Agenda packet, regular meeting — Mayor and City Council, December 17, 2025 (part 3 of 4)

ACKNOWLEDGEMENT OF INSURANCE REQUIREMENTS
(Required Submittal)
VENDOR NAME: PHONE:

ADDRESS:

RFP F-25-1039

PROFESSIONAL DESIGN ENGINEERING SERVICES FOR CITY HALL PARKING STRUCTURE (5 LEVEL) PROJECT NO. GB26-012
The P roposer shall demonstrate the willingness and ability to provide the required insurance coverage as set forth in the City requirements within ten (10) calendar days of notification of selection for contract award. The insurance requirements are detailed below:

COVERAGE TYPE MINIMUM POLICY LIMITS
Commercial General Liability $2,000,000 per occurrence/$4,000,000 aggregate for bodily injury, personal injury, and property damage
Automobile Liability $1,000,000 per occurrence for bodily injury and property damage
Employer’s Liability $1,000,000 per occurrence
Professional Liability $1,000,000 per claim and aggregate (errors and omissions)
By signing below, the Proposer acknowledges that they have reviewed the City’s insurance requirements and confirm their ability to meet these requirements within the specified timeframe.

SUBMITTED BY: DATE: ___________________
(Authorized Representative Signature)
PRINT NAME: TITLE: ___________________
IDS Group, Inc. 949.387.8500
980 Montecito Blvd. Suite 205, Corona, CA 92879
October 20, 2025
Said Hilmy, PhD, PE, SE, LEED AP Principal

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35 CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039

CONTRACT TERMINATION HISTORY
a. IDS HAS NOT failed to enter into a contract or design services agreement once selected. b. IDS HAS NOT withdrawn of a proposal as a result of an error. c. IDS HAS NOT BEEN terminated or failed to complete a contract. d. IDS HAS NOT BEEN Debarred by any municipal, county, state, federal or local agency. e. IDS HAS NOT BEEN involved in litigation, arbitration or mediation. There HAS NOT BEEN a conviction of the firm or its principals for violating a state or federal antitrust law by bid or proposal rigging, collusion, or restrictive competition between bidders or proposers, or conviction of violating any other federal or state law related to bidding or professional services performance. IDS HAS NOT knowingly concealed any deficiency in the performance of a prior contract.
f. IDS HAS NOT falsified information or submitted any deceptive or fraudulent statements in connection with a contract.
g. IDS HAS NOT willfully disregarded any applicable rules, laws or regulations.

LITIGATION
IDS Group, Inc. HAS NOT filed any claims NOR has any claims been filed against IDS related to our services in the past five (5) years.

10. CONTRACT TERMINATION

HISTORY & LITIGATION

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36 CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039

PROJECT MANAGEMENT & PROJECT CONTROLS
IDS’ project manager will implement project controls including timely and regular client communications, established monitoring to control costs and schedule. Activities under the umbrella of project controls include:

Project Planning: IDS’ Project Manager will create project plans, schedules, WBS, and budget to establish a baseline to work with throughout the project. This includes a kick-off meeting to deeply understand all of our client’s needs.

Budgeting: IDS’ team will provide schedule-phased budgets, a transparent model that will be available to serve as a benchmark throughout the project and as an important cash flow tool for accurate invoicing and project accounting.

Risk Management: Our team will preemptively identify risks, monitor risk continuously, and develop a contingency plan to address and mitigate issues to help reduce impacts to budget and schedule.

Forecasting: IDS’ team will perform regular updates to the schedule to ensure faster responses and corrective actions if a project schedule moves off-track.

Project Administration: This process involves established processes and systems that can help team members communicate and collaborate. The goal is to track status, action items, capture meeting minutes and lessons learned, and manage workflows seamlessly so teams can focus on efficient execution of project tasks.

Constructability Reviews
To improve project efficiency and constructability, IDS’ team leverages Bluebeam Revu®, a PDF-based solution designed for the construction industry, for each phase of the preconstruction process. Revu enables IDS to electronically share project feedback by redlining PDFs with industry-standard markups and takeoffs. In addition, IDS utilizes an online session collaboration feature, which allows multiple discipline-lead reviewers to comment on the same PDF together in real-time, or individually. As a result of this concurrent review, where team members can see comments made by other members, a more comprehensive, easy to understand, and quality list of comments are generated resulting in improved deliverables.

