In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.
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4 • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-14 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 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 PURPOSE OF THE DISTRICT
The District is a blended component unit of the City of Modesto, California (the City). It is controlled by the City, and the City Council is the District’s governing body. City employees perform most of the duties and functions required of the District, but certain tasks are provided by third parties under contract.
The District’s purpose under California law is to provide a funding mechanism for public facilities and services authorized by the District. The District is the vehicle that will be used to ensure that all landowners in the Specific Plan area contribute to the cost of the public facilities and services. Additional information on the District can be found below and in Note 1 to the accompanying financial statements.
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Community Facilities District
Number 2000-2 Coffee-Claratina
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 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.
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year.
The Statement of Net Position and the Statement of Activities present information about the following:
Governmental activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector. #7..
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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. #7..
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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 Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are then deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
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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. #7..
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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 #7..
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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
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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
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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 #7..
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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. #7..
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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.
The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items that are not properly included among program revenues, are reported instead as general revenues.
Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied. #7..
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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.
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 2000-2 Coffee-Claratina
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
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period.
In addition to liabilities, the 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. #7..
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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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- 556 -
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.
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 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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- 557 -
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. #7..
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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.
NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.
Cash and investments in the 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. #7..
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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
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. #7..
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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.
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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
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.
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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. #7..
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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
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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #7..
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
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Community Facilities District
Number 1998-1 Enterprise Business Park
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 16
Statement of Activities – Governmental Activities 17
Balance Sheet – Governmental Fund 19
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 20
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 21
Notes to Basic Financial Statements 22
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 30
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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. #7..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Park and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Park’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. #7..
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Park’s internal control. Accordingly, no such opinion is expressed.
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4 • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Park’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 6-14 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 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) #7..
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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. #7..
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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. #7..
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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. #7..
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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. #7..
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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.
The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items that are not properly included among program revenues, are reported instead as general revenues.
Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied. #7..
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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. #7..
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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.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Park’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #7..
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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 #7..
- 601 -
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 #7..
- 603 -
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. #7..
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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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- 605 -
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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- 606 -
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 6-19 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 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 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. #7..
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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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- 612 -
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. #7..
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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.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year. The Statement of Net Position and the Statement of Activities present information about the following:
Governmental activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments.
Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector.
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. #7..
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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 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 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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- 618 -
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) #7..
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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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- 620 -
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.
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.
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 Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
- 623 -
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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- 624 -
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 #7..
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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 #7..
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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 #7..
- 629 -
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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- 630 -
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 #7..
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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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- 633 -
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.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
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- 634 -
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.
Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Maintenance Special Taxes
The maintenance special taxes are collected by the County of Stanislaus on the property tax bill. The special taxes are due November 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. #7..
- 635 -
Community Facilities District
Number 2003-1 Fairview Village
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period. Deferred outflow of resources reported by the District consists of unamortized loss on bond defeasance to be amortized over the life of the refunding debt.
In addition to liabilities, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that applies to a future reporting period. Deferred inflow of resources reported by the District consists of unearned deferred assessments that have been billed as of year-end, but not yet collected.
Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable - Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have nonspendable resources as of June 30, 2025.
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- 636 -
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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- 637 -
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.
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 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. #7..
- 638 -
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.
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. #7..
- 639 -
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. #7..
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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. #7..
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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.
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. #7..
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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 #7..
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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 #7..
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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. #7..
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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 6-15 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.
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.
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. #7..
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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. #7..
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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 BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year. #7..
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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.
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 $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. #7..
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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. #7..
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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 #7..
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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
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.
CAPITAL ASSETS
Under GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, the District is required to record all its capital assets, including infrastructure, at their historical cost, and to depreciate these assets over their estimated useful lives. However, title to all infrastructure assets acquired or constructed by the District is turned over to the City upon completion and acceptance. Accordingly, capital outlay expenditures are reported in both the District’s fund and government-wide financial statements.
Therefore, the District reports no long-term capital assets.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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16 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting, the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.
The Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
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See notes to basic financial statements.
17 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 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
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See notes to basic financial statements.
18 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Activities – Governmental Activities
Year ended June 30, 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. #7..
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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 #7..
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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 #7..
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See notes to basic financial statements.
22 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year ended June 30, 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 #7..
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See notes to basic financial statements.
23 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities Year ended June 30, 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 #7..
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See notes to basic financial statements.
24 Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual
Year Ended June 30, 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
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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.
The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 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.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 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.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 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.
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.
Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that is applicable to a future reporting period. #7..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 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.
Maintenance Special Taxes
The maintenance special taxes are collected by the County of Stanislaus on the property tax bill. The special taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. The County of Stanislaus bills and collects the special taxes and remits them to the District. The Rate and Method of Apportionment of Special Tax (RMA), set forth in the District’s Public Report, describes how the tax will be allocated among properties in the District. The Public Report was established during the formation of the District.
A cost of living adjustment is applied to the special taxes annually.
Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have any nonspendable resources as of June 30, 2025.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 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.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 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.
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 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.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 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.
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 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.
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 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.
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:
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. #7..
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Community Facilities District
Number 2016-1 Kiernan Business Park East #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 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.
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34 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and 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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35 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #7..
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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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www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #7..
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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
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 17
Statement of Activities – Governmental Activities 18
Balance Sheet – Governmental Funds 20
Statement of Revenues, Expenditures, and Changes in Fund 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 #7..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 1997-1 North Beyer Park (the District), a component unit of the City of Modesto, California, as of and for the year ended June 30, 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. #7..
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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 6-15 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.
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 basic financial statements.
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Community Facilities District
Number 1997-1 North Beyer Park
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
On November 26, 1996, by Resolution No. 96-641, the City Council adopted the North Beyer Specific Plan, which proposed a maximum of 1,200 residential units on 160 acres within the Specific Plan area. In addition, three areas within the Specific Plan were designated “Mixed Use,” two of which were expected to develop as neighborhood commercial shopping centers and the third, which was expected to develop as office space.
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). #7..
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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.
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year.
The Statement of Net Position and the Statement of Activities present information about the following:
Governmental activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. 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. #7..
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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. #7..
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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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- 702 -
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) #7..
- 703 -
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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- 704 -
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 Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
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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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- 707 -
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. #7..
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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. #7..
- 710 -
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 District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are 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.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.
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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.
Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable - Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have any nonspendable resources as of June 30, 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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- 716 -
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.
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 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. #7..
- 717 -
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.
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. #7..
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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 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.
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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- 719 -
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. #7..
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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 #7..
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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 #7..
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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. #7..
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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 6-18 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.
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 2002-1 Northpointe
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 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. 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. #7..
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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. #7..
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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.
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year. The Statement of Net Position and the Statement of Activities present information about the following:
Governmental Activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector. #7..
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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.
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.
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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. #7..
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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 Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
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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. #7..
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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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- 751 -
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 #7..
- 752 -
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
#7..
