Agenda packet — Finance Committee, September 28, 2026 (part 2 of 3)

DISCUSSION:

In accordance with Administrative Directive 3.1, Selection Procedures for Professional Consultants who Provide Architectural & Engineering Services for Capital Projects, a Request for Qualifications was formally advertised through OpenGov for On-Call Hydrogeological Services and nine (9) Statements of Qualifications (SOQ) were received.

After careful review by a selection committee comprised of Utilities Department staff, the following firms were selected as the most qualified to provide on-call services:
• EKI Environment & Water, Inc.
• West Yost Associates
• Luhdorff & Scalmanini Consultant Engineers, Inc.

When on-call professional services are required, a written task order will be issued to the consultant identifying the agreed upon scope, cost, and schedule to complete the specific task(s).

In accordance with Modesto Municipal Code 8-3.204(a), “Exceptions to Formal Bidding Requirements”, Agreements for Professional Services are exempt from the bidding requirements of Modesto Municipal Code 8-3.203 if competitive quotations or proposals have been sought informally from at least three (3) qualified entities. The approval of On-Call Agreements for Hydrogeological Services with EKI Environment & Water, Inc., West Yost Associates, and Luhdorff & Scalmanini Consultant Engineers, Inc., conforms to Modesto Municipal Code 8-3.204, subsection (a) as they are providing professional services and at least three informal proposals were obtained.

FISCAL IMPACT:

Costs for On-Call Hydrogeological Services are not expected to exceed $100,000 per year, per agreement. The total costs associated with the proposed three-year Agreements (initial one-year term, with two one-year extension options) are not to exceed $300,000 per consultant Agreement.

No new budget allocations are required at this time as task orders associated with these On-Call Agreements will be project specific and encumbered against existing approved Capital Improvement Program budgets.

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. #4..
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Finance Committee, September 28, 2026
On-Call Hydrogeological Services Agreements

Page 3 of 3 ends

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending three On-Call Hydrogeological Service Agreements with: EKI Environment & Water, Inc., of Daly City, CA, West Yost Associates of Davis, CA, and Luhdorff & Scalmanini Consultant Engineers, Inc., of Woodland, CA for an estimated annual amount of $300,000 each and a total combined amount not to exceed $900,000 over three years and forwarding to Council for approval.

Approved by:

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

1. On-Call Hydrogeological Services Agreement and Exhibits A-C EKI Environment & Water, Inc.

2. On-Call Hydrogeological Services Agreement and Exhibits A-C Luhdorff & Scalmanini Consultant Engineers, Inc.

3. On-Call Hydrogeological Services Agreement and Exhibits A-C West Yost Associates
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ON-CALL HYDROGEOLOGICAL SERVICES AGREEMENT
THIS AGREEMENT, made and entered into in the City of Modesto, State of California, this day of , 2026, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and EKI Environment & Water, Inc., a California Corporation, hereinafter referred to as "Consultant".

This Agreement is made with regard to the following recitals:

A. City has determined that there is a need for On-Call Hydrogeological Services.

B. Consultant represents that it is qualified, willing and able to provide the requested On-Call Hydrogeological Services.

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Services to be provided by Consultant under this agreement shall generally fall under, but are not limited to, one or more of the categories as set forth and described in the documents attached hereto and referred to as Exhibit "A".

Specific scope(s) of services to be provided by Consultant shall be further defined by and authorized by City through the issuance of project-specific Task Orders. Each specific Task Order will require a written scope outlining the specific services to be provided by Consultant, the schedule for completion, and the proposed compensation amount(s) and payment methodology to perform the specified services. The City must authorize each Task Order in writing prior to commencement of services by the Consultant. #4..
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The Consultant shall perform the services, as described in Exhibit "A" to this Agreement and subsequent Task Orders, in a manner consistent with and limited to the professional skill and care ordinarily provided by engineers providing similar services and practicing in the same or similar locality under the same or similar circumstances (“Standard of Care”).

2. TERM OF AGREEMENT.

This Agreement is effective as of the date first written above and will continue in effect until City's acceptance of and payment for all services authorized by City and performed by Consultant, or one (1) year from the above date, whichever occurs latter, with the possibility of two (2) one-year extension options, upon the mutual agreement of City and Consultant, unless terminated earlier in accordance with the provisions of the termination clause in this Agreement.

City hereby gives Consultant notice to proceed with the provision of services described in Exhibit "A" to this Agreement, as of the Effective Date of this agreement.

Consultant shall diligently proceed with the work and agrees to complete said specific scope(s) of services within the time period set forth in each respective Task Order.

3. COMPENSATION.

Consultant agrees to accept an estimated amount of ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($100,000) per year, and a total amount not to exceed THREE HUNDRED THOUSAND AND 00/100 DOLLARS ($300,000) over three years as of the Effective Date as full remuneration for performing all services and furnishing all staffing and materials called for in Exhibit "A”, and subsequent Task Orders, and for performance by Consultant of all of its duties and obligations under this Agreement. #4..
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The Compensation shall be paid pursuant in the manner and at the times set forth below:

City shall pay Consultant for work performed as authorized by subsequent Task Orders. All work shall be billed: 1) on a time and materials basis, at the hourly rates set forth in Exhibit “B”, attached hereto, or; 2) on a lump sum, fixed fee basis, as authorized by City per specific Task Order(s). Lump sum fees shall generally be in accordance with approximate amounts as shown in Exhibit “B”. Unless otherwise approved by City, the hourly rates and lump sum fees shown in Exhibit “B” shall remain in effect for the entire term of the agreement, including all extensions.

Consultant shall submit monthly invoices to City which include a detailed description of completed tasks, hours worked, and billable rates or percentage complete (for lump sum tasks) for all work completed, and detailed receipts for any out-of-pocket costs paid by Consultant in connection with work performed on this Project.

Expenses for travel reimbursement shall comply with the City's Administrative Directive (AD) 1.2, as amended periodically. AD 1.2 can be found on the City’s website at the following location:
https://www.modestogov.com/DocumentCenter/View/24156/Citys-Administrative-Directive-12

4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business.

Consultant warrants that it has all of the tools, instrumentalities, facilities and other resources necessary to provide the City with the services contemplated by this Agreement. Consultant further represents that it will follow the Standard of Care to make findings, render opinions, #4..
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prepare factual presentations, and provide professional advice and recommendations regarding the projects described in each Task Order.

5. PERFORMANCE BY KEY EMPLOYEE.

Consultant has represented to City that C. David Umezaki, PE will be the person primarily responsible for the performance of the services referred to in this Agreement.

City has entered into this Agreement in reliance on that representation by Consultant.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder (collectively “Materials) shall, upon payment to Consultant for the preparation of such Materials, become and remain the property of the City, and may be used by City as it may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City. Consultant shall have no liability to City for use of any Materials not contemplated by this Agreement or a Task Order.

Title to Data
If, as a part of the agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual aids and other related materials (collectively, “Data”), the originals of all such data generated under this agreement will be delivered to City upon payment to Consultant for the preparation of such Data and the completion or termination of services under the Agreement.

7. NEWS AND INFORMATION RELEASE.

Consultant agrees that it will not issue any news releases in connection with either the award of this Agreement, or any subsequent amendment of or efforts under this Agreement, without first obtaining review and approval of said news releases from City through the City Manager.

8. INTEREST OF CONTRACTOR.

Consultant warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of services required to be performed under this Agreement. Consultant warrants that, in performance of this Agreement, Consultant shall not employ any person having any such interest. Consultant agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this contract if so required at the option of City.

9. AMENDMENTS.

Both parties to this Agreement understand that it may become desirable or necessary during the execution of this Agreement, for City or Consultant to modify the scope of services provided for under this Agreement. Any material extension or change in the scope of work shall be discussed with City and the change and cost shall be memorialized in a written amendment to the original contract prior to the performance of the additional work.

Until a change order is so executed, City will not be responsible to pay any charges Consultant may incur in performing such additional services, and Consultant shall not be required to perform any such additional services. #4..
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10. INDEPENDENT CONTRACTOR.

All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed as independent contractors and not as agents, officers, or employees of City. Consultant, by virtue of this Agreement, has no authority to bind or incur any obligation on behalf of City.

Consultant has no authority or responsibility to exercise any rights or power vested in the City.

No agent, officer, or employee of the City is to be considered an employee of Consultant. It is understood by both Consultant and City that this Agreement shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture.

Consultant, its agents, officers and employees are and, at all times during the terms of this Agreement, shall represent and conduct themselves as independent contractors and not as employees of City.

Consultant shall determine the method, details and means of performing the work and services to be provided by Consultant under this Agreement. Consultant shall be responsible to City only for the requirements and results specified in this Agreement, and, except as expressly provided in this Agreement, shall not be subjected to City's control with respect to the physical action or activities of the Consultant in fulfillment of this Agreement. Consultant has control over the manner and means of performing the services under this Agreement.

Consultant is permitted to provide services to others during the same period service is provided to City under this Agreement. If necessary, Consultant has the responsibility for employing other persons or firms to assist Consultant in fulfilling the terms and obligations under this Agreement.

If in the performance of this Agreement any third persons are employed by Consultant, such persons shall be entirely and exclusively under the direction, supervision, and #4..
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control of Consultant. All terms of employment including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirement of law shall be determined by the Consultant.

It is understood and agreed that as an independent contractor and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the City to any obligation whatsoever.

It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel.

As an independent contractor, Consultant hereby indemnifies and holds City harmless from any and all claims that may be made against City based upon any contention by any third party that an employer-employee relationship exists by reason of this Agreement.

11. ASSIGNMENT.

Neither this Agreement nor any portion thereof shall be subcontracted or assigned without the express prior written consent of the City in each and every instance. This Agreement shall not be assigned by the City without the express prior written consent of the Consultant, which consent shall not be unreasonably withheld.

12. PATENT/COPYRIGHT MATERIALS.

Unless otherwise expressly provided in the contract, Consultant shall be solely responsible for obtaining the right to use any patented or copyrighted materials in the performance of this Agreement. Consultant shall furnish a warranty of such right to use to City at the request of City.
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13. NOTICES.

Notice required by this Agreement shall be given in writing and shall be deemed given and effective upon receipt provided that such are delivered in accordance with the provisions of this Section. Notices shall be delivered either by: (a) personal delivery (including delivery by an overnight courier service which obtains confirmation of receipt); or (b) by facsimile, provided that such transmission is followed by delivery by an overnight courier service which obtains confirmation of receipt; or (c) postage prepaid, return receipt requested, certified mail; or (d) by electronic transmission subject to reasonable proof that the notice was both transmitted and received. Each such notice shall be sent to the parties at the address respectively set forth below or to such other address as a party may designate by written notice given in accordance with the provisions of this Section:

FOR CONSULTANT: Name: EKI Environment & Water, Inc.

Address: 2001 Junipero Serra Boulevard
Suite 300
Daly City, CA 94014
Attention: C. David Umezaki
Phone: (650) 292-9100
Email: [email protected]
FOR CITY: Name: City of Modesto
Address: 1010 10th Street
Suite 4600
Modesto, CA 95354
Attention: David Felix
Phone: (209) 577-5488
Email: [email protected]

14. INSURANCE REQUIREMENTS.

During the term of this Agreement, Consultant shall maintain in full force and effect at its own cost and expense the insurance coverage as set forth in the attached Exhibit #4..
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“C” to this Agreement and shall otherwise comply with the other provisions of Exhibit “C” to this Agreement. Consultant is responsible for uploading updated insurance documentation to the City's "PINS Advantage" program.

15. TERMINATION OF AGREEMENT.

Termination by City for Default of Consultant
Should Consultant default in the performance of this Agreement or materially breach any of its provisions, at its option, City may terminate this Agreement by giving written notification to Consultant. The termination date shall be the effective date of the notice. For the purposes of this section, material breach of this Agreement shall include, but not be limited to, any of the following: failure to perform required services or duties, willful destruction of City's property by Consultant, dishonesty or theft.

Termination by City for Convenience
The City may also terminate the Consultant's performance under the Agreement, either in whole or in part, at its own discretion, or when conditions encountered during the Work make it impossible or impracticable to proceed, or when the City is prevented from proceeding with the Agreement by act of God, by law, or by official action of a public authority, or upon a determination by the City that such termination is in the best interest and convenience of the City, or whenever the City is prohibited from completing the Work for any reason. The City shall provide no less than ten (10) calendar days written notice of its intent to terminate the Agreement for convenience and shall endeavor to provide the Consultant with consultation with the City prior to termination.

Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the Consultant shall:
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a. Cease its services as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all subconsultants 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 subconsultants, but in no event shall recovery by Consultant or any subconsultant 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 Consultant 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 Work as has not been terminated;
g. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably #4..
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aware of the status of Consultant's services on the project. h. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which City determines in good faith are unacceptable and/or not useful to City as of the termination date.

City will pay Consultant an amount based on hours billed or percentage of satisfactory services completed (for lump sum services) in accordance with the notice of termination. The final payment to the Consultant 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 subconsultant 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 Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Consultant.

Termination by Consultant for Default of City
Should City default in the performance of this Agreement or materially breach any of its provisions, at its option, Consultant may terminate this Agreement by giving seven (7) days written notification to City.
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Authorization to Terminate Agreement
Termination of the Agreement may be invoked by the City Manager, or his/her designee, subject to the right of the Consultant to appeal the City Manager, or his/her designee’s, decision to the City Council. The Consultant shall appeal by notifying the City Clerk in writing within ten (10) calendar days of receipt of written notification from City of termination of the Agreement. In the event that termination of this Agreement is upheld by the City Council, any cessation of payment of delay claims, extended claims, Eichleay claims, or any other claims for delay shall be retroactive to the date of termination selected by the City Manager, or his/her designee.

16. CERTIFIED PAYROLL REQUIREMENT.

For consultants performing field work on public works contracts on which prevailing wages are required: The Consultant shall comply with the provisions of Section 1776 of the California Labor Code, regarding payroll records, and shall require its subconsultants and subcontractors to comply with that section as may be required by law.

17. INDEMNITY.

The Consultant shall hold the City, its agents, 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 intentionally wrongful act or omission of Consultant, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement.

The Consultant shall have no duty to hire counsel to defend an indemnified party, but at the time of any settlement or adjudication of a matter the Consultant #4..
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shall pay as damages to an indemnified party all reasonable attorney's fees and costs incurred by indemnified party to the extent arising from the negligent or intentionally wrongful act or omission of Consultant, or its agents, officers, employees, or volunteers.

Consultant's obligation to defend, indemnify, and hold the City, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for Consultant to procure and maintain a policy of insurance.

18. DISPUTE RESOLUTION.

This paragraph is not intended to and does not waive the claim filing requirements found in California Government Code section 900 et seq. In the event that a timely and legally sufficient, arbitrable claim is filed by Consultant with City, and the claim is rejected in whole or in part by City, this paragraph shall result in the conclusive, final, and binding resolution of all the issues presented in the claim by Consultant so long as any issues presented #4..
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by the claim are arbitrable. Claims rejected by City or by operation of law, shall be submitted by Consultant to arbitration pursuant to the Arbitration Rules of the American Arbitration Association within ninety (90) days after mailing of the written rejection by City to Consultant.

The “fast track’ rules of the American Arbitration Association shall apply to any claim or counterclaim less than ONE HUNDRED FIFTY THOUSAND AND 00/100 ($150,000.00) DOLLARS. In arbitration not proceeding under the “fast track” rules, the arbitrator shall have the power to order that depositions be taken and other discovery be made.

Both City and Consultant shall have the right, upon written notice, to take no more than three (3) depositions of the other as a matter of right in an arbitration proceeding under the “fast track” rules.

Whether or not City and Consultant may be engaged in interstate commerce, any controversy or dispute mentioned above shall be determined by, and the parties shall be bound by, the substantive law of the State of California, and not the Federal Arbitration Act at 9 USC Section 1 et seq.

The arbitrator may grant any remedy or relief deemed by the arbitrator just and equitable under the circumstances, whether or not such relief could be awarded in a court of law. The arbitrator shall be empowered to award monetary sanctions against a party for failure of cooperation in the arbitration. The arbitrator shall, in written award, allocate all the costs of the arbitration, including the fees of the arbitrator and the reasonable attorney fees of the prevailing party, against the party who did not prevail. The prevailing party shall be the party in whose favor the majority of the central issues in the case are resolved.

Notwithstanding anything in this provision to the contrary, the arbitrator shall have no power to award punitive damages or other damages not measured by the party’s actual damages (excluding litigation costs and fees) against any party. This limitation of the #4..
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arbitrator’s powers under this Agreement shall not operate as an exclusion of the issue of punitive damages from this Agreement to Arbitrate sufficient to vest jurisdiction in a court with respect to that issue.

Consultant shall include in all subcontracts a specification whereby the subcontractor consents to being joined in arbitration between City and Consultant involving the work of the subcontractor to be joined. Consultant’s failure to do so shall be a breach of this Agreement.

The parties hereby waive any rights provided by Title 9.2 of the California Code of Civil Procedure, Section 1296. The arbitrator’s award shall be deemed final, conclusive and binding to the fullest extent allowed by California law.

19. ENTIRE AGREEMENT.

This Agreement and its exhibits contain the entire understanding between Consultant and City. Additional or new terms contained in this Agreement which vary from Consultant's proposal are controlling and are deemed accepted by Consultant by shipment of any article or other commencement of performance hereunder. Additional or new terms contained in any Task Order are controlling. All previous proposals, 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 of or exception to any of the terms, conditions, and provisions of this Agreement shall be considered valid unless specifically agreed to in writing by all the parties.

20. 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. #4..
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21. 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.

22. AUDIT.

The City's duly authorized representative shall have access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify Consultant's charges to City under this Agreement.

Consultant agrees to retain reports, records, documents, and files related to charges under this Agreement for a period of four (4) years following the date of final payment for Consultant services. City's representative shall have the right to reproduce any of the aforesaid documents.

23. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

24. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

25. COMPLIANCE WITH LAWS.

Consultant shall ensure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws. Subject to the Standard of Care applicable to Consultant’s services, Consultant shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.
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26. CITY BUSINESS LICENSE.

Consultant will have a City of Modesto business license.

27. THIRD PARTIES.

Nothing contained in this Agreement shall create a contractual relationship with, or a cause of action in favor of, a third party against either City or Consultant. Consultant’s services hereunder are being performed solely for the benefit of the City.

28. FORCE MAJEURE.

Neither party shall be liable for any failure or delay in performance under this Agreement to the extent such failure or delay results directly from causes beyond the reasonable control of that party, including but not limited to acts of God, war, terrorism, government orders or regulations, epidemics or pandemics declared by a competent authority, cyberattacks on critical infrastructure, or labor disputes not caused by the affected party (each, a “Force Majeure Event”). The party affected by a Force Majeure Event shall: (i) provide written notice to the other party within five (5) business days of the occurrence; (ii) describe the nature of the event and its expected duration; (iii) use commercially reasonable efforts to mitigate the impact; and (iv) resume performance as soon as practicable after the event concludes.

IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attestation by its City Clerk under authority of Resolution No. 2026- , adopted by the Council of the City of Modesto on the day of , 2026, and EKI Environment & Water, Inc. has caused this agreement to be duly executed as of the Effective Date. #4..
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EXHIBIT A
On-Call Hydrogeological Services
Scope of Services
_____________________________________________________________ On-Call Hydrogeological Services are anticipated to include, but are not limited to the following:

WATER QUALITY ASSESSMENTS
Groundwater supplies almost 60% of the City’s current annual average demand. Like many cities in the Central Valley, the quality of the groundwater supply within the City’s water service area is sometimes threatened by natural and manmade contaminants at concentrations that would exceed (without some type of mitigation) drinking water standards. The principal contaminants are arsenic, manganese, nitrate, TCP, DBCP, PCE, and uranium. The City employes a variety of activities and actions to maintain a safe and reliable potable water supply to its customers, such as, well replacement, well rehabilitation, wellhead treatment, and blending with surface water. Water quality assessments may be needed for both site-specific and system-wide locations.

Services may include, but are not limited to:
- Evaluation of Groundwater Quality Relative to Regulatory Standards (MCLs) - Assessment of Contaminants
- Evaluation of Treatment Alternatives and Blending Strategies - Support for Pilot Testing and Regulatory Coordination

WELL EVALUATIONS AND DESIGN SUPPORT
The City’s production wells can require evaluation to address production and water quality issues.

