarily attributed to the increase in revenues for the year. • Special Revenue Fund revenues remained the same with $1.4 million in the prior year and $1.4 million for fiscal year 2025, and expenditures increased from $985K in the prior year to $1.0 million for fiscal year 2025. The increase in expenditure is due primarily to an increase in professional and other contractual services. • Special Revenue Fund ending fund balance increased from $1.3 million in the prior year to $1.6 million in the current year.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS (CONTINUED)
• Debt Service Fund revenues increased from $2.4 million to $3.3 million in the fiscal year 2025, and expenditures increased by $47K to $2.1 million for fiscal year 2025. The increase in the revenue is due to an increase in the facilities special taxes, and the increase in expenditure is attributed to the increase in debt service payments as compared to the prior year.
• Debt Service Fund ending fund balance increased for fiscal year 2025 from $3.6 million to $4.8 million.

Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and comprise the statement of net position and the statement of activities. The statement of net position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The statement of activities provides information about the District’s revenues and all its expenses. The statement of activities explains in detail the change in net position for the year. #5..
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
The Statement of Net Position and the Statement of Activities present information about the following:

As of June 30, 2025, total assets and deferred outflow of resources of $46.6 million were offset by total liabilities and deferred inflow of resources of $23.6 million. The District’s net position from governmental activities increased to $23.0 million in 2025 from $20.5 million in 2024. This increase was due to increases in special tax revenues and fair value of investments. The District’s net position has restrictions as follows: $16.9 million for acquisition or construction of infrastructure, $4.5 million for debt service, and $1.6 million for District maintenance. #5..
- 684 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) The following summarizes the Statements of Net Position as of June 30, 2025 and 2024 and the related changes:

Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $20,249,192 $17,958,331 $2,290,861 Cash and investments with
fiscal agent 3,148,374 2,986,410 161,964
Taxes receivable 84,535 94,798 (10,263)
Assessments receivable 21,505,000 22,540,000 (1,035,000) Interest receivable 89,861 60,366 29,495
Prepaid expenses 77 624 (547)
Lease receivable 382,642 403,855 (21,213)
Nondepreciable capital asset 477,126 477,126 -
Total assets $45,936,807 $44,521,510 $1,415,297
(Continued)
#5..
- 685 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) Description 2025 2024 Change
Deferred outflow of resources
Loss on refunding of debt $684,996 $746,339 $(61,343)
Total deferred outflow of resources 684,996 746,339 (61,343) Liabilities
Current and other liabilities 984,223 1,059,639 (75,416) Long-term debt 22,249,360 23,351,019 (1,101,659)
Total liabilities 23,233,583 24,410,658 (1,177,075)
Deferred inflow of resources
Leases 353,970 379,523 (25,553)
Total deferred inflow of resources 353,970 379,523 (25,553) Net position
Restricted for:

Capital projects 16,919,905 15,886,686 1,033,219
Debt service 4,492,044 3,265,353 1,226,691
District maintenance 1,622,301 1,325,629 296,672
Total net position $23,034,250 $20,477,668 $2,556,582
FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenues came primarily from $3.4 million in annual facilities and maintenance special taxes, along with investment earnings of $1.2 million. District expenses of $2.0 million were primarily for district maintenance, including professional services and utilities, and interest on long-term debt.
#5..
- 686 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES (CONTINUED) The following summarizes the Statements of Activities for the years ended June 30, 2025 and 2024 and the related changes.

Statements of Activities – Governmental Activities
Description 2025 2024 Change
Revenues
Program revenues
Charges for services $- $9,500 $(9,500)
General revenues
Facilities special taxes 2,140,897 1,490,076 650,821
Maintenance special taxes 1,241,173 1,285,964 (44,791)
Lease revenue 16,877 17,308 (431)
Investment earnings 1,195,643 847,806 347,837
Interest income from leases 4,114 6,139 (2,025)
Others 2,096 - 2,096
Total revenues 4,600,800 3,656,793 944,007
Expenses
Community development 1,073,478 1,010,842 62,636
Interest on long-term debt 970,740 1,019,895 (49,155)
Total expenses 2,044,218 2,030,737 13,481
Change in net position 2,556,582 1,626,056 $930,526
Net position, beginning of year 20,477,668 18,851,612
Net position, end of year $23,034,250 $20,477,668
#5..
- 687 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) The fund financial statements report the District’s operations in more detail than the government-wide financial statements and focus primarily on the short-term activities of the District’s three funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other longterm amounts.