- 753 -
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. #7..
- 754 -
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. #7..
- 755 -
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.
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. #7..
- 756 -
Community Facilities District
Number 2002-1 Northpointe
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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.
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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- 757 -
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. #7..
- 758 -
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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- 759 -
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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- 760 -
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.
In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period.
In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that applies to a future reporting period. The deferred inflow of resources reported by the District is from the lease, which is measured at the present value of future lease payments and recognized as revenue over the lease term.
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. #7..
- 761 -
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.
NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.
Cash and investments in the 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. #7..
- 762 -
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. #7..
- 763 -
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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- 764 -
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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- 765 -
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. #7..
- 766 -
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.
#7..
- 767 -
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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- 768 -
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. #7..
- 769 -
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
#7..
- 770 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #7..
- 771 -
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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- 772 -
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 #7..
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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. #7..
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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 6-21 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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- 778 -
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 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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- 779 -
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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- 780 -
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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- 781 -
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.
THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and comprise the statement of net position and the statement of activities. The statement of net position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The statement of activities provides information about the District’s revenues and all its expenses. The statement of activities explains in detail the change in net position for the year. #7..
- 782 -
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:
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.
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 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. #7..
- 783 -
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)
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- 784 -
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.
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- 785 -
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
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- 786 -
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:
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- 787 -
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
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- 788 -
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 #7..
- 789 -
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)
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- 790 -
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
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- 791 -
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
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- 792 -
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.
CAPITAL ASSETS
Under GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, the District is required to record all its capital assets, including infrastructure, at their historical cost, and to depreciate these assets over their estimated useful lives. However, title to all infrastructure assets acquired or constructed by the District is turned over to the City upon completion and acceptance. Accordingly, capital outlay expenditures are reported in both the District’s fund and government-wide financial statements.
The District reports $477K of nondepreciable capital assets related to the construction of a selfstorage facility as of June 30, 2025. #7..
- 793 -
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.
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- 794 -
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 Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the change in net position and reconciled with the Statement of Net Position. General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position.
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- 795 -
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)
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- 796 -
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
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- 797 -
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
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- 798 -
26 Community Facilities District
Number 2004-1 Village One #2
City of Modesto, California
FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.
The District determined all its funds to be major funds. They are:
The Capital Projects Fund accounts for all financial resources and uses related to acquisition, construction, and formation/annexation activities.
The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District.
The Debt Service Fund accounts for the payment of principal and interest on the 2014 Refunding Special Tax bonds.
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- 799 -
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)
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- 800 -
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 #7..
- 801 -
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 #7..
- 802 -
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 #7..
- 803 -
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)
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- 804 -
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 #7..
- 805 -
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
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- 806 -
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.
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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- 807 -
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.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities 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.
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- 808 -
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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- 809 -
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. #7..
- 810 -
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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- 811 -
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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- 812 -
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.
Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period. The deferred outflow of resources reported by the District consists of deferred loss on refunding 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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- 813 -
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. #7..
- 814 -
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
#7..
- 815 -
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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- 816 -
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.
#7..
- 817 -
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. #7..
- 818 -
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 #7..
- 819 -
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.
#7..
- 820 -
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)
#7..
- 821 -
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.
#7..
- 822 -
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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- 823 -
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.
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. #7..
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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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- 825 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #7..
- 826 -
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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- 827 -
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 #7..
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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. #7..
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2 Basis For Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
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4 • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.
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 6-16 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.
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.
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, #7..
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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
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. #7..
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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
8 THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year.
The Statement of Net Position and the Statement of Activities present information about the following:
Governmental activities - All the District’s basic services are governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector.
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 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.
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
Facilities special taxes $38,374 $27,765 $10,609
Maintenance special taxes 1,258,688 1,257,081 1,607
Investment earnings 145,441 84,029 61,412
Lease revenue 16,888 17,308 (420)
Interest revenue - leases 4,114 6,139 (2,025)
Others 2,096 - 2,096
Total revenues 1,465,601 1,392,322 73,279
Expenses
Community development 970,006 914,322 55,684
Total expenses 970,006 914,322 55,684
Change in net position 495,595 478,000 $17,595
Net position, beginning of year 2,449,964 1,971,964
Net position, end of year $2,945,559 $2,449,964
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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
12 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.
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 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. #7..
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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
13 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) The following summarizes the Balance Sheets and the Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund as of and for the years ended June 30, 2025 and 2024, and their respective changes:
Balance Sheets – Capital Projects Fund
Description 2025 2024 Change
Assets
Cash and investments $264,589 $212,946 $51,643
Interest receivable 1,208 740 468
Total assets $265,797 $213,686 $52,111
Fund Balances
Restricted for:
Capital projects 265,797 213,686 52,111
Total fund balances $265,797 $213,686 $52,111
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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
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $2,672,354 $2,246,856 $425,498
Assessments receivable 30,415 26,342 4,073
Interest receivable 11,741 7,499 4,242
Lease receivable 382,642 403,855 (21,213)
Prepaid expenditures 77 - 77
Total assets $3,097,229 $2,684,552 $412,677
Liabilities
Accounts payable $63,497 $68,751 $(5,254)
Total liabilities 63,497 68,751 (5,254)
Deferred inflows of resources
Unavailable revenues 15,329 14,266 1,063
Leases 353,970 379,523 (25,553)
Total deferred inflows of resources 369,299 393,789 (24,490) Fund balances
Nonspendable 77 - 77
Restricted for:
District maintenance 2,664,356 2,222,012 442,344
Total fund balances 2,664,433 2,222,012 442,421
Total liabilities, deferred inflows of
resources, and fund balances $3,097,229 $2,684,552 $412,677 #7..
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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
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund
Description 2025 2024 Change
Revenues $52,111 $36,175 $15,936
Expenditures - - -
Net change in fund balance 52,111 36,175 $15,936
Fund balance, beginning of year 213,686 177,511
Fund balance, end of year $265,797 $213,686
Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $1,412,427 $1,352,437 $59,990
Expenditures (970,006) (914,322) (55,684)
Net change in fund balance 442,421 438,115 $4,306
Fund balance, beginning of year 2,222,012 1,783,897
Fund balance, end of year $2,664,433 $2,222,012
At June 30, 2025, the District’s governmental funds reported combined fund balances of $2,930,230, which was a $494,532 increase from fiscal year 2024. The Capital Projects Fund realized a $52,111 increase in 2025, while the Special Revenue Fund realized a $442,421 increase due to revenues being more than the expenditures. #7..
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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
16 CAPITAL ASSETS
Under GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, the District is required to record all its capital assets, including infrastructure, at their historical cost, and to depreciate these assets over their estimated useful lives. However, title to all infrastructure assets acquired or constructed by the District is turned over to the City upon completion and acceptance. Accordingly, capital outlay expenditures are reported in both the District’s fund and government-wide financial statements.
The District reports no long-term capital assets.