8. OTHER INFORMATION

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CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039
37 Work Schedule Management
The key to successfully implementing a project schedule is to: first, develop a realistic schedule with sufficient detail to define the critical-path tasks required; second, implement a timely decision-making process that continually moves the project forward in a proactive manner; and finally, to tenaciously adhere to that schedule with a continual sense of urgency. Equally important is to allow sufficient time for the Client’s involvement and evaluation of all design issues. The team prides itself on both our ability to build realistic, achievable schedules and to guide the design team, including the owner, through the decision-making process that meets those critical timelines.

Bringing a Project Back on Schedule
We keep projects on track through constant team communication and anticipating possible delays in the schedule.

Before initiating a major project, the IDS Team will hold a special meeting to discuss work tasking and schedule constraints for each element of the project. Minutes from these meetings will be circulated to all Project Team members for their review and concurrence. Schedules will be distributed to all parties via email. Most importantly, the schedule is more than simply a reporting tool. It is an “early warning device” to anticipate possible delays and proactively manage activities. Our “percent complete” schedule will realistically measure work order progress. With such advance notice, each team leader can respond quickly to avoid task slowdowns and maintain the schedule. IDS typically holds Project Team meetings, which are scheduled bi-monthly or weekly (as deemed necessary) to keep a project on “target” and “on track.”
Potential Problem
Method of Identification
Possible Corrective ActionDiscussion
with Agency
Communicate
to Project
Manager by
Staff
Team
Meetings
Progress
Review by
Project
Manager
Change in Requirements Expand Staff; accelerate schedule. Hold team meeting; revise staffing; revise
schedule and budget if necessary.
- Accelerated Delivery 
- Modification of Scope 
Slippage in Schedule    Expand staffing; revise schedule in consultation with Agency.

Attrition of Personnel    Execute backup plan for key staff; utilize existing resource pool.

Cost Growth    Absorb cost growth if no change in scope of work.

Quality of Work    
Immediate meeting of project Manager
and appropriate staff; possible staff
changes.

Subcontractor
Performance   
Immediate discussions between Project
Manager and Subcontractor; implement
specific corrective action plan.

Delay in Review Process
at the Agency 
Hold in-person review to expedite review
schedule; accelerate the response to
comment schedule.

The Project Manager will present persistent problems to senior management at IDS for assistance in problem resolution to assure that contract performance meets all Agency expectations and standards. The table below summarizes potential problem areas and the management methods IDS’ uses to identify and resolve them at the earliest possible time.

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CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039
38 Construction Observation | Administration
Scheduling is a critical component of the design and construction process. A project schedule for each assignment will be developed using the critical-path-method in Microsoft Project and / or Excel. The project schedule will be developed at the start of the project and will include all the phases and milestones that are identified by the City and / or mandated by project requirements. The design schedule will include meetings with the City project manager and its consultants at various milestones and provide status / progress reports. We will update the schedule and work plan regularly based on the actual hours worked that are tracked by our internal accounting system. In this way, we can adjust resources to ensure that the project milestones are completed on schedule. We also have an excellent record working on fast-track projects. In these projects, it is essential for the design team to meet the critical path milestones that precede project completion.

Cost Estimates/ Cost Control
Our standard software, PlanSwift, provides the flexibility to quickly break out the itemized takeoff. This efficiency reduces the number of resources required to complete the takeoff for each project, and the program’s area and zone functions allow the estimator to sort the takeoff into multiple breakouts with minimal effort.

As design progresses, the more detailed documents can be virtually overlaid over previous ones, and changes/additions are immediately visible on screen. This ensures that our estimates at logical milestones during design (SD, DD, CD, etc.), can execute the later levels of design faster and more accurately.

When tasked with value engineering on the same project, our team members will go back and modify the original takeoffs to determine the less expensive methods or materials to construct the project. The benefit with PlanSwift is it allows the estimator to select the existing items and easily assign them to new or other existing conditions with the click of a button.

