In 2017, staff had American Chiller recondition and retrofit the chillers, which would prolong the life of the equipment for approximately ten years for a cost of approximately $65,000. In 2018, $49,668 was spent to upgrade the computer components to monitor and control the operating system.
In April 2018, by Resolution No 2018-175, Council approved $75,000 to fund a purchase Agreement with American Chiller to complete additional repairs and reinstate annual equipment service, funding for quarterly maintenance, and contingency funding for any emergency repairs for the balance of FY 17-18 and through FY 18-19. At that time, American Chiller was identified as the most capable provider for future service and repairs.
In June 2023, by Resolution No. 2023-275, Council approved an Agreement with American Chiller to complete HVAC Maintenance and emergency repairs for the Modesto Centre Plaza for a two-year agreement with three one-year extension options, for an annual estimated amount of $75,000, and a total amount not to exceed $375,000 over five years.
DISCUSSION:
During calendar year 2025, the Modesto Centre Plaza experienced a higher-thananticipated number of HVAC system failures requiring immediate emergency repairs to maintain building operations and protect public use of the facility. These emergency conditions resulted in repair costs that exceeded the emergency contingency funds authorized under the current Agreement.
Due to the age and complexity of the HVAC system, immediate corrective action was necessary to avoid prolonged system outages, potential facility closures, and risk to City assets. American Chiller Service, Inc., as the original installer and long-standing service provider for the system, was uniquely qualified to respond to these emergencies in a timely and effective manner.
In October 2025, the City entered into a new agreement with the DoubleTree Hotel for rental and management of the Centre Plaza facility. While the DoubleTree oversees daily operations and routine interior maintenance, the City retains responsibility for specific building systems, including the heating, ventilation, and air conditioning (HVAC) infrastructure. Under this agreement, the City remains responsible for maintaining the HVAC maintenance contract and ensuring the system remains fully operational. This amendment is therefore necessary to uphold the City’s obligations under the current operating agreement with the DoubleTree and to maintain uninterrupted facility operations.
This First Amendment requests an additional $48,597 to account for emergency repair expenditures incurred in 2025 and to reconcile the Agreement funding level with actual costs necessary to maintain safe and reliable operation of the Modesto Centre Plaza #4..
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Finance Committee, March 23, 2026
First Amendment to Agreement for HVAC Maintenance and Emergency Repairs for the Modesto Centre Plaza
HVAC system. In addition, the City is requesting an additional $48,000 for each of the final two years of the Agreement to cover anticipated emergency repairs, ensuring continued HVAC reliability through the extended term for an overall increase of $157,900.
The requested funding increase reflects emergency HVAC repair services already completed in calendar year 2025 under the following purchase orders:
Purchase Order No. Amount
297207 $34,920
309917 $10,352
303467 $3,325
Total $48,597
The remaining term of the agreement includes an increase based on forecasting CPI percentage increases using an average of the CPI index over the last twelve (12) months a 5.8% inflator. City staff project annual increases based on this estimated forecast.
Fiscal Year
Annual
Amount
Emergency
Repair CPI Increase
New Annual
Total
2025-2026 $75,000 $48,597 $- $123,597
2026-2027 $75,000 $48,000 $4,350 $127,350
2027-2028 $75,000 $48,000 $8,953 $131,953
New Annual Average: $127,634
Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid.
However, exceptions to the formal bidding process are granted in MMC 8-3.204. Where the Purchasing Manager, in his or her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, in order to increase efficiency and avoid delays or disruptions to City projects or services.
FISCAL IMPACT:
Approval of the First Amendment will increase the Agreement amount by $157,900, funded by the Centre Plaza Fund, to account for emergency HVAC repair expenditures for the remainder of the agreement. No additional General Fund impact is anticipated. #4..
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Finance Committee, March 23, 2026
First Amendment to Agreement for HVAC Maintenance and Emergency Repairs for the Modesto Centre Plaza
Annual Spending History for this Agreement:
Year Amount
2023 $29,633
2024 $73,120
2025 $93,798
Total $196,551
CEQA/NEPA REQUIREMENTS:
This item does not constitute a “project” within the meaning of California Environmental Quality Act (CEQA) Guidelines Section 15378 and requires no environmental review.
RECOMMENDED COMMITTEE ACTION:
Staff Recommendations:
Motion recommending a First Amendment to the Agreement with American Chiller Service, Inc, Modesto, California for HVAC Maintenance and Emergency Repairs for the Modesto Centre Plaza increasing the agreement by $157,900 to a new estimated annual amount of $127,634 for the remaining two years and a new total amount not to exceed $532,900 through the term of the Agreement and forwarding to Council for approval.
Approved by:
Jeremy Rogers,
Director of Parks, Recreation, and
Neighborhoods
Joseph P. Lopez, City Manager
Attachments:
1. First Amendment
2. American Chiller Agreement 2023
3. Updated CA Levine Act Disclosure Form
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FIRST AMENDMENT TO AGREEMENT
WITH AMERICAN CHILLER SERVICE, INC. FOR HVAC MAINTENANCE AND EMERGENCY
REPAIRS
This FIRST AMENDMENT to the Agreement for HVAC MAINTENANCE AND EMERGENCY REPAIRS (“AMENDMENT”) is entered into between the CITY OF MODESTO, a municipal corporation of the State of California (hereinafter the “CITY”) and AMERICAN CHILLER SERVICE, INC., a California corporation (hereinafter “CONTRACTOR”) as of the ________ day of ______________, 2026.
RECITALS
This FIRST AMENDMENT to Agreement for HVAC MAINTENANCE AND EMERGENCY REPAIRS is made with regard to the following recitals:
WHEREAS, CITY and CONTRACTOR previously entered into an Agreement for HVAC MAINTENANCE AND EMERGENCY REPAIRS on the 1st day of July 2023 (the "ORIGINAL AGREEMENT"), and
WHEREAS, CITY and CONTRACTOR desire to amend the ORIGINAL AGREEMENT by increasing the previously approved estimated annual amount from $75,000 to $127,637 and a total amount not to exceed from $375,000 to $532,900.
NOW, THEREFORE, in consideration of this FIRST AMENDMENT, and the mutual promises, covenants, and signatures contained in the ORIGINAL AGREEMENT and this FIRST AMENDMENT, the parties agree as follows:
1. THE WORK, Section 1, paragraph E, of the ORIGINAL AGREEMENT shall be deleted and replaced in its entirety with the following:
"CONTRACTOR shall furnish said services at the following AGREEMENT rates for an estimated annual amount of $127,637. The total amount paid by CITY to CONTRACTOR over the full term of the AGREEMENT shall not exceed $532,900. Unless the services provided are for a lump sum or flat fee, fees for work performed by CONTRACTOR on an hourly basis shall not exceed the amounts shown on Bid attached hereto as Exhibit B.
2. Except as modified and amended by this FIRST AMENDMENT, all other provisions of the Agreement, shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this FIRST AMENDMENT to the ORIGINAL AGREEMENT for HVAC MAINTENANCE AND EMERGENCY REPAIRS by its City Manager and attestation by its City Clerk under the authority of Resolution No. 2026-________ on the ________ day of #4..
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___________, 2026, and AMERICAN CHILLER SERVICE, INC. has caused this FIRST AMENDMENT to be duly executed as of the Effective Date. #4..
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1 ANNUAL AGREEMENT - SERVICES
This agreement, hereinafter called AGREEMENT, made and entered into in the City of Modesto, State of California, this ______ day of __________ 2023, by and between the City of Modesto, a municipal corporation of the State of California, hereinafter called CITY, and American Chiller Service, Inc., hereinafter called CONTRACTOR.
W I T N E S S E T H :
WHEREAS, the Modesto City Council adopted Resolution No. 2023-_______, authorizing the Award of Proposal and agreement for ANNUAL MAINTENANCE, MONTHLY
MAINTENANCE, AND EMERGENCY REPAIRS TO THE HEATING, VENTILATION, AND AIR CONDITIONING UNITS AT THE MODESTO CENTRE PLAZA, attached hereto as Exhibit "A" and made a part hereof, and
WHEREAS, the CONTRACTOR provided a responsive and responsible submittal that best meets the CITY needs and shall enter into an agreement for ANNUAL MAINTENANCE,
MONTHLY MAINTENANCE, AND EMERGENCY REPAIRS TO THE HEATING,
VENTILATION, AND AIR CONDITIONING UNITS AT THE MODESTO CENTRE PLAZA, attached here and
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. THE WORK:
a. CONTRACTOR shall furnish all labor, materials, equipment, fuel, tools, licenses, and insurance necessary to perform and complete the
and in strict accordance with the conditions of the complete AGREEMENT. b. CONTRACTOR shall do and perform the work contemplated hereby in a good workmanlike manner under the direction of and to the satisfaction of the CITY Representative. #4..
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2 c. CONTRACTOR shall maintain proper insurance with the CITY for the duration of the AGREEMENT.
d. CONTRACTOR shall maintain a CITY business license for the duration of the AGREEMENT.
e. CONTRACTOR shall furnish said services at the following AGREEMENT rates for an estimated annual amount of $75,000. The total amount paid by CITY to CONTRACTOR over the full term of the AGREEMENT shall not exceed $375,000. Unless the services provided are for a lump sum or flat fee, fees for work performed by CONTRACTOR on an hourly basis shall not exceed the amounts shown on Proposal attached hereto as Exhibit B.
AGREEMENT PRICING
Fiscal Year Program Cost Emergency Contingency
(not to exceed)
Total
2023-2024 $52,785 $22,215 $75,000
2024-2025 $53,313 $21,687 $75,000
2025-2026 $53,844 $21,156 $75,000
2026-2027 $54,380 $20,620 $75,000
2027-2028 $54,924 $20,076 $75,000
2. PREVAILING WAGES:
In accordance with California Labor Code section 1771, CONTRACTOR shall pay all workers, and shall ensure its subcontractors pay all of their workers, engaged in performing the B
B are to be
performed, and not less than the general prevailing rate of per diem wages for holiday and overtime work as provided in the California Labor Code. In accordance with California Labor Code Section 1773.2, the City has obtained the general prevailing wages in the locality in which the services described in Exhibit A are to be performed for each craft or type of work needed to be as published #4..
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3 by the State of California Department of Industrial Relations, Division of Labor Statistics and Research, a c
available on request. Contractor must comply with all applicable laws and regulations that apply B
in Labor Code section 1770 et. seq.