Services may include, but are not limited to:
- Well Performance Testing and Evaluations
Static/Dynamic Flow Profiling, Optimization Analysis, Etc. - Well Draw-Down and Pumping Analysis
- Well Development
- Wellhead Treatment Evaluations
- Wellhead and/or Well Site Modifications
- individual Well Water Quality Assessments
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EXHIBIT A
- Rehabilitation Recommendations
- Design Support for New and Replacement Wells

AQUIFER STORAGE & RECOVERY PROGRAM DEVELOPMENT/MANAGEMENT The City may require assistance to investigate the feasibility of a groundwater banking program.

Services may include, but are not limited to:
- Identify Tasks Required for Further Evaluation
- Assist with Refinement of Site-Specific Aquifer Characterization - Conduct Geophysical and Geochemical Analysis
- Evaluate Location and Seasonal Fluctuation of Groundwater Levels and Gradients - Analyze Source Water Chemical Compatibility with Basin Geological Formations - Data Collection and Evaluation of Current and Projected Quantities of Extraction - Estimate Basin Storage Capacity, Provide Pilot Study and Demonstration Project Design Layout and Permitting Support

OTHER HYDROGEOLOGICAL RELATED SERVICES
Other hydrogeological related services may be needed to support ongoing groundwater/subsurface investigations and/or project management efforts.

Proposal/Agreement Date: 20 May 2026 EKI Proposal/Project # C60147.00 SCHEDULE OF CHARGES FOR EKI ENVIRONMENT & WATER, INC. 1 January 2026 Personnel Classification Hourly Rate
Officer and Chief Engineer-Scientist 366
Principal Engineer-Scientist 353
Supervising I, Engineer-Scientist 343
Supervising II, Engineer-Scientist 329
Senior I, Engineer-Scientist 315
Senior II, Engineer-Scientist 304
Associate I, Engineer-Scientist 291
Associate II, Engineer-Scientist 275
Engineer-Scientist, Grade 1 255
Engineer-Scientist, Grade 2 241
Engineer-Scientist, Grade 3 221
Engineer-Scientist, Grade 4 199
Engineer-Scientist, Grade 5 175
Engineer-Scientist, Grade 6 152
Project Assistant 143
Technician 137
Senior GIS / Database Analyst 180
CADD Operator / GIS Analyst 157
Senior Administrative Assistant 172
Administrative Assistant 136
Secretary 114
Direct Expenses
Reimbursement for direct expenses, as listed below, incurred in connection with the work will be at cost plus fifteen percent (15%) for items such as:
a. Maps, photographs, reproductions, printing, equipment rental, and special supplies related to the work. b. Consultants, soils engineers, surveyors, drillers, laboratories, and contractors. c. Rented vehicles, local public transportation and taxis, travel, and subsistence. d. Special fees, insurance, permits, and licenses applicable to the work. e. Outside computer processing, computation, and proprietary programs purchased for the work.

A Communication charge for e-mail access, web conferencing, cellphone calls, messaging and data access, file sharing, local and long distance telephone calls and conferences, facsimile transmittals, standard delivery U.S. postage, and incidental in-house copying will be charged at a rate of 4% of labor charges. Large volume copying of project documents, e.g., bound reports for distribution or project-specific reference files, will be charged as a project expense as described above.

Reimbursement for use of personal vehicles will be at the federally allowed rate plus fifteen percent (15%). Reimbursement for company-owned vehicles used in connection with the work will be at the federally allowed rate. There will be an additional charge of thirty dollars ($30.00) per day for company-owned vehicles used for field work.

CADD and other specialized software computer time will be charged at twenty dollars ($20.00) per hour. In-house material and equipment charges will be in accordance with the current rate schedule or special quotation. Excise taxes, if any, will be added as a direct expense.

Rate for professional staff for legal proceedings or as expert witnesses will be at a rate of one and one-half times the Hourly Rates specified above.

The foregoing Schedule of Charges is incorporated into the Agreement for the Services of EKI Environment & Water, Inc. and may be updated annually.

EXHIBIT B
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EXHIBIT C – Insurance Requirement for Professional Services Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the Consultant his agents, representatives, employees or subconsultants.

MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:

1. 1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.

2. Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if Contractor has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 per accident for bodily injury and property damage.

3. Workers’ Compensation: as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.
(Not required if consultant provides written verification, it has no employees)

4. Professional Liability (Errors and Omissions) Insurance appropriates to the Consultant’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate.

If the consultant maintains broader coverage and/or higher limits than the minimums shown above, the City of Modesto requires and shall be entitled to the broader coverage and/or the higher limits maintained by the consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Modesto.

Umbrella or Excess Coverage
The Consultant may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply #4..
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to a loss covered hereunder, shall be called upon to contribute to a loss until the Consultant’s primary and excess liability policies are exhausted.

The insurance policies are to contain, or be endorsed to contain, the following provisions:

Additional Insured Status
The City of Modesto, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Consultant including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Consultant’s insurance with coverage equal to ISO form CG 2010. If Completed Operations endorsement is required, a separate endorsement equal to ISO form CG 2037 is required.

Primary Coverage
The Additional Insured coverage under the Consultant’s policy shall be “primary and noncontributory” and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as CG 20 01 04 13. The City of Modesto does not accept endorsements limiting the Consultant’s insurance coverage to the sole negligence of the Named Insured.

Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City of Modesto.

Waiver of Subrogation
Consultant hereby grants to City of Modesto a waiver of any right to subrogation which any insurer of said Consultant may acquire against the City of Modesto by virtue of the payment of any loss under such insurance. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City of Modesto has received a waiver of subrogation endorsement from the insurer.

Self-Insured Retentions
All Self-insured retentions must be disclosed to Risk Management for approval and shall not reduce the limits of liability. The City of Modesto may require the Consultant to purchase coverage with a lower retention or provide proof of the ability to pay losses and related investigations, claim administration, and defense expenses within the retention. Any and all deductibles and SIRs shall be the sole responsibility of consultant or subconsultant who procured such insurance and shall not apply to the Indemnified Additional Insured Parties.

Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City of Modesto.

Claims Made Policies (applicable to Professional Liability only) If any of the required policies provide claims-made coverage:
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1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.

2. Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

If coverage is canceled or non-renewed and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of work.

Verification of Coverage
Consultant shall furnish the City of Modesto with original certificates and amendatory endorsements or copies of the applicable policy language affecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements. All certificates and endorsements are to be received and approved by the City of Modesto Risk Services before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them. The City of Modesto reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. City reserves the right to obtain a full certified copy of any insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver of right to exercise later.

Subconsultants
Consultants shall require and verify that all subconsultants, or other parties hired for this work, purchase and maintain coverage for indemnity and insurance requirements as least as broad as specified in this agreement to the extent they apply to the scope of the subconsultant’s work with the same certificate of insurance requirements and naming as additional insureds all parties to this contract.

Special Risks or Circumstances
City of Modesto reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

Certificate Holder Address
Proper address for mailing certificates, endorsements and notices shall be:

City of Modesto
Attn: Risk Management
1010 10th Street
Modesto, CA 95354
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ON-CALL HYDROGEOLOGICAL SERVICES AGREEMENT
THIS AGREEMENT, made and entered into in the City of Modesto, State of California, this day of , 2026, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and Luhdorff and Scalmanini Consulting Engineers, Inc., a California Corporation, hereinafter referred to as "Consultant".

This Agreement is made with regard to the following recitals:

A. City has determined that there is a need for On-Call Hydrogeological Services.

B. Consultant represents that it is qualified, willing and able to provide the requested On-Call Hydrogeological Services.

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Specific scope(s) of services to be provided by Consultant shall be further defined by and authorized by City through the issuance of project-specific Task Orders. Each specific Task Order will require a written scope outlining the specific services to be provided by Consultant, the schedule for completion, and the proposed compensation amount(s) and payment methodology to perform the specified services. The City must authorize each Task Order in writing prior to commencement of services by the Consultant. #4..
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The Consultant shall perform the services, as described in Exhibit "A" to this Agreement and subsequent Task Orders, in a manner compatible with the standards of its profession and shall produce a fully complete project that is acceptable to City.

2. TERM OF AGREEMENT.

This Agreement is effective as of the date first written above and will continue in effect until City's acceptance of and payment for all services authorized by City and performed by Consultant, or one (1) year from the above date, whichever occurs latter, with the possibility of two (2) one-year extension options, at the sole discretion of City, unless terminated earlier in accordance with the provisions of the termination clause in this Agreement.

City hereby gives Consultant notice to proceed with the provision of services described in Exhibit "A" to this Agreement, as of the Effective Date of this agreement.

Consultant shall diligently proceed with the work and agrees to complete said specific scope(s) of services within the time period set forth in each respective Task Order.

3. COMPENSATION.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

City shall pay Consultant for work performed as authorized by subsequent Task Orders. All work shall be billed: 1) on a time and materials basis, at the hourly rates set #4..
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forth in Exhibit “B”, attached hereto, or; 2) on a lump sum, fixed fee basis, as authorized by City per specific Task Order(s). Lump sum fees shall generally be in accordance with approximate amounts as shown in Exhibit “B”. Unless otherwise approved by City, the hourly rates and lump sum fees shown in Exhibit “B” shall remain in effect for the entire term of the agreement, including all extensions.

4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business.

Consultant warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to provide the City with the services contemplated by this Agreement. Consultant further warrants that it will follow the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.
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5. PERFORMANCE BY KEY EMPLOYEE.

Consultant has represented to City that Eddy Teasdale, PG, CH G will be the person primarily responsible for the performance of the services referred to in this Agreement. City has entered into this Agreement in reliance on that representation by Consultant. Consultant therefore agrees that ten percent (10%) or more of the time to be devoted to the project that is the subject of this Agreement will be that of the above-named person.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the City, and may be used by City as it may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City.

Title to Data
If, as a part of the agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual aids and other related materials, the originals of all such data generated under this agreement will be delivered to City upon the completion or termination of services under the contract.

7. NEWS AND INFORMATION RELEASE.

8. INTEREST OF CONTRACTOR.

9. AMENDMENTS.

10. INDEPENDENT CONTRACTOR.

All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed #4..
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as independent contractors and not as agents, officers, or employees of City. Consultant, by virtue of this Agreement, has no authority to bind or incur any obligation on behalf of City.

Consultant has no authority or responsibility to exercise any rights or power vested in the City.

If in the performance of this Agreement any third persons are employed by Consultant, such persons shall be entirely and exclusively under the direction, supervision, and control of Consultant. All terms of employment including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirement of law shall be determined by the Consultant.
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It is understood and agreed that as an independent contractor and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the City to any obligation whatsoever.

It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel.

11. ASSIGNMENT.

Neither this Agreement nor any portion thereof shall be subcontracted or assigned without the express prior written consent of the City in each and every instance.

12. PATENT/COPYRIGHT MATERIALS.

13. NOTICES.

Notice required by this Agreement shall be given in writing and shall be deemed given and effective upon receipt provided that such are delivered in accordance with the provisions of this Section. Notices shall be delivered either by: (a) personal delivery (including delivery by an overnight courier service which obtains confirmation of receipt); or (b) by facsimile, provided that such transmission is followed by delivery by an overnight courier #4..
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service which obtains confirmation of receipt; or (c) postage prepaid, return receipt requested, certified mail; or (d) by electronic transmission subject to reasonable proof that the notice was both transmitted and received. Each such notice shall be sent to the parties at the address respectively set forth below or to such other address as a party may designate by written notice given in accordance with the provisions of this Section:

FOR CONSULTANT: Name: Luhdorff and Scalmanini Consulting Engineers, Inc.

Address: 500 1st Street
Woodland, CA 95695
Attention: Eddy Teasdale
Phone: (530) 661-0109
Email: [email protected]
FOR CITY: Name: City of Modesto
Address: 1010 10th Street, Suite 4600
Modesto, CA 95354
Attention: David Felix
Phone: (209) 577-5488
Email: [email protected]

14. INSURANCE REQUIREMENTS.

During the term of this AGREEMENT, CONSULTANT shall maintain in full force and effect at its own cost and expense the insurance coverage as set forth in the attached Exhibit (C) to this AGREEMENT and shall otherwise comply with the other provisions of Exhibit (C) to this AGREEMENT. CONSULTANT is responsible for uploading updated insurance documentation to the City's "PINS Advantage" program.

15. TERMINATION OF AGREEMENT.

Termination by City for Default of Consultant
Should Consultant default in the performance of this Agreement or materially breach any of its provisions, at its option, City may terminate this Agreement by #4..
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giving written notification to Consultant. The termination date shall be the effective date of the notice. For the purposes of this section, material breach of this Agreement shall include, but not be limited to, any of the following: failure to perform required services or duties, willful destruction of City's property by Consultant, dishonesty or theft.

Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the Consultant shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all orders and Subcontractors except as necessary to complete any portion of the Work that is not terminated; c. If directed in writing by the City to do so, assign all right, #4..
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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 subconsultants, but in no event shall recovery by any Consultant or subconsultant include lost profits for portions of the Work 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 Consultant in performing the Work 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 Work 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 Work and/or property related to the Work;
h. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably aware of the status of Consultant's work on the project. i. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain
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unacceptable and/or not useful to City as of the termination date.

City will pay Consultant an amount based on the percentage of satisfactory work completed in accordance with the notice of termination. The final payment to the Consultant 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 Work such as subconsultant agreements or contracts for materials;
b. The Agreement price allocable to the portion of the Work properly performed or goods supplied to the work site by the Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Consultant.

Authorization to Terminate Agreement
Termination of the Agreement may be invoked by the City Manager, or his/her designee, subject to the right of the Consultant to appeal the City Manager, or his/her designee’s, decision to the City Council. The Consultant shall appeal by notifying the City Clerk in writing within ten (10) calendar days of receipt of written notification from City of termination of the Agreement. In the event that termination of this Agreement is upheld by the City Council, any cessation of payment of delay claims, extended claims, Eichleay claims, or any other claims for delay shall be retroactive to the date of termination selected by the City Manager, or his/her designee.
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16. CERTIFIED PAYROLL REQUIREMENT.

17. INDEMNITY.

The Consultant shall hold the City, its agents, 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 Consultant, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement.

18. DISPUTE RESOLUTION.

This paragraph is not intended to and does not waive the claim filing requirements found in California Government Code section 900 et seq. In the event that a timely and legally sufficient, arbitrable claim is filed by Consultant with City, and the claim is rejected in whole or in part by City, this paragraph shall result in the conclusive, final, and binding resolution of all the issues presented in the claim by Consultant so long as any issues presented by the claim are arbitrable. Claims rejected by City or by operation of law, shall be submitted by Consultant to arbitration pursuant to the Arbitration Rules of the American Arbitration Association within ninety (90) days after mailing of the written rejection by City to Consultant.

Otherwise, the claim or claims shall be deemed waived in their entirety.

Whether or not City and Consultant may be engaged in interstate commerce, any controversy or dispute mentioned above shall be determined by, and the parties #4..
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shall be bound by, the substantive law of the State of California, and not the Federal Arbitration Act at 9 USC Section 1 et seq.

Notwithstanding anything in this provision to the contrary, the arbitrator shall have no power to award punitive damages or other damages not measured by the party’s actual damages (excluding litigation costs and fees) against any party. This limitation of the arbitrator’s powers under this Agreement shall not operate as an exclusion of the issue of punitive damages from this Agreement to Arbitrate sufficient to vest jurisdiction in a court with respect to that issue.

19. ENTIRE AGREEMENT.

This Agreement and its exhibits contain the entire understanding between Consultant and City. Additional or new terms contained in this Agreement which vary from Consultant's proposal are controlling and are deemed accepted by Consultant by shipment of any article or other commencement of performance hereunder. All previous proposals, 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 of or exception to any of the terms, conditions, and provisions of this Agreement shall be considered valid unless specifically agreed to in writing by all the parties.

20. PARTIAL INVALIDITY.

21. WAIVER.

22. AUDIT.

Consultant agrees to retain reports, records, documents, and files related to charges under this Agreement for a period of four (4) years following the date of final payment #4..
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for Consultant services. City's representative shall have the right to reproduce any of the aforesaid documents.

23. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

24. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

25. COMPLIANCE WITH LAWS.

Consultant shall ensure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws. Consultant shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

26. CITY BUSINESS LICENSE.

Consultant will have a City of Modesto business license.

IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attestation by its City Clerk under authority of Resolution No. 2026- , adopted by the Council of the City of Modesto on the day of , 2026, and Luhdorff and Scalmanini Consulting Engineers, Inc. has caused this agreement to be duly executed as of the Effective Date. #4..
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WELL EVALUATIONS AND DESIGN SUPPORT
The City’s production wells can require evaluation to address production and water quality issues.

EXHIBIT A
- Rehabilitation Recommendations
- Design Support for New and Replacement Wells

AQUIFER STORAGE & RECOVERY PROGRAM DEVELOPMENT/MANAGEMENT The City may require assistance to investigate the feasibility of a groundwater banking program.

OTHER HYDROGEOLOGICAL RELATED SERVICES
Other hydrogeological related services may be needed to support ongoing groundwater/subsurface investigations and/or project management efforts.

Services may include, but are not limited to:
- Subsurface Investigations
Data Collection, Water and Soil Sampling/Testing/Inventorying, Groundwater Level Monitoring, etc.
- General Field Investigations
- Data Management
GIS Related, Facility Inventorying, SCADA, etc.
- Permitting Applications and Related Fees
- Environmental Clearance Documentation
- Coordination with Sub-Consultants and City Staff
- Monitoring Project Budget and Schedule
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* Engineer, Geologist, Hydrogeologist, and Hydrologist
Send invoice payments to Accounts Receivable, 500 1st Street, Woodland, CA 95695 or [email protected] CALIFORNIA • IDAHO
Professional*
Senior Principal ...............................................................................$297/hr.

Principal Professional......................................................................$269/hr.

Supervising Professional .................................................................$258/hr.

Senior Professional .........................................................................$230/hr.

Project Professional ........................................................................$206/hr.

Staff Professional ............................................................................$181/hr.

Technical
Data Management Specialist..........................................................$181/hr.

Senior GIS Analyst...........................................................................$181/hr.

GIS Specialist...................................................................................$130/hr.

Engineering Assistant/Scientist.......................................................$125/hr.

Project Admin Support
Word Processing, Clerical ...............................................................$110/hr.

Digital Communications Specialist..................................................$125/hr.

Project Administrator .....................................................................$125/hr.

Professional or Technical Testimony 200% of Regular Rates Technical Overtime (if required) 150% of Regular Rates
Outside Services/Rentals Cost Plus 15%
Services by Associate Firms Cost Plus 15%
Prevailing Wage Rate $215/hr
Vehicle Use $0.73/mi (or curr. IRS rate)
Subsistence Cost Plus 15%
Copies $0.20 ea.

Field Equipment Rental
Pressure Transducer $10/day
Ultrasonic Flow Meter $150/day
Multiparameter Sonde $125/day
Field Materials As-Incurred
2026 SCHEDULE OF FEES

ENGINEERING AND RELATED FIELD SERVICES

EXHIBIT B
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EXHIBIT C – Insurance Requirement for Professional Services Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the Consultant his agents, representatives, employees or subconsultants.

MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:

4. Professional Liability (Errors and Omissions) Insurance appropriates to the Consultant’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate.

Umbrella or Excess Coverage
The Consultant may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply #4..
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to a loss covered hereunder, shall be called upon to contribute to a loss until the Consultant’s primary and excess liability policies are exhausted.

The insurance policies are to contain, or be endorsed to contain, the following provisions:

Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City of Modesto.

Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City of Modesto.

Claims Made Policies (applicable to Professional Liability only) If any of the required policies provide claims-made coverage:
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1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.

2. Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

Certificate Holder Address
Proper address for mailing certificates, endorsements and notices shall be:

City of Modesto
Attn: Risk Management
1010 10th Street
Modesto, CA 95354
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ON-CALL HYDROGEOLOGICAL SERVICES AGREEMENT
THIS AGREEMENT, made and entered into in the City of Modesto, State of California, this day of , 2026, (“Effective Date”) by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and West Yost Associates, a California Corporation, hereinafter referred to as "Consultant".

This Agreement is made with regard to the following recitals:

A. City has determined that there is a need for On-Call Hydrogeological Services.

B. Consultant represents that it is qualified, willing and able to provide the requested On-Call Hydrogeological Services.

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Specific scope(s) of services to be provided by Consultant shall be further defined by and authorized by City through the issuance of project-specific Task Orders. Each specific Task Order will require a written, scope outlining the specific services to be provided by Consultant, the schedule for completion, and the proposed compensation amount(s) and payment methodology to perform the specified services. The City must authorize each Task Order in writing prior to commencement of services by the Consultant. #4..
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The Consultant shall perform the services, as described in Exhibit "A" to this Agreement and subsequent Task Orders in a manner compatible with the standards of its profession and shall produce a fully complete project that is acceptable to City.