Value Engineering, Life Cycle Cost Analysis, and Bid Alternate Designation IDS performs in-house cost estimates to identify opportunities for alternate bids that will provide flexibility for our clients as they balance the project scope for construction and the cost of construction.

The first path to value engineering savings is constructability. Our construction cost estimator provides an internal constructability review, which will allow the design team to eliminate scope that will later prove to be impractical to build and therefore costly.

The second path to value engineering is the search for alternates that provide nearly equal performance at less initial cost. When considering these initial cost savings, IDS provides a life cycle cost analysis of the alternatives so that our clients can make informed choices.

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980 Montecito, Suite, 205, Corona, California 92879 951.631.8550 www.idsgi.com

12. CERTIFICATION OF

PROPOSAL
“The undersigned hereby submits its proposal and, by doing so, agrees to furnish services to the City in accordance with the Request for Proposal (RFP), and to be bound by the terms and conditions of the RFP .” Said Hilmy, PhD, PE, SE, LEED AP
Contract Administrator

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CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039
40

Page 24 of 60 ends

CERTIFICATION OF PROPOSAL
(Required Submittal)
VENDOR NAME: PHONE:

ADDRESS:

RFP F-25-1039

PROFESSIONAL DESIGN ENGINEERING SERVICES FOR CITY HALL PARKING STRUCTURE (5 LEVEL) PROJECT NO. GB26-012
The undersigned hereby certifies that they are legally authorized to submit this proposal and to bind the entity on whose behalf this proposal is submitted.

The undersigned further certifies that the information contained in this proposal is true and correct to the best of their knowledge, and that the proposal is valid for a period of not less than 120 calendar days from the date of submission.
☐☐ This proposal includes exceptions to the RFP .

If checked, please identify the page number(s) and section(s) where exceptions appear:
☐☐ This proposal does not include exceptions to the RFP .

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CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039
41

Page 23 of 60 ends

PROPOSAL CHECKLIST
(as detailed in Chapter II. Request for Proposals, Section E. of the RFP) # REQUIRED DOCUMENT INCLUDED IN

BID PACKAGE
1 Required - Proposal
Technical Proposal
• Executive Summary (E.1)
• Table of Contents (E.2)
• Identification of Proposer (E.3)
• Staffing Resources (e.g., Assigned Personnel experience) (E.4) • Experience and Technical Competence (E.6)
• Proposed Method to Accomplish the Work (E.7)
• Litigation History (if any) (E.10)
• Other Information (pertinent to proposal) (E.11)
 Completion of other similar projects;
 Community involvement (if any);
 Prior projects, agreements, involvement with the City (if any);  No Conflict-of-Interest statement.
• Certification of Proposal (E.12)
 “The undersigned hereby submits its proposal and, by doing so, agrees to furnish services to the City in accordance with the Request for Proposal (RFP), and to be bound by the terms and conditions of the RFP.”
• Appendices (E.13)
• Statement of “No Deviations from RFP” (F.)
 If proposer does not take any exceptions or deviations from the terms and conditions indicated in the agreement, then the proposer must indicate this information by making a statement within the proposal documents.

Fiscal Stability (E.5)
• Current report from any Commercial Credit Rating Service (e.g. Dunn & Bradstreet);
• Line of credit; or
• Financial Statement.
☐
2 Required - Fee Proposal (E.8) ☐
3 Required - Certificate of Insurance (E.9) ☐
4 Required - Vendor Quote Form ☐
5 Required - Acknowledgement of Insurance Requirements ☐ 6 Required - Applicable Licenses ☐
Submittal Instructions: Electronic PDF file format via Planetbids on the date and time stated in the RFP.

Please allow time for system to process your proposal. The City shall not be responsible for proposals that are not received on time. The City will not be responsible for and will not accept late bids due to slow internet connection, or incomplete transmissions.

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40 CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039

APPENDIX
The following is our CONFIDENTIAL FINANCIAL STATEMENTS certified by a CPA.

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AMMV Financial Services Inc
Certified Public Accountants
To Management
IDS Group Inc.