The fund financial statements provide detailed information about each of the District’s most significant funds, called major funds. Major funds present the major activities of the District for the year and may change from year to year as a result of changes in the pattern of the District’s activities. All of the District’s funds are presented here as major funds; their purpose is explained in Note 1 to the basic financial statements. All of the District’s funds are governmental funds; financial statements for these funds are prepared on the modified accrual basis of accounting, which means they measure only current financial resources and uses.

The following summarizes the Balance Sheets and the Statements of Revenues, Expenditures, and Changes in Fund Balances for the Capital Projects Fund, the Special Revenue Fund and the Debt Service Fund for the years ended June 30, 2025 and 2024, and the respective changes:
#5..
- 688 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Capital Project Fund
Description 2025 2024 Change
Assets
Cash and investments $16,368,045 $15,356,305 $1,011,740 Interest receivable 74,734 53,255 21,479
Total assets $16,442,779 $15,409,560 $1,033,219
Fund balances
Restricted for:

Capital projects $16,442,779 $15,409,560 $1,033,219
Total fund balances $16,442,779 $15,409,560 $1,033,219
#5..
- 689 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
16 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $1,650,685 $1,357,034 $293,651
Taxes receivable 22,416 30,951 (8,535)
Interest receivable 7,020 4,303 2,717
Prepaid expenditures 77 - 77
Lease receivable 382,642 403,855 (21,213)
Total assets $2,062,840 $1,796,143 $266,697
Liabilities
Accounts payable $63,497 $68,705 $(5,208)
Total liabilities 63,497 68,705 (5,208)
Deferred inflows of resources
Leases 353,970 379,523 (25,553)
Unavailable revenues 11,471 23,072 (11,601)
Total deferred inflows
of resources 365,441 402,595 (37,154)
Fund balances
Nonspendable 77 - 77
Restricted for:

District maintenance 1,633,825 1,324,843 308,982
Total fund balances 1,633,902 1,324,843 309,059
Total liabilities, deferred inflows of
resources, and fund balances $2,062,840 $1,796,143 $266,697 #5..
- 690 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
17 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Debt Service Fund
Description 2025 2024 Change
Assets
Cash and investments $2,230,462 $1,244,992 $985,470
Cash and investments with fiscal agent 3,148,374 2,986,410 161,964 Taxes receivable 62,119 63,847 (1,728)
Assessments receivable 21,505,000 22,540,000 (1,035,000) Interest receivable 8,107 2,808 5,299
Prepaid expenditures - 624 (624)
Total assets $26,954,062 $26,838,681 $115,381
Liabilities
Accounts payable $1,462 $836 $626
Unearned revenues 598,347 651,931 (53,584)
Total liabilities 599,809 652,767 (52,958)
(Continued)
#5..
- 691 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
18 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Description 2025 2024 Change
Deferred inflow of resources
Unavailable revenues $21,537,488 $22,590,865 $(1,053,377) Total deferred inflow of resources 21,537,488 22,590,865 (1,053,377) Fund balance
Nonspendable - 624 (624)
Restricted for:

