Modesto City Council
March 3, 2026

The Finance Department will inform Council of all grant activity by preparing a bi-monthly informational report on both grant applications and awards. The Finance Department has implemented a grant management software, eCivis, which established a workflow approval process and serves as a centralized databased of all City grant applications and awards and as a research tool for grants for all City Departments. City departments continue to actively pursue new grant opportunities as part of notifications received from federal, state, and local agencies they have subscribed to, such as Department of Housing, Department of Transportation, State Water Resources Control Board, Department of Justice and professional government associations. City departments have staff assigned to monitor these grant application notices to determine if the City meets the required qualifications to apply for the grant.

On September 9, 2025, under Resolutions 2025-330, City Council approved a prequalified local consultant list for Civil Engineering services for a period of five (5) to the following four (4) firms BKF Engineers, Black Water Consulting Engineers, Inc. NorthStar Engineering Group, Inc and Siegfried Engineering, Inc. Services to be provided by these firms include but is not limited to grant research, grant writing and grant management.

DISCUSSION:

During the months of November and December 2025, the City Manager and the Director of Finance approved the following application which required no local match contribution.

Community Economic Development Department
(Grant Application $1,255,500 – Local Match $0) COM0105 Community Cleanup and Employment Pathway (CCEP) Grant Proposal from California Department of Transportation. Funds from this grant would be used to fund an expansion of the existing City of Modesto Mo’Beautiful Initiative, which is a collaborative, community-led cleanup and beautification effort designed to restore dignity and safety to underserved areas within the City of Modesto. This project also represents a critical opportunity to address the longstanding issues of tagging and illegal dumping through collaborative external and interdepartmental partnerships and high-need areas across Modesto. The expansion of the Mo’Beuatifiul initiative will combine public space beautifications with transitional employment and case management services for individuals experiencing homelessness.

Funds will enhance workforce development opportunities for individuals from the HomeWorks team, in collaboration with the City of Modesto.

FISCAL IMPACT:

No fiscal impact will result from the acceptance of this informational report on November and December 2025, grant application and awards. A monthly summary by grant application and awards is shown below:

Grant Applications: $1,255,500
Local Match: $0
COMMITTEE RECOMMENDATION:

This item is being presented as information to share the bi-monthly grant applications and awards to Council and public and is not required to be reviewed by a standing committee. #10..
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City Council, March 3, 2026
November and December 2025, Grant Application and Awards

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Motion accepting an Informational Report for November and December 2025, Grant Applications and Awards.

Approved by:

DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:

1. November and December 2025 Applications Submitted
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Applications Submitted: Organization: Modesto
Projected Funds: Report Date: 01/23/2026
Cash: Requested By: Maria Garnica
In-Kind: Accounting Manager
[email protected]
Information based on all grant applications submitted during the reporting period:

Grant Status Agency Submitted Submitted Projected Award Match Cash In-Kind Application Submitted California Department of
Transportation
11/01/2025 $1,255,500 None N/A N/A
Applications Submitted, Created by Maria Garnica, [email protected], 01/23/2026 Source: Euna™ Grants Network®
http://www.ecivis.com/
Department: Community Economic Development - Housing Urban Development Modesto Mo'Beautiful
COM0105 Community Cleanup and Employment Pathway
(CCEP) Grant Proposal
Activity Report - Applications Submitted
Report Range: Report Range: 01-Nov-25 - 23-Jan-26
1 $1,255,500
$0
$0
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

March 3, 2026
Date: January 27, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jeremy Rogers, Director of Parks, Recreation and Neighborhoods Department SUBJECT: Community/Special Event and Program Grant Awards for Fiscal Year 2025-2026 CONTACT: Jeremy Rogers, Director of Parks, Recreation and Neighborhoods, [email protected], 209-577-5347
DESCRIPTION:

Consider approving the Community/Special Event and Program Grants providing $2,500 in inkind support and $5,000 in grant funding and authorizing $5,000 in in-kind support and $10,000 in financial funding support through the City’s co-sponsorship program, for events and programs planned in the second half of Fiscal Year 2025-2026. (Funding Source: General Fund) STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto’s 2025-2026 Strategic Plan to promote trust and engagement between the community and the City by enhancing responsiveness, communicating broadly about City opportunities and challenges, and increasing public participation in municipal affairs.

BACKGROUND:

Community and special events and programs provide quality of life and economic benefits to Modesto. Prior to Fiscal Year 25/26, the City co-sponsored events by offering financial and inkind support under the guidelines of former Administrative Directive 3.6 for Community & Special Event Sponsorships (AD 3.6). From January 2022 through June 2025, co-sponsorships under AD 3.6 were awarded to new and one-time applicants as well as for long-standing events and programs.

Beginning in FY 2025-2026, AD 3.6 was replaced by two new directives:
1) Administrative Directive 3.7 – Co-Sponsorships for Designated City Partners’ Events and Programs (AD 3.7).
2) Administrative Directive 3.8 – Community/Special Event and Program Grants (AD 3.8).

This directive serves those seeking City support or monetary assistance (grants) for an upcoming community or special event, or a program. The process includes an application #11..
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City Council, March 3, 2026
Community/Special Event and Program Grant
Awards for Fiscal Year 2025-2026

intake process, offers online tools and resources, sets annual funding thresholds, improves applicant accountability, and promotes fiscal responsibility.

For the purposes of this staff report, AD 3.8 will be considered. Key components of AD 3.8 include fiscal responsibility and grant thresholds.

Fiscal Responsibility: The amount of available funding for grants of funds and/or the provision of in-kind support may vary per year depending on the economic outlook and available resources.

This includes the availability of funds for monetary grants and the City’s capacity to cover costs and provide staffing and services for each event. For Fiscal Year 25/26, the value of in-kind support and monetary grants is capped at $50,000 each.

Grant Thresholds: Awards for in-kind assistance may range between $1,000-$5,000. The same applies for monetary contributions: $1,000-$5,000. Requests for a combination of in-kind and monetary grants are permitted provided they do not exceed their respective thresholds.

DISCUSSION:

Applications that were on file when AD 3.6 ended were retained and processed under the new grant program. A total of eight events were considered: 2025 International Heritage Festival, 2025 MoPride in the Park, 2025 National Slavery Remembrance Day, Central Valley Business Expo, History of Low-Riding Holiday, Festival Folklor: Celebrando la Vida, NeLaPaLooza, and West Modesto Community Collaborative’s Back to School Health Fair. On August 12, 2025, by Resolution No. 2025-297, Council approved grants to all applicants totaling $19,815 in in-kind support and $18,157 in grant funding.

New grant applications for events and programs occurring in the second half of FY 2025-2026 were accepted online from July 7, 2025, through September 30, 2025. Three applications in all were submitted during this time, and one more application that was not considered in the first round of grant awards is now being reviewed. Four applications, in total, in all are under review.

The applications were initially presented to the Finance Committee on January 26, 2026.

Following the meeting, staff conducted a further eligibility review and determined that West Modesto Community Collaborative and NAACP do not meet the eligibility requirements of Administrative Directive 3.8. While the applications do not meet the requirements of Administrative Directive 3.8 for grant funding, the events remain eligible for consideration under Administrative Directive 3.7 – Co-Sponsorships for Designated City Partners’ Events and Programs, which operates under separate criteria and approval procedures. Staff intends to process those requests through the co-sponsorship program.

Staff now recommends awarding grants under AD 3.8 only to applicants meeting all eligibility requirements as outlined below:

Applicant Event In-Kind
(Value)
Grant
Funding
Total
Award
South Modesto Businesses
United*
Christmas Posada & Toy
Giveaway
N/A $5,000 $5,000
King-Kennedy Memorial
Center Board of Directors
Juneteenth Celebration $2,500 $2,500 $5,000
$2,500 $7,500 $10,000
*Applicant notified grant funding will be reimbursed after said event and pending Council approval. #11..
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City Council, March 3, 2026
Community/Special Event and Program Grant
Awards for Fiscal Year 2025-2026

The following events do not meet the eligibility requirements of Administrative Directive 3.8 but qualify for support under the City’s co-sponsorship program (AD 3.7), which operates under separate criteria and approval procedures.

Applicant Event In-Kind
(Value)
Financial
Funding
City Support
Value
NAACP 2026 Freedom Fund
Banquet & Community
Service Awards
N/A $5,000 $5,000
West Modesto Community
Collaborative
7th Annual Crab Feed $5,000 $5,000 $10,000
TOTAL $5,000 $10,000 $15,000
FISCAL IMPACT:

Awards of in-kind grants for Fiscal Year 2025–2026 are limited to $50,000 and are incorporated across multiple Department operating budgets (Parks, Recreation and Neighborhoods, Police, Fire, Public Works, and Community and Economic Development). Grant awards of monetary funding for Fiscal Year 2025–2026 are limited to $50,000 and are budgeted in the Parks, Recreation and Neighborhoods Administration budget (0100‑31010‑54920) In-Kind Grants: To date, a total of $19,815 in in-kind support has been awarded. Council approval of an additional $2,500 will bring the total awarded to $22,315, leaving a balance of $27,685 within the program’s $50,000 in-kind allocation.

To date, a total of $18,157 in grant funding has been awarded. Council approval of an additional $5,000 will bring the total awarded to $23,157, leaving a balance of $26,843 within the program’s $50,000 monetary allocation.

In addition to the Community/Special Event Grant Program allocations, the City provides support for co‑sponsored activities that qualify under Administrative Directive 3.7. For Fiscal Year 2025– 2026, qualifying co‑sponsorships total $332,672, consisting of:
 $261,022 in in‑kind contributions; and
 $71,650 in monetary contributions.

The above totals for co-sponsorships are reported for transparency and do not modify the established annual thresholds for in-kind or monetary grant awards under the Community/Special Event Grant Program.

COMMITTEE RECOMMENDATION:

This was presented to Finance Committee on January 26, 2026, under Administrative Directive

3.8, but after further review, two applicants were found not to meet AD 3.8 eligibility requirements. These applicants will instead be considered under Administrative Directive 3.7 through the City’s co-sponsorship program and was recommended to forward to Council for approval.
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City Council, March 3, 2026
Community/Special Event and Program Grant
Awards for Fiscal Year 2025-2026

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving Community/Special Event and Program Grants providing $2,500 in in-kind support and $5,000 in grant funding for eligible events and authorizing $5,000 in in-kind support and $10,000 in financial funding support through the City’s co-sponsorship program during the second half of Fiscal Year 2025-2026.

Approved by:

Jeremy Rogers, Director of Parks, Recreation and
Neighborhoods Department
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Administrative Directive 3.7

3. Administrative Directive 3.8

4. Grant Applications (Redacted)
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03/03/2026/PRN/JRogers/Item XX 1 2026-XX

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX

RESOLUTION APPROVING COMMUNITY/SPECIAL EVENT AND
PROGRAM GRANTS PROVIDING $2,500 IN IN-KIND SUPPORT AND $5,000 IN GRANT FUNDING FOR ELIGIBLE EVENTS AND AUTHORIZING $5,000 IN IN-KIND SUPPORT AND $10,000 IN FINANCIAL FUNDING SUPPORT THROUGH THE CITY’S CO-SPONSORSHIP PROGRAM DURING THE
SECOND HALF OF FISCAL YEAR 2025-2026
WHEREAS, the City of Modesto recognizes the importance of community and special events and programs in enhancing quality of life and fostering economic benefits; and
WHEREAS, Administrative Directive 3.8 establishes guidelines for awarding Community/Special Event and Program Grants to promote fiscal responsibility, transparency, and public engagement; and
WHEREAS, the Parks, Recreation and Neighborhoods Department has reviewed and recommended approval of grant applications for events scheduled during the second half of Fiscal Year 2025-2026; and
WHEREAS, the Finance Committee reviewed this item on January 26, 2026, and recommended forwarding it to the City Council for approval; and WHEREAS, the Parks, Recreation and Neighborhoods Department reviewed grant applications for events scheduled during the second half of Fiscal Year 2025-2026 and conducted additional eligibility verification following Finance Committee review; and
WHEREAS, although certain applicants were determined ineligible for funding under Administrative Directive 3.8, the City intends to support those events through the #11..
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03/03/2026/PRN/JRogers/Item XX 2 2026-XX
City’s co-sponsorship program administered under Administrative Directive 3.7, which operates under separate eligibility requirements and approval procedures; and WHEREAS, the City Council desires to act upon the revised recommendations presented in this staff report, which supersede the funding recommendations previously considered by the Finance Committee; and
WHEREAS, the proposed Community/Special Event and Program Grant awards under Administrative Directive 3.8 include $2,500 in in-kind support and $5,000 in grant funding, as detailed below:

Applicant Event InKind
(Value)
Grant
Funding
Total
Award
South Modesto Businesses United Christmas Posada & Toy
Giveaway
N/A $5,000 $5,000
King-Kennedy Memorial Center
Board of Directors
Juneteenth Celebration $2,500 $2,500 $5,000
$2,500 $7,500 $10,000
WHEREAS, certain applicants determined ineligible under Administrative Directive 3.8 qualify for support under Administrative Directive 3.7 – Co-Sponsorships for Designated City Partners’ Events and Programs, which operates under separate criteria and approval procedures; and
WHEREAS, the proposed co-sponsorship support under Administrative Directive

3.7 is as follows:

Applicant Event In-Kind
(Value)
Financial
Funding
City
Support
Value
NAACP 2026 Freedom Fund Banquet
& Community Service
Awards
N/A $5,000 $5,000
West Modesto Community
Collaborative
7th Annual Crab Feed $5,000 $5,000 $10,000
TOTAL $5,000 $10,000 $15,000
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03/03/2026/PRN/JRogers/Item XX 3 2026-XX
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Modesto that it hereby approves the Community/Special Event and Program Grants under Administrative Directive 3.8 providing $2,500 in in-kind support and $5,000 in grant funding for eligible events and programs listed above; and, providing $5,000 in inkind support and $10,000 in financial funding through the City’s co-sponsorship program administered under Administrative Directive 3.7 for the events listed above; with funding sourced from the General Fund and allocated within the Parks, Recreation and Neighborhoods Department budget.
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03/03/2026/PRN/JRogers/Item XX 4 2026-XX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 3rd day of March 2026, by Councilmember ______________, who moved its adoption, which motion being duly seconded by Councilmember ____________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________

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

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

ADMINISTRATIVE

DIRECTIVE
Original Effective Date: 06/12/2025
Latest Revision Date: 06/12/2025

Policy Number: 3.8
Approved By: Joseph Lopez
City Manager
Subject: COMMUNITY/SPECIAL EVENT AND PROGRAM GRANTS

POLICY:

This policy will provide the basis for the City’s granting of contributions of in-kind support and funds for community and special events. Grant requests will be approved in an equitable manner, ensuring a variety of programs, services and community organizations receive available support. It should be noted that the Community and Special Events Grants policy does not apply to co-sponsored activities initiated by the City and its selected partners to enhance quality of life and promote Modesto.

BACKGROUND:

The City values and encourages events, programs, and services that benefit residents of the City.

Historically, the City has supported various community events either with in-kind support or financial support based on citywide community needs and budgetary allocations. In order to ensure equitable opportunity for organizations to submit proposals, the City is formalizing the process in which organizations/groups receive City support.

PURPOSE:

This policy is designed to clarify the process of requesting and awarding City in-kind and monetary support for those community and special events not designated as City partnered events or programs and are co-sponsored by the City of Modesto. However, City contributions of funds, in-kind services, and support for new/returning applicants are made available biannually pending an application and review process and the availability of City funding and resources. A Community or Special Event is defined as an upcoming organized community or special event benefiting the community-at-large, occurs in/on City-owned property or street, and where the City is not the primary partner or organizer.

A program is defined as a program benefiting the community at large and where the City is not the primary partner or organizer.

SCOPE:

Goals & Objectives:

The granting of funds or in-kind services, including but not limited to contributions of staff, equipment or other services, and booth participation, will be considered for special and community events, community projects or programs designed to accomplish one or more of the goals and objectives:
• Promotes the City of Modesto as a desirable place to live, visit, and do business. • Promotes the City of Modesto as a visitor destination and/or brings tourism-associated revenue to the City.
• Enhances the quality of life and well-being of the citizenry. • Advances the City’s commitment to and pride in being a diverse and multicultural community. • Encourages the development of neighborhood engagement, identity, and pride. • Promotes cultural awareness among the citizenries.
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POLICY NO. 3.8

COMMUNITY/SPECIAL EVENT AND PROGRAM GRANTS

The granting of City funds or in-kind support is evaluated according to the effectiveness and impact the particular special event, community project or program has on the community-at-large. Special attention is paid to contributions that promote the attractiveness of the City as a place to visit and/or live, celebrate the heritage of the City and its neighborhoods, and/or enrich the character and quality of life of its citizens.

Event Criteria:

The granting of funds or in-kind services, including but not limited to contributions of staff, equipment or other services, and booth participation, will be considered for special and community events, community projects or programs which meet all of the City’s criteria:

1. Takes place within the upcoming Fiscal Year (July 1st – June 30th).

2. Offers a cultural, social, educational, economic, or recreational benefit to the community.

3. Not religious or political in nature nor does it seek to support or oppose any religious or political viewpoint.

4. Takes place within the City of Modesto limits at a City facility, building, park, or street(s).

Some limited exceptions may be granted.

5. Includes other sources of funding sufficient to cover at least 50% of all anticipated eventrelated expenses.

3. Does not occur on the same date(s) as other City-sponsored or grant-funded events which may or may not be similar in nature or theme.

4. Open to the public and does not require any entrance fees paid for admittance and provides services on a non-discriminatory basis.

8. Supports the aforementioned goals and objectives.

Event/Program Organizer Criteria:

The granting of funds or in-kind services will be considered for special and community events, community projects or programs whose event organizer, organization or applicant meet all of the City’s criteria:

1. Based within the City of Modesto boundaries and is in good standing current on all City accounts.

2. Demonstrates that the organization has the experience and the expertise to undertake the planning and execution of the proposed event.