DIR Project ID#: 461292
3. CITY REPRESENTATIVE:
Laurie A. Smith
Director Parks, Recreation & Neighborhoods Department
(209) 577-5347
The CITY Representative is not authorized to commit the CITY to changes in specifications, requirements, or scope of work, changes in price(s), period of performance or delivery date(s) or method of shipment. Changes of a contractual or business nature shall be effective only by written change to the AGREEMENT, issued by the City of Modesto, Purchasing Division.
4. TERM OF AGREEMENT:
The term of the AGREEMENT shall be for a period of two years, with three (3) one-year extension options at the sole discretion of CITY, for a total of up to five years.
Year 1: July l, 2023 through June 30, 2024
Year 2: July l, 2024 through June 30, 2025
Year 3: July 1, 2025 through June 30, 2026
Year 4: July 1, 2026 through June 30, 2027
Year 5: July 1, 2027 through June 30, 2028
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4 Pricing as set forth in Section 1.e. above shall remain firm for the first two years of the AGREEMENT. Price increases for any subsequent AGREEMENT years following the second year, shall not exceed the percentage change in the Consumer Price Index (CPI) for the City of Modesto West Urban Area in any one AGREEMENT year, and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONTRACTOR in writing, 90 days prior to the annual anniversary date of the AGREEMENT to be effective for the subsequent year.
5. LIABILITY INSURANCE:
The CONTRACTOR shall provide, at its own expense, and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the CITY as may be required by the City Clerk of the CITY. The policies or certificates thereof shall provide that, at least 30 days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the CITY by registered mail, return receipt requested, for all of the following stated insurance policies. a. General Liability - insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. The insurance shall indicate on the certificate of insurance the following coverage and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent contractors and subcontractors; products and completed operations; and/or professional liability.
b. Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage and transportation related #4..
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5 pollution liability. This insurance shall cover any automobile for bodily injury and property damage.
c. Workers' Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000 per accident for bodily injury or disease.
If at any time any of said policies shall be unsatisfactory to the CITY, as to form or substance or if a company issuing such policy shall be unsatisfactory to the CITY, the for approval and submit a certificate thereof as hereinabove provided. Upon failure of the CONTRACTOR to furnish, deliver or maintain such insurance and certificates as above provided, this AGREEMENT, at the election of the CITY, may be forthwith declared suspended, or terminated. Failure of the CONTRACTOR to obtain and/or maintain any required insurance shall not relieve the CONTRACTOR from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the CONTRACTOR concerning indemnification. The CITY, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation.
The Workers' Compensation insurer shall agree to waive all rights of subrogation against the CITY, its agents, officers, employees, and volunteers for losses arising from work performed by CONTRACTOR for the CITY.
the coverage
is primary as respects the CITY; shall include no special limitations to coverage provided to #4..
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6 additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A: VII or For any
shall be primary insurance as respects CITY, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by CITY, its officers, officials, employees, or volunteers
6. PAYMENT:
CONTRACTOR shall invoice CITY not less than once per month based on the cost for services performed and reimbursable costs incurred prior to the invoice date. All invoices shall be paid in full the following payment terms within thirty days after completion and acceptance of the Services by the CITY, and receipt of a properly prepared invoice, CITY will pay CONTRACTOR The CITY is exempt from payment of Federal Excise Tax, and all invoices shall be exclusive of such excise tax.
Invoice to: City of Modesto
Attn: Accounts Payable
P.O. Box 642
Modesto, CA 95353
Email to: [email protected]
At a minimum, invoices shall state the following:
This AGREEMENT NUMBER 245323
CITY department/division name and address
Billing period
Service hours worked day and week
Unit price, extended price, sales tax and total
7. INDEMNITY:
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7 The CONTRACTOR shall hold the CITY, its agents, officials, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of CONTRACTOR, or its agents, officials, officers, employees, or volunteers relating to or during the performance of its obligations un
obligation to defend, indemnify, and hold the CITY, its agents, officials, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this AGREEMENT for CONTRACTOR to procure and maintain a policy of insurance.
8. VENUE & GOVERNING LAW:
Venue for any dispute or claim arising or related to this AGREEMENT its performance, breach, or interpretation (including issues about its validity or enforceability), shall be exclusively in the Superior Court of Stanislaus County or the United States District Court for the Eastern District of California.
This AGREEMENT shall be deemed made in, governed by, performed in, and construed and enforced in accordance with the laws of the State of California, without giving effect to its conflicts of laws provisions or principles.
9. :
If a party to this AGREEMENT brings any action, including an action for declaratory relief, to enforce or interpret the provision of this AGREEMENT, the prevailing party shall be #4..
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8 entitled. The court may set such fees in the same action or in a separate action brought for that purpose.
10. COMMENCEMENT AND COMPLETION OF THE WORK:
The work contemplated herein shall be commenced immediately after receipt of the Notice to Proceed for this AGREEMENT. The Notice to Proceed shall not be issued until the agreement administrator receives and has on file:
Proofs of insurance (approved by CITY Risk Manager); and Executed Agreement;
a. Resolution No. 2023-______;
b. CONTRACTOR Proposal submittal;
c. C
11. TERMINATION OF SERVICES:
Termination for Default: In the event either party fails to perform under this AGREEMENT or breaches any condition contained herein, the other party shall notify in writing the breaching party of the non-performance. Within 10 days after receipt of notification, the breaching party shall correct any non-performance to the reasonable satisfaction of the nonbreaching party, or such other time as may be identified in the notice. Failure to correct any nonperformance shall allow the non-breaching party to terminate this AGREEMENT for cause.
Termination by City for Convenience: The City may also terminate this AGREEMENT, either in whole or in part, at its own discretion and without cause.
Post-Termination Procedure:
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the CONTRACTOR shall:
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9 a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subcontractors, and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all orders and subcontracts except as necessary to complete any portion of the SERVICES that are not terminated;
c. If directed in writing by the CITY to do so, assign all right, title and interest in subcontracts and materials in progress to CITY, in which case the CITY will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such, but in no event shall recovery by any CONTRACTOR or subcontractor include lost profits for portions of the SERVICES not completed or undertaken, including materials not delivered;
d. Deliver or otherwise make available to the CITY all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the CONTRACTOR in performing the SERVICES whether completed or in process;
e. Settle outstanding liabilities and claims, subject to the approval of CITY; f. Complete performance of such part of the SERVICES as has not been terminated; g. Take such other actions as may be necessary, or as may be directed by the CITY for the protection and preservation of the SERVICES and/or property related to the SERVICES;
h. If CITY so requests, and at CITY's cost, CONTRACTOR shall provide sufficient oral or written status reports to make CITY reasonably aware of the status of #4..
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10 i. ion,
refuse to pay CONTRACTOR for that portion of CONTRACTOR's SERVICES which were performed by CONTRACTOR on the project prior to the termination date and which remain unacceptable and/or not useful to CONTRACTOR as of the termination date.
CITY will pay CONTRACTOR for SERVICES actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to the CONTRACTOR after termination for convenience shall be limited to amounts due and owing under the AGREEMENT at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the SERVICES such as subcontractor agreements or contracts for materials; b. The AGREEMENT price allocable to the portion of the SERVICES properly performed or goods supplied to the work site by the CONTRACTOR as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the CONTRACTOR for such SERVICES.
12. COMPLIANCE WITH ALL LAWS:
CONTRACTOR hereby agrees that CONTRACTOR and its subcontractors, if any, in the performance of the SERVICES described herein, will comply with all federal, state, county and municipal laws, rules and regulations which may be applicable to the work herein contracted for, whether now in existence or hereafter adopted.
13. FAILURE TO PERFORM SATISFACTORY WORK:
It is agreed and understood that if the CONTRACTOR fails to perform the SERVICES as specified herein, CITY's representative may:
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11 a. Consent to accept such unsatisfactory service with an appropriate adjustment in contract price, based on established cost factors,
b. Have such required work done by CITY forces or otherwise, and charge the cost thereof to the CONTRACTOR, or
c. Recommend termination of AGREEMENT between said the CONTRACTOR and the City of Modesto.
Those discrepancies and deficiencies in the SERVICES that remains uncorrected after the date set for correction may be the necessary justification for a billing adjustment in the month following the occurrence. Unless otherwise negotiated, billing adjustments for this incomplete or uncorrected work shall be permanent retention of 100% of the estimated monthly cost for the SERVICES not corrected or completed.
14. ASSIGNMENT OF RIGHTS:
The CONTRACTOR offers and agrees, and will require all subcontractors and suppliers to agree, to assign to the CITY all rights, title, and interest in and to all causes of action it and they may have under Section 4 of the Clayton Act (15 United States code, Section 15) or under the Cartwright Act (Business and Professions Code, Section 16700 et seq.), arising from the acquisition of goods, services, or materials pursuant to this AGREEMENT or any allowed subcontract. The assignment made by CONTRACTOR and all assignments made by subcontractors and suppliers shall be made and become effective at the time the CITY makes final payment to The CONTRACTOR, without further acknowledgment by the parties (Government Code, Sections 4550-4554).
15. CITY PROCESS/PROCEDURE APPROVALS:
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12 CITY approval of any process or procedure shall not relieve CONTRACTOR of its responsibility to furnish the required SERVICES meeting all specifications contained herein.
16. DIR REGISTRATION:
Pursuant to Labor Code section 1771.1, CONTRACTOR may not engage in the perform public work pursuant to Section 1725.5 thereof. As required in Section 7029.1 of the Business and Professions Code or by Section 10164 or 20103.5 of the Public Contract Code, that during the term of this AGREEMENT, CONTRACTOR shall be registered to perform public work pursuant to Section 1725.5 thereof.
17. :
If CONTRACTOR damages any property belonging to the CITY or a third party, the expense, to the satisfaction of the CITY. In the event that CONTRACTOR fails to perform the necessary repairs, the CITY may either retain from the money due to CONTRACTOR an amount sufficient to repair the damage or perform the repairs and send an invoice to the CONTRACTOR for such costs, which shall be paid within thirty (30) days.
18. NOTICES:
Any notice, payment or instrument required or permitted by this AGREEMENT to be given or delivered to either party shall be deemed to have been received when personally delivered, or one calendar week following deposit of the same in any United States Post Office, registered or certified mail, postage prepaid, addressed as follows:
CONTRACTOR: Rudy Castano
American Chiller
931 Reno Avenue, Suite L
Modesto, CA 95351
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13 (209) 557-0111
[email protected]
CITY: City of Modesto
Purchasing Division
P.O. Box 642
Modesto, CA 95353
Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party.
19. SIGNATORY(IES) FOR CONTRACTOR:
Each signatory for CONTRACTOR below warrants and represents that it is legally competent to, and have full authority to, execute the AGREEMENT.