2. TERM OF AGREEMENT.

This Agreement is effective as of the date first written above and will continue in effect until City's acceptance of and payment for all services authorized by City and performed by Consultant, or one (1) year from the above date, whichever occurs latter, with the possibility of two (2) one-year extension options, at the sole discretion of City, unless terminated earlier in accordance with the provisions of the termination clause in this Agreement.

City hereby gives Consultant notice to proceed with the provision of services described in Exhibit "A" to this Agreement, as of the Effective Date of this agreement.

Consultant shall diligently proceed with the work and agrees to complete said specific scope(s) of services within the time period set forth in each respective Task Order.

3. COMPENSATION.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

City shall pay Consultant for work performed as authorized by subsequent Task Orders. All work shall be billed: 1) on a time and materials basis, at the hourly rates set #4..
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forth in Exhibit “B”, attached hereto, or; 2) on a lump sum, fixed fee basis, as authorized by City per specific Task Order(s). Lump sum fees shall generally be in accordance with approximate amounts as shown in Exhibit “B”. Unless otherwise approved by City, the hourly rates and lump sum fees shown in Exhibit “B” shall remain in effect for the entire term of the agreement, including all extensions.

4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business.

Consultant represents that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to provide the City with the services contemplated by this Agreement. Consultant further represents that it will follow the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project. In providing services under this Agreement, Consultant shall perform in a manner consistent with that degree of care and skill ordinarily exercised by members of the same #4..
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profession currently practicing under similar circumstances at the same time and in the same or similar locality (“Standard of Care”).

5. PERFORMANCE BY KEY EMPLOYEE.

Consultant has represented to City that Ken Loy will be the person primarily responsible for the performance of the services referred to in this Agreement. City has entered into this Agreement in reliance on that representation by Consultant. Consultant therefore agrees that ten percent (10%) or more of the time to be devoted to the project that is the subject of this Agreement will be that of the above-named person.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder (except for pre-existing intellectual property) shall become and remain the property of the City, upon payment of all invoices due and owing to Consultant, and may be used by City as it may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City. City shall, the fullest extent permitted by law, defend, indemnify, and hold harmless Consultant from and against any and all costs, expenses, fees, losses, claims, demands, liabilities, suits, actions, and damages whatsoever to the proportionate extent arising out of or resulting from any reuse or modification of Consultant’s work products and documents other than those of this agreement.

Title to Data
If, as a part of the agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual #4..
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aids and other related materials, the originals of all such data generated under this agreement will be delivered to City upon the completion or termination of services under the contract.

All materials, documents, data or information obtained from the City data files or any City medium furnished to Consultant in the performance of this Agreement will at all times remain the property of the City. Such data or information may not be used or copied for direct or indirect use by Consultant after termination of this Agreement without written consent of the City. City shall, the fullest extent permitted by law, defend, indemnify, and hold harmless Consultant from and against any and all costs, expenses, fees, losses, claims, demands, liabilities, suits, actions, and damages whatsoever to the proportionate extent arising out of or resulting from any reuse or modification of Consultant’s work products and documents other than those of this agreement.

7. NEWS AND INFORMATION RELEASE.

8. INTEREST OF CONSULTANT.

9. AMENDMENTS.

10. INDEPENDENT CONSULTANT.

All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed as independent Consultants and not as agents, officers, or employees of City. Consultant, by virtue of this Agreement, has no authority to bind or incur any obligation on behalf of City.

Consultant has no authority or responsibility to exercise any rights or power vested in the City.

Consultant, its agents, officers and employees are and, at all times during the terms of this Agreement, shall represent and conduct themselves as independent Consultants and not as employees of City.

Consultant shall determine the method, details and means of performing the work and services to be provided by Consultant under this Agreement, in a manner consistent with the Standard of Care. Consultant shall be responsible to City only for the requirements and #4..
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results specified in this Agreement, and, except as expressly provided in this Agreement, shall not be subjected to City's control with respect to the physical action or activities of the Consultant in fulfillment of this Agreement. Consultant has control over the manner and means of performing the services under this Agreement. Consultant is permitted to provide services to others during the same period service is provided to City under this Agreement. If necessary, Consultant has the responsibility for employing other persons or firms to assist Consultant in fulfilling the terms and obligations under this Agreement.

It is understood and agreed that as an independent Consultant and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the City to any obligation whatsoever.

It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel.

As an independent Consultant, Consultant hereby indemnifies and holds City harmless from any and all claims that may be made against City based upon any contention by any third party that an employer-employee relationship exists by reason of this Agreement. #4..
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11. ASSIGNMENT.

Neither this Agreement nor any portion thereof shall be subcontracted or assigned without the express prior written consent of the City in each and every instance.

12. PATENT/COPYRIGHT MATERIALS.

13. NOTICES.

FOR CONSULTANT: Name: West Yost Associates
Address: 2020 Research Park Drive, Suite 100
Davis, CA 95618
Attention: Ken Loy
Phone: (530) 574-1940
Email: [email protected]
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FOR CITY: Name: City of Modesto
Address: 1010 10th Street, Suite 4600
Modesto, CA 95354
Attention: David Felix
Phone: (209) 577-5488
Email: [email protected]

14. INSURANCE REQUIREMENTS.

15. TERMINATION OF AGREEMENT.

Termination by City for Convenience
The City may also terminate the Consultant's performance under the Agreement, either in whole or in part, at its own discretion, or when conditions encountered during the Work make it impossible or impracticable to proceed, or when the City is prevented from proceeding with the Agreement by act of God, by law, or by official action of a public authority, or upon a determination by the City that such termination is in the best interest and convenience of the #4..
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City, or whenever the City is prohibited from completing the Work for any reason. The City shall provide no less than ten (10) calendar days written notice of its intent to terminate the Agreement for convenience and shall endeavor to provide the Consultant with consultation with the City prior to termination.

Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the Consultant shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all orders and Subconsultants except as necessary to complete any portion of the Work that is 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 subconsultants, but in no event shall recovery by any Consultant or subconsultant include lost profits for portions of the Work 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 Consultant in performing the Work whether completed or in process; #4..
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e. Settle outstanding liabilities and claims, subject to the approval of City;
f. Complete performance of such part of the Work 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 Work and/or property related to the Work;
h. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably aware of the status of Consultant's work on the project. i. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain
unacceptable and/or not useful to City as of the termination date.

City will pay Consultant an amount based on the percentage of satisfactory work completed in accordance with the notice of termination. The final payment to the Consultant 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 Work such as subconsultant agreements or contracts for materials;
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Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Consultant.

16. CERTIFIED PAYROLL REQUIREMENT.

17. INDEMNITY.

The Consultant shall hold the City, its agents, officers, employees, and volunteers, harmless from and save 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, to the extent they are arising directly or indirectly out of any negligent, reckless, or willful misconduct of Consultant, or its agents, officers, employees, or volunteers #4..
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relating to or during the performance of its obligations under this Agreement. In no event shall the cost to defend charged to the Consultant exceed the Consultant’s proportionate percentage of fault.

However, notwithstanding the foregoing, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, the Consultant shall meet and confer with other parties regarding unpaid defense costs. The parties also acknowledge that this Agreement is subject to California Civil Code 2782.8 as amended.

Consultant's obligation to indemnify, and hold the City, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for Consultant to procure and maintain a policy of insurance.

18. DISPUTE RESOLUTION.

All claims, controversies, or disputes arising out of, or relating to the formation of this Agreement, or the breach, termination execution, enforcement, interpretation, or validity of this Agreement, including the determination of the scope or applicability of this contract provision shall be determined by binding arbitration in Modesto, California by one arbitrator, except as otherwise specified in this Agreement. The American Arbitration Association shall administer the arbitration under its Arbitration Rules then in effect, subject to the modifications of those rules contained in this paragraph. This agreement to arbitrate shall be specifically enforceable under the prevailing law of any court having jurisdiction, and the award rendered by the arbitrator may be entered in any court having jurisdiction. The appropriate venue for any arbitration or court proceeding relating to or arising out of this provision shall be in Stanislaus County, California.
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This paragraph is not intended to and does not waive the claim filing requirements found in California Government Code section 900 et seq. In the event that a timely and legally sufficient, arbitrable claim is filed by Consultant with City, and the claim is rejected in whole or in part by City, this paragraph shall result in the conclusive, final, and binding resolution of all the issues presented in the claim by Consultant so long as any issues presented by the claim are arbitrable. Claims rejected by City or by operation of law, shall be submitted by Consultant to arbitration pursuant to the Arbitration Rules of the American Arbitration Association within ninety (90) days after mailing of the written rejection by City to Consultant.

Otherwise, the claim or claims shall be deemed waived in their entirety.

The arbitrator may grant any remedy or relief deemed by the arbitrator just and equitable under the circumstances, whether or not such relief could be awarded in a court of law. The arbitrator shall be empowered to award monetary sanctions against a party for failure of cooperation in the arbitration. The arbitrator shall, in written award, allocate all the costs of #4..
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the arbitration, including the fees of the arbitrator and the reasonable attorney fees of the prevailing party, against the party who did not prevail. The prevailing party shall be the party in whose favor the majority of the central issues in the case are resolved.

Notwithstanding anything in this provision to the contrary, the arbitrator shall have no power to award punitive damages or other damages not measured by the party’s actual damages (excluding litigation costs and fees) against any party. This limitation of the arbitrator’s powers under this Agreement shall not operate as an exclusion of the issue of punitive damages from this Agreement to Arbitrate sufficient to vest jurisdiction in a court with respect to that issue.

Consultant shall include in all subcontracts a specification whereby the subconsultant consents to being joined in arbitration between City and Consultant involving the work of the subconsultant to be joined. Consultant’s failure to do so shall be a breach of this Agreement.

19. ENTIRE AGREEMENT.

This Agreement and its exhibits contain the entire understanding between Consultant and City. Additional or new terms contained in this Agreement which vary from Consultant's proposal are controlling and are deemed accepted by Consultant by shipment of any article or other commencement of performance hereunder. All previous proposals, 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 of #4..
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or exception to any of the terms, conditions, and provisions of this Agreement shall be considered valid unless specifically agreed to in writing by all the parties.

20. PARTIAL INVALIDITY.

21. WAIVER.

22. AUDIT.

23. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

24. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.
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25. COMPLIANCE WITH LAWS.

Consultant shall comply with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws.

Consultant shall comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

26. CITY BUSINESS LICENSE.

Consultant will have a City of Modesto business license.

IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attestation by its City Clerk under authority of Resolution No. 2026- , adopted by the Council of the City of Modesto on the day of , 2026, and West Yost Associates has caused this agreement to be duly executed as of the Effective Date.
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WELL EVALUATIONS AND DESIGN SUPPORT
The City’s production wells can require evaluation to address production and water quality issues.

EXHIBIT A
- Rehabilitation Recommendations
- Design Support for New and Replacement Wells

AQUIFER STORAGE & RECOVERY PROGRAM DEVELOPMENT/MANAGEMENT The City may require assistance to investigate the feasibility of a groundwater banking program.

OTHER HYDROGEOLOGICAL RELATED SERVICES
Other hydrogeological related services may be needed to support ongoing groundwater/subsurface investigations and/or project management efforts.

POSITIONS

ENGINEERING
Principal/Vice President $406
Engineer/Scientist/Geologist Manager I / II $383 / $400 Principal Engineer/Scientist/Geologist I / II $345 / $367 Senior Engineer/Scientist/Geologist I / II $307 / $323
Associate Engineer/Scientist/Geologist I / II $255 / $274 Engineer/Scientist/Geologist I / II / III $198 / $229 / $239 Engineering Aide $121
Field Monitoring Services $150
Administrative I / II / III / IV $111 / $138 / $166 / $182

ENGINEERING TECHNOLOGY
Engineering Tech Manager I / II $397 / $400
Principal Tech Specialist I / II $365 / $378
Senior Tech Specialist I / II $331 / $346
Senior GIS Analyst $302
GIS Analyst $287
Technical Specialist I / II / III / IV $213 / $239 / $270 / $301 Technical Analyst I / II $153 / $182
Technical Analyst Intern $123
Cross-Connection Control Specialist I / II / III / IV $159 / $173 / $195 / $215 CAD Manager $241
CAD Designer I / II $187 / $211

CONSTRUCTION MANAGEMENT
Senior Construction Manager $386
Construction Manager I / II / III / IV $230 / $245 / $260 / $329 Resident Inspector (Prevailing Wage Groups 4 / 3 / 2 / 1) $207 / $230 / $256 / $265 Apprentice Inspector $187
CM Administrative I / II $99 / $135
Field Services $265
2026 - 2027 Billing Rate Schedule

LABOR CHARGES (DOLLARS PER HOUR)
■ Hourly rates include charges for technology and communication, such as general and CAD computer software, telephone calls, routine in-house copies/prints, postage, miscellaneous supplies, and other incidental project expenses. ■ Outside services, such as vendor reproductions, prints, and shipping; major West Yost reproduction efforts; as well as engineering supplies, etc., will be billed at the actual cost plus 15%. ■ The Federal Mileage Rate will be used for mileage charges and will be based on the Federal Mileage Rate applicable to when the mileage costs were incurred. Travel other than mileage will be billed at cost. ■ Subconsultants will be billed at actual cost plus 10%. ■ Expert witness services, research, technical review, analysis, preparation, and meetings will be billed at 150% of standard hourly rates. Expert witness testimony and depositions will be billed at 200% of standard hourly rates. ■ A finance charge of 1.5% per month (an annual rate of 18%) on the unpaid balance will be added to invoice amounts if not paid within 45 days from the date of the invoice.

EXHIBIT B

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(Effective Sept 1, 2026, through Sept 30, 2027)
Equipment Charges

EQUIPMENT
2" Purge Pump & Control Box $300 / day
Aquacalc / Pygmy or AA Flow Meter $28 / day
Emergency SCADA System $35 / day
Field Vehicles (Groundwater) $200 / day
Gas Detector $80 / day
Generator $60 / day
Hydrant Pressure Gauge $10 / day
Hydrant Pressure Recorder, Impulse (Transient) $55 / day Hydrant Pressure Recorder, Standard $40 / day
Low Flow Pump Back Pack $135 / day
Low Flow Pump Controller $200 / day
Powers Water Level Meter $32 / day
Precision Water Level Meter 300ft $30 / day
Precision Water Level Meter 500ft $40 / day
Precision Water Level Meter 700ft $45 / day
QED Sample Pro Bladder Pump $65 / day
Skydio 2+ Drone (2 hour minimum) $100 / hour
Storage Tank $20 / day
Sump Pump $24 / day
Transducer Communications Cable $10 / day
Transducer Components (per installation) $23 / day
Trimble GPS – Geo 7x $220 / day
Tube Length Counter $22 / day
Turbidity Meter $30 / day
Turbidity Meter (2100Q Portable) $35 / day
Vehicle (Construction Management) $18.75 / hour
Water Flow Probe Meter $20 / day
Water Quality Meter $50 / day
Water Quality Multimeter $185 / day
Well Sounder $30 / day

BILLING RATES
2026 - 2027 Billing Rate Schedule

EXHIBIT B

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EXHIBIT C – Insurance Requirement for Professional Services Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the Consultant his agents, representatives, employees or subconsultants.

MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:

4. Professional Liability (Errors and Omissions) Insurance appropriates to the Consultant’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate.

Umbrella or Excess Coverage
The Consultant may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply #4..
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to a loss covered hereunder, shall be called upon to contribute to a loss until the Consultant’s primary and excess liability policies are exhausted.

The insurance policies are to contain, or be endorsed to contain, the following provisions:

Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City of Modesto.

Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City of Modesto.

Claims Made Policies (applicable to Professional Liability only) If any of the required policies provide claims-made coverage:
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1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.

2. Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

Certificate Holder Address
Proper address for mailing certificates, endorsements and notices shall be:

City of Modesto
Attn: Risk Management
1010 10th Street
Modesto, CA 95354
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

September 28, 2026
Date: August 24, 2026
TO: Finance Committee
David Wright. Chair
Nick Bavaro, Vice-Chair
Rosa Escutia-Braaton, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Scotty Douglass, City Manager’s Office
SUBJECT: Land Exchange with Leytonstone PTC, Inc. for Property along the Dry Creek Trail
CONTACT: Scotty Douglass, City Manager’s Office, [email protected], 209-571-9149
DESCRIPTION:

Consider a Land Exchange Agreement with Leytonstone PTC, Inc. to acquire certain real property located along the Dry Creek Trail for a portion of 945 Claus Rd. (APN 068- 024-003 and APN 068-024-001) and forwarding to Council for approval. (Funding Source: General Fund)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City’s 2025-2026 Strategic Plan Goal D to provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

In August of 2025, the City of Modesto and the Mary C. Gallo Trust executed a Letter of Intent (LOI) to explore the potential exchange of real property between the parties. The proposed exchange is intended to support the ongoing development and expansion of the Dry Creek Regional Park by acquiring property needed for the Pamela Monterosso Trail. The property to be acquired by the City through the exchange will secure the land ownership necessary to ensure the trail has a long-term future currently extended to #5..
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Finance Committee, September 28, 2026
Land Exchange with Leytonstone PTC, Inc. for Property along the Dry Creek Trail

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Claus Road and to enhance future public recreational opportunities within the regional park system.

The LOI established a framework for the City and the Mary C. Gallo Trust to use good faith efforts to negotiate and prepare a detailed Exchange Agreement for consideration by both parties. The LOI identified the general terms and conditions that would guide the negotiation process while acknowledging that additional provisions customary to a real property exchange would be incorporated into a future Exchange Agreement.

Consistent with the due diligence contemplated by the LOI, the City retained Bender Rosenthal Inc. to prepare an independent appraisal of the properties proposed for exchange. The appraisal assignment was conducted to determine the as-is fair market value of the fee simple interest in the subject properties and to assist the parties in evaluating the proposed land exchange. The appraisal included Site A, consisting of Assessor's Parcel Number (APN) 068-024-001 and a portion of APN 068-024-003, and Site B, consisting of a portion of APN 079-001-001, as identified by the City. Bender Rosenthal Inc. completed the appraisal on October 29, 2025, under the project titled Appraisal Services for Dry Creek Area in Modesto.

The valuation included an investigation and analysis of the subject properties, the surrounding neighborhood, and regional market conditions, including social, economic, governmental, and environmental factors that could influence property values. The completed appraisal established the fair market value of each property and provided the basis for continued negotiations between the City and the Mary C. Gallo Trust and then Leytonstone PTC, Inc as it acquired the subject property.

Following review of the appraisal, both parties agreed to proceed with the proposed land exchange. To facilitate preparation of the Exchange Agreement and the legal descriptions required for the transaction, the City initiated procurement of professional land surveying services to define the boundaries of the portions of the properties to be exchanged. On April 30, 2026, the City obtained proposals for the surveying services.

Survey work is an estimated cost of approximately $20,000.

DISCUSSION:

As stated above, the appraisal, completed on October 29, 2025, established the fair market value of the Leytonstone PTC, Inc. property (Site A) at $70,000 and the Cityowned property (Site B) at $460,000.

Although Site A consists of approximately 13.57 acres, its appraised value is lower due to its physical characteristics and limited development potential. The property follows Dry Creek, contains predominantly sloping topography and portions of the creek channel, and is encumbered by an existing City trail easement along its southern boundary. While the property contains multiple zoning and General Plan designations, these physical constraints and the existing easement significantly limit its development potential.
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Land Exchange with Leytonstone PTC, Inc. for Property along the Dry Creek Trail

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Site B consists of approximately 10.86 acres of generally level, unimproved land with development potential. Based on the City's zoning and General Plan designations, the property could accommodate a variety of future uses, including public open space, single-family residential development, and agricultural uses. These characteristics contribute to its higher appraised fair market value.

Approval of the proposed Exchange Agreement will authorize staff to complete the remaining due diligence, including completion of the property survey, preparation of legal descriptions and conveyance documents, satisfaction of all applicable legal requirements, and execution of the property exchange.

The proposed exchange has been evaluated for compliance with the California Surplus Land Act (Government Code Section 54220 et seq.) and is anticipated to qualify as an exempt transaction under the Act. The Exchange Agreement has been reviewed by the City Attorney's Office for legal sufficiency.

FISCAL IMPACT:

The proposed property exchange will result in both expenditures and revenue to the City of Modesto associated with completion of the transaction. The City and the Leytonstone PTC, Inc. shared equally in the cost of the independent appraisal completed by Bender Rosenthal Inc. The total appraisal cost was $6,500, with the City's portion totaling $3,250.

To complete the property exchange, the City will be responsible for the cost of professional surveying services necessary to define the property boundaries and prepare the legal descriptions required for the transaction. The estimated cost of the survey is approximately $20,000 and will be funded by the General Fund and offset by the receipt of the following equalization payment.