3. Completes/Submits required Community/Special Event and Program Grant Application and supporting documents during the identified application filing period.

4. Payment of Community/Special Event and Program Grant Application fee.

5. Compliant with all City, County, and State requirements.

6. Fiscally responsible for all other event expenses not related to or granted by the City.

Grant Funding and Use Restrictions:

The amount of available funding for grants of funds and/or the provision of in-kind support may vary per year depending on economic outlook and available resources. Past grant awards are no assurance of future awards. Careful consideration of the fiscal impact for each application will be assessed. This includes the availability of funds for monetary grants and the City’s capacity to cover costs and provide staffing and services for each event. Available grants are subject to City Council approval. The City may terminate the program at any time due to unforeseen circumstances. #11..
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POLICY NO. 3.8

COMMUNITY/SPECIAL EVENT AND PROGRAM GRANTS

Awarded grants must be used for event-related expenses only and not for operating deficit, administrative costs, or other organizational costs unrelated to the production of the event or program or for any capital equipment purchases. No part of the grant shall be used for any political advocacy or for sole religious purposes.

Requests for the following in-kind support and services will not be considered and all costs associated therein shall be the applicant/organizer’s responsibility • Modesto Police and Fire emergency services, such as traffic control, street closures, security, or escorts
• Application and permit fees for the sale, serving, or consumption of alcohol • Special Event Itinerant application, permits, and applicable taxes • Community and Special Event Grant Application Fee
Request for monetary contributions for the following expenses will not be considered and all costs associated therein shall be the applicant/organizer’s responsibility. • All City of Modesto application, permit, and inspection fees. • Special Event Itinerant Business License and taxes
• Alcohol Permits/Licenses
• Alcohol Expenditures
• Request for City Services
• Scholarships
• Charitable Donations
• Travel and Transportation Expenditures
• Permanent Equipment or Capital Expenditure
• Staff Salaries and Benefits
• Cash Awards, Incentives, Prizes, or Plaques
Grant Thresholds:

The thresholds for City grants per event or program are as follows: In-Kind Value of $1,000-$5,000 and Monetary Contributions of $1,000-$5,000. Requests for a combination of In-Kind and Monetary Grants are permitted provided they do not exceed their respective thresholds.

The annual thresholds for City grants per applicant, organizer or organization are as follows:
2 events per fiscal year provided the combined total of the grants for both in-kind and monetary contributions do not exceed $10,000.

Requests valued under $1,000 shall be considered on a case-by-case basis and approved or denied in whole or in part by the applicable Department Head.

PROCEDURES:

Administration:

The Parks, Recreation and Neighborhoods Department manages the administrative process for the City’s Community/Special Event and Program Grant Program, as it also manages the permitting process for the majority of special events in the City. The Community/Special Event Grant and Program Application will be processed together twice each fiscal year for events held in the upcoming #11..
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POLICY NO. 3.8

COMMUNITY/SPECIAL EVENT AND PROGRAM GRANTS

fiscal year. Grant applications will be reviewed for completeness. Incomplete applications will be rejected.

All Community/Special Event Grant and Program Applications which are deemed complete, along with a fiscal impact analysis, will be forwarded to a sub-committee, composed of various advisory board, committee, commission members, and others who will conduct applicant interviews, score applications, and make award recommendations for the Finance Committee. Sub-Committee recommendations will be based on the following: Economic Development, Community Benefit, Community Participation, City Recognition, Fiscal Responsibility, Organization Capacity, and City/County/State Compliance. Final recommendations will be considered by the full City Council in tandem with the approval of the Finance or Safety & Communities Committee. Grant funding will be disbursed within 60 days of the scheduled event.

Acknowledging City Support:

Grant recipients must acknowledge the City’s financial support in all appropriate materials and media.

The acknowledgement should read, “Supported in part by the City of Modesto” or similar language, unless the City is part of a list of supporters. In the latter case, the acknowledgement may simply say “City of Modesto”. Recipients must display the City’s logo whenever other sponsor/contributor logos are displayed, and in accordance with City logo use and guidelines. All use of the City of Modesto logo shall be approved in advance by the Public Relations and Legislative Affairs Manager. #11..
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POLICY NO. 3.8

COMMUNITY/SPECIAL EVENT AND PROGRAM GRANTS

Reporting Requirements:

Within 90 days of the event, the applicant shall remit the Community/Special Event and Program Final Report. Recipients who neglect to turn in the Final Report on or before the due date will be required to pay back all awarded funds and invoiced for the value of all in-kind services and support rendered.

Failure to submit the final report on time will also jeopardize the applicant’s consideration for future funding.

The Final Report encompasses the following reporting categories:
1) Attendance
2) Community Benefit
3) Event Summary, Deviations, and Matters of Concern
4) Pre-Event Requirements and Approvals
5) Accounting of Use of Grant Funding
6) Income and Expenditure Reporting (including copies of receipts, cancelled checks, etc. to support expenses).
7) Promotion and Marketing
Timelines & Schedules:

The intake, review, and award of grants is completed biannually. The grant application process, now online, will be open twice a year to consider events scheduled in the upcoming fiscal year A) July 1st – June 30th and B) January 1st -June 30th Events. In conjunction with the City’s budget process, grant applications will be reviewed for completeness and fiscal impact. A Sub-Committee composed of members from various City boards, committees, and commissions will be tasked to interview and rank applicants and make recommendations for funding consideration. Staff will complete a final review and forward all funding recommendations to the Finance Committee and then to City Council.

Application In-Take & Approval
IN-TAKE SESSION – A
For events/programs planned in the next fiscal year – JULY 1st through JUNE 30th.

OCTOBER 1- OCTOBER 31 NOTIFICATION – CALL FOR APPLICATIONS NOVEMBER 1 – DECEMBER 31 APPLICATION PORTAL OPEN
JANUARY 1 – JANUARY 31 PRELIMINARY REVIEWFISCAL IMPACT ANALYSIS FEBRUARY 1 – FEBRUARY 28 SUB-COMMITTEE REVIEW
MARCH 1 – MARCH 31 FINAL RECOMMENDATIONS
APRIL 1 – APRIL 30 FINANCE COMMITTEE
MAY 1 – JUNE 30 CITY COUNCIL APPROVAL

IN-TAKE SESSION - B
For events/programs planned in the latter half of the next fiscal year – JANUARY 1st through June 30th.

APRIL 1 – APRIL 30 NOTIFICATION – CALL FOR APPLICATIONS MAY 1 – JUNE 30 APPLICATION PORTAL OPEN
JULY 1 – JULY 31 PRELIMINARY REVIEWFISCAL IMPACT ANALYSIS AUGUST 1 – AUGUST 31 SUB-COMMITTEE REVIEW
SEPTEMBER 1 – SEPTEMBER 31 FINAL RECOMMENDATIONS
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POLICY NO. 3.8

COMMUNITY/SPECIAL EVENT AND PROGRAM GRANTS

OCTOBER 1 – OCTOBER 31 FINANCE COMMITTEE
NOVEMBER 1 – NOVEMBER 30 CITY COUNCIL APPROVAL
Roll out of the policy in year 1 may differ from the schedule listed herein and could include shorter review, and award timelines. Events and programs scheduled within 30 days of award may be disbursed post event.

Attachments:
1) Resolution (Pending City Council approval 6/3/2025)
2) Community/Special Event and Program Grant Application 3) Community/Special Event and Program Grant In-Kind Fee Calculation Form 4) Community/Special Event and Program Grant Preliminary Budget Template 5) Community/Special Event and Program Scoring Worksheet 6) Community/Special Event and Program Grant Final Report #11..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

March 03, 2026
Date: February 03, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Memorandum of Understanding between City of Modesto and Stanislaus County for Rock Well Maintenance at Charles Sharp Park
CONTACT: Jeff Daniels, Wastewater Division Manager, [email protected], 209-577-6255
DESCRIPTION:

Consider approving the Memorandum of Understanding (MOU) between the City of Modesto (City) and Stanislaus County (County) for the provision of rock well maintenance services at Charles M. Sharp Park, 1812 Torrid Avenue, Modesto, CA. (Funding Source: Storm Drain Fund) STRATEGIC PLAN ELEMENT:

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

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

BACKGROUND:

The County owns and operates two (2) rock wells located at Charles M. Sharp Park (Park). The Park is located in a county pocket within City of Modesto city limits.

The street along the park is notorious for flooding during storm events. The County has requested the City provide annual preventative maintenance, corrective, and emergency services for these rock wells.

The City currently maintains approximately 9,600 rock wells throughout the City’s stormwater collection system. These rock wells are maintained and repaired by City staff and rejuvenated, as needed, through a contract the City holds for rock well rejuvenation services.

On October 13, 2020, by Resolution No. 2020-423, Council approved an Agreement with Fox Loomis for Rock well rejuvenation services for an annual estimated cost of $300,000 and total amount not to exceed $3,000,000 over five (5) years.
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City Council, March 03, 2026
Memorandum of Understanding between City of Modesto and Stanislaus County for Rock Well Maintenance at Charles Sharp Park

On June 23, 2025, the City Manager authorized an extension to the contract with no additional costs, to go into effect on October 13, 2025, and expire on June 30, 2026.

The City is currently in the process of finalizing the new contract for rock well rejuvenation services, with an estimated effective date of July 01, 2026.

DISCUSSION:

The County has requested the assistance of the City of Modesto for the provision of annual preventative maintenance, corrective, and emergency services for the two (2) rock wells located at Charles M. Sharp Park.

The City of Modesto, Wastewater Division, possesses the necessary equipment, materials, and personnel to perform such services and regularly maintains similar infrastructure within its jurisdiction. The City is willing to assist the County under the terms of the MOU:
 The City will perform annual preventative maintenance and as needed, corrective or emergency services on the two rock wells.
 The City may also rejuvenate the wells up to once every ten (10) years, at its discretion.  The City may replace or upgrade the wells to drywells if deemed necessary.  The County will reimburse the City for all services rendered, as outlined in Exhibit A of the MOU.
 Capital Improvement costs will be shared equally, fifty percent (50%)/ fifty percent (50%), between the City and the County.
 The agreement has a term of ten (10) years, with automatic one-year renewals unless terminated by either party with 90 days’ notice.
 Either party may terminate the agreement at any time with 30 days’ written notice.

By assisting the County with the maintenance of the rock wells at the park, this will help in mitigating localized flooding for the community.

FISCAL IMPACT:

The estimated annual cost per well is $640, subject to an annual escalation of 6.2% or current CPI. The anticipated cost of $1,280 will be absorbed within the current Storm Drain Fund Fiscal Year 2025-26 operating budget.

ANTICIPATED MAINTENANCE EXPENDITURES (Annual Cost)
Rock Well Annual Preventative Maintenace $400
Rock Well Rejuvenation (Contractor) $880
Corrective or Emergency Repair As Needed
City Staff Time
Stanislaus County Reimbursement
As Needed
($1,280) + Additional Costs
TOTAL Cost to City $0.00 + 50% Capital Project Costs
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City Council, March 03, 2026
Memorandum of Understanding between City of Modesto and Stanislaus County for Rock Well Maintenance at Charles Sharp Park

COMMITTEE RECOMMENDATION:

This item was considered by the Economic Development Committee on February 02, 2026, where it was recommended that it be forwarded to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the Memorandum of Understanding between the City of Modesto and Stanislaus County for the provision of rock well maintenance services at Charles M. Sharp Park, located at 1812 Torrid Avenue, Modesto, CA, and authorizing the City Manager, or his designee, to execute the Agreement.

Approved by:

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

1. Resolution

2. Memorandum of Understanding
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03/03/2026/Utilities/JDaniels/Item X 1 2026-XX

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX

RESOLUTION APPROVING THE MEMORANDUM OF UNDERSTANDING

BETWEEN THE CITY OF MODESTO AND STANISLAUS COUNTY FOR THE PROVISION OF ROCK WELL MAINTENANCE SERVICES AT CHARLES M.

SHARP PARK, 1812 TORRID AVENUE, MODESTO, CA AND AUTHORIZING

THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT WHEREAS, Stanislaus County (County) owns and operates two (2) rock wells located at Charles M. Sharp, which is in a county pocket within the City of Modesto (City) city limits; and
WHEREAS, the street along the park floods during storm events; and WHEREAS, the County has requested the City’s assistance in providing preventative maintenance, corrective, and emergency services for these rock wells; and WHEREAS, the City’s Wastewater Division, possesses the necessary equipment, materials, and personnel to perform such services and regularly maintains similar infrastructure within its jurisdiction; and
WHEREAS, the City is willing to assist the County under the terms of the Memorandum of Understanding, and services described in Exhibit A, which is attached as a component thereof.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the Memorandum of Understanding between the City of Modesto and Stanislaus County for the provision of rock well maintenance services at Charles M.

Sharp Park, 1812 Torrid Avenue, Modesto, CA.

BE IT FURTHER RESOLVED that the City Manager, or his designee, are hereby authorized to execute the agreement, in a form approved by the City Attorney. #12..
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03/03/2026/Utilities/JDaniels/Item X 2 2026-XX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 3rd day of March, 2026, by __________________, who moved its adoption, which motion being duly seconded by ____________________ was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _________________________________

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

BY: __________________________________
JOSE M. SANCHEZ, City Attorney
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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF MODESTO AND

THE COUNTY OF STANISLAUS REGARDING ROCK WELL MAINTENANCE This MEMORANDUM OF UNDERSTANDING (“MOU”) is entered into _________, 2026 (the “Effective Date”) between the County of Stanislaus (hereinafter referred to as “County”) and the City of Modesto (hereinafter referred to as “City”), collectively hereinafter referred to as “Parties”.

WHEREAS, The County has the need and desire to maintain and service two rock wells located at 1812 Torrid Ave known as Charles Sharp Park (the “Rock Wells”); and WHEREAS, The City possesses the equipment, materials, and personnel to maintain and service existing rock wells and regularly performs similar repairs in the City.

NOW THEREFORE, the County and City agree as follows:

ARTICLE I

PARTY RESPONSIBILITIES

1. The above Recitals are made a part of this MOU agreement as if they were set forth herein.

2. The City, pursuant to the terms and conditions hereinafter set forth, hereby agrees to perform annual preventative maintenance, as well as corrective or emergency service on the Rock Wells as determined necessary by the City.

3. Annually or as needed, the City shall perform preventative maintenance on identified Rock Wells.

4. The City shall clean Rock Wells as needed and shall rejuvenate the Rock Wells no more than once every 10-years, if determined necessary in the City’s discretion

5. The City may replace or upgrade either Rock Well to a drywell, as deemed necessary by City in its sole discretion.

6. The County shall reimburse the City for all work performed by the City pursuant to this MOU as specified in Exhibit A, attached hereto and incorporated herein.

7. Upon being invoiced for completed work, the County agrees to pay the invoice within 30 days.

8. Scope of Services (Exhibit A) referred to in this Agreement is attached hereto and incorporated herein by reference.
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Memorandum of Understanding
2 ARTICLE II

GENERAL PROVISIONS

1. This MOU, including attachments, shall form the entire agreement and understanding between County and City. no other written or verbal statements, shall be binding upon the Parties or construed as modifying this MOU in any way.

2. The governing law of this MOU shall be the law of the State of California. The Parties agree that the County is the sole proper venue for the litigation of any and all disputes arising out of or relating to this MOU.

3. Each Party warrants and represents that in executing this MOU, it has received independent legal advice from its attorneys or the opportunity to seek such advice.

4. Headings or captions to the provisions of this MOU are solely for the convenience of the Parties, are not part of this MOU, and shall not be used to interpret or determine the validity of this MOU. Any ambiguity in this MOU shall not be construed against the drafter, but rather the terms and provisions hereof shall be given a reasonable interpretation as if both parties had in fact drafted this MOU.

5. Any notice, communication, amendment, addition, or deletion to this MOU, including change of address of either Party during the term of this MOU, which shall be required or may desire to make shall be in writing and may be personally served or, alternatively, sent by prepaid first-class mail to the respective parties as follows:

Communications to the County shall be directed to:

David A. Leamon
Department of Public Works
1716 Morgan Road
Modesto, CA 95358
Communications to the City shall be directed to:

William Wong
Director of Utilities
City of Modesto
1010 Tenth Street, Suite 4600
Modesto, CA 95353

ARTICLE III
TERM
The term of this MOU shall be 10-years from the Effective Date until, unless sooner terminated as provided below. At the end of the initial term, the MOU shall renew for successive one (1) year periods, unless either Party terminates the MOU at least 90 days prior to the end of such term.
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Memorandum of Understanding
3 ARTICLE IV

INDEPENDENT CONTRACTOR STATUS
This MOU is by and between two independent parties and is not intended to and shall not be construed to create the relationship of employer, employee, partnership, agent, servant, or joint venture with City or any persons employed by City including subcontractors or employees thereof. The City and County shall control the manner and means of accomplishing the performance of the MOU.

ARTICLE VI

INDEMNIFICATION
Neither Party, nor any of its officers or employees, shall be responsible for any damage or liability occurring by reason of any act or failure to act by the other party under or in connection with any work delegated to that party under this MOU. The Parties further agree, pursuant to Governmental Code Section 895.4, that each Party shall fully indemnify and hold harmless the other Party and its agents, officers, employees, and contractors from and against all claims, damages, losses, judgments, liabilities, expenses and other costs, including litigation costs and attorney fees, (collectively, “Claims”) arising out of, resulting from, or in connection with any work delegated to or action taken or omitted to be taken by such Party under this MOU. The City’s foregoing indemnification obligations shall not apply to any Claims arising out of flooding caused by the alleged failure of the City to properly maintain the Rock Wells.

ARTICLE VII

AMENDMENT
This MOU may be modified, amended, changed, added to or subtracted from by the mutual consent of the Parties hereto if such amendment or change is in written form and executed with the same formalities as this MOU and attached to the original MOU agreement to maintain continuity.

ARTICLE VIII

DISPUTES
The Parties may pursue their respective remedies at law or equity for any claim, controversy, or dispute relating to this MOU.