20. QUANTITIES:
No minimum or maximum is guaranteed or implied.
21. FUNDING:
All annual extensions are based upon continuous funding for that purpose by the City Council. Failure to fund any annual extension shall result in an immediate termination of the AGREEMENT without redress.
22. OTHER GOVERNMENT/PUBLICLY FUNDED AGENCIES:
If mutually agreeable to all parties, the issuance of any resultant contract/purchase order referencing these specifications and modified by mutual agreement between all parties may be extended to other government or publicly funded agencies. It shall be understood that all terms and conditions as specified herein shall apply.
23. NON-DISCRIMINATION:
a. During the performance of this AGREEMENT, CONTRACTOR and any allowed subcontractors shall not unlawfully discriminate against any employee or applicant for #4..
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14 employment because of race, color, ancestry, religion, sex, national origin, marital status, age, medical condition (cancer related), physical handicap (including AIDS), sexual orientation, or any other basis prohibited by Federal or California law. Equal employment opportunity extends, but is not limited to recruitment, compensation, benefits, layoff, termination, and all other conditions of employment. The CONTRACTOR and any allowed subcontractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free of such discrimination. The CONTRACTOR and any allowed subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Administrative Code, Title 2, and Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900, set forth in Chapter 5 of Division 4 of Title 2 of the California Administrative Code are incorporated into this contract by reference and made a part hereof as if set forth in full.
b. The CONTRACTOR and any allowed subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
c. The CONTRACTOR shall include the nondiscrimination and compliance provisions of this clause in any allowed subcontracts to perform SERVICES. d. The Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the CITY upon reasonable notice at any time during the normal other sources of information and its facilities as said Department or CITY shall require to ascertain compliance with this AGREEMENT.
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15 e. By executing this AGREEMENT, CONTRACTOR certifies that it shall follow and be in compliance with the Americans with Disabilities Act of 1990, the applicable administrative requirements promulgated in response thereto, and any other applicable Federal laws and regulations relating to handicap discrimination and participation and will continue to do so for at least the duration of the AGREEMENT and any extensions thereof.
24. CONTRACTOR LICENSES & PERMITS:
CONTRACTOR warrants and represents that it possesses and shall maintain all licenses, and shall secure and maintain all necessary permits, necessary to perform the SERVICES.
25. RECORDS:
All final versions of reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that CONTRACTOR prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the CITY.
CONTRACTOR hereby agrees to deliver those documents to the CITY upon termination of the AGREEMENT, and the CITY may use, reuse, or otherwise dispose of the documents without including but not limited to those described above, prepared pursuant to this AGREEMENT are prepared specifically for the City and are not necessarily suitable for any future or other use.
26. FACILITIES AND EQUIPMENT:
Except as set forth herein, CONTRACTOR shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the services required by this AGREEMENT. CITY shall make available to CONTRACTOR only the facilities and equipment B
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16 27. INDEPENDENT CONTRACTOR; NOT AGENT:
At all times during the term of this AGREEMENT, CONTRACTOR shall be an independent contractor and shall not be an employee of CITY. CITY shall have the right to control this AGREEMENT. Except as City may specify in writing, CONTRACTOR shall have no authority, express or implied, to act on behalf of CITY in any capacity whatsoever as an agent.
CONTRACTOR shall have no authority, express or implied, pursuant to this AGREEMENT to bind City to any obligation whatsoever.
28. DRUG FREE WORKPLACE:
CONTRACTOR certifies that it is following and in compliance with Sections 8350 - 8355 of Chapter 5.5 of the Government Code, Drug Free Workplace Act whereby each person or organization awarded a contract/purchase order or grant for the procurement of any property or service from any state agency (city) shall certify to the contracting or granting agency that it will provide a drug free workplace.
29. ASSIGNMENT:
Neither this AGREEMENT nor any SERVICES hereunder shall be subcontracted or assigned by CONTRACTOR without the prior written consent of the CITY in each and every instance.
30. WAIVER:
The waiver by any party to this AGREEMENT of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.
31. HEADINGS NOT CONTROLLING:
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17 Headings used in the Agreement are for reference purposes only and shall not be considered in construing this AGREEMENT.
32. MISCELLANEOUS:
Time is of the essence in
AGREEMENT.
33. ENTIRE AGREEMENT:
This Agreement and its exhibits contain the entire understanding between CONTRACTOR and CITY. Additional or new terms contained in this AGREEMENT which vary from performance of any SERVICES or other commencement of performance hereunder. The terms and conditions of the IFB, attached hereto as Exhibit C, are incorporated herein. In the event of a conflict between the IFB and this AGREEMENT, this AGREEMENT shall control. All previous bids, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. No future waiver or exception to any of the terms, conditions, and provisions of this AGREEMENT shall be considered valid unless specifically agreed to in writing by the parties.
34. PARTIAL INVALIDITY:
If any provision in this AGREEMENT is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.
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18 IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this Agreement in duplicate by its City Manager and attested by its City Clerk under authority of Resolution No. 2023-_______, adopted by the Council of the City of Modesto on the _____________ day of _____________________, 2023 and ________________________________________ has caused this Agreement to be duly executed. #4..
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CITY OF MODESTO,
a municipal corporation
BY: ____________________________
JOSEPH P. LOPEZ, City Manager
ATTEST:
(Seal)
BY: ____________________________
DIANE NAYARES-PEREZ, CMC,
City Clerk
________________________________ BY: ____________________________ By _____________________________
Name Title
BY: ____________________________
By _____________________________
Name Title
APPROVED AS TO FORM:
BY: ____________________________
JOSE M. SANCHEZ, City Attorney
APPROVED AS TO FORM:
BY: ____________________________
JOE F. RODRIGUEZ, Risk Manager
Federal ID # ___________
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Large Tonnage Air
Conditioning Specialists
Sacramento 11328 Sunrise Gold Circle, Rancho Cordova CA 95742 Phone: (916)457-7800 Fax: (916)731-8100 Bay Area 743 Thornton Street San Leandro CA 94577 Phone: (510)686-1111 Fax: (510)686-1234 Modesto 931 Reno Ave., Suite L Modesto CA 95351 Phone: (209)557-0111 Fax: (209)557-0123 Reno / Tahoe 745 E. Greg Street, Suite 5 Sparks NV 89431 Phone: (775)322-9900 Fax: (775)322-9929 Mailing Address P.O. Box 1887 Rancho Cordova CA 95741-1887 Toll Free: (800)916-2445 Website: www.americanchiller.com E-Mail: [email protected] Contractors Licenses: CA: 605046 C-4/C-20/C-38/D-58 NV: 0035255 C-21 ID: HVC-C-10073 Payment to be made as follows: Net 30 Days All material is guaranteed to be as specified. All work to be completed in a professional manner according to standard practices. All work is covered by a one year parts and labor warranty unless otherwise specified. Any alteration or deviation from above specifications involving extra costs will be executed only upon written orders, and will become an extra charge over and above the estimate. All agreements contingent upon strikes, accidents or delay beyond our control. American Chiller Service or Customer can terminate with one month written notice to the other party. Owner to carry fire and other necessary insurance. Our workers are date of proposal.
March 10, 2023
City of Modesto
Modesto Centre Plaza
1000 L Street DIR# 1000000880
Modesto CA 95354 Phone: (209) 652-5949
Attn: Mr. Bob Quintilla Quote: 64350
Dear Mr. Quintilla:
Per your request we would like to offer our proposal for HVAC services at the Centre Plaza to include annual and monthly services for all mechanical equipment. Below are the full details of the proposed service; attached are the checklists we will use. All services are quoted for work during standard business hours, M-F.
Equipment Covered:
o Two Air Handlers and return fans
o Two Trane Water Cooled Chillers
o
o One BAC Cooling Tower
o One Hot Water Boiler
o Control System
o One Domestic Hot Water Boiler
o One Fountain Panel and Pump
o One Filter pump and panel
o Two Chilled Water Pumps
o Two Condenser Water Pumps
o Two Hot Water Pumps
o One Compressor and Air Dryer
o One Refrigerant Monitor
Proposed Program Term:
-Third Quarter 2023-Second Quarter 2028
Scope of Work:
Provide labor and materials to perform annual/quarterly services per attached check lists.
Provide calibration of all pneumatic systems and check operation of building DDC system as part of control /VAV annual portion Exhaust fan portion to include v-belt replacement.
Quarterly service to all building components listed above.
Provide written reports at completion of each service.
Program Cost:
2023-2024: $ 52,785.00
2024-2025: $ 53,313.00
Total Program Cost: $106,098.00*
Additional Considerations:
Maintenance Renewal2025-2026: $ 53,844.00
2026-2027: $ 54,380.00
2027-2028: $ 54,924.00
Total Maintenance Renewal: $163,148.00**
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Large Tonnage Air
Conditioning Specialists
Sacramento 11328 Sunrise Gold Circle, Rancho Cordova CA 95742 Phone: (916)457-7800 Fax: (916)731-8100 Bay Area 743 Thornton Street San Leandro CA 94577 Phone: (510)686-1111 Fax: (510)686-1234 Modesto 931 Reno Ave., Suite L Modesto CA 95351 Phone: (209)557-0111 Fax: (209)557-0123 Reno / Tahoe 745 E. Greg Street, Suite 5 Sparks NV 89431 Phone: (775)322-9900 Fax: (775)322-9929 Mailing Address P.O. Box 1887 Rancho Cordova CA 95741-1887 Toll Free: (800)916-2445 Website: www.americanchiller.com E-Mail: [email protected] Contractors Licenses: CA: 605046 C-4/C-20/C-38/D-58 NV: 0035255 C-21 ID: HVC-C-10073 Payment to be made as follows: Net 30 Days All material is guaranteed to be as specified. All work to be completed in a professional manner according to standard practices. All work is covered by a one year parts and labor warranty unless otherwise specified. Any alteration or deviation from above specifications involving extra costs will be executed only upon written orders, and will become an extra charge over and above the estimate. All agreements contingent upon strikes, accidents or delay beyond our control. American Chiller Service or Customer can terminate with one month written notice to the other party. Owner to carry fire and other necessary insurance. Our workers are date of proposal.
Note:
*Pricing does not include belts for air handlers, or additional money that may be needed to perform repairs beyond scope of provided check sheets. **Acceptance of years 3-5 pending agreement by both parties.
