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. #7..
- 985 -
Community Facilities District
Number 2016-2 The Vintage
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)
• 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..
- 986 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
32 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.
Cash and investments 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 $572,332
Total cash and investments $572,332
Deposits with the City
Cash and investment pool $572,332
Total cash and investments $572,332
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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- 987 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 NOTE 3 RESTRICTED FUND BALANCES
Restrictions of Fund Balances
Fund balances are all presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2025, restrictions included:
Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District.
NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that it will initiate foreclosure proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. (b) All parcels delinquent at June 30 when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1 following the end of the fiscal year.
At June 30, 2025, the District had 1 delinquent parcel for a total of $237. The District received
99.86% of the Special Revenue Fund maintenance special taxes levied during the year ended June 30, 2025. The delinquencies total of $237 at June 30, 2025 is included in assessments receivable on the Statement of Net Position and Balance Sheet. #7..
- 988 -
Community Facilities District
Number 2016-2 The Vintage
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
34 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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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 2016-2 The Vintage (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 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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37 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Glendale, California
November 12, 2025
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- 992 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #7..
- 993 -
Community Facilities District
Number 2021-1 Woodglen
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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- 994 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management's Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Statement of Net Position – Governmental Activities 18
Statement of Activities – Governmental Activities 19
Balance Sheet – Governmental Funds 21
Reconciliation of Governmental Funds Balance Sheet to Governmental Activities Statement of Net Position 22
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 23
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to 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 2021-1 Woodglen (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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- 998 -
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 6-16 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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- 1000 -
6 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management's Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
The City of Modesto Community Facilities District Number 2021-1 (Woodglen) (the District) has issued its financial statements in the format prescribed by the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, which requires the District to provide this overview of its financial activities for the fiscal year.
Please read this overview in conjunction with your reading of the accompanying basic financial statements.
THE PURPOSE OF THE DISTRICT
The District is a blended component unit of the City of Modesto, California (the City). It is controlled by the City, and the City Council is the District’s governing body. City employees perform most of the duties and functions required of the District, but certain tasks are provided by third parties under contract.
The District’s purpose under California law is to encompass maintenance for landscaped lots, tree pruning, masonry wall maintenance, neighborhood park maintenance, storm drain basin maintenance, and other services, including but not limited to litter and debris removal, pruning, staking, fertilizing, plant replacement and restoration, fire and weed control, erosion control, trimming of vegetation, and storm drain system maintenance. Additional information on the District can be found below and in Note 1 to the accompanying financial statements. #7..
- 1001 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 BACKGROUND AND MANAGEMENT’S DISCUSSION
On November 6, 2013 by Resolution No. 2013-398, the City Council approved the Woodglen Specific Plan that set forth a plan for development of 367 single-family residential lots, two open space/storm basin lots, one park lot, and ten landscape lots. 225 single-family dwellings have been fully built to date with final subdivision maps approved on September 9, 2025 for an additional 138 single family lots. Resolution No. 2021-196 was adopted by the City Council on June 1, 2021, stating its intention to establish Community Facilities District No. 2021-1 (Woodglen) and to authorize the levy of a special tax within Woodglen to provide a funding source for maintenance of landscaped lots, tree pruning, masonry wall maintenance, neighborhood park maintenance, storm drain basin maintenance and other services. On July 6, 2021, the City Council through Resolution No. 2021-268 formally declared its formation.
FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS
Financial highlights of the year include the following:
Government-Wide
• At June 30, 2025, the District’s net position increased to $634,412. • Total District revenues were $285,018 and expenses were $104,345.
Fund Basis
• Capital Projects Fund revenues decreased from $46,239 in the prior year to $19,231 for fiscal year 2025, and expenditures of $0 had no change from the prior year. The decrease in revenues is attributed to the decrease in facilities special taxes, as fewer properties had to pay the one-time facilities special tax. The Capital Projects Fund balance increased by $19,231 to an ending fund balance of $262,968.
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- 1002 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS (CONTINUED)
Fund Basis (Continued)
• Special Revenue Fund revenues of $265,766 were $47,902 more than the prior year, primarily due to an increase in maintenance special taxes. Expenditures of $104,345 were $21,504 more than the prior year due to an increase in services and payroll expenditures.
The Special Revenue Fund balance increased by $161,421 to an ending fund balance of $370,890.
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:
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- 1003 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 THE BASIC FINANCIAL STATEMENTS (CONTINUED)
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 amounted to $643,701 offset by total liabilities of $9,289. The District’s net position from governmental activities increased to $634,412 in 2025 from $453,739. The District’s net position has restrictions as follows: $262,968 for acquisition or construction of infrastructure and $371,444 for District maintenance. The following summarizes the Statements of Net Position as of June 30, 2025 and 2024, and the related changes. #7..
- 1004 -
Community Facilities District
Number 2021-1 Woodglen
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) Statements of Net Position – Governmental Activities
Description 2025 2024 Change
Assets
Cash and investments $637,934 $458,013 $179,921
Assessments receivable 3,000 2,888 112
Interest receivable 2,767 1,495 1,272
Total assets 643,701 462,396 181,305
Liabilities
Accounts payable 9,289 8,657 632
Total liabilities 9,289 8,657 632
Net position
Restricted for:
Capital projects 262,968 243,737 19,231
District maintenance 371,444 210,002 161,442
Total net position $634,412 $453,739 $180,673
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- 1005 -
Community Facilities District
Number 2021-1 Woodglen
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 of $250,630 and interest income of $17,440. District expenses of $104,345 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
Program revenues
Charges for services $- $7,699 $(7,699)
General revenues
Maintenance special taxes 250,630 35,672 214,958
Facilities special taxes 4,781 205,571 (200,790)
Interest income 17,440 8,588 8,852
Investment earnings 12,167 6,594 5,573
Total revenues 285,018 264,124 20,894
Expenses
Community development 104,345 82,841 21,504
Changes in net position 180,673 181,283 $(610)
Net position, beginning of year 453,739 272,456
Net position, end of year $634,412 $453,739
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Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 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 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.
Presented on the succeeding pages are the condensed Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2025, and 2024, and the respective changes:
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- 1007 -
Community Facilities District
Number 2021-1 Woodglen
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 $261,772 $242,892 $18,880
Interest receivable 1,196 845 351
Total assets $262,968 $243,737 $19,231
Fund Balances
Restricted for:
Capital projects $262,968 $243,737 $19,231
Total fund balances $262,968 $243,737 $19,231
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- 1008 -
Community Facilities District
Number 2021-1 Woodglen
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 $376,162 $215,121 $161,041
Assessments receivable 3,000 2,888 112
Interest receivable 1,571 650 921
Total assets $380,733 $218,659 $162,074
Liabilities
Accounts payable $9,289 $8,657 $632
Total liabilities 9,289 8,657 632
Deferred inflow of resources
Unavailable revenues 554 533 21
Total deferred inflow of resources 554 533 21
Fund Balances
Restricted for:
District maintenance 370,890 209,469 161,421
Total fund balances 370,890 209,469 161,421
Total liabilities, deferred inflow of
resources, and fund balances $380,733 $218,659 $162,074 #7..
- 1009 -
Community Facilities District
Number 2021-1 Woodglen
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 $19,231 $46,239 $(27,008)
Expenditures - - −
Net change in fund balance 19,231 46,239 $(27,008)
Fund balance, beginning of year 243,737 197,498
Fund balance, end of year $262,968 $243,737
Statements of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund
Description 2025 2024 Change
Revenues $265,766 $217,864 $47,902
Expenditures 104,345 82,841 21,504
Net change in fund balance 161,421 135,023 $26,398
Fund balance, beginning of year 209,469 74,446
Fund balance, end of year $370,890 $209,469
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- 1010 -
Community Facilities District
Number 2021-1 Woodglen
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 a combined fund balance of $633,858, an increase of $180,652 compared to fiscal year 2024. The Capital Projects Fund realized a $19,231 increase, while the Special Revenue Fund realized a $161,421 increase.
The increase in the fund balances of both funds is primarily due to the increase in the collection of special taxes.
CAPITAL ASSETS
Under GASB Statement No. 34, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, the District is required to record all its capital assets, including infrastructure, at their historical cost, and to depreciate these assets over their estimated useful lives. However, title to all infrastructure assets acquired or constructed by the District is turned over to the City upon completion and acceptance. Accordingly, capital outlay expenditures are reported in both the District’s fund and government-wide financial statements.
Therefore, the District reports no long-term capital assets.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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17 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting as that used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting, the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.
The Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.
The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the modified accrual basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues that are generated directly by these programs are deducted from program expenses to arrive at the net program revenue (expense). General revenues that are not generated directly by these programs are then added to arrive at the change in net position and reconciled with the Statement of Net Position. #7..
- 1012 -
See notes to basic financial statements.
18 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2025
ASSETS
Cash and investments $637,934
Assessments receivable 3,000
Interest receivable 2,767
Total Assets 643,701
LIABILITIES
Accounts payable 9,289
Total Liabilities 9,289
NET POSITION
Restricted for:
Capital projects 262,968
District maintenance 371,444
Total Net Position $634,412
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See notes to basic financial statements.
19 Community Facilities District
Number 2021-1 Woodglen
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 $104,345 $- $(104,345)
$104,345 $- (104,345)
General Revenues
Maintenance special taxes 250,630
Facilities special taxes 4,781
Interest income 17,440
Investment earnings 12,167
Total General Revenues 285,018
Change in Net Position 180,673
Net Position, Beginning of Year 453,739
Net Position, End of Year $634,412
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- 1014 -
20 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.
The District determined all its funds to be major funds. They are:
The Capital Projects Fund accounts for all financial resources and uses related to acquisition, construction, and formation/annexation activities.
The Special Revenue Fund accounts for all financial resources and uses related to the maintenance of parkways, storm drainage basin facilities, tree pruning, etc. within the District. #7..
- 1015 -
See notes to basic financial statements.
21 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2025
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $261,772 $376,162 $637,934
Assessments receivable - 3,000 3,000
Interest receivable 1,196 1,571 2,767
Total Assets $262,968 $380,733 $643,701
LIABILITIES
Accounts payable $- $9,289 $9,289
Total Liabilities - 9,289 9,289
DEFERRED INFLOW OF RESOURCES
Unavailable revenues - 554 554
Total Deferred Inflow of Resources - 554 554
FUND BALANCES
Restricted for:
Capital projects 262,968 - 262,968
District maintenance - 370,890 370,890
Total Fund Balances 262,968 370,890 633,858
Total Liabilities, Deferred Inflow of
Resources, and Fund Balances $262,968 $380,733 $643,701 #7..
- 1016 -
See notes to basic financial statements.
22 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Reconciliation of Governmental Funds Balance Sheet to
Governmental Activities Statement of Net Position
June 30, 2025
Total Fund Balances - Governmental Funds $633,858
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. 554
Total Net Position - Governmental Activities $634,412
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- 1017 -
See notes to basic financial statements.
23 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2025
Capital
Projects Fund
Special
Revenue Fund Total
REVENUES
Maintenance special taxes $- $250,609 $250,609
Facilities special taxes 4,781 - 4,781
Interest income 8,448 8,992 17,440
Change in fair value of investments 6,002 6,165 12,167
Total Revenues 19,231 265,766 284,997
EXPENDITURES
Community development
Services – professional and other - 92,860 92,860
Utilities - 11,485 11,485
Total Expenditures - 104,345 104,345
Net Change in Fund Balances 19,231 161,421 180,652
Fund Balances, Beginning of Year 243,737 209,469 453,206 Fund Balances, End of Year $262,968 $370,890 $633,858
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- 1018 -
See notes to basic financial statements.
24 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to Governmental Activities Statement of Activities Year Ended June 30, 2025
Net Change in Fund Balances - Governmental Funds $180,652 Amounts reported for governmental activities in the Statement of Activities are different because:
Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the governmental funds. 21 Change in Net Position - Governmental Activities $180,673 #7..
- 1019 -
See notes to basic financial statements.
25 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual
Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
REVENUES
Maintenance special taxes $212,775 $212,775 $250,609 $37,834 Interest income - - 8,992 8,992
Change in fair value of
investments - - 6,165 6,165
Total Revenues 212,775 212,775 265,766 52,991
EXPENDITURES
Community development
Services - professional and
other 99,811 99,811 92,860 6,951
Utilities 8,000 25,000 11,485 13,515
Total Expenditures 107,811 124,811 104,345 20,466
Net Change in Fund Balance $104,964 $87,964 161,421 $73,457 Fund Balance, Beginning of Year 209,469
Fund Balance, End of Year $370,890
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- 1020 -
26 Community Facilities District
Number 2021-1 Woodglen
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
Community Facilities District 2021-1 Woodglen (the District) was formed on July 6, 2021, by the City Council Resolution No. 2021-268 following a vote by the property owners within the proposed boundaries. The District is bounded by Bangs Avenue to the North, Tully Road to the East, Carver Road to the West, and Pelendale Avenue to the South. The District, a separate legal entity, was formed to provide maintenance for landscaped lots, tree pruning, masonry wall maintenance, neighborhood park maintenance, storm drain basin maintenance and other services. The District encompasses property totaling approximately 41.257 acres which will also be subject to levy and collection of special taxes.
The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.
The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. #7..
- 1021 -
Community Facilities District
Number 2021-1 Woodglen
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) 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. #7..
- 1022 -
Community Facilities District
Number 2021-1 Woodglen
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..
- 1023 -
Community Facilities District
Number 2021-1 Woodglen
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 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 $633,858 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 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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- 1024 -
Community Facilities District
Number 2021-1 Woodglen
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 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.
When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.
Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the District recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the District that applies to a future reporting period. #7..
- 1025 -
Community Facilities District
Number 2021-1 Woodglen
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 and Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that applies to a future reporting period. Deferred inflow of resources reported by the District consists of unearned deferred assessments that have been billed as of year-end, but not yet collected.
Net Position
Net position represents the residual interest in the District’s assets and deferred outflows of resources after liabilities and deferred inflows of resources are deducted. In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the 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 – The amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to those assets' acquisition, construction, or improvement. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that do not meet the definition “net investment in capital assets” or “restricted” net position.
When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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- 1026 -
Community Facilities District
Number 2021-1 Woodglen
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
During the year ended June 30, 2025, the District implemented the following Governmental Accounting Standards Board (GASB) standards with no impact on the financial statements:
GASB Statement No. 101 – Compensated Absences. The requirements of this statement are effective for reporting periods beginning after December 15, 2023.
GASB Statement No. 102 – Certain Risk Disclosures. The requirements of this statement are effective for reporting periods beginning after June 15, 2024.
Released GASB Statements to be implemented in future financial statements are as follows:
GASB Statement No. 103 – Financial Reporting Model Improvements. The requirements of this statement are effective for reporting periods beginning after June 15, 2025.
GASB Statement No. 104 – Disclosure of Certain Capital Assets. The requirements of this statement are effective for reporting periods beginning after June 15, 2025.
NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the District’s investments as all cash is invested as part of the common cash and investment pool of the City.
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Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
33 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.
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 $637,934
Total cash and investments $637,934
Deposits with the City
Cash and investment pool $637,934
Total cash and investments $637,934
Detailed information regarding the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s Annual Comprehensive Financial Report. As of June 30, 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.
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- 1028 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
34 NOTE 3 RESTRICTED FUND BALANCES (CONTINUED)
Restrictions of Fund Balances (Continued)
Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District.
NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that will initiate foreclosure proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within 120 days after the third delinquency. (b) All parcels delinquent at June 30 when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1 following the end of the fiscal year.
At June 30, 2025, the District had 1 delinquent parcel for a total of $554. The District received
99.78% of the maintenance special taxes levied during the year ended June 30, 2025. The delinquencies total of $554 at June 30, 2025, is included in assessments receivable on the Statement of Net Position and Balance Sheet.
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- 1029 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2025
35 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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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 2021-1 Woodglen (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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- 1031 -
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..
- 1032 -
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 entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Glendale, California
November 12, 2025
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- 1033 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #7..
- 1034 -
City of Modesto, California
Abandoned Vehicle Abatement Program
Annual Financial Report
For the Year Ended June 30, 2025
with Independent Auditor’s Report
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- 1035 -
Abandoned Vehicle Abatement Program
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Financial Statements
Statement of Revenues and Costs – Cash Basis 5
Notes to Financial Statement 6
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards and the AVA Program Handbook 8
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- 1036 -
1 Independent Auditor’s Report
Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statement
Opinion
We have audited the statement of revenues and costs – cash basis of the Abandoned Vehicle Abatement Program (the Program) of the City of Modesto, California (the City), for the year ended June 30, 2025, and the related notes to the financial statement.