Debt service 4,816,765 3,594,425 1,222,340
Total fund balances 4,816,765 3,595,049 1,221,716
Total deferred inflow of resources and
fund balances $26,954,062 $26,838,681 $115,381
Statements of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund
Description 2025 2024 Change
Revenues $1,033,219 $814,208 $219,011
Expenditures - (66) 66
Net change in fund balance 1,033,219 814,142 $219,077
Fund balance, beginning of year 15,409,560 14,595,418
Fund balance, end of year $16,442,779 $15,409,560
#5..
- 692 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
19 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $1,351,634 $1,354,878 $(3,244)
Expenditures (1,042,575) (984,833) (57,742)
Net change in fund balance 309,059 370,045 $(60,986)
Fund balance, beginning of year 1,324,843 954,798
Fund balance, end of year $1,633,902 $1,324,843
Statements of Revenues, Expenditures, and Changes in Fund Balance – Debt Service Fund
Description 2025 2024 Change
Revenues $3,280,925 $2,428,999 $851,926
Expenditures (2,059,209) (2,011,904) (47,305)
Net change in fund balance 1,221,716 417,095 $804,621
Fund balance, beginning of year 3,595,049 3,177,954
Fund balance, end of year $4,816,765 $3,595,049
#5..
- 693 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
20 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) The District’s fiscal year 2025 revenues primarily came from facilities special taxes in the amount of $3.2 million and maintenance special taxes in the amount of $1.3 million.

District expenditures of $3.1 million in fiscal year 2025 consisted of $1.0 million in Special Revenue Fund expenditures for maintenance of District facilities and ongoing administrative expenditures, and $2.1 million in Debt Service Fund expenditures.

At June 30, 2025, the District’s governmental funds reported combined fund balances of $22.9 million, an increase of $2.6 million from last year. This increase was primarily due to a combination of increases in special taxes and fair value of investments.

The District reports $477K of nondepreciable capital assets related to the construction of a selfstorage facility as of June 30, 2025. #5..
- 694 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
21 LEASES
Under GASB Statement No. 87, the District is required to record all leases that meet the definition of a lease as defined in GASB Statement No. 87. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. The District recognized a lease receivable of $383K and a deferred inflow of resources of $354K in both the District’s fund and government-wide financial statements as of June 30, 2025.

DEBT ADMINISTRATION
The District issued Special Tax Bonds, Series 2006 in the principal amount of $31.1 million in March 2006. The proceeds have been and will continue to be used to reimburse developers for the infrastructure they install pursuant to the Acquisition & Shortfall Agreements entered into between developers and the District as well as to fund authorized facilities installed by the District.

The District issued Refunding Special Tax Bonds, Series 2014 in the principal amount of $29.3 million with a premium of $1.5 million in July 2014 to refund the outstanding Special Tax Bonds, Series 2006.

The balance of the long-term debt at June 30, 2025, is $22.2 million. Additional details can be found in Note 4 to the basic financial statements.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
#5..
- 695 -
22 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California

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

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

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the change in net position and reconciled with the Statement of Net Position. General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position.
#5..
- 696 -
See notes to basic financial statements.
23 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $20,249,192
Cash and investments with fiscal agent 3,148,374
Taxes receivable 84,535
Assessments receivable 21,505,000
Interest receivable 89,861
Prepaid expenses 77
Lease receivable 382,642
Nondepreciable capital asset 477,126
Total Assets 45,936,807

DEFERRED OUTFLOW OF RESOURCES
Loss on refunding of debt 684,996
Total Deferred Outflow of Resources 684,996

LIABILITIES
Accounts payable 64,959
Unearned revenues 598,347
Interest payable 320,917
Long-term debt
Due in one year 1,196,659
Due in more than one year 21,052,701
Total Liabilities 23,233,583
(Continued)
#5..
- 697 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Statement of Net Position – Governmental Activities (Continued) June 30, 2025
See notes to basic financial statements.
24 DEFERRED INFLOW OF RESOURCES
Leases $353,970
Total Deferred Inflow of Resources 353,970

NET POSITION
Restricted for:

Capital projects 16,919,905
Debt service 4,492,044
District maintenance 1,622,301
Total Net Position $23,034,250
#5..
- 698 -
See notes to basic financial statements.
25 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Charges for
Services
Governmental
Activities
Community development $1,073,478 $- $(1,073,478)
Interest on long-term debt 970,740 - (970,740)
$2,044,218 $- (2,044,218)
General Revenues
Facilities special taxes 2,140,897
Maintenance special taxes 1,241,173
Lease revenue 16,877
Investment earnings 1,195,643
Interest income from leases 4,114
Others 2,096
Total General Revenues 4,600,800
Change in Net Position 2,556,582
Net Position, Beginning of Year 20,477,668
Net Position, End of Year $23,034,250
#5..
- 699 -
26 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California

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

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

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

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

The Debt Service Fund accounts for the payment of principal and interest on the 2014 Refunding Special Tax bonds.
#5..
- 700 -
See notes to basic financial statements.
27 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund
Debt
Service
Fund Total
ASSETS
Cash and investments $16,368,045 $1,650,685 $2,230,462 $20,249,192 Cash and investments with
fiscal agent - - 3,148,374 3,148,374
Taxes receivable - 22,416 62,119 84,535
Assessments receivable - - 21,505,000 21,505,000
Interest receivable 74,734 7,020 8,107 89,861
Prepaid expenditures - 77 - 77
Lease receivable - 382,642 - 382,642
Total Assets $16,442,779 $2,062,840 $26,954,062 $45,459,681

LIABILITIES
Accounts payable $- $63,497 $1,462 $64,959
Unearned revenues - - 598,347 598,347
Total Liabilities - 63,497 599,809 663,306

DEFERRED INFLOWS OF

RESOURCES
Leases - 353,970 - 353,970
Unavailable revenues - 11,471 21,537,488 21,548,959
Total Deferred Inflows of
Resources - 365,441 21,537,488 21,902,929
(Continued)
#5..
- 701 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Balance Sheet – Governmental Funds (Continued)
June 30, 2025
See notes to basic financial statements.
28 Capital
Projects Fund
Special
Revenue
Fund
Debt
Service
Fund Total

FUND BALANCES
Nonspendable $- $77 $- $77
Restricted for:

Capital projects 16,442,779 - - 16,442,779
District maintenance - 1,633,825 - 1,633,825
Debt service - - 4,816,765 4,816,765
Total Fund Balances 16,442,779 1,633,902 4,816,765 22,893,446 Total Liabilities,
Deferred Inflows of
Resources, and Fund
Balances $16,442,779 $2,062,840 $26,954,062 $45,459,681 #5..
- 702 -
See notes to basic financial statements.
29 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position
June 30, 2025
Total Fund Balances - Governmental Funds $22,893,446
Amounts reported for governmental activities in the Statement of Net Position are different because:

Other long-term assets are not available to pay for the current period expenditures and therefore are deferred in the funds. 21,505,000 Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position. 43,959
Capital assets used in governmental activities are not current assets or financial resources and, therefore, are not reported in the governmental funds. 477,126
Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds:

Long-term debt (22,249,360)
Loss on refunding of debt 684,996
Interest payable (320,917)
Total Net Position - Governmental Activities $23,034,250 #5..
- 703 -
See notes to basic financial statements.
30 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Statement of Revenues, Expenditures,
and Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund
Debt
Service
Fund Total

REVENUES
Facilities special taxes $131,825 $- $3,062,449 $3,194,274 Maintenance special taxes - 1,252,774 - 1,252,774
Lease revenue - 16,877 - 16,877
Interest income 526,028 42,310 195,307 763,645
Interest income from leases - 4,114 - 4,114
Change in fair value of investments 375,366 33,463 23,169 431,998 Others - 2,096 - 2,096
Total Revenues 1,033,219 1,351,634 3,280,925 5,665,778