Year 2023-2024 to be billed in 12 equal monthly payments of $4,398.75 Year 2024-2025 to be billed in 12 equal monthly payments of $4,442.75 Year 2025-2026 to be billed in 12 equal monthly payments of $4,487.00 Year 2026-2027 to be billed in 12 equal monthly payments of $4,532.00 Year 2027-2028 to be billed in 12 equal monthly payments of $4,577.00 Thank you for the opportunity to provide this proposal, we look forward to working with you on this project! Respectfully,
American Chiller Service, Inc. Approved By:
____________________________ Kyle Ferguson Modesto Centre Plaza #4..
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Large Tonnage Air
Conditioning Specialists
Sacramento 11328 Sunrise Gold Circle, Rancho Cordova CA 95742 Phone: (916)457-7800 Fax: (916)731-8100 Bay Area 743 Thornton Street San Leandro CA 94577 Phone: (510)686-1111 Fax: (510)686-1234 Modesto 931 Reno Ave., Suite L Modesto CA 95351 Phone: (209)557-0111 Fax: (209)557-0123 Reno / Tahoe 745 E. Greg Street, Suite 5 Sparks NV 89431 Phone: (775)322-9900 Fax: (775)322-9929 Mailing Address P.O. Box 1887 Rancho Cordova CA 95741-1887 Toll Free: (800)916-2445 Website: www.americanchiller.com E-Mail: [email protected] Contractors Licenses: CA: 605046 C-4/C-20/C-38/D-58 NV: 0035255 C-21 ID: HVC-C-10073 Payment to be made as follows: Net 30 Days All material is guaranteed to be as specified. All work to be completed in a professional manner according to standard practices. All work is covered by a one year parts and labor warranty unless otherwise specified. Any alteration or deviation from above specifications involving extra costs will be executed only upon written orders, and will become an extra charge over and above the estimate. All agreements contingent upon strikes, accidents or delay beyond our control. American Chiller Service or Customer can terminate with one month written notice to the other party. Owner to carry fire and other necessary insurance. Our workers are date of proposal.
American Chiller Service, Inc.
TERMS & CONDITIONS
1. This Standard Service Proposal or Maintenance Agreement (hereinafter sometimes referenced as , upon acceptance by the Customer, is made solely on the terms and conditions hereof, notwithstanding any additional or conflicting conditions that may be contained in any purchase order or other form of Customer, all of which additional or conflicting terms and conditions are hereby rejected by American Chiller Service. Further, you acknowledge and agree that any purchase order issued by you in accordance with this Agreement will only establish payment authority for your internal accounting purposes. Any such purchase order will not be considered by us to be a counteroffer, amendment, modification, or other revision to the terms of this agreement. No waiver, alteration or modification of the terms and conditions herein shall be valid unless made in writing and signed by an authorized representative of American Chiller Service.
2. This Maintenance Agreement or Standard Service Proposal is subject to acceptance by the Customer within 30 days from date shown on the quote, unless specified otherwise. Prices quoted are for services, labor, and material as specified in this Proposal. If acceptance of this Maintenance Agreement or Standard Service Proposal is delayed or modified, prices are subject to adjustment.
3. Terms of payment are subject at all times to prior approval of credit department. Terms of payment are net 30 days upon receipt of invoice unless previously otherwise agreed in writing. Should payment become more than 30 days delinquent, American Chiller Service may stop all work under this Agreement or terminate this Agreement with five (5) days written notice to Customer. American Chiller Service reserves the right to add to any account outstanding more than 30 days interest at 1 ½ per month or the highest rate allowed by law. In the event of default in payment, Customer agrees to pay all costs of collection incurred by American Chiller Service including, but not limited to, collection agency fees, attorney fees and court costs. Additional services may be performed upon request at a price to be determined, subject to these Terms and Conditions.
4. In the event that American Chiller Service determines, during the first thirty (30) days of any Maintenance Agreement or upon seasonal start-up (discovery period) that any equipment covered under this Agreement in need of repair and/or replacement, American Chiller Service shall inform Customer of the equipment condition and remedy. American Chiller Service shall not be responsible for the present or future repair and/or replacement or operability of any specific equipment; until such time as the equipment is brought up to an acceptable condition or the Customer removes the unacceptable system(s), component(s), or part(s) from this contract.
5. Any Maintenance Agreement price is subject to adjustment once each calendar year, effective on the anniversary date, for changes in labor, subcontractor and material costs. The customer shall receive forty-five (45) days prior written notice of such adjustment unless specifically excluded otherwise in writing.
6. A Maintenance Agreement may be terminated: (i) by either party upon the anniversary date hereof; provided however, that written notice of such termination must be given to the non-terminating party at least thirty (30) days prior to the anniversary date; (ii) by American Chiller Service upon five (5) days prior written notice to Customer, in the event that any sums or monies due or payable pursuant to this Agreement are not paid when due or in the event that additions, alterations, repairs or adjustments are made to the system or equipment without American Chiller Se prior approval; (iii) by either party, in the event that the other party commits any other material breach of this Agreement and such breach remains uncured for ten (10) business days, after written notice thereof. If a Maintenance Agreement is terminated for any reason, other than a material breach by American Chiller Service, Customer shall pay, in addition to all sums currently due and owing, the entire remaining balance due for the term of the Maintenance Agreement, or an amount equal to time and materials expended for the year, whichever is less. Notices required hereunder shall be sent via Certified U.S. Mail, Return Receipt Requested and provided that such notice is postmarked by the required date, such notice shall be deemed properly given.
7. Unless Customer provides appropriate documentation of tax exemption, Customer shall pay American Chiller Service, in addition to the contract price, the amount of all excise, sales, use, privilege, occupation or other similar taxes imposed by the United States Government or any other National, State or Local Government, which American Chiller Service is required to pay in connection with the services or materials furnished hereunder. Customer shall promptly pay invoices within 30 days of receipt. Should payment become more than 30 days delinquent, American Chiller Service may stop all work under this Agreement or terminate this Agreement as provided in the next paragraph.
8. Any and all costs, fees and expenses arising from or incurred in anticipation of any federal, state, county, local or administrative statute, law, #4..
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Large Tonnage Air
Conditioning Specialists
Sacramento 11328 Sunrise Gold Circle, Rancho Cordova CA 95742 Phone: (916)457-7800 Fax: (916)731-8100 Bay Area 743 Thornton Street San Leandro CA 94577 Phone: (510)686-1111 Fax: (510)686-1234 Modesto 931 Reno Ave., Suite L Modesto CA 95351 Phone: (209)557-0111 Fax: (209)557-0123 Reno / Tahoe 745 E. Greg Street, Suite 5 Sparks NV 89431 Phone: (775)322-9900 Fax: (775)322-9929 Mailing Address P.O. Box 1887 Rancho Cordova CA 95741-1887 Toll Free: (800)916-2445 Website: www.americanchiller.com E-Mail: [email protected] Contractors Licenses: CA: 605046 C-4/C-20/C-38/D-58 NV: 0035255 C-21 ID: HVC-C-10073 Payment to be made as follows: Net 30 Days All material is guaranteed to be as specified. All work to be completed in a professional manner according to standard practices. All work is covered by a one year parts and labor warranty unless otherwise specified. Any alteration or deviation from above specifications involving extra costs will be executed only upon written orders, and will become an extra charge over and above the estimate. All agreements contingent upon strikes, accidents or delay beyond our control. American Chiller Service or Customer can terminate with one month written notice to the other party. Owner to carry fire and other necessary insurance. Our workers are date of proposal.
rule, regulation or ordinance (collectively directly or indirectly requiring that refrigerant other than the type of refrigerant currently being utilized in connection with the equipment subject to this Agreement be used, shall be borne solely by Customer. In this regard, American Chiller Service shall not be required to bear any expense in connection with the modification, removal, replacement or disposal of any refrigerant in response to any Governmental Regulation designed to reduce or eliminate the alleged environmental hazards associated with the refrigerant.
9. The contract price stated herein is predicated on the fact that all work will be done during regular working hours of regular working days unless otherwise specified. If for any reason Customer requests that work be performed other than during regular working hours or outside the scope of services specified hereunder, Customer agrees to pay American Chiller Service any additional charges arising from such additional services, including but not limited to premium pay, special freight or other fees or costs associated therewith.
10. Customer shall be responsible for all costs, expenses, damages, fines, penalties, claims and liabilities associated with or incurred in connection with any hazardous materials or substances, including but not limited to asbestos, upon, beneath, about or inside equipment or property.
Title to, ownership of, and legal responsibility and liability for any and all such hazardous materials or substances, shall at all times remain with Customer. Customer shall be responsible for the removal, handling and disposal of all hazardous materials and substances in accordance with all applicable Governmental Regulations. Customer shall defend, indemnify, reimburse and hold harmless American Chiller Service and its officers, directors, agents, and employees from and against any and all claims, damages, costs, expenses, liabilities, actions, suits, fines and penalties (including without limitation, fees and expenses) suffered or incurred by any such indemnified parties, based upon, arising out of or in any way relating to exposure to, handling of, or fees and expenses) suffered or incurred by any such indemnified parties, based upon, arising out of or in any way relating to exposure to, handling of, or disposal of any hazardous materials or substances, including but not limited to asbestos, in connection with the services performed hereunder. American Chiller Service shall have the right to suspend its work at no penalty to American Chiller Service until such products or materials and the resultant hazards are removed. The time for completion of the work shall be extended to the extent caused by the suspension and the contract price equitably adjusted. American Chiller Service reserves the right to engage others in a subcontractor status to perform the work hereunder.
11. Customer agrees to provide American Chiller Service personnel with the usual required utilities (water, electricity, compressed air, etc.) and special tools and equipment normally used for such services unless restricted specifically in the quote. Customer agrees to ensure that sufficient service access space is provided. American Chiller Service shall not be held liable for failure or damage to any equipment caused by power interruptions, single phasing, phase reversal, low voltage, or other deficiencies beyond the control of American Chiller Service.
12. This agreement does not include responsibility for design of the system (unless specifically included), obsolescence, electrical power failures, low voltage, burned-out main or branch fuses, low water pressure, vandalism, misuse or abuse of the system(s) by others (including the Customer), negligence of the system by others (including the Customer), failure of the Customer to properly operate the system(s), or other causes beyond the control of American Chiller Service.
13. In the event that American Chiller Service is required to make any repairs and/or replacements or emergency calls occasioned by the improper operation of the equipment covered hereby, or any cause beyond American Chiller Service control, Customer shall pay American Chiller Service for the charges incurred in making such repairs and/or replacements or emergency calls in accordance with the current established American Chiller Service rates for performing such services.