In our opinion, the accompanying financial statement referred to above presents fairly, in all material respects, the revenues and costs of the Program for the year ended June 30, 2025, in accordance with the cash basis of accounting described in Note 2.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and certain provisions of the Abandoned Vehicle Abatement (AVA) Program Handbook, issued by the California Highway Patrol. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statement section of our report.
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- 1037 -
2 We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter – Basis of Accounting
As discussed in Note 2, the financial statement is prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. The Program intends to present the cash-basis statement of revenues and costs of the Program. It does not purport to, and does not, present fairly the financial position of the City as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters.
Responsibilities of Management for the Financial Statement Management is responsible for the preparation and fair presentation of this financial statement in accordance with the cash basis of accounting described in Note 2, and for determining that the cash basis of accounting is an acceptable basis for the preparation of the financial statement in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a financial statement that is free from material misstatement, whether due to fraud or error.
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- 1038 -
3 Auditor's Responsibilities for the Audit of the Financial Statement Our objectives are to obtain reasonable assurance about whether the financial statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and certain provisions of the AVA Program Handbook will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statement.
In performing an audit in accordance with GAAS, Government Auditing Standards, and certain provisions of the AVA Program Handbook, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statement, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
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- 1039 -
4 • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statement.
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.
Other Reporting Required by Government Auditing Standards and AVA Program Handbook
In accordance with Government Auditing Standards and certain provisions of the AVA Program Handbook, we have also issued our report dated November 12, 2025, on our consideration of the City’s internal control over the Program’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over the Program’s financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over the Program’s financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and certain provisions of the AVA Program Handbook in considering the City’s internal control over the Program’s financial reporting and compliance.
Glendale, California
November 12, 2025
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- 1040 -
See notes to financial statement.
5 City of Modesto, California
Abandoned Vehicle Abatement Program
Statement of Revenues and Costs – Cash Basis
Year Ended June 30, 2025
Revenues received
Charges for services $5,518
Registration fees 184,239
Total revenues received 189,757
Costs disbursed
Personnel 132,035
Services and supplies 43,345
Total costs disbursed 175,380
Excess of revenues received over costs disbursed 14,377 Surplus, beginning of year 665,418
Surplus, end of year $679,795
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- 1041 -
6 City of Modesto, California
Abandoned Vehicle Abatement Program
Notes to Financial Statement
Year ended June 30, 2025
NOTE 1 GENERAL PROGRAM DESCRIPTION
The Abandoned Vehicle Abatement Program (the Program) is a statewide program administered by the California Highway Patrol (CHP). The City of Modesto, California (the City) administers and operates the local vehicle abatement program pursuant to Section 22710 of the Vehicle Code, Modesto Municipal City Code Section 3-2.1002 et seq., and the Stanislaus Council of Governments (StanCOG) Abandoned Vehicle Program and Plan. Section 9250.7 of the Vehicle Code establishes the funding source for the abatement of abandoned vehicles by a county-based Service Authority (the Authority), pursuant to the provisions of Section 22710 of the Vehicle Code. The Vehicle Code imposes a service fee of one dollar ($1) on vehicles registered to an owner with an address in the County of Stanislaus that established the Authority. This fee is paid to the Department of Motor Vehicles (DMV) at the time of registration or renewal of registration. The DMV, after deducting its administrative costs, at least quarterly transmits the net amount collected to the State Controller’s Office (SCO) for deposit in the Abandoned Vehicle Trust Fund. All money in the fund is continuously appropriated to the SCO for allocation to an Authority that has an approved Program pursuant to Section 22710 of the Vehicle Code, and for payment of the administrative costs of the SCO. The Authority established StanCOG pursuant to Section 22710 of the Vehicle Code to distribute Program funds to participating entities based on the allocations determined in the Vehicle Abatement Services Agreement.
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- 1042 -
City of Modesto, California
Abandoned Vehicle Abatement Program
Notes to Financial Statement
Year ended June 30, 2024
7 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation
The financial statement is prepared on the method of accounting prescribed by the CHP and the Abandoned Vehicle Abatement (AVA) Program Handbook. The financial statement presents the information requested by the CHP and, therefore, does not purport to reflect the results of operations in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
The receipts and costs of the Program are included in the General Fund of the City’s basic financial statements. The Statement of Revenues and Costs of the Program does not purport to, and does not present fairly the financial position of the City, as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with U.S. GAAP.
Basis of Accounting
The financial statement for the Program is prepared on the cash basis of accounting, in which revenue is recognized when received and costs are recognized as disbursed and claimed in accordance with the AVA Program Handbook.
NOTE 3 SUBSEQUENT EVENTS
The City has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statement. Such events were evaluated through November 12, 2025, the date the financial statement was available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statement.
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8 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards and the AVA Program Handbook
Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and certain provisions of the Abandoned Vehicle Abatement (AVA) Program Handbook, issued by the California Highway Patrol, the statement of revenues and costs – cash basis of the City of Modesto, California, (the City), Abandoned Vehicle Abatement Program (the Program) for the year ended June 30, 2025, and the related notes to the financial statement, 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 statement, we considered the City’s internal control over the Program’s financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the Program’s financial statement, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
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9 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Program’s financial statement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Program’s financial statement is free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the Program’s financial statement. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the AVA Program Handbook.
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10 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the AVA Program Handbook in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Glendale, California
November 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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Modesto-Ceres Fire Protection Agency
Annual Financial Report
As of and for the Year Ended June 30, 2025
With Independent Auditor’s Report
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Modesto-Ceres Fire Protection Agency
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 6
Statement of Activities 7
Fund Financial Statements
Balance Sheet – Governmental Fund 8
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 9
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to the Governmental Activities Statement of Activities 10
Statement of Revenues, Expenditures, and Changes in Fund Balance – General Fund – Budget to Actual 11
Notes to Basic Financial Statements 13
Other Information
Schedule of Officers 23
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 24 #7..
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1 Independent Auditor’s Report
Board of Directors
Modesto-Ceres Fire Protection Agency
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and major fund of the Modesto-Ceres Fire Protection Agency (the Agency) as of and for the year ended June 30, 2025, the budgetary comparison statement for the general fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the Agency’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and major fund of the Agency as of June 30, 2025, and the respective changes in financial position and the budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #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 Agency and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
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 Agency’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
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 Agency’s internal control. Accordingly, no such opinion is expressed.
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4 • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Agency’s ability to continue as a going concern for a reasonable period of time.
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
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information.
Other Information
Management is responsible for the other information included in the annual financial report.
The other information comprises the schedule of officers but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
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5 In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the Agency’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Agency’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Agency’s internal control over financial reporting and compliance.
Glendale, California
November 12, 2025
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See notes to basic financial statements.
6 Modesto-Ceres Fire Protection Agency
Statement of Net Position
June 30, 2025
Governmental
Activities
ASSETS
Cash and investments $239,887
Interest receivable 2,840
Taxes receivable 110,846
Total Assets 353,573
LIABILITIES
Accounts payable 353,573
Total Liabilities 353,573
NET POSITION
Unrestricted -
Total Net Position $-
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See notes to basic financial statements.
7 Modesto-Ceres Fire Protection Agency
Statement of Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Charges for
Services
Governmental
Activities
Governmental Activities
Fire and ambulance services $16,971 $- $(16,971)
Total $16,971 $- (16,971)
General Revenues
Taxes 761,913
Interest 11,847
Investment income 10,447
Distributions to Member Agencies (796,599)
Net General Revenues and Distributions to
Member Agencies (12,392)
Change in Net Position (29,363)
Net Position, Beginning of Year 29,363
Net Position, End of Year $-
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See notes to basic financial statements.
8 Modesto-Ceres Fire Protection Agency
Balance Sheet – Governmental Fund
June 30, 2025
General Fund
ASSETS
Cash and investments $239,887
Interest receivable 2,840
Taxes receivable 110,846
Total Assets $353,573
LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable $353,573
Total Liabilities 353,573
Fund Balance
Unassigned -
Total Fund Balance -
Total Liabilities and Fund Balance $353,573
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.
9 Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes
in Fund Balance – Governmental Fund
Year Ended June 30, 2025
General Fund
REVENUES
Taxes $790,117
Interest 11,847
Change in fair value of investments 10,447
Total Revenues 812,411
EXPENDITURES
Fire and ambulance services
Professional services 5,350
Liability insurance 2,020
City of Modesto – administrative fee 6,411
Other 3,190
Total Expenditures 16,971
Excess of revenues over expenditures 795,440
OTHER FINANCING USES
Distributions to Member Agencies
City of Modesto (442,511)
City of Ceres (354,088)
Total Other Financing Uses (796,599)
Net Change in Fund Balance (1,159)
Fund Balance, Beginning of year 1,159
Fund Balance, End of year $-
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See notes to basic financial statements.
10 Modesto-Ceres Fire Protection Agency
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 $(1,159) Amounts reported for governmental activities in the Statement of Activities are different because of the following:
Revenues reported as unavailable revenues in the governmental fund but are recognized in the Statement of Activities. (28,204) Change in Net Position – Governmental Activities $(29,363) #7..
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See notes to basic financial statements.
11 Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes in Fund Balance – General Fund – Budget to Actual
Year Ended June 30, 2025
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
REVENUES
Taxes $755,065 $801,258 $790,117 $(11,141)
Interest 2,396 12,313 11,847 (466)
Change in fair value of investments - - 10,447 10,447
Total Revenues 757,461 813,571 812,411 (1,160)
EXPENDITURES
Fire and ambulance services
Professional services 6,000 6,000 5,350 650
Liability insurance 1,300 2,020 2,020 -
City of Modesto – administrative fee 4,500 4,500 6,411 (1,911) Other 3,299 3,300 3,190 110
Total Expenditures 15,099 15,820 16,971 (1,151)
Excess of Revenues Over
Expenditures 742,362 797,751 795,440 (2,311)
(Continued)
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Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes
in Fund Balance – General Fund – Budget to Actual (Continued) Year Ended June 30, 2025
See notes to basic financial statements.
12 Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
OTHER FINANCING USES
Distributions to Member Agencies
City of Modesto $(412,382) $(443,150) $(442,511) $639
City of Ceres (329,980) (354,601) (354,088) 513
Total Other Financing Uses (742,362) (797,751) (796,599) 1,152 Net Change in Fund Balance $- $- (1,159) $(1,159)
Fund Balance, Beginning of Year 1,159
Fund Balance, End of Year $-
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13 Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Modesto-Ceres Fire Protection Agency (the Agency) was formed on March 13, 2007 by a joint powers agreement made in accordance with Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (commencing with Section 6500) between the Industrial Fire District (the District), the City of Modesto, and the City of Ceres, for the cities to provide fire protection and administrative services within the District. The Agency operates under the Fire Protection District Law of 1987 and the Health and Safety Code, Sections 13801- 13999.
Funding for the Agency's operation comes from property tax revenues collected by the County of Stanislaus (the County).
Reporting Entity
The Agency’s financial statements include the accounts of all Agency operations. The criteria for including organizations as component units within the Agency’s reporting entity, as set forth in Section 2100 of the Governmental Accounting Standards Board’s (GASB) Codification of Government Accounting and Financial Reporting Standards, include whether:
• The organization is legally separate (can sue and be sued in its own name). • The Agency holds the corporate powers of the organization. • The Agency appoints a voting majority of the organization’s board. • The Agency can impose its will on the organization.
• The organization has the potential to impose a financial benefit/burden on the Agency. • There is fiscal dependency by the organization on the Agency.
Based on the criteria, the Agency has no component units. #7..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
14 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the Agency’s activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are identifiable with a specific function or segment.
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied.
Governmental Fund Financial Statements
Governmental fund financial statements (i.e., Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance) are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues susceptible to accrual are property taxes, interest on investments, and intergovernmental revenues.
Property taxes are recorded as revenues in the fiscal year in which they are levied, provided they are collected in the current period or within sixty days thereafter. A one-year availability period is used for all other revenues. Interest in invested funds is recognized when earned.
Intergovernmental revenues that are reimbursements for specific expenditures are recognized when all eligibility requirements are met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting; however, debt service expenditures are recorded only when payment is due.
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
15 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Fund Financial Statements (Continued)
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balance provide a reconciliation to facilitate this comparison between the governmental fund and governmental activities.
The Agency reports one major governmental fund:
The General Fund is the primary operating fund and accounts for all financial resources of the Agency.
The Agency adopts annual appropriated budgets for its General Fund, which is a major fund.
A budgetary comparison statement has been provided for this fund to demonstrate compliance with the budgets. The budgetary comparison statement is presented on a budgetary basis which differs from generally accepted accounting principles in the method of accounting for accruals and encumbrances.
Budget
The budget for the General Fund is prepared on a cash and expenditures/encumbrances basis.
Revenues are budgeted in the year receipt is expected; expenditures, which include encumbrances, are budgeted in the year that the applicable warrant requisitions are expected to be issued.
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
16 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Budget (Continued)
Annual budget requests are submitted by the Agency staff to the Agency’s Board of Directors (Agency Board) for review. After a public hearing, a budget is approved by the Agency Board, with a resolution adopting said budget. Copies of the approved budget are sent to all required agencies.
The General Fund budget is prepared within the limit on spending as regulated by Proposition 4 Appropriations Limitation. Unencumbered appropriations for annual budgeted funds lapse at year-end.
Proposition 4
The Proposition 4 Appropriations Limitation for the year ended June 30, 2025, was $ 1,549,050.
Cash and Investments
The Agency maintains its cash account with the City of Modesto as part of the cash and investment pool. The City of Modesto is restricted by Government Code Section 53635 pursuant to Section 53601 to invest in time deposits, U.S. government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements.
In accordance with GASB Statement No. 43, Accounting and Financial Reporting for Certain Investments and External Investment Pools, investments held by the City of Modesto are stated at fair value. The fair value of pooled investments is determined monthly and is based on current market prices received from the securities custodian. The balance available for withdrawal is based on the accounting records maintained by the City of Modesto. #7..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
17 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property Tax
Secured property taxes are attached as an enforceable lien on real property as of the 1st day of January. Taxes are payable in two installments on November 1st and February 1st and become delinquent if not paid before December 10th and April 10th. Unsecured property taxes are billed in one installment, are due March 15th, and become delinquent if not paid on or before August 31st. The County bills and collects all property taxes and remits to the Agency its share of the 1% property tax allocation.
Employees’ Retirement Plan
The Agency no longer participates in the County retirement plan since firefighters are paid by the cities of Modesto and Ceres.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Net Position
Net position represents the residual interest in the Agency’s assets and deferred outflows of resources after liabilities and deferred inflows of resources are deducted. In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
18 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
Net investment in capital assets - Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets.
Restricted - Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature.
Unrestricted - Amount consists of net position that does not meet the definition of “net investment in capital assets” or “restricted” net position.
When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
Fund Balance
In the fund financial statements, in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the Agency is bound to honor constraints on how specific amounts can be spent. • Nonspendable - Amounts that are not in spendable form (such as inventory) or are required to be maintained intact. The Agency did not have any nonspendable resources as of June 30, 2025.
• Restricted - Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. The Agency did not have any restricted resources as of June 30, 2025. #7..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
19 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed - Amounts constrained to specific purposes by the Agency itself, using its highest level of decision-making authority, the Agency Board. To be reported as committed, amounts cannot be used for any other purpose unless the Agency Board takes the same highest-level action to remove or change the constraint. The Agency did not have any committed resources as of June 30, 2025.
• Assigned - Amounts the Agency intends to use for a specific purpose. Intent can be expressed by the Agency or by an official or body to which the Agency Board delegates the authority. The Agency did not have any assigned resources as of June 30, 2025. • Unassigned - Amounts that are available for any purpose. The Agency did not have any unassigned resources as of June 30, 2025.
In circumstances when an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the Agency considers amounts to have been spent first out of committed funds then assigned funds, and finally unassigned funds, as needed, unless the Agency Board has provided otherwise in its commitment or assignment actions.