LEASES
Under GASB Statement No. 87, Leases, the District is required to record all leases that meet the definition of a lease as defined in GASB Statement No. 87. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. Accordingly, the District recognized a lease receivable of $382,642 and a deferred inflow of resources of $353,970 in both the District’s fund and government-wide financial statements as of June 30, 2025.
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 1996-1 Village One
City of Modesto, California
17 STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting as that used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting – the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.
The Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
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See notes to basic financial statements.
18 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $2,936,943
Assessments receivable 30,415
Interest receivable 12,949
Lease receivable 382,642
Prepaid expenses 77
Total Assets 3,363,026
LIABILITIES
Accounts payable 63,497
Total Liabilities 63,497
DEFERRED INFLOW OF RESOURCES
Leases 353,970
Total Deferred Inflow of Resources 353,970
NET POSITION
Restricted for:
District maintenance 2,679,762
Capital projects 265,797
Total Net Position $2,945,559
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See notes to basic financial statements.
19 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Operating Grants
and
Contributions
Governmental
Activities
Community development $970,006 $- $(970,006)
$970,006 $- (970,006)
General Revenues
Facilities special taxes 38,374
Maintenance special taxes 1,258,688
Investment earnings 145,441
Lease revenue 16,888
Interest revenue - leases 4,114
Others 2,096
Total General Revenues 1,465,601
Change in Net Position 495,595
Net Position, Beginning of Year 2,449,964
Net Position, End of Year $2,945,559
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
20 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. #7..
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See notes to basic financial statements.
21 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $264,589 $2,672,354 $2,936,943
Assessments receivable - 30,415 30,415
Interest receivable 1,208 11,741 12,949
Lease receivable - 382,642 382,642
Prepaid expenditures - 77 77
Total Assets $265,797 $3,097,229 $3,363,026
LIABILITIES
Accounts payable $- $63,497 $63,497
Total Liabilities - 63,497 63,497
(Continued)
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Balance Sheet – Governmental Funds (Continued)
June 30, 2025
See notes to basic financial statements.
22 DEFERRED INFLOWS OF RESOURCES
Capital
Projects
Fund
Special
Revenue
Fund Total
Unavailable revenues $- $15,329 $15,329
Leases - 353,970 353,970
Total Deferred Inflows of Resources - 369,299 369,299
FUND BALANCES
Nonspendable - 77 77
Restricted for:
District maintenance - 2,664,356 2,664,356
Capital projects 265,797 - 265,797
Total Fund Balances 265,797 2,664,433 2,930,230
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $265,797 $3,097,229 $3,363,026 #7..
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See notes to basic financial statements.
23 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Reconciliation of the Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position
June 30, 2025
Total Fund Balances - Governmental Funds $2,930,230
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. 15,329
Total Net Position - Governmental Activities $2,945,559 #7..
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See notes to basic financial statements.
24 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year ended June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
REVENUES
Facilities special taxes $38,374 $- $38,374
Maintenance special taxes - 1,257,625 1,257,625
Interest income 8,201 75,225 83,426
Change in fair value of investments 5,536 56,479 62,015 Lease revenue - 16,888 16,888
Interest revenue - leases - 4,114 4,114
Others - 2,096 2,096
Total Revenues 52,111 1,412,427 1,464,538
EXPENDITURES
Community development
Services – professional and other - 729,126 729,126
Utilities - 240,880 240,880
Total Expenditures - 970,006 970,006
Net Change in Fund Balances 52,111 442,421 494,532
Fund Balances, Beginning of Year 213,686 2,222,012 2,435,698 Fund Balances, End of Year $265,797 $2,664,433 $2,930,230 #7..
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See notes to basic financial statements.
25 Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities
Year ended June 30, 2025
Net Change in Fund Balances - Governmental Funds $494,532 Amounts reported for governmental activities in the Statement of Activities are different because:
Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the governmental funds. 1,063 Change in Net Position - Governmental Activities $495,595 #7..
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See notes to basic financial statements.
26 Community Facilities District
Number 1996-1 Village One
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 $1,352,000 $1,368,350 $1,257,625 $(110,725) Interest income - - 75,225 75,225
Change in fair value of
investments - - 56,479 56,479
Lease revenue - - 16,888 16,888
Interest revenue - leases - - 4,114 4,114
Others - - 2,096 2,096
Total Revenues 1,352,000 1,368,350 1,412,427 44,077
EXPENDITURES
Community development
Services – professional and
other 665,968 682,318 729,126 (46,808)
Utilities 293,150 293,150 240,880 52,270
Total Expenditures 959,118 975,468 970,006 5,462
Net Change in Fund Balance $392,882 $392,882 442,421 $49,539 Fund Balance, Beginning of Year 2,222,012
Fund Balance, End of Year $2,664,433
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27 Community Facilities District
Number 1996-1 Village One
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 1996-1 Village One (the District) was formed on October 8, 1996, by City Council Resolution No. 96-544 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. The District is located in the North Eastern portion of the City of Modesto, California (the City), bordered by Sylvan Avenue to the North, Claus Road to the East, Briggsmore to the South, and Oakdale Road to the West. The District is expected to yield 6,186 residential dwelling units at buildout, in addition to 15 acres of commercial property and 220 acres of industrial property. The District currently supports over 3,221 fully developed single family residences to date as well as a vibrant commercial area.
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 1996-1 Village One
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 (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.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. #7..
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Substantially, all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrued and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.
The District reports the following major governmental funds:
The Capital Projects Fund accounts for all financial resources and uses related to acquisition, construction, and formation/annexation activities.
The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District.
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 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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.
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.
Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that is applicable to a future reporting period. #7..
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources (Continued)
In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that is applicable to a future reporting period. Deferred inflows of resources reported by the District consist of unearned deferred assessments that have been billed as of year-end, but not yet collected, and deferred leases.
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 $2,930,153 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. #7..
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 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.
Assigned fund balance is established by the District through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.
When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.
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Community Facilities District
Number 1996-1 Village One
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 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 1996-1 Village One
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. #7..
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
35 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.
Cash and investments in the 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.
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 $2,936,943
Total cash and investments $2,936,943
Deposits with the City
Cash and investment pool $2,936,943
Total cash and investments $2,936,943
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 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
36 NOTE 3 LEASE RECEIVABLE
On December 16, 2021, the District, lessor, and New Cingular Wireless PSC, LLC, lessee, entered into a land lease agreement to install, operate, and maintain a communication facility and other improvements. The initial term lease is five years and will automatically renew for four additional five-year terms. The lessee will pay the District a base rent of $1,600 with an increase of 3% each year on the anniversary of the rent commencement date, including throughout the extension terms. Upon execution of the agreement, a one-time fee of $10,000 was paid in full by the lessee for the Camera Fee to enable the District to purchase and install, a live-feed security camera. Lease revenue recognized under the lease agreement was $9,970 for the year ended June 30, 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 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 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
37 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
2045-2047 33,905 534 34,439
$382,642 $69,329 $451,971
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:
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. #7..