14. American Chiller Service shall not in any event be liable for failure to perform or for delay in performance due to fire, flood, strike or other labor difficulty, act of God, act of any Governmental Authority or of Customer, riot, war, embargo, fuel or energy shortage, wrecks or delay in transportation, inability to obtain necessary labor, materials, or equipment from usual sources, or due to any cause beyond its reasonable control. In the event of delay in performance due to any such cause, the date of delivery or time of completion will be extended by a period of time reasonably necessary to overcome the effect of such delay. If the materials or equipment included in this Proposal become temporarily or permanently unavailable for reasons beyond the control of American Chiller Service, American Chiller Service shall be excused from furnishing said materials or equipment and be reimbursed for the difference between cost of materials or equipment unavailable and the cost of an available reasonable substitute.
15. AMERICAN CHILLER SERVICE SHALL NOT IN ANY EVENT BY LIABLE TO THE CUSTOMER OR TO THIRD PARTIES FOR ANY
INCIDENTAL, CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF PRODUCTION, LOSS #4..
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Large Tonnage Air
Conditioning Specialists
Sacramento 11328 Sunrise Gold Circle, Rancho Cordova CA 95742 Phone: (916)457-7800 Fax: (916)731-8100 Bay Area 743 Thornton Street San Leandro CA 94577 Phone: (510)686-1111 Fax: (510)686-1234 Modesto 931 Reno Ave., Suite L Modesto CA 95351 Phone: (209)557-0111 Fax: (209)557-0123 Reno / Tahoe 745 E. Greg Street, Suite 5 Sparks NV 89431 Phone: (775)322-9900 Fax: (775)322-9929 Mailing Address P.O. Box 1887 Rancho Cordova CA 95741-1887 Toll Free: (800)916-2445 Website: www.americanchiller.com E-Mail: [email protected] Contractors Licenses: CA: 605046 C-4/C-20/C-38/D-58 NV: 0035255 C-21 ID: HVC-C-10073 Payment to be made as follows: Net 30 Days All material is guaranteed to be as specified. All work to be completed in a professional manner according to standard practices. All work is covered by a one year parts and labor warranty unless otherwise specified. Any alteration or deviation from above specifications involving extra costs will be executed only upon written orders, and will become an extra charge over and above the estimate. All agreements contingent upon strikes, accidents or delay beyond our control. American Chiller Service or Customer can terminate with one month written notice to the other party. Owner to carry fire and other necessary insurance. Our workers are date of proposal.
OF USE OR LOSS OF PROFITS OR REVENUE ARISING FROM ANY CAUSE WHATSOEVER INCLUDING, BUT NOT LIMITED TO ANY DELAY, ACT, ERROR OR OMISSION OF AMERICAN CHILLER SERVICE. IN NO EVENT WILL A MERI CA N CHI LLE R SE RV I CE
LIABILITY FOR DIRECT OR COMPENSATORY DAMAGES EXCEED TWO TIMES THE PAYMENT RECEIVED BY AMERICAN CHILLER SERVICE FROM CUSTOMER UNDER THE INSTANT AGREEMENT.
16. American Chiller Service extends the man warranties on all parts and materials and warrants labor to meet industry standards for a period of thirty (30) days from the date performed, unless a longer duration is expressly stated elsewhere in this Agreement. American Chiller Service expressly limits its warranty on Cust Equipment to cover only that portion of Equipment which had specific service work done by American Chiller Service. These warranties do not extend to any Equipment or service which has been repaired by others, abused, altered, or misused, or which has not been properly maintained. THESE WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE OF MERCHANTABILITY AND FITNESS FOR SPECIFIC PURPOSE, WHICH ARE HEREBY SPECIFICALLY DISCLAIMED.
17. Each of us agrees that we are responsible for any injury, loss, or damage caused by any negligence or deliberate misconduct of our employees or employees of our subcontractors. If any of our employees or those of our subcontractors, cause any injury, loss or damage in connection with performing their duties under this agreement, the responsible party will pay for all costs, damages, and expenses, which arise. Each of us agrees to defend and hold harmless the other party, its officers, directors and employees, from and against all claims, damages, losses and expenses, including but not limited to fees and court costs, arising out of or resulting from the performance of work hereunder, to the extent that such claim, damage, loss, or expense is caused by an active or passive act or omission of the indemnifying party or anyone directly or indirectly employed by that party, or anyone for whose acts that party may be liable.
18. This Agreement shall be binding upon and inure to the benefit of each respective successors, assigns and affiliates. This Agreement is governed by and construed in accordance with the laws of the State of California. #4..
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CITY OF MODESTO
COMMITTEE AGENDA REPORT
DATE OF MEETING:
March 23, 2026
Date: March 14, 2026
TO: Finance Committee
David Wright, Chair
Nick Bavaro, Vice-Chair
Rosa Escutia-Braaton, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Stephan Christensen, Office of Performance Management and Budget Director
SUBJECT: Fiscal Year 2025-26 Mid-Year General Fund Update Report CONTACT: Kaceey Culbertson, Budget Manager, [email protected], 209-571-5855
DESCRIPTION:
Consider the informational Fiscal Year 2025-26 Mid-Year General Fund Update Report and recommended adjustments to the major General Fund revenues and expenditures and forwarding to Council for acceptance and approval. (Funding Source: General Fund) STRATEGIC PLAN ELEMENT:
This item supports the City of Modesto 2025-2026 Strategic Plan focus on Governance and Service Delivery under Goal H: Achieve Long-Term Financial Sustainability.
BACKGROUND:
Periodically, the Budget Division in the Office of Performance Management & Budget presents updates to the Finance Committee and Council on the status of the General Fund. This update often includes recommended adjustments to the Annual Operating, Capital Improvement and Multi-year non-Capital Project budgets. The purpose of the update is to summarize financial results through the mid-year and to present any recommended adjustments to the Operating Revenue and Expenditure budgets as needed. In addition, the update will highlight any potential issues, concerns, or items of interest, as needed.
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Finance Committee, March 23, 2026
Fiscal Year 2025-26 Mid-Year General Fund Update Report
DISCUSSION:
The attached Fiscal Year 2025-26 Mid-Year General Fund Update report focuses on the performances of the City’s General Fund major revenue sources, as well as the various expenditures across the operating departments. The revenue data gathered through February 28, 2026, begins to show important trends in the revenue and expenditure data which has provided important insight into the projections that are described within the report pertaining to the General Fund’s fiscal year-end.
To date, the General Fund has received 49% of the budgeted revenues through February 28, 2026. This is slightly behind the normal rate of receipts at this time of the year for the General Fund when compared to the prior fiscal year. In the prior year, 54% of the revenues had been receipted through February of 2025.
The main contributing factor to the lower total receipt of revenues is the lag time that is experienced in the Sales Tax category. Sales Tax is receipted two months in arrears. This means that the revenue received for the month of February will reflect actual sales tax receipts for the month of December 2025. In terms of the overall percentage shown in the attached report, this lag time contributes to some of the delays in revenues being received.
Details about each major revenue category can be found within the report. Major revenues show an overall increase of $451 thousand. This is mainly due to a large projected increase in the Sales Tax category ($1.3M) and the Utility User Tax category ($557K) being offset by decreases in the Business License/Mill Tax (-$1.3M) and Cannabis Tax (-$204K) categories.
Sales Tax is showing signs of growth as receipts have been bolstered by inflation that has increased the costs of goods sold from consumer spending. This category will continue to be monitored as there are still concerns about the future pace of growth with looming tariff fluctuations and the geopolitical climate and potential future impacts on Sales Tax. The Utility User Tax has slight increases that have been caused by the increases in costs of gas, electricity and water utilities. These increases equate to additional tax revenue that is remitted by providers to the City. The positive gains in these two categories have been offset by decreases in Business License Mill/Tax (BLMT) and Cannabis Tax revenues. BLMT has decreased largely due to gross receipts from businesses being much lower through February than what was budgeted for the fiscal year. Mill Tax applies a tax on the portion of gross receipts for commercial retail, service and home-based businesses and to date these are much lower than the prior year. For Cannabis Tax, the revenues for the current fiscal year show another year of decline for annual revenues compared to the prior year. This revenue source is beginning to show a steady leveling out of what appears to be annual revenues of about $3.2M.
When compared to the total amount expended as a percentage, overall actual expenditure for City departments is slightly ahead of their expenditure budgets. #5..
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Finance Committee, March 23, 2026
Fiscal Year 2025-26 Mid-Year General Fund Update Report
Additionally, the General Fund has expended 68% of the total expense budget. This is slightly higher than the expected amount of 67% for this point in the fiscal year. However, there are contributing factors associated with the 1% difference as indicated. The primary reason for the variance is due to the full payment of the CalPERS unfunded liability that was made in July at the beginning of the fiscal year. This payment resulted in expenditure showing higher to date as the payment is made in full at the beginning of the fiscal year to save on interest costs. There have also been other increased costs in departments due to increased costs of goods and contract services that are inflating year-to-date spending.
FISCAL IMPACT:
This item contains multiple recommendations from staff to increase and decrease major General Fund revenue categories to correspond with the estimated projections for the fiscal year-end. The recommended revenue increases/decreases are as follows:
Category
Current
Budget
Increase/
(Decrease)
Revised
Amount
Account -
Description
Sales Tax $35,904,490 $1,330,262 $37,234,752 41201 - Sales and Use Taxes Utility User Tax $23,619,649 $557,119 $24,176,768 41203 - Utility Users Tax Transient
Occupancy Tax $3,546,585 $94,188 $3,640,773
41204 - Transient Occupancy
Tax
Business
License/Mill Tax $18,690,534 $(1,326,252) $17,364,282
41402 - Business License Tax -
Mill Tax
Cannabis Tax $3,400,793 $(204,048) $3,196,745 41406 - Cannabis Tax Grand Totals $85,162,051 $451,269 $85,613,320
The total recommended increases/decreases across the major General Fund revenues have a net increase impact in the amount of $451,269 for Fiscal Year 2025-26 and are explained in more detail in the Fiscal Year 2025-26 Mid-Year General Fund Update report.
No increases/decreases are being recommended for General Fund expenditure budgets currently. However, staff will continue to monitor the General Fund expenditure budget and will bring any changes of note to Council via the monthly budget adjustment process.
CEQA/NEPA REQUIREMENTS:
This item does not constitute a “project” within the meaning of California Environmental Quality Act (CEQA) Guidelines Section 15378 and requires no environmental review. #5..
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Finance Committee, March 23, 2026
Fiscal Year 2025-26 Mid-Year General Fund Update Report
RECOMMENDED COMMITTEE ACTION:
Staff Recommendations:
Motion accepting the information Fiscal Year 2025-26 Mid-Year General Fund Update Report and recommended adjustments to the major General Fund revenues and expenditures and forwarding to Council for acceptance and approval.