Governmental Accounting Standards Update
During the year ended June 30, 2025, the Agency implemented the following 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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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
20 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 Agency are pooled with other City of Modesto funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the Agency’s investments as all cash is invested as part of the common cash and investment pool of the City of Modesto. Cash in the City pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The Agency does not have any deposits with financial institutions as of June 30, 2025. #7..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
21 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
Cash and investments $239,887
Total cash and investments $239,887
Summary of Deposits
Cash and investments as of June 30, 2025 consist of the following:
Deposits with City of Modesto
Cash and investments pool $239,887
Total cash and investments $239,887
Detailed information regarding the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s Annual Comprehensive Financial Report. As of June 30, 2025, the fair value of the Agency’s position in the pool is the same as the value of its pool shares.
NOTE 3 EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Excess of expenditures over appropriations for the year ended June 30, 2025 was as follows:
Expenditures Amount
General Fund
Fire and ambulance services
City of Modesto – administrative fee $(1,911)
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2025
22 NOTE 4 SUBSEQUENT EVENTS
The Agency 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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OTHER INFORMATION
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23 Modesto-Ceres Fire Protection Agency
Other Information
Schedule of Officers
June 30, 2025
President Joseph P. Lopez - City of Modesto
City Manager
Secretary Juana Lynch – City of Modesto
Executive Assistant
Member Doug Dunford - City of Ceres
City Manager
Member Kevin Wise – City of Modesto
Fire Chief
Member Christopher Perry – City of Ceres
Police Chief
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24 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards
Board of Directors
Modesto-Ceres Fire Protection Agency
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and major fund of the Modesto-Ceres Fire Protection Agency (the Agency), as of and for the year ended June 30, 2025, the budgetary comparison statement for the general fund for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the Agency’s basic financial statements, and have issued our report thereon dated November 12, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Agency’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Agency’s internal control.
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25 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Agency’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Agency’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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26 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Agency’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Agency’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Glendale, California
November 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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Tuolumne River Regional Park
Annual Financial Report
As of and for the Year Ended June 30, 2025
With Independent Auditor’s Report
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Tuolumne River Regional Park
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 6
Basic Financial Statements
Government-Wide Financial Statements 20
Statement of Net Position 20
Statement of Activities 21
Fund Financial Statements 22
Balance Sheet – Governmental Funds 22
Reconciliation of the Governmental Funds Balance Sheet to the 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 Statement of Activities 26 Notes to Financial Statements 27
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance – General Fund – Budget and Actual 41
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual 43
Note to the Required Supplementary Information 44
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 45 #7..
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1 Independent Auditor’s Report
The Tuolumne River Regional Park Commission,
The Board of Supervisors of the County of Stanislaus, California, and The Honorable Members of the City Council of Modesto, California Tuolumne River Regional Park
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the Tuolumne River Regional Park (the Park) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Park’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Park, as of June 30, 2025, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
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2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Park and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
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 - 19 and budgetary comparison information on pages 41 - 43 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 Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
This section of the annual financial report presents a discussion and analysis of the financial performance of Tuolumne River Regional Park (the Park or TRRP) during the past fiscal year.
Please read it in conjunction with the Park’s financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
The assets of the Park exceeded liabilities and deferred inflow of resources at the close of the 2025 fiscal year by $13,352,404 (net position). Of this amount, $10,771,734 is invested in capital assets and $2,580,670 (unrestricted net position) may be used to meet ongoing obligations to citizens and creditors.
• Total net position increased by $2,138,731 from current year activities. • At June 30, 2025, the Park’s funds reported a combined fund balance of $2,370,379, a decrease of $7,583 in comparison with the prior year.
• At the end of the fiscal year, the General Fund had a fund balance of $778,475.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to Park’s basic financial statements. The basic financial statements are made up of three components: 1) GovernmentWide Financial Statements, 2) Fund Financial Statements, and 3) Notes to Financial Statements. Required Supplementary Information is included in addition to the basic financial statements.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
7 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Statements are designed to provide readers with a broad overview of Park finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on all assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Park is improving or deteriorating. The Statement of Activities presents information showing how net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash inflows or outflows in future fiscal periods.
The sole function of the Park is the administration of parks and recreation. It is principally supported by contributions from the three participating agencies of the Park joint powers agreement, the County of Stanislaus and the Cities of Modesto and Ceres, rather than by user fees, and thus, is considered a governmental activity. Effective July 1, 2025, the City of Ceres is no longer part of the agreement, having formally withdrawn its participation from the JPA.
The government-wide financial statements can be found on pages 20 to 21 of this report.
Fund Financial Statements provide evidence of accountability by demonstrating compliance with budgetary decisions. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or purposes stipulated by laws, regulations, or policies. All Park funds are governmental funds. #7..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
8 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental funds financial statements focus on nearterm inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds financial statements is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the longterm impact of the government’s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Park maintains three individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, Special Revenue Fund, and the Capital Projects Fund.
The governmental funds financial statements and reconciliations to government-wide financial statements can be found on pages 22 through 26 of this report. #7..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
9 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Notes to Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found on pages 27 through 40 of this report.
Required Supplementary Information presents budgetary comparison schedules for the General Fund and Special Revenue Fund to demonstrate compliance with the budget.
Required supplementary information can be found on pages 41 through 44 of this report.
Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The net position of the Park was $13,352,404 at the close of fiscal year 2025, compared with $11,213,673 as of June 30, 2024.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
10 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Analysis (Continued)
Statements of Net Position– Governmental Activities
Description 2025 2024
Assets
Current and other assets $3,988,373 $3,916,140
Capital assets 10,771,734 8,581,609
Total assets 14,760,107 12,497,749
Liabilities
Accounts payable 382,419 199,058
Total liabilities 382,419 199,058
Deferred inflow of resources
Leases 1,025,284 1,085,018
Total deferred inflow of resources 1,025,284 1,085,018
Net position
Net investment in capital assets 10,771,734 8,581,609
Unrestricted 2,580,670 2,632,064
Total net position $13,352,404 $11,213,673
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
11 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Analysis (Continued)
The largest portion of net position, $10,771,734, is made up of the Park’s net investment in capital assets. The Park uses these assets to provide its parks and recreation services; consequently, they are not available for future spending.
The remaining net position of $2,580,670 is unrestricted. This amount is the balance at yearend which may be used to meet the Park’s ongoing obligations.
The Park’s net position increased by $2,138,731 during the current fiscal year. #7..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
12 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Analysis (Continued)
Statements of Activities – Governmental Activities
Description 2025 2024
Revenues
Program revenues
Charges for services $4,494 $ -
Capital grants and contributions 1,455,015 818,765
Operating grants and contributions 849,312 583,900
General revenues
Lease revenue 55,408 52,803
Interest income 90,751 7,245
Interest revenue - leases 15,362 17,565
Investment earnings 80,398 8,914
Other revenue 230,749 1,035,079
Gain on sale of capital asset 461,074 -
Special items
Insurance recoveries 453,744 -
Recovery of previously written-off
capital asset 180,011 -
Total revenues 3,876,318 2,524,271
Expenses
Parks and recreation 1,737,587 1,563,982
Total expenses 1,737,587 1,563,982
Change in net position 2,138,731 960,289
Net position, beginning of year 11,213,673 10,253,384
Net position, end of year $13,352,404 $11,213,673
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
13 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Analysis (Continued)
The 2025 net position increased by $2,138,731 which is mainly attributable to the increase in funding received from the State of California, gain on sale of capital asset, recovery of previously written off capital asset, and insurance recoveries.
FINANCIAL ANALYSIS OF PARK FUNDS
As noted earlier, the Park uses fund accounting to ensure and demonstrate compliance with budgetary decisions.
Governmental funds
The parks and recreation function of the Park is recorded in the General, Special Revenue and Capital Projects Funds. The focus of these governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Park’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of net resources available for spending at the end of the fiscal year.
At June 30, 2025, the Park’s governmental funds reported a combined fund balance of $2,370,379, a decrease of $7,583 in comparison with the prior year.
The General Fund is the chief operating fund of the Park. At June 30, 2025, the General Fund had a fund balance of $778,475, an increase of $646,118 from the prior year. This increase can be attributed to the proceeds generated from the sale of capital asset.
Revenues of General, Special Revenue, and Capital Projects Funds totaled $2,825,300 in fiscal year 2025, an increase of $429,233 or 17.91% from fiscal year 2024. The following table presents the revenues from various sources as well as increases or decreases from the prior year.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
14 FINANCIAL ANALYSIS OF PARK FUNDS (CONTINUED)
Revenues Classified by Source
Governmental Funds
Revenues by Source
2025
Amount
2025
Percent
2024
Amount
2024
Percent
Change
(Amount)
Change
(Percent)
Intergovernmental $1,498,826 53.05% $690,561 28.82% $808,265 117.04% Operating grants and
contributions 849,312 30.06% 583,900 24.36% 265,412 45.46% Charges for services 4,494 0.15% - 0.00% 4,494 100.00%
Lease revenue 55,408 1.96% 52,803 2.20% 2,605 4.93%
Interest income 90,751 3.21% 7,245 0.30% 83,506 100.00% Interest revenue -
leases 15,362 0.54% 17,565 0.73% (2,203) (12.54)%
Change in fair value
of investments 80,398 2.84% 8,914 0.37% 71,484 801.93%
Other 230,749 8.19% 1,035,079 43.22% (804,330) (77.71)% $2,825,300 100.00% $2,396,067 100.00% $429,233 17.91%
The overall increase in revenues is mainly attributable to the increase in contributions of governmental and participating agencies, offset by a reduction in one-time funding received to cover specific expenses.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
15 FINANCIAL ANALYSIS OF PARK FUNDS (CONTINUED)
The following table presents expenditures by function compared to prior year amounts.
Expenditures by Function
Governmental Funds
Expenditures by
Function
2025
Amount
2025
Percent
2024
Amount
2024
Percent
Change
(Amount)
Change
(Percent)
Parks and
recreation $1,303,459 34.70% $1,126,078 90.78% $177,381 15.75% Capital outlay 2,452,468 65.30% 2,389,171 9.22% 63,297 2.65% $3,755,927 100.00% $3,515,249 100.00% $240,678 6.85%
Current expenditures for operations showed an increase, primarily due to increased project expenditures for the year. Parks and recreation expenses experienced an increase in expenses for the Park, primarily in materials and supplies.
The current year changes in fund balances as compared to the prior year are presented in the following table:
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
16 FINANCIAL ANALYSIS OF PARK FUNDS (CONTINUED)
Statements of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
Description
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
2025 Total
Governmental
Funds
2024 Total
Governmental
Funds
Revenues $856,588 $239,137 $1,729,575 $2,825,300 $2,396,067 Expenditures (629,770) (239,137) (2,887,020) (3,755,927) (3,515,249) Excess
(deficiency) of
revenues over
(under)
expenditures 226,818 - (1,157,445) (930,627) (1,119,182) Other financing
sources 419,300 - 503,744 923,044 -
Net change in fund
balances 646,118 - (653,701) (7,583) (1,119,182)
Fund balances,
beginning of year 132,357 - 2,245,605 2,377,962 3,497,144 Fund balances,
end of year $778,475 $- 1,591,904 $2,370,379 $2,377,962 The fund balance of the Park’s General Fund increased by $646,118 during the fiscal year, compared to the final budget anticipated decrease of $(261,013). A key factor in this increase was the unanticipated additional revenue from the proceeds from sale of a fixed asset. #7..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
17 GENERAL FUND BUDGETARY HIGHLIGHTS
Actual revenues were higher than final budgetary estimates by $187,419. This is mainly attributable to investment earnings and lease revenue. Actual expenditures were $250,412 lower than final budgetary estimates with a majority of savings on the maintenance of the Park.
CAPITAL ASSETS
The Park’s net investment in capital assets as of June 30, 2025, amounted to $10,771,734 (net of accumulated depreciation of $7,765,653). This net investment in capital assets includes land, buildings and other improvements, and construction in progress. The net investment in capital assets increased by $2,190,125, or 25.52% over the prior year. The major components of this change were:
Capital Asset Activities
Description Amount
Capital asset additions $2,452,468
Capital asset adjustments 180,011
Sale of a capital asset (8,226)
Depreciation expense (434,128)
Total $2,190,125
Additional information on the Park’s capital assets can be found in Note 4 on page 39 of this report.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
18 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
On June 26, 2024, the City of Ceres delivered a notice of withdrawal and termination from the Joint Powers Agreement (JPA). The City of Ceres withdrew and terminated their involvement in the JPA on June 30, 2025, and as of July 1, 2025, is no longer an active partner of the JPA.
There are still landownership and other obligations that need to be worked out with the City of Ceres.
In April 2025, the TRRP Commission approved a budget for FY 2025/26 that included an approximate 4.5% increase in the contributions from Stanislaus County and the City of Modesto. This budget did not include a contribution from the City of Ceres.
During FY 2024-25 and continuing into FY 2025-26, the City of Modesto’s Parks, Recreation, and Neighborhoods Department has continued the process of updating the TRRP Master Plan, previously adopted by the member agencies in December of 2001. The TRRP Master Plan Update will be a critical project to plan for the fiscal and operational sustainability of the TRRP.
The TRRP Master Plan Update is anticipated to be completed by the end of FY 2025-26.
Staff and the Park Commission continue to seek funding from all appropriate grant sources.
During FY 2024-2025 staff completed the Carpenter Road Area (Bellenita) Soccer Complex Phase 2 Project, the TRRP River Pavilion and Learning Theater Project, and the TRRP Area B Picnic Area. All three projects are critical to encouraging positive use of the park and are anticipated to bring in revenue in future fiscal years. No additional grant funding was received for TRRP in the past fiscal year but projects such as the TRRP Riverwalk Trail from Gateway to Neece, the TRRP Riverwalk Trail from Gateway to Legion, and Gateway to Dry Creek Trail Connector are in design and anticipated to complete construction in future years.
The two agencies that make up the Park’s JPA continue to work collaboratively to ensure that the vision for this urban river corridor becomes a reality. #7..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2025
19 REQUESTS FOR MORE INFORMATION
This financial report is designed to provide a general overview of the Park’s finances for those interested in its finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Modesto, Accounting Division, P.O. Box 642, Modesto, California 95353. #7..
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See notes to financial statements.
20 Tuolumne River Regional Park
Statement of Net Position
June 30, 2025
Governmental
Activities
ASSETS
Cash and investments $2,610,828
Interest receivable 3,138
Dues from other governments 265,426
Lease receivable 1,108,752
Prepaid expenses 229
Capital assets
Nondepreciable 5,634,159
Depreciable, net 5,137,575
Total Assets 14,760,107
LIABILITIES
Accounts payable 382,419
Total Liabilities 382,419
DEFERRED INFLOW OF RESOURCES
Leases 1,025,284
Total Deferred Inflow of Resources 1,025,284
NET POSITION
Net investment in capital assets 10,771,734
Unrestricted 2,580,670
Total Net Position $13,352,404
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See notes to financial statements.
21 Tuolumne River Regional Park
Statement of Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Charges
for
Services
Capital
Grants and
Contributions
Operating
Grants and
Contributions
Governmental
Activities
Governmental activities
Parks and recreation $1,737,587 $4,494 $1,455,015 $849,312 $571,234 Total Governmental
Activities $1,737,587 $4,494 $1,455,015 $849,312 571,234 General Revenues
Lease revenue 55,408
Interest income 90,751
Interest revenue -
leases 15,362
Investment earnings 80,398
Other revenue 230,749
Gain on sale of
capital asset 461,074
Special Items
Insurance recoveries 453,744
Recovery of
previously written-off
capital asset 180,011
Change in Net Position 2,138,731
Net position, Beginning
of Year 11,213,673
Net Position, End
of Year $13,352,404
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See notes to financial statements.
22 Tuolumne River Regional Park
Basic Financial Statements
June 30, 2025
DESCRIPTION
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Governmental
Funds
ASSETS
Cash and investments $731,532 $55,097 $1,824,199 $2,610,828 Interest receivable 3,138 - - 3,138
Due from other governments - - 265,426 265,426
Lease receivable 1,108,752 - - 1,108,752
Prepaid expenditures 229 - - 229
Total Assets $1,843,651 $55,097 $2,089,625 $3,988,373
LIABILITIES
Accounts payable $38,379 $55,097 $288,943 $382,419
Total Liabilities 38,379 55,097 288,943 382,419
DEFERRED INFLOWS OF
RESOURCES
Unavailable revenues 1,513 - 208,778 210,291
Leases 1,025,284 - - 1,025,284
Total Deferred Inflows of Resources 1,026,797 - 208,778 1,235,575
FUND BALANCE
Nonspendable 229 - - 229
Committed - - 1,591,904 1,591,904
Unassigned 778,246 - - 778,246
Total Fund Balances 778,475 - 1,591,904 2,370,379
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $1,843,651 $55,097 $2,089,625 $3,988,373 #7..