EXPENDITURES
Community Development
Services – professional and other - 777,836 30,903 808,739 Utilities - 264,739 - 264,739
Debt service
Principal - - 1,035,000 1,035,000
Interest and fiscal charges - - 993,306 993,306
Total Expenditures - 1,042,575 2,059,209 3,101,784
Net Change in Fund Balances 1,033,219 309,059 1,221,716 2,563,994 Fund Balances, Beginning of Year 15,409,560 1,324,843 3,595,049 20,329,452 Fund Balances, End of Year $16,442,779 $1,633,902 $4,816,765 $22,893,446 #5..
- 704 -
See notes to basic financial statements.
31 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities
Year Ended June 30, 2025
Net Change in Fund Balances - Governmental Funds $2,563,994 Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues previously recognized in the Statement of Activities that did not provide current financial resources and therefore were not reported as revenues in the funds are reported as revenues in the funds when received. (1,035,000)
Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the governmental funds. (29,978)
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment
of the principal of long-term debt and the payment to
refund escrow consumes current financial resources
of governmental funds. Neither transaction, however,
has any effect on net position:

Repayment of the principal of long-term debt. 1,035,000 (Continued)
#5..
- 705 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities (Continued) Year Ended June 30, 2025
See notes to basic financial statements.
32 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds:

Amortization of bond premium $66,659
Amortization of deferred loss on refunding of debt (61,343) Interest payable 17,250
Change in Net Position - Governmental Activities $2,556,582 #5..
- 706 -
See notes to basic financial statements.
33 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special taxes $1,352,000 $1,352,000 $1,252,774 $(99,226) Lease revenue - - 16,877 16,877
Interest income - - 42,310 42,310
Interest income from leases - - 4,114 4,114
Change in fair value of
investments - - 33,463 33,463
Others - - 2,096 2,096
Total Revenues 1,352,000 1,352,000 1,351,634 (366)

EXPENDITURES
Community development
Services – professional and
other 722,484 727,984 777,836 (49,852)
Utilities 317,100 320,700 264,739 55,961
Total Expenditures 1,039,584 1,048,684 1,042,575 6,109
Net Change in Fund Balance $312,416 $303,316 309,059 $5,743 Fund Balance, Beginning of Year 1,324,843
Fund Balance, End of Year $1,633,902
#5..
- 707 -
34 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 2004-1 Village One #2 (the District) was formed on April 6, 2004, by City Council Resolution No. 2004-199 following a vote of the property owners within the proposed district. The District, a separate legal entity, was formed to provide a funding and reimbursement mechanism for public facilities and services required by the Village One Specific Plan. The District is the vehicle used to ensure that all landowners in the Specific Plan area contribute to the cost of public improvements. The District encompasses approximately 1,840 gross acres of land on which a pedestrian-oriented, mixed-use, planned community is anticipated to be developed. The District is located in the North Eastern portion of the City of Modesto, California (the City), bordered by Sylvan Avenue to the North, Claus Road to the East, Briggsmore to the South, and Oakdale Road to the West. The District was proposed to yield 6,186 residential dwelling units at buildout; in addition to 15 acres of commercial property and 220 acres of industrial property.

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

Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
#5..
- 708 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
35 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items that are not properly included among program revenues, are reported instead as general revenues.

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

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities to the current period. For this purpose, the District considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially, all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. However, principal and interest expenditures are recorded as fund liabilities when due or when amounts have been accumulated in the Debt Service Fund for payments early in the following year.
#5..
- 709 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental funds:

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

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

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

Facilities and Maintenance Special Taxes
The facilities and maintenance special taxes are collected by the County of Stanislaus on the property tax bill. The special taxes are due November 1st and February 1st and are delinquent if not paid by December 10th and April 10th, respectively. The County of Stanislaus bills and collects the special taxes and remits them to the District. The Rate and Method of Apportionment of Special Tax (RMA), set forth in the District’s Public Report, describes how the special taxes will be allocated among properties in the District. The Public Report was established during the formation of the District. A cost-of-living adjustment is applied to the special taxes annually.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
37 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District reported $77 in nonspendable resources as of June 30, 2025.
• Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. The District reported $22,893,369 in restricted resources as of June 30, 2025. #5..
- 711 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
38 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed - Amounts constrained to specific purposes by the District itself, using the District’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest-level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. The District did not have any committed resources as of June 30, 2025. • Assigned - Amounts the District intends to use for a specific purpose. Intent can be expressed by the District at either the highest level of decision-making or by an official or body to which the District delegates the authority. The District did not have any assigned resources as of June 30, 2025.
• Unassigned - The residual classification for the District that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. The District did not have any unassigned resources as of June 30, 2025.