ARTICLE IX

NON-ASSIGNMENT
Neither Party shall assign, transfer, or further subcontract this MOU, in whole or in part, without prior written approval of the other.
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Memorandum of Understanding
4 ARTICLE X

SEVERABILITY AND SURVIVAL
If any portion of this MOU or application thereof to any person or circumstance shall be declared invalid by a court of competent jurisdiction or if it is found in contravention of any federal, state, or county statute, ordinance, or regulation, the remaining provisions of this MOU or the application thereof shall not be invalidated thereby and shall remain in full force and effect to the extent that the provision of this MOU are severable.

ARTICLE XI

TERMINATION
Each Party retains the right to terminate this MOU without cause upon thirty (30) days advance notice to the other. Each Party retains the right to terminate this MOU due to a breach of the MOU by the other Party, after providing notice and a reasonable opportunity to cure to the breaching Party.

ARTICLE XII

ENTIRE DOCUMENT
This MOU supersedes any and all other agreements, either oral or in writing, between any of the Parties herein with respect to the subject matter hereof and contains all the agreements between the Parties with respect to such matter. Each Party acknowledges that no representations, inducements, promises or agreements, oral or otherwise, have been made by any Party, or anyone acting on behalf of any Party, which are not embodied herein, and that no other agreement, statement or promise not contained in this MOU shall be valid or binding.

ARTICLE XIII

SIGNATURES

1. The person signing this Agreement (“Signatory”) represents and warrants that he or she is duly authorized and has legal capacity to execute this MOU. Signatory represents and warrants that the execution and delivery of the MOU and the performance of Parties’ obligations hereunder has been duly authorized, and that the MOU is a valid and legal agreement binding on Parties and enforceable in accordance with its terms.

2. Each Party agrees that the electronic signatures (whether digital or encrypted) of the Parties included in this MOU are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a Party with the intent to sign such record (including facsimile or email electronic signatures) pursuant to the California Uniform Electronic Transactions Act (Cal.

Civ. Code § 1633.1 et seq.) as amended from time to time. [ signatures appear on following page]
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Memorandum of Understanding
5 IN WITNESS WHEREOF, the parties have caused this MOU to be executed by their duly authorized representatives, as follows:

COUNTY OF STANISLAUS CITY OF MODESTO
A political subdivision of the
State of California
By: _____________________________ By: _____________________________ Jody Hayes Joseph Lopez
Chief Executive Officer City Manager
ATTEST: ATTEST:

By: _____________________________ By: _____________________________ Noemi Leon Diane Nayares-Perez
Clerk of the Board of Supervisors City Clerk
Of the County of Stanislaus,
State of California
APPROVED AS TO CONTENT: APPROVED AS TO CONTENT:

Department of Public Works Utilities Department
By: _____________________________ By: ____________________________ David A. Leamon, Director William Wong, Director
APPROVED AS TO FORM: APPROVED AS TO FORM:

Thomas E. Boze Jose M. Sanchez
County Counsel City Attorney
By: _____________________________ By: ____________________________ Thomas E. Boze Jose M. Sanchez
County Counsel City Attorney
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Memorandum of Understanding
6 EXHIBIT A

SCOPE OF SERVICES

ANNUAL ROCK WELL MAINTENANCE
The City of Modesto (City) and Stanislaus County (County) define the maintenance program, cost allocation, invoicing procedures, and term under which the City of Modesto (City) will perform rock well maintenance.

Annual Rock Well Maintenance (cost) per Rock Well
 Location: 1812 Torrid Ave
 Cleaning: $200/ per well/ year, as needed.
 Rejuvenation: $440/ per well/year (funds a rejuvenation once every 10-years, at City’s discretion
 Estimated Annual Cost: $640/ per well, escalating at 6.2% per year or current CPI.

Rock Wells
Rock Well Location Rock Well Identifier
1812 Torrid Ave East Well
1812 Torrid Ave West Well
Capital Improvements
 City may replace or upgrade any rock well to a drywell, as deemed necessary by the City.
 Capital improvements will be split 50/50 between City and County based on actual expenditures.
 County will reimburse City for 50% of actual costs associated with replacement or upgrade.

Additional Maintenance
 Unscheduled service shall be billed at the annual cleaning rate ($200) plus 6.2%, or current CPI, inflator per year.

Billing
Service Billing Lead Agency
Rejuvenation Once/ten years as needed City
Preventative Annually as needed City
Corrective As needed City
Emergency As needed City
Terms & Exit
 10-year term
 Either party may exit the maintenance agreement for any reason with 30 days’ notice #12..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

March 3, 2026
Date: February 10, 2026
TO: Mayor and City Council
FROM: Colleen Rozillis, City Auditor
SUBJECT: Acceptance of the Enterprise Risk Assessment Report.

CONTACT: Colleen Rozillis, City Auditor, [email protected], 206-302-6795 DESCRIPTION:

Consider accepting the Enterprise Risk Assessment Report dated January 5, 2026. (Funding Source: General Fund)
STRATEGIC PLAN ELEMENT:

The recommended action supports the following 2025-2026 City of Modesto Strategic Plan Initiatives: Goal J: Build a high-performance organization.

BACKGROUND:

City Council approved a Citywide Enterprise Risk Assessment as part of the FY25-26 Internal Audit work plan. These types of assessments should be performed around every three (3) years.

On February 28, 2023, under Resolution 2023-073, Council approved the last Citywide Risk Assessment prepared by Sjoberg Evashenk Consulting, Inc.

DISCUSSION:

This assessment identified, analyzed, and measured risks facing the City. Risk was evaluated across 17 categories of risk, which collectively comprise operations. Risks were assessed considering the level of inherent vulnerability, the level of preparedness to mitigate them, and the impact such negative events could have on the City should they occur. This assessment informs the three-year internal audit work program and provides a way for City leadership to measure the City’s ability to achieve defined strategic objectives and operate effectively.

The following table includes overall risk ratings for each of the 17 categories assessed. Risks were rated on a 5-point scale, ranging from Low to High. The full report includes a detailed summary of risk ratings as well as risk mitigation strategies for each category.

Risk Category Overall Risk Level
Asset Management and Capital Programs Moderate to High
Human Resources Moderate to High
Information Technology Moderate to High
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City Council Agenda Report, March 3, 2026
Acceptance of the Enterprise Risk Assessment Report

Public Safety Moderate to High
Risk Programs Moderate to High
Accounting, Finance, and Budgeting Moderate
Compliance Moderate
Funding and Economics Moderate
Organization and Staffing Moderate
Procurement and Contracting Moderate
Service Delivery Moderate
Governance Low to Moderate
Management and Leadership Low to Moderate
Policies and Procedures Low to Moderate
Reputation and Public Perception Low to Moderate
Ethics and Fraud, Waste, Abuse Low
Planning and Strategy Low
FISCAL IMPACT:

This assessment was budgeted at $45,000 fees and was delivered within budget. This audit amount was funded as part of the General Fund budget.

COMMITTEE RECOMMENDATION:

This item was considered by the Audit Committee on January 21, 2026. The Audit Committee moved to forward to the City Council for acceptance.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Motion accepting the Enterprise Risk Assessment Report.

Approved by:

Colleen Rozillis, City Auditor
Attachments:

1. Enterprise Risk Assessment Report dated 01-05-26
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City of Modesto
Enterprise Risk Assessment
Proprietary & Confidential

FINAL REPORT
January 5, 2026
Baker Tilly Advisory Group, LP
999 Third Avenue, Suite 2800
Seattle, WA 98104
(206) 302-6500
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Enterprise Risk Assessment Report

FOR INTERNAL USE OF CITY OF MODESTO ONLY
Table of Contents
Executive Summary 1
Project Scope 1
Risk Assessment Framework 1
Risk Assessment Results 1
Introduction 4
Project Scope 4
Methodology 4
Risk Assessment Framework 5
Definition of Levels 7
Employee Survey Results 8
Risk Assessment Results 10
High-Risk Categories 10
Moderate to High-Risk Categories 10
Moderate Risk Categories 34
Low to Moderate Risk Categories 53
Low Risk Categories 63
Risk Assessment Survey Results 70
Survey Respondent Profile 70
Risk Category Ratings 71
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Enterprise Risk Assessment Report

FOR INTERNAL USE OF CITY OF MODESTO ONLY
Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. #14..
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EXECUTIVE SUMMARY

PROJECT SCOPE
This enterprise risk assessment provides a way for the leadership of the City of Modesto (the City) to measure uncertainty related to the City’s ability to achieve defined strategic objectives and operate effectively. Risks are identified, analyzed, and measured by the level of inherent vulnerability, the City’s level of preparedness to mitigate them, and the impact negative events could have on the City should they occur.

RISK ASSESSMENT FRAMEWORK
Each risk category assessed has an overview of the risk condition, including the current risk level, likelihood, impact, preparedness, and trajectory, as defined below.

RISK LEVEL
Level of uncertainty that could impair functions and processes, in the absence of any actions taken to alter either the risk’s likelihood or impact.

LIKELIHOOD Qualitative assessment of the probability of a negative event occurring, given the current risk conditions.

IMPACT Level of potential impact of a negative event on strategy, people, operations, systems, and resources.

PREPAREDNESS Level of preparedness, through activities and resources, to manage risks and minimize and limit potential losses.

TRAJECTORY Trajectory of the risk level, given the current risk conditions.

RISK ASSESSMENT RESULTS
This assessment evaluates the City’s risks across 17 categories that collectively comprise operations across the City. The following tables summarize assessment results, organized alphabetically for each risk level.

High Risk
Risk Category Impact Likelihood Preparedness Trajectory No risks identified
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Moderate to High Risk
Risk Category Impact Likelihood Preparedness Trajectory Asset Management and
Capital Programs High High Low to Moderate
Decreasing
– Low
Human Resources Moderate
to High Moderate Low to Moderate Flat
Information Technology High Moderate to
High Moderate Decreasing – Low
Public Safety High Moderate Moderate Decreasing
– Low
Risk Programs Moderate
to High
Moderate to
High Moderate Flat
Moderate Risk
Risk Category Impact Likelihood Preparedness Trajectory Accounting, Finance, and
Budgeting High Low to Moderate
Moderate to
High Flat
Compliance Moderate
to High Moderate Moderate Flat
Funding and Economics High Moderate Moderate to
High Flat
Organization and Staffing Moderate
to High Moderate Moderate Flat
Procurement and
Contracting
Moderate
to High Moderate Moderate Decreasing – Low
Service Delivery High Moderate Moderate Decreasing
– Low
Low to Moderate Risk
Risk Category Impact Likelihood Preparedness Trajectory Governance Moderate
to High
Low to
Moderate Moderate Decreasing – Low
Management and
Leadership
Moderate
to High Moderate Moderate to High
Decreasing
– Low
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Risk Category Impact Likelihood Preparedness Trajectory Policies and Procedures Moderate Moderate Moderate Decreasing – Low
Reputation and Public
Perception
Moderate
to High Moderate Moderate to High
Decreasing
– Low
Low Risk
Risk Category Impact Likelihood Preparedness Trajectory Ethics and Fraud, Waste,
Abuse Moderate Low to Moderate
Moderate to
High
Decreasing
– Low
Planning and Strategy Moderate Moderate Moderate to
High
Decreasing
– Low
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INTRODUCTION

PROJECT SCOPE
The City engaged its internal auditor, Baker Tilly, to conduct an independent enterprise risk assessment to analyze the City’s overarching areas of risk. This assessment provides a way for City leadership to measure the City’s ability to achieve defined strategic objectives and operate effectively. This assessment is also intended to inform the City’s internal audit plan. Risks are identified, analyzed, and measured by the level of inherent vulnerability, the City’s level of preparedness to mitigate them, and the impact negative events could have on the City should they occur.

The Baker Tilly team evaluated 17 categories of risk and the business processes within each category, which collectively comprise operations across the City. Risk assessment procedures included identifying the current levels of risk, likelihood of a negative event occurring, impact of a negative event, and level of preparedness in terms of mitigating negative events. Using this information, the City can identify the most important areas of risk and prioritize risk management efforts accordingly. All City departments were included in the risk assessment process. This assessment includes information provided by City Council members, City leadership, managers, and staff.

The assessment process followed conventional Enterprise Risk Management (ERM) methodology as defined by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and embraced by the Institute of Internal Auditors (IIA).

The enterprise risk assessment process reflects a specific point in time: August to November 2025. The overall risk ratings and trajectory levels are directly connected to this timing.

METHODOLOGY
The enterprise risk assessment process consists of four phases: 1) planning, 2) fact finding, 3) analysis, and 4) reporting. The activities and goals for each phase are described in detail below.

PLANNING
We began planning our assessment by requesting a standard set of documents from the City, including (but not limited to) prior risk assessments, audits, financial reports, public website documents, planning documents, and policies and procedures.

We used these documents to identify the first round of
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individuals to interview and additional document needs based on business process and functional areas.

FACT FINDING
Fact finding encompassed analyzing received documents,
interviewing leadership, including Council Members, City leadership, and managers from various departments, and
soliciting additional employee feedback via an online survey distributed to all full-time City employees. During this phase, we gathered information to gain a clear understanding of the City’s processes and the way it operates to achieve its goals and purpose.

ANALYSIS
With the information collected and compiled, we performed a risk assessment that included a comprehensive review and analysis of the various risk categories. This analysis included assessing current risk conditions and their trajectory, the level of preparedness efforts to mitigate risks, and the probability and potential impact a negative event may have on City’s ability to achieve its mission, vision, and strategic goals.

REPORTING
During this phase, we developed a final report and engaged in a review and discussion with senior leadership. Based on
feedback, we finalized our report for delivery to City
management.

The enterprise risk assessment process relies heavily on evidence obtained from employees. By design, the assessment process requires access to all senior leadership and many department and division managers. Full disclosure of information has been assumed in this process.

RISK ASSESSMENT FRAMEWORK
The process to identify and assess risks considers both internal and external factors. As part of this risk assessment, Baker Tilly used a variety of techniques, both qualitative and quantitative, to identify external and internal factors that contribute to risk. Risk assessments involve a dynamic and iterative process to identify and analyze risks to the City’s ability to achieve its objectives, forming a basis for determining how risks should be managed.
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For each risk category assessed, our assessment includes an overview of the risk condition, including the current risk level, likelihood, impact, preparedness, and trajectory. In addition, risk mitigation identifies potential strategies to reduce overall risk for each category, and residual risk represents the probable risk exposure after risk mitigation efforts have been implemented. The elements provided below make up the risk assessment framework, which are industry standard and defined by COSO’s ERM methodology.

RISK LEVEL
Level of uncertainty that could impair
functions and processes, in the
absence of any actions taken to alter
either the risk’s likelihood or impact.
● Low
● Low to Moderate
● Moderate
● Moderate to High
● High
IMPACT Level of potential impact of a negative
event on strategy, people, operations,
systems, and resources.
● Low
● Low to Moderate
● Moderate
● Moderate to High
● High
LIKELIHOOD Qualitative assessment of the
probability of a negative event
occurring, given current risk
conditions.
● Low
● Low to Moderate
● Moderate
● Moderate to High
● High
PREPAREDNESS Level of preparedness, through
activities and resources, to manage
risks and minimize and limit potential
losses.
● Low
● Low to Moderate
● Moderate
● Moderate to High
● High

TRAJECTORY
Trajectory of the risk level, given the
current risk conditions.
● Decreasing – High
● Decreasing – Low
● Flat
● Increasing – Low
● Increasing – High

RISK MITIGATION
Potential strategies for reducing risk.
● Based on the current
risk conditions.
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RESIDUAL RISK Possible remaining exposure after
known risks have been mitigated
through specific actions.
● Low
● Low to Moderate
● Moderate
● Moderate to High
● High

DEFINITION OF LEVELS
For each risk factor category, we assigned an overall risk level rating. These risk levels are intended to provide City leadership with a means of prioritizing remediation efforts.

Definitions of each risk level are explained in the tables that follow.

Risk Level Definitions
Risk Significance
High Represents significant risks that should be addressed immediately
Moderate to High Represents serious risks that should be addressed expeditiously
Moderate Represents moderate risks that should be addressed as soon as reasonably possible
Low to Moderate Represents ordinary risks that should be addressed during the next review cycle
Low Represents a minor threat to the City
Impact Level Definitions
Risk Significance
High Threatens the success of the City/service delivery Moderate to High Substantial impact on time, cost, or quality Moderate Notable impact on time, cost, or quality
Low to Moderate Minor impact on time, cost, or quality
Low Negligible impact
Likelihood Level Definitions
Risk Significance
High Almost certain to occur with current risk conditions #14..
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Risk Significance
Moderate to High Very likely to occur with current risk conditions Moderate Likely to occur with current risk conditions
Low to Moderate May occur with current risk conditions
Low Unlikely to occur with current risk conditions
Preparedness Level Definitions
Risk Significance
High
Risk preparedness activities are robust and likely to be sustained, with readily available evidence attesting to this level of achievement
Moderate to High Risk preparedness efforts are well established, documented, and stable
Moderate Deliberate risk preparedness efforts are underway; important gaps remain
Low to Moderate Preliminary risk preparedness efforts have been initiated although few, if any, have been implemented
Low Minimal risk preparedness activity
Trajectory Definitions
Risk Significance
Increasing Inherent risk is increasing in current conditions Flat Inherent risk is holding steady in current conditions Decreasing Inherent risk is decreasing in current conditions

EMPLOYEE SURVEY RESULTS
We distributed an all-staff survey that offered staff the opportunity to identify the City’s perceived strengths and weaknesses, which helped us assess potential opportunities for improvement and identify areas of specific vulnerability. The survey posed a variety of statements about each risk category to employees, including rating scale questions and open-ended questions. The confidential questionnaire was distributed to employees and open for submission from September 5, 2025 through September 22, 2025. Out of the 1,303 employees invited to take the survey, 428 individuals submitted responses to the survey (a participation rate of 33%). Survey results are noted in each section where #14..
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relevant, and respondent demographics and overall risk ratings are included in the Risk Assessment Survey Results of this report.