- 1101 -
See notes to financial statements.
23 Tuolumne River Regional Park
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
June 30, 2025
Total Fund Balances - Governmental Funds $2,370,379
Amounts reported for governmental activities in the Statement of Net Position are different from those reported in the governmental funds because of the following:
Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position. 210,291
Capital assets used in governmental activities are not current assets or financial resources and therefore, are not reported in the governmental funds. 10,771,734
Total Net Position - Governmental Activities $13,352,404 #7..
- 1102 -
See notes to financial statements.
24 Tuolumne River Regional Park
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2025
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Governmental
Funds
REVENUES
Intergovernmental $- $- $1,498,826 $1,498,826
Operating grants and contributions 610,175 239,137 - 849,312 Charges for services 4,494 - - 4,494
Lease revenue 55,408 - - 55,408
Interest income 90,751 - - 90,751
Interest revenue - leases 15,362 - - 15,362
Change in fair value of investments 80,398 - - 80,398
Other - - 230,749 230,749
Total Revenues 856,588 239,137 1,729,575 2,825,300
EXPENDITURES
Parks and recreation
Contractual services 601,166 68,373 485,316 1,154,855
Materials and supplies 14,388 120,000 - 134,388
Insurance 14,216 - - 14,216
Capital outlay - 50,764 2,401,704 2,452,468
Total Expenditures 629,770 239,137 2,887,020 3,755,927
Excess (Deficiency) of Revenues
Over (Under) Expenditures 226,818 - (1,157,445) (930,627) (Continued)
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Tuolumne River Regional Park
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds (Continued)
Year Ended June 30, 2025
See notes to financial statements.
25 DESCRIPTION
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Governmental
Funds
OTHER FINANCING SOURCES
(USES)
Proceeds from sale of a capital asset $469,300 $- $- $469,300 Proceeds from insurance recoveries - - 453,744 453,744
Transfers in - - 50,000 50,000
Transfers out (50,000) - - (50,000)
Total Other Financing Sources 419,300 - 503,744 923,044 Net Change in Fund Balances 646,118 - (653,701) (7,583) Fund Balances, Beginning of Year 132,357 - 2,245,605 2,377,962 Fund Balances, End of Year $778,475 $- $1,591,904 $2,370,379 #7..
- 1104 -
See notes to financial statements.
26 Tuolumne River Regional Park
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities Year Ended June 30, 2025
Net change in fund balances of the governmental funds $(7,583) Amounts reported for governmental activities in the Statement of Activities are different from those reported in the governmental funds because of the following:
Revenues earned in the Statement of Activities in a previous year that did not provide current financial resources in that year were not reported as revenue in the governmental funds until they provided current financial resources this year. (43,811) Governmental funds report capital outlay expenditures.
However, in the Statement of Activities, the costs of those assets are capitalized and allocated over their estimated useful lives and reported as depreciation expense.
Capital outlay expenditures 2,452,468
Depreciation expense (434,128) 2,018,340
The net effect of various miscellaneous transactions involving capital assets is to increase net position.
Sale of a capital asset (8,226)
Recovery of previously written off capital asset 180,011 171,785 Change in net position of governmental activities $2,138,731 #7..
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27 Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Tuolumne River Regional Park (the Park) is a Joint Power Authority (JPA) founded in 1972 by an agreement between the County of Stanislaus (the County) and the cities of Modesto and Ceres (the Cities). The agreement provides for financing, development, and maintenance of the Park facilities. The Park includes approximately 180 developed and 330 undeveloped acres with group picnic areas, play equipment lots, ballfields, and Legion Hall. Rent is generated from public use of these facilities. The County and Cities provide additional operating funds. The Park is governed by the Tuolumne River Regional Park Commission, which consists of two members of the County’s Board of Supervisors and two members of the City of Modesto’s City Council. Financial transactions initiated by the Park are processed and accounted for by the City of Modesto’s financial system.
Effective July 1, 2025, the City of Ceres is no longer part of the agreement, having formally withdrawn its participation from the JPA.
Reporting Entity
The Park’s financial statements include the accounts of all Park operations. The criteria for including organizations as component units within the Park’s reporting entity, as set forth in Section 2100 of the Governmental Accounting Standards Board’s (GASB) Codification of Government Accounting and Financial Reporting Standards, include whether:
• the Park is legally separate (can sue and be sued in their own name). • the Park holds the corporate powers of the organization. • the Park appoints a voting majority of the organization’s board. #7..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Reporting Entity (Continued)
• the Park can impose its will on the organization.
• there is fiscal dependency by the organization on the Park based on the criteria that the Park has no component units.
Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the Park’s activities. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by contributions, lease, and intergovernmental revenues. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are identifiable with a specific function or segment.
The 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.
The Statement of Activities demonstrates the degree to which the direct expenses are offset by program revenues. Direct expenses are those that are identifiable with the parks and recreation function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by the parks and recreation function and 2) grants and contributions that are restricted to meeting the operational and capital requirements of the parks and recreation function. Revenues that are not classified as program revenues, including investment earnings and other revenues, are reported as general revenues. Separate financial statements are provided for governmental funds. #7..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Governmental fund financial statements (i.e., Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances) are reported using the current financial resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Park considers revenues to be available if they are collected within 180 days of the end of the current fiscal period.
Interest on invested funds is recognized when earned. Intergovernmental revenues that are reimbursements for specific expenditures are recognized when all eligibility requirements are met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
Major individual governmental funds are reported as separate columns in the fund financial statements. Because the focus of governmental funds is narrower than that of the governmentwide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. #7..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
The Park reports three major governmental funds:
The General Fund is the primary operating fund and accounts for all financial resources of the Park
The Special Revenue Fund is used to account for financial resources restricted for specific purposes.
The Capital Projects Fund is used to account for financial resources restricted for capital purposes.
The Park adopts annual appropriated budgets for its General and Special Revenue Funds, which are major funds. Budgetary comparison schedules have been provided for these funds to demonstrate compliance with these budgets. The budgetary comparison schedule is presented on a budgetary basis which differs from generally accepted accounting principles in the method of accounting for accruals and encumbrances.
Budget
The budgets for the General and Special Revenue Fund are prepared on a cash and expenditures/encumbrances basis. Revenues are budgeted in the year receipt is expected; expenditures, which include encumbrances, are budgeted in the year that the applicable warrant requisitions are expected to be issued.
Annual budget requests are submitted by the Park’s staff to the Park’s Commission for review.
After the public hearing, a budget is approved by the Park’s Commission, with a resolution adopting said budget. Copies of the approved budget are sent to all member agencies. #7..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Investments
The Park maintains its cash account with the City of Modesto as part of the cash and investment pool. The City of Modesto is restricted by Government Code Section 53635 pursuant to Section 53601 to invest in time deposits, U.S. government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements.
In accordance with GASB Statement No. 43, Accounting and Financial Reporting for Certain Investments and External Investment Pools, investments held by the City of Modesto are stated at fair value. The fair value of pooled investments is determined monthly and is based on current market prices received from the securities custodian. The balance available for withdrawal is based on the accounting records maintained by the City of Modesto.
Due From Other Governments
Grant revenues and contributions are recorded as receivables in the funds when they are susceptible to accrual (i.e. when all eligibility requirements have been met and deemed available per the Park’s revenue recognition policies) and not yet received as of year-end. The total amount due from governments for grants and contributions at June 30, 2025 is $265,426.
Management believes all amounts are fully collectible, and as such no allowance has been recorded against the due from other governments balance as of June 30, 2025.
Capital Assets
Capital assets acquired are recorded at cost or estimated cost where cost is not available.
Donated or contributed capital assets are recorded at estimated fair value on the date received.
Capital assets are defined by the Park as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. The costs of normal maintenance and repairs are charged to operations as incurred. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets, as applicable. #7..
- 1110 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets (Continued)
Depreciation of capital assets is computed using the straight-line method applied over the estimated useful lives of the assets as follows:
Buildings 30 years
Improvements 20 years
Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the Park recognizes deferred outflows and inflows of resources.
In addition to assets, the Statements of Net Position and Fund Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the Park that is applicable to a future reporting period.
In addition to liabilities, the Statement of Net Position and Fund Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the Park that is applicable to a future reporting period.
Deferred inflows reported by the Park consist of grants receivable that are not expected to be collected within the available period and the deferred leases. #7..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Risk Management
The Park is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Park participates in the City of Modesto’s insurance pool to mitigate the risk of loss and contributes its pro-rata share of estimated losses. The City of Modesto’s insurance pool does not maintain separate records for estimated outstanding liabilities, including incurred but not reported claims.
Refer to the City of Modesto’s Annual Comprehensive Financial Report (ACFR) for further information related to the insurance pool. Additional insurance is purchased for special events when certain Park facilities are rented to the public.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Lease Receivable
The Park’s lease receivable is measured at the present value of lease payments expected to be received during the lease term. There are no variable components under the lease agreement. A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease.
#7..
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Tuolumne River Regional Park
Notes to 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 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 presented it in three broad components:
Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets.
Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature.
Unrestricted – Amount consists of net position that does not meet the definition “net investment in capital assets” or “restricted” net position.
When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
Fund Balance
In the fund financial statements, in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental funds report fund balance as nonspendable, restricted, committed, assigned or unassigned based primarily on the extent to which the Park is bound to honor constraints on how specific amounts can be spent. #7..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
35 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Nonspendable – Amounts that are not in spendable form (such as inventory) or are required to be maintained intact. The Park had $229 in nonspendable resources as of June 30, 2025.
• Restricted – Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. The Park did not have any restricted resources as of June 30, 2025.
• Committed - Amounts constrained to specific purposes by the Park itself, using its highest level of decision-making authority (Park’s Commission). To be reported as committed, amounts cannot be used for any other purpose unless the Park’s Commission takes the same highest-level action to remove or change the constraint. The Park had $1,591,904 as 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 or by an official or body to which the Board of Supervisors of the County delegates authority. The Park did not have any assigned resources as of June 30, 2025.
• Unassigned – Amounts that are available for any purpose. $778,246 of the Park’s resources were considered unassigned as of June 30, 2025.
In circumstances when an expenditure is incurred for which restricted, committed, assigned, or unassigned fund balances are available, the Park considers amounts to have been spent first out of restricted funds then committed funds, and finally assigned and unassigned funds, as needed, unless the Park’s Commission has provided otherwise in its commitment or assignment actions.
#7..
- 1114 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2025, the Agency implemented the following 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 of Modesto funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the Park’s investments as all cash is invested as part of the common cash and investment pool of the City of Modesto. Cash in the 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. #7..
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Tuolumne River Regional Park
Notes to 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 statements as follows:
Statement of Net Position
Cash and investments $2,610,828
Total cash and investments $2,610,828
Deposits with City of Modesto
Cash and investments pool $2,610,828
Total cash and investments $2,610,828
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s ACFR. As of June 30, 2025, the fair value of the Park’s position in the pool is the same as the value of its pool shares.
NOTE 3 LEASE RECEIVABLE
On December 7, 2020, the Park (the lessor) and Vertical Bridge Development, LLC (the lessee) entered into a land lease agreement for the purpose of erecting, installing, operating, and maintaining radio and communications facilities. The initial lease term will be for five years with a monthly rental payment of $2,000 and $250 for each additional broadband carrier. The lease agreement will automatically renew for five additional five-year terms (extension term). #7..
- 1116 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
38 NOTE 3 LEASE RECEIVABLE (CONTINUED)
Monthly rent will increase by 2% annually on each anniversary of the commencement date.
Lease revenue recognized under the lease agreement was $24,643 for the year ended June 30, 2025. Interest revenue recognized under the lease agreement was $10,683 for the year ended June 30, 2025.
On April 16, 2015, the Park (the lessor) and Sacramento-Valley Limited Partnership, d/b/a Verizon Wireless (the lessee) entered into a land lease agreement for the purpose of constructing, maintaining, repairing, and operating a communications facility. The initial lease term will be for five years with a monthly rental payment of $1,700. The lease agreement will automatically renew for four additional five-year terms (extension term). Monthly rent will increase by 2.5% annually on each anniversary of the commencement date. Lease revenue recognized under the lease agreement was $25,377 for the year ended June 30, 2025. Interest revenue recognized under the lease agreement was $4,679 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 $34,919 $16,393 $51,312
2027 36,395 15,860 52,255
2028 38,131 15,302 53,433
2029 39,919 14,718 54,637
2030 41,762 14,107 55,869
2031-2035 238,480 60,352 298,832
2036-2040 284,417 40,494 324,911
2041-2045 152,773 24,154 176,927
2046-2050 183,762 11,580 195,342
2051-2052 58,194 659 58,853
Total $1,108,752 $213,619 $1,322,371
#7..
- 1117 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
39 NOTE 4 CAPITAL ASSETS
Capital asset activities for the year ended June 30, 2025, were as follows:
Description
Beginning
Balance
Additions/
Adjustments
Transfers/
Reclassifications
Ending
Balance
Capital assets, not being
depreciated
Land $2,338,116 $171,785 $- $2,509,901
Construction in
progress 2,997,798 2,308,464 (2,182,004) 3,124,258
Total capital assets not
being depreciated 5,335,914 2,480,249 (2,182,004) 5,634,159 Capital assets, being
depreciated
Buildings 135,484 - - 135,484
Improvements 10,441,736 144,004 2,182,004 12,767,744
Total capital assets, being
depreciated 10,577,220 144,004 2,182,004 12,903,228
Less accumulated
depreciation for
Buildings (116,170) (1,426) - (117,596)
Improvements (7,215,355) (432,702) - (7,648,057)
Total accumulated
depreciation (7,331,525) (434,128) - (7,765,653)
Total capital assets, being
depreciated, net 3,245,695 (290,124) 2,182,004 5,137,575 Capital assets, net $8,581,609 $2,190,125 $- $10,771,734 Depreciation expense for the year ended June 30, 2025 was $434,128. #7..
- 1118 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2025
40 NOTE 5 RELATED PARTY TRANSACTIONS
The Park reimburses the City of Modesto for administrative and other costs incurred by the City of Modesto on the Park’s behalf. During the 2025 fiscal year, contractual service expenditures included $170,602 of the City of Modesto’s payroll costs that were allocated to the Park.
NOTE 6 DEFICIENCIES OF EXPENDITURES OVER APPROPRIATIONS For the year ended June 30, 2025, expenditures exceeded appropriations as follows:
Expenditures Amount
General Fund
Parks and recreation
Insurance and taxes $(522)
NOTE 7 SUBSEQUENT EVENT
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.
#7..
- 1119 -
REQUIRED SUPPLEMENTARY INFORMATION
#7..
- 1120 -
See independent auditor’s report.
41 Tuolumne River Regional Park
Schedule of Revenues, Expenditures, and
Changes in Fund Balance – General Fund – Budget and Actual Year Ended June 30, 2025
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
REVENUES
Operating grants and contributions $610,175 $610,175 $610,175 $- Charges for services 4,494 4,494 4,494 -
Lease revenue 54,500 54,500 55,408 908
Interest income - - 90,751 90,751
Interest revenue - leases - - 15,362 15,362
Change in fair value of investments - - 80,398 80,398
Total Revenues 669,169 669,169 856,588 187,419
EXPENDITURES
Parks and recreation
Contractual services 850,944 850,944 601,166 249,778
Materials and supplies 15,544 15,544 14,388 1,156
Insurance and taxes 13,694 13,694 14,216 (522)
Total Expenditures 880,182 880,182 629,770 250,412
Excess (Deficiency) of Revenues Over
(Under) Expenditures (211,013) (211,013) 226,818 437,931 (Continued)
#7..
- 1121 -
Tuolumne River Regional Park
Schedule of Revenues, Expenditures, and
Changes in Fund Balance – General Fund – Budget and Actual (Continued) Year Ended June 30, 2025
See independent auditor’s report.