Under the Exchange Agreement, the City and Leytonstone have agreed that the City Exchange Property has a fair market value of $460,000, while the Leytonstone Exchange Property has a fair market value of $70,000. Leytonstone will donate the Leytonstone Exchange Property to the City for $0 and will pay the City $460,000 as the Purchase Price for the City Exchange Property. The $460,000 payment will be deposited into the General Fund, as the original purchase of Site B was financed with General Fund dollars.

The estimated fiscal impact associated with the transaction is summarized below:

Land Exchange
Summary
Amount Source / Funding
Purchase Price Paid to
City
$460,000 Leytonstone PTC, Inc.

Appraisal Cost $3,250 City (General Fund)
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Finance Committee, September 28, 2026
Land Exchange with Leytonstone PTC, Inc. for Property along the Dry Creek Trail

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Land Survey Cost $20,000 City (General Fund)
Net Value to City After
Costs
$436,750 $460,000 benefit less $23,250 costs
transferred to General Fund
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 Land Exchange Agreement with Leytonstone PTC, Inc. to acquire approximately 13.6 acres of their 77-acre property located along the Dry Creek Trail (Site A), valued at $70,000, through a donation to the City for $0, in exchange for approximately 10.9 acres of City-owned property at 800 N. McClure Road (APN 079- 001-001) (Site B), valued at $460,000, with Leytonstone PTC, Inc. paying the City $460,000 as the Purchase Price, and forwarding to Council for approval.

Approved by:

Scotty Douglass, Deputy City Manager
Joseph P. Lopez, City Manager
Attachments:

1. Dry Creek Land Exchange Agreement Draft

2. Appraisal Dry Creek

3. Executed – Dry Creek Exchange Letter of Intent
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Leytonstone Land Exchange Agreement
City of Modesto and Gallo
1 LAND EXCHANGE AGREEMENT BETWEEN
CITY OF MODESTO AND LEYTONSTONE PTC, INC.

THIS LAND EXCHANGE AGREEMENT (this “Agreement”) is entered into as of ____________, 2026 (“Effective Date”) by and between the City of Modesto, a California charter city (“City”), and Leytonstone PTC, Inc., a Nevada corporation, successor Trustee of the Claus Road Farm Trust (“Leytonstone”). City and Leytonstone are hereinafter collectively referred to as the “Parties.”

RECITALS
A. City is the fee owner of certain real property consisting of approximately 23 acres located in the City of Modesto, commonly known as 800 N. McClure Road (APN 079-001-001). The City is interested in exchanging approximately 10.86 acres of this property (“City Exchange Property”), as depicted on the Map of Exchange Properties attached hereto as Exhibit A, and legally described in the City Exchange Property Legal Description attached hereto as Exhibit B, which are incorporated herein by this reference. The City Exchange Property does not include the existing historic McClure House building.

B Leytonstone is the owner of certain real property approximately 77 acres located in the City of Modesto commonly known as 945 Claus Rd. (APN 068-024-003).

Leytonstone is interested in exchanging an approximately 13.57 acre portion of this property (“Leytonstone Exchange Property”) as depicted on the Map of Exchange Properties and legally described in the Leytonstone Exchange Property Legal Description attached hereto as Exhibit C, which is incorporated herein by this reference. (The City Exchange Property and the Leytonstone Exchange Property are collectively referred to herein as the “Properties,” and individually as a “Property”).

C. The Parties desire to provide for the exchange of the Properties through Leytonstone’s conveyance of fee title to the Leytonstone Exchange Property to City, and City’s conveyance of fee title to the City Exchange Property to Leytonstone.

D. The fair market value of the Leytonstone Exchange Property is $70,000 and the fair market value of the City Exchange Property is $460,000, as determined by independent appraisals conducted by Bender Rosenthal Incorporated.

E. Leytonstone has voluntarily agreed that it will not receive any credit against the purchase price for the City Exchange Property for the value of the Leytonstone Exchange Property to be conveyed to City. Leytonstone instead desires that its conveyance of the Leytonstone Exchange Property to City will constitute a donation of that property to be used by City for governmental purposes, which may include recreational trail uses.
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Leytonstone Land Exchange Agreement
City of Modesto and Gallo
2 F. The City Council has made a finding that the City Exchange Property is “exempt surplus land” pursuant to Government Code Section 54221(f)(1)(C) of the Surplus Land Act, as it is surplus land that the City is exchanging for another property necessary for the City’s use.

G. The City has determined that the disposition of the City Exchange Property and acquisition of the Leytonstone Exchange Property pursuant to this Agreement is consistent with the City’s General Plan.

H. City finds that the transactions contemplated hereby further the health, safety and welfare of the City’s residents and are in conformity with the City’s economic development plans and municipal code.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows.

1. Recitals. The Parties acknowledge that the foregoing recitals are true and correct and are incorporated herein by this reference.

2. Exchange of Properties.

2.1 Exchange and Conveyance. Subject to satisfaction of the conditions precedent set forth in Sections 2.2 and 2.3, City shall convey the City Exchange Property to Leytonstone, and Leytonstone shall convey the Leytonstone Exchange Property to City (the “Exchange”), in accordance with the terms, covenants and conditions set forth herein. Based on independent appraisals completed by Bender Rosenthal Inc. dated October 29, 2025, City and Leytonstone agree that the fair market value of the City Exchange Property is Four Hundred Sixty Thousand Dollars ($460,000), and the fair market value of the Leytonstone Exchange Property is Seventy Thousand Dollars ($70,000). Leytonstone agrees to donate the Leytonstone Exchange Property to the City for zero dollars ($0), Leytonstone agrees to pay to City the sum of Four Hundred Sixty Thousand Dollars ($460,000) (the “Purchase Price”). The conveyance of the City Exchange Property from City to Leytonstone shall be accomplished by recordation of a grant deed, substantially in the form attached hereto as Exhibit D (“City Grant Deed”). The conveyance of the Leytonstone Exchange Property from Leytonstone to City shall be accomplished by recordation of a grant deed, substantially in the form attached hereto as Exhibit E (“Leytonstone Grant Deed”).

The form of the City Grant Deed and the Leytonstone Grant Deed may be modified with the mutual consent of the Parties, as necessary to transfer good and marketable fee simple title.

2.2 Conditions Precedent in Favor of City. Notwithstanding anything to the contrary set forth herein, the closing of the Exchange is expressly conditioned upon #5..
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Leytonstone Land Exchange Agreement
City of Modesto and Gallo
3 satisfaction of the following conditions for the benefit of City, unless waived by City in writing (“City’s Conditions Precedent”):
(a) City has approved the condition of the title to the Leytonstone Exchange Property, the survey and all due diligence items; (b) Leytonstone has performed all obligations to be performed by Leytonstone pursuant to this Agreement;
(c) Leytonstone’s representations and warranties herein are true and correct in all material respects as of the Closing Date; (d) The Title Company is irrevocably committed to issue to City an Owner’s Policy of Title Insurance in the full amount of the value of the Leytonstone Exchange Property as set forth in Section 3, effective as of the Closing Date, insuring title to City subject only to the Permitted Exceptions, and together with such endorsements as City may reasonably require.
(e) City shall have timely made all submissions to HCD pursuant to Section 4.6 hereof, and shall have resolved to the satisfaction of City any objection or challenge by HCD regarding compliance with the Surplus Land Act as set forth in Section 4.6 hereof, and there shall be no outstanding notice of violation regarding the City Exchange Property of the Surplus Land Act from HCD. (f) Leytonstone has paid into the Escrow the Purchase Price. (g) The City Exchange Property and Leytonstone Exchange Property have been created as legal parcels pursuant to Section 3 hereof.

2.3 Conditions Precedent in Favor of Leytonstone. Notwithstanding anything to the contrary set forth herein, the Closing of the Exchange is expressly conditioned upon satisfaction of the following conditions for the benefit of Leytonstone, unless waived by Leytonstone in writing (“Leytonstone’s Conditions Precedent”):
(a) Leytonstone has approved the condition of the title to the City Exchange Property, the survey and all due diligence items; (b) City has performed all obligations to be performed by City pursuant to this Agreement;
(c) City’s representations and warranties herein are true and correct in all material respects as of the Closing Date.
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4 (d) The Title Company is irrevocably committed to issue to Leytonstone an Owner’s Policy of Title Insurance in the full amount of the value of the City Exchange Property as set forth in Section 3, effective as of the Closing Date, insuring title to Leytonstone subject only to the Permitted Exceptions, and together with such endorsements as Leytonstone may reasonably require. (e) The City Exchange Property and Leytonstone Exchange Property have been created as legal parcels pursuant to Section 3 hereof.

3. Creation of Legal Parcels. The City shall, at its sole cost and expense, prepare all plans and drawings, make all applications and take all actions necessary for City approval of a parcel map, lot line adjustment or similar action as necessary to divide the current parcel owned by the Party into the City Exchange Property and Leytonstone Exchange Property, as applicable. The City shall cause a survey to be performed with respect to the Properties as required to configure the Properties into the City Exchange Property and Leytonstone Exchange Property, at the City’s expense. City’s and the Leytonstone’s approval of the reconfiguration of the current parcels into the City Exchange Property and Leytonstone Exchange Property, and performance of the surveys of such Properties, are conditions precedent to Closing for each Party.

4. Closing & Payment of Costs.

4.1 Escrow; Escrow Instructions. Not later than five (5) days following the Effective Date, Leytonstone and City shall open an escrow at First American Title Company (“Title Company” or “Escrow Agent”), at its office located at 1 Parkcenter Drive, Suite 120, Sacramento, CA 95825 Attention: Lesley Kaufman, phone number:
(916) 490-4512 or such other title company as may be mutually agreed upon by the Parties. Upon the opening of escrow, the Parties shall deposit with the Escrow Agent an executed copy of this Agreement, which together with such additional instructions as may be executed by either Party and delivered to the Escrow Agent, shall serve as the escrow instructions of Leytonstone and City for the conveyance of the Leytonstone Exchange Property to City and the conveyance of the City Exchange Property to Leytonstone.

4.2 Close of Escrow; Closing Costs. Each Party shall pay the cost of any title insurance such Party elects to purchase with respect to the Property to be acquired by such Party pursuant to this Agreement. Leytonstone and City shall each pay one-half (1/2) of all other closing costs and escrow fees (including without limitation recording fees and escrow charges) associated with the close of escrow for the conveyance of the Leytonstone Exchange Property to City and the conveyance of the City Exchange Property to Leytonstone (collectively, the “Close of Escrow”). Notwithstanding the foregoing, Leytonstone shall be responsible for paying any real estate transfer taxes #5..
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5 and documentary transfer taxes applicable to the transfer of the Leytonstone Exchange Property to the City and City shall be responsible for paying any real estate transfer taxes and documentary transfer taxes applicable to the transfer of the City Exchange Property to the Leytonstone.

4.3 Closing Date; Documents and Funds; Timing. Provided that the City’s Conditions Precedent and Leytonstone’s Conditions Precedent set forth in Section 2 have been satisfied, and no Party has terminated this Agreement prior to the end of the Due Diligence Period, the Close of Escrow for the Exchange shall take place as soon as practicable following the deposit into escrow of all the documents described in this Section, but in no event later than December 31, 2026 (the “Closing Date”). The Parties each agree that they shall not unreasonably condition, delay, or withhold consent to an extension of the Closing Date.

Prior to the Close of Escrow, the Parties shall deposit the following documents into escrow:
(a) City shall deposit the fully executed City Grant Deed substantially in the form attached hereto as Exhibit D sufficient to convey to Leytonstone good and marketable fee simple title to the City Exchange Property, free of all title defects and encumbrances except the Permitted Exceptions (as defined in Section 7), and an executed Certificate of Acceptance of the Leytonstone Grant Deed. (b) Leytonstone shall deposit a fully executed Leytonstone Grant Deed substantially in the form attached hereto as Exhibit E sufficient to convey to City good and marketable fee simple title to the Leytonstone Exchange Property, free of all title defects and encumbrances except the Permitted Exceptions. (c) Leytonstone and City shall each deposit into escrow their share of closing costs as set forth in Section 4.2, as well as funds sufficient to satisfy their respective share of the Prorations as set forth in Section 4.4. (d) City and Leytonstone shall each deposit such additional duly executed instruments and documents as the Escrow Agent may reasonably require to consummate the conveyance of the City Exchange Property to Leytonstone and the Leytonstone Exchange Property to City.
(e) The Parties shall each deposit an affidavit or qualifying statement which satisfies the requirements of paragraph 1445 of the Internal Revenue Code of 1986, as amended, any regulations thereunder (the “Non-Foreign Affidavit”). (f) The Parties shall each deposit a California Franchise Tax Board form 590 to satisfy the requirements of California Revenue and Taxation Code Section 18805(b) and 26131 (the “California Certificate”).
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6 4.4 Prorations. In connection with the conveyance of the Leytonstone Exchange Property to City and the City Exchange Property to Leytonstone, the Escrow Agent shall make the following prorations: (i) property taxes and assessments shall be prorated as of the Closing Date based upon the most recent tax bill available, including any property taxes which may be assessed after the Closing Date but which pertain to the period prior to the transfer of title, regardless of when or to whom notice thereof is delivered (provided that City is a public agency and represents that it is exempt from the payment of property taxes and Leytonstone shall cooperate with City for City to obtain reimbursement or avoid the payment of any property taxes due on either Property); and (ii) any bond or assessment that constitutes a lien on the Leytonstone Exchange Property on the Closing Date shall be assumed by City, and any lien on the City Exchange Property shall be assumed by Leytonstone (provided however, it shall be a condition to Closing that any such bond or assessment be paid current by each Party).

Any utility and sewer service charges shall be prorated as of the respective Closing Date.

4.5 Closing. The Escrow Agent shall close escrow for the conveyance of the Leytonstone Exchange Property to City and the City Exchange Property to Leytonstone by:

(i) causing the City Grant Deed and the Leytonstone Grant Deed to be recorded in the official records of Stanislaus County.
(ii) issuing the Title Policies (defined in Section 6) for the Leytonstone Exchange Property and the City Exchange Property and delivering same to City and Leytonstone, respectively.
(iii) delivering to City and Leytonstone a conformed copy of the Grant Deeds for the Property to be conveyed to each, indicating recording information thereon.
(v) delivering to the City and Leytonstone, as applicable, the Non-Foreign Affidavit and the California Certificate.
(vi) distributing to itself the payment of escrow fees and expenses required hereunder.

On the Closing Date, possession of the Leytonstone Exchange Property shall be delivered to City and possession of the City Exchange Property shall be delivered to Leytonstone.

4.6 Surplus Land Act Compliance. Not later than thirty (30) days prior to the scheduled Close of Escrow, City shall submit to the California Department of Housing #5..
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7 and Community Development (“HCD”) a notice of City’s determination, together with the written findings regarding Surplus Land Act compliance made by City in connection with the approval of this Agreement and such other findings as City shall deem appropriate, that the Exchange of the Properties is exempt from, in compliance with, and/or is not subject to, the requirements of the Surplus Land Act, Government Code Section 54220, et seq. City shall take all other actions required pursuant to the Surplus Land Act and the Surplus Land Act Guidelines which are required, if any, for the Exchange of the Properties pursuant to this Agreement.

5. Title Documents. No later than ten (10) business days following the Effective Date, the Title Company shall deliver or cause to be delivered to the Parties an updated title report for its Property (“Preliminary Report”) setting forth all liens, encumbrances, easements, restrictions, conditions, and other matters of record affecting title to that Property (“Title Exceptions”) together with copies of all instruments referred to therein.

Each Party shall approve or disapprove the Title Exceptions within thirty (30) days following receipt of the Preliminary Report and documents relating to the Title Exceptions. Upon failure to object within such period, any Title Exceptions that are not disapproved shall be deemed to be Permitted Exceptions (as defined in Section 7).

If either Party objects to any Title Exception, the other Party shall use its commercially reasonable efforts at its sole expense to remove from title or otherwise satisfy each such exception in a form that is reasonably satisfactory to the requesting Party within thirty (30) days following the date that the objecting Party objects to such exception.

Notwithstanding anything in this Agreement to the contrary, each party agrees that any deed of Leytonstone, mortgage, monetary lien (other than for taxes not yet due or payable) shall be paid in full at the Closing and shall not be considered a Permitted Exception and need not be disapproved as set forth above,

6. Title Policy. It shall be a condition to the close of escrow that Title Company shall commit to deliver to each Party an owner’s policy of title insurance ("Title Policy"), to be issued by Title Company in an amount equal to the value of the applicable Property as set forth in Section 3 or such other amount approved by the Parties, showing title to each Property, subject only to the Permitted Exceptions (as defined in Section 7), including such endorsements as may reasonably be requested by each Party, and committing Title Company to issue each Title Policy to the respective Party upon the Close of Escrow.

7. Conveyance of Title. Each Party shall convey by Grant Deed to the other Party marketable fee simple title to its respective Property, free and clear of all recorded and unrecorded liens, encumbrances, restrictions, easements, and leases, except: (i) liens for nondelinquent general and special taxes, assessments and/or bonds; and (ii) such other conditions, liens, encumbrances, restrictions, easements and exceptions as approved in writing by the Party receiving the Property or deemed approved as provided in Section 5 (all of the foregoing, are collectively hereinafter referred to as the “Permitted Exceptions”).
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8 8. Due Diligence.

8.1 Due Diligence. Each Party shall have ninety (90) days from the date of this Agreement (the “Due Diligence Contingency Period”) to complete physical inspections of the Property that such Party has agreed to acquire, and due diligence related to the purchase of such Property. During the Due Diligence Contingency Period, each Party and its agents, contractors and employees shall have the right to enter upon the Property that such Party has agreed to acquire for the purpose of making inspections or to perform environmental testing, at such Party’s sole risk, cost and expense. All of such entries upon the Properties shall be during normal business hours and after at least twenty-four (24) hours’ prior notice to the Party that owns the subject Property, and the Party that owns the subject Property or its agent shall have the right to accompany the other Party during any activities performed by such Party on the Property. At a Party’s request, such Party shall be provided with a copy of the results of any environmental tests and inspections at no cost. If any inspection or test disturbs a Property, the Party conducting the inspection or test shall restore such Property to the substantially the same condition as existed before the inspection or test.

Each Party shall defend, indemnify and hold the other Party harmless from and against any and all losses, costs, damages, claims or liabilities, including but not limited to, mechanic’s and materialmen’s liens, (each a “Claim” and collectively, “Claims”) arising out of or in connection with such Party’s inspection of a Property as permitted pursuant to this Section 8.1, except for any Claim arising from material or substances that existed on the Property prior to such inspection.

8.2 Contracts, Reports and Investigations. Leytonstone and City shall make available to the other Party, not later than ten (10) days following the execution and delivery of this Agreement, any and all information, studies, reports, investigations, contracts, leases, rental agreements and other obligations concerning or relating to the Property each Party has agreed to convey pursuant to this Agreement which are in such Party’s possession or which are reasonably available to such Party, including without limitation any Phase I Environmental Site Assessments, surveys, studies, reports, documents and investigations concerning the property's physical, environmental or geological condition, habitability, or the presence or absence of Hazardous Substances in, on or under the Property and its compliance with Environmental Laws. Each Party agrees to make any necessary disclosures relating to hazardous substances located on or beneath its Property and natural hazards affecting its Property, to the extend required by law.

8.3 Termination Upon Due Diligence Disapproval. Each Party shall have the right, in its sole discretion, to terminate this Agreement for any reason (or no reason) by written notice to the other Party prior to the expiration of the Due Diligence Contingency Period (as it may be extended). If a Party timely sends such a termination notice, this #5..
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9 Agreement shall terminate, and neither party shall have any further rights or obligations hereunder except those which expressly survive the termination hereof.

9. “As Is” Purchase. Except as otherwise specified in this Agreement, each Party agrees to accept the Property conveyed to it pursuant to this Agreement, including the land, all buildings, structures, improvements, equipment, and operating systems located on or under the land “AS IS, WHERE IS” and in its current state and condition, without any warranties whatsoever regarding its condition except as specifically described in this Agreement, and with all faults and defects, including Hazardous Substances and any other environmental conditions or hazards, if any, that may be located on, under, or around the Property, whether known or unknown, suspected or unsuspected, actual or potential, and each Party assumes all responsibility for any such faults, defects, and conditions as of the Close of Escrow.