Irvine, CA
We have prepared the accompanying statement of assets, liabilities, and equity-income tax basis of IDS Group Inc. as of December 31, 2023 through December 31, 2024 and the related statement of revenues, expenses, and retained earnings-income tax basis for the year then ended. We have prepared, not audited, reviewed, or compiled the accompanying.financial statements and, accordingly, do not express an opinion, conclusion or provide any assurance on them. Management is responsible for the accuracy and completeness of the data.
-�
Ashraf Samir,
CPA 02/01/2025
464 E Bonita Ave, Suite 9
San Dimas, CA 91773
Phone: (626) 617-1164
Fax: (909} 632-4343

CONFIDENTIAL

Packet Page. 421

Jan - Dec 24
Ordinary Income/Expense
Income
40000 · Consulting Income 83,606.14
41000 · Design Income
41006 · Preconstruction 24,477.68
41001 · Architectural Engineering 8,276,480.75
41002 · Civil Engineering 2,327,470.09
41003 · Electrical Engineering 1,204,171.91
41004 · Mechanical Engineering 2,096,907.76
41005 · Structural Engineering 2,318,611.22
41000 · Design Income - Other 459.00
Total 41000 · Design Income 16,248,578.41
42500 · Misc Reimbursables Income 7,018.04
43000 · Fee Adjustment -300.00
46500 · Retainer Due -14,590.00
49000 · Write Off & Discounts -623.19
Total Income 16,323,689.40
Cost of Goods Sold
50500 · Direct Labor
50507 · Direct -Employee Benefits 66,522.67
Total 50500 · Direct Labor 66,522.67
50000 · Cost of Goods Sold 131.63
51000 · Subcontracted Services
51007 · Cost Estimating 19,230.80
51006 · Consultants 154,286.39
51005 · Electrical Engineering 5,645.00
51004 · Mechanical Engineering 1,835.00
51001 · Architectural Engineering 549,927.63
51002 · Structural Engineering 147,284.78
51003 · Civil Engineering 317,819.44
51000 · Subcontracted Services - Other 979,205.22
Total 51000 · Subcontracted Services 2,175,234.26
52000 · Supplies (project related) 14,749.77
53000 · Reimbursed Expenses 67,476.32
Total COGS 2,324,114.65
Gross Profit 13,999,574.75
Expense
60940 · Promotion Expense 5,584.25
60780 · Outside Services Expense 4,325.00
60000 · Accounting & Legal 39,824.34
60050 · Alarm & Security 4,106.69
60075 · Amortization Expense 46,455.00
60100 · Automobile Expense 11,732.23
60150 · Bank Service Charges 3,047.16
60200 · Business Licenses and Permits 6,729.05
60225 · Computer/Software Expense 231,210.70
60300 · Continuing Education 3,214.90
60275 · Cleaning & Disposal 18,275.00
60325 · Company Events
60326 · Thanksgiving Event 1,713.15
60327 · Christmas Event 10,199.76
60329 · Others 884.72
60325 · Company Events - Other 1,346.90
Total 60325 · Company Events 14,144.53
60350 · Dues and Subscriptions 12,026.91
10:00 AM IDS Group, Inc.
09/17/25 Profit & Loss
Accrual Basis January through December 2024