42 Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
OTHER FINANCING SOURCES
(USES)
Proceeds from sale of a capital asset $- $- $469,300 $469,300 Transfers out (50,000) (50,000) (50,000) -
Total Other Financing Sources (Uses) (50,000) (50,000) 419,300 469,300 Net Change in Fund Balance $(261,013) $(261,013) 646,118 $907,131 Fund Balance, Beginning of Year 132,357
Fund Balance, End of Year $778,475
#7..
- 1122 -
See independent auditor’s report.
43 Tuolumne River Regional Park
Schedule 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
Operating grants and contributions $469,941 $563,645 $239,137 $(324,508) Total Revenues 469,941 563,645 239,137 (324,508)
EXPENDITURES
Parks and recreation
Contractual services 93,704 93,704 68,373 25,331
Materials and supplies 120,000 120,000 120,000 -
Capital outlay 349,941 349,941 50,764 299,177
Total Expenditures 563,645 563,645 239,137 324,508
Excess (Deficiency) of Revenues
Over (Under) Expenditures $(93,704) $- - $-
Fund Balance, Beginning of Year -
Fund Balance, End of Year $-
#7..
- 1123 -
See independent auditor’s report.
44 Tuolumne River Regional Park
Note to the Required Supplementary Information
Year Ended June 30, 2025
NOTE 1 BUDGET AND BUDGETARY ACCOUNTING
Tuolumne River Regional Park (the Park) operates under the general laws of the State of California and annually adopts a budget for its General and Special Revenue Funds to be effective July 1 the ensuing fiscal year. The budgets must be approved by each of the legislative bodies of the parties to the joint powers agreement. From the effective date of the budgets, which are adopted and controlled at the fund level, the amounts stated therein as proposed expenditures become appropriations. The Park may amend the budgets by approval from each of the legislative bodies of the parties to the agreement during the fiscal year. The budgets for the General and Special Revenue Funds are prepared on a cash and expenditures/ encumbrance basis. Revenues are budgeted in the year receipt is expected; expenditures, which include encumbrances, are budgeted in the year that the applicable warrant requisitions are expected to be issued. No encumbrances were outstanding as of June 30, 2025, so the actual budgetary-basis expenditures are the same as the actual GAAP-basis expenditures. #7..
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45 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Tuolumne River Regional Park Commission,
The Board of Supervisors of the County of Stanislaus, California, and The Honorable Members of the City Council of Modesto, California Tuolumne River Regional Park
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the Tuolumne River Regional Park (the Park) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Park’s basic financial statements, and have issued our report thereon dated November 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.
#7..
- 1125 -
46 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the 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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47 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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..
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City of Modesto, California
Transportation Development Act Funds
Annual Financial Report
As of and for the Year Ended June 30, 2025
with Independent Auditor’s Report
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City of Modesto
Transportation Development Act Funds
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Fund Financial Statements
Balance Sheet 5
Statement of Revenues, Expenditures, and Changes in Fund Balances 6 Notes to Basic Fund Financial Statements 7
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standard and the Transportation Development Act 13
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Transportation Development Act (TDA) Funds of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, and the related notes to the basic fund financial statements, as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the TDA Funds of the City of Modesto, California, as of June 30, 2025, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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2 Emphasis of Matter
As discussed in Note 1, the financial statements present only the TDA Funds and do not purport to, and do not, present fairly the financial position of the City of Modesto, California, as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
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.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in 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 #7..
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3 due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Report on Summarized Comparative Information
We have previously audited the financial statements of the City’s TDA Funds 2024 financial statements, and we expressed an unmodified opinion on those statements in our report dated November 8, 2024. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2024, is consistent, in all material respects, with the audited financial statements from which it has been derived. #7..
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4 Required Supplementary Information
Management has omitted management’s discussion and analysis and budgetary comparison information that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the City’s internal control over the TDA Funds financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’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 City’s internal control over financial reporting and compliance.
Glendale, California
November 12, 2025
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See notes to basic fund financial statements.
5 City of Modesto
Transportation Development Act Funds
Basic Fund Financial Statements
Balance Sheet
June 30, 2025
(With Summarized Prior Year Data for Comparison Purposes Only) NonMotorized
Streets
and
Roads
Total
2025
Total
2024
ASSETS
Cash and investments $2,199,636 $187,720 $2,387,356 $1,942,589 Total Assets $2,199,636 $187,720 $2,387,356 $1,942,589
LIABILITIES AND FUND
BALANCES
Liabilities
Unearned revenue $2,197,860 $187,720 $2,385,580 $1,940,813 Total Liabilities 2,197,860 187,720 2,385,580 1,940,813
FUND BALANCES
Restricted 1,776 - 1,776 1,776
Total Fund Balances 1,776 - 1,776 1,776
Total Liabilities and Fund
Balances $2,199,636 $187,720 $2,387,356 $1,942,589
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See notes to basic fund financial statements.
6 City of Modesto
Transportation Development Act Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended June 30, 2025
(With Summarized Prior Year Data for Comparison Purposes Only) NonMotorized
Streets
and
Roads
Total
2025
Total
2024
REVENUES
Intergovernmental
Local transportation funds $- $50,553 $50,553 $60,993
Interest income 68,998 - 68,998 97,913
Total Revenues 68,998 50,553 119,551 158,906
EXPENDITURES
Culture and recreation
Maintenance and supplies - - - -
Total Expenditures - - - -
Excess of Revenues Over Expenditures 68,998 50,553 119,551 158,906
OTHER FINANCING USES
Transfers out to other funds of the City (68,998) (50,553) (119,551) (158,906) Total Other Financing Uses (68,998) (50,553) (119,551) (158,906) Net change in Fund Balances - - - -
Fund Balances, Beginning of the Year 1,776 - 1,776 1,776 Fund Balances, End of Year $1,776 $- $1,776 $1,776
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7 City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Reporting Entity
The City of Modesto, California (the City) accounts for California Transportation Development Act (TDA) monies in the Local Transportation Special Revenue Funds (TDA Funds). These funds are a part of the City and not a separate legal entity. As such, these financial statements only present the fund financial statements and not the government-wide information or financial statements. The TDA Funds are combined and presented as a special revenue fund in the City’s Annual Comprehensive Financial Report (ACFR). These financial statements are intended to reflect only the financial position and changes in financial position of the City’s TDA Funds in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Basis of Presentation, Basis of Accounting, and Measurement Focus The City’s TDA Funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Intergovernmental and interest revenues are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Under Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, budgetary comparison information is required to be presented for each major special revenue fund with a legally adopted budget. The City is not legally required to adopt a budget for the TDA Funds. Therefore, budget comparison information is not included in these financial statements. #7..
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
8 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) The financial statements include certain prior year summarized comparative information in total but not at the level of detail required for a presentation in accordance with U.S. GAAP.
Accordingly, such information should be read in conjunction with the City’s TDA Funds financial statements for the year ended June 30, 2025, from which the summarized information was derived.
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
The City reports the following TDA Funds:
The Non-Motorized Fund accounts for monies received and spent under Article 3, Section 99234 of the TDA.
The Streets and Roads Fund accounts for monies received and to be spent under Article 8, Section 99400(a) of the TDA.
Management’s Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
9 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Due from Other Governments/Unearned Revenue
Grants, entitlements, or shared revenues are recorded as receivables and revenues in the TDA Funds when they are received or susceptible to accrual.
Unearned revenue consists of grant funds received in excess of qualified expenditures. Grant revenue is recognized in the period qualified expenditures/expenses are incurred.
Capital Outlay
Capital projects funded by the TDA Funds, including infrastructure (roads, curbs, gutters, streets, bridges, sidewalks, drainage systems, lighting systems, rights-of-way, and land related to such assets), are recorded as transfers out to other City funds and capital outlay expenditures of the TDA Funds. These expenditures are capitalized in the City’s governmentwide financial statements as the related capital assets become the property of the City and are maintained by the City.
Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the City is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory) or are required, either legally or contractually, to be maintained intact.
Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation. #7..
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
10 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed - Amounts constrained to specific purposes by the City, using the highest level of decision-making authority (City Council). To be reported as committed, amounts cannot be used for any other purpose unless the City takes the same highest level of action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. • Assigned - Amounts the City intends to use for a specific purpose. Intent can be expressed by the City at either the highest level of decision-making authority or by an official or body to which the City delegates the authority. • Unassigned - For the City’s TDA Funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes.
The TDA Funds’ total fund balances as of June 30, 2025 is restricted for programs under Article 3, Section 99234 and Article 8, Section 99400(a) of the TDA.
In circumstances where an expenditure is incurred for which restricted, committed, assigned, or unassigned funds are available for use, it is the City’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed. #7..
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
11 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the TDA Funds are pooled with other City funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the TDA Funds’ investments as all cash is invested as part of the common cash and investment pool of the City. Cash in the pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The TDA Funds do not have any deposits with financial institutions as of June 30, 2025.
Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:
Description Amount
Balance Sheet – TDA Funds:
Cash and investments $2,387,356
Total cash and investments $2,387,356
Summary of Deposits
Cash and investments as of June 30, 2025 consist of the following:
Description Amount
Deposit with the City
Cash and investment pool $2,387,356
Total cash and investments $2,387,356
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City of Modesto
Transportation Development Act Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
12 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s ACFR. As of June 30, 2025, the fair value of the TDA Funds’ position in the pool is the same as the value of its pool shares.
NOTE 3 UNEARNED REVENUE
Unearned revenue for the TDA Funds for the year ended June 30, 2025, was as follows:
NonMotorizedStreets and
Roads Total
Unearned revenue, beginning of year $1,702,540 $238,273 $1,940,813 TDA funds allocated 564,318 - 564,318
TDA funds earned (68,998) (50,553) (119,551)
Unearned revenue, end of year $2,197,860 $187,720 $2,385,580 NOTE 4 SUBSEQUENT EVENTS
The City has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statement. Such events were evaluated through November 12, 2025, the date the financial statement was available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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13 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standard and the Transportation Development Act
The Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the Transportation Development Act (TDA) Funds of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, and the related notes to the basic fund 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 City’s internal control over the TDA Funds’ financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. #7..
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14 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s TDA Funds financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s TDA Funds financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the applicable statutes, rules and regulations of the Transportation Development Act, noncompliance with which could have a direct and material effect on the TDA Funds financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the Transportation Development Act. #7..
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15 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the Transportation Development Act in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Glendale, California
November 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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City of Modesto, California
Single Audit Report
For the Year Ended June 30, 2025
with Independent Auditor’s Report
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City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Reports
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 4 Schedule of Expenditures of Federal Awards 9
Notes to Schedule of Expenditures of Federal Awards 22
Schedule of Findings and Questioned Costs 24
Summary Schedule of Prior Audit Findings 28
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1 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Mayor and the Members of the City Council City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 8, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
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2 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #7..
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3 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Glendale, California
December 8, 2025
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4 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
The Honorable Mayor and the Members of the City Council City of Modesto, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Modesto, California’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2025. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal programs for the year ended June 30, 2025.
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5 Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s federal programs.
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6 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.
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7 We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit, we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. #7..
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8 The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon, dated December 8, 2025, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Glendale, California
December 23, 2025, except for the Schedule of Expenditures of Federal Awards, as to which the date is December 8, 2025.
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See Notes to Schedule of Expenditures of Federal Awards. 9 City of Modesto, California
Schedule of Expenditures of Federal Awards
Year ended June 30, 2025
Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF ENERGY
Direct Program:
Energy Efficiency and Conservation Block
Grant (EECBG) 81.128 $241,720 $-
TOTAL U.S. DEPARTMENT OF ENERGY 241,720 -
U.S. DEPARTMENT OF HEALTH AND HUMAN
SERVICES
Direct Program:
Community Funded Projects 93.493 6H79FG001127-01M002 586,743 - TOTAL U.S. DEPARTMENT OF HEALTH
AND HUMAN SERVICES 586,743 -
(Continued)
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City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 10 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOMELAND SECURITY
Direct Programs:
Staffing for Adequate Fire and Emergency
Response (SAFER) 97.083 EMW-2020-FF-01443 $963,661 $-
Staffing for Adequate Fire and Emergency
Response (SAFER) 97.083 EMW-2023-FF-00366 348,899 -
Total Direct Programs 1,312,560 -
Passed through the California Governor’s Office
of Emergency Services:
Building Resilience In Infrastructure and
Communities (BRIC) 97.047 EMF-2023-BR-004-0023 4,442 -
TOTAL U.S. DEPARTMENT OF
HOMELAND SECURITY 1,317,002 -
(Continued)
#7..
- 1158 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 11 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number
Grant Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
Direct Programs:
Community Development Block Grants
(CDBG)/Entitlement Program 14.218 B-23-MC-060002 $429,755 $423,574 Community Development Block Grants
(CDBG)/Entitlement Program 14.218 B-24-MC-060002 1,317,870 283,244 Community Development Block Grants
(CDBG)/Entitlement Program – Loan Programs 14.218 4,100,582 - Total CDBG – Entitlement Grants Cluster 5,848,207 706,818 Emergency Solutions Grant Program 14.231 E-23-MC-060002 31,230 28,888 Emergency Solutions Grant Program 14.231 E-24-MC-060002 119,781 92,171 Total Emergency Solutions Grant Program 151,011 121,059 (Continued)
#7..
- 1159 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 12 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (CONTINUED)
Direct Programs (Continued):
Home Investment Partnerships Program 14.239 M-18-MC-060207 $1,779 $- Home Investment Partnerships Program 14.239 M-19-MC-060207 71,583 - Home Investment Partnerships Program 14.239 M-20-MC-060207 94,946 - Home Investment Partnerships Program 14.239 M-21-MC-060207 600 - Home Investment Partnerships Program 14.239 M-21-MP-060207 856,681 - Home Investment Partnerships Program 14.239 M-22-MC-060207 1,178 - Home Investment Partnerships Program 14.239 M-23-MC-060207 145,181 - (Continued)
#7..
- 1160 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 13 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (CONTINUED)
Direct Programs (Continued):
Home Investment Partnerships Program 14.239 M-24-MC-060207 $133,186 $- Home Investment Partnerships Program –
Loan Programs 14.239 19,945,820 -
Total Home Investment Partnerships Program 21,250,954 - * Economic Development Initiative 14.251 B-22-CP-CA-0035 188,487 148,788 TOTAL U.S. DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT 27,438,659 976,665
(Continued)
#7..
- 1161 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 14 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF JUSTICE
Direct Programs:
Public Safety Partnership and Community
Policing Grants 16.710 15JCOPS-21-GG-02447-SPPS $25,449 $- Public Safety Partnership and Community
Policing Grants 16.710 15JCOPS-23-GG-02011-PPSE 14,579 - Public Safety Partnership and Community
Policing Grants
16.710 15JCOPS-24-GG-02089-TECP
1,428,961 -
Total Direct Programs 1,468,989 - *
Passed through the County of Stanislaus: -
Edward Byrne Memorial Justice
Assistance Grant 16.738 2022 BJAG 61,624 -
(Continued)
#7..
- 1162 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 15 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF JUSTICE
(CONTINUED)
Passed through the County of Stanislaus
(Continued):
Edward Byrne Memorial Justice
Assistance Grant 16.738 2023-2024 BJAG $86,199 $-
Total Edward Byrne Memorial Justice
Assistance Grant 147,823 -
TOTAL U.S. DEPARTMENT OF JUSTICE 1,616,812 -
U.S. DEPARTMENT OF TRANSPORTATION
Direct Programs:
Safe Streets and Roads for All 20.939 693JJ32340542 440,740 - (Continued)
#7..
- 1163 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 16 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Direct Program (Continued):
Airport Improvement Program 20.106 3-06-0153-046-2024 $26,100 $19,350 Total Direct Programs 466,840 19,350
Passed through the California Department
of Transportation:
Highway Planning and Construction 20.205 BRLS-5938(167) 48,839 - Highway Planning and Construction 20.205 TGHPLUL-5059(230) 243,206 - Highway Planning and Construction 20.205 ATPL-5059(233) 1,553,973 - Highway Planning and Construction 20.205 CML-5059(258) 1,039,555 - Highway Planning and Construction 20.205 CMLNI-5059(229) 11,967 - Highway Planning and Construction 20.205 STPL-5059(234) 7,825 - (Continued)
#7..