Approved by:
Stephan Christensen, Office of Performance
Management and Budget Director
Joseph P. Lopez, City Manager
Attachments:
1. Fiscal Year 2025-26 Mid-Year General Fund Update Report #5..
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FISCAL YEAR 2025-26
MID-YEAR GENERAL
FUND UPDATE REPORT:
The Mid-Year General Fund Update Report is created by the Office of Performance Management & Budget (OPMB) - Budget Division through the direction of the City Manager to provide a general update concerning the health of the City’s General Fund as well as any adjustments to its revenues and/or
expenditures. Information contained within this report seeks to provide data on the performance of the General Fund as the revenues are collected, and the expenditures continue through February of the current fiscal year.
Please note that the expenditures and revenues reported herein are through February 28, 2026, and may not reflect final figures for the month.
Created by the
OPMB - Budget
Division
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Fiscal Year 2025-26 Mid-Year General Fund Update
1 | P a g e
General Fund Revenues
(Overview)
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Fiscal Year 2025-26 Mid-Year General Fund Update
2 | P a g e
eneral Fund revenues are classified into three categories: tax revenues, fee revenues, and other departmental revenues. Through February 28, 2026, the total General Fund revenues receipted are $99.6 million or approximately 49% of the total budgeted revenues for Fiscal Year 2025-26. This is slightly behind the normal rate of receipts at this time of the year for the General Fund. For comparison, at the same time last fiscal year, the City had received 54% of the total budgeted revenues (approximately $104.2 million). The main reason for the decline in the percentage of receipts is due to the typical lag in terms of the timing of receipts in revenues for sales tax and timing of larger payments for Franchise Fees and Utility Users Tax. Some of the decline in the percentage of receipts is also attributed to a slight decline in departmental revenues, some of which is tied to timing for revenue received for contracts and also a slight lag in rental revenue, which is expected to see an increase over the next few months.
The revenues received to date are spread across all three major revenue types and are broken down further in the chart below:
*Please note that Departmental Revenues category includes an amount of $6.9M in revenue for the Oakdale Fire Contract, $8.0M in revenue for the Ceres Fire Contract, $413K in revenue for Stanislaus Consolidated Fire contract, $353K in revenue for Turlock Fire contract, and $2.3M in revenue for Salida Fire contract which are all used to pay for offsetting expenditures.
Category
Current
Budget
Actuals (as of
Feb 28, 2026)
Amount
Outstanding
% Received to
Date
Tax Revenues:
Property Tax - Property $ 24,573,189 $ 14,215,354 $ 10,357,835 58% Property Tax - VLF Swap $ 24,839,088 $ 12,189,855 $ 12,649,233 49% Sales Tax $ 35,904,490 $ 18,817,079 $ 17,087,411 52%
Utility Users Tax $ 23,619,649 $ 13,577,675 $ 10,041,974 57% Transient Occupancy Tax $ 3,546,585 $ 2,048,381 $ 1,498,204 58% Business License/Mill Tax $ 18,690,534 $ 9,024,656 $ 9,665,878 48% Cannabis Tax $ 3,400,793 $ 1,682,876 $ 1,717,917 49%
Total Tax Revenues $ 134,574,328 $ 71,555,876 $ 63,018,452 53% Fee Revenues:
Franchise Fees $ 5,977,722 $ 1,978,123 $ 3,999,599 33%
Motor Vehicle Fees $ 525,000 $ 387,945 $ 137,055 74%
Construction Revenues $ 3,331,668 $ 2,006,484 $ 1,325,184 60% Total Fee Revenues $ 9,834,390 $ 4,372,552 $ 5,461,838 44% Other Revenues:
Departmental Revenues $ 39,805,102 $ 23,689,839 $ 16,115,263 60% Measure H (General Fund Budget Structural Deficit) $ 11,664,984 $ - $ 11,664,984 0% Additional Measure H Sales Tax (Supplemented for Lost ARPA Rev) $ 2,000,000 $ - $ 2,000,000 0% Transfers In $ 3,398,484 $ - $ 3,398,484 0%
Total Other Revenues $ 56,868,570 $ 23,689,839 $ 33,178,731 42% Total Revenues $ 201,277,288 $ 99,618,267 $ 101,659,021 49% G
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Fiscal Year 2025-26 Mid-Year General Fund Update
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Tax Revenues
Tax revenues represent 67% of the total General Fund operating revenue budget at $134.57 million of the total $201.28 million revenue operating budget for Fiscal Year 2025-26. As of February 28, 2026, $71.56 million of the budgeted $134.57 million has been received to date. This represents approximately 53% of the tax revenue budget being received. This is on target for this point-in-time during the year. Sales Tax is coming in higher overall than what was anticipated when the budget was adopted and is being impacted by the local economy and what is occurring with sustained inflation and increased prices on goods and services. The increased prices on goods and services have impacted the sales tax amount to be received and consumer spending has continued to remain steady.
Fee Revenues
Fee Revenues represent 4.9% of the total General Fund operating revenue budget at $9.8 million of the total $201.28 million revenue operating budget for Fiscal Year 2025-
26. Most of the fee revenues are generated from Franchise Fees which are collected as “rent” paid for the use of public right of way. These are negotiated costs to allow utility companies (telecommunications, natural gas, garbage, etc.) to access structures like transmission towers, sewage systems, and roads. The City collects approximately $5.98 million in franchise fees annually. Through February 28, 2026, $1.9 million has been collected in this revenue category (33% of the budgeted amount). This amount is below what is expected for this time of the year due to the timing of a payment in the Garbage Franchise Fee category. The payment is expected to come in the month of March/April and is anticipated to get this revenue category back on track with estimated budget amounts.
Construction Revenues
Construction revenues are a sub-category of Fee Revenues and include all revenues collected in the Building Safety Division and the Planning Division in the Community and Economic Development Department (CEDD). These revenues represent approximately
1.7% of the total budgeted General Fund operating revenues for Fiscal Year 2025-26.
They are budgeted at $3.3 million as of February 28, 2026.
Construction revenues received through February 28, 2026, are approximately 60% of the budgeted amount. This is slightly behind the amounts collected in the previous fiscal year in terms of percentage collected (60% vs 66%), but higher in terms of total revenues ($2.0M vs $1.69M). Construction revenues continue to be strong, and it is anticipated that these revenues will continue to build through the spring and summer as there is continued activity in the building industry in this area. This is especially #5..
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important as the City continues to look toward strengthening its economic development endeavors.
Other Revenues
Other Revenues represent 28% of the total General Fund operating revenue budget at $56.8 million of the total $201.28 million revenue operating budget for Fiscal Year 2025-
26. Other revenues include any revenue source that is received by departments and is not included in the tax or fee revenues categories as well as transfers into the General Fund from other funds.
These revenues are accounted for under the generating department and include a wide range of revenue sources such as direct charge revenue (all departments), fire inspection fees (Fire Department), league and facility rental fees (Parks, Recreation & Neighborhoods), and the McHenry Tax Sharing Agreement revenues (NonDepartmental). #5..
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General Fund Revenues
(Analysis)
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Property Tax Revenues Analysis
As of February 28, 2026, the first payment has been received in one of the subcategories that makes up the property tax revenues, Property Tax – Property. The first payment for the second sub-category, Property Tax – Vehicle License Fee (VLF) Swap has also been received. These two payments are significant indicators of how the property tax revenues for the entire fiscal year will perform. With both payments receipted a clearer picture can be made for this major tax revenue category for Fiscal Year 2025-26.
Property Tax – Property
In Fiscal Year 2025-26, the first installment of property tax was received in January in the amount of $12.17 million. This first payment is receipted under current year secured property taxes and is the bulk of the property tax revenue that is received. Other revenues that fall under Property Tax – Property include, current year unsecured, delinquent, delinquent unsecured, supplemental roll, and Redevelopment Property Tax Trust Fund (RPTTF) allocation. These revenue accounts make up the total amounts that sum up to the total Property Tax – Property amount received by the City.
With the first payment received, estimates for fiscal year-end 2025-26 show that the amounts for this revenue category are on target with the adopted budget amounts.
Year-end estimates show that a total of $24.5 million is expected to be received based off the $12.17 million first payment which tracks with estimates for the current budgeted amount for Property Tax – Property. Staff recommend keeping the current budget for Fiscal Year 2025-26 based upon estimates for remaining revenues to be receipted.
Staff are not recommending any changes to this category currently.
Property Tax – VLF Swap
Property Tax – VLF Swap is the second portion of the revenues that makes up the total Property Tax category for the City. This revenue source came into effect with the passing of the State of California Budget in 2004 by then Governor Schwarzenegger.
The budget included a swap of city and county vehicle license fee revenues for an additional property tax share. These additional VLF backfill funds, which equate to a dollar-for-dollar like amount of property taxes, also increase annually in proportion to the growth in assessed valuation in the local jurisdictions.
The first Property Tax – VLF Swap payment for the City has been received in the amount of $12.19 million in the month of February. The amount received in the first payment is typically around 50% of the total payment that will be received for the year.
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this first payment, staff recommends keeping the current budget for Fiscal Year 2025-
26. Staff are not recommending any changes to this category currently.
Property Tax Charts:
Annual Property Tax
Annual Property Tax – Property
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Annual Property Tax – VLF – Swap
The preceding property tax charts show the trends that have been occurring since fiscal year 2016/2017. There has been steady growth in both the Property Tax and VLF swap categories of this revenue source. At this point, the growth is expected to continue as the housing market remains strong, and valuation of homes continues to grow because of the increased prices of homes. This revenue source will continue to be monitored as there will be a point in time when the prices will begin to decline as the supply of houses begins to exceed the demand for homes in terms of buyers, and the City will want to stay ahead of any revenue decreases as much as possible. #5..
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Sales Tax Revenues Analysis
As of February 28, 2026, Sales Tax revenues received to date are approximately $18.82 million. This represents 52% of the total Sales Tax budgeted for the fiscal year ($35.9 million). Sales Tax is received by the City monthly but is receipted within a twomonth lag time, meaning that the receipts received in any particular month are for the actual sales tax receipts two months prior. For example, sales tax revenues accounted for in the month of February are for actual sales tax receipts made in the month of December (two months prior). This continuous two-month lag time is something that is closely monitored by the OPMB - Budget Division staff as estimates are created for fiscal year-end.