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
38 NOTE 5 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that it will initiate foreclosure proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. (b) All parcels were delinquent at June 30th when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1st following the end of the fiscal year.
At June 30, 2025, the District had 27 parcels that were delinquent for a total of $15,329, five of which were delinquent for more than two consecutive payments.
The District received 99.30% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2025. The delinquencies total of $15,329 at June 30, 2025 is included in assessments receivable on the Statement of Net Position and Balance Sheet.
NOTE 6 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2025 was as follows:
Expenditures Amount
Special Revenue Fund
Community Development
Services – professional and other $(46,808)
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Community Facilities District
Number 1996-1 Village One
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
39 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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40 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 1996-1 Village One (the District), as of and for the year ended June 30, 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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41 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. #7..
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42 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 #7..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 18
Statement of Activities – Governmental Activities 19
Balance Sheet – Governmental Funds 21
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 22
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activitie 23
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 24
Notes to Basic Financial Statements 25
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 36 #7..
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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 2007-2 Kiernan Business Park West (the District), a component unit of the City of Modesto, California, as of and for the year ended June 30, 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. #7..
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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 6-15 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 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 2007-2 Kiernan Business Park West (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.
Please read this overview in conjunction with your reading of the accompanying basic financial statements.
THE 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 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 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. 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 on October 2, 2007 by City Council Resolution No. 2007-584 to generate funding for construction of certain roadway improvements, and the ongoing maintenance of landscaped medians, a bike path, well site, storm drainage pump and basin and related facilities.
FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:
Government-Wide
• At June 30, 2025, the District’s net position was $414,243. • At June 30, 2025, total assets were $418,648 while total liabilities were $4,405. • Total District revenues were $132,833 and expenses were $62,841. #7..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS (CONTINUED)
Fund Basis
• Capital Projects Fund revenues increased by $1,470 due to increases in interest income and the fair value of investments while expenditures of $0 were the same as in the previous year. The Capital Project Fund ending fund balance increased from $76,024 in the prior year to $80,734 in the current year.
• Special Revenue Fund revenues increased from $104,833 in the prior year to $144,419 for fiscal year 2025, and expenditures increased from $56,458 in the prior year to $62,841 for fiscal year 2025. The increase in revenue is due to an increase in the annual maintenance special taxes, and the increase in expenditure is due primarily to an increase in services and utilities expenditures. Special Revenue Fund ending fund balance increased from $251,931 in the prior year to $333,509 in the current year.
THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position. #7..
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year.
The Statement of Net Position and the Statement of Activities present information about the following:
Governmental activities - All 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.
FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.
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Community Facilities District
Number 2007-2 Kiernan Business Park West
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) As of June 30, 2025, total assets of $418,648 were offset by liabilities of $4,405. The District’s net position from governmental activities increased to $414,243 in 2025 from $334,251 in 2024.
The District’s net position has restrictions as follows: $80,734 for the acquisition or construction of infrastructure and $333,509 for District 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 $416,816 $291,584 $125,232
Taxes receivable - 56,104 (56,104)
Interest receivable 1,832 943 889
Total assets 418,648 348,631 70,017
Liabilities
Accounts Payable 4,405 4,380 25
Total liabilities 4,405 4,380 25
Net position
Restricted for:
Capital projects 80,734 76,024 4,710
District maintenance 333,509 268,227 65,282
Total net position $414,243 $344,251 $69,992
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Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenue came primarily from maintenance special taxes, which amounted to $112,751, along with investment earnings of $20,082. District expenses of $62,841 were for professional services and utilities.
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 $112,751 $113,154 $(403)
Investment earnings 20,082 11,215 8,867
Total revenues 132,833 124,369 8,464
Expenses
Community development 62,841 56,458 6,383
Total expenses 62,841 56,458 6,383
Changes in net position 69,992 67,911 $2,081
Net position, beginning of year 344,251 276,340
Net position, end of year $414,243 $344,251
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- 884 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 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 funds. The fund financial statements measure only current revenues and expenditures and fund balance; they exclude capital assets, long-term debt, and other long-term amounts.
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 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 Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund as of and for the years ended June 30, 2025 and 2024, and the respective changes:
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- 885 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
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 – Capital Projects Fund
Description 2025 2024 Change
Assets
Cash and investments $80,367 $76,024 $4,343
Interest receivable 367 - 367
Total Assets $80,734 $76,024 $4,710
Fund Balances
Restricted for:
Capital projects $80,734 $76,024 $4,710
Total Fund Balances $80,734 $76,024 $4,710
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- 886 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
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 – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $336,449 $215,560 $ 120,889
Taxes receivable - 56,104 (56,104)
Interest receivable 1,465 943 522
Total Assets $337,914 $272,607 $65,307
Liabilities
Accounts payable $4,405 $4,380 $25
Total Liabilities 4,405 4,380 25
Deferred Inflow of Resources
Unavailable revenues - 16,296 (16,296)
Total Deferred Inflow of Resources - 16,296 (16,296)
Fund Balances
Restricted for:
District maintenance 333,509 251,931 81,578
Total Fund Balances 333,509 251,931 81,578
Total Liabilities, Deferred Inflow of
Resources, and Fund Balances $337,914 $272,607 $65,307
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- 887 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund
Description 2025 2024 Change
Revenues $4,710 $3,240 $1,470
Expenditures - - -
Net change in fund balances 4,710 3,240 $1,470
Fund balances, beginning of year 76,024 72,784
Fund balances, end of year $80,734 $76,024
Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $144,419 $104,833 $39,586
Expenditures 62,841 56,458 6,383
Net change in fund balances 81,578 48,375 $33,203
Fund balances, beginning of year 251,931 203,556
Fund balances, end of year $333,509 $251,931
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- 888 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
16 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) At June 30, 2025, the District’s governmental funds reported combined fund balances of $414,243, an increase of $86,288 from the fiscal year 2024. The Capital Projects Fund realized a $4,710 increase due to increases in interest income and fair value of investments, while the Special Revenue Fund realized a $81,578 increase due to annual maintenance special taxes 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.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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17 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting – the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.
The Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
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See notes to basic financial statements.
18 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $416,816
Interest receivable 1,832
Total Assets 418,648
LIABILITIES
Accounts payable 4,405
Total Liabilities 4,405
NET POSITION
Restricted for:
Capital projects 80,734
District maintenance 333,509
Total Net Position $414,243
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- 891 -
See notes to basic financial statements.
19 Community Facilities District
Number 2007-2 Kiernan Business Park West
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 $62,841 $- $(62,841)
$62,841 $- (62,841)
General Revenues
Maintenance special taxes 112,751
Investment earnings 20,082
Total General Revenues 132,833
Change in Net Position 69,992
Net Position, Beginning of Year 344,251
Net Position, End of Year $414,243
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- 892 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
20 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. #7..