The District establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the District through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
39 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.

Net Position
Net position represents the residual interest in the District’s assets and deferred outflows of resources after liabilities and deferred inflows of resources are deducted. In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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- 713 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
40 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Lease Receivable
The District’s lease receivable is measured at the present value of lease payments expected to be received during the lease term. There are no variable components under the lease agreement. A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease.

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

In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that applies to a future reporting period. Deferred inflows of resources reported by the District consist of deferred assessments that have been billed as of year-end but not yet collected, deferred leases, and prepayment of special taxes related to the issued bonds.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
41 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2025, the District implemented the following Governmental Accounting Standards Board (GASB) standards with no impact to the financial statements:

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

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

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

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

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

NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District, with the exception of cash and investments with fiscal agents, are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City. #5..
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
42 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Cash and investments in the pool are considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The District does not have any deposits with financial institutions as of June 30, 2025.

The District is a voluntary participant in the California Asset Management Program (CAMP), a California Joint Powers Authority that falls under California Government Code Section 53601(p), which is directed by a Board of Trustees that is made up of experienced local government finance directors and treasurers. The District reports its investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share.

Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:

Statement of Net Position - Governmental Activities:

Description Amount
Cash and investments $20,249,192
Cash and investments with fiscal agent 3,148,374
Total cash and investments $23,397,566
Deposits with the City
Cash and investment pool $20,249,192
Deposits with fiscal agents
CAMP 3,148,374
Total cash and investments $23,397,566
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
43 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The District is required to disclose investments that represent a concentration of five percent (5%) or more of investments in any one issuer held by individual funds in the securities of issuers other than U.S. Treasury securities, mutual funds, and external investment pools. At June 30, 2025, no investments represented a concentration of five percent (5%) or more of investments in any one issuer held by the District in the securities of issuers other than U.S.

Treasury securities, mutual funds, and external investment pools.

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

Detailed information concerning the City’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s Annual Comprehensive Financial Report. As of June 30, 2025, the fair value of the District’s position in the pool is the same as the value of its pool shares.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
44 NOTE 3 LEASE RECEIVABLE
On December 16, 2021, the District, lessor, and New Cingular Wireless PSC, LLC, lessee, entered into a land lease agreement to install, operate, and maintain a communication facility and other improvements. The initial term of the lease is five years and will automatically be renewed for four additional five-year terms. The lessee will pay the District a base rent of $1,600 with an increase of 3% each year on the anniversary of the rent commencement date, including throughout the extension terms. Upon execution of the agreement, a one-time fee of $10,000 was paid in full by the lessee for the Camera Fee to enable the District to purchase and install a live-feed security camera. Lease revenue recognized under the lease agreement was $9,970 for the year ended June 30, 2025. Interest revenue recognized under the lease agreement was $3,650 for the year ended June 30, 2025.

On July 8, 2014, the District, lessor, and Sacramento-Valley Limited Partnership d/b/a Verizon Wireless, lessee, entered into a land lease agreement in which the lessee is granted the right and option to lease the premises, including a right-of-way for access. The initial term of the lease is five years with a total annual rent of $14,000 to be paid by the lessee in equal monthly installments on the first day of the month. The lease will be automatically extended for five additional five-year terms. Annual rent for each additional five-year term will increase by 10% at the beginning of each five-year term. Lease revenue recognized under the lease agreement was $6,904 for the year ended June 30, 2025. Interest revenue recognized under the lease agreement was $464 for the year ended June 30, 2025.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
45 NOTE 3 LEASE RECEIVABLE (CONTINUED)
Future minimum lease and interest payments to be received are as follows:

Year Ending June 30 Principal Interest Total
2026 $11,622 $5,660 $ 17,282
2027 12,073 5,483 17,556
2028 12,543 5,298 17,841
2029 13,032 5,107 18,139
2030 13,932 4,907 18,839
2031-2035 79,969 21,098 101,067
2036-2040 95,712 14,535 110,247
2041-2045 109,854 6,707 116,561
2046-2047 33,905 534 34,439
$382,642 $ 69,329 $451,971
NOTE 4 LONG-TERM DEBT
On July 30, 2014, the District issued Refunding Special Tax Bonds (refunding bonds) with a par amount of $29,320,000 to refund the District’s $29,925,000 outstanding Special Tax Bonds (refunded bonds) issued on March 8, 2006, which were issued primarily to finance various public improvements needed to develop property located within the District. Interest on the refunding bonds is payable semiannually on March 1st and September 1st through September 1, 2036. The refunding bonds were issued with interest rates varying from 2% to 5% and are payable solely from revenues derived from the assessment of annual special taxes to be levied on the taxable property within the District and from certain other funds pledged under the Trust Indenture. The principal of these bonds is not subject to acceleration. #5..
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
46 NOTE 4 LONG-TERM DEBT (CONTINUED)
Any one or more of the following events shall constitute an “event of default” for these bonds:
(a) Default in the due and punctual payment of the principal of or redemption premium, if any, on any bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise.
(b) Default on the due and punctual payment of the interest on any bond when and as the same shall become due and payable.
(c) Except as described in (a) or (b), default shall be made by the District in the observance of any of the agreements, conditions, or covenants for a period of thirty (30) days after the District has been given notice in writing of such default by the Trustee or the owners of twenty-five percent (25%) in aggregate principal amount of the outstanding bonds.

The long-term debt activities for the year ended June 30, 2025 were as follows:

Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Refunding Special
Tax Bonds $22,540,000 $- $(1,035,000) $21,505,000 $1,130,000 Premium on
Refunding Bonds 811,019 - (66,659) 744,360 66,659
Total $23,351,019 $- $(1,101,659) $22,249,360 $1,196,659 #5..
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
47 NOTE 4 LONG-TERM DEBT (CONTINUED)
Annual debt service requirements for the bonds are shown below:

Year Ending June 30 Principal Interest
2026 $1,130,000 $934,500
2027 1,230,000 875,500
2028 1,335,000 811,375
2029 1,455,000 741,625
2030 1,570,000 666,000
2031-2035 3,535,000 2,430,125
2036-2037 11,250,000 1,125,000
$21,505,000 $7,584,125
Interest expense for the year ended June 30, 2025 was $970,740.

NOTE 5 RESTRICTED FUND BALANCES
Fund Balances
Fund balances are all presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2025, restrictions included:

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

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

Restricted for Debt Service – the portion of fund balance legally restricted to the payment of principal and interest on long-term liabilities.
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Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
48 NOTE 6 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds discussed in Note 4 that it will initiate foreclosure proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. (b) All parcels delinquent at June 30th when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1st following the end of the fiscal year.

At June 30, 2025, the District had 15 delinquent parcels for a total of $11,471, three of which are delinquent for more than two consecutive payments.

The District received 99.42% of the Special Revenue Fund and Debt Service Fund facilities and maintenance special taxes levied during the year ended June 30, 2025. The delinquencies total of $11,471 at June 30, 2025 is included in taxes receivable on the Statement of Net Position and Balance Sheet.

NOTE 7 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2025 was as follows:

Expenditures Amount
Special Revenue Fund
Community development
Services - professional and other $(49,852)
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- 722 -
Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
49 NOTE 8 SUBSEQUENT EVENTS
The District has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through November 12, 2025, the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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50 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2004-1 Village One #2 (the District), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 12, 2025.