In Fiscal Year 2025-26, there have been several categories of Sales Tax that have increased in the last few quarters for the City. These have been in the industries of general retail, transportation, and to a lesser extent restaurants and hotels. Certain subcategories within the larger areas of industries have also seen decline in the third quarter of 2025 (covering the months of July through September). These areas included fuel and service stations, miscellaneous retail, and business to business.
Countywide Pool Sales Tax
The City continues to receive its share of the County Pool related to the “origin sourcing” portion of sales tax. “Origin sourcing” is a sales tax practice under which sales tax for purchases of goods that are shipped to purchasers are generally sourced to the business location of the retailer where the sale originates.
Under current California Department of Tax and Fee Administration (CDTFA) regulations, a substantial portion of local use tax collections are allocated through a countywide pool to local jurisdictions, like Modesto, where the purchased property is put to its first functional use. Under the pool system, the tax is reported by the taxpayer to the countywide pool of use and then distributed to each jurisdiction in that county on a pro-rata share of taxable sales. If there is a situation where a county of use cannot be determined, then the allocation goes to the state pool for pro-rata distribution on a statewide basis.
The City of Modesto consistently received anywhere between 32% to 38% of the allocation of the countywide pool described above, however this proportionate share has been dropping in recent quarters. With the opening of new stores and distribution centers in areas such as Riverbank, Turlock, and Patterson, the City of Modesto has seen its proportionate share of the Countywide pool drop steadily since the second quarter of 2023. Where once the proportionate share was in the 38% range, the City most recently in the third quarter of 2025 saw this share dip down to 29.7%, though it should be noted that this was an increase of 11.2% from the third quarter of 2024. While #5..
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this share of sales tax can still represent anywhere between $950 thousand to $1.8 million on a quarterly basis, the City’s share for Q3 2025 was $1.47 million which was higher than the $1.15 million received in Q3 2024.
At this time current year-end projections show sales tax figures that are coming in higher than in the prior fiscal year and higher than what was initially budgeted for the current fiscal year when the budget was adopted. When the initial estimates for the current year were made, they were done conservatively in relation to the current growth trends due to prolonged inflation and a somewhat volatile political landscape at the federal level has affected the local economy much faster than anticipated. Sales Tax will continue to be monitored throughout the year and as changes occur, staff will bring any updates back to City Council as needed. At this time staff are recommending a large increase in Sales Tax revenues based upon current trends.
Staff are recommending an increase of $1,330,262 for this category for Fiscal Year 2025-26.
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Sales Tax Charts
Annual Sales Tax Chart
Quarterly Sales Tax Chart
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Cannabis Tax Revenue Analysis
Cannabis Tax is beginning to be a normalized source of revenue, and we continue to see some annualized trends in the revenues each fiscal year. When the revenue began to be receipted back in the latter half of fiscal year 2018-19, it started slowly as there was not the full amount of Council approved dispensaries up and running at the time.
Over the next six to eight months the dispensaries began to gain traction and permitted dispensaries became fully operational. Revenues began to increase steadily over the next fiscal year and a half and steadily rose to a consistent $400k+ per month in receipted revenues per month to the City. Since that time, cannabis revenues have dropped to an average of $239K per month in Fiscal Year 2025-26.
As of February 28, 2026, $1.68 million in Cannabis Tax revenue have been received for Fiscal Year 2025-26. This is approximately 49% of the budgeted amount of $3.4 million.
Currently, staff is recommending a decrease of $204 thousand in this revenue category.
The average monthly revenues have decreased by approximately 14.6% from the prior fiscal year and should this trend continue, it would put the fiscal year-end estimate for Cannabis Tax receipts at a total of $3.2 million. The Cannabis Tax revenues that have been receipted this year seem to be steadying but at the same time they are leveling off at a lower average monthly amount than what was seen received last fiscal year.
Staff are recommending a decrease of $204,048 for this category for Fiscal Year 2025-26.
Annual Cannabis Tax Revenues
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Monthly Cannabis Tax Revenues
The preceding charts show the trends for Cannabis Tax revenues and the growth initially seen and then the declines that have been seen since annually. The chart also shows that through the end of Fiscal Year 2024-25 through the current month of Fiscal Year 2025-26; the revenue trends have steadied for Cannabis Tax at a lower amount.
The monthly cannabis tax revenues area chart shows the monthly revenue for cannabis over a 12-month period from March 2025 through February 2026. It is expected that Fiscal year 2025-26 will continue to see steady revenues though at a lower amount than the prior fiscal year.
Other Tax Revenues
Transient Occupancy Tax (TOT) is a tax collected from guests that occupy or have a right to occupy a living space or establishment for 27 days or less. This tax is most often associated with room rentals at hotels or other like establishments. The current TOT rate in Modesto is 9%. Current trends in this revenue category are showing a somewhat lower rate of receipt than what was shown in the prior fiscal year. Currently the City has received 58% of the budgeted $3.55 million TOT revenue. Year-end projections for this category estimate a slight increase above the budgeted amount of approximately $94 thousand.
Utility Users Tax (UUT) is a usage tax collected on every person that uses electricity, water, gas, or telephone services in the City. This usage tax is collected by the service provider and remitted to the city. The taxes imposed by the UUT are at a rate of 6 percent on all charges made for such services and are capped at a maximum annual amount of $1,500 for any service user for an individual service in any 12-month period. #5..
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UUT revenues received to date are at 57% of the budgeted amount of $23.6 million. At the same time in the prior fiscal year, 59% of the total budget had been receipted to date, however at a lower budgeted amount of $22.1 million. Current monthly revenues are tracking about an average of 3.1% higher than the previous fiscal year, which is why staff is recommending a conservative increase of approximately $557 thousand. We will continue to monitor this revenue account to see if there are additional gains that will be seen in the next few months that can be realized before fiscal year end.
Business License/Mill Tax is coming in at a much lower amount than the previous fiscal year. To date 48% of the total budgeted revenue of $18.7 million. With Business License/Mill Tax larger total payments are typically received in the months of February and January. January in Fiscal Year 2025-26 had lower amounts received than in the prior fiscal year ($2.5M compared to $2.3M), however, February in Fiscal Year 2025-26 had higher amount received than in the prior fiscal year($1.56M compared to 1.0M) and overall, the revenue received is approximately $507 thousand higher than the prior fiscal year at the same point in time. While revenue is trending slightly higher than the prior Fiscal Year, the budgeted revenue is higher than what is projected to be received by year end. Staff will continue to monitor this revenue source closely as the final amounts are receipted during the remainder of the fiscal year, but at this time recommend a decrease to this category.
Staff are recommending an increase to the Transient Occupancy Tax revenue category in the amount of $94,188, an increase to the Utility Users Tax revenue category in the amount of $557,119 and a decrease to the Business License/Mill Tax revenue category of $1,326,252 for Fiscal Year 2025-26.
Other Fee Revenues
Motor Vehicle Fees are currently being receipted at a slightly lower amount than the current budget ($387K receipted as of February 28, 2026, vs $443K budget), however is trending on track to the current Fiscal Year 2025-26 budget. Accordingly, staff are not recommending any change in this category of revenue.
Staff are not recommending any changes to this category currently.
Departmental Revenue Analysis
Departmental revenues are coming in slightly behind than anticipated at this time and it will be an area that will continue to be monitored. The revenues received have a slight lag due to contractual payments and a slight decrease in rentals that are expected to increase in the next few months.
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There are no other major areas of concern currently. If anything changes in this category, OPMB - Budget Division will bring an item through the monthly budget adjustment process and update Council on any changes in these categories.
Staff are not recommending any changes to this category currently.
Summary of Recommended Revenue Changes
Category Current Budget
Increase/
(Decrease)
Revised
Amount Account - Description
Sales Tax $35,904,490 $ 1,330,262 $ 37,234,752 41201 - Sales and Use Taxes Utility User Tax $23,619,649 $ 557,119 $ 24,176,768 41203 - Utility Users Tax Transient Occupancy Tax $ 3,546,585 $ 94,188 $ 3,640,773 41204 - Transient Occupancy Tax Business License/Mill Tax $18,690,534 $ (1,326,252) $ 17,364,282 41402 - Business License Tax - Mill Tax Cannabis Tax $ 3,400,793 $ (204,048) $ 3,196,745 41406 - Cannabis Tax Grand Totals $85,162,051 $ 451,269 $ 85,613,320
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General Fund Expenditures
(Analysis)
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eneral Fund expenditures make up the total budgets from which departments pay for costs related to one of four expenditure categories. These categories include salary and benefit costs, internal service fund costs, discretionary costs, and transfers out to other funds. In the General Fund, there are 13 Operating Departments and one category for Transfers Out of the General Fund to other funds.
The 13 Operating Departments make up a total General Fund operating expenditure budget of $210.1 million with Transfers Out having a budget of $5.52 million. Including the variance rate of a credit of $13.8 million, the total current General Fund operating expenditure budget in Fiscal Year 2025-26 is $202.7 million.
The table below shows the current budget and expenditures through February 28, 2026.
General Fund Department Expenditures
At the point in time that the expenditure data was collected, one could expect an estimated expenditure rate of approximately 67% (8 months elapsed out of the fiscal year). The chart shows that the overall General Fund expenditures are slightly above this target with 68% of the total budget expended. We are seeing salary savings in some of the departments due to vacant positions which are resulting in some of the decreased level of expenditure. The slightly higher rate of expenditure of 68% is due to the payment that is made in July for the full year of CalPERs unfunded liability. This payment made at the beginning of the fiscal year will show the spend down percentage Department Current Budget
Actuals (as of
Feb 28, 2026)
% of Budget
Expended
Police Department $ (89,747,857) $ (56,669,440) 63%
Fire Department $ (56,102,566) $ (38,557,200) 69%
Oakdale Fire Contract Expense $ (7,013,021) $ (5,020,370) 72% Ceres Fire Contract Expense $ (8,040,529) $ (5,857,165) 73% Stanislaus Consolidated Fire Contract Expense $ (413,871) $ (224,884) 54% Turlock Fire Contract Expense $ (353,777) $ (244,674) 69% Salida Fire Contract Expense $ (2,308,700) $ (1,560,161) 68% Parks, Recreation, and Neighborhoods $ (16,273,159) $ (10,687,798) 66% Community and Economic Development $ (7,653,603) $ (4,784,168) 63% Engineering Services Department $ (3,045,847) $ (1,878,883) 62% City Council $ (799,128) $ (434,086) 54%
City Manager's Office $ (3,106,676) $ (2,031,826) 65%
Human Resources $ (2,234,656) $ (1,493,429) 67%
City Attorney's Office $ (2,044,503) $ (1,198,708) 59%
City Clerk's Office $ (834,877) $ (558,674) 67%
Office of Performance Management & Budget $ (1,290,074) $ (704,888) 55% Office of the City Auditor $ (603,761) $ (130,175) 22%
Finance Department $ (7,799,276) $ (5,005,223) 64%
Non-Departmental $ (435,500) $ (60,695) 14%
Total Departmental Expenses $ (210,101,381) $ (137,102,447) 65% Transfers Out $ (6,515,077) $ (300,245) 5%
Variance Rate (5%) $ 13,868,142 $ - 0%
Total Department Expenses $ (202,748,316) $ (137,402,692) 68% G
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slightly higher as the payment is for the full fiscal year and made at the beginning of the year. There are also increases in other areas that are bringing up overall expenses such as the increased cost of goods, and the increased costs of contract services. #5..