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See notes to basic financial statements.
21 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $80,367 $336,449 $416,816
Interest receivable 367 1,465 1,832
Total Assets $80,734 $337,914 $418,648
LIABILITIES
Accounts payable $- $4,405 $4,405
Total Liabilities - 4,405 4,405
FUND BALANCES
Restricted for:
Capital project 80,734 - 80,734
District maintenance - 333,509 333,509
Total Fund Balances 80,734 333,509 414,243
Total Liabilities and Fund Balances $80,734 $337,914 $418,648 There are no differences between the Governmental Fund Balance Sheet and the Governmental Activities Statement of Net Position as of June 30, 2025. #7..
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See notes to basic financial statements.
22 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
REVENUES
Maintenance special taxes $- $129,047 $129,047
Interest income 2,857 9,097 11,954
Change in fair value of investments 1,853 6,275 8,128
Total Revenues 4,710 144,419 149,129
EXPENDITURES
Community development
Services - professional and other - 59,405 59,405
Utilities - 3,436 3,436
Total Expenditures - 62,841 62,841
Net Change in Fund Balances 4,710 81,578 86,288
Fund Balances, Beginning of Year 76,024 251,931 327,955 Fund Balances, End of Year $80,734 $333,509 $414,243
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- 895 -
See notes to basic financial statements.
23 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Governmental Activities Statement of Activities
Year Ended June 30, 2025
Net Change in Fund Balances - Governmental Funds $86,288 Amounts reported for governmental activities in the Statement of Activities are different because:
Revenues that did not provide current financial resources are reported as unavailable revenues in the governmental funds but are recognized in the Statement of Activities when earned. (16,296)
Change in Net Position - Governmental Activities $69,992 #7..
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See notes to basic financial statements.
24 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in
Fund Balance – Special Revenue Fund – Budget and Actual Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
REVENUES
Maintenance special taxes $114,000 $ 114,000 $129,047 $15,047 Interest income - - 9,097 9,097
Change in fair value of investments - - 6,275 6,275
Total Revenues 114,000 114,000 144,419 30,419
EXPENDITURES
Community development
Services - professional and other 65,140 37,811 59,405 (21,594) Utilities 5,200 32,529 3,436 29,093
Total Expenditures 70,340 70,340 62,841 7,499
Net Change in Fund Balance $43,660 $43,660 81,578 $37,918 Fund Balance, Beginning of Year 251,931
Fund Balance, End of Year $333,509
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25 Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 2007-2 Kiernan Business Park West (the District) was formed on October 2, 2007, by City Council Resolution No. 2007-584 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 is a proposed 88-acre project, a portion of the Kiernan-Carver Comprehensive Planning District, and bounded on the North by Kiernan Avenue, on the East by Dale Road, on the South by Bangs Avenue, and on the West by Modesto’s city limits.
The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
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- 898 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
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 that are not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.
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. #7..
- 899 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
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) Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.
The District reports the following major governmental funds:
The Capital Projects Fund accounts for all financial resources and uses related to acquisition, construction, and formation/annexation activities.
The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District.
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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- 900 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 October 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.
Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period.
In addition to liabilities, the 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. #7..
- 901 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
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
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.
• 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 $414,243 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.
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- 902 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
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)
• 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. 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.
Net Position
Net position represents the residual interest in the District’s assets after liabilities are deducted.
In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the fund equity section on the Statement of Net Position was combined to report the total net position and presented it in three broad components:
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- 903 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
31 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. #7..
- 904 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 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.
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 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.
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- 905 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 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 $416,816
Total cash and investments $416,816
Deposits with the City
Cash and investment pool $416,816
Total cash and investments $416,816
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:
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. #7..
- 906 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
34 NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that it will initiate foreclosure proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. (b) All parcels delinquent at June 30th when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1st following the end of the fiscal year.
At June 30, 2025, the District had no delinquent parcels. The District received 100% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2025.
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 $(21,594)
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- 907 -
Community Facilities District
Number 2007-2 Kiernan Business Park West
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
35 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.
#7..
- 908 -
36 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2007-2 Kiernan Business Park West (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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37 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the 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. #7..
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38 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’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 #7..
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements 18
Statement of Net Position – Governmental Activities 18
Statement of Activities – Governmental Activities 19
Balance Sheet – Governmental Funds 21
Reconciliation of Governmental Funds Balance Sheet to the Governmental Activities Statement of Net Position 22
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 23
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Governmental Activities Statement of Activities 24
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund Budget and Actual 25
Notes to Basic Financial Statements 26
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 36 #7..
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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 2007-1 North Beyer Park #2 (the District), a component unit of the City of Modesto, California, as of and for the year ended June 30, 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. #7..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
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4 • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.
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 6-16 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 District’s internal control over financial reporting and compliance.
Glendale, California
November 12, 2025
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6 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 2007-1 (North Beyer Park #2) (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.
Please read this overview in conjunction with your reading of the accompanying basic financial statements.
THE 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 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
Adopted on November 26, 1996 by City Council Resolution No. 96-641, the North Beyer Specific Plan proposed a maximum of 1,200 residential units on 160 acres within the Specific Plan area. In addition, three areas within the Specific Plan were designated “Mixed Use,” two of which were expected to develop as neighborhood commercial shopping centers and the third which was expected to develop as office space.
On May 8, 2007, by Resolution No. 2007-270, the City formed the City of Modesto Community Facilities District Number 2007-1 (CFD No. 2007-1). The authorized services to be funded by special tax revenues include maintenance and repair of parks, landscaped medians, storm drainage basins, and related facilities, including but not limited to, concrete curbs and walks, trees, shrubs, vines, ground cover, turf, lights and irrigation systems. The services to be provided include, but are not limited to, litter and debris removal, graffiti abatement, painting repairs to landscape structures, building maintenance and repairs, pruning, staking, fertilizing, plant replacement and restoration, fire and weed control, erosion control, mowing of lawns, trimming of vegetation, and maintenance, repair and replacement of lighting systems within the parks.
The facilities authorized to be funded by special tax revenues include the installation of the landscaped medians on Oakdale and Coffee Roads, which may but will not necessarily include concrete curbs and walks, trees, shrubs, ground cover, lights, and irrigation systems. #7..
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 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 $764,002. • For the year ended June 30, 2025, total revenues were $151,798 and total expenses were $98,491.
Fund Basis:
• Capital Projects Fund revenues of $30,656 were $7,987 higher than in the prior year due to an increase in the fair value of investments for fiscal year 2025 and expenditures of $0 were the same as the previous year.
• Special Revenue Fund revenues increased from $117,564 in the prior year to $120,687 for fiscal year 2025 and expenditures increased from $85,482 in the prior year to $98,491 for fiscal year 2025. The increase in revenues 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 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. #7..
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year.
The Statement of Net Position and the Statement of Activities present information about the following:
Governmental activities - All 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.
FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE (CONTINUED) As of June 30, 2025, total assets of $773,397 were offset by liabilities of $9,395. The District’s net position from governmental activities increased to $764,002 in 2025 from $710,695 in 2024.
The District’s net position has restrictions as follows: $556,642 for the acquisition or construction of infrastructure and $207,360 for District 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
Asset
Cash and investments $769,464 $716,912 $52,552
Assessments receivable 455 503 (48)
Interest receivable 3,478 2,449 1,029
Total assets 773,397 719,864 53,533
Liabilities
Account payable 9,395 9,169 226
Total liabilities 9,395 9,169 226
Net position
Restricted for:
Capital projects 556,642 525,986 30,656
District maintenance 207,360 184,709 22,651
Total net position $764,002 $710,695 $53,307
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenues of $151,798 came primarily from maintenance special taxes, which amounted to $110,292, along with investment earnings of $41,506. District expenses of $98,491 were primarily for professional services and utilities expenses.
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 $110,292 $110,368 $(76)
Investment earnings 41,506 28,997 12,509
Total revenues 151,798 139,365 12,433
Expenses
Community development 98,491 85,482 13,009
Total expense 98,491 85,482 13,009
Changes in net position 53,307 53,883 $(576)
Net position, beginning of year 710,695 656,812
Net position, end of year $764,002 $710,695
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 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.
The fund financial statements provide detailed information about each of the District’s most significant funds, called major funds. Major funds present the major activities of the District for the year and may change from year to year as a result of changes in the pattern of the District’s activities. All of the District’s funds are presented here as major funds; their purpose is explained in Note 1 to the financial statements. All of the District’s funds are governmental funds; financial statements for these funds are prepared on the modified accrual basis of accounting, which means they measure only current financial resources and uses. #7..
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) The following summarizes the Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balance for both the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2025 and 2024, and the respective changes:
Balance Sheets - Capital Projects Fund
Description 2025 2024 Change
Assets
Cash and investments $554,111 $524,162 $29,949
Interest receivable 2,531 1,824 707
Total assets $556,642 $525,986 $30,656
Fund balances
Restricted for:
Capital projects $556,642 $525,986 $30,656
Total Fund Balances $556,642 $525,986 $30,656
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheets – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $215,353 $192,750 $22,603
Assessments receivable 455 503 (48)
Interest receivable 947 625 322
Total assets $216,755 $193,878 $22,877
Liabilities
Accounts payable $9,395 $9,169 $226
Total liabilities 9,395 9,169 226
Deferred inflow of resources
Unavailable revenues 455 - 455
Total deferred inflow of resources 455 - 455
Fund balances
Restricted for:
District maintenance 206,905 184,709 22,196
Total fund balances 206,905 184,709 22,196
Total liabilities, deferred inflow of
resources, and fund balances $216,755 $193,878 $22,877
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statements of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund
Description 2025 2024 Change
Revenues $30,656 $22,669 $7,987
Expenditures - - -
Net change in fund balance 30,656 22,669 $7,987
Fund balance, beginning of year 525,986 503,317
Fund balance, end of year $556,642 $525,986
Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $120,687 $117,564 $3,123
Expenditures 98,491 85,482 13,009
Net change in fund balance 22,196 32,082 $(9,886)
Fund balance, beginning of year 184,709 152,627
Fund balance, end of year $206,905 $184,709
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
16 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) At June 30, 2025, the District’s governmental funds reported combined fund balances of $763,547, an increase of $52,852 compared with last year. This increase was primarily due to higher maintenance special taxes and investment earnings recognized 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.
The District reports no long-term capital assets.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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17 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting – the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.
The Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are 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. #7..
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See notes to basic financial statements.
18 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $769,464
Assessments receivable 455
Interest receivable 3,478
Total Assets 773,397
LIABILITIES
Accounts payable 9,395
Total Liabilities 9,395
NET POSITION
Restricted for:
Capital projects 556,642
District maintenance 207,360
Total Net Position $764,002
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See notes to basic financial statements.
19 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Operating
Grants and
Contributions
Governmental
Activities
Community development $98,491 $ - $(98,491)
$98,491 $ - (98,491)
General Revenues
Maintenance special taxes 110,292
Investment earnings 41,506
Total General Revenues 151,798
Change in net position 53,307
Net Position, Beginning of Year 710,695
Net Position, End of Year $764,002
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20 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.
The District determined all its funds to be major funds. They are:
The Capital Projects Fund accounts for all financial resources and uses related to acquisition, construction, and formation/annexation activities.
The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #7..
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See notes to basic financial statements.
21 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $554,111 $215,353 $769,464
Assessments receivable - 455 455
Interest receivable 2,531 947 3,478
Total Assets $556,642 $216,755 $773,397
LIABILITIES
Accounts payable $ - $9,395 $9,395
Total Liabilities - 9,395 9,395
DEFERRED INFLOW OF RESOURCES
Unavailable revenues - 455 455
Total Deferred Inflow of Resources - 455 455
FUND BALANCES
Restricted for:
Capital projects 556,642 - 556,642
District maintenance - 206,905 206,905
Total Fund Balances 556,642 206,905 763,547
Total Liabilities, Deferred Inflow of
Resources, and Fund Balances $556,642 $216,755 $773,397 #7..
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See notes to basic financial statements.
22 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Reconciliation of Governmental Funds Balance Sheet
to the Governmental Activities Statement of Net Position Year Ended June 30, 2025
Total Fund Balances - Governmental Funds $763,547
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 funds but are considered earned in the Statement of Activities. 455
Total Net Position - Governmental Activities $764,002
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See notes to basic financial statements.
23 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
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 $ - $109,837 $109,837
Interest income 17,874 6,148 24,022
Change in fair value of investments 12,782 4,702 17,484 Total Revenues 30,656 120,687 151,343
EXPENDITURES
Services – professional and other - 80,215 80,215
Utilities - 18,276 18,276
Total Expenditures - 98,491 98,491
Net Change in Fund Balances 30,656 22,196 52,852
Fund Balances, Beginning of Year 525,986 184,709 710,695 Fund Balances, End of Year $556,642 $206,905 $763,547
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See notes to basic financial statements.
24 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
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 $52,852 Amounts reported for governmental activities in the Statement of Activities are different because:
Revenues not available for current-period expenditures are deferred in the governmental fund but are considered earned in the Statement of Activities. 455 Change in Net Position - Governmental Activities $53,307 #7..
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See notes to basic financial statements.