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CONFIDENTIAL

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Jan - Dec 24
60375 · Delivery & Shipping 3,456.77
60400 · Depreciation Expense 15,078.00
60450 · Donations and Contributions 30,000.00
60460 · Employee Benefits-Indrect 46,522.60
60500 · Employee Insurance
60501 · Employee Paid -420,361.47
60502 · Company Paid 1,038,311.91
60506 · Dental Insurance Company Paid 122,611.61
60500 · Employee Insurance - Other 13,151.78
Total 60500 · Employee Insurance 753,713.83
60550 · Insurance Expense 244,309.93
60650 · Interest Expense 500.00
60675 · Leased Equipment -Irvine 11,428.89
60750 · Marketing 8,965.85
60775 · Meals & Meetings 3,289.37
60800 · Office Supplies
606804 · Los Angeles Office- Supply 377.06
606902 · Corona Office - Supplies 2,297.07
606952 · Encinitas Office - Supplies 858.67
60800 · Office Supplies - Other 56,878.87
Total 60800 · Office Supplies 60,411.67
60850 · Payroll Expenses - Employees
606803 · Los Angeles Office - Wages 110,700.66
60861 · Mechanical 1,201,542.41
60860 · Electrical 1,040,773.15
60859 · China Lake -Parsons 128.79
60858 · Covid 19 Expense 0.00
60857 · Civil 1,085,029.53
60854 · Architectural 2,562,896.69
60853 · Structure 1,379,642.18
60855 · Officers 418,949.96
60856 · Administration 963,993.80
60850 · Payroll Expenses - Employees - Other 2,384.80
Total 60850 · Payroll Expenses - Employees 8,766,041.97 60880 · Payroll Tax Expense 673,855.94
60900 · Pension Plan Expense 3,825.00
60950 · Property Tax 6,767.14
61000 · Plotting & Printing 10,422.28
61050 · Plan Check Fee 3,450.45
61200 · Repairs and Maintenance 6,598.08
61300 · Recruiting Expense 145,607.96
61400 · Research & Development 237,862.50
61500 · Rent Expense
61503 · Rent - Pasadena Office 23,751.25
606801 · Los Angeles Office - Rent 30,287.59
606901 · Corona Office - Rent 62,392.70
606951 · Encinitas Office - Rent 31,089.70
61501 · Rent - Irvine 500,500.00
61502 · Rent - Civil 64,995.35
61500 · Rent Expense - Other 52,027.06
Total 61500 · Rent Expense 765,043.65
61600 · Saudi Arabia Office/Project Exp 8,731.11
61700 · Tax & License 8,157.04
61800 · Telephone & Internet Expense 20,737.87
61900 · Travel Expense 8,292.58
62100 · Utilities
606802 · Los Angeles Office - Utilities 271.01
606903 · Corona Office -Utilities 1,718.19
606953 · Encinitas Office - Utilities 5,275.48
10:00 AM IDS Group, Inc.
09/17/25 Profit & Loss
Accrual Basis January through December 2024

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CONFIDENTIAL

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Jan - Dec 24
62100 · Utilities - Other 104,305.42
Total 62100 · Utilities 111,570.10
Total Expense 12,355,316.34
Net Ordinary Income 1,644,258.41
Other Income/Expense
Other Income
47000 · Miscellaneous Income 0.00
47500 · Golf Tournament 48,000.00
47600 · Credit card Fees - Golf -1,124.45
Total Other Income 46,875.55
Other Expense
60328 · Golf Tournament Expenses 29,297.28
70000 · Other Expense 3,700.00
Total Other Expense 32,997.28
Net Other Income 13,878.27
Net Income 1,658,136.68
10:00 AM IDS Group, Inc.
09/17/25 Profit & Loss
Accrual Basis January through December 2024

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CONFIDENTIAL

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S O L U T I O N S
t h r o u g h i n t e g r a t e d d e s i g n
9 8 0 M o n t e c i t o D r . S u i t e 2 0 5 , C o r o n a , C A 9 2 8 7 9 T : 9 4 9 . 3 8 7 . 8 5 0 0
w w w . i d s g i . c o m

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C i t y o f S a n B e r n a r d i n o
P r o f e s s i o n a l D e s i g n E n g i n e e r i n g S e r v i c e s

C I T Y H A L L P A R K I N G S T R U C T U R E
I M P R O V E M E N T S - P r o j e c t N o . G B 2 6 - 1 2 O c t o b e r 2 0 , 2 0 2 5

C O S T F I L E

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P
age 25 of 60

VENDOR QUOTE FORM
(Required Submittal)
VEN
DOR NAME: PHONE:

AD
DRESS:

RFP F-25-1039

PROFESSIONAL DESIGN ENGINEERING SERVICES FOR CITY HALL PARKING STRUCTURE (5 LEVEL) PROJECT NO. GB26-012
The undersigned hereby submits the following price quote in response to the above-referenced RFP . Pricing includes all labor, materials, equipment, transportation, and services necessary to perform the work described in the RFP .

ITEM NO. DESCRIPTION QUANTITY UNIT COST
TOTAL
AMOUNT

T OTAL VENDOR QUOTE
Total Number of Additional Pages:

I declare under penalty of perjury that the information provided herein is true and correct.