10. Representations, Warranties, and Covenants.

10.1 Representations and Warranties. Each Party hereby represents, warrants, and covenants that except as disclosed in writing to the other Party, as of the Effective Date and as of the Close of Escrow: (i) except for the City’s easement and any rights of the City with respect to the Leytonstone Exchange Property, no contracts, licenses, leases or commitments regarding the maintenance or use of its Property or allowing any third party rights to use its Property are in force; (ii) such Party knows of no pending actions, suits, condemnation or other proceedings against or affecting its Property or any portion thereof or the interest of such Party in its Property; (iii) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting its Property or any portion thereof; (iv) such Party knows of no receipt of notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on its Property are in violation of any Environmental Law; and (v) the City has disclosed all material facts concerning the City Exchange Property. The City acknowledges that it has utilized and has had access to the Leytonstone Exchange Property for many years and has independent knowledge (not based on any disclosures by the Leytonstone) of all material facts regarding the Leytonstone Exchange Property and is not relying upon any statements or documents provided by Leytonstone.

10.2 Additional Representations. Each Party further represents and warrants that this Agreement and all other documents to which it is a party and delivered or to be delivered in connection herewith shall at the time of their delivery: (a) have been duly authorized, executed, and delivered; (b) are the binding obligations of that Party; (c) collectively are sufficient to transfer all of that Party's right, title and interest in and to its Property; and (d) are not in violation of the provisions of any agreement to which such Party is a party or which affects its Property. Each Party further represents and warrants that the persons who have executed this Agreement on behalf of that Party are authorized to do, that it has the legal right to enter into this Agreement and to perform all #5..
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10 of its terms and conditions, and that this Agreement is enforceable against the Party in accordance with its terms.

10.3 Covenants. Each Party covenants that from the Effective Date and through the Close of Escrow, it: (i) shall not willingly permit any liens, encumbrances, or easements to be placed on its Property other than Permitted Exceptions; (ii) shall not without the prior written consent of the other Party, enter into any agreement regarding the sale, rental, management, repair, improvement, or any other matter affecting its Property that would be binding on the other Party or the Property after the Close of Escrow; (iii) shall not permit any act of waste or act that would tend to diminish the value of its Property for any reason, except that caused by ordinary wear and tear; and (iv) shall maintain its Property in its condition as of the date hereof, ordinary wear and tear excepted.

10.4 Notification. Each Party shall notify the other Party of any facts that would cause any of the representations contained in this Agreement to be untrue as of the Close of Escrow. If either Party reasonably believes that any fact materially and adversely affects its Property, such Party shall have the option to terminate this Agreement by delivering written notice thereof to other Party. In the event either Party elects to terminate this Agreement, all funds and documents deposited into escrow by or on behalf of each Party shall be returned to that Party, and all rights and obligations hereunder shall terminate.

11. Mutual Release & Indemnity. Each Party (i) releases and forever discharges the other Party from any and all claims and causes of action under or with respect to any Environmental Laws, including without limitation the California Hazardous Substance Account Act, California Health and Safety Code Section 25300 et seq., (including section 25359.7), the Comprehensive Environmental Response, Compensation, and Liability Act, (“CERCLA”) title 42 U.S.C. section 9601 et seq., the Resource Conservation and Recovery Act (“RCRA”) title 42 U.S.C. section 6901 et seq.; and the Clean Water Act, title 33 U.S.C. section 2601 et seq., as these laws may be amended in the future; and (ii) agrees to defend (with counsel approved by both Parties, which approval will not be unreasonably withheld) indemnify, protect and hold the other Party free and harmless from any claim, liability, damages of any kind, attorneys’ fees, costs, etc. arising out of or resulting from the physical condition or use of the Property it is acquiring on or after Close of Escrow, including, without limitation, due to the presence of Hazardous Substances on the Property it is acquiring, as well as any claims or causes of action threatened or made by anyone relating to the condition or use of the Property it is acquiring including, without limitation, third parties adjoining property owners, governmental agencies, or claims brought under Proposition 65, California Health and Safety Code Sections 25249.5-25249.13.

11.1 “Hazardous Substances” means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or #5..
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11 otherwise classified pursuant to any Environmental Laws (defined below) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “extremely hazardous waste”, “infectious waste”, “toxic substance”, “toxic pollutant”, or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term “hazardous substances” shall also include asbestos or asbestos-containing materials, radon, methyl tertiary butyl ether, perchlorate, polychlorinated biphenyls, petroleum, petroleum products or by-products, petroleum components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, and synthetic gas usable as fuel, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws.

11.2 “Environmental Laws” means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Substances, or the protection of the environment or human, plant or animal health.

12. Miscellaneous Provisions.

12.1 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant hereto shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice shall be deemed delivered upon receipt;
(ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail;
(iii) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or (iv) by email.
.

City: City of Modesto
1010 10th Street
Modesto, CA 95354
Attention: City Manager
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12 Email: [email protected]
Leytonstone: Timothy A. Byrd
502 E. Whitmore Ave.

Modesto, CA 95358
209-602-0571
[email protected]

12.2 Attorneys’ Fees. In any action at law or in equity, arbitration or other proceeding arising in connection with this Agreement, the prevailing party shall recover reasonable attorneys’ fees and other costs, including but not limited to court costs and expert and consultants’ fees incurred in connection with such action, in addition to any other relief awarded.

12.3 Escrow Cancellation Charges. If the escrow fails to close by reason of a default by Leytonstone or City hereunder, such defaulting party shall pay all escrow or other Title Company charges. If the escrow fails to close for any reason other than default by a Party, then Leytonstone and City shall each pay one-half of such charges.

12.4 Amendments; Assignment. This Agreement may be amended only by a written instrument executed by the Parties hereto or their successors in title. Except as provided in Section 12.9, this Agreement may not be assigned without written authorization from both Parties.

12.5 Severability. If any term, provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged thereby.

12.6 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenant or condition, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right.

12.7 Default and Remedies. An event of default (“Default”) under this Agreement shall occur if either Party fails to comply with any of such Party’s covenants or obligations set forth herein and does not commence to cure such default within ten (10) days and fails to thereafter proceed with due diligence to cure such default. Upon the occurrence of an event of default hereunder the Parties may pursue all remedies at law or in equity including the remedy of specific performance. The rights and remedies of the Parties hereunder are cumulative, and the exercise or failure to exercise one or more of such rights or remedies by either Party shall not preclude the exercise by it, at #5..
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13 the same time or different times, of any right or remedy for the same default or any other default.

12.8 Entire Agreement. This Agreement, together with Exhibits A through E which are hereby incorporated by reference, contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, documents and discussions pertaining thereto, specifically including the Letter of Intent between the Parties dated August 20, 2025, which is superseded by this Agreement and shall be of no further force or effect.

12.9 Binding Effect; Due Authorization. This Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest and assigns of each of the Parties hereto. Without the requirement to obtain the consent of City, Leytonstone may assign this Agreement to and/or take title to the City Exchange Property in another entity, and intends to title as follows: ½ to Leytonstone PTC, Inc., Trustee of the Trust for the Benefit of Theresa M. Gallo and Descendants under Article IV of the David E. Gallo 1979 Trust for Descendants, as Modified; and ½ to Leytonstone PTC, Inc., Trustee of the Trust for the Benefit of Christopher D. Gallo and Descendants Under Article IV of the David E. Gallo 1979 Trust for Descendants, as Modified. . Any reference in this Agreement to a specifically named party shall be deemed to apply to any successor, heir, administrator, executor or assign of such party who has acquired an interest in compliance with the terms of this Agreement, or under law.

12.10 Parties Not Co-Venturers; No Brokers. Nothing in this Agreement is intended to or does establish the parties as partners, co-venturers, or principal and agent with one another. Each Party hereby represents and warrants to the other Party that it has retained no broker or other party to whom a commission or finder's fee is due with respect to the transactions contemplated hereby. Each Party agrees to defend, indemnify, and hold the other Party harmless from and against all claims, losses, costs, expenses and liabilities arising in connection with a breach of this representation and warranty by the indemnifying party. The terms of this Section shall survive the expiration or earlier termination of this Agreement and shall survive Close of Escrow.

12.11 No Third Party Beneficiaries. Nothing contained in this Agreement is intended by the Parties, nor shall any provision of this Agreement be deemed or construed by the Parties or by any third person, to be for the benefit of any third party, nor shall any third party have any right to enforce any provision of this Agreement or be entitled to damages for any breach by Leytonstone or City of any of the provisions of this Agreement.

12.12 Captions; Interpretation. The section headings used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in #5..
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14 the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.

12.13 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

12.14 Further Assurances. The Parties each agree to execute, acknowledge and deliver to the other such other documents and instruments, and to undertake such actions, as either shall reasonably request or as may be necessary to carry out the intent of this Agreement. City agrees to sign an IRS Form 8283, assist with tax documentation, and take any other actions necessary to establish Leytonstone’s donation of the Leytonstone Exchange Property to City as requested by Leytonstone.

12.15 Governing Law. This Agreement shall be interpreted under and pursuant to the laws of the State of California without regard to principle of conflicts of laws.

Venue for any dispute arising out of this Agreement shall be in the state or federal courts of Stanislaus County.

12.16 No Merger; Survival of Representations. The obligations stated herein which are intended to operate after the Close of Escrow, including without limitation indemnification obligations, shall not merge with the transfer of title but shall remain in effect until fulfilled as provided herein. Without limiting the generality of the foregoing, the representations and warranties made by each Party shall survive Close of Escrow.

12.17 Indemnification. Each Party shall indemnify, defend and hold harmless the other Party and its respective boards, commissions, and elected and appointed officials, shareholders, beneficiaries, employees, agents and contractors (collectively “Indemnitees”) from and against all claims, actions, proceedings, demands, liabilities, judgments, losses, expenses (including reasonable attorneys’ fees and expenses) and costs (collectively “Claims”) arising out of or related to (i) any breach by the indemnifying party of this Agreement; (ii) any liability or obligation of indemnifying Party which the indemnified Party is not required to assume hereunder or accruing prior to such assumption; or (iii) the inaccuracy or breach of any of the representations, warranties, or covenants made by the indemnifying Party. Each Party shall promptly notify the other Party of any such Claim. Nothing contained in this Section shall prohibit a Party from participating in a defense of any Claim, and if it chooses to do so, it shall be reimbursed for its reasonable attorneys’ fees and expenses. The provisions of this Section shall survive the expiration or termination of this Agreement and Close of Escrow.

12.18. Time. Time is of the essence to the performance of each and every obligation under this Agreement.
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15 12.19. Reasonable Consent and Approval. Except as otherwise provided in this Agreement, whenever a party is required or permitted to give its consent or approval under this Agreement, such consent or approval shall not be unreasonably withheld or delayed. If a party is required or permitted to give its consent or approval in its sole and absolute discretion or if such consent or approval may be unreasonably withheld, such consent or approval may be unreasonably withheld but shall not be unreasonably delayed.

12.20 Approvals. Whenever this Agreement calls for City approval, consent, extension or waiver, the written approval, consent, or waiver of the City, the City Manager or his or her designee(s) shall constitute the approval, consent, extension or waiver of the City, without further authorization required from the City Council. City hereby authorizes the City Manager and her designee(s) to deliver any such approvals, consents, or extensions or waivers as are required by this Agreement, or that do not otherwise reduce City’s rights under this Agreement, and to waive requirements under this Agreement, on behalf of the City.

12.21 Fence Maintenance. City agrees at its sole cost and expense to repair, maintain, and replace the fence between the Leytonstone Exchange Property and the remaining property to avoid entry by any persons from the Leytonstone Exchange Property onto such remaining property of Leytonstone. This obligation will survive the close of escrow.

12.22 Maintenance of Trees and Vegetation. City shall be solely responsible for the maintenance, replacement and planting of trees and vegetation on the Leytonstone Exchange Property. Leytonstone may, but is not obligated to, enter the Leytonstone Exchange Property to conduct such maintenance from time to time, provided it provides evidence of insurance reasonably requested by City and performs such work in coordination with City staff.

SIGNATURES ON FOLLOWING PAGE
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16 IN WITNESS WHEREOF, the City and Leytonstone have executed this Agreement as of the Effective Date first written above.

CITY OF MODESTO
By: _______________________________
Joseph P. Lopez, City Manager
ATTEST:

By:

Diane Nayares-Perez, City Clerk

APPROVED AS TO FORM
By: _______________________________
Jose M. Sanchez, City Attorney
Leytonstone PTC, Inc., a Nevada corporation, successor Trustee of the Claus Road Farm Trust By: ________________________________
Marilyn Falkenhagen, President
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17 Exhibit A

MAP OF EXCHANGE PROPERTIES
(Attach Map)
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18 Exhibit B

LEGAL DESCRIPTION OF CITY EXCHANGE PROPERTY
(Attach legal description)
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City of Modesto
Exhibit C

LEGAL DESCRIPTION OF LEYTONSTONE EXCHANGE PROPERTY
(Attach Legal Description)
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McClure Land Exchange Agreement
City of Modesto
Exhibit D

CITY GRANT DEED
Recording Requested by
and When Recorded, Return to:

Matthew Friedrich
P.O. Box 1130
Modesto, CA 95353
(SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE)
APN ______________________
The undersigned grantor(s) declare(s):

Documentary transfer tax is $_____________
City Transfer Tax is: $_______________
[ ] computed on full value of property conveyed, or
[ ] computed on full value less value of liens or encumbrances remaining at time of sale, [ ] incorporated area

GRANT DEED
For valuable consideration, the receipt of which is hereby acknowledged, the City of Modesto, a California municipal corporation hereby grants in fee an undivided ½ interest to Leytonstone PTC, Inc., a Nevada corporation, Trustee of the Trust for the Benefit of Theresa M. Gallo and Descendants under Article IV of the David E. Gallo 1979 Trust for Descendants, as Modified, and an undivided ½ interest to Leytonstone PTC, Inc., a Nevada corporation, Trustee of the Trust for the Benefit of Christopher D.

Gallo and Descendants Under Article IV of the David E. Gallo 1979 Trust for Descendants, as Modified, all that real property located in the City of Modesto, County of Stanislaus, State of California and more particularly described and depicted in Exhibit A, attached hereto and incorporated herein by this reference. #5..
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McClure Land Exchange Agreement
City of Modesto
IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of as of _________________.

Grantor:

City of Modesto,
a California Municipal Corporation

DO NOT EXECUTE - FORM
By:

Joseph Lopez, City Manager
ATTEST:

By:

Diane Nayares-Perez, City Clerk

APPROVED AS TO FORM
By: _______________________________
Jose M. Sanchez, City Attorney

SIGNATURE MUST BE NOTARIZED
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McClure Land Exchange Agreement
City of Modesto
Exhibit A to City Grant Deed

LEGAL DESCRIPTION
That real property located in the City of Modesto, County of Stanislaus, State of California, described as follows:
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McClure Land Exchange Agreement
City of Modesto
A notary public or other officer completing
this certificate verifies only the identity of the
individual who signed the document to which
this certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.

State of California )
) ss.

County of _____________ )
On_____________________, 20____ before me, _____________________, a Notary Public, in and for said State and County, personally appeared _______________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
_______________________________

NOTARY PUBLIC
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McClure Land Exchange Agreement
City of Modesto
Exhibit E

LEYTONSTONE GRANT DEED
Recording Requested by
and When Recorded, Return to:

City of Modesto
1010 10th Street
P.O. Box 642
Modesto, CA 94354
Attn: City Clerk

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
APN ______________________ (SPACE ABOVE THIS
LINE RESERVED FOR RECORDER’S USE)
The undersigned grantor(s) declare(s)
Documentary transfer tax is $0
City Transfer Tax: $0.00
SECTION 11922 R & T CODE:

GOVERNMENTAL AGENCY ACQUIRING TITLE
[ ] computed on full value of property conveyed, or
[ ] computed on full value less value of liens or encumbrances remaining at time of sale,

GRANT DEED
For valuable consideration, the receipt of which is hereby acknowledged, Leytonstone PTC, Inc., a Nevada corporation, successor Trustee of the Claus Road Farm Trust (the “Grantor”), hereby grants in fee to the City of Modesto, a California municipal corporation (the “Grantee”), all that real property located in the County of Stanislaus, State of California and more particularly described and depicted in Exhibit A, attached hereto and incorporated here by this reference (the “Property”).

IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of as of _________________.

Grantor:

Leytonstone PTC, Inc., a Nevada corporation, successor Trustee of the Claus Road Farm Trust ______________________, DO NOT EXECUTE - FORM By:

Marilyn Falkenhagen, President

SIGNATURE MUST BE NOTARIZED
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McClure Land Exchange Agreement
City of Modesto
Exhibit A to Leytonstone Grant Deed

LEGAL DESCRIPTION
That real property located in the City of Modesto, County of Stanislaus, State of California, described as follows:
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McClure Land Exchange Agreement
City of Modesto

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by the Grant Deed dated _________________, from ___________________, Leytonstone PTC, Inc., a Nevada corporation, successor Trustee of the Claus Road Farm Trust (“Grantor”), to the City of Modesto (“City”), is hereby accepted on behalf of the City by the undersigned officer pursuant to the authority conferred by Government Code section 27281 and Resolution No. ____________, adopted by the City Council on _____________, 2026, and the City consents to the recordation thereof in the official records of Stanislaus County by its duly authorized officer.

Dated: _________________

CITY OF MODESTO

DO NOT EXECUTE - FORM
By: ________________________________
Joseph Lopez, City Manager
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McClure Land Exchange Agreement
City of Modesto
A notary public or other officer completing
this certificate verifies only the identity of the
individual who signed the document to which
this certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.

State of California )
) ss.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
_______________________________

NOTARY PUBLIC
#5..
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McClure Land Exchange Agreement
City of Modesto
A notary public or other officer completing
this certificate verifies only the identity of the
individual who signed the document to which
this certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.

State of California )
) ss.

County of ______________ )
On_____________________, 20____ before me, _____________________, a Notary Public, in and for said State and County, personally appeared _______________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
_______________________________

NOTARY PUBLIC
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Appraisal Report
Appraisal Services for Dry Creek Area in
Modesto
Owners: City of Modesto & Mary C Gallo Trust
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California, 95355
Date of Value: October 8, 2025
Date of Report: October 29, 2025
BRI 25243 TO 3
2825 Watt Avenue, Suite 200,
Sacramento, CA 95821
www.benderrosenthal.com
916.978.4900
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Company_Address Company_CityStateZip | www.benderrosenthal.com | Company_Phone October 29, 2025
Scotty Douglass
Deputy City Manager
City of Modesto
1010 10th Street
Modesto, CA 95354
RE: TO 3 Dry Creek Area
Subject Property A: Scenic Dr & 945 Claus Rd
Subject Property B: 800 N. McClure Rd
Modesto, California 95355
Bender Rosenthal, Inc. File No: 25243 TO 3
Mr. Douglass:

We have completed the appraisal of the above-referenced subject properties that are being considered for a property exchange between the City of Modesto and the Mary C. Gallo. The purpose of the appraisal assignment is to determine the as-is, fair market value (fee simple estate) of the subject propertiesfor internal decision-making purposes regarding a land exchange. Our client is the City of Modesto, who, along with Mary C. Gallo, are the intended users of this report.

There are two subject properties which are referred to as Site A and Site B, and include the following:

Site A: Includes all of APN 068-024-001 located at Scenic Drive and a portion of 068-024-003 located at 945 Claus Road.

Site B: Includes a portion of 079-001-001 located at 800 N. McClure Rd The properties are currently unimproved; therefore, this appraisal values the properties as land only.

This is a narrative appraisal report as defined by USPAP. As such, it presents sufficient data, reasoning, and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. The depth of discussion contained in this report is specific to the needs of the client and of the intended use stated in this report. The following report sets forth the descriptive and factual data, the assumptions and conditions affecting the appraisal, and the findings and analyses that lead to and support our value opinion. The appraisers are not responsible for unauthorized use of this report. Every effort has been made to conform to the Standards of Professional Practice of the Appraisal Institute, which fully incorporate the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation.

The undersigned conducted the appraisal and prepared the report. #5..
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Mr. Scotty Douglass
October 29, 2025
Page II
Company_Address Company_CityStateZip | www.benderrosenthal.com | Company_Phone We are pleased to have this opportunity to provide you with professional appraisal services.

Respectfully Submitted,
BENDER ROSENTHAL, INC.