The overall risk ratings summarized below reflect responses from management-level staff only, as staff were not asked to provide ratings on overall risk in each category.

Survey ratings are not a primary source of information used for our overall assessment and recommendations. Instead, they provide additional context and a point of comparison to understand staff sentiment and identify trends occurring across departments. Survey responses reflect moderate concern levels consistent with our evaluation. Readers should consider these survey insights as complementary context that highlights staff sentiment and helps identify trends, rather than as standalone measures of risk.

Risk Category Risk
Assessment
Employee
Survey Results
Accounting, Finance, and Budget Moderate Moderate
Asset Management and Capital Programs Moderate to High Moderate Compliance Moderate Moderate
Ethics and Fraud, Waste, and Abuse Low Moderate
Funding and Economics Moderate Moderate
Governance Low to Moderate Moderate
Human Resources Moderate Moderate
Information Technology Moderate to High Moderate
Management and Leadership Low to Moderate Moderate
Organization and Staffing Moderate Moderate
Planning and Strategy Low Moderate
Policies and Procedures Low to Moderate Moderate
Procurement and Contracting Moderate Moderate
Public Safety Moderate to High Moderate
Reputation and Public Perception Low to Moderate Moderate Risk Programs Moderate to High Moderate
Service Delivery Moderate Moderate
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RISK ASSESSMENT RESULTS
For each risk category assessed, our risk assessment includes an overview of the risk condition, including the levels for overall risk, impact, likelihood, preparedness, and trajectory of the risk conditions. We identified potential risk mitigation strategies intended to reduce overall risk for each category. The residual risk level represents the probable risk exposure after risk mitigation efforts are implemented.

The levels and corresponding color coding for each risk condition, impact, likelihood, preparedness, and trajectory are represented in the table below.

Impact Likelihood Preparedness Trajectory
High High Low Increasing – High
Moderate to High Moderate to High Low to Moderate Increasing – Low Moderate Moderate Moderate Flat
Low to Moderate Low to Moderate Moderate to High Decreasing – Low Low Low High Decreasing – High

HIGH-RISK CATEGORIES
No risk categories were identified as high risk.

MODERATE TO HIGH-RISK CATEGORIES
Asset Management and Capital Programs
Overall Risk Level: Moderate to High
Impact Likelihood Preparedness Trajectory
High High Low to Moderate Decreasing – Low
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Risk Mitigation
● Develop a comprehensive list of unfunded projects to enable effective planning and resource allocation.
● Continue efforts to standardize the process for estimating and reporting CIP project budgets across departments to increase the reliability of information for decision-making. ● Continue efforts to improve interdepartmental collaboration between the engineering functions in the City.
● Continue efforts to increase and prioritize funding dedicated to deferred maintenance to reduce the backlog and reduce asset deterioration.
● Develop a parks master plan to promote effective parks planning and resource management.
● Develop a clear and transparent process for prioritizing deferred maintenance needs to promote fair resource
allocation and benefit all parts of the community.
● Continue efforts to hire a full-time Fleet Manager to support the City’s fleet management needs.
● Centralize or standardize the City’s inventory management system to improve consistency and accuracy.
● Document comprehensive asset management data in a
database or system for the City’s utility infrastructure to better be able to predict and address utility needs.

Residual Risk LOW TO MODERATE
Scope: This area covers risks related to managing and safeguarding the City’s physical and capital assets (including facilities, vehicles, equipment, and related resources) across their lifecycle from supply and deployment to maintenance, tracking, and reporting. It also includes risks tied to capital improvement programs such as planning, financing, construction, contract compliance, and project closeout.

These activities rely on integrated strategies, processes, people, and technology to ensure service levels are met while minimizing asset ownership costs.

The City is working on improving its asset management and capital programs, partially supported by Measure H funding and documented plans such as its Capital Improvement Program Plan and a completed Facility Condition Assessment. However, staff identified several challenges largely related to deferred maintenance needs in several areas across the City, inconsistent asset management practices, and challenges managing capital improvement project budgets across projects. #14..
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Capital Improvement Program
The City maintains a five-year Capital Improvement Program (CIP) that directs the funding and execution of all public improvement projects, encompassing both replacement and expansion initiatives. For the FY 2025 budget, the City allocated $306,127,268 for capital improvement projects across more than 180 projects. This budget was developed through a collaborative process involving the Finance Department and other relevant departments, followed by reviews from the Planning Commission and Finance Committee, and ultimately approved by the City Council. Most surveyed employees (86%) rated the CIP process as average or better.

Q: How would you rate the processes the City uses to identify and prioritize capital improvement projects?
While the City has an established CIP, the City does not have a comprehensive list of unfunded projects, which makes it difficult to plan for and complete these projects. This lack of visibility into unfunded projects creates risk by potentially delaying critical improvements and limiting the City’s ability to allocate resources effectively in response to emerging needs.

Furthermore, as noted in the CIP Assessment completed as part of the FY 2025 Internal Audit Program, the City lacks a standardized method for estimating and reporting CIP project budgets across departments. Because departments use different assumptions and formats, it is difficult to compare data or aggregate information reliably for decisionmaking and oversight. This inconsistency raises the risk of inaccurate budgeting, misallocation of resources, and difficulties tracking project progress. Staff reported this issue is being addressed in the current budget cycle.

Several CIP projects involve multiple departments, particularly those requiring engineering services. Engineering functions are distributed across three groups:

Engineering Services Department, Traffic Engineering within Public Works, and Engineering Services within Utilities. Staff reported that due to this interdepartmental approach, some engineering projects lack sufficient coordination, which can impede strategic planning, resource allocation, and may result in duplicative efforts. To address this, the City is actively working to improve interdepartmental collaboration. A recent Excellent, 1%
Good, 30% Average, 55% Poor,
13%
Terrible, 1%
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initiative includes integrating a Geographic Information System (GIS) layer into the City’s system, enabling visual mapping of engineering projects across departments.

This tool will support better coordination and planning of capital projects citywide across all engineering functions and support risk reduction in this area.

Deferred Maintenance
The City faces significant deferred maintenance and replacement needs across several areas, including the Fire Department, parks, forestry/trees, and sidewalks. Measure H funding has been allocated to address some of these concerns, with $2.2 million (5% of Measure H funds) dedicated to deferred maintenance in the FY 2025 budget. While this funding helps reduce risk exposure by addressing maintenance issues and mitigating future costs, many unmet needs remain, increasing the likelihood of asset failure, higher repair expenses, and potential safety hazards.

The City also lacks a comprehensive master plan to guide park development and prioritize deferred maintenance projects specifically for parks. More broadly, staff reported the process for prioritizing deferred maintenance needs across all areas lacks clarity, particularly regarding equitable resource allocation, which increases the risk of unfair distribution and challenges in achieving outcomes that benefit the entire community.

Facilities
At the end of 2024, a consultant conducted a Facilities Condition Assessment (FCA) for the City, which rated overall facility conditions as “fair,” reflecting a mid-level status with some assets needing immediate attention and others recently updated. The assessment identified approximately $123.8 million in facility needs over the next five years. While Measure H funding will address part of these needs, it will not cover the majority, requiring the City to secure additional funding for the remaining improvements.

Unfunded deferred maintenance creates risks of accelerated asset deterioration, increased safety hazards, and significantly higher repair costs in the future.

Survey respondents gave mixed ratings on City facilities, with 42% rating them as average, consistent with the FCA findings. Many noted outdated conditions and safety concerns such as poor air filtration, mold, and elevator problems. Beyond safety risks, negative perceptions of facilities can lower morale and damage the City’s reputation. #14..
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Q: How would you rate the condition of the facilities (buildings) used by the City? Streets and City Canopy
The City’s pavement condition index (PCI), which measures pavement quality on a scale from 0 to 100%, currently stands at 63%, indicating a moderate overall condition of roadways. Staff noted this represents an improvement over previous years, reflecting the positive impact of recent maintenance and rehabilitation efforts. However, a PCI of 63% also highlights the need for continued investment and planning to further improve pavement conditions, ensure safety and reliability for community members, and avoid high repair costs in the future.

Staff reported significant improvements in forestry management over the past few years, supported by increased funding and dedicated personnel. These enhancements have allowed the City to establish a more consistent and systematic maintenance cycle for the urban tree canopy. Regular activities such as pruning, hazardous tree removal, and new tree planting help sustain the health and longevity of the canopy, contributing positively to the City’s environment.

Equipment and Fleet Maintenance
The City manages equipment at the department level and manages all fleet within the Fleet Division. Maintenance of these types of assets can be improved at the City to support reduced risks.

Staff reported challenges in fleet replacement due to a backlog in acquiring new vehicles, a vacant Fleet Manager position, and difficulties maintaining an accurate fleet inventory, which may result in increased maintenance costs or an insufficient fleet to meet operational demands. Survey feedback reflects broader concerns about equipment condition, with 46% of employees rating it as average and many noting issues not only with vehicles but also with other equipment and personal protective gear. Outdated or poorly maintained equipment increases the risk of high costs, decreased efficiency, safety hazards, and potential disruptions in City services.

Excellent, 5%
Good, 28% Average, 42% Poor, 20%
Terrible, 5%
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Q: How would you rate the condition of the non-IT equipment you use for your job? Inventory and Asset Management
Asset management practices vary across departments, leading to inconsistencies in how assets are tracked and monitored. This variation increases the risk that some assets may be overlooked, improperly tracked, or unaccounted for, resulting in inefficient resource use, unexpected maintenance costs, and difficulties in long-term planning.

The City lacks a centralized inventory management system, and while a central store exists for purchasing, equipment acquired outside this system may not be properly inventoried. Departments rely on different systems or manual spreadsheets to manage inventory, contributing to inconsistent tracking. Reflecting these challenges, 54% of employees surveyed agreed that assets are only moderately well tracked and accounted for. Without standardized procedures and a unified system, there is a risk of inaccurate inventory records, which can undermine effective asset management and compromise the accuracy of the City’s financial statements.

Q: How well do you feel the assets of the City are tracked and accounted for? As noted in the Utility Fiscal Review Performance Audit completed as part of the FY 2024 Internal Audit Program, the City has some asset management data for its utility infrastructure but does not have comprehensive information such as installation dates, renewal periods, or estimated costs for all its water, wastewater, and storm drain infrastructure. Furthermore, this data is not consistently maintained within a centralized database or system, limiting operational efficiency. Without comprehensive and wellorganized utility asset data, the City’s ability to predict and prioritize maintenance needs is constrained, leading to a reactive maintenance approach that is less strategic and Excellent, 8%
Good, 29% Average, 46% Poor, 14%
Terrible, 3%
Extremely well, 3%
Very well, 19% Moderately well, 54% Slightly well,
17%
Not well at all, 7%
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often more costly. Properly maintained utility assets are essential to sustaining operations and safeguarding the community by ensuring access to clean water and effective wastewater management. Staff reported the City is planning to move forward with a study to complete a asset management gap analysis for its utilities in 2026.

Human Resources
Overall Risk Level: Moderate to High
Impact Likelihood Preparedness Trajectory
Moderate to High Moderate Low to Moderate Flat
Risk Mitigation
● Regularly review and update the employee manual to
ensure policies reflect current laws, best practices, and organizational needs.
● Accelerate the transition to digital HR systems for personnel files, I-9 verification, benefits administration, performance evaluation, and other HR processes to improve record
accuracy, compliance, and operational efficiency.
● Streamline and resource the investigation process to ensure timely resolution of employee matters.
● Continue efforts to enhance recruitment strategies, such as by expanding outreach, leveraging partnerships, and
optimizing hiring workflows to address talent shortages and improve candidate experience. This includes developing
targeting campaigns for hard-to-fill positions.
● Continue efforts to use compensation study findings to guide competitive pay adjustments as needed.
● Monitor benefit cost trends and explore cost-containment strategies to maintain fiscal sustainability while offering competitive packages.
● Establish a formal, City-wide succession planning
framework, prioritizing leadership roles and critical positions to preserve institutional knowledge and promote operational continuity.
● Continue efforts to centralize the City’s learning
management system.
● Develop structured career pathways and development plans to support employee growth and strengthen talent retention. ● Clarify and consistently enforce performance expectations and consequences to reinforce accountability all levels and reduce performance management risks.
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Residual Risk LOW TO MODERATE
Scope: Risks associated with labor management and human resources include hiring, onboarding, employee performance, training, compensation and benefits, retention, succession planning, grievances, overtime, resource availability, diversity, wellness, and communication.

The mission of the Human Resources Department (HR) is to recruit, develop, and retain a diverse, well-qualified, healthy, professional, and productive workforce. HR provides citywide HR services, including recruitment, benefits administration, employee relations, and training.

Staff reported generally positive perceptions of HR customer service, noting HR is approachable and helpful. Maintaining strong HR support is important to promote employee satisfaction, reduce workplace conflicts, and support compliance with employment laws, all of which contribute to reduced HR risks.

Q: How would you rate the quality of internal customer service provided to staff by the HR Department?
HR Policies and Processes
The City’s employee manual includes several key policies, such as equal employment opportunity (EEO), anti-harassment and discrimination, ethics, recruiting and hiring, compensation, and grievance procedures. However, the manual has not been updated since 2013. This outdated status poses risks including non-compliance with current laws and regulations, gaps in addressing evolving workplace issues, and diminished clarity for both employees and management. These factors can lead to misunderstandings, inconsistent policy application, and increased legal and reputational exposure for the City.

While staff reported some HR processes have been recently modernized (e.g., onboarding), some processes are still paper based, including personnel files, I-9 verification, and some performance evaluation and benefits related processes.

Excellent, 22% Good, 42% Average, 25%
Poor, 10%
Terrible, 1%
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Continued reliance on paper based manual processes raises the risk of lost or inaccurate records, compliance issues, and reduced operational efficiency.

City Culture and Employee Relations
Employee satisfaction across the City is relatively high. In the City’s March 2024 Employee Engagement Survey, 86% of employees reported being satisfied with their jobs, describing the City as a meaningful place to work that provides a sense of belonging and professional growth. The survey conducted for the risk assessment showed a decrease in these results with 48% of employees rating the City’s culture as excellent or good. Overall, staff described the workplace as welcoming and collaborative, and many expressed appreciations for supportive supervisors and a shared commitment to serving the community. However, with 13% of staff rating the culture as poor and 3% as terrible, there are potential risks related to employee engagement and motivation. In interviews some staff expressed concern that not all employees across departments are treated equally, suggesting ongoing risk mitigation work is needed to strengthen perceptions of fairness and equity across teams.

Q: How would you rate the City’s current workplace culture (e.g., welcoming, including, trusting, transparent)?
Employee relations play a critical role in maintaining a positive work environment, addressing employee concerns, and ensuring fair and consistent treatment across the City. Investigations into employee matters typically involve examining complaints or allegations related to workplace conduct, policy violations, or other personnel issues to determine facts and guide appropriate actions. Staff consistently reported that the investigation process is slow, which delays resolution of these matters and impacts workforce productivity. Several staff reported this concern is one of the City’s biggest challenges. Delays in resolving employee issues can increase risks such as decreased morale, prolonged conflicts, potential legal exposure, and reduced overall City effectiveness.

Excellent, 10%
Good, 38% Average, 36% Poor, 13%
Terrible, 3%
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Recruitment
Staff reported HR has made recent improvements to the City’s recruiting processes, including dedicating staff to assist high-need departments, attending job fairs, and conducting targeted outreach. These efforts have resulted in faster hiring timelines, which reduces risks related to staffing shortages, operational disruptions, and increased overtime costs. Still, most survey respondents (45%) rated the City’s recruitment process and support as average, suggesting continued opportunities for improvement.

Q: How would you rate the City’s recruitment processes and support? As is common for cities across the country, staff reported recruitment for specialized roles (e.g., engineering) is an ongoing challenge, which can lead to talent shortages in critical positions.

Compensation and Benefits
The City’s 2023 Compensation Study found that most City positions fall significantly below peer agency averages, creating challenges in attracting and retaining qualified staff. While this study is being used to guide upcoming adjustments, below-market pay remains a key vulnerability. Survey respondents were divided in their views on compensation, with 43% rating it as average, 22% as good, and 23% as poor. Several narrative responses indicated benefits are a key concern for employees. Negative perceptions of compensation and benefits among staff can contribute to uncertainty and dissatisfaction, potentially impacting retention and engagement if concerns are not addressed.

Q: How would you rate the competitiveness of the City’s compensation and benefits?
Excellent, 4%
Good, 26% Average, 45% Poor, 21%
Terrible, 4%
Excellent, 6%
Good, 22% Average, 43% Poor, 23%
Terrible, 6%
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Industry wide, benefit costs are projected to increase in the future, which could put a financial strain on the City’s budget. Rising industrywide benefit costs could increase fiscal pressure in coming years, risking the City’s ability to offer competitive compensation and benefits in the future.

Succession Planning
Succession planning was commonly cited as a concern by staff, as it is not consistently prioritized across departments. This risk is exacerbated given that about 20% of City employees will be eligible for retirement within five years, including several employees in leadership positions. In addition to retirement, turnover rates can increase the need for succession planning. As explored in Organization and Staffing, overall turnover rates are generally in line with industry standards, but some supervisory positions experienced frequent turnover from 2022 to 2025, which may result in loss of institutional knowledge and potential disruptions in service delivery.

Inconsistent prioritization of succession planning, especially when a notable portion of employees are nearing retirement, poses risks related leadership gaps, loss of institutional knowledge, and operational disruptions that could hinder the City’s ability to maintain continuity and effective service delivery.

Training and Performance Management
HR provides new employee training, compliance training, and other training opportunities for staff. The City has also invested in improving training for managers and supervisors in recent years. Overall, a combined 61% of survey respondents rated their access to training and development resources as excellent or good, suggesting the City’s investment in training is valued.

Q: How would you rate your access to the training and professional development resources you need to grow your career?
The City does not currently have a centralized learning management system to support training delivery and recordkeeping, though the City is exploring implementation of NeoGov’s Learn platform for this purpose. Implementing a centralized system reduces Excellent, 22% Good, 39% Average, 27%
Poor, 9%
Terrible, 4%
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risk by promoting consistent training compliance, improving record accuracy, and enhancing accountability for timely completion.