25 Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in
Fund Balance – Special Revenue Fund
Budget and Actual
Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
REVENUES
Maintenance special taxes $114,400 $114,400 $109,837 $(4,563) Interest income - - 6,148 6,148
Change in fair value of investments - - 4,702 4,702
Total Revenues 114,400 114,400 120,687 6,287
EXPENDITURES
Community development
Services - professional and other 79,307 79,307 80,215 (908) Utilities 22,500 22,500 18,276 4,224
Total Expenditures 101,807 101,807 98,491 3,316
Net Change in Fund Balance $12,593 $12,593 22,196 $9,603 Fund Balance, Beginning of Year 184,709
Fund Balance, End of Year $206,905
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26 Community Facilities District
Number 2007-1 North Beyer Park #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 2007-1 North Beyer Park #2 (the District) was formed on May 8, 2007, by City Council Resolution No. 2007-27 following a vote of the property owners within the proposed District. The District, a separate legal entity, formed to provide a funding mechanism for public facilities and services as required by the District Specific Plan including maintenance and repair of parks, landscaped medians, storm drainage basins, and related facilities, including but not limited to, concrete curbs and walks, trees, shrubs, vines, ground cover, turf, lights and irrigation systems.
The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items that are not properly included among program revenues, are reported instead as general revenues.
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 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.
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
28 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.
Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Maintenance Special Taxes
The maintenance special taxes are collected by the County of Stanislaus on the property tax bill. The special taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. The County of Stanislaus bills and collects the special taxes and remits them to the District. The Rate and Method of Apportionment of Special Tax (RMA), set forth in the District’s Public Report, describes how the tax will be allocated among properties in the District. The Public Report was established during the formation of the District.
A cost-of-living adjustment is applied to the special taxes annually. #7..
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position and Fund Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that is applicable to a future reporting period.
In addition to liabilities, the Statements of Net Position and Fund Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that is applicable to a future reporting period. Deferred inflows reported by the District consist of unearned deferred assessments that have been billed as of year-end, but not yet collected.
Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have any nonspendable resources as of June 30, 2025.
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
30 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 $763,547 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.
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- 944 -
Community Facilities District
Number 2007-1 North Beyer Park #2
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)
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.
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 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 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. #7..
- 945 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
• Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.
When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
Governmental Accounting Standards Update
During the year ended June 30, 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. #7..
- 946 -
Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.
Cash and investments in the 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 $769,464
Total cash and investments $769,464
Deposits with the City
Cash and investment pool $769,464
Total cash and investments $769,464
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
34 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Detailed information regarding the City’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s Annual Comprehensive Financial Report. As of June 30, 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:
Restricted for Capital Projects - the portion of fund balance legally restricted for the acquisition, construction, and formation/annexation activities.
Restricted for District Maintenance - the portion of fund balance legally restricted for the maintenance of parkways and open space within the District.
NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that will initiate foreclosure proceedings against delinquent parcels as follows:
a. Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. b. All parcels delinquent at June 30 when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1 following the end of the fiscal year. #7..
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Community Facilities District
Number 2007-1 North Beyer Park #2
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
35 NOTE 4 DELINQUENCIES AND FORECLOSURES (CONTINUED)
At June 30, 2025, there was one delinquent parcel in the District amounting to $455. The District received 99.59% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2025. The delinquencies total of $455 at June 30, 2025 is included in assessments receivable on the Statement of Net Position and Balance Sheet.
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 $(908)
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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36 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2007-1 North Beyer Park #2 (the District), as of and for the year ended June 30, 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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37 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #7..
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38 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Glendale, California
November 12, 2025
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- 952 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #7..
- 953 -
Community Facilities District
Number 2016-2 The Vintage
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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- 954 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 17
Statement of Activities – Governmental Activities 18
Balance Sheet – Governmental Fund 20
Reconciliation of the Governmental Fund Balance Sheet to the Governmental Activities Statement of Net Position 21
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 22
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to the Governmental Activities Statement of Activities 23 Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 24
Notes to Basic Financial Statements 25
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 35 #7..
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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 2016-2 The Vintage (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 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. #7..
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
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4 • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.
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 6-15 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 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 2016-2 The Vintage (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.
Please read this overview in conjunction with your reading of the accompanying basic financial statements.
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 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
The District was formed by the City Council on March 8, 2016 by Resolution No. 2016-95 to generate funding for the construction of certain roadway improvements and to provide ongoing services. The authorized services include, but are not limited to, maintenance, repair and replacement of parkways, landscaped medians, storm drainage facilities, including but not limited to, catch basins, manholes, underground infiltration trenches and pipes, landscaped bio-swale lots and medians, storm water treatment devices and filters, shrubs, vines, ground cover, irrigation systems, litter and debris removal, pruning, staking, fertilizing, plant replacement and restoration, fire and weed control, erosion control, trimming of vegetation, and storm drain system maintenance.
The District supported the development of 227 single-family residential lots built out to date,
6.05 acres of proposed multi-family residential development, and approximately 10 acres for potential commercial development that will assist in implementing the City’s long-range objectives to enhance its local economy, generate jobs for residents, and create a better jobshousing balance.
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 $572,571. • Total District revenues were $201,936 and expenses were $61,979. #7..
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Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS (CONTINUED)
Fund Basis
• Special Revenue Fund revenues increased from $182,627 in the prior year to $201,699 for fiscal year 2025 and expenditures increased from $55,362 in the prior year to $61,979 for fiscal year 2025. The increase in revenues is attributed to increases in maintenance special taxes and investment earnings, and the increase in expenditures is attributed to an increase in activities in community development. The Special Revenue Fund balance increased by $139,720 to an ending balance of $572,334.
THE BASIC FINANCIAL STATEMENTS
The basic financial statements comprise the government-wide financial statements and the fund financial statements; these two sets of financial statements provide two different views of the District’s financial activities and financial position.
Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.
The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year. #7..
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Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
Government-Wide 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.
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 $578,568 were offset by liabilities of $5,997. The District’s net position from governmental activities increased to $572,571 in 2025 from $432,614 in 2024.
This increase was due to higher maintenance special taxes revenue and an increase in the fair value of investments. The District’s net position has restrictions as follows: $572,571 for District maintenance.
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Community Facilities District
Number 2016-2 The Vintage
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 $572,332 $436,640 $135,692
Interest receivable 2,519 1,429 1,090
Taxes receivable 3,717 478 3,239
Total assets 578,568 438,547 140,021
Liabilities
Accounts payable 5,997 5,933 64
Total liabilities 5,997 5,933 64
Net position
Restricted for:
District maintenance 572,571 432,614 139,957
Total net position $572,571 $432,614 $139,957
FISCAL YEAR 2025 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2025 revenue came primarily from annual maintenance special taxes of $174,148 and investment earnings of $27,788. District expenses of $61,979 were primarily for community development.
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Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 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
Revenue
General revenues
Maintenance special taxes $174,148 $167,217 $6,931
Investment earnings 27,788 14,611 13,177
Total revenues 201,936 181,828 20,108
Expenses
Community development 61,979 55,362 6,617
Total expenses 61,979 55,362 6,617
Changes in net position 139,957 126,466 $13,491
Net position, beginning of year 432,614 306,148
Net position, end of year $572,571 $432,614
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- 966 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 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 fund. The fund financial statements measure only current revenues and expenditures and fund balance; they exclude capital assets, long-term debt, and other long-term amounts.