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

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #5..
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52 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 12, 2025
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #5..
- 727 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
With Independent Auditor’s Report
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 18
Statement of Activities – Governmental Activities 19
Balance Sheet – Governmental Funds 21
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 23
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 24
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 25 Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 26
Notes to Basic Financial Statements 27
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards 40 #5..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 1996-1 Village One (the District), a component unit of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, the budgetary comparison statement for the special revenue fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of June 30, 2025, and the respective changes in financial position, and the budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #5..
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2 Basis For Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-16 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Glendale, California
November 12, 2025
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6 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 1996-1 Village One (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.

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

BACKGROUND AND MANAGEMENT’S DISCUSSION
In October of 1989, the City initiated planning of the area now known as Village One. The original Village One Specific Plan, adopted by the City Council on October 16, 1990 via Resolution No. 90-828A, contemplated a pedestrian-oriented, self-contained neighborhood concept that offered housing to accommodate various income levels. In addition, the original plan called for a number of landscaped areas, parks, as well as other amenities. Over the years, substantial revisions to the original plan occurred, including reconfiguration of streets, #5..
- 735 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION (CONTINUED)
a reduction of landscaped areas, and modification of the financing strategy. At the close of fiscal year 2003-2004, the Village One area was based on the Specific Plan, the Infrastructure Financing Plan, and the Facilities Master Plan adopted in April 2003. The 2003 Infrastructure Financing Plan calls for a combination of funding sources for the identified facilities improvements, including the City’s Capital Facilities Fees (CFF) program and a Mello-Roos Community Facilities District (CFD). CFD 1996-1 (Village One) was formed on October 8, 1996 by Resolution No. 96-544 and now supports ongoing maintenance of parks and landscaped medians benefiting 3,221 single family residences.

FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:

Government-Wide
• During the year ended June 30, 2025, the District’s net position increased by $495,595 • Total District revenues were $1,465,601 and expenses were $970,006.

Fund Basis
• Capital Projects Fund revenues of $52,111 were $15,936 greater than the prior year due to increased facilities special tax collections. The Capital Projects Fund ending fund balance increased by $52,111 to $265,797 during the fiscal year 2025. • Special Revenue Fund revenues of $1,412,427 were $59,990 greater than the prior year due to increases in maintenance special tax collections, and investment earnings. Its expenditures amounting to $970,006 were $55,684 more than the prior year due to increases in professional services and utilities expenditures. The Special Revenue Fund balance increased by $442,421 to an ending fund balance of $2,664,433. #5..
- 736 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.

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

Governmental activities - All the District’s basic services are governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector.
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- 737 -
Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.

As of June 30, 2025, total assets of $3,363,026 were offset by liabilities of $63,497 and deferred inflow of resources of $353,970. The District’s net position from governmental activities increased to $2,945,559 in 2025 from $2,449,964 in 2024. All the District’s net position is restricted as follows: $265,797 for the acquisition of infrastructure and $2,679,762 for maintaining that infrastructure.
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) The following summarizes the Statements of Net Position as of June 30, 2025 and 2024 and the related changes:

Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $2,936,943 $2,459,802 $477,141
Assessments receivable 30,415 26,342 4,073
Interest receivable 12,949 8,239 4,710
Lease receivable 382,642 403,855 21,213
Prepaid expenses 77 - 77
Total assets 3,363,026 2,898,238 464,788
Liabilities
Accounts payable 63,497 68,751 (5,254)
Total liabilities 63,497 68,751 (5,254)
Deferred inflow of resources
Leases 353,970 379,523 (25,553)
Total deferred inflow of resources 353,970 379,523 (25,553) Net position
Restricted for:

District maintenance 2,679,762 2,236,278 443,484
Capital projects 265,797 213,686 52,111
Total net position $2,945,559 $2,449,964 $495,595
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenues came primarily from special facilities and maintenance taxes of $1,297,062. District expenses of $970,006 were for professional services and utilities.

Audit CommitteeJanuary 21, 2026

Audit Committee
January 21, 2026