Performance Management
The City has a formal performance evaluation system, with reviews at the 3-, 6-, and 9- month marks for probationary employees, and then annually after the first year. Overall, most survey respondents rated the performance evaluation and appraisal process as at least moderately effective. Staff reported that high levels of paperwork requirements may limit efficiency. HR is in the process of revamping evaluations to make them faster and more meaningful while preserving accountability.

Q: How would you rate the effectiveness of the current performance evaluation/appraisal process?
While the City has an established performance evaluation process, the City does not consistently provide formal career development plans for employees. Without structured pathways, the City may struggle to fully retain and advance talent.

When asked about the constructive guidance they receive to address performance gaps, employees provided somewhat more positive feedback. Nearly half (46%) rated the guidance they receive as good or excellent and another 40% rated guidance as average, indicating that most employees feel they receive some actionable feedback from supervisors.

Q: How would you rate any constructive guidance you have been provided on how to improve any performance gaps (e.g., clear steps on what needs to be improved, and what that improvement looks like)?
Extremely effective, 4%
Very effective, 16%
Moderately
effective, 40%
Slightly
effective, 20%
Not effective
at all, 19%
Excellent, 10%
Good, 36% Average, 40%
Poor, 11%
Terrible, 3%
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Perceptions of accountability and corrective action were mixed, suggesting employees may perceive gaps between performance expectations and follow-through on consequences when improvement does not occur.

Q: How would you rate the process for placing low-performing employees on a performance improvement plan and taking subsequent action if no improvements are made?
Q: How often are non-supervisory employees consistently held accountable for their actions?
Q: How often are management-level employees consistently held accountable for their actions?
Information Technology
Overall Risk Level: Moderate to High
Impact Likelihood Preparedness Trajectory
High Moderate to High Moderate Decreasing – Low
Excellent, 3%
Good, 28% Average, 39% Poor, 19%
Terrible, 10%
Always, 14%
Most of the
time, 39%
About half the time, 11%
Sometimes,
29%
Never, 7%
Always, 12%
Most of the
time, 35%
About half the time, 11%
Sometimes,
28%
Never,
14%
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Risk Mitigation
● Continue efforts to develop and implement comprehensive IT policies, including those related to information security, access control, physical security, and technology and data
governance.
● Consider hiring a permanent position dedicated to
cybersecurity to ensure consistent oversight, continuity in managing threats, and effective long-term cybersecurity planning.
● Continue to provide regular cybersecurity training to staff to keep them aware of evolving threats and improve their ability to prevent and respond to cyber incidents.
● Conduct periodic penetration testing to identify system vulnerabilities and guide timely remediation efforts.
● Apply structured project management and risk management practices to new technology rollouts to minimize delays, cost overruns, and operational disruptions.
● Review the current hardware replacement schedule to ensure risks related to outdated equipment are proactively managed.

Residual Risk MODERATE
Scope: Risks associated with the design, development, implementation, administration, operations, and maintenance of information systems including change management and system development life cycle. Also includes cybersecurity risks and risks to infrastructure, system performance, data architecture and management, integration, back-up, security, privacy, outsourcing, and controls. The importance and pervasiveness of information technology and information systems continues to rapidly expand, regardless of organization.

The City’s Information Technology Department (ITD) provides technology services, support and guidance to City departments. ITD reports to the Deputy City Manager for Support Services and is overseen by a Chief Information Officer (CIO). ITD includes many functions, including but not limited to the City’s technology infrastructure, enterprise applications, and cybersecurity.

The City’s IT support environment has reportedly improved over the last two years and staff reported strong collaboration between IT and other departments. Survey results also suggest strong satisfaction with IT support services. Nearly two-thirds (64%) of staff rated IT customer service as excellent or good. This reflects an overall perception that IT provides responsive and effective internal service. #14..
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Q: How would you rate the quality of the internal customer service provided to staff by the IT team?
IT Policies
The City has some established IT policies, including a computer use policy and a change control policy. However, several important policies have not been established or are in draft form. For instance, the City does not have an established information security policy to set the overall framework, roles, and responsibilities for protecting all City information assets. The City also lacks completed policies related to access control, physical security, and data privacy. Without these key policies, the City faces increased risks such as unauthorized access, data breaches, and inconsistent handling of sensitive information. These gaps can weaken the overall security posture and make it harder to manage and reduce IT risks effectively. An internal audit project is ongoing to review IT policies and procedures and staff reported several IT policies and procedures are currently in progress.

Cyber and Information Security
Cybersecurity is a critical concern for any jurisdiction. The City experienced a cybersecurity attack in 2023 and the risk and sophistication of attacks remains an ongoing threat across the industry. As noted above, the City does not have comprehensive IT policies in place, many of which are important to reduce risks related to cyber and information security.

The City has a dedicated cybersecurity position. This reduces risk in providing focused oversight and management of cybersecurity threats, helping to detect and respond to incidents more quickly. However, this position is currently filled on a temporary basis which may limit continuity and long-term planning, increasing the risk that important cybersecurity initiatives could be delayed or inconsistently managed.

Staff reported cybersecurity training is conducted monthly. Of surveyed staff, 98% reported they have received training focused on cybersecurity and 76% reported feeling very or extremely prepared as a result. Regular training helps reduce the risk of security Excellent, 25% Good, 39% Average, 28%
Poor, 6%
Terrible, 2%
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breaches by increasing staff awareness of threats and improving their ability to recognize and respond to potential cyber incidents.

Q: Have you received training focused on cybersecurity (e.g., best practices, resources, etc.) provided by the City within approximately the last year? Q: Based on this training, how prepared do you feel to identify, report, or manage a cybersecurity threat?
The City has not conducted regular penetration testing. Penetration testing is a controlled process where experts simulate cyberattacks to find weaknesses in systems before real attackers can exploit them. Without regular penetration testing, the City may be unaware of vulnerabilities in its IT systems, increasing the risk of successful cyberattacks and data breaches.

The City has an established technology disaster recovery plan, which provides a plan to respond to a disaster that significantly impacts the City’s central computer systems.

Such a plan helps staff restore operations as quickly as possible after a disaster and is important to reduce risks associated with prolonged system downtime, data loss, and service interruptions.

IT and Data Governance
Staff reported IT governance is generally working well. The Technical Steering Alignment Committee, facilitated and led by ITD, was established to review departmental IT needs and promote alignment and cost effectiveness across the City.

ITD is also involved in purchases for new technology, including systems and hardware.

Such processes are important because they help ensure that IT investments align with City goals, optimize resource use, and reduce risks associated with uncoordinated or Yes, 98%
No, 1%
I don't know, 1%
Extremely
prepared, 28% Very prepared, 48% Moderately prepared, 20% Slightly prepared, 3%
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redundant technology acquisitions. However, the City does not have a formal, documented IT governance policy, which can lead to inconsistencies in decision-making and accountability and increase the risk of misaligned priorities across departments.

The City does not yet have a formal data governance policy in place, though one is being developed. Such a policy is important to reduce risks related to inconsistent data management practices, data quality issues, compliance, and data privacy. This is a key need as the City moves forward with expanding its open data initiatives.

Systems Environment
The City maintains City-wide technology infrastructure, including an enterprise resource planning (ERP) system and a comprehensive human resource information system (HRIS). Staff reported a generally sufficient systems environment and noted that most systems are well integrated, though some concerns were noted in interviews with the limited functionality of the City’s work order and document management systems (Lucity and OnBase, respectively), which can create inefficiencies in these areas. Overall, 41% of survey respondents rated the quality of IT systems as good or excellent.

Q: How would you rate the quality of the information technology systems (e.g., software, applications, programs, etc.) that you currently have and use in your role?
The City is implementing a new Computer-Aided Dispatch (CAD) system for public safety and upgrading its phone system. Any technology implementation carries risks, including potential delays, cost overruns, technical challenges, and disruptions to existing operations. Such risks can be particularly impactful for such a critical public safety system.

Staff reported the City maintains an up-to-date critical software inventory. This is important because it enables more effective management of software assets, helps identify outdated or unsupported applications that may pose security vulnerabilities, and ensures compliance with licensing requirements.

Excellent, 8%
Good, 33% Average, 43%
Poor, 11%
Terrible, 4%
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Hardware
Staff reported that a standard IT replacement schedule is in place for end-user devices.

This is important to manage risks associated with outdated equipment, such as those related to performance and security. Overall, 40% of employees rated IT hardware quality as good or excellent, though several respondents noted concerns with outdated computers. The replacement schedule supports ongoing equipment updates, though continued monitoring is important to address any remaining issues.

Q: How would you rate the quality of the information technology hardware (e.g., computers, accessories, etc.) that you currently have and use in your role? Public Safety
Overall Risk Level: Moderate to High
Impact Likelihood Preparedness Trajectory
High Moderate Moderate Decreasing – Low
Risk Mitigation
● Continue efforts to identify drivers of missed response time targets and deploy targeted improvements to meet
established response time benchmarks.
● Continue efforts to address traffic safety through a balance of education, enforcement, and engineering initiatives. ● Continue efforts to address homelessness-related risks, such as through enhanced interdepartmental and partner
collaboration and continued investments in housing and
prevention programs.
● Continue to support the CPRB in its police oversight role to strengthen community accountability.
● Develop and execute a leadership succession plan for the MFD Chief to promote a smooth transition and maintain
operational continuity within the department.
● Continue efforts to address deferred maintenance and
facility repairs in MFD.

Excellent, 9%
Good, 31% Average, 43%
Poor, 11%
Terrible, 6%
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● Review staffing and overtime in MFD to identify underlying causes of increased overtime and implement strategies that optimize workforce capacity and control labor costs.

Residual Risk LOW TO MODERATE
Scope: Risks associated with public safety services, including level of services, funding, and community issues. Includes emergency services such as law enforcement, fire, dispatch, and community disaster response programs.

The City has made progress in public safety, with Modesto Police Department major crimes statistics1 showing a 7% decrease in major crimes year-to-date, from 1,941 major crimes in 2023 to 1,801 major crimes in 2024, indicating reduced risks. However, ongoing challenges remain, including national issues affecting law enforcement morale, recruitment, and community trust.

While calls for service fell 14% from 2021 and 2024, they rose 8% between 2023 to 20242, which can result in an increased operational workload and potentially impact response times. In FY 2025, Modesto Police Department’s (MPD) response time to priority one calls was 6.23 minutes, greater than their five-minute established benchmark. Staff reported they are looking into this issue to determine the key drivers and develop a strategy for reducing response times.

Homelessness and traffic issues remain areas of elevated risk. According to data from the State of California3, the City was ranked among the worst in the state for traffic issues, having the highest number of total fatal and injury crashes for cities of its size.

To mitigate this risk, the MPD has increased staffing in its traffic unit, reintroduced redlight cameras, and launched a threat assessment group to review each traffic fatality.

According to Stanislaus County’s Point-in-Time count of sheltered and unsheltered people experiencing homelessness, the City of Modesto had 1,622 people experiencing homelessness in 2024, an increase from 1,433 in 2022. The City recently launched several housing initiatives to support reduced risks related to homelessness, including new shelter sites and homelessness prevention programs. However, effective public safety services like homelessness response require strong coordination among multiple departments and external partners, which can be challenging when many groups are 1 MPD June 2024 Report (pdf)
2 MPD Annual Report 2024 (pdf)
3 California Office of Traffic Safety Crash Ranking Results #14..
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involved in addressing the same issues. An assessment as part of the FY 2026 Internal Audit Program will review the City’s response to homelessness.

Survey results reflect mixed perceptions of public safety in the community among City staff, as shown in the chart below. Aligned with the above, staff reported areas such as traffic safety and homelessness as ongoing priorities in narrative responses.

Q: How would you rate the overall feeling of safety in the community? Police Accountability
MPD has worked to improve accountability and public trust in recent years. In 2022, the City established the Community Police Review Board (CPRB) following recommendations from the City’s Forward Together Working Group that responded to calls for police reform locally and nationally. The CPRB serves as an independent civilian oversight body that reviews the independent police auditor’s annual report and analysis of completed administrative investigations; department use of force incidents; and critical incidents such as officer involved shootings, in-custody deaths, and other events resulting in major incident review. As a relatively new oversight body, staff reported the City and the CPRB are continuing to understand and refine the CPRB’s role and develop its capacity to effectively navigate the complexities of civilian oversight.

MPD uses body-worn cameras to document police interactions, increase officer accountability, and provide objective evidence in investigations and complaints. MPD also distributes surveys to community members following certain police interactions to gather feedback and identify areas for improvement. Despite these efforts, interviews and recent annual reports indicate that use-of-force incidents and officer-involved shootings remain a priority focus due to their inherent seriousness, underscoring the ongoing challenges police departments face in balancing effective law enforcement with community safety and trust.

Modesto Fire Department (MFD)
While staff generally reported strong fire operations, the MFD Chief is set to retire in FY 2026. Turnover in key leadership positions can create gaps or transitional challenges that affect department operations. Additionally, MFD staff reported significant deferred Excellent, 4%
Good, 29% Average, 48% Poor, 17%
Terrible, 2%
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equipment maintenance and facility repairs, posing risks to equipment reliability, firefighter safety, and emergency response effectiveness.

MFD overtime hours increased about 10% between FY 2022 and 2024, compared to a

4.8% decrease in MPD overtime during the same time period. The rise in overtime may reflect staffing shortages or increased emergency call volumes, which can lead to firefighter fatigue and burnout, potentially impacting response times and decisionmaking during critical incidents. While overtime is a common tool used in public safety departments to ensure adequate coverage during peak demand periods, increased overtime contributes to higher labor costs, placing additional strain on the department’s budget and potentially limiting resources available for equipment maintenance, training, or other critical needs.

Risk Programs
Overall Risk Level: Moderate to High
Impact Likelihood Preparedness Trajectory
Moderate to High Moderate to High Moderate Flat
Risk Mitigation
● Review driver safety training and vehicle use policies to identify potential opportunities to reduce liability exposures and associated claims.
● Continue to prioritize workplace safety programs and injury prevention initiatives, with targeted focus on high-risk departments, to maintain and improve employee safety
outcomes.
● Review workers’ compensation claims management
procedures to identify opportunities to streamline processes, enhance timeliness, and increase employee satisfaction. ● Conduct a review of facility access and security to identify any potential vulnerabilities and address any identified issues to improve employee safety and confidence.
● Develop and implement comprehensive emergency
operations, continuity of operations, and crisis
communication plans to ensure coordinated and effective responses during disasters.
● Establish mandatory, regular emergency preparedness
training for all staff to ensure consistent understanding of roles and responsibilities and enhance the City’s readiness.

Residual Risk LOW TO MODERATE
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Scope: Risks associated with the City’s formal risk management efforts, including employee health and safety, operational risk management, incident response, and emergency management. This encompasses administration of general liability, workers’ compensation, safety, disability management, and property programs, as well as contract and insurance certificate review, insurance procurement, and continuity of operations planning to promote the City’s resilience.

Risk Management
The City’s risk management team reports to Human Resources (HR) and includes a risk manager, risk analyst, safety officer, safety specialist, and senior administrative office assistant. This team is responsible for promoting workplace safety, managing claims and compliance, and supporting the City’s overall risk management and loss prevention efforts.

Staff reported the City has a comprehensive insurance portfolio, including general, property, crime, aircraft, cyber, and other insurance. Comprehensive insurance decreases the risk of financial crisis in the case of elevated claims.

General liability claims increased about 39% between calendar years 2022 and 2024 (from 315 to 435 claims) largely due to increases in tort claims, including a rise in auto accidents involving City employees. An increase in general liability claims can indicate growing exposure to legal and financial risks for the City, potentially resulting in increased costs, resource demands, and reputational impacts if not effectively managed. Staff reported projections by actuaries indicate potential stabilization in 2025.

Workers’ compensation claims decreased about 18% between calendar years 2022 and 2024 (from 300 to 247 claims), largely due to a reduction in police department related claims. It is important to continue focusing on workplace safety and injury prevention to sustain this positive trend and further reduce risks related to employee injuries, associated costs, and operational disruptions.

Of survey respondents, 35% rated workers’ compensation programs and processes as excellent or good, while 28% rated it poor or terrible. Several survey respondents described challenges with workers’ compensation claims processes in narrative responses, noting the processes are cumbersome and untimely. These issues increase the risk of employee dissatisfaction and delayed claim resolutions.

Q: How would you rate the workers compensation program and processes? #14..
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Staff reported the City monitors insurance claims on a quarterly basis to help identify trends and support the goal of reducing claims annually. This regular monitoring helps the City detect emerging risks early and implement corrective actions, reducing the likelihood and financial impact of future claims.

Workplace Safety
The City has active safety programs supported by dedicated safety staff and training, which helps promote a safer work environment and reduce incidents. MPD and MFD also maintain safety programs tailored to operational risks, which enhances the City’s ability to manage workplace safety risks effectively.

Of survey respondents, 54% rated physical security as excellent or good, 27% as average, and 18% as poor or terrible. Additionally, while 74% of respondents reported they had not experienced an incident that felt unsafe in the last two years, 26% reported they had. Most those who reported they had experienced a safety incident in the last two years (about 67%) were in departments related to public safety and City infrastructure, whose roles may involve exposure to higher-risk environments. In narrative survey responses, many staff who had concerns with physical safety noted security concerns related to building access and security. Such concerns may increase the risk of unauthorized entry and safety incidents, potentially impacting employee safety. Furthermore, perceptions of inadequate security can affect employee morale and trust in the City's ability to provide a safe work environment.