The fund financial statements provide detailed information about the District’s significant funds, called major funds. Major funds present the major activities of the District for the year and may change from year to year as a result of changes in the pattern of the District’s activities. The District’s one fund is presented here as a major fund; its purpose is explained in Note 1 to the basic financial statements. The District’s Special Revenue Fund is a governmental fund; financial statements for this fund are prepared on the modified accrual basis of accounting, which means it measures only current financial resources and uses.
The following summarizes the Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance for the Special Revenue Fund as of and for the years ended June 30, 2025 and 2024, and the respective changes:
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- 967 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Balance Sheet – Special Revenue Fund
Description 2025 2024 Change
Assets
Cash and investments $572,332 $436,640 $135,692
Interest receivable 2,519 1,429 1,090
Taxes receivable 3,717 478 3,239
Total Assets $578,568 $438,547 $140,021
Liabilities
Accounts payable $5,997 $5,933 $64
Total Liabilities 5,997 5,933 64
Deferred inflow of resources
Unavailable revenues 237 - 237
Total Deferred Inflow of Resources 237 - 237
Fund balances
Restricted for:
District maintenance 572,334 432,614 139,720
Total Fund Balances 572,334 432,614 139,720
Total Liabilities, Deferred Inflow of
Resources, and Fund Balances $578,568 $432,614 $140,021 #7..
- 968 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 THE DISTRICT’S FUND FINANCIAL STATEMENTS (CONTINUED) Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $201,699 $182,627 $19,072
Expenditures 61,979 55,362 6,617
Net change in fund balance 139,720 127,265 $12,455
Fund balances, beginning of year 432,614 305,349
Fund balances, end of year $572,334 $432,614
At June 30, 2025, the District’s governmental fund reported a fund balance of $572,334, an increase of $139,720 from last year. This increase was primarily due to increases in maintenance special taxes and investment earnings.
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. #7..
- 969 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O.
Box 642, Modesto, California 95353.
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- 970 -
16 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting - the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.
The Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues, that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
- 971 -
See notes to basic financial statements.
17 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $572,332
Interest receivable 2,519
Taxes receivable 3,717
Total Assets 578,568
LIABILITIES
Accounts payable 5,997
Total Liabilities 5,997
NET POSITION
Restricted for:
District maintenance 572,571
Total Net Position $572,571
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- 972 -
See notes to basic financial statements.
18 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Operating Grants
and Contributions
Governmental
Activities
Community development $61,979 $- $(61,979)
$61,979 $- (61,979)
General Revenues
Maintenance special taxes 174,148
Investment earnings 27,788
Total General Revenues 201,936
Change in Net Position 139,957
Net Position, Beginning of Year 432,614
Net Position, End of Year $572,571
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- 973 -
19 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.
The District determined its fund to be a major fund. That is:
The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways and open space within the District. #7..
- 974 -
See notes to basic financial statements.
20 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Balance Sheet – Governmental Fund
June 30, 2025
Special
Revenue
Fund
ASSETS
Cash and investments $572,332
Interest receivable 2,519
Taxes receivable 3,717
Total Assets $578,568
LIABILITIES
Accounts payable $5,997
Total Liabilities 5,997
DEFERRED INFLOW OF RESOURCES
Unavailable revenues 237
Total Deferred Inflow of Resources 237
FUND BALANCE
Restricted for:
District maintenance 572,334
Total Fund Balance 572,334
Total Liabilities, Deferred Inflow of Resources, and Fund Balance $578,568 #7..
- 975 -
See notes to basic financial statements.
21 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Reconciliation of the Governmental Fund Balance Sheet
to the Governmental Activities Statement of Net Position June 30, 2025
Total Fund Balance - Governmental Fund $572,334
Amounts reported for governmental activities in the Statement of 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. 237
Total Net Position - Governmental Activities $572,571
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- 976 -
See notes to basic financial statements.
22 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Governmental Fund
Year Ended June 30, 2025
Special
Revenue
Fund
REVENUES
Maintenance special taxes $173,911
Interest Income 16,354
Changes in fair value of investments 11,434
Total Revenues 201,699
EXPENDITURES
Community development
Services – professional and other 60,793
Utilities 1,186
Total Expenditures 61,979
Net Change in Fund Balance 139,720
Fund Balance, Beginning of year 432,614
Fund Balance, End of year $572,334
#7..
- 977 -
See notes to basic financial statements.
23 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to the Governmental Activities Statement of Activities Year Ended June 30, 2025
Net Change in Fund Balance - Governmental Fund $139,720 Amounts reported for governmental activities in the Statement of Activities are different because:
Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the governmental fund. 237 Change in Net Position - Governmental Activities $139,957 #7..
- 978 -
See notes to basic financial statements.
24 Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual
Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
REVENUES
Maintenance special taxes $173,259 $173,259 $173,911 $652 Interest income - - 16,354 16,354
Change in fair value of investments - - 11,434 11,434
Total Revenues 173,259 173,259 201,699 28,440
EXPENDITURES
Community development
Services - professional and other 77,001 77,001 60,793 16,208 Utilities 3,500 3,500 1,186 2,314
Total Expenditures 80,501 80,501 61,979 18,522
Net Change in Fund Balance $92,758 $92,758 139,720 $46,962 Fund Balance, Beginning of Year 432,614
Fund Balance, End of Year $572,334
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- 979 -
25 Community Facilities District
Number 2016-2 The Vintage
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 2016-2 The Vintage (the District) was formed on March 8, 2016 by City Council Resolution No. 2016-95 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 is a 45-acre project, west of Dale Road and north of Vintage Faire Mall, which currently supports 227 residential lots to date.
The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are 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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- 980 -
Community Facilities District
Number 2016-2 The Vintage
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) Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.
Basis of Presentation, Basis of Accounting, and Measurement Focus The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year for which they are levied.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 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.
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- 981 -
Community Facilities District
Number 2016-2 The Vintage
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) 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.
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.
Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period. #7..
- 982 -
Community Facilities District
Number 2016-2 The Vintage
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 will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that applies to a future reporting period. Deferred inflows reported by the District consist of deferred assessments that have been billed as of year-end but have not yet been collected.
Maintenance Special Taxes
The maintenance special taxes are collected by the County of Stanislaus on the property tax bill. The special taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. The County of Stanislaus bills and collects the special taxes and remits them to the District. The Rate and Method of Apportionment of Special Tax (RMA), set forth in the District’s Public Report, describes how the tax will be allocated among properties in the District. The Public Report was established during the formation of the District.
A cost of living adjustment is applied to the special taxes annually.
Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. • Nonspendable - Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact. The District did not have any nonspendable resources as of June 30, 2025.
#7..
- 983 -
Community Facilities District
Number 2016-2 The Vintage
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 $572,334 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.
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- 984 -
Community Facilities District
Number 2016-2 The Vintage
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 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.