Lawrence Clark
Appraiser
Certified General Real Estate Appraiser
California License No. 3011366
Expiration Date 5/11/2027
916-978-4900
[email protected]
David Houghton, MAI
Appraisal Manager
Certified General Real Estate Appraiser
California License No.AG039402
Expiration Date 12/26/2025
(916) 978-4900
[email protected]
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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TABLE OF CONTENTS
LETTER OF TRANSMITTAL ....................................................................................................................................................I TABLE OF CONTENTS .........................................................................................................................................................III EXECUTIVE SUMMARY........................................................................................................................................................1 Site A 1
Site B 2
Aerial Photograph 3
Subject Property Photographs (Site A) 4
Subject Property Photographs (Site B) 7
IDENTIFICATION OF ASSIGNMENT......................................................................................................................................9 Proposed Land Exchange 9
Purpose 9
Client/Intended Use/Users of Appraisal 9
Scope of Work 9
Description of The Appraisal Process 10
Property Rights Appraised 11
Property and Sales History 11
Definition of Market Value 11
Property Rights Appraised 12
Value Scenarios 12
Assumptions & Limiting Conditions 12
Non-Discrimination Statement 13
Extraordinary Assumptions 13
Hypothetical Conditions 14
REGIONAL AREA MAP.......................................................................................................................................................15 REGIONAL AREA ANALYSIS ...............................................................................................................................................16 Introduction 16
Regional Overview 16
Access And Transportation 16
Population 16
Economic Profile 18
Major Employers 19
Unemployment Rate 20
Conclusion 20
REGIONAL AREA ANALYSIS ...............................................................................................................................................20 LOCAL AREA MAP .............................................................................................................................................................21 #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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LOCAL AREA ANALYSIS......................................................................................................................................................22 Introduction 22
Demographics 22
Surrounding Land Use 23
Access and Public Transportation 23
Local Area Summary 24
SINGLE-FAMILY MARKET OVERVIEW ................................................................................................................................25 Discussions with Market Participants 27
Conclusion of the Single Family Residential Market 27
Subject Exhibit..................................................................................................................................................................28 SITE DESCRIPTIONS...........................................................................................................................................................29 SITE A 29
Site B 32
MARKET ANALYSIS ............................................................................................................................................................35 Site A 35
Site B 36
VALUATION METHODS......................................................................................................................................................38 Valuation Methods and Considerations 38
SITE VALUATION (SITE A) ..................................................................................................................................................39 Introduction 39
Comparable Selection 39
Land Sale Exhibits 42
Comparable Land Sale Discussion 42
Land Value Conclusion 44
Site Valuation (SITE B).......................................................................................................................................................45 Introduction 45
Land Sale Exhibits 47
Land Value Conclusion 49
Value Conclusion 50
APPENDIX .........................................................................................................................................................................51 Appraiser’s Certification
Definitions
Letter of Intent Regarding the Exchange of Real Properties Grant Deed
Qualifications of Appraiser
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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EXECUTIVE SUMMARY
Project Name Appraisal Services for Dry Creek Area in Modesto Purpose of the Appraisal To provide an opinion of Fair Market Value of the subject properties for a proposed land exchange.

Appraisal Assignment Determine the as-is, fair market value (fee simple estate) of the subject properties for a proposed land exchange between the City of Modesto and the Mary C Gallo Trust.

Subject Properties There are two subject properties being appraised each subject property has common location, ownership, and zoning. Site A includes all of APN 068-024-001 and a portion of 068-024-003 (as identified by the client, the City of Modesto). Site B is a portion of 079-001-001 (as identified by the City of Modesto).

Intended Use Assist the Intended User(s) in developing a fair market of the subject properties for a proposed land exchange.

Date of Inspection October 8, 2025
Date of Value October 8, 2025
Date of Report October 29, 2025
SITE A
Property Address/Location The subject property is located on the southern side of Scenic Drive at 945 Claus Road, Modesto, California.

Assessor’s Parcel Numbers 068-024-001 & 068-024-003
Owner of Record Mary C. Gallo, Trustee of the Ernest and Amelia Gallo Claus Road Farm Trust For Descendants of David and Mary Gallo, UTA dated May 27, 1983, per the most recent grant deed, document # 2013- 0023809-00.

Size
APN 068-024-001
APN 068-024-003 (portion of)
Total
250,655 square feet, or 5.75± acres
340,454 square feet, or 7.82± acres
591,109 square feet or 13.57± acres
Source: The total size of Site A was provided in the Letter of Intent Regarding the Exchange of Real Properties Exhibit A. The size of APN 068-024-001 was provided by the Stanislaus County Assessor & the portion of APN 068-024-003 was calculated based on these sizes.
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 2
Zoning
APN 068-024-001
APN 068-024-003
R-1, Low-Density Residential
A-2-10, General Agriculture 10-Acre min.

General Plan
APN 068-024-001
APN 068-024-003
OS, Open Space
UT, Urban Transition
Current Use Open Space / City trail
Highest and Best Use of Subject Property (As
Vacant)
Open Space / Recreation
SITE B
Property Address/Location 800 N. McClure Rd, Modesto, California Assessor’s Parcel Numbers 079-001-001
Owner of Record City of Modesto, per public records.

Parcel Size
APN: 079-001-001(portion of) 473,062 square feet, or 10.86± acres Source: The Size of Site B was provided in the Letter of Intent Regarding the Exchange of Real Properties.

Zoning R-1, Low-Density Residential
General Plan Open Space
Current Use Open Space / recreation
Highest and Best Use of Larger Parcel (As Vacant) Rural residential, single family development #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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AERIAL PHOTOGRAPH
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 4

SITE A PHOTOGRAPHS (SITE A)
View facing west from the eastern portion of site A. Site A runs along the fencing line and is encumbered with the City trail.

View of the Dry Creek, which runs approximately along the center of Site A. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 5

SITE A PHOTOGRAPHS (SITE A)
View of Dry Creek. APN 068-024-001 is located from the centerline of Dry Creek and extends up the slope to Scenic Drive.

View of the Dry Creek towards the western edge of Site A. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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SITE A PHOTOGRAPHS (SITE A)
View of the city trail and subject parcel.

View from the southern end of Site A. The city trail can be seen running through the site. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 7

SITE B PHOTOGRAPHS (SITE B)
View of Site B to the left and Claus Road to the right. This is the primary access point for Site B.

View of Site B access point.
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 8

SITE B PHOTOGRAPHS (SITE B)
Typical view of Site B.

Typical view of Site B’s topography and natural vegetation. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 9

INTRODUCTION

PROPOSED LAND EXCHANGE
The city has proposed exchanging approximately 13.57 acres of land owned by Mary C. Gallo, located at the north of her parcel, for 10.86 acres of surplus land owned by the City of Modesto, located to the south of the property.

PURPOSE
The purpose of this appraisal assignment is to provide the City of Modesto with an opinion of fair market value of the subject properties.

CLIENT/INTENDED USE/USERS OF THE APPRAISAL
The client of this assignment is the City of Modesto, who, along with Mary C. Gallo, are the intended users. The intended use of the opinion of fair market value of the subject properties for internal decision making regarding a proposed land exchange.

SCOPE OF WORK
The appraisal assignment is to develop an opinion of the current fair market value of the subject properties. The date of value is based on the inspection date, unless noted otherwise in the appraisal. The date of the report is the date the appraisal is transmitted to the client.

ASSIGNMENT CONDITIONS
The City of Modesto provided the following areas for each parcel to be included in the proposed property exchange.

Under the conditions of this assignment, this valuation is predicated on the hypothetical condition that the subject properties are legally separate and salable parcels, as defined by the client.

VALUATION / RESEARCH OVERVIEW
The following is an overview of the valuation process and research involved for the subject properties and comparable sales. The valuation of the properties involved an investigation and analysis of the neighborhood, as well as the entire regional area for social, economic, governmental, and environmental forces and trends that affect or could influence property values.
• The property was inspected on October 8, 2025 by Lawrence Clark, from Bender Rosenthal, Inc., which sets the date of value for this report.
• Research the area, community, and neighborhood to determine market influences/conditions. • Research of public records to verify information about the subject property and comparables to ensure they are factually accurate and that there are no terms or additional influences that affect price or value. • Research zoning and general plans obtained from the City of Modesto Planning Department, the Stanislaus County Planning Department, and other agency websites, and research of the Land market. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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• Review of applicable soil surveys, flood and seismic hazard areas from appropriate source data. • Review public records obtained from the various city and county governmental agencies including the Planning Department, Assessor’s Office, and Tax Collector’s Office. • Research the subject properties.
• Determine the highest and best use of the properties. • Identify the Approaches of Value to be used in this assignment. • Research comparable property sales, listings, and offers to purchase or sales involving properties like the subject property and within the subjects’ or competing market areas. • Interview comparable property owners and/or brokers.
• Determine the market value via the Sales Comparison Approach for sales of properties with a similar highest and best use for open space or recreational use.
• Value the rights required for the project.
• Complete narrative Appraisal Report.

DESCRIPTION OF THE APPRAISAL PROCESS
The valuation process is a systematic series of steps, appropriate for the type of assignment, as the framework to produce a well-supported opinion of value reflecting all of the pertinent factors that influence the value of the property being appraised. Traditionally, specific methodology within the three approaches to value are applied to derive indications of real property value. One or more approaches are used depending on which are necessary to produce credible results.

Reference: The Appraisal of Real Estate, 15th Edition, Chapter 4

VALUATION APPROACHES
There are typically three approaches to value that may be used in the real property valuation process. They are the Sales Comparison Approach, Income Approach, and Cost Approach. Each approach provides an indicated value that is reconciled into a final estimate of value for the subject based on the interests appraised, the defined objective of the valuation and the stated definition of value. The analysis may include one, two or all three approaches to value based on the data available, the type of property and appraisal valuation problem.

SALES COMPARISON APPROACH
A value indication is derived by comparing the property being appraised to similar properties that have sold recently; making qualitative or quantitative comparisons to the subject; then applying units of comparisons to indicate a value for the subject properties. The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant; it is the most common and preferred method of valuation when an adequate supply of comparable sales is available. Sales, listings and current escrows of comparables were considered in this analysis. Primary reliance has been placed on closed transactions. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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INCOME APPROACH
A value indication is derived for income-producing property by converting its anticipated benefits (cash flows and reversion) into a value for real property interests. Typically, the annual net income is capitalized at a market-derived capitalization rate to estimate the desired value. The income approach is most often used for income producing properties or real estate acquired as an investment. Given that the structures are not impacted by the proposed acquisition, we are valuing the land only. The Income Approach was not utilized to value the subject as this is not a typical method utilized to value vacant land.

COST APPROACH
A value indication is derived for a property by estimating the current cost to construct a replacement/reproduction of the existing structure(s); deducting depreciation from all sources; and adding the estimated land value. The cost approach is most often used when valuing properties with new or relatively new improvements and special use properties. The Cost Approach is not considered to be applicable to this appraisal problem because this is not a typical approach employed to estimate the value of vacant land.

PROPERTY RIGHTS APPRAISED
The property rights appraised constitute the fee simple estate interest.

FEE SIMPLE INTEREST
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. 1

PROPERTY AND SALES HISTORY
We are not aware of any other sale transactions, transfers, listings, pending or recent contracts for sale that have occurred within the last three years. This is based on our interview with the borrower, and a search utilizing Loopnet, CoStar, public records, MLS and various other sources. Given that the noted previous transaction occurred more than three years ago, we have not reconciled this past indication of market value with our current indication of market value reported herein.

DEFINITION OF FAIR MARKET VALUE
Fair Market Value
[Source: Section 1263.320 of the Code of Civil Procedure] A) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.
1 The Dictionary of Real Estate Appraisal, Seventh Edition, Appraisal Institute, Chicago, Illinois, 2022 #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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B) The fair market value of property taken for which there is no relevant, comparable market is its value on the date of valuation as determined by any method of valuation that is just and equitable.

All other appraisal definitions can be found in the appendix.

PROPERTY RIGHTS APPRAISED
The property rights appraised constitute the fee simple estate interest.

VALUE SCENARIOS

AS-IS MARKET VALUE
The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date.2

GENERAL ASSUMPTIONS & LIMITING CONDITIONS
This appraisal report and the value estimates it contains are expressly subject to the following assumptions and/or limiting conditions.

1. Title to the property is marketable.

2. No survey of the property has been made by the appraisers and property lines as they appear on the ground are assumed to be correct.

3. Data, maps, and descriptive data furnished by the client or his/her representatives are accurate and correct.

4. No responsibility is assumed for matters of law or legal interpretation.

5. No conditions exist that would affect the use and value of the property, which are not discoverable through normal, diligent investigation.

6. The valuation is based on information from sources believed reliable, and that such information is correct and accurately reported.

7. The value estimate is made subject to the purpose, date, and definition of value.

8. The report isto be considered in its entirety and use of only a portion will invalidate the appraisal.

9. This appraisal was made on the premise that there are no encumbrances prohibiting utilization of the property under the appraiser's estimate of highest and best use. 2 The Dictionary of Real Estate Appraisal, Seventh Edition, Appraisal Institute, Chicago, Illinois, 2022 #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 13

10. Possession of this report or a copy does not carry with it the right of publication nor may it be used for any purpose by anyone other than the client without the previous written consent of Bender Rosenthal, Inc., and then only with proper qualifications.

11. Disclosure of the contents of this appraisal report is governed by the By-Laws and Regulations of the Appraisal Institute. No part of this narrative report may be reproduced by any means nor disseminated to the public in any way without the prior written consent of Bender Rosenthal, Inc.

12. Any person or entity who obtains or reads this report, or a copy, other than the client specified in this report, expressly assumes all risk of damages to themselves or third persons arising out of reliance on this report and waives the right to bring any action based on the appraisal, and neither the appraisers nor the appraisal firm shall have any liability to any such person or entity.

13. The appraiser shall not be required to give testimony or appear in court by reason of this appraisal with reference to the property described in this report unless prior arrangements have been made.

14. No responsibility is assumed for building permits, zone changes, engineering or any other services or duty connected with legally utilizing the subject property.

15. The property appraised may or may not be subject to the Americans with Disabilities Act of 1990 (ADA). Title III of this act provides for penalties for discrimination in failing "to remove architectural barriers in existing facilities [unless] an entity can demonstrate that the removal is not readily achievable." Unless otherwise noted in this appraisal, it is assumed that the property appraised is not substantially impacted by this law.

16. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraisers. The appraisers have no knowledge of the existence of such materials on or in the property. The appraisers, however, are not qualified to detect such substances. The presence of such substances as asbestos, urea- formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired.

17. It is assumed that the property appraised is competently managed and marketed.

NON-DISCRIMINATION STATEMENT
This appraisal has been completed without regard to race, color, religion, national origin, sex, marital status or any other prohibited basis, and does not contain references which could be regarded as discriminatory.

EXTRAORDINARY ASSUMPTIONS

1. A preliminary title report was not provided for either subject property. In the absence of a title report, we assume there are no easements or encumbrances that would impact the marketability or sale of the property.

Additionally, the property owned by Mary C Gallo is encumbered by a City trail, for which we assume there is an existing easement.
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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HYPOTHETICAL CONDITIONS

1. This appraisal is valued under the hypothetical condition that Site A and Site B, as defined by the client, are independently saleable properties.
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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REGIONAL AREA MAP
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Modesto, California
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REGIONAL AREA ANALYSIS

INTRODUCTION
In order to understand the subject’s position in the area or region, we have undertaken a brief analysis in order to determine how trends—both historical and projected—in population, employment, personal income, consumer spending, and housing impact supply and demand and influence the subject’s area directly and indirectly. This analysis first begins on a broader spectrum, and without respect to the subject itself, and is highlighted in the Regional Area Analysis. Secondly, we undertake a more narrowly focused study of the aforementioned attributes as they relate directly to the subject and the subject’s neighborhood. This discussion is presented in the forthcoming Local Area Analysis.

REGIONAL OVERVIEW
The subject is located within the Modesto MSA, which is comprised of Stanislaus County. A number of unincorporated communities, many of whose origins are traced to serving surrounding agricultural activities, function as important residential and employment centers. Modesto has traditionally been and continues to exist as the financial, governmental, cultural, and commerce center of the County.

ACCESS AND TRANSPORTATION
State Route 99 bisects Stanislaus County with the majority of development found along it. Interstate 5 also runs through the county, along the southwest portion with less intense development. Route 108, also known as McHenry Avenue, runs north and south through the center of Modesto and intersects major streets, as well as State Route 219.

State Route 132 runs east and west through Modesto and is the direct access to Interstate 5. Additional transportation routes include State Highway 33, which runs north and south, and travels through the city of Patterson.

POPULATION
As of 2015, the population within Stanislaus County was at 532,534, which increased to 555,765 in 2025. This reflects an approximate 4.4% increase in population over the 10-year period. It is noted, however, that some of the cities in Stanislaus County have experienced relatively high population growth rates, including Patterson, Newman, Hughson, and Riverbank. The cities of Modesto and Turlock have comparatively seen low population growth of 4.6% and 2.3%, respectively. The table below contains the 2010 Census data through January of 2015 to January of 2025 populations for the county, cities, and the unincorporated county area. #5..
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Source: Department of Finance, Population Estimates
Population growth happens primarily by one of three ways: through migration; the natural growth of the city’s population; or the reclassification of nearby non-urban districts. The latest influx of migration is from the Bay Area into the Central Valley. This migration is generally of persons of higher education and technical skills. In recent years, Bay Area residents have been priced out of the San Francisco Bay Area and Silicon Valley, as well Bay Area remote workers taking advantage of relocating to the Central Valley. These residents have found the benefits of lower residential pricing compared to the Bay Area and even the Sacramento region.

As shown in the table below, population projections indicate that Stanislaus County is expected to increase by 15.2% between 2025 and 2070. This growth is approximately three times the amount of the State as a whole over the same period. Please note, there was a slight discrepancy between the Stanislaus County population estimates presented in the prior table and the following table.

Source: Department of Finance, Population Estimates
Area
Stanislaus County
Ceres 47,314 48,352 48,673 48,989 49,803 49,508 49,121 49,480 49,305 4.2% -0.4% Hughson 7,148 7,313 7,407 7,468 7,486 7,493 7,590 7,801 7,977 11.6% 2.3% Modesto 210,124 214,921 217,449 218,641 218,745 217,860 217,833 219,705 219,765 4.6% 0.0% Newman 10,994 11,660 12,296 12,357 12,333 12,259 12,183 12,260 12,389 12.7% 1.1% Oakdale 21,760 22,528 23,074 23,183 23,210 23,137 23,014 23,167 23,231 6.8% 0.3% Patterson 21,527 22,636 23,614 23,708 23,796 24,221 24,492 24,977 25,868 20.2% 3.6% Riverbank 23,522 24,473 24,739 24,806 24,792 24,654 24,775 25,290 26,090 10.9% 3.2% Turlock 70,586 71,976 72,046 72,029 71,626 71,296 71,228 71,997 72,219 2.3% 0.3% Waterford 8,777 8,951 9,014 9,096 9,100 8,965 9,110 9,161 9,169 4.5% 0.1% Balance Of County 110,782 112,463 112,635 112,211 110,831 109,879 109,077 109,776 109,752 -0.9% 0.0% Incorporated 421,752 432,810 438,312 440,277 440,891 439,393 439,346 443,838 446,013 5.8% 0.5% County Total 532,534 545,273 550,947 552,488 551,722 549,272 548,423 553,614 555,765 4.4% 0.4% State of California 38,810,306 39,273,915 39,503,656 39,535,623 39,369,530 39,179,680 39,228,444 39,420,663 39,529,101 1.9% 0.3% 1/1/2015 1/1/2017 1/1/2019 1/1/2020 1/1/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 10-Year Change
One-Year
Change

POPULATION ESTIMATES - STANISLAUS COUNTY
Area
Stanislaus County 551,418 557,349 569,331 582,934 596,982 608,614 617,231 623,226 628,648 635,351 15.2% State of California 39,232,359 39,771,423 40,414,799 40,968,090 41,433,273 41,726,601 41,810,763 41,720,611 41,510,351 41,237,997 5.1%

POPULATION PROJECTIONS - STANISLAUS COUNTY
2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 Projected 2025- 2070 Change
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ECONOMIC PROFILE
The economy of Stanislaus County provides a mix of jobs for those migrating to the area. Stanislaus County has an increasingly diverse economy, and its geography has attracted a number of employers and residents to the area in recent years. The following chart shows the leading industries and their respective percentage of the region’s total employment.

Source: Employment Development, Labor Market Information Division, Published August 2025 As shown in the above pie chart, the largest employment industry in Stanislaus County is Private Education and Health Services at 20% of total employment in the region. This is followed by Trade, Transportation, and Utilities at 19%; Government at 15%; and Manufacturing at 12%.

Major employers in the county are shown next.