- 1164 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 17 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Department
of Transportation (Continued):
Highway Planning and Construction 20.205 CML-5059(236) $1,807,900 $- Highway Planning and Construction 20.205 HSIPL-5059(237) 52,738 - Highway Planning and Construction 20.205 CMLNI-5059(249) 61,730 - Highway Planning and Construction 20.205 STPL-5059(242) 29,955 - Highway Planning and Construction 20.205 STPL-5059(250) 908,978 - Highway Planning and Construction 20.205 CML-5059(262) 6,843 - Highway Planning and Construction 20.205 CML-5059(261) 30,993 - (Continued)
#7..
- 1165 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 18 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Department
of Transportation (Continued):
Highway Planning and Construction 20.205 CML-5059(245) $10,875 $- Highway Planning and Construction 20.205 CML-5059(246) 12,210 - Highway Planning and Construction 20.205 CML-5059(264) 9,167 - Highway Planning and Construction 20.205 STPL-5059(259) 28,343 - Highway Planning and Construction 20.205 CML-5059(263) 3,337 - Highway Planning and Construction 20.205 CML-5059(260) 17,851 - Highway Planning and Construction 20.205 CML-5059-(256) 36,326 36,326 (Continued)
#7..
- 1166 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 19 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Department
of Transportation (Continued):
Highway Planning and Construction 20.205 CML-5059(268) $360 $- Total Highway Planning and Construction 5,922,971 36,326 Passed through the California Office of Traffic
Safety:
State and Community Highway Safety 20.600 PT25179 128,389 - State and Community Highway Safety 20.600 PS25046 9,257 - State and Community Highway Safety 20.600 PT24120 96,699 - State and Community Highway Safety 20.600 PS24021 4,903 - Total Highway Safety Cluster 239,248 -
(Continued)
#7..
- 1167 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 20 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
(CONTINUED)
Passed through the California Office of Traffic
Safety (Continued):
Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 20.608 PT25179 $258,665 $-
Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 20.608 PT24120 76,955 -
Total Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 335,620 -
TOTAL U.S. DEPARTMENT OF
TRANSPORTATION 6,964,679 55,676
(Continued)
#7..
- 1168 -
City of Modesto, Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2025
See Notes to Schedule of Expenditures of Federal Awards. 21 Federal Grantor/Pass-through
Grantor/Cluster/Program
Assistance
Listing
Number Grant Identifying Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF THE TREASURY
Direct Program:
American Rescue Plan Act 21.027 $11,638,948 $1,375,000
TOTAL U.S. DEPARTMENT OF THE TREASURY 11,638,948 1,375,000 TOTAL EXPENDITURES OF FEDERAL AWARDS $49,804,563 $2,407,341 * Denotes major program
#7..
- 1169 -
22 City of Modesto, California
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 2025
NOTE 1 BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (SEFA) presents the activity of all federal financial assistance programs of the City of Modesto, California (the City). For purposes of this schedule, financial awards include federal awards received directly from a federal agency, as well as federal funds received indirectly by the City from a non-federal agency or other organization. Only the portions of program expenditures reimbursable with federal funds are reported in the accompanying schedule. Program expenditures in excess of the maximum reimbursement authorized, if any, or the portion of the program expenditures that were funded with other state, local or other non-federal funds are excluded from the accompanying schedule.
The information in the SEFA is presented in accordance with the requirements of Title 2 U.S.
Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because SEFA presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying SEFA is presented using the modified accrual basis of accounting, which is described in Note 1 of the notes to the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
The City has elected not to use the 10-percent de minimis indirect cost rate allowed in the Uniform Guidance.
#7..
- 1170 -
City of Modesto, California
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 2025
23 NOTE 3 RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
Grant expenditure reports for the year ended June 30, 2025, which have been submitted to grantor agencies, will, in some cases, differ from the amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of the year-end accruals.
NOTE 4 RELATIONSHIP TO ANNUAL COMPREHENSIVE FINANCIAL REPORT Amounts reported in the accompanying SEFA agree, in all material respects, with amounts reported within the City’s Annual Comprehensive Financial Report.
NOTE 5 LOANS RECEIVABLE
Loans made with CDBG funds of $3,939,926 and loans made with HOME funds of $19,867,357 are outstanding as of June 30, 2025. During the fiscal year 2024-25, there were no new loans made with CDBG and HOME funds.
The City participates in HOME and CDBG programs that sponsor revolving loan programs, which are administered by the City. The funds are returned to the programs upon repayment of the principal and interest. In accordance with 2 CFR section 200.502(b), the value of new loans made, the beginning balance of loans from previous years and any interest subsidy, cash or administrative cost allowance received are included in the SEFA. #7..
- 1171 -
24 City of Modesto, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2025
SECTION I – SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor’s report issued on whether the
financial statements audited were prepared
in accordance with GAAP Unmodified
Internal control over financial reporting:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? None reported Noncompliance material to financial
statements noted No
Federal Awards
Internal control over major programs:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? None reported Type of auditor’s report issued on compliance
with respect to major federal programs: Unmodified
Any audit findings disclosed that are required to be reported in accordance with Section 2 CFR 200.516(a)? No
#7..
- 1172 -
City of Modesto, California
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2025
25 SECTION I – SUMMARY OF AUDITOR'S RESULTS (CONTINUED) Identification of Major Programs:
Assistance Listing Number Name of Federal Program or Cluster
14.239 Home Investment Partnerships Program
16.710 Public Safety Partnership and Community
Policing Grants
Dollar threshold used to distinguish between
Type A and Type B programs $1,494,137
Auditee qualified as a low-risk auditee? Yes
#7..
- 1173 -
City of Modesto, California
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2025
26 SECTION II – FINANCIAL STATEMENT FINDINGS
There were no financial statement findings noted during the fiscal year ended June 30, 2025. #7..
- 1174 -
City of Modesto, California
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2025
27 SECTION III – FEDERAL AWARD FINDINGS
There were no federal award findings noted during the fiscal year ended June 30, 2025. #7..
- 1175 -
28 City of Modesto, California
Summary Schedule of Prior Audit Findings
Year ended June 30, 2025
There were no prior year findings reported during the fiscal year ended June 30, 2024. #7..
- 1176 -
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 #7..
- 1177 -
City of Modesto
Annual Financial Report
Measure H Funds
of the City of Modesto, California
As of and for the Year Ended June 30, 2025
With Independent Auditor’s Report
#7..
- 1178 -
City of Modesto, California
Measure H Funds
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 5
Statement of Activities 6
Fund Financial Statements
Balance Sheet – Governmental Fund 7
Reconciliation of the Governmental Fund Balance Sheet to the Governmental Activities Statement of Net Position 8
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 9
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance
to the Governmental Activities Statement of Activities 10 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund 11
#7..
- 1179 -
City of Modesto, California
Measure H Funds
Table of Contents (Continued)
Statement of Net Position - Proprietary Fund 14
Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Fund 15
Statement of Cash Flows - Proprietary Fund 16
Notes to Basic Fund Financial Statements 18
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 #7..
- 1180 -
1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the major fund, and the aggregate remaining fund information of the Measure H Funds of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, the budgetary comparison statement for the general fund for the year ended June 30, 2025, and the related notes to the basic fund financial statements, which collectively comprise the Measure H Funds 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, the major fund, and the aggregate remaining fund information of the Measure H Funds of the City of Modesto, California, as of June 30, 2025, the respective changes in financial position, the budgetary comparison for the general fund, and where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
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).
#7..
- 1181 -
2 Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City, 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.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Measure H Funds and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2025, and changes in its financial position, the budgetary comparison for the general fund, and where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.
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.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. #7..
- 1182 -
3 Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. #7..
- 1183 -
4 Required Supplementary Information
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic fund financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic fund financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic fund financial statements are not affected by this missing information.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2025, on our consideration of the City’s internal control over Measure H Funds financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’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 City’s internal control over financial reporting and compliance.
Glendale, California
November 12, 2025
#7..
- 1184 -
See notes to basic fund financial statements.
5 City of Modesto
Measure H Funds
Statement of Net Position
June 30, 2025
Governmental
Activities
ASSETS
Cash and investments $39,708,709
Accounts receivable 54,950
Taxes receivable 8,363,298
Interest receivable 201,929
Prepaid items 9,224,656
Capital assets, net of accumulated depreciation 1,464,729 Total Assets 59,018,271
LIABILITIES
Accounts payable 1,038,622
Accrued payroll 388,701
Total Liabilities 1,427,323
NET POSITION
Net investment in capital assets 1,464,729
Unrestricted 56,126,219
Total Net Position $57,590,948
#7..
- 1185 -
See notes to basic fund financial statements.
6 City of Modesto
Measure H Funds
Statement of Activities
Year Ended June 30, 2025
Program
Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Functions/Programs Expenses
Charges for
Services
Governmental
Activities
Governmental Activities
General government $1,411,002 $2,141 $(1,408,861)
Community development 1,648,946 2,502 (1,646,444)
Public safety 11,475,001 498,162 (10,976,839)
Parks and recreation 7,284,443 11,054 (7,273,389)
Public works 4,466,322 6,778 (4,459,544)
Total government activities $26,285,714 $520,637 (25,765,077) General Revenues
Sales taxes 47,211,026
Interest income 1,372,412
Investment earnings 931,315
Miscellaneous 761,987
Transfers, net (8,452,354)
Total General Revenues and
Transfers, net 41,824,386
Change in Net Position 16,059,309
Net Position, Beginning of Year 41,531,639
Net Position, End of Year $57,590,948
#7..
- 1186 -
See notes to basic fund financial statements.
7 City of Modesto
Measure H Funds
Balance Sheet – Governmental Fund
June 30, 2025
General Fund
ASSETS
Cash and investments $39,668,270
Accounts receivable 54,950
Taxes receivable 8,363,298
Interest receivable 201,781
Prepaid items 9,224,656
Total Assets $57,512,955
LIABILITIES
Accounts payable $1,038,622
Accrued payroll 388,701
Total Liabilities 1,427,323
DEFERRED INFLOW OF RESOURCES
Unavailable revenues 38,501
Total Deferred Inflow of Resources 38,501
FUND BALANCES
Nonspendable 9,224,656
Assigned 2,942,525
Unassigned 43,879,950
Total Fund Balances 56,047,131
Total Liabilities, Deferred Inflow of Resources
and Fund Balances $57,512,955
#7..
- 1187 -
See notes to basic fund financial statements.
8 City of Modesto
Measure H Funds
Reconciliation of the Governmental Fund Balance Sheet to the Governmental Activities Statement of Net Position
June 30, 2025
Total Fund Balance - Governmental Fund $56,047,131
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. 38,501
Capital assets used in governmental activities are not current assets or financial resources and, therefore, are not reported in the governmental funds. 99,150
Internal service fund is used by management to charge the cost of fleet management to individual funds. The assets, deferred outflows of resources, liabilities and deferred inflows of resources of the internal service fund is included in governmental activities in the Statement of Net Position. 1,406,166
Total Net Position - Governmental Activities $57,590,948 #7..
- 1188 -
See notes to basic fund financial statements.
9 City of Modesto
Measure H Funds
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Governmental Fund
Year Ended June 30, 2025
General Fund
REVENUES
Sales taxes $47,211,026
Charges for services 442,248
Interest income 1,371,834
Change in fair value of investments 931,194
Miscellaneous 761,987
Total Revenues 50,718,289
EXPENDITURES
Current
General government 1,405,677
Community development 1,642,724
Public safety 11,431,701
Parks and recreation 7,256,956
Public works 4,449,469
Capital outlay 1,467,584
Total Expenditures 27,654,111
Excess of revenues over expenditures 23,064,178
OTHER FINANCING USES
Transfers out $(8,548,686)
Total Other Financing Uses (8,548,686)
Net Change in Fund Balance 14,515,492
Fund Balance, Beginning of Year 41,531,639
Fund Balance, End of Year $56,047,131
#7..
- 1189 -
See notes to basic fund financial statements.
10 City of Modesto
Measure H Funds
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 $14,515,492 Amounts reported for governmental activities in the
Statement of Activities are different because:
Revenues earned in the Statement of Activities in
the previous year that did not provide current
financial resources in that year were not reported
as revenue in the governmental fund until they
provided current financial resources this year.
38,501
Governmental fund reports capital outlay
expenditures. However, in the Statement of
Activities, the cost of those assets is capitalized and allocated over their estimated useful lives and
reported as depreciation expense. (This amount is
presented net of the $1,368,434 capital
contributions to the internal service fund, as
disclosed in Note 6.)
99,150
The internal service fund is used by management
to charge the costs of fleet management to
individual funds. The net revenue or increase in net
position of internal service fund is reported with
governmental fund.
1,406,166
Change in Net Position - Governmental Activities $16,059,309 #7..
- 1190 -
See notes to basic fund financial statements.
11 City of Modesto
Measure H Funds
Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund
Year Ended June 30, 2025
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
REVENUES
Sales taxes $42,809,800 $42,809,800 $47,211,026 $4,401,226 Charges for services 201,713 201,713 442,248 240,535
Fines and forfeitures 100,000 100,000 - (100,000)
Interest income - - 1,371,834 1,371,834
Change in fair value of
investments - - 931,194 931,194
Miscellaneous - - 761,987 761,987
Total Revenues 43,111,513 43,111,513 50,718,289 7,606,776 (Continued)
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City of Modesto
Measure H Funds
Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund (Continued)
Year Ended June 30, 2025
See notes to basic fund financial statements.
12 Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget
EXPENDITURES
Current
General government $2,405,156 $1,420,275 $1,405,677 $14,598 Community development 4,125,870 4,848,729 1,642,724 3,206,005 Public safety
Fire protection 1,987,117 11,357,265 2,035,770 9,321,495 Police protection 11,833,581 12,684,517 9,395,931 3,288,586 Parks and recreation
Operations service and
maintenance 16,339,913 16,315,522 7,256,956 9,058,566
Public works
Streets 6,015,950 4,921,671 4,449,469 472,202
Capital outlay 2,875,852 3,406,683 1,467,584 1,939,099
Total Expenditures 48,583,439 54,954,662 27,654,111 27,300,551 Excess (deficiency) of
revenues over (under)
expenditures (2,471,926) (11,843,149) 23,064,178 34,907,327 #7..
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City of Modesto
Measure H Funds
Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund (Continued)
Year Ended June 30, 2025
See notes to basic fund financial statements.
13 Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance with
Final Budget
OTHER FINANCING
SOURCES (USES)
Transfers in $8,802,000 $10,997,550 $ - $(10,997,550)
Transfers out (9,185,702) (12,131,252) (8,548,686) 3,582,566 Total Other Financing
Sources (Uses) (383,702) (1,133,702) (8,548,686) (7,414,984) Net Change in Fund
Balance $(2,855,628) $(12,976,851) 14,515,492 $27,492,343 Fund Balance, Beginning of
Year 41,531,639
Fund Balance, End of Year $56,047,131
#7..
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See notes to basic fund financial statements.
14 City of Modesto
Measure H Funds
Statement of Net Position
Proprietary Fund
June 30, 2025
Governmental Activities
Fleet Management Fund
Internal Service Fund
ASSETS
Current Assets
Cash and investments $40,439
Interest receivable 148
Total Current Assets 40,587
Noncurrent Assets
Capital assets being depreciated, net 1,365,579
Total Noncurrent Assets 1,365,579
Total Assets 1,406,166
NET POSITION
Net investment in capital assets 1,365,579
Unrestricted 40,587
Total Net Position $1,406,166
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See notes to basic fund financial statements.
15 City of Modesto
Measure H Funds
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund
Year Ended June 30, 2025
Increase in Net Position 1,406,166
Net Position, Beginning of Year -
Net Position, End of Year $1,406,166
Governmental Activities
Fleet Management Fund
Internal Service Fund
Operating Revenues
Charges for services $39,888
Total Operating Revenue 39,888
Operating Expenses
Depreciation expense 99,187
Total Operating Expense 99,187
Operating Loss (59,299)
Other Nonoperating Revenues
Capital contributions from the General Fund 1,368,434
Interest income 578
Investment earnings 121
Transfers in 96,332
Total Other Nonoperating Revenues 1,465,465
#7..
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See notes to basic fund financial statements.
16 City of Modesto
Measure H Funds
Statement of Cash Flows
Proprietary Fund
June 30, 2025
Governmental Activities
Fleet Management Fund
Internal Service Fund
Cash Flow from Operating Activity
Cash received from users $40,009
Cash Provided by Operating Activity 40,009
Cash Flow from Investing Activity
Interest received 430
Cash Provided by Investing Activity 430
Net Increase in Cash and Investments 40,439
Cash and Investments, Beginning of Year -
Cash and Investments, End of Year $40,439
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City of Modesto
Measure H Funds
Statement of Cash Flows
Proprietary Fund (Continued)
June 30, 2025
See notes to basic fund financial statements.