Q: How would you rate the overall level of physical security within the facility and/or location in which you work?
Excellent, 6%
Good, 29% Average, 37% Poor,
13%
Terrible,
15%
Excellent,
16% Good, 38% Average, 27% Poor, 13%
Terrible, 5%
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Q: In the last two years, have you experienced an incident or time where you’ve felt physically at risk or unsafe while working at the City? Emergency Management and Continuity Planning
The City lacks key plans to support risk reduction in emergencies or crises, including an emergency operations plan, continuity of operations plan, and crisis communication plan. Furthermore, staff reported the City does not have coordinated efforts across departments to ensure an effective response during disasters or emergencies. This lack of planning and coordination is a critical driver of risk in this category. Without adequate planning, there is an increased the risk of confusion, delayed response, and ineffective management during critical incidents, potentially endangering public safety and city operations.

Of survey respondents, 74% reported feeling extremely or very prepared to handle an emergency, indicating a high level of staff confidence and preparedness across the City.

However, 57% reported receiving emergency preparedness training within the past year. While the majority of staff have received training, it is important for all staff to receive annual emergency preparedness training to promote understanding of roles and responsibilities during an emergency. Without comprehensive and consistent training, some staff may be unprepared to respond effectively during emergencies, increasing the risk of operational disruptions and safety incidents.

Q: How prepared do you feel to respond to or handle an emergency within your department or office?
Q: Have you received training focused on emergency preparedness provided by the City within the last year?
Yes, 26% No, 74%
Extremely
prepared, 30%
Very prepared,
44%
Somewhat
prepared, 25%
Slightly prepared, 1%
Not prepared at all, 1%
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MODERATE RISK CATEGORIES
Accounting, Finance, and Budget
Overall Risk Level: Moderate
Impact Likelihood Preparedness Trajectory
High Low to Moderate Moderate to High Flat
Risk Mitigation
● Review and update the Capital Improvement Plan Policy to ensure it is updated with regulations and City procedures. ● Consider opportunities to address staff capacity around monitoring revenue collections, such as through process automation, cross-training of existing staff, hiring temporary staff, or contracting our training or specific audits.
● Continue efforts to streamline cash handling processes across departments and improve oversight through means
such as central monitoring tools or periodic spot checks. ● Upgrade the accounts receivable system, as planned, to streamline the process and reduce manual errors.
● Continue current efforts to update the budgeting process for capital improvements in the next budget cycle to provide consistency and informative reporting for capital projects.

Residual Risk LOW TO MODERATE
Scope: Risks associated with managing the City’s financial resources, including fiscal control, budgeting, revenue collection, transaction processing, and ongoing financial tracking. This includes risks related to the content, distribution, assembly, utilization, frequency, formatting, accuracy, and reliability of financial reports such as audited annual financial statements and other key documents. It also covers risks tied to recordkeeping and compliance through proper recording and classification of financial transactions. Reliable financial information is fundamental to planning, Yes, 57% No, 25% Don't Know,
18%
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budgeting, evaluating vendor performance, assessing partnerships, and a range of other operational and strategic activities.

Finance
The Finance Department provides fiduciary control of the City’s assets and resources and oversees all financial duties, including grant management, accounts payable, payroll, revenue collection and financial reporting. Staff reported the City’s accounting and financial processes are generally functioning effectively, supported by numerous controls, policies, and procedures that the Finance Department regularly reviews and updates. Given the critical role Finance plays in the overall health and accountability of the City, maintaining strong oversight and continuous improvement in these processes is essential to safeguard public resources and support sound decision-making.

There were no financial statement or single audit findings from FY 2022 through FY 2024, demonstrating the City’s strong financial management and effective internal controls. These clean audit reports reduce the risk of financial misstatements and reinforces confidence in the City’s financial oversight.

The Finance Department maintains numerous documented policies and procedures, most of which have been updated within the last four years, covering key areas such as accounting, cash handling, asset management, accounts receivable, and payroll. The Capital Improvement Plan Policy, last revised in 2020, is the only exception. The assessment of the City’s Capital Improvement Program, completed as part of the City’s FY 2025 Internal Audit Program, recommended establishing a comprehensive and upto-date set of capital planning policies and procedures informed by best practices, including project management resources that provide standardized templates, checklists, and forms. Well-documented and regularly updated policies promote consistency, accountability, and compliance, supporting effective fiscal management.

While accounting and finance processes were reported to be generally working well, there are a few areas which create risk for the City and could be improved. ● The Revenue Collections and Compliance team within the Finance Department is responsible for ensuring that all City revenues are accurately collected, including maintaining current business licenses and permits and properly handling cash collections. While staff conduct audits and provide training, staff reported limited staff capacity hinders effective revenue monitoring such as reviewing accounts, following up on delinquent payments, and verifying revenue streams. Proper oversight is critical to prevent revenue loss, ensure legal compliance, and support financial integrity and sustainability.
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● Staff reported they maintain ongoing oversight of cash handling through in-person training, recorded policy sessions, and various audits. However, they reported effective monitoring remains challenging. This is due in part to cash handling responsibilities spread across departments, and inconsistent adherence to established policies. An assessment cash handling is planned for FY 2026 Internal Audit Program.
● Staff reported no major issues with the accounts payable process but noted that for accounts receivable processes, the system is outdated. As noted in the 2024 Accounts Receivable Internal Controls Review from Baker Tilly and by staff, the current accounts receivable system operates outside the City’s ERP system and requires manual processes which can lead to errors, slower processing, and process management challenges. The City reported they are upgrading to a new system to automate and streamline receivables and improve accuracy and efficiency.

Finance Internal Service
Most employees (76%) surveyed reported high quality internal customer service provided by the Finance Department. This high-quality customer service fosters effective collaboration and helps ensures that City departments receive the support they need to manage their financial responsibilities efficiently.

Q: How would you rate the quality of the internal customer service provided by the Finance team?
Additionally, employees surveyed reported the timeliness (57%) and quality (51%) of financial information provided by Finance is excellent or good. Timely and quality financial information enables informed decision-making, effective budget management, and the ability to respond quickly to changing financial conditions, while also ensuring transparency and building city-wide trust.

Q: How would you rate the timeliness of the financial information you receive (e.g., reports, response time to requests, etc.)?
Excellent, 35% Good, 41% Average, 20%
Poor, 3%
Terrible, 1%
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Q: How would you rate the quality of the financial reporting system? Budget
The Office of Performance of Management and Budget oversees the preparation of the City’s budget, as well as other duties related to performance and project management.

The City’s budget process is reportedly effective and collaborative among stakeholders with 60% of employees surveyed reporting the process as excellent or good. This fiscal year, the City transitioned to a two-year budget cycle aligned with its Strategic Plan, with departments actively involved in the transition. Such collaboration enhances resource allocation, alignment with long-term goals, increases transparency, encourages diverse input, and supports better decision-making.

Q: How would you rate your experience of the City's budgeting process? Staff reported ongoing improvements to the budgeting process for capital improvements, which have historically been inconsistently tracked and reported across the City (see Asset Management and Capital Programs). Enhancing the capital improvement budgeting process improves the accuracy and consistency of project and expenditure tracking, enables better prioritization of infrastructure investments, and supports more effective long-term financial planning to ensure efficient allocation of capital resources.

Excellent,
18% Good, 39% Average, 35%
Poor, 5%
Terrible, 2%
Excellent, 9%
Good, 42% Average, 42%
Poor, 5%
Terrible, 2%
Excellent,
18% Good, 42% Average, 34%
Poor, 6%
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Compliance
Overall Risk Level: Moderate
Impact Likelihood Preparedness Trajectory
Moderate to High Moderate Moderate Flat
Risk Mitigation
● Offer targeted support to departments with limited capacity for compliance management, such as through automated
compliance monitoring, process improvements, and
effective tracking tools to enhance oversight and reduce compliance risks.
● Centralize grant management activities, or at a minimum, standardize key components of grant management
compliance such as providing consistent policy guidance, reporting, and oversight, and requiring the consistent use of the City’s grant management system.
● Continue efforts to reduce ADA risks related to deferred maintenance.

Residual Risk LOW TO MODERATE
Scope: Risks associated with compliance with laws, regulations, and requirements both internal and external to the City. This includes, but is not limited to, requirements related to grants, finance, labor, health and safety, and the environment.

City governments are required to comply with an expanding array of federal, state, and local regulations including, but not limited to, those related to financial reporting, safety, human resources, grants, and the Americans with Disabilities Act (ADA). Compliance is also inherently risky due to the complexity and constantly changing nature of requirements. Non-compliance can result in significant penalties such as fines, legal action, loss of federal funding, and damage to public trust.

Staff reported limited time and capacity creates challenges in maintaining a consistent focus on compliance in areas such as traffic, solid waste, fleet management, public records requests, and grants administration. These resource constraints may contribute to the mixed perceptions among surveyed employees about the likelihood of the City encountering compliance issues within the next year, as shown in the following chart.

Consistent compliance is essential for the City to meet legal requirements, avoid penalties, and maintain public trust.
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Q: What do you feel are the chances that the City will experience any issue with compliance (e.g., late or missed reporting; noncompliance with safety requirements; breach of sensitive data, etc.) within the next year? Although some concerns about compliance exist, an Internal Controls Review conducted as part of the FY 2023 Internal Audit Program found the City appears to have a strong internal controls environment with only minor gaps identified in the following functions:
● Fixed Assets and Asset Management
● Inventory
● IT General Controls
● Payroll and Timekeeping
● Purchasing and Accounts Payable
● Revenue and Billing
Additionally, most employees surveyed expressed positive views regarding overall internal controls and the quality of resources and training available to maintain compliance. These positive perceptions suggest that staff feel well-supported in understanding and adhering to regulatory requirements, which helps mitigate the risk of non-compliance and its potential legal or financial consequences.

Q: How would you rate the City's overall internal controls environment, including checks and balances, preventative and detective measures, testing/evaluating internal controls, and monitoring effectiveness of controls? Q: How would you rate the quality of resources/training provided at the City about how to remain in compliance with laws, regulations, and requirements? Extremely unlikely, 11%
Somehwat
unlikely, 27%
Uncertain,
32%
Somewhat
likely, 26%
Extremely likely, 3%
Excellent, 8%
Good, 42% Average, 39%
Poor, 7%
Terrible, 4%
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Grant Management
Grant management at the City is currently decentralized, making consistent compliance with federal, state, and local regulations challenging. This fragmentation can result in monitoring gaps, inconsistent reporting, and duplicated efforts, which can increase the risk of errors, missed deadlines, or misuse of funds. This may lead to financial penalties, loss of grant funding, or reputational damage to the City.

The City has a grant tracking system (eCivis) to track grants but not all departments use the system, increasing the risk that not all grants are adequately tracked. Further, most employees surveyed (43%) rated the existing systems for tracking and monitoring grant compliance as average.

Q: How would you rate the quality of the systems used to track and monitor grants for compliance purposes?
ADA Compliance
The City has several functions and activities to address ADA compliance and promote a more inclusive environment. A designated ADA Coordinator within the HR Department oversees ADA compliance efforts, collaborates with departments, and investigates ADA grievances. The City conducted a comprehensive ADA compliance self-evaluation to evaluate accessibility throughout the City with the goal of identifying any discriminatory or potentially discriminatory practices or policies. Following this evaluation, the ADA transition plan was updated to fully align with federal requirements. Additionally, to improve the management of accessibility concerns the City implemented an accessibility management system to track and address ADA-related issues.

Excellent, 7%
Good, 46% Average, 32% Poor, 15%
Excellent, 4%
Good, 28% Average, 43% Poor, 21%
Terrible, 5%
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While these efforts demonstrate the City’s commitment to ADA compliance, ongoing issues such as those related to facilities, bus stops, and streets identified in the transition plan continue to present risks. These deferred maintenance challenges can hinder accessibility, potentially exposing the City to legal liabilities and negatively impacting community members who rely on accessible infrastructure. The City is actively working to improve tracking and management of deferred maintenance related to ADA compliance, which is critical to mitigating these risks and ensuring equitable access for all residents.

Funding and Economics
Overall Risk Level: Moderate
Impact Likelihood Preparedness Trajectory
High Moderate Moderate to High Flat
Risk Mitigation
● Continue to proactively monitor City revenues and fund balances to promote financial stability, identify potential shortfalls early, and support informed budgeting and
resource allocation decisions.
● Establish a capital asset replacement fund to address unfunded capital projects.
● Continue efforts to address deficit fund balances to avoid any borrowing needs and support the financial sustainability of these funds.
● Evaluate cost recovery of City fees through the planned internal audit.
● Develop a strategic approach to prioritize and align grantseeking efforts with City goals and consider integrating related responsibilities into existing roles to promote sufficient capacity for pursuing key funding opportunities.

Residual Risk LOW TO MODERATE
Scope: Risks associated with the financial management factors that impact the City’s ability to maintain operations and deliver programs and services in the long term.

This includes factors such as revenue sources, funding levels, cash management, liquidity, expenditure rates and commitments, debt management, and interorganizational business. #14..
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The City’s funding and economic management have several strengths, including stable credit ratings from Moody’s (Aa3) and S&P (AA for wastewater bonds). Additionally, the City has well-established financial planning processes, such as proformas that analyze past performance and forecast future expenses. The City also conducts regular utility rate studies to ensure utility rates are aligned with service needs.

The City also maintains a Finance Committee that serves in an advisory capacity to the City Council on matters pertaining to City finances, including the budget, capital improvement plan, and long-range financial planning. This committee helps mitigate financial risks by providing oversight, ensuring fiscal responsibility, and supporting informed decision-making to promote the City’s long-term financial stability.

Interviewed staff reported generally strong financial stability, supported by Measure H funding, which has enhanced resources across multiple departments. Measure H is a one-cent sales tax measure approved in 2022, estimated to generate approximately $42 million annually for general government purposes. Most of the City’s General Fund revenues for FY 2025 (71%) are from tax revenues. Though taxes are typically the dominant local government income source, changes in taxes can greatly impact the City's funding, which may present financial risks.
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*Departmental revenues include contract revenues for fire services with Oakdale, Ceres, Stanislaus, Consolidated, Turlock, and Salida
Surveyed staff reported more average perceptions on financial stability than interviewees did, noting current economic uncertainties related to inflation, tariffs, and shifts in federal funding that could impact future revenues.

Q: How would you rate the current level of financial stability at the City? Q: How would you rate the future trajectory of the City’s financial stability? Taxes, 71%
Fees, 3%
Construction
Revenues, 1%
Departmental
Revenues*,
21%
Cannabis Tax
and Admin
Fee, 2%
Transfers In,
0%
FY 2025 General Fund Revenue
Excellent, 3%
Good, 36% Average, 51%
Poor, 10%
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The City maintains reserves that meet the Government Finance Officers Association’s (GFOA) recommendation of two months’ general fund operating expenses and has established replacement funds for IT and fleet asset repairs. These funds enhance financial stability, help manage unexpected costs, and ensure service continuity.

However, the absence of a capital asset replacement fund may hinder the City’s ability to save sufficient funding for capital asset needs.

Some nonmajor or internal services funds are not fully funded. The 2024 financial statements indicate that several funds currently have deficit balances including the Downtown Improvement District, Cannabis Fund, Capital Grants Fund, Compost Fund, Central Services Fund, Insurance Fund, and Employee Benefits Management Fund.

The statements include a note that the City acknowledges these deficits and plans to address them through various means, including future tax revenues, fees, or grant funding. Nevertheless, the existence of deficit balances can impact the City’s overall financial health by limiting available resources for operations and capital projects, potentially increasing borrowing needs, and constraining the ability to respond to unexpected expenses.

The City collects fees to support the costs of various services and programs (e.g., permitting, licensing, and facility use). However, not all fees fully recover costs. For example, the 2025 Permitting Efficiency Study found the City’s current fee structure may not adequately cover the cost of all phases of development review and permitting activities, which could result in the subsidization of these activities. This may place additional financial strain on the City. An assessment as part of the FY 2026 Internal Audit Program will assess City fees.

Approximately 8% of the City’s FY 2025 operating budget comes from grant funding, with roughly half designated for capital projects. However, staff reported limited capacity to pursue and manage grants. Without dedicated grant management resources, the City may miss strategic funding opportunities.

Excellent, 4%
Good, 37% Average, 42% Poor, 17%
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Organization and Staffing
Overall Risk Level: Moderate
Impact Likelihood Preparedness Trajectory
Moderate to High Moderate Moderate Flat
Risk Mitigation
● Assess areas of high turnover and understaffing to
understand and mitigate any issues.
● Continue efforts to reduce the City’s vacancy rate, such as through targeted recruitment campaigns, competitive
compensation adjustments, and enhanced employee
retention programs.
● Prepare succession plans for key positions that are eligible to retire in the next few years, particularly leadership or manager level positions so operations can continue
effectively as these employees leave the City.
● Update job descriptions to match current requirements and ensure descriptions are clear to avoid potential confusion in roles and responsibilities.

Residual Risk LOW
Scope: Risks associated with how personnel are organized, as well as staffing levels and skills. This encompasses hierarchy, chain of command, span of control, and staffing levels and capacity.

The City is organized in alignment with similar sized cities, and supervisors appear to have adequate span of control which is important to ensure clear oversight and effective operations. Additionally, staffing levels were not a major concern noted in interviews, though staff noted some concerns with turnover and understaffing in critical areas, including Engineering; Fleet; Risk; Parks, Recreation & Neighborhoods, and MPD, which can lead to talent shortages in key positions. Most survey respondents rated staffing levels across the City and in their department as at least average. #14..
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Q: How would you rate the current staffing levels across the City as a whole? Q: How would you rate the adequacy of current staffing levels within your department?
While the City’s vacancy rate has improved from about 18% in 2022 to approximately 9% in 2025, it remains higher than the national government average of 3.2% for state and local governments.
4 An elevated vacancy rate poses risks including increased workload and burnout for existing staff, potential delays in service delivery, and challenges in maintaining institutional knowledge and operational continuity.

Although overall turnover rates are generally in line with industry standards and have decreased in recent years (12.7% in calendar year 2022 and 8.7% in calendar year 2025), some supervisory positions experienced frequent turnover from 2022 to 2025, including:
● Fire Captain
● Police Sergeant
● Senior Systems Engineer
● Operations Supervisor
Frequent turnover in these roles can lead to increased recruitment and training costs, loss of institutional knowledge, decreased team morale, and potential disruptions in service delivery.