S
UBMITTED BY: DATE: ___________________
(Authorized Representative Signature)
P
RINT NAME: TITLE: ___________________
LIC. NO: CLASSIFICATION: DIR REG. NO: _______________ IDS Group, Inc.
949.387.8500
980 Montecito Blvd. Suite 205, Corona, CA 92879
$140,633
3 Said Hilmy, PhD, PE, SE, LEED AP
S3680 | C43988
Structural/Civil
1000034536
10/20/2025
Principal
1 Architectural & Engineering Services
1 $116,183
$116,183
2 HAZ MAT Allowance
1 $12,850
$12,850
3 Elevator Consulant Allowance
1 $11,600
$11,600

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CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039

FEE PROPOSAL
The following is a Summary of Fees followed by a Detailed Breakdown and Rate Sheet.

Design Disciplines Architecture Landscape
Arch Structural Electrical Mechanical/
Plumbing Civil Precon Subtotal
TASK 1 CONCEPTUAL DESIGN $12,385 $1,425 $3,355 $1,745 $1,625 $1,625 $2,040 $24,200 TASK 2 CONSTRUCTION DESIGN $22,345 $4,205 $10,529 $9,345 $6,083 $16,935 $2,720 $72,162 TASK 3 BID & CONSTRUCTION SUPPORT $10,540 $600 $2,618 $2,520 $1,678 $1,865 $0 $19,821 TOTAL PROPOSAL FEE $45,270 $6,230 $16,502 $13,610 $9,386 $20,425 $4,760 $116,183 Summary of Fees
San Bernardino City Hall Parking Structure Renovation

HAZ-MAT
Allowance Elevator
$8,000 $4,800
$4,500 $6,000
$350 $800
$12,850 $11,600
Addition Support Services
Total
$37,000
$82,662
$20,971
$140,633

Packet Page. 428

CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039
San Bernardino City Hall Parking Structure Renovation
IDS Group
Staff Allocations per Discipline: HAZ-MAT Allowance Topographic Survey Elevator Role/Classifications: Hours IDS Fees Associate
Principal Overall PM Architect (RA) CAD Drafting Associate Principal
Snr
Landscape
Architect
BIM Designer Principal Senior Proj.

Eng. (SE) BIM Designer Associate
Principal
Senior Proj.