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Below is a table that shows the breakdown of the expenditures from each department by appropriation unit category. As reminder the breakdown of expenditure categories is as follows:
• Appr Unit A – Salaries and Benefits
• Appr Unit AA – Intrafund Labor
• Appr Unit B – Internal Service Fund Charges
• Appr Unit C – Discretionary Charges
• Appr Unit D – Transfers Out
Department
Current
Budget
Actuals (as of
Feb 28, 2026)
Amount
Available
%
Expended
City Attorney's Office
Salaries and Benefits (Appr Unit A) $ 717,040 $ 444,849 $ 272,191 62% ISF Charges (Appr Unit B) $ 217,352 $ 140,926 $ 76,426 65% Discretionary Charges (Appr Unit C) $ 1,110,111 $ 619,355 $ 476,697 56% City Attorney's Office Total $ 2,044,503 $ 1,205,130 $ 839,372 59% City Clerk's Office $ -
Salaries and Benefits (Appr Unit A) $ 540,988 $ 370,869 $ 170,119 69% ISF Charges (Appr Unit B) $ 100,523 $ 66,169 $ 34,354 66% Discretionary Charges (Appr Unit C) $ 193,366 $ 115,213 $ 76,255 60% City Clerk's Office Total $ 834,877 $ 552,252 $ 282,625 66% City Council $ -
Salaries and Benefits (Appr Unit A) $ 557,323 $ 325,529 $ 231,794 58% ISF Charges (Appr Unit B) $ 115,202 $ 75,004 $ 40,198 65% Discretionary Charges (Appr Unit C) $ 126,603 $ 33,554 $ 79,702 27% City Council Total $ 799,128 $ 434,086 $ 365,041 54%
City Manager's Office $ -
Salaries and Benefits (Appr Unit A) $ 2,244,443 $ 1,473,634 $ 770,809 66% ISF Charges (Appr Unit B) $ 257,347 $ 168,848 $ 88,499 66% Discretionary Charges (Appr Unit C) $ 604,886 $ 389,344 $ 220,235 64% City Manager's Office Total $ 3,106,676 $ 2,031,826 $ 1,074,850 65% Community & Economic Development $ -
Salaries and Benefits (Appr Unit A) $ 5,325,092 $ 3,337,694 $ 1,987,398 63% Intrafund Labor (Appr Unit AA) $ (39,836) $ (9,608) $ (30,229) 24% ISF Charges (Appr Unit B) $ 1,286,669 $ 846,716 $ 439,953 66% Discretionary Charges (Appr Unit C) $ 1,081,678 $ 609,365 $ 469,016 56% Community & Economic Development Total $ 7,653,603 $ 4,784,168 $ 2,869,436 63% Engineering Department
Salaries and Benefits (Appr Unit A) $ 2,539,025 $ 1,677,573 $ 861,452 66% Intrafund Labor (Appr Unit AA) $ (97,851) $ (47,350) $ (50,501) 48% ISF Charges (Appr Unit B) $ 180,882 $ 119,796 $ 61,086 66% Discretionary Charges (Appr Unit C) $ 423,791 $ 128,864 $ 294,519 30% Engineering Department Total $ 3,045,847 $ 1,878,883 $ 1,166,964 62% Finance Department
Salaries and Benefits (Appr Unit A) $ 5,237,967 $ 3,341,212 $ 1,896,755 64% Intrafund Labor (Appr Unit AA) $ (73,058) $ (49,297) $ (23,761) 67% ISF Charges (Appr Unit B) $ 901,542 $ 593,810 $ 307,732 66% Discretionary Charges (Appr Unit C) $ 1,732,825 $ 1,119,497 $ 687,765 65% Finance Department Total $ 7,799,276 $ 5,005,223 $ 2,794,053 64% Fire Department
Salaries and Benefits (Appr Unit A) $ 52,457,888 $ 35,617,792 $ 16,840,096 68% ISF Charges (Appr Unit B) $ 1,938,724 $ 1,292,483 $ 646,241 67% Discretionary Charges (Appr Unit C) $ 6,507,483 $ 4,056,189 $ 2,713,802 62% Fire Department Total $ 60,904,095 $ 40,966,464 $ 19,937,630 67% #5..
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The main takeaway from the information above is that unlike in past years there are not a large amount of savings in the Salaries and Benefits expenditures for departments like Department
Current
Budget
Actuals (as of
Feb 28, 2026)
Amount
Available
%
Expended
Fire Department - Ceres
Salaries and Benefits (Appr Unit A) $ 6,034,438 $ 5,320,176 $ 714,262 88% ISF Charges (Appr Unit B) $ 144,909 $ 96,606 $ 48,303 67% Discretionary Charges (Appr Unit C) $ 228,532 $ 200,379 $ 29,562 88% Fire Department - Ceres Total $ 6,407,879 $ 5,617,161 $ 790,718 88% Fire Department - Oakdale $ -
Salaries and Benefits (Appr Unit A) $ 6,369,214 $ 4,505,832 $ 1,863,382 71% ISF Charges (Appr Unit B) $ 145,777 $ 97,185 $ 48,592 67% Discretionary Charges (Appr Unit C) $ 405,500 $ 277,813 $ 108,057 69% Fire Department - Oakdale Total $ 6,920,491 $ 4,880,829 $ 2,039,662 71% Human Resources $ -
Salaries and Benefits (Appr Unit A) $ 2,018,606 $ 1,361,132 $ 657,474 67% Intrafund Labor (Appr Unit AA) $ (170,365) $ (113,577) $ (56,788) 67% ISF Charges (Appr Unit B) $ 336,865 $ 221,042 $ 115,823 66% Discretionary Charges (Appr Unit C) $ 49,550 $ 24,832 $ 24,793 50% Human Resources Total $ 2,234,656 $ 1,493,429 $ 741,227 67% Non-Departmental $ -
Discretionary Charges (Appr Unit C) $ 435,500 $ 60,695 $ 371,497 14% Non-Departmental Total $ 435,500 $ 60,695 $ 374,805 14% Office of the City Auditor $ -
Salaries and Benefits (Appr Unit A) $ 317,271 $ 60,100 $ 257,171 19% ISF Charges (Appr Unit B) $ 16,440 $ 10,624 $ 5,816 65% Discretionary Charges (Appr Unit C) $ 270,050 $ 59,450 $ 163,106 22% Office of the City Auditor Total $ 603,761 $ 130,175 $ 473,586 22% Office of Performance Management & Budget $ -
Salaries and Benefits (Appr Unit A) $ 1,036,805 $ 640,663 $ 396,142 62% ISF Charges (Appr Unit B) $ 85,259 $ 56,285 $ 28,974 66% Discretionary Charges (Appr Unit C) $ 168,010 $ 7,941 $ 160,069 5% Office of Performance Management & Budget Total $ 1,290,074 $ 704,888 $ 585,186 55% Parks, Recreation & Neighborhoods $ -
Salaries and Benefits (Appr Unit A) $ 7,812,609 $ 5,314,434 $ 2,498,175 68% Intrafund Labor (Appr Unit AA) $ (658,613) $ (580,466) $ (78,147) 88% ISF Charges (Appr Unit B) $ 2,054,849 $ 1,367,020 $ 687,829 67% Discretionary Charges (Appr Unit C) $ 7,064,314 $ 4,586,811 $ 2,324,235 65% Parks, Recreation & Neighborhoods Total $ 16,273,159 $ 10,687,798 $ 5,585,361 66% Police Department $ -
Salaries and Benefits (Appr Unit A) $ 68,014,500 $ 43,989,505 $ 24,024,995 65% Intrafund Labor (Appr Unit AA) $ - $ (236,483) $ 236,483 0% ISF Charges (Appr Unit B) $ 6,618,382 $ 4,416,583 $ 2,201,799 67% Discretionary Charges (Appr Unit C) $ 15,114,975 $ 8,499,835 $ 4,798,789 56% Police Department Total $ 89,747,857 $ 56,669,440 $ 33,078,417 63% Transfers Out $ -
Transfers Out $ 6,515,077 $ 300,245 $ 6,214,832 5%
Transfers Out Total $ 6,515,077 $ 300,245 $ 6,214,832 5% Variance Rate $ -
Variance Rate $ (13,868,142) $ - $(13,868,142) 0%
Variance Rate Total $ (13,868,142) $ - $(13,868,142) 0% Grand Total $202,748,316 $137,402,692 $ 65,345,624 68%
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Parks, Recreation and Neighborhoods, Police, and Community and Economic Development. These departments still see some savings in this category, but they are experiencing much lower rates of vacancy in totality throughout the fiscal year.
The other issue that is starting to be seen across the organization is the impact of the prolonged inflation on costs of goods and services. Parts are much more expensive to procure, and services see price increases throughout the life of contracts and all these things contribute to increased expenses in the Discretionary category.
One area that has the potential to impact fiscal year-end is the subsidies that are provided through transfer outs to the Centre Plaza and the Parking Fund. The Centre Plaza subsidy was budgeted for one half of the year through December 31, 2025. The final transfer amount will be determined as part of the transfers that are completed at fiscal year-end. The Parking Fund has continued to experience loss in revenue. The actual year-end transfer amount will depend on actual revenue and expenditure at fiscal year-end. This will be closely monitored by staff as we continue through the current fiscal year.
The revenues and expenditures will continue to be monitored for each of these funds in the next few months for potential impacts on the General Fund and will be reported back to Council if necessary.
Expenditure Conclusions
Overall expenditures are trending slightly above what would be expected at this time in the fiscal year. This is being driven mainly by the CalPERS unfunded liability payment that is made at the beginning of the fiscal year. Discretionary spending will continue to be monitored as well as the possibility of increasing subsidy needs from the Centre Plaza and Parking Funds.
Staff are recommending no change to department expenditure budgets for Fiscal Year 2025-26 currently.
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