Approximately 20% of City employees are eligible to retire within the next five years.

Several departments—including the City Clerk’s Office, City Manager’s Office, Parks, 4 BLS Average Job Rates
Excellent, 3%
Good, 24% Average, 51% Poor, 19%
Terrible, 2%
Excellent, 9%
Good, 30% Average, 34% Poor, 19%
Terrible, 9%
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Recreation & Neighborhoods Department, Fire Department, and Utilities Department— face particularly high risk, with the potential loss of more than 25% of their workforce due to retirement during this period. This trend may present significant hiring challenges and increase risks to business continuity.

Department % of Employees
Eligible to Retire
City Clerk’s Office 50%
City Manager’s Office 33%
Parks, Recreation & Neighborhoods Department 27%
Fire Department 25%
Utilities Department 23%
Police Department 19%
Engineering Services Department 19%
Finance Department 18%
Information Technology Department 17%
Public Works Department 13%
Community & Economic Development Department 10%
City Attorney's Office 0%
Human Resources Department 0%
Office of Performance of Management and Budget 0%
Employees surveyed reported job descriptions range from good to average in quality.

Some surveyed employees noted that job descriptions are vague, outdated, or overly broad, leading to overlaps with high-level positions and inconsistencies in duties across departments, especially for low-level roles such as assistants and technicians. Outdated or unclear job descriptions can increase the likelihood of role confusion or disputes and lead to challenges in performance management.

Q: How would you rate the quality of the current job descriptions used by the City in terms of defining roles, responsibilities, qualification criteria, and position goals? #14..
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Procurement and Contracting
Overall Risk Level: Moderate
Impact Likelihood Preparedness Trajectory
Moderate to High Moderate Moderate Decreasing – Low
Risk Mitigation
● Continue efforts to enhance procurement documentation, templates, and checklists to support staff education and training around proper purchasing procedures.
● Strengthen procurement card (p-card policy) training and monitoring (such as conducting regular audits of p-card transactions) to enhance employee accountability and
reduce risks of financial mismanagement.
● Regularly evaluate the purchase order process and system to ensure manual processes are accurate and efficient,
given the current environment and resources.
● Complete a Purchasing staff workload analysis once
systems are implemented and processes are updated to
assess whether the division has sufficient staffing.

Residual Risk LOW TO MODERATE
Scope: Risks associated with procurement processes (e.g., specifications development, bidding, selection) and contract administration (e.g., compliance with terms and conditions, payments, change orders) for goods, services, and capital programs.

The City’s procurement processes are managed by the City’s Purchasing Division (Purchasing) within the City’s Finance Department. Purchasing coordinates the procurement of goods and services for all departments and divisions within the City.

The Purchasing Manual, most recently updated in February 2025 and reviewed annually, serves as the primary framework for the City’s procurement processes.

Excellent, 8%
Good, 36% Average, 37% Poor, 16%
Terrible, 4%
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Staff reported the procurement environment has improved in recent years, supported by updated guidance and training, reduced staff turnover, and systems enhancements that have reportedly increased efficiency. Purchasing offers monthly training sessions and is developing new templates and checklists to enhance clarity and efficiency. However, despite these efforts, most survey respondents rated the documentation and processes for acquiring goods and services as average, with some reporting difficulties in understanding and navigating the process. Departments continue to face challenges related to comprehending procurement requirements, managing expectations around timelines, and tracking contract expenditures. These challenges can result in delays and slower processes, increased costs, and potential non-compliance with regulations, ultimately affecting the City’s operational efficiency and financial management.

Q: How would you rate the combined clarity and comprehensiveness of the documentation on procurement and contracting procedures (e.g., standardized forms, know what type of purchasing should be done in different circumstances)? Q: How would you rate the processes needed to acquire the goods and services your division/department needs?
Purchasing reported making various updates to the p-card program over the past few years, including implementing procedures to enhance employee accountability.

Excellent, 6%
Good, 36% Average, 41% Poor, 15%
Terrible, 1%
Excellent, 9%
Excellent, 7%
Good, 28%
Good, 28%
Average, 37%
Average, 44%
Poor, 25%
Poor, 20%
Terrible, 2%
Terrible, 1%
Purchasing
Contracting
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However, some employees expressed ongoing concerns about p-card compliance across the City, particularly regarding the effectiveness of training and education on related policies. Failure to adhere to p-card policies can result in financial mismanagement and increased risk of fraud or misuse. An assessment is planned to assess controls in this area as part of the FY 2026 Internal Audit Program.

Purchasing implemented the OpenGov platform in February 2025 to support purchasing processes. The bidding module has been implemented, which staff reported has improved processes. The contracts module is being phased in. The purchase order process remains separate within Oracle, requiring manual work. While staff reported no major challenges have risen with this approach, maintaining separate systems can cause confusion, delays, and a high risk of errors.

The Procurement Performance Audit completed as part of the FY 2024 Internal Audit Program, found high turnover in Purchasing, leading to high workloads. Staff reported workloads remain high. A workload analysis has not been completed yet as ongoing system implementations affect staff capacity.

Service Delivery
Overall Risk Level: Moderate
Impact Likelihood Preparedness Trajectory
High Moderate Moderate Decreasing – Low
Risk Mitigation
● Continue efforts to implement a centralized 311 system to provide a single, streamlined point of contact for residents, improving response efficiency and reducing confusion in service requests.
● Continue efforts to leverage annual community survey
results to identify emerging concerns and proactively adjust service delivery strategies.
● Continue ongoing efforts to address blight, homelessness, and permitting challenges by enhancing interdepartmental collaboration, allocation sufficient resources, and
streamlining processes.
● Improve asset management processes for parks to reduce deferred maintenance risks and ensure safe, high-quality recreational spaces for the community.
● Strengthen equity focused policies and monitoring to
promote consistent and fair access to City services across all neighborhoods.
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● Continue efforts to develop and use KPIs consistently across departments to enable data-driven decision-making, improve accountability, and demonstrate service delivery effectiveness.

Residual Risk LOW TO MODERATE
Scope: Risks associated with day-to-day operations across the City, and efficient and effective delivery of the City’s programs and services in alignment with goals, vision, and mission. This includes community expectations, customer satisfaction, level of service commitments, scheduling, program/service delivery, sustainability, quality, process efficiencies, and resource allocation.

The City provides a wide range of services to support the health, safety, and well-being of its community. These services include public safety through police and fire departments, maintenance of streets and infrastructure, water and wastewater management, parks and recreation programs, community development, and various administrative and support functions. The City’s budget reflects its commitment to delivering essential services that promote quality of life and sustainable growth for its residents.

Service delivery at the City is generally strong and many staff noted the City has become more responsive and agile in addressing community requests, largely due to additional resources provided by Measure H funding. Additionally, customer service remains a high priority, with numerous initiatives across the City aimed at enhancing service delivery, improving accessibility, and strengthening departmental programs.

Most survey respondents (62%) rated the City’s ability to effectively deliver core services as excellent or good and another 34% rated services as average.

Q: How would you rate the City's overall ability to deliver core services to the public in an effective manner?
Customer service is a key priority for the City. As such, efforts are underway to improve how residents engage with City services and access support. Currently, there are several ways for residents to contact the City, such as through calling departments or Excellent, 11%
Good, 51% Average, 34%
Poor, 4%
Terrible, 0%
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using the City’s on-the-go reporting tool, GoModesto!, which allows residents to report issues like street flooding, light outages, and illegal dumping. GoModesto! supports reduced risks for the City by enabling timely reporting and resolution of issues, thereby helping to prevent hazards, reduce service disruptions, and enhance public safety.

However, staff reported that when residents call the City, as opposed to using this online resource, they can be routed to multiple departments, which can be confusing and time consuming. To address this, the City is implementing a centralized 311 system to streamline communication, provide a single point of contact, and improve response efficiency for residents.

The City also conducts an annual community survey, which helps identify residents’ concerns and satisfaction levels with City services. Collecting regular community feedback supports the City in proactively address emerging issues, improving service delivery, and strengthening community trust, thereby reducing risks related to public dissatisfaction, disengagement, and harm to the City’s reputation.

Despite these strengths, staff reported the following key service delivery concerns in interviews:
● Blight: Staff reported ongoing efforts to address blight through dedicated teams like the Mo’Beautiful team that actively tackles illegal dumping, tagging, and encampments. While improvements have been made, blight remains a visible community concern that affects neighborhood quality of life and public health.

Continued focus and resources are needed to sustain progress and mitigate risks related to property devaluation and community dissatisfaction. ● Homelessness and affordable housing: The City is actively working to support individuals experiencing homelessness through initiatives such as those connecting people to permanent supportive housing and behavioral health services (see also Public Safety). Despite these efforts, homelessness continues to drive public safety and health challenges, particularly in parks and public spaces. Expanding affordable housing options remains a priority to reduce homelessness and its associated risks, but funding and coordination among departments and partners remain ongoing challenges.
● Permitting: Staff noted that permitting processes can be inefficient and complex, contributing to delays that impact development and economic growth. The City is working on improving permitting efficiency, including through studies and system enhancements, but challenges remain in streamlining workflows and managing expectations. Addressing these issues is critical to reducing risks of project delays, increased costs, and potential loss of developer confidence. #14..
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● Parks maintenance: Staff reported Parks, Recreation & Neighborhoods Department is understaffed relative to the number of parks and maintenance needs, leading to deferred maintenance and service quality concerns. Additionally, asset management for parks is still paper based, increasing risks of lost records and inefficiencies. While Measure H funding has supported improvements, ongoing resource constraints and aging infrastructure pose risks to public safety and community satisfaction.
● Equitable service delivery: The City is committed to promoting equity as a criterion in service delivery, recognizing the need to ensure fair and consistent access to services across all communities. However, staff feedback indicates inconsistencies in the equitable delivery of certain services, such as tree trimming and parks maintenance, across different neighborhoods. Addressing these disparities is essential to building community trust and reducing risks related to social inequities and community dissatisfaction.

The City has identified key performance indicators (KPIs) for all departments within its annual operating budget; however, not all departments currently have complete data available, and KPI development is still in progress. KPIs are important for effective service delivery because they allow the City to objectively measure performance, identify areas for improvement, and ensure that resources are effectively contributing to desired community outcomes. Efforts are ongoing to develop and implement KPIs specifically for Measure H initiatives, aiming to transparently demonstrate the impact of these investments to the community and support continuous improvement. The City is also working to enhance KPI development and data quality citywide, with plans to expand comprehensive KPI tracking to enable more data-driven decision making and strengthen accountability for service outcomes.

LOW TO MODERATE RISK CATEGORIES
Governance
Overall Risk Level: Low To Moderate
Impact Likelihood Preparedness Trajectory
Moderate to High Low to Moderate Moderate Decreasing – Low Risk Mitigation
● Continue reviewing the number and structure of committees, commissions, and boards to reduce overlap and improve
community representation.
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● Continue efforts to standardize training, meeting
procedures, and bylaws for governing bodies to ensure
consistent and effective governance practices.

Residual Risk LOW
Scope: Risks associated with the City’s governing body, including ongoing oversight, ethics and values, control environment, policy management, risk management, accountability, coordination and communication, and defined roles, responsibilities, and authorities.

The City operates under a council–manager form of government, which provides a division between policymaking and administration. The City Council serves as the City’s legislative body, establishing ordinances, budgets, and strategic goals, while the City Manager oversees daily operations and implements Council decisions.

Overall, staff reported the City has strong governance characterized by effective communication and transparency between management and City Council. Most survey respondents (77%) rated the effectiveness of Council governance and oversight as moderately effective or better. Strong governance reduces risks by fostering accountability, enabling informed decision making, and supporting timely responses to emerging issues.

Q: How would you rate the effectiveness of Council governance and oversight at the City?
Council Operations
The Council is composed of seven members, a mayor elected at-large and six districtbased councilmembers, each serving four-year staggered terms with a two-term limit.

This staggered cycle promotes continuity and institutional memory, reducing governance risk by avoiding large-scale turnover.

Staff reported the City Council has established bylaws that outline governance procedures and responsibilities, although these were not provided for review. Having formal bylaws is important to provide clear guidelines for governance processes, roles, Extremely effective, 2%
Very effective,
33%
Moderately
effective, 42%
Slightly
effective,
16%
Not effective at all, 7%
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and responsibilities, and to help promote consistent decision-making, transparency, and accountability within the Council.

Shared Governance and Advisory Bodies
Multiple committees, commissions, and boards support community engagement at the City. Staff reported the City is reviewing these groups to determine whether their number and structure effectively meet community needs. Currently, there is a risk of overlapping responsibilities, inefficiencies, and diminished effectiveness in representing community interests. The ongoing review aims to address these issues and enhance the overall impact of these groups.

Efforts are also underway to standardize training, meeting procedures, bylaws, and appointment processes across advisory bodies. Standardization reduces risks related to inconsistent governance practices, unclear roles, and potential legal or compliance issues, thereby improving the effectiveness and accountability of these groups in serving the community.

Survey results indicate mixed perceptions of the effectiveness of boards, commissions, and committees, as shown in the following chart. These results suggest that although most staff view the City’s boards and commissions as functional and moderately successful in fulfilling their roles, there is room to strengthen their overall impact.

Continued efforts to clarify expectations, enhance coordination with City departments, and improve follow-up on recommendations could help these bodies operate more strategically and contribute more directly to City priorities.

Q: How would you rate the effectiveness of the boards, commissions, and committees currently in place at the City?
Extremely effective, 1%
Very effective,
21%
Moderately
effective, 50%
Slightly
effective, 22%
Not effective at all, 7%
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Management and Leadership
Overall Risk Level: Low To Moderate
Impact Likelihood Preparedness Trajectory
Moderate to High Moderate Moderate to High Decreasing – Low Risk Mitigation
● Enhance the consistency and effectiveness of
communication from the executive team by establishing
clear communication protocols and ensuring information
reaches all relevant staff.
● Implement targeted initiatives to improve employee
engagement and motivation, particularly addressing staff concerns related to the City’s culture.
● Continue to expand and tailor management and supervisor training programs and support to close gaps in expertise and promote consistent supervisory practices.
● Develop a comprehensive, citywide succession planning framework to ensure consistent leadership development and knowledge transfer.

Residual Risk LOW TO MODERATE
Scope: Risks associated with City leadership, management practices, strategic activities, and operating styles. This includes risks associated with change management, project management, and the City’s culture.

The City benefits from a cohesive and stable leadership team, marked by strong collaboration among executive management, the Council, and staff. Interviewed staff consistently reported the City’s leadership team as a key strength.

Effective communication from leadership throughout the City is essential to keep staff informed, engaged, and working collaboratively toward common goals. However, with only 39% of survey respondents rating communication from the executive team as excellent or good, and 24% rating it as poor or terrible, there is a risk that inconsistent or ineffective communication could cause misunderstandings, decrease employee engagement, and hinder coordination across departments. These challenges may ultimately impact City performance and the successful execution of initiatives. Several staff noted in narrative responses that communication flow is inconsistent and information does not always reach all relevant employees. #14..
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Q: How would you rate the quality of the communication you receive from the Executive Team?
While leadership is a recognized strength, several staff noted opportunities to further enhance management-level capabilities. The City has made progress by implementing manager and supervisor training academies, which have been well received and help develop leadership skills across departments. Survey results show 54% of respondents rated the usefulness/effectiveness of management and supervisory training as excellent or good. This is important because such training supports effective supervision and leadership within the City. However, staff reported gaps remain in management expertise and consistency in supervisory practices, which may impact overall team effectiveness and City performance.

Q: How would you rate the usefulness/effectiveness of the management and/or supervisor training you have received?
As previously noted in the Human Resources section, the City does not yet have a formal, citywide succession planning framework, though succession activities are underway in some departments. Leadership recognizes the importance of preparing for retirements and knowledge transfer, and programs such as the City’s Emerging Leaders+ Academy are expected to support long-term continuity. However, without a formalized framework, there is a risk of inconsistent leadership development and succession efforts, which could result in gaps in leadership capacity, reduced City effectiveness, and challenges in maintaining strong management across departments.

Excellent, 11%
Good, 28% Average, 37% Poor, 16%
Terrible, 8%
Excellent, 10%
Good, 44% Average, 31% Poor,
12%
Terrible, 3%
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Policies and Procedures
Overall Risk Level: Low to Moderate
Impact Likelihood Preparedness Trajectory
Moderate Moderate Moderate Decreasing – Low
Risk Mitigation
● Continue efforts to prioritize the finalization and
implementation of key IT policies to reduce risks associated with data breaches and unauthorized access.
● Implement a policy management policy to establish clear standards and procedures for the creation, review, approval, communication, and retirement of policies, ensuring
consistency, accountability, and timely updates across the City.
● Continue efforts to review and revise policies and
procedures on at least a five-year schedule to ensure City policies follow current regulations and City practices. ● Develop clear accountability mechanisms and provide
training to managers and staff to consistently enforce
policies, minimizing risks of non-compliance and operational inefficiencies.

Residual Risk LOW
Scope: Risks associated with policies and procedures including efficiency, effectiveness, and level of documentation. Policies define what should be done, while procedures explain how to carry out those policies. Together they are essential for promoting consistent operations and preserving institutional knowledge.

Policies and procedures guide internal operations and clarify expectations. They should be regularly updated, communicated, and easily accessible. Updates should be shared promptly, with training provided, as needed. Maintaining current policies and procedures is essential part of risk mitigation.

The City maintains a comprehensive policy framework supported by a policy management system implemented in 2023, which facilitates the scheduled review and updating of policies. Many critical policies are in place (e.g., those related to managing human resources, accounting and finance, procurement, records retention, ethics, and fraud, waste and abuse), while others are currently being updated. As previously noted in the Information Technology section, several key IT policies (including those on #14..
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information security, access control, physical security, and data privacy) are incomplete or in draft form, posing increased risks to data protection and IT security. The City is working on drafting these policies and a related internal audit project is underway to support the City in addressing these gaps and strengthen the City’s IT policy framework.