Eng. (PE) CAD Designer Associate
Principal Engineer (PE) BIM Designer Associate
Principal Engineer (PE) CAD Designer Senior Cost
Estimator if required if required
Hourly Rate: 225$ 215$ 175$ 120$ Hrs Fees 225$ 150$ 139$ Hrs Fees 235$ 195$ 139$ Hrs Fees 225$ 190$ 120$ Hrs Fees 225$ 175$ 139$ Hrs Fees 225$ 175$ 120$ Hrs Fees 170$ Hrs Fees TASK 1 CONCEPTUAL DESIGN 130 $24,200 1 24 40 0 $12,385 1 8 0 $1,425 1 16 0 $3,355 1 8 0 $1,745 1 8 0 $1,625 1 8 0 $1,625 12 $2,040 $8,000 $4,800 Submit Basis of Design (BOD), Program
Level Rough Order of Magnitude (ROM)
Cost Estimate, Concept Design
116 $21,400 1 16 40 57 $10,665 1 6 7 $1,125 1 12 13 $2,575 1 8 9 $1,745 1 8 9 $1,625 1 8 9 $1,625 12 12 $2,040 8,000.00$ 4,800.00$ Community Engagement/Meeting with
Parking Tenants 4 $860 4 4 $860 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 Review with the City the Deliverable 10 $1,940 4 4 $860 2 2 $300 4 4 $780 0 $0 0 $0 0 $0 0 $0 TASK 2 CONSTRUCTION DESIGN 490 $72,162 1 20 36 96 $22,345 1 8 20 $4,205 1 20 46 $10,529 1 24 38 $9,345 1 16 22 $6,083 5 30 88 $16,935 16 $2,720 $4,500 $6,000 Submit 60% PS&E to City 182 $26,180 8 16 44 68 $9,800 0 $0 8 20 28 $4,340 8 18 26 $3,680 0 $0 2 10 40 52 $7,000 8 8 $1,360 Submit 90% PS&E to City 230 $33,116 8 16 44 68 $9,800 6 16 22 $3,124 8 20 28 $4,340 8 16 24 $3,440 8 18 26 $3,902 2 12 44 58 $7,830 4 4 $680 3,000.00$ 4,800.00$ Plan Review and Final PS&E 78 $12,866 1 4 4 8 17 $2,745 1 2 4 7 $1,081 1 4 6 11 $1,849 1 8 4 13 $2,225 1 8 4 13 $2,181 1 8 4 13 $2,105 4 4 $680 1,500.00$ 1,200.00$ TASK 3 BID & CONSTRUCTION SUPPORT 109 $19,821 0 24 28 4 $10,540 0 4 0 $600 0 12 2 $2,618 0 12 2 $2,520 0 8 2 $1,678 1 8 2 $1,865 0 $0 $350 $800 Pre-Bid Meeting 4 $860 4 4 $860 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 Pre-Construction Meeting 4 $860 4 4 $860 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 Construction Progress Meetings 28 $5,280 6 14 20 $3,740 0 $0 4 4 $780 4 4 $760 0 $0 0 $0 0 $0 Punch List 24 $4,660 8 8 $1,720 0 $0 4 4 $780 4 4 $760 4 4 $700 4 4 $700 0 $0 Submittal & RFI Review 36 $6,420 2 14 16 $2,880 4 4 $600 4 4 $780 4 4 $760 4 4 $700 4 4 $700 0 $0 350.00$ 800.00$ Record Drawings 13 $1,741 4 4 $480 0 $0 2 2 $278 2 2 $240 2 2 $278 1 2 3 $465 0 $0 TOTAL - Hours 729 2 68 104 100 274 2 16 20 42 2 48 48 98 2 44 40 86 2 32 24 58 13 84 180 143 44 28 Total Fees $116,183 $45,270 $6,230 $16,502 $13,610 $9,386 $20,425 $4,760 $12,850 $11,600 Additional Support Services $24,450
Grand Total $140,633
TOTAL
SubtotalSubtotal
Landscape Arch Structural Electrical Mechanical/ Plumbing PreconCivil Architecture Subtotal Subtotal Subtotal Subtotal Subtotal
10/20/2025 1
San Bernardino City Hall Parking Structure Renovation
IDS Group
Staff Allocations per Discipline: HAZ-MAT Allowance Topographic Survey Elevator Role/Classifications: Hours IDS Fees Associate
Principal Overall PM Architect (RA) CAD Drafting Associate Principal
Snr
Landscape
Architect
BIM Designer Principal Senior Proj.

Eng. (SE) BIM Designer Associate
Principal
Senior Proj.

Packet Page. 429

CITY OF SAN BERNARDINO
Professional Design Engineering Services
CITY HALL PARKING STRUCTURE (5 Level)
RFP No. F-25-1039
1 2025 ON-CALL RATES

IDS GROUP
2025 Rate Sheet

ARCHITECTURE ENGINEERING
Title Hourly Rate Title Hourly Rate
Principal $235.00 Principal $235.00
Associate Principal $225.00 Associate Principal $223.00 Senior Project Manager $215.00 Senior Project Manager $215.00 Project Manager $200.00 Project Manager $200.00
Senior Architect (RA) $195.00 Senior Project Engineer (SE) $195.00 Architect (RA) $175.00 Senior Project Engineer (PE) $190.00 Senior Designer $170.00 Engineer (SE) $190.00
Designer $160.00 Engineer (PE) $175.00
Job Captain $140.00 Senior Designer $170.00
BIM Designer $139.00 Designer $160.00
CAD Drafting $120.00 BIM Designer $139.00
Senior Planner $211.00 CAD Drafting $120.00
Planner $175.00 QA/QC Manager $214.00
Sr. Landscape Architect (PLA) $150.00 Senior Office Administration $75.00 Landscape Architect (PLA) $125.00 Administration & Accounting $70.00 QA/QC Manager $214.00
Senior Office Administration $75.00
Administration & Accounting $70.00

SURVEYING PRECONSTRUCTION/COST ESTIMATION
Title Hourly Rate Title Hourly Rate
Two-Person Survey Crew $310.00 Senior Cost Estimator $175.00 Senior Surveyor (In House) $200.00 Cost Estimator $170.00 Lead Surveyor (In House) $110.00
Expenses such as, but not limited to, plan check fees, permits, inspections, testing services, title company fees, special delivery charges, plotting/ presentation boards, maps, aerial photographs, and reprographics/ illustrations that may be required for community or other stakeholder presentations shall be billed to the owner at the Consultant’s direct cost plus 10%.