Total Farm
7%
Mining, Logging, and
Construction
5%
Manufacturing
12%
Trade,
Transportation, and
Utilities
19%
Information
0%
Financial Activities
2% Professional and Business
Services
7%
Private Education and Health
Services
20%
Leisure and
Hospitality
10%
Other Services
3%
Government
15%

CHART TITLE
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MAJOR EMPLOYERS

EMPLOYER NAME LOCATION INDUSTRY NUMBER OF EMPLOYEES
Amazon Fulfillment Ctr Patterson Mail Order Fulfillment Service 1,000 to 4,999 Bartles & Jayme’s Co Modesto Wineries (mfrs) 1,000 to 4,999 Conagra Brands Inc Oakdale Food Products (whls) 1,000 to 4,999 E & J Gallo Winery Modesto Wineries (mfrs) 1,000 to 4,999 Foster Farms Turlock Poultry Processing Plants (mfrs) 1,000 to 4,999 Memorial Medical Ctr Modesto Hospitals 1,000 to 4,999
Temsa Turlock Nonclassified Establishments 1,000 to 4,999 Behavioral Health & Recovery Modesto Mental Health Services 500 to 999 Emmanuel Medical Ctr Turlock Hospitals 500 to 999
Frito-Lay Inc Modesto Snacks (mfrs) 500 to 999
Health Services Agency Modesto Clinics 500 to 999
Macdonald Group At PMZ Real Modesto Real Estate 500 to 999 Modesto Bee Modesto Newspapers (Publishers/Mfrs) 500 to 999 Oak Valley Hospital District Oakdale Health Care Management 500 to 999 Stanislaus County Welfare Dept Modesto Government Offices-County 500 to 999 Duarte Nursery Hughson Nurserymen 250 to 499
Pacific Southwest Contnr LLC Modesto Corrugated & Solid Fiber Boxes (Mfrs) 250 to 499 Patterson City Sheriff Ofc Modesto City Government-Executive Offices 250 to 499 Stanislaus County Ofc of Edu Modesto Home Health Service 250 to 499 Storer Coachways Modesto Buses-Charter & Rental 250 to 499 Sysco Central California Modesto Grocers-Wholesale 250 to 499 Turlock Irrigation District Turlock Utility Contractors 250 to 499 United States Postal Svc Modesto Post Offices 250 to 499 Walmart Modesto Department Stores 250 to 499
Source: Employment Development
As can be seen in the chart above, Stanislaus County has many hospitals and clinics. The county also has a strong agricultural and trade-based economy.
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UNEMPLOYMENT RATE
The following table presents the unemployment rate for Stanislaus County from August 2023 through July 2025, the most current data available. The graph highlights the seasonal variances in the regional unemployment rate.

Source: Employment Development, Labor Market Information Division, Published September 19, 2025.

The unemployment rate in the Stanislaus County was 7.0 percent in August 2025, down from a revised 7.8 percent in July 2025, and above the year-ago estimate of 6.9 percent. This compares with an unadjusted unemployment rate of

5.8 percent for California and 4.5 percent for the nation during the same period.

CONCLUSION
Stanislaus County is well-positioned with respect to transportation corridors such as north-south running Highway 99 and Interstate 5, as well as Interstate 580, which provides access to the San Francisco Bay area. This county has been turning into a “bedroom community” for individuals working in the eastern Bay Area, which has resulted in notable population growth in certain parts of the County.
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LOCAL AREA MAP
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LOCAL AREA ANALYSIS

INTRODUCTION
The subject properties are located in the City of Modesto and Stanislaus County, and within the Modesto submarket.

The immediate area is mostly characterized by single-family residential neighborhoods, with some agricultural land and open space to the east, and open space and recreational land to the west. The subject properties are located along Dry Creek, where the open space, agricultural land, and recreational land is located.

DEMOGRAPHICS
The following information reflects the demographics for the subject’s area.

POPULATION
The estimate provided by ESRI for the current 2025 population within the subject neighborhood’s 1 - 3 mile radius is 67,226 representing a (0.92%) since 2020. ESRI’s 2025 population estimate for the subject’s 3 - 5 mile radius is 125,815, which also represents a slight decrease of (0.23%) since 2020. #5..
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Looking forward, ESRI estimates that the population within the subject neighborhood’s 1 - 3 mile radius is forecasted to change to 66,658 by the year 2030. As for the broader area, ESRI forecasts that the population within the subject’s 3 - 5 mile radius will change to 125,303 over the next five years. The population estimates for the next five years within the subject’s 3 - 5 mile radius represents a decrease of (0.41%) as well as a (1.50%) decrease within the subject’s 0 - 1 mile radius for the same period.

HOUSEHOLDS
The estimates provided by ESRI indicate that the number of households within the subject neighborhood’s 1 - 3 mile radius is 23,156, which is a 0.44% change since 2020. Within the subject’s broader 3 - 5 mile radius, ESRI estimates that the number of households is 41,220, a 0.33% change over the same period of time.

By the year 2030, the estimates provided by ESRI indicate that the number of households within the subject neighborhood’s 1 - 3 mile radius will decrease by (0.31%) to 23,084 households. Additionally, ESRI’s estimate for total households over the next five years within the subject’s broader 3 - 5 mile radius indicates an expected change of

0.03% which will result in a total household estimate of 41,234.

Looking back, the number of households in the subject neighborhood’s 1 - 3 mile radius increased 6.84% during the ten-year period of 2010 to 2020. Since then, it has increased by 0.44%.

INCOME
Income estimates provided by ESRI for the subject neighborhood’s 1 - 3 mile radius indicates that the median household income is $87,132 and that the average household income is $108,245. Further, the estimates provided by ESRI indicate that, for the subject’s broader 3 - 5 mile radius, the median household income is $81,004, and the average household income is $102,771. Given that there are reportedly 41,220 households in the subject’s 3 - 5 mile radius, it is estimated that the local effective buying income is around $4,236,220,620.

SURROUNDING LAND USES
Located on the eastern edge of Modesto, the area is a transition zone between urban and rural with residential properties (mostly single-family) to the north, south, and west and farmland to the east. Dry Creek cuts through the area, so open space, parkland, some farmland, and a golf course are located along the creek and its floodplain. Along with single-family residential properties in the area, there is a high school to the southeast, off of Claus Road, and elementary schools located in the neighborhoods to the north and south.

ACCESS/PUBLIC TRANSPORTATION
The streets within the neighborhood are predominantly laid out in a grid pattern. Major streets in the neighborhood include Claus Road, which runs in a north-south direction, and Yosemite Boulevard (Hwy 132) and E Briggsmore Avenue, which run in an east-west direction. Additionally, the neighborhood is about 5-1/2 miles east of Highway 99, which spans most of the Central Valley in a generally north-south direction. Bus service in the neighborhood is operated by Stanislaus Regional Transit Authority, which connects the neighborhood to other locations throughout Modesto and surrounding areas, including the Modesto Amtrak Station. Modesto is also proposed to be included in Phase 2 of the under-construction California High Speed Rail System.
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LOCAL AREA SUMMARY
The immediate area has seen relatively low population growth and even a slight population decline in recent years, and is projected to see a continued slight decrease in population in the foreseeable future. Additionally, incomes in the neighborhood are slightly lower than the region as a whole. The subject’s neighborhood on the eastern edge of Modesto is characterized by agricultural, park space, and residential properties, as well as vacant land along Dry Creek and its floodplain.
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SINGLE-FAMILY MARKET OVERVIEW
Given that the property appraised (Site B) is near various single-family residential uses and the highest and best use is for single-family development, a discussion of the residential market is merited. Data was obtained from multiple sources including Standard & Poor’s and the local Multiple Listing Service (MLS). The following is a discussion of the trends observed in the Modesto market area specifically. The following information shows details of recent re-sales of single-family homes, the current sales prices of actively selling new home products, as well as a discussion with market participants.

SALE PRICES
One of the more pertinent measures of demand is sale prices. If sale prices are rising, it is likely that demand will increase. Conversely, if sales prices are falling, it is likely that demand is decreasing. By tracking changes in sales prices over time, we can get a good idea of how demand for the residential markets are changing.

For an analysis of the historical median single family detached home prices for the market area, we utilized data from the California Association of Realtors website. The chart below demonstrates the trend in median home prices throughout the past five years in Stanislaus County.

Source: California Association of Realtors
The current median detached home price in Stanislaus County is $475,000, which represents a minimal decrease of

0.5% year over year.

MORTGAGE INTEREST RATES
Changes in mortgage rates largely correlate with changes in the Federal Reserve fund rate. Looking over the last 10 years, mortgage rates held between approximately 3.5% and 5% from 2014 into the beginning of 2020. Rates dropped to historic lows in 2020, correlated with a decrease in the Federal Reserve rate to spur the economy during the COVID19 pandemic. During the pandemic, the average 30-year mortgage interest rate hovered around the high 2% to low #5..
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3% range. Subsequently, inflation rose dramatically. In an attempt to moderate inflation, the Federal Reserve enacted several interest rate increases in 2022, which led to a significant spike in mortgage interest rates, reaching approximately 5.81% in June of 2022, 7.08% in October 2022, and the most recent high of 7.79% in October 2023.

More recent data shows the average mortgage interest rate has moderated somewhat to approximately 6.25% as of July of 2025, although this is still significantly higher than the rates observed before the 2022 and 2023 rate increases.

Further decreases in the Federal Reserve fund rate may trigger decreases in the average 30-year fixed mortgage rate.

The average 30-year fixed mortgage rates over the past decade are shown in the following table.

Source: Federal Reserve Economic Data (FRED), division of the Federal Reserve Bank of St. Louis

DAYS ON MARKET
Days on market (DOM) is the number of days a property has been listed for sale on the market before it is sold. DOM is a useful metric for tracking demand for real estate, as it can indicate how quickly homes are selling in a particular area. In general, a shorter DOM indicates higher demand for real estate in a particular area. Conversely, a longer DOM indicates lower demand for real estate in a particular area.

Source: Metrolist Data
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The most recent data shows that homes listed in Stanislaus County take an average of 46 days to sell. This amount has largely fluctuated in the last four years, reaching lows of 22 days in the fall of 2024 and highs of 52 days in the Spring of 2025.

One factor to consider is the increase in interest rates over the last several years. In many markets, the increase in interest rates has caused many people to be “married to their low rates” and not consider listing their homes, causing homes to be quickly absorbed because there is a low amount of alternative products available.

DISCUSSIONS WITH MARKET PARTICIPANTS
During our comparable confirmation process, real estate agents who have been active in the local neighborhood were surveyed about market conditions. Agent comments indicate that buyers are predominantly buying lots to develop single-family residences. Market conditions have been relatively stable over the last few years for rural residential properties; however, new development has slowed down with increased rates and construction costs.

CONCLUSION OF THE SINGLE-FAMILY RESIDENTIAL MARKET
In mid-to-late 2025, the Modesto single-family home market shows signs of a slow shift towards a more balanced market, though it remains competitive. The typical home value is around $500,000, and while there was a slight yearover-year value decrease, inventory is growing, and the time it takes for a home to sell has lengthened. More homes are selling at or below the list price, with fewer selling above, and sellers are showing more willingness to negotiate. #5..
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SUBJECT EXHIBIT
Presented below is an exhibit that shows the areas involved in the property exchange, Sites A and B, and the parcels that make up each of these sites.
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SITE DESCRIPTIONS
SITE A
Site A includes all of parcel APN 068-024-001 and a portion of parcel 068-024-003, which together total 13.57 acres in size. The site has a long, irregular shape that follows the Dry Creek and the areas surrounding the creek. Additionally, there is a city trail easement which runs along the south of Dry Creek.

The following summarizes the salient characteristics of Site A:

Address Scenic Drive and 800 North McClure Road, Modesto, California Census Tract 06-099-002004
Assessors Parcels 068-024-001 and a portion of 068-023-003 Size
APN 068-024-001
APN 068-024-003 (portion of)
Total
250,655 square feet, or 5.75± acres
340,454 square feet, or 7.82± acres
591,109 square feet or 13.57± acres
Source: The total size of Site A was provided in the Letter of Intent Regarding the Exchange of Real Properties Exhibit A. The size of APN 068-024-001 was provided by the Stanislaus County Assessor & the portion of APN 068-024-003 was calculated based on these sizes.

Site Topography The subject property follows the dry creek and is mostly sloping with different grades.

A strip of the site is level along the southern side of Dry Creek.

Site Shape Irregular
Utilities Municipal utilities are located nearby to the property.

Adjacent properties To the west and north of Site A are single-family and some multi-family residential neighborhoods. To the east is open space, agricultural land, and an elementary school.

To the south is open space/agricultural land and more single-family residential land.

Accessibility The site is currently accessible via a well-developed, two-way bike path. There is a bike bath interchange/ramp connecting the designated bike path that runs along Claus Road to the bike path that passes under Claus Road and connects to the bike path that runs the length of Site A. The site is potentially accessible from Scenic Drive, though currently it is fully fenced along Scenic Drive, and the slope is steep since it runs down to Dry Creek.
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Flood Plain Zone AE. This is referenced by Panel Number 06099C034F, dated August 24, 2021.

Zone AE is a High Risk Special Flood Hazard Area (SFHA). Special Flood Hazard Areas represent the area subject to inundation by 1% annual chance flood. Structures located within the SFHA have a 26% chance of flooding during the life of a standard 30-year mortgage. Federal floodplain management regulations and mandatory flood insurance purchase requirements apply in these zones. Areas subject to inundation by the 1% annual chance flood event determined by detailed methods. BFEs are shown within these zones. (Zone AE is used on new and revised maps in place of Zones A1– A30.)
Seismic The subject property is not within a Fault-Rupture Hazard Zone (formerly an AlquistPriolo Special Studies Zone), according to Special Publication 42, "Fault-Rupture Hazard Zones in California", published by the California Department of Conservation, Division of Mines and Geology, revised 2007. No active faults are located on or in the proximity of the property. However, strong earthquakes generated along any of the active California faults may affect the site depending on the characteristics of the earthquake and the location of the epicenter. In general, the effects should be confined to shaking and/or acceleration (shock waves) and potential damage to structures should be minimized by employing adequate design and construction procedures. Current engineering design, and construction practices, such as the Uniform Building Code, provides the opportunity to reduce earthquake related hazards.

Easements Per extraordinary assumption #1, there is a public trail which runs through the entire length of the site on the southern edge of the property line. Since, a title report was not provided, we assume there are no other easements or encumbrances that would impact the marketability or sale of the property.

Hazardous Waste As of the date of value, a Phase 1 Environmental Site Assessment report was not provided. A search on the State Water Boards Geo Tracker website shows no open cleanup sites on the subject sites or within 1,000 feet of the subject sites. Please refer to General Limiting Condition Number 16 regarding hazardous materials.

Zoning & General Plan The subject is comprised of two parcels. The first of which APN 068-024-001 is located within the city of Modesto zoning jurisdiction, while APN 068-024-003 is located within the County of Stanislaus. The zoning and general plan for each property is displayed in the following tables.
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Taxes & Assessment According to Stanislaus County, no property taxes apply to the subject parcel because it is part of an agricultural preserve and is enrolled in the Williamson Act. A review of property taxes for similar adjacent properties in the 59005 Tax Rate Area indicate an annual property tax rate of 1.08113 percent plus direct tax charges of around $215 per year.
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OVERALL SITE COMMENTS
Site A consists of 13.57 acres of land with an irregular shape that follows Dry Creek. The majority of the site has sloping topography or consists of the Creek itself. Additionally, a strip of the site, which is generally level along the southern boundary, is encumbered with a trail easement for the City of Modesto. While each parcel has a different zoning and general plan use designations, given the site's topography and trail easement, it is considered undevelopable.

SITE B
Site B consists of 10.86 acres of land, which is generally level and triangular in shape. The site is located within the City of Modesto and is the eastern portion of APN 079-001-001.

The following summarizes the salient characteristics of Site B:

Address 800 N McClure Road, Modesto, CA, 95357
Census Tract 06-099-002004
Assessors Parcels 079-001-001 (eastern portion)
Parcel Size
APN: 079-001-001
(a portion of)
473,062 square feet, or 10.86± acres
Source: The Size of Site B was provided in the Letter of Intent Regarding the Exchange of Real Properties.

Site Topography The subject is generally level and at street grade.

Site Shape The site is triangular in shape with minimal frontage along Clause Road to the east.

Utilities Municipal utilities are located nearby to the property.

Adjacent properties To the west and south of Site B are single-family residential neighborhoods. To the east is open space, agricultural land, and an elementary school. To the north is open space/agricultural land and more single-family residential neighborhoods.

Accessibility The site can be accessed via Clause Road to the east.

Flood Plain Zone X (unshaded), referenced by FEMA Panel Number 06099C034F, dated August 24, 2021. Zone X (unshaded) is a moderate and minimal risk area. Areas of moderate or minimal hazard are studied based upon the principal source of flood in the area.

However, buildings in these zones could be flooded by severe, concentrated rainfall coupled with inadequate local drainage systems. Local storm water drainage systems are not normally considered in a community’s flood insurance study. The failure of a local drainage system can create areas of high flood risk within these zones. #5..
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Seismic The subject property is not within a Fault-Rupture Hazard Zone (formerly an AlquistPriolo Special Studies Zone), according to Special Publication 42, "Fault-Rupture Hazard Zones in California", published by the California Department of Conservation, Division of Mines and Geology, revised 2007. No active faults are located on or in the proximity of the property. However, strong earthquakes generated along any of the active California faults may affect the site depending on the characteristics of the earthquake and the location of the epicenter. In general, the effects should be confined to shaking and/or acceleration (shock waves) and potential damage to structures should be minimized by employing adequate design and construction procedures. Current engineering design, and construction practices, such as the Uniform Building Code, provides the opportunity to reduce earthquake related hazards.

Easements Per Extraordinary Assumption 1, a preliminary title report was not available for review, and we assume there are no easements or encumbrances that would impact the marketability or sale of the property.

Zoning Site B, parcel 079-001-001, is located in the City of Modesto and in zoning area R-1, Low Density Residential, and it has a General Plan designation of Open Space. Per the City of Modesto Planning Department, when a parcel’s land use zoning and general plan do not align, the general plan designation takes precedent over the land use zoning for a property which does allow for residential development and agricultural uses but would not allow for the parcel to be subdivided. Additionally, the planning department indicated that all open space designated parcels within the City of Modesto are zoned R-1, and while the general plan could be amended, this change would be unlikely. The zoning and general plan for the property is displayed in the following table.
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Taxes & Assessment According to Stanislaus County, the subject parcel is a non-taxable property owned by a city government, the City of Modesto. A review of property taxes for similar adjacent properties in the area indicates an annual property tax rate of 1.08113 percent plus direct tax charges of around $215 per year.

OVERALL SITE COMMENTS
Site B consists of 10.86 acres of land, which is triangular in shape and generally level. The site is currently unimproved and, per the City of Modesto zoning and general plan, designations can be used for a variety of uses, including public open space, single-family development, and agriculture. #5..
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HIGHEST & BEST USE
Highest and best use may be defined as the reasonably probable use of property that results in the highest value.

There are four criteria used in the highest and best use analysis process. These are:

1. Legally Permissible Use
What uses are permitted legally under existing zoning, building codes, historic district controls, environmental regulations, deed (private) restrictions, and long-term lease provisions on the site in question?

2. Physically Possible Use
What uses of the site are physically possible, given its size, shape, area, terrain, soils composition, accessibility, assembly potential, and risk potential from natural disasters?

3. Financially Feasible Use
Which possible and permissible uses will produce a positive net return to the owner of the property?

4. Maximally Productive Use
Among the feasible uses, which use will produce the highest residual land value consistent with the rate of return warranted by the market for that use?
This section develops the highest and best use of the subject property As-Vacant. In this case, the subject sites are unimproved; therefore, the highest and best use as vacant is analyzed. Since there are two subject sites, the highest and best use of the properties will be analyzed separately. Both subject properties and their highest and best use have considered and developed independently in the following sections.

SITE A

LEGALLY PERMISSIBLE USES
Possible uses are constrained by legal restrictions on a property, whether private or public. As previously discussed, the subject property has two land use zoning and general plan designations:

APN 068-024-001 has a zoning designation for R-1, Low Density Residential, per the City of Modesto. The R-1 lowdensity zoning allows for single-family development, manufactured homes, building accessories, as well as horticulture stock and fruit and nut trees. The general plan designation per the Stanislaus County is OS, Open Space, which includes a number of low-impact recreational facilities, public uses, low-density residential, and agriculture.

APN: 068-024-003 has a zoning for, R-1—Low Density Residential under the City of Modesto. The R-1 low-density zoning allows for single-family development, manufactured homes, building accessories as well as horticulture stock and fruit and nut trees. The general plan per Stanislaus County is A-2-10, which allows for a variety of agricultural uses as well as the development of a single-family home (10-acre minimum) and agricultural support structures.