17 Reconciliation of Operating Loss to Net Cash Provided by Operating Activity
Operating loss $(59,299)
Adjustments to reconcile operating loss to net cash provided by operating activity
Depreciation expense 99,187
Unrealized gain on investments 121
Total Adjustments 99,308
Net Cash Provided by Operating Activity $40,009
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18 City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
NOTE 1 GENERAL
On November 8, 2022, the City of Modesto, California (the City) voters approved Measure H, a one-cent sales tax for general City services. Measure H is expected to provide the City an approximately $39 million annually in additional sales tax revenues into its General Fund.
Measure H funding seeks to improve City services over public safety, blight, and homelessness and to fund citywide deferred maintenance across multiple City departments.
Measure H specifies that the rate of the transactions tax shall be one-cent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City and that the rate of the transactions and use tax shall be one-cent of the sales price of tangible personal property stored, used, or otherwise consumed in the City. The tax shall be in effect until it is repealed by the voters. The California Department of Tax and Fee Administration collects the tax from retailers subject to the tax and remits the funds to the City.
Measure H Funds are part of the City and are not separate legal entities. These financial statements present the fund financial statements and the government-wide financial statements of Measure H Funds. The Measure H Funds are presented as part of the General Fund, the Special Fund for Capital Outlay Capital Projects Fund, and the Fleet Management Internal Service Fund in the City’s Annual Comprehensive Financial Report (ACFR). These financial statements are intended to reflect only the financial position and changes in financial position of the City’s Measure H Funds in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
19 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report on all the Funds’ activities. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by intergovernmental revenues. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are identifiable with a specific function or segment.
The 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.
The Statement of Activities demonstrates the degree to which the direct expenses are offset by program revenues. Direct expenses are those that are identifiable with the functions.
Program revenues include charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by the City. Revenues that are not classified as program revenues, including investment earnings and other revenues, are reported as general revenues. Separate financial statements are provided for governmental funds.
Separate financial statements are provided for governmental funds and proprietary funds.
Governmental fund financial statements (i.e., Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances) are reported using the current financial resources measurement focus and the modified accrual basis of accounting. #7..
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
20 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 180 days of the end of the current fiscal period.
Interest on invested funds is recognized when earned. Intergovernmental revenues that are reimbursements for specific expenditures are recognized when all eligibility requirements are met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
Major individual governmental funds are reported as separate columns in the fund financial statements. Because the focus of governmental funds is narrower than that of the governmentwide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
Measure H reports one major governmental fund:
The General Fund is the primary operating fund and accounts for all financial resources of the Measure H Funds.
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
21 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
The City created an internal service fund for Measure H during the fiscal year 2024/25. The Fleet Replacement Internal Service Fund is used to report assets acquired using Measure H funds that are used to provide services to other departments of the City.
The Measure H Funds’ internal service fund is a proprietary fund. In the fund financial statements, the proprietary fund is presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activities are included in the Statement of Net Position. Proprietary fund-type operating statement presents increases (revenues) and decreases (expenses) in total net position.
Amounts paid to acquire capital assets are capitalized as assets in the internal service fund financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability in the internal service fund financial statements, rather than as other financing sources. Amounts paid to reduce long-term indebtedness of the internal service fund are reported as a reduction of the related liability, rather than as an expenditure.
Budget
The City is required by its Charter to adopt an annual budget. On or before the first day of June each year, the City Manager shall submit to the City Council a proposed budget for all departments. The said budget shall include estimates for all revenues and expenditures for the ensuing year. From the effective date of the budget, the amounts stated therein, proposed expenditures become appropriations to various City departments. The City adopts annual appropriated budgets for its General Fund and major Special Revenue Funds. #7..
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
22 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Budget (Continued)
A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with the budget. The budgetary comparison statement is presented on a budgetary basis which differs from U.S. GAAP in the method of accounting for accruals and encumbrances.
Cash and Investments
In order to maximize the flexibility of its investment program and to aid in cash budgeting, the City pools the cash of all funds, except for monies deposited with fiscal agents in accordance with related bond indentures. The cash and investments balance in each fund represents the fund’s equity share of the City’s cash and investment pool, as the City places no restrictions on the deposit account for the participating funds.
Interest income earned from pooled cash and investments is allocated monthly. Interest income on restricted cash and investments with fiscal agents is credited directly to the related fund.
Deferred Outflows and Inflows of Resources
Pursuant to Governmental Accounting Standards Board (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 Measure H Funds recognize deferred outflows and inflows of resources.
In addition to assets, the Statements of Net Position and Fund Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the Measure H Funds that is applicable to a future reporting period.
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
23 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Deferred Outflows and Inflows of Resources (Continued)
In addition to liabilities, the Statement of Net Position and Fund Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the Measure H Funds that is applicable to a future reporting period. Deferred inflows reported by the Measure H Funds consist of receivables that are not expected to be collected within the available period.
Fund Balance
In the fund financial statements, in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental funds report fund balance as nonspendable, restricted, committed, assigned or unassigned based primarily on the extent to which the City is bound to honor constraints on how specific amounts can be spent. • Nonspendable – Amounts that are not in spendable form (such as inventory and prepaid items) or are required to be maintained intact. The Measure H Funds have nonspendable fund balances of $9,224,656 as of June 30, 2025. • Restricted – Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. The Measure H Funds did not have any restricted resources as of June 30, 2025.
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
24 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Fund Balance (Continued)
• Committed – Amounts constrained to specific purposes by the City, using its highest level of decision-making authority (City Council). To be reported as committed, amounts cannot be used for any other purpose unless the City Council takes the same highestlevel action to remove or change the constraint. The Measure H Funds did not have any committed resources as of June 30, 2025.
• Assigned – Amounts the Measure H Funds intend to use for a specific purpose. Intent can be expressed by the Measure H Funds or by an official or body to which the City Council delegates authority. The Measure H Funds have assigned resources of $2,942,525 as of June 30, 2025.
• Unassigned – Amounts that are available for any purpose. The Measure H Funds unassigned resources as of June 30, 2025 amounted to $43,879,950.
The Measure H Funds establish, and modify or rescind fund balance commitments by passage of an ordinance or policy. This is typically done through the adoption and amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved contracts. The assigned fund balance is established by the City through the adoption or amendment of the budget or future budget plan as intended for a specific purpose. The City’s policy is to first apply restricted, committed or assigned resources when an expense is incurred for purposes for which restricted, committed or assigned and unassigned fund balances are available.
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
25 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Net Position
Net position represents the residual interest in the Measure H Funds’ 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. • Unrestricted – Amount consists of net position that does not meet the definition “net investment in capital assets” or “restricted” net position.
When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
26 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Governmental Accounting Standards Update
During the year ended June 30, 2025, the Measure H Funds implemented the following 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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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
27 NOTE 3 CASH AND INVESTMENTS
Unspent funds received for the Measure H Funds are pooled with the City’s other cash and investments. The Measure H Funds’ share of the interest earned from the cash and investment pool is allocated monthly based on each fund’s respective average monthly cash balance.
Credit quality ratings are not available for Measure H Funds’ 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. Measure H Funds do 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
Cash and investments $39,708,709
Total cash and investments $39,708,709
Deposits with City of Modesto
Cash and investments pool $39,708,709
Total cash and investments $39,708,709
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s ACFR. As of June 30, 2025, the fair value of Measure H Funds’ position in the pool is the same as the value of its pool shares.
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City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
28 NOTE 4 CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2025 was as follows:
Beginning
Balance Additions Deletions
Ending
Balance
Capital assets, not being depreciated:
Constructions in
progress $- $99,150 $- $99,150
Total capital assets not being
depreciated - 99,150 - 99,150
Capital assets, being depreciated:
Equipment pool - 1,464,766 - 1,464,766
Total capital assets being
depreciated - 1,464,766 - 1,464,766
Less accumulated depreciation for:
Equipment pool - (99,187) - (99,187)
Total accumulated depreciation - (99,187) - (99,187)
Total capital assets, being
depreciated, net - 1,365,579 - 1,365,579
Capital assets, net $- $1,464,729 $- $1,464,729
Depreciation expense for the year ended June 30, 2025 amounted to $99,187. #7..
- 1208 -
City of Modesto
Measure H Funds
Notes to Basic Fund Financial Statements
Year Ended June 30, 2025
29 NOTE 5 CAPITAL CONTRIBUTION FROM GENERAL FUND TO INTERNAL SERVICE FUND
During the fiscal year, the General Fund transferred $1,368,434 of capital assets to the Internal Service Fund to enhance fleet management operations. The transaction is reported as a capital outlay expenditure in the General Fund and as a capital contribution in the Internal Service Fund. In accordance with GASB Statement No. 34, transfers of capital assets between governmental and proprietary funds that are nonreciprocal in nature and intended for capital purposes are recognized as capital contributions by the receiving proprietary fund. Although the General Fund does not retain ownership of the assets, the expenditure classification appropriately reflects the use of governmental resources to invest in long-term internal service capacity.
NOTE 6 SUBSEQUENT EVENTS
The City has evaluated events or transactions subsequent to June 30, 2025, to assess the need for potential recognition or disclosure in the financial statement. Such events were evaluated through November 12, 2025, the date the financial statement was available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.
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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, the major fund, and the aggregate remaining fund information of the Measure H Funds of the City of Modesto, California (the City) as of and for the year ended June 30, 2025, the budgetary comparison statement for the general fund for the year then ended June 30, 2025, and the related notes to the basic fund financial statements, which collectively comprise the Measure H Funds 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 City’s internal control over the Measure H Funds’ financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. #7..
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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 City’s Measure H Funds financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the City’s Measure H Funds financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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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 City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Glendale, California
November 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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PRESENTATION TO THE
AUDIT COMMITTEE OF
THE CITY OF MODESTO,
CALIFORNIA
January 21, 2026
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1 Introduction
Leadership Team 2
Scope of Services 3
Independence 4
Summary of Audit Results 5
Financial Statement Audit 6
Single Audit 7
Financial Reporting Highlights 8
Required Communications to Those Charged with Governance 13 New Accounting Pronouncements – Effective in Future Years 18 Questions 20
Contact Information 21
/ Table of Contents
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2 / Leadership Team Serving CITY OF MODESTO
Cristy A. Canieda
Partner
Information Technology
Rhoda Dollaga
Audit Senior Manager
Germaine Sakiwat
Associate Manager
Jason Tagasa
IT Audit Senior Manager
Audit
C’zar Jerick Sanchez
Audit Manager
Linda Narciso
Quality Control Partner
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3 The Financial Statement Audit
/ Scope of Services
• City’s basic financial statements
• City’s IT General Controls
• City’s 13 Community Facilities Districts
• City’s Measure H Funds
• City’s Transportation Development Act
Funds
• City’s Abandoned Vehicle Abatement
Program
• Tuolumne River Regional Park
• Modesto-Ceres Fire Protection Agency
Consultation
Audit of Major Federal Grant
Programs in accordance with
the Uniform Guidance
The Single Audit
Year-Round Consultation
on Financial and
Accounting Matters
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4 / Independence
There are no relationships between any
of our representatives and the City that,
in our professional judgment, may
reasonably be thought to bear on
independence.
Vasquez & Company LLP meets the
independence requirements of the
AICPA and the Government Auditing
Standards, as they relate to the City.
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5 / Summary of Audit
Results
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6 / Financial Statement Audit
Unmodified Opinions on the Basic Financial Statements
§ The basic financial statements present fairly, in all material respects, the City’s financial position as of June 30, 2025, the changes in net position, and cash flows for the year then ended.
§ The supplemental combining and individual financial statements, supplemental budgetary comparison schedules, and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Internal Control over Financial Reporting
§ No material weaknesses and significant deficiencies were noted on internal control over financial reporting.
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7 1 Major Programs 2 Classification 3 Results
• No financial statements findings.
• Unmodified opinion on compliance
• No federal awards findings.
• No prior year financial statements and
federal awards findings.
• The City is classified as a “Low-Risk
Auditee” based on the Federallyprescribed criteria.
• ALN 14.239 – HOME Investment
Partnerships Program ($21.3 million,
including $19.9 million balance of loans
from previous years)
• ALN 16.710 – Public Safety Partnership
and Community Policing Grants
($1.5 million)
The major programs covered 45.8% of total
federal expenditures of $49.8 million.
/ Single Audit #7..
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8 / Financial Reporting Highlights – Government-wide
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9 / Financial Reporting Highlights – Government-wide
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10 / Financial Reporting Highlights – General Fund
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11 / Financial Reporting Highlights – General Fund
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12 ØThe City’s General Fund showed strong financial performance, with total revenues coming in $9.7 million above projections and expenditures $29.4 million below budget, improving the City’s fiscal position (ACFR p. 108). • The implementation of GASB 101, Compensated Absences, resulted in restatement of governmentwide net position with additional liability of $5.4 million General Fund
Budgetary
Highlights
ØThe City reported the following Net Pension and Net OPEB liabilities at June 30, 2025:
• Net Pension liability - $405.3 million (2024 - $428.21 million) (ACFR p. 97) • Net OPEB Liability - $21.7 million (2024 - $19.01 million) (ACFR p. 91) GASB 101
Implementation
Net Pension and
OPEB Liability
/ Financial Reporting Highlights – GF Budgetary Highlights and Others
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13 / Required Communications
to Those Charged With
Governance
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14 Our responsibilities Our responsibilities have been described in our engagement letter dated May 7, 2025.
Planned scope and timing of
the audit
We have issued a separate communication regarding the planned scope and timing of our audit and identified significant risks.
Adoption of, or change in,
accounting policies
Management has the primary responsibility for the appropriateness of the accounting policies used. During the fiscal year ended June 30, 2025, the City implemented GASB Statement No. 101, Compensated Absences, and GASB Statement No. 102, Certain Risk Disclosures. The implementation of GASB Statement No. 101 has resulted in the restatement of beginning net position and an additional note disclosure to the financial statements.
Significant accounting policies We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant unusual
transactions We did not identify any significant unusual transactions. / Required Communications
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15 Audit adjustments
Audit adjustments, other than those that are clearly trivial, proposed by us and recorded by the City. We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.
Disagreements with
management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the financial statements.
Consultations with other
accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.
Significant issues discussed
with management
No significant issues arising from the audit were discussed or were the subject of correspondence with management.
Significant difficulties
encountered in performing the
audit
We did not encounter any significant difficulties in dealing with management during the audit.
/ Required Communications, continued
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16 Significant matters that
required consultation
We did not encounter any difficult or contentious matters that required consultation outside the engagement team and that are, in our professional judgment, significant and relevant to your responsibility to oversee the financial reporting process.
Shared responsibilities for
independence
Independence is a joint responsibility and is managed most effectively when management, City Council, and audit firms work together in considering compliance with American Institute of Certified Public Accountants (AICPA) and Government Accountability Office (GAO) independence rules. AICPA and GAO rules require independence both in mind and in appearance when providing audit and other attestation services. Vasquez ensures that the AICPA and GAO’s General Requirements for performing non-attest services are adhered to and included in all letters of engagement. Vasquez maintains a system of quality control over compliance with independence rules and firm policies.
Significant written
communication between
management and our firm
The most significant written communications between management and our firm were the Letter of Comments to Management and the Management Representation Letters. / Required Communications, continued
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17 Summary of Significant Accounting Estimates
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events and certain assumptions about future events. The following describes the significant accounting estimates reflected in the City’s June 30, 2025 financial statements. The estimated useful lives of the City’s capital assets were based on management’s best estimate and prevailing practices in the local government sector. Net pension/ other postemployment benefits (OPEB) liabilities were actuarially calculated based on certain assumptions disclosed in notes to the financial statements. Investments’ fair market values were obtained from the fiscal agents, the pension and OPEB trustees, the investment custodian and the bond trustees and based on amortized cost and observable inputs.
The fair values of interest rate swaps were estimated by PFM using the future net settlement payments required by the swap, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates.
The City’s receivables are stated at the amounts collectible based on the results of the City’s evaluations.
Claim payables are estimated when a loss has occurred, and the amount of the loss can be reasonably estimated and includes an amount for claims that have been incurred but not reported as of the end of the year.