The City aims to ensure policies and procedures are updated on a regular basis, but currently lacks a formal policy management policy that outlines standardized processes for policy creation, review, approval, and retirement. The City’s recently implemented policy management system will support ongoing maintenance of policies and updates moving forward, helping to maintain a reduced risk environment in this area.

Staff also reported that consistently enforcing adherence to policies remains an ongoing challenge, as is common in many organizations. Failure to consistently enforce policies can increase the risk of non-compliance and operational inefficiencies. Effective enforcement is crucial to ensure that policies achieve their intended purpose, promote accountability, and protect the City from legal and operational risks.

Reputation and Public Perception
Overall Risk Level: Moderate to High
Impact Likelihood Preparedness Trajectory
Moderate to High Moderate Moderate to High Decreasing – Low Risk Mitigation
● Sustain targeted efforts to improve areas such as tree maintenance, code enforcement, traffic safety, blight, and fiscal management, while proactively communicating
progress to rebuild and maintain public trust.
● Modernize the 2020 plan to reflect current technology, staffing, and practices so communication remains consistent and effective during routine and emergency situations.
● Continue efforts to develop and implement consistent
tracking and reporting mechanisms, including the Measure H dashboard, to transparently communicate how resident
feedback leads to tangible actions, thereby enhancing
accountability and community support.
● Continue conducting annual community surveys to identify emerging concerns and satisfaction levels, using the data to inform service improvements and strengthen community
trust, reducing risks related to public dissatisfaction and reputational harm.
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Residual Risk LOW TO MODERATE
Scope: Risks associated with the City’s reputation and the public’s perception of the City, including its competency (financial performance, safety and security, and responsiveness), transparency (openness and integrity), and guardianship (demonstrating care and consideration). Reputation reflects how stakeholders view the City’s decisions, actions, and behaviors, shaped by direct and indirect interactions with employees, programs, and services, and public commentary (e.g., news stories, press releases, and social media).

The City’s reputation has strengthened in recent years, supported by Measure H initiatives and proactive communication from the Community & Media Relations Department. These communication efforts are continually being enhanced to further improve public perception. However, challenges in areas like tree maintenance, code enforcement, traffic, spending, and blight continue to impact public opinion, underscoring the need for sustained and targeted communication about the City’s successes, including those related to Measure H.

Community and Media Relations
The Community and Media Relations division plays a central role in the City’s communication efforts, serving as the key liaison to help coordinate messaging and support smooth transitions across departments. The division works to build and maintain trust in City government by providing residents, businesses, visitors, and stakeholders with timely, accurate, and relevant information.

The City has an established Communications Plan that describes roles and responsibilities related to communicating with the community, and defines the messages, priorities, strategies, and tools the City uses for external communication.

While this guidance is important to ensuring consistent and effective communication with residents and stakeholders, the plan was last updated in 2020 and may not fully reflect current City structures, staffing, or communication technologies. Maintaining an up-to-date communications plan is essential to support clear messaging, enhance community engagement, and uphold the City’s reputation.

Overall, most survey respondents rated the City’s consistency of communication with the public as average (41%) or better (49%).

Q: How would you rate the City's overall consistency of communication with the public (e.g., residents, key stakeholders, etc.)?
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Reputation and Public Perception
A review of major news coverage over the past three years did not identify any highprofile scandals or crises involving the City. However, local reporting and community discussions have highlighted ongoing concerns related to tree maintenance, traffic safety, code enforcement, blight, and City spending, which remain active topics in regional news and online forums. These persistent issues pose a risk of eroding public trust and may undermine the City’s overall reputation if not effectively addressed.

While these issues are not crisis-level events, their continued visibility contributes to mixed public sentiment—reflected in survey results where 48% of staff rated the City’s reputation as average and 18% as poor or terrible. Continued transparency and communication about service improvements could help address these risks and reinforce the City’s reputation for accountability and progress. To support these efforts, the City is developing a dashboard to showcase Measure H successes, providing the community with clear, accessible information on the impact of key initiatives. These efforts should support continued reduced risks in this area.

Q: What kind of reputation do you think the City has within the community? Emergency and Crisis Communications
The City’s Communications Plan previously mentioned includes a dedicated section on Emergency Communication, stating that the Community and Media Relations Division is responsible for developing and positioning emergency messages, disseminating information, preparing department leaders and emergency responders, and managing media relations. Additionally, MPD and MFD have policies and staff to support communications in an emergency. Clear assignment of responsibilities helps reduce risks of miscommunication and ensures coordinated messaging during emergencies.

Excellent, 8%
Good, 41% Average, 41%
Poor, 9%
Terrible, 1%
Excellent, 3%
Good, 31% Average, 48% Poor, 16%
Terrible, 2%
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Though, as previously noted, the Communications Plan needs to be updated to ensure it addresses the City’s current practices.

Responsiveness to Residents
Survey results show that 67% of respondents believe the City is appropriately responsive to residents, while 18% perceive it as somewhat unresponsive and 15% as overly responsive. This distribution suggests that, overall, staff see the City as striking a healthy balance between attentiveness and operational autonomy, lowering the risk of dissatisfaction among community members.

Q: How responsive is the City to resident feedback?
Both survey and interview input indicate that the City could further strengthen feedback loops by publicly communicating how resident concerns lead to tangible action.

Developing more consistent tracking and reporting mechanisms, particularly through the City’s planned Measure H dashboard, will reinforce transparency and accountability in public engagement. Without these improvements, there is a risk that residents may not understand the products of their tax dollars, risking support for the measure.

In addition to ongoing responsiveness efforts, the City’s annual community survey plays a vital role in supporting reputation and public perception. By regularly gathering residents’ concerns and satisfaction levels with City services, the survey enables proactive identification of emerging issues and informs targeted improvements. This consistent engagement helps build community trust, enhances transparency, and reduces risks associated with public dissatisfaction, disengagement, and potential damage to the City’s reputation. Integrating survey findings with initiatives like the Measure H dashboard will further strengthen the City’s ability to demonstrate accountability and responsiveness to its residents.

Far too responsive, 5%
Slightly too responsive, 10%
Appropriate level, 67%
Slightly too
unresponsive,
15%
Far too unresponsive, 3%
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LOW RISK CATEGORIES
Ethics and Fraud, Waste, Abuse
Overall Risk Level: Low
Impact Likelihood Preparedness Trajectory
Moderate Low to Moderate Moderate to High Decreasing - Low Risk Mitigation
● Continue to maintain updated ethics and fraud, waste, and abuse policies and procedures to ensure they continue to include updated guidance and are communicated out to
employees.
● Ensure employees regularly take fraud, waste, and abuse training to ensure they are properly educated in how to handle related issues.

Residual Risk LOW
Scope: Risks associated with misappropriation of funds, extravagant spending, using one’s position to accomplish a specific outcome, the intent to deceive, or behavior that does not align with the City’s ethical values and policies.

The City maintains a fraud, waste, and abuse program overseen by the City Auditor.

This oversight ensures an independent and objective approach to identifying and addressing potential instances of fraud, waste, and abuse and enhances accountability and transparency within City operations.

The City operates a whistleblower hotline managed by a third-party vendor, Lighthouse, which ensures anonymity for individuals submitting tips, to the extent permitted by law.

The hotline provides a confidential and accessible channel for employees to report unethical behavior without fear of retaliation. Managed by an independent third party, the hotline enhances trust and confidence in the reporting process, encouraging more individuals to come forward with concerns.

The City has documented policies and procedures around ethics and fraud, waste, and abuse including their Code of Ethics, Policy Against Harassment, Discrimination and Bullying, and a Whistleblower policy. These documented codes and policies support a strong control foundation for the City and enables the City to identify and address potential issues promptly.
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Staff did not express concerns regarding fraud, waste, or abuse, and there was a general consensus that controls in this area are effective. Most employees believe they would be protected from retaliation and feel confident that they could report or intervene to prevent wrongdoing, which supports a strong control environment. A strong control environment in which employees feel confident reporting wrongdoing fosters a culture of transparency and accountability, encouraging staff to act ethically and responsibly and supports early detection of potential issues.

Q: What are the chances that you would be protected from retaliation if you reported wrongdoing?
Q: What are the chances that management above you would make efforts to stop wrongdoing if you reported it?
While the risk of fraud, waste, or abuse can never be completely eliminated, the City’s strong control environment provides mitigation. This is reflected in the survey results, where most employees expressed a generally positive to average level of confidence that such incidents are unlikely to occur within the City over the next year.

Q: How likely is it that you believe an incident of fraud, waste, or abuse would occur at the City within the next year?
Definitely would be protected, 17%
Probably would be
protected, 37%
Might or might
not be protected,
27%
Probably not protected, 11%
Definitely not protected, 7%
Definitely would,
38%
Probably would,
30%
Might or might
not, 20%
Probably would not, 8%
Definitely would not, 3%
Definitely will not, 6%
Probably will
not, 32%
Might or might
not, 35%
Probably will,
16%
Definitely will, 12%
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The City provides regular employees with Fraud, Waste and Abuse training. The last trainings were provided in 2024 with separate trainings for the Council, Directors and Managers, and all other employees. While most employees surveyed reported they have taken trainings related to fraud, waste, and abuse, and ethics, not all employees have. Many employees who reported they had not yet taken these trainings have been employed at the City less than two years, and so may not have had the opportunity to take the trainings yet. Such training is important to ensure consistent understanding of policies, promote ethical behavior, and help protect the City resources from misuse and misconduct.

Q: Have you received training focused on fraud, waste, and abuse prevention provided by the City within approximately the last two years? Q: Have you received training focused on ethics provided by the City within approximately the last two years?
Most employees surveyed reported that they understand the appropriate actions to take if they become aware of unethical or fraudulent behavior. This feedback reinforces a strong ethical environment that helps prevent and detect potential issues.

Q: Do you know what action(s) to take if you were to become aware of unethical or fraudulent activity?
Yes, 77% No, 23%
Yes, 85% No, 15%
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Planning and Strategy
Overall Risk Level: Low
Impact Likelihood Preparedness Trajectory
Moderate Low to Moderate Moderate to High Decreasing – Low Risk Mitigation
● Carefully manage the shift to a shorter strategic planning cycle to maintain alignment with long-term goals and ensure continuity in achieving the City’s broader objectives.
● Encourage and support all departments in developing formal annual operating plans to align activities with City goals, improving performance management and accountability.
● Enhance two-way communication and broaden opportunities for stakeholder involvement in planning to ensure diverse perspectives are consistently incorporated into planning and decision-making processes.

Residual Risk LOW
Scope: Risks associated with how the City plans for programs, strategies, and the future, including both short-term and long-range planning. A comprehensive planning framework builds upon strategic goals and dives into the next layer of planning, which looks at strategic objectives for the City as a whole and sets objectives for departments, divisions, programs, and individual roles.

The City’s planning and strategy efforts are generally strong, supported by a current strategic plan that aligns with the City’s budget process and is reviewed annually by the City Council.

Yes - I know
what I would do
first, 75%
Maybe - I
would have to
research a bit,
21%
No, not really sure, 4%
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The City’s 2020-2025 Strategic Plan outlines the City’s vision, mission, goals, and strategies to guide City priorities and resource allocation. To enhance flexibility and responsiveness, the City is transitioning to a two-year strategic planning cycle, with the 2025-2026 Strategic Plan already developed to align more closely with evolving community needs and budget processes. While this shorter planning horizon allows for more frequent updates and adaptability, it requires careful management to maintain alignment with long-term goals and ensure continuity in achieving the City’s broader objectives. The City’s long-term plans, including its Urban Area General Plan and other master plans described below, help reduce risks in this area. Survey respondents generally rated the City’s use of its strategic plan in guiding City decisions and activities positively, with 71% rating it as at least moderately effective with lower ratings from those in non-managerial positions.

Q: How effective would you rate the City’s use of its strategic plan in terms of guiding City decisions and activities?
The City’s Urban Area General Plan, which guides future growth and development in the City, is currently being updated to guide development through 2050. The City also has other long-term plans including its Downtown Master Plan and other infrastructure related master plans (e.g., plans for storm drainage, groundwater, and wastewater).

Additionally, the City’s Housing Element, adopted in 2024 and valid through 2031, is a required component of state planning regulations and demonstrates the City’s commitment to addressing housing needs and regional goals. These planning efforts contribute positively to the City’s risk environment by providing direction for sustainable development, supporting coordinated infrastructure investments, and helping to anticipate and manage future community needs effectively.

Some City departments have developed annual operating plans to align their activities with broader City goals; however, not all departments have formal operating plans in place. Operating plans are important because they establish clear priorities, support effective resource allocation, and provide a basis for measuring progress and accountability. This lack of consistency poses risks such as misalignment of departmental objectives with City priorities, uneven performance management, and difficulties in tracking and improving service delivery across the City.

Extremely effective, 6%
Very effective,
24%
Moderately
effective, 41%
Slightly
effective, 22%
Not effective at all, 6%
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The City’s long-term financial planning includes detailed proformas that analyze past performance and forecast future expenses across various funds and projects.

Additionally, a formal policy requires the City Manager to submit an annual five-year economic forecast of revenues and expenditures for each department to the Mayor and Council. This integrated planning framework provides a comprehensive, multi-year view of the City’s fiscal position, enabling proactive identification of potential budgetary challenges and informed decision-making. By maintaining this level of financial foresight, the City reduces risks related to fiscal instability, unexpected funding shortfalls, and inadequate resource allocation, thereby supporting sustainable service delivery and long-term City resilience.

Measuring Progress Against Plans
KPIs play a critical role in the City’s planning and strategy efforts by providing measurable benchmarks to track progress toward strategic goals. As noted in the service delivery section, the City has identified KPIs across departments and is working to improve data quality and expand tracking. It is also important to ensure that KPIs are closely aligned with the City’s Strategic Plan so that performance measurement effectively supports the City’s overarching vision and priorities. Aligning KPIs with the Strategic Plan enables the City to monitor the effectiveness of its initiatives, make informed adjustments, and demonstrate accountability to the community for achieving long-term objectives.

Stakeholder Engagement in Planning
Survey results suggest that while the City engages stakeholders during planning activities, perceptions of inclusiveness are mixed. A combined 26% of respondents believe the City solicits input from impacted stakeholders extremely or very well and another 32% view engagement as moderate. However, 43% rated noted the City engages stakeholders slightly well or not at all well, indicating that many employees perceive limited opportunities for stakeholder involvement. These results suggest that while outreach occurs, there is room to strengthen two-way communication and ensure staff and community perspectives are consistently incorporated into planning and decision-making processes.

Q: How well does the City solicit input from all impacted stakeholders (e.g., employees, community members, business owners, etc.) during planning activities?
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Extremely well, 7%
Very well, 19% Moderately
well, 32%
Slightly well,
22%
Not well at all,
21%
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RISK ASSESSMENT SURVEY RESULTS
We distributed a confidential online questionnaire to all employees on September 8, 2025, and collected data through September 22, 2025. Out of the 1,303 employees invited to take the survey, 428 individuals submitted responses to the survey—a participation rate of 33%.

SURVEY RESPONDENT PROFILE
Years of Tenure
Employee Level5
5 Only management-level employees were asked to rate overall level of risk for each category.

Less
than 1,
14%
Less than 1, 8%
1 to 2, 28%
1 to 2,
15%
3 to 5, 26%
3 to 5,
17%
6 to 10,
17%
6 to 10, 22%
11 to 15, 7%
11 to 15,
12%
More than 15, 9%
More than 15,
26%
Tenure in
Position
Tenure with
Organization
Management Yes, 35% No, 65%
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RISK CATEGORY RATINGS
How would you rate the City’s level of overall risk?
Accounting and Finance
Asset Management
Capital Program
Compliance
Low, 17% Low to Moderate,
31% Moderate, 44%
Moderate to High, 7%
High, 1%
Low, 8%
Low to
Moderate, 25% Moderate, 50% Moderate to High, 13%
High, 3%
Low, 7%
Low to
Moderate, 34% Moderate, 48%
Moderate to High, 8%
High, 3%
Low, 7%
Low to
Moderate, 32% Moderate, 53%
Moderate to High, 6%
High, 2%
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Ethics and Fraud, Waste, Abuse
Funding and Economics
Governance
Human Resources
Information Technology
Low, 11%
Low to
Moderate, 31% Moderate, 47%
Moderate to High, 8%
High, 3%
Low, 6%
Low to
Moderate, 27% Moderate, 54%
Moderate to High, 11%
High, 3%
Low, 7%
Low to
Moderate, 33% Moderate, 49%
Moderate to High, 8%
High, 3%
Low, 6%
Low to
Moderate, 30% Moderate, 46%
Moderate to High, 11%
High, 6%
Low,
12%
Low to
Moderate, 32% Moderate, 45%
Moderate to High, 10%
High, 1%
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Management and Leadership
Organization and Staffing
Planning and Strategy
Policies and Procedures
Procurement and Contracting
Low,
12%
Low to
Moderate, 30% Moderate, 46%
Moderate to High, 9%
High, 3%
Low, 6%
Low to
Moderate, 29% Moderate, 40% Moderate to High, 19%
High, 7%
Low, 13% Low to
Moderate, 34% Moderate, 44%
Moderate to High, 8%
High, 1%
Low, 13% Low to
Moderate, 30% Moderate, 49%
Moderate to High, 7%
High, 1%
Low,
9%
Low to
Moderate, 26% Moderate, 47%
Moderate to High, 12%
High, 7%
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Public Safety
Reputation and Public Perception
Risk Programs
Service Delivery
Low,
8%
Low to
Moderate, 28% Moderate, 45% Moderate to High, 15%
High, 4%
Low,
8%
Low to
Moderate, 30% Moderate, 50%
Moderate to High, 8%
High, 5%
Low,
8%
Low to
Moderate, 36% Moderate, 45%
Moderate to High, 7%
High, 4%
Low, 15% Low to
Moderate, 27% Moderate, 48%
Moderate to High, 8%
High, 2%
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