Additionally, per extraordinary assumption #1, the subject is further restricted by a City of Modesto trail easement, which runs along the southern property line.
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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Overall, the subjects' legally permissible uses are largely restrained by the general plan which takes precedence over the existing zoning if they do not correspond, which includes a range of public uses, recreation, single-family development and agricultural uses, which are further restricted by the trail easement encumbrance on the property.

PHYSICAL POSSIBLE USES
The size, topography, and location of the subject are important factors in determining the use of the property. The size of the site can significantly affect the type of development that is possible, as the “economies of scale” notion often comes into play. The subject property totals 13.57 acres in size and has a long, narrow and irregular shape, which impacts the development potential of the site. The majority of the site is either located within Dry Creek or its banks, which have a steel slope. Additionally, the only level portion of the site is encumbered with a trail easement as previously stated or has sloping topography. Overall, due to the site's topography and encumbrances, the property cannot be physically developed, and the only possible use is for open space or recreation, either public or private.

FINANCIALLY FEASIBLE AND MAXIMALLY PRODUCTIVE USE
A proposed property improvement must be able to deliver an income return that, in turn, generates a market value sufficient to pay for the developmental costs, the undertaking of the risks involved, and a profit appropriate for the development. As previously stated, the only possible physical use of the property is for recreation or open space. Public uses do not generate a return on the land and for this reason, are not considered financially feasible. However, the site could be utilized by a private owner for continued recreational use. Therefore, the financially feasible and maximally productive use of the property is for open space and recreation.

SITE B

LEGALLY PERMISSIBLE USES
Possible uses are constrained by legal restrictions on a property, whether private or public property. The legal uses of the subject property as though vacant are those uses allowed by the City of Modesto in the R-1, Low-Density Residential land use zone and under a general plan designation of Open Space.

The R-1 low-density residential zoning allows for single-family development, manufactured homes, building accessories as well as horticulture stock and fruit and nut trees. The low-density zoning allows a maximum density of 10.7 units per acre. The property has a general plan designation for OS - Open Space, which allows for a number of low-impact recreational facilities, public uses, low-density residential (10-acre minimum), and agriculture, which does not correspond with the current zoning.

Conversations with the City of Modesto planning department indicated that the general plan takes precedence over the current zoning designation. Additionally, while the general open space plan allows for the development of a single home on the site, the parcel cannot be subdivided unless the general plan is amended, which is not considered likely.

Therefore, the legally permissible uses of the subject property are largely restricted by the open space general plan, which allows for a range of recreational facilities, public uses, development of a single-family home, and agriculture. #5..
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 37

PHYSICAL POSSIBLE USES
The size, topography, and location of the subject are important factors in determining the use of the property. The size of the site can significantly affect the type of development that is possible, as the “economies of scale” notion often comes into play. The subject consists of 10.86 acres of land, which has a triangular shape and is generally level. The site can be accessed from Claus Road to the east. There are also municipal utilities located nearby; however, they would need to be pulled a fair distance, which is possible for water and electricity, but it is much more likely that a septic system would be developed than attaching to the city sewer system. In terms of agricultural uses, the property's size restricts it from being economically farmed by itself, and for this reason, a strictly agricultural use is unlikely.

Additionally, there are several sites to the east of the subject along the Dry Creek which are physically similar to the subject and have been developed with rural residences over the last decade. Overall, there are no physical limitations that would prevent the subject from being able to develop to those uses allowed under the open space general plan designation.

FINANCIALLY FEASIBLE AND MAXIMALLY PRODUCTIVE USES
A proposed property improvement must be able to deliver an income return that, in turn, generates a market value sufficient to cover the developmental costs, undertake the risks involved, and yield a profit appropriate for the development. The subject is not well-suited for agricultural uses, as previously explained. Furthermore, agricultural use in this location is not considered to be financially feasible, as land for rural residences often transacts at higher values and provides a larger return. However, the site could be developed as a rural residence with a single-family home. While there has been a pullback in new developments due to construction and lending costs, there is evidence as shown by the sale comparables of similar properties in the area being developed with a single-family home. For these reasons, the financially feasible and maximally productive use of the property is for future development of a single-family home. The most likely buyer would be an owner-user. #5..
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 38

VALUATION METHODS

VALUATION METHODS AND CONSIDERATIONS
The initial stages of the appraisal process include the investigation, organization, and analysis of relevant market data and other information that relate to the market value of the subject property. Factors discussed previously that influence value include demographics and economic conditions, neighborhood characteristics and features, and subject property attributes. All of these need to be considered when rendering the highest and best use conclusion.

After a highest and best use conclusion has been made, the possibilities for the property have been sufficiently narrowed so that a proper valuation process can be pursued. This section of the report contains the comparable data, the interpretation, analysis, and processing of these data and the conclusions reached about the property's market value.

An appraisal of an improved property typically utilizes up to three valuation approaches:
• The Replacement Cost Approach to Value
• The Sales Comparison Approach to Value
• The Income Capitalization Approach to Value

COST APPROACH
The Cost Approach to Value usually involves estimating land value through the sales comparison approach. Then, we estimate the replacement cost of the improvements as if they were new, less a deduction for depreciation, which is computed after analyzing the deficiencies or disadvantages of the existing building compared to a new building. Since the subject properties are unimproved, the cost approach does not apply.

SALES COMPARISON APPROACH
In the Sales Comparison Approach to Value, the subject property should be compared to other similarly improved properties that have recently sold in the market area. The respective sale prices of the comparable properties are adjusted, quantitatively, if possible, based on market data, but at least subjectively based on the appraiser’s knowledge of market behavior, in order to derive an indication of market value. All sale and listing properties were compared based on price per site basis, consistent with the market for both low utility open space and rural residential sites. This approach is a logical one for this appraisal assignment since similar land parcels within the region have recently sold.

INCOME CAPITALIZATION APPROACH
The Income Capitalization Approach to Value is based on the assumption that there is a relationship between the amount of income a property will produce and its value. This approach involves estimating the annual net income the property will earn and converting it into value. The direct capitalization methodology is not appropriate for this assignment since the subject properties are not income-producing properties.

The next step in the appraisal process is the reconciliation or correlation of the value indications generated by the approaches used, as influenced by other pertinent analysis that previously have been developed in the report. Since only one approach was used in this appraisal, reconciliation is not needed. #5..
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 39

SITE VALUATION (SITE A)

INTRODUCTION
In the Sales Comparison Approach, the value of a property is estimated by comparing it with similar, recently sold properties in the surrounding or competing areas. Inherent in this approach is the principle of substitution, which holds that when a property is replaceable in the market, its value tends to be set by the cost of buying an equally desirable property, assuming that no costly delay occurs in making the substitution. All the sale properties were compared based on price per Units, consistent with the market.

COMPARABLE SELECTION
Through the analysis of sales of verified arm’s-length transactions, market value and price trends are identified. The sales utilized are comparable to the subject in physical, functional, and economic characteristics. With regard to elements of comparison, the comparables were analyzed in terms of property rights, financing, conditions of sale, changes in market conditions, location, and overall utility.

A concerted effort was made to locate sales of similar open space/recreational land properties in the subject’s immediate market area. Overall, the comparables utilized in this report are considered the most appropriate sales available for analysis.

A map of the comparable sales and summary table are on the following pages, followed by a discussion of the comparable sales and comparison to the subject property. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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Modesto, California
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LAND SALE EXHIBITS

COMPARABLE LAND SALE DISCUSSION
Clearly, the results of the analysis of each comparable are not absolute; therefore, the appraiser considers the strengths and weaknesses of the analysis in the reconciliation process by giving more or less weight to specific comparable properties. In the analysis of the individual comparables, property characteristics identified that could have an impact on value are considered. Qualitative adjustments will be considered during the individual comparable write-ups.

It was reported that the sales were either cash or cash equivalent, and there were no unusual conditions of sale, unless noted. With regard to changes in market conditions, there is no general market for open space properties, as many sell on a case-by-case basis and for this reason, there is no time adjustment made. Additionally, due to the lack of available sales in the subject's immediate market area, we have expanded our search to include the larger region.

The following is a discussion of each comparable sale used. #5..
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 43
Land Sale 1
This is the sale of a 20.53-acre open space property located at the southern edge of Galt, California, along Dry Creek.

The property sold on February 26, 2025, for $90,000 in an all-cash transaction. The property has extremely limited use due to the Open Space zoning and conservation easement. This conservation easement prohibits any farming, grazing, gardening, or other agriculturally related uses. It is also noted that the property lies within the Dry Creek watershed in FEMA Flood Zone AE, with a base flood elevation of 43 feet. The buyer purchased the property with the intention of holding it for investment. Of note, this property has transacted several times over the last five years, and two prior owners intended to utilize the site for recreational purposes.

This comparable has an inferior overall location to the subject property. The comparable is similar in terms of topography, as it is encumbered by a creek, and the remainder of the site is sloping and wooded. However, the comparable is much larger in size than the subject, which is superior on a per-site basis. Overall, due to the larger size of the comparable it is considered superior to the subject.

Land Sale 2
This is the sale of a 13.25-acre parcel located east of Fort Donelson Drive in Stockton. This parcel is mostly underwater within the White Slough. A small portion of the parcel consists of island land. Surrounding land uses outside of the slough include residential, agriculture, a marina, and a restaurant. The parcel is zoned OS (Open Space) and has a General Plan land use designation of Open Space/Agriculture. This property sold on October 20, 2020, for $30,000, or $2,264 per acre in a cash transaction. The buyer is an agent who represented himself in this transaction. His intention for the property was for personal use such as kayaking.

This comparable is relatively similar in size to the subject. However, most of the comparable areas are underwater within the White Slough and, for this reason, has significantly less utility for recreational uses when compared to the subject. Based on this, the comparable is overall considered inferior to the subject.

Land Sale 3
This is the sale of 41.7 acres of vacant land sandwiched between the east shore of Bass Lake and Bass Lake Road. The property is elongated with an 'L' shape. The topography is level to gently rolling and the northern portion of the parcel is heavily treed. Approximately three acres is water known as Dry Pond. The property has a general plan land use designation of Open Space and a zoning for low intensity recreational uses. The property was purchased by the El Dorado Hills Community Service District who was assembling the property with two adjacent parcels totaling 157 acres for development into a regional park. The park is tentatively anticipated to have a variety of amenities including lit sports fields, wetland areas, dog park, sand volleyball courts, playgrounds, bocce courts, multi-use event center, small museum and education facility, camping areas, and amphitheater, among others. The purchase price was based on an appraisal and reflected market value.

This comparable has several superiorities to the subject, which include its larger size, shape, and overall utility for recreational uses. Additionally, while the property sold at market value, it sold to a public agency that was motivated to combine it with neighboring sites. Overall, primarily due to the comparables larger size and superior utility, it is considered significantly superior to the subject.
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 44
Land Sale 4
This is the sale of seven acres of land located just south of Isleton, at the southwest corner of Jackson Boulevard and 6th Street. This property is very irregular in shape and was a prior Southern Pacific Railroad Line. The property is L shaped and along the northern portion of the site there are power lines, and the southern portion of the site there seems to be an access easement to allow for the farmers to the south access to their sites. The portion of the site with the most utility is the central portion of the property. This property was listed on the market August of 2019 and was pending just one month later with more than one serious offer. The property closed November 7, 2019 for $75,000.

The property was purchased by the neighbor to the east, and is currently being utilized for bee keeping and hobby farming. The agent stated that the buyer is also planning on moving a mobile "tiny home" onto this property at a future date, but hasn't yet done so. This property is located within FEMA Flood Zone AE with a base flood elevation of 9 feet.

This comparable is smaller in size than the subject which is inferior. However, the property was purchased by the neighboring property owner who was motivated to expand his site. Additionally, the comparable has greater overall utility due to its zoning which allows for a mobile home on the site as well as agricultural uses. Overall, due to the greater utility of the site, it is considered slightly superior to the subject.

LAND VALUE CONCLUSION (SITE A)
Based on the foregoing discussion, the land sale comparables indicate a bracketed value subject property between $30,000 and $75,000 on a per-site basis.

Comparable Greater Than / Less Than Price / Site
L-3 < $250,000
L-1 < $90,000
L-4 < $75,000
Subject Range From $30,000 to $75,000 per site
L-2 > $30,000
The subject property is bracketed by land sales 2 and 4, which provide a range of $30,000 to $75,000 per site, with a midpoint of $52,500. Land Sale 2 at the lower end of the range is mostly underwater and for this reason, has significantly less utility than the subject and is considered a low indicator of value. Land Sale 4 has several offsetting characteristics to the subject, including its superior overall utility but much smaller inferior size. Overall, considering the subject's size and physical characteristics, and primarily its utility for recreational uses, a value above the midpoint, closer to Sale 4 of $70,000, is considered appropriate for the subject property on a per-site basis. #5..
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 45

SITE VALUATION (SITE B)

INTRODUCTION
This section values the subject site by comparing it with substitute land sales or listings within the local market area or in competitive areas throughout the region. Land value is influenced by a number of factors; most notably development and use potential. These factors, as well as others, are factored in the following analysis.

A concerted effort was made to locate sales of similar rural residential sites in the subject's immediate market area.

Overall, the comparables utilized in this report are considered the most appropriate sales available for analysis.

A map of the comparable sales and summary table are on the following pages, followed by a discussion of the comparable sales and comparison to the subject property. *Comparable #2 was adjusted to account for a building improvement (workshop) located on the property. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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Modesto, California
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LAND SALE EXHIBITS

It was reported that the sales were either cash or cash equivalent and there were no unusual conditions of sale, unless noted. With regard to changes in market conditions, the sales range in transfer dates from August of 2022 to January of 2025. Broker interviews indicated that market conditions have been relatively stable for rural residential land over the last several years.

The following is a discussion of each comparable sale used. #5..
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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Land Sale 1
This is the sale of a 15.22-acre rural residential site located along the north side of Wellsford Road in Hughson, California. The site is generally rectangular in shape, level, and at street grade. The property is improved with a mature orchard at the time of sale, which is flood irrigated with district water. There was an agricultural well on the site; however, it collapsed and is no longer operational. Utilities are located nearby in the street; however, a septic system would need to be built to develop a home on the site. The property is zoned AG-2-10, which allows for agricultural uses and the development of a single-family home. The property sold on January 21, 2025, for $515,000 in an arms-length transaction. The buyer plans to develop a home on the site in the future.

This comparable has a slightly inferior location and access to utilities as the subject property. However, this is more than offset by the comparable larger size and existing orchard, which are superior to the subject. Overall, primarily due to the larger size of the subject, it is considered slightly superior to the subject.

Land Sale 2
This is the sale of a 9.77-acre, rural residential parcel located at 501 Wellsford Road in Modesto. The site is rectangular in shape, generally level, and improved with a mature almond orchard and workshop. The orchard is flood-irrigated with access to irrigation district water. The property is zoned A240, which permits both agricultural uses and the development of a single-family home. The site is stubbed to all municipal utilities, and a home would just need to be hooked up. Additionally, the property is enhanced with a 2,000-square-foot workshop, constructed from metal. Per the listing broker, the workshop added approximately $50,000 to $60,000 in value. The property was sold on December 18, 2024, for $460,000 in an arms-length transaction. The buyer intends to develop a home on the site in the future.

The transaction was conventionally financed. The listing broker reported there was a lot of interest in the property, and it sold quickly. This comparable has been adjusted to account for the site improvements by $55,000, resulting in an adjusted sales price of $405,000.

This comparable is improved with a mature orchard and has a utility stubbed to the site, which is slightly superior to the subject. However, this is more than offset by the comparable’s inferior location and slightly smaller size when compared to the subject. Overall, primarily based on the location of the comparable, it is considered inferior to the subject.

Land Sale 3
This is the sale of 11.16 acres of rural residential land located at 4475 Gomes Road in Modesto. The site is just south of Dry Creek, is generally level with sloping portions to the north, and can be accessed via Gomes Road. The property was unimproved raw land at the time of sale, and a portion, which totals 0.85 acres to the west, is bisected by a power line.

The site is zoned A-2-10, which allows for agricultural uses and the development of a single-family home. The property is also located in flood zone AE, which, while not preventing development, has an increased risk of flooding. The site has access to municipal utilities in the street, but they are not stubbed to the site. The buyer purchased the property with the intent of building a single-family home in the future. The property sold for $460,000 on December 21, 2023, in an arms-length transaction. The seller carried a small portion of the loan, and the buyer primarily paid in cash. #5..
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 49
This comparable has several similarities to the subject which include its overall location and general topography.

Although the comparable is slightly larger in size than the subject, which is superior, this is generally offset by its higherrisk flood zone, as well as a portion of the site being bisected by a power line. Overall, this comparable is considered similar to the subject.

Land Sale 4
This is the sale of 9.6 acres of rural residential land located at 4200 Roselle Avenue in Modesto, California. The site is rectangular in shape and has a generally level topography. While the site was vacant at the time of sale, it had historically been utilized for agricultural purposes. The property has access to municipal utilities in the street, and there is an operating agricultural well. The property is zoned AG-2-10, which allows for agricultural uses and the development of a single-family home. The property was sold on August 11, 2022, for $588,000 in an arms-length transaction. It was reported that the buyer took out a hard money loan to finance the purchase.

This comparable is slightly smaller in size than the subject. However, the comparable has an overall superior location to the subject and is considered superior for this reason.

LAND VALUE CONCLUSION
Based on the foregoing discussion, the land sale comparables indicate a bracketed value for the subject property between $405,000 and $515,000 on a per-site basis.

Comparable Greater Than / Less Than Price / site
L-4 < $588,000
L-1 < $515,000
Subject Range From $405,000 to $515,000 on a per-site basis L-3 (≅) $460,000
L-2 > $405,000
The comparable is bracketed by L-2 and L-1, which provide a range from $405,000 to $515,000 on a per-site basis and a midpoint of $460,000. Both bracketing sales have offsetting characteristics to the subject property, but overall, L-2 is considered inferior due to its location, and L-1 is considered superior due to its larger size. L-3 sold for $460,000, which is the bracketed midpoint of L-1 and L-2. L3, while also having small offsetting differences to the subject, is overall considered most similar to the subject based on its overall location. Therefore, the concluded value for Site B is $460,000 on a per-site basis. Additionally, the concluded value breaks down to a per-acre value of $42,357, which is similar to Sales 1 and 3 and within the range of the comparable data, further supporting our conclusion. #5..
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
25243 TO 3 50

ADDITIONAL INFORMATION
Additionally, we are aware of a similar site located just east of the subject, which is currently listed for sale. The property is located at 4519 Gomes Road, Modesto. This comparable is located adjacent to the east side of L-3, which we applied most weight to in our analysis. The property has similar physical characteristics to this site and totals 11.3 acres in size. The property has been listed for approximately 18 months at a list price of $499,999. The broker indicated that the site had not sold because it is listed too high. This further supports our marked conclusion, and this site is very similar to the subject, indicating that a value below this is considered appropriate.

VALUE CONCLUSION
The final value conclusion for both Site 1 and Site 2 is displayed in the table below:
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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APPENDIX
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Modesto, California
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APPRAISER’S CERTIFICATION
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
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CERTIFICATION
I certify that, to the best of my knowledge and belief:

1. The statements of fact contained in this report are true and correct.

2. The analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial and unbiased and professional analyses, opinions and conclusions.

3. I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest with respect to the parties involved.

4. I have not previously appraised the property that is the subject of this report within the three-year period.

5. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

6. My engagement in this assignment was not contingent upon developing or reporting predetermined results.

7. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

8. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP).

9. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice.

10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

11. I have made a personal inspection of the property that is the subject of this report.

12. I have not revealed the findings and results of this appraisal to anyone other than the proper officials of the client and I will not do so unless and until authorized by the client, or until I am required to do so by due process of law, or until I am released from this obligation by having publicly testified as to such findings.

13. Such appraisal has been made in conformity with the appropriate California laws, Title VI of the 1964 Civil Rights Act, and regulations, policies, and procedures applicable to appraisal of right of way.

14. To the best of my knowledge, no portion of the value of the property appraised consists of items which are non-compensable under the established laws of California. It is my understanding that federal funds may be involved in the project that pertains to the subject of this report.

15. Kathleen Russick provided significant assistance in the preparation of this report including collection and analysis of the data under the direct supervision of the undersigned. #5..
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Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
BENDER ROSENTHAL, INC. 25243 TO 3 54

16. My opinion of the total fair market value of the appraised property identified in this report was derived without collusion, coercion or direction as to value.

Lawrence Clark
Appraiser
California License No. 3011366
Expiration Date 5/11/2027
916-978-4900
[email protected]
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TO 3 Dry Creek Area
Scenic Dr, 945 Claus Rd, 800 N. McClure Rd
Modesto, California
BENDER ROSENTHAL, INC. 25243 TO 3 55