• The net present values of the future leases and subscription payments are calculated based on the estimated incremental borrowing rates.
/ Required Communications, continued
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18 / New Accounting
Pronouncements
Effective in Future Years
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19 / New Accounting Pronouncements –
Effective in Future Years
The Governmental Accounting Standards Board (GASB) has issued several pronouncements that have effective dates that may impact future financial presentations.
To be implemented in
FY 2026
• GASB 103 – Financial Reporting Model
• GASB 104 – Disclosure of Certain Capital Assets
To be implemented in
FY 2027
• GASB 105 – Subsequent Events
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20 Questions
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Vasquez + Company LLP has over 55 years of
experience in performing audit, accounting, and
consulting services for all types of private
companies, nonprofit organizations, and
governmental entities.
Vasquez + Company LLP is proud to be part of
Aprio Alliance—a national association created by
accounting professionals to help collaborative,
growth-minded CPA firms thrive. This affiliation
gives us access to leading expertise, resources, and
best practices, while preserving what matters most:
the personalized service and local insight you
expect from an independent firm. Aprio Alliance
member firms are separate and independent
businesses and legal entities that are responsible for
their own acts and omissions, and each are
separate and independent from Aprio. “Aprio” is the
brand name under which Aprio, LLP and Aprio
Advisory Group, LLC (and its subsidiaries) provide
professional services.
/ Contact Information
21 www.vasquez.cpa
Cristy Canieda, CPA, CGMA
O: +1.213.873.1720
[email protected]
Rhoda Dollaga, CPA
O: +1.213.873.1746
[email protected]
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22 Thank you for your
time and attention!
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City of Modesto, California
Required Communication to the City Council
Year Ended June 30, 2025
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December 8, 2025
The Honorable Mayor and the Members of the City Council City of Modesto
Modesto, CA
We are pleased to present this report related to our 2025 audit of the City of Modesto, California’s (the City) basic financial statements, hereafter, the financial statements. Our report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for the City’s financial reporting process.
This report is intended solely for the information and use of the City Council and management and is not intended to be, and should not be, used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to continue to be of service to the City.
Very truly yours,
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TABLE OF CONTENTS
PAGE
Required Communications 1
Summary of Significant Accounting Estimates 4
Recorded Audit Adjustments 6
Significant Written Communications Between Management and Our Firm Appendix A – Management Representation Letters 9
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1 REQUIRED COMMUNICATIONS
The following required communications summarize our responsibilities regarding the financial statement audit as well as observations from our audit that are significant and relevant to your responsibility to oversee the financial and related compliance reporting process.
Our Responsibilities
We describe our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States to you in our engagement letter dated May 7, 2025. Our audit of the basic financial statements does not relieve management or you of your responsibilities, which are also described in that letter.
Planned Scope and Timing of the Audit
We have previously issued a separate communication dated May 7, 2025 regarding the planned scope and timing of our audit and identified significant risks.
Accounting Policies and Practices
Preferability of Accounting Policies and Practices
Under accounting principles generally accepted in the United States of America, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice.
Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting policies used by the City. The following is a description of significant accounting policies or their application that were either initially implemented or changed during the year:
• During the fiscal year ended June 30, 2025, the City adopted the provisions of GASB Statement No. 101, Compensated Absences, and GASB Statement No. 102, Certain Risk Disclosures. The implementation of GASB Statement No. 101 has resulted in the restatement of beginning net position and an additional note disclosure to the financial statements.
Significant Accounting Policies
We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Unusual Transactions
We did not identify any significant unusual transactions.
Management’s Judgments and Accounting Estimates
Summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates is in the attached Summary of Significant Accounting Estimates.
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2 Audit Adjustments and Uncorrected Misstatements
Audit adjustments, other than those that are clearly trivial, proposed by us and recorded by the City are shown in the attached list of Recorded Audit Adjustments. We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.
Other Information Included in Annual Reports
Our responsibility for other information included in annual reports is to read the information and consider whether its content or the manner of its presentation is materially inconsistent with the financial information covered by our auditor’s report, whether it contains a material misstatement of fact or whether the other information is otherwise misleading. We read the City’s introductory, statistical, and continuing disclosure sections and did not identify material inconsistencies.
Observations About the Audit Process
Disagreements With Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the basic financial statements.
Consultations With Other Accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.
Significant Issues Discussed With Management
No significant issues arising from the audit were discussed or were the subject of correspondence with management.
Significant Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit.
Significant Matters That Required Consultation
We did not encounter any difficult or contentious matters that required consultation outside the engagement team and that are, in our professional judgment, significant and relevant to your responsibility to oversee the financial reporting process.
Shared Responsibilities for Independence
Independence is a joint responsibility and is managed most effectively when management, audit committees (or their equivalents), and audit firms work together in considering compliance with American Institute of Certified Public Accountants (AICPA) and Government Accountability Office (GAO) independence rules. For Vasquez and Company LLP (Vasquez) to fulfill its professional responsibility to maintain and monitor independence, management, the City Council, and Vasquez each play an important role.
Our Responsibilities
• AICPA and GAO rules require independence both of mind and in appearance when providing audit and other attestation services. Vasquez is to ensure that the AICPA and GAO’s General Requirements for performing nonattest services are adhered to and included in all letters of engagement. • Maintain a system of quality management over compliance with independence rules and firm policies. #7..
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3 Shared Responsibilities for Independence (Continued)
The City’s Responsibilities
• Timely inform Vasquez, before the effective date of transactions or other business changes, of the following:
− New affiliates, City Council members, officers, directors, or persons in financial reporting and compliance oversight roles.
− Changes in the organization structure or the reporting entity impacting affiliates such as related entities, investments, joint ventures, component units, and jointly governed organizations. • Provide necessary affiliate information such as new or updated structure charts, as well as financial information required to perform materiality calculations needed for making affiliate determinations. • Understand and conclude on the permissibility, prior to the City and its affiliates, City Council members, officers, directors, or persons in a decision-making capacity, engaging in business relationships with Vasquez.
• Not entering into arrangements of nonaudit services resulting in Vasquez being involved in making management decisions on behalf of the City.
• Not entering into relationships resulting in close family members of Vasquez covered persons, temporarily or permanently acting as an officer, director, or person in an accounting, financial reporting or compliance oversight role at the City.
Significant Written Communications Between Management and Our Firm The most significant written communications between our firm and management were the Management Representation Letters, attached as Appendix A.
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4 SUMMARY OF SIGNIFICANT ACCOUNTING ESTIMATES
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events and certain assumptions about future events. You may wish to monitor throughout the year the process used to determine and record these accounting estimates. The following summarizes the significant accounting estimates reflected in the City’s June 30, 2025 financial statements.
• The estimated useful lives of the City’s capital assets were based on management’s best estimate and prevailing practices in the local government sector. • Net pension/ other postemployment benefits (OPEB) liabilities were actuarially calculated based on certain assumptions disclosed in Note 19 to the financial statements. • The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the CalPERS Plans is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures.
• The City’s total OPEB liability was measured as of June 30, 2024 and the OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation as of June 30, 2024. • Estimated fair values for investments are obtained from quoted market prices where available. • The fair values of interest rate swaps were estimated by PFM using the future net settlement payments required by the swap, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates.
• Collectability of receivables and provision for uncollectible accounts are based on management’s estimates and historical experience.
• Claims liabilities are estimated when a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities also include an amount for claims that have been incurred but not reported as of the end of the year.
• Pollution remediation obligations are based on expected outlays for cleanup and remediation. • The City is a lessor for certain lease contracts and recognizes lease receivables and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease receivable. Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) the lease term, and (3) lease receipts. (1) The City uses the investment rate of return or estimated incremental borrowing rate as the discount rate.
(2) The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.
(3) Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee.
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5 SUMMARY OF SIGNIFICANT ACCOUNTING ESTIMATES (CONTINUED) • The City recognizes lease and SBITA liabilities for lease contracts and SBITAs, respectively, with a lease term greater than one year in the government-wide financial statements. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease and SBITA liabilities. Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease and subscription payments to present value, (2) the lease and subscription terms, and (3) lease and subscription payments. (1) The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases and SBITAs. (2) The lease and subscription terms include the noncancelable period of the lease and subscription, respectively, plus any option periods that are likely to be exercised. (3) Lease and subscription payments included in the measurement of the lease and subscription liabilities, respectively, are composed of fixed payments that the City is reasonably certain to exercise.
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6 RECORDED AUDIT ADJUSTMENTS
Management corrected the following material misstatements that were identified as a result of our audit procedures.
Governmental Activities
To reclassify revenues from intergovernmental to interest earnings.a b $ - $ - $ - $ - $ -
To correct the transfer of assets to Measure H Funds.c - - - (308,522) 308,522 To reclassify SR911 funds from deferred revenues to
revenues.
c - 703,387 - (703,387) -
To reclassify debt service expenditures as transfers out from Measure H to the City’s General Fund in order to
account for the one
‑
time transfer of Measure H funds and to
recognize SBITA
‑
related debt expenditures within the City’s
General Fund.
c - - - (383,702) 383,702
To agree on the balances of the Special Districts with the issued reports for Village One #2 and Fairview Village.d - (26,974) - 26,974 - To recognize additional UAL payments as contributions
subsequent to the measurement date. 2,287,180 206,919 (2,343,032) (151,067) To reclassify negative cash to a liability account.e 8,485 (8,485) - - - Total adjustments $ 2,295,665 $ 874,847 $ (1,368,637) $ 541,157 Increase in changes in net position (827,480)
Cumulative effect on net position $ (3,170,512)
a The adjustment is recorded within the same financial statement element, resulting in net zero impact. b This adjustment pertains to Transportation Development Act Funds, for which the City issues a standalone report. c This adjustment pertains to Measure H Funds, for which the City issues a standalone report. d This adjustment pertains to Village One #2 and Fairview Village Community Facilities Districts, for which the City issues a standalone report. e This adjustment pertains to North Beyer Park Community Facilities District, for which the City issues a standalone report.
Business-type Activities
To recognize additional UAL payments as contributions
subsequent to the measurement date. $ $ 249,609 $ - (206,919) $ - $ (42,690) Total adjustments $ $ 249,609 (206,919) $ $ - (42,690)
Increase in changes in net position (42,690)
Cumulative effect on net position $ (42,690)
General Fund
To account for the transfer of funds from Measure H Funds to the City's General Fund and to recognize SBITA debt
expenditures within the City's General Fund.a $ - $ - $ - $ $ (383,702) 383,702 Total adjustments $ - $ - $ $ (383,702) 383,702
Increase in changes in fund balance -
Cumulative effect on fund balance $ -
a This adjustment pertains to Measure H Funds, for which the City issues a standalone report.
Description Effect—Debit (Credit)
Assets Liabilities Fund Balance Revenues Expenditures
Description Effect—Debit (Credit)
Assets Liabilities Net Position Revenues Expenses
Description Effect—Debit (Credit)
Assets Liabilities Net Position Revenues Expenses
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7 RECORDED AUDIT ADJUSTMENTS (CONTINUED)
Water Enterprise Fund
To recognize additional UAL payments as contributions
subsequent to the measurement date. $ $ 130,700 $ - (258,265) $ $ 127,565 Total adjustments $ $ 130,700 (258,265) $ $ - 127,565
Decrease in changes in net position 127,565
Cumulative effect on net position $ 127,565
Sewer Enterprise Fund
To recognize additional UAL payments as contributions
subsequent to the measurement date. $ $ 86,429 $ - (13,545) $ - $ (72,884) Total adjustments $ $ 86,429 (13,545) $ $ - (72,884)
Increase in changes in net position (72,884)
Cumulative effect on net position $ (72,884)
Aggregate Nonmajor Funds - Governmental Funds
To reclassify revenues from intergovernmental to interest earnings.a $ - $ - $ - $ - $ -
To reclassify negative cash to a liability account.b 8,485 (8,485) - - - To reclassify SR911 funds from deferred revenues to
revenues.
c - 703,387 - (703,387) -
To agree on the balances of the Special Districts with the issued reports for Village One #2 and Fairview Village.d - (26,974) - 26,974 - Total adjustments $ $ 8,485 667,928 $ $ (676,413) -
Increase in changes in fund balance (676,413)
Cumulative effect on fund balance $ (676,413)
a The adjustment is recorded within the same financial statement element, resulting in net zero impact. b This adjustment pertains to North Beyer Park Community Facilities District, for which the City issues a standalone report. c This adjustment pertains to Measure H Funds, for which the City issues a standalone report. d This adjustment pertains to Village One #2 and Fairview Village Community Facilities Districts, for which the City issues a standalone report.
Description Effect—Debit (Credit)
Assets Liabilities Fund Balance Revenues Expenditures
Description Effect—Debit (Credit)
Assets Liabilities Net Position Revenues Expenses
Description Effect—Debit (Credit)
Assets Liabilities Net Position Revenues Expenses
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8 RECORDED AUDIT ADJUSTMENTS (CONTINUED)
Aggregate Nonmajor Funds - Enterprise Funds
To recognize additional UAL payments as contributions
subsequent to the measurement date. $ $ 32,480 $ - 64,891 $ $ (97,371) Total adjustments $ $ 32,480 64,891 $ $ - (97,371)
Increase in change in net position (97,371)
Cumulative effect on net position $ (97,371)
Aggregate Nonmajor Funds - Internal Service Funds
To correct the transfer of assets to Measure H Funds.a $ - $ - $ - $ $ (617,044) 617,044 To recognize additional UAL payments as contributions
subsequent to the measurement date. 43,729 107,338 - - (151,067) Total adjustments $ $ 43,729 107,338 $ $ (617,044) 465,977 Increase in changes in net position (151,067)
Cumulative effect on net position $ (151,067)
a This adjustment pertains to Measure H Funds, for which the City issues a standalone report.
Aggregate Nonmajor Funds - Fiduciary Funds
To reverse a prepayment transaction.a $ $ (1,741) $ - 1,741 $ - $ - To accrue for FY2025 expenses.b - (6,489) - - 6,489
To agree on the balances of the Special Districts with the issued reports for Village One #2 and Fairview Village.c 26,974 - - (26,974) - Total adjustments $ $ 25,233 (4,748) $ $ (26,974) 6,489 Increase in changes in net position (20,485)
Cumulative effect on net position $ (20,485)
a This adjustment pertains to the Modesto-Ceres Fire Protection Agency, for which the City issues a standalone report. b This adjustment pertains to the Tuolumne River Regional Park, for which the City issues a standalone report. c This adjustment pertains to the Tuolumne River Regional Park, for which the City issues a standalone report.
Description Effect—Debit (Credit)
Assets Liabilities Net Position Revenues Expenses
Description Effect—Debit (Credit)
Assets Liabilities Net Position Revenues Expenses
Description Effect—Debit (Credit)
Assets Liabilities Net Position Revenues Expenses
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Significant Written Communications Between
Management and Our Firm
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Finance Department
Accounting Division
P.O. Box 642
Modesto, California 95354
209.577.5387
[email protected]
December 8, 2025
Vasquez and Company LLP
655 N Central Avenue, Suite 1550
Glendale, CA 93215
This representation letter is provided in connection with your audits of the basic financial statements of the City of Modesto, California (the City), as of and for the year ended June 30, 2025, for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
We confirm, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves, that as of December 8, 2025:
Financial Statements
1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated May 7, 2025, for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP.
2. We acknowledge our responsibility for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
3. We acknowledge our responsibility for the design, implementation and maintenance of controls to prevent and detect fraud.
4. The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of U.S. GAAP, and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take.
5. The methods, assumptions and data used to measure accounting estimates are as follows, and result in estimates that are appropriate for financial statement measurements and disclosure purposes and have been consistently selected and applied in making the estimate: (1) investments’ fair market values were obtained from the fiscal agents, from the pension and OPEB trustees, investment custodian and the bond trustees and based on amortized cost and observable inputs, (2) the City’s receivables are stated at the amounts collectible based on the results of the City’s evaluations, (3) the estimated useful lives of the City’s capital assets were based on management’s best estimate and prevailing practices in the local government sector, (4) claim payables are estimated when a loss has occurred and the amount of the loss can be reasonably estimated and include an amount for claims that have been incurred, but not reported as of the end of the year, (5) the fair value of interest rate swaps were estimated by PFM using the future net settlement payments required by the swap, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates, and (6) 9 Appendix A - Management Representation Letters
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Vasquez and Company LLP
December 8, 2025