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S O L U T I O N S
t h r o u g h i n t e g r a t e d d e s i g n
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: December 17, 2025
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works
Department: Public Works
Subject: Approve Amendment No. 2 to the Professional Services Agreement with Miller Architectural Corporation for the Encanto Community Center Improvement Project for
$73,400 and Professional Services Contingencies in the
amount of $26,600. (Ward 1)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California:

1. Approve Amendment No. 2 to the Professional Services Agreement with Miller Architectural Corporation in the amount of $73,400 for the Encanto Community Center Project (Project), increasing the not-to-exceed amount to $329,580, and extending the term to July 31, 2027; and

2. Authorize Professional Services Contingencies in the amount of $33,000 for a total Project professional services budget of $362,580; and

3. Authorize the City Manager or designee to execute all documents with Miller Architectural Corporation; and

4. Authorize the City Manager or designee to expend the contingency fund, if necessary, to complete the project.

City Manager's Comments
The City Manager recommends approval.

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Executive Summary
Amending the Professional Services Agreement for Encanto Community Center would allow Miller Architectural Corporation to complete the necessary work to bid the project for construction. It will also extend the term through project construction and closeout.

The additional services will be paid for using previously allocated Project funding sources.

Background
The Encanto Community Center is a 24,660 square foot city-owned facility that was constructed in 1968 to support programs focused on providing physical, educational, vocational, rehabilitative, preventative, and recreational services to the community.

Due to the age and condition of the building, the City decided to complete improvements to the facility to address deferred maintenance needs and redesign existing spaces to allow for the restoration and expansion of recreational services at the facility.

On January 20, 2021, the Mayor and City Council adopted Resolution 2021-01 the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2021-1:
oApproving the use of donated funds from the Estate of Sharell Paramo to support a project for renovation of the Encanto Community Center; and oAuthorizing the Director of Finance to appropriate funds in the amount of $2,236,622 from Donations Fund No. 006 to the Encanto Community Center Improvements Project (“Project”) and amend the FY 2020-21 Capital Improvement Plan to include the Project; and
oApproving the award of a Professional Services Agreement with Miller Architectural Corporation for Project design services in the amount of $178,385 from Encanto Community Center Improvements Project Fund No. 006-380-8748.

On November 15, 2023, the Mayor and City Council approved Amendment No 1. To the Professional Services Agreement with Miller Architectural Corporation in the amount of $77,795, increasing the not to exceed amount to $256,180.

Discussion
The Encanto Community Center Project is currently in the final stages of design.

Proposed project improvements include, but are not limited to:
Locker room renovation
Multipurpose room remodel/renovation
ADA Accessibility
Staff Office remodel/renovation
Pool equipment relocation

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Kitchen renovation
Gymnasium renovation
Restroom renovation
As a result of the permitting and review process, more items than previously anticipated will need to be revised in order to meet current code requirements. Additionally, the estimated project cost ($9M to 10M) significantly exceeds the current project budget.

To help proceed with the most critical elements of the project, City staff have directed the design team to prepare a phased approach to the project. This helps provide the flexibility necessary to construct portions of the project separately as additional funding sources are made available.

Amendment No. 2 provides an additional $73,400 to complete the design plans and specifications and extends the term through July 31, 2027. The extended term allows Miller Architectural Corporation to continue to provide their services through the end of the construction and project closeout process. It will also allow Miller Architectural Corporation to remain under contract in anticipation of the next phase of the Project.

An additional $33,000 is recommended for professional services contingencies.

The Project currently has an available Fund balance of $3,179,040.26 from all sources, which is sufficient to cover the cost of the additional professional services and professional services contingency total of $106,400.

Project Fund Balance
Fund Type Available Balance
Donation Fund $2,058,062.15
CDBG-CV 1 Fund $17,893.48
CDBG-CV 3 Fund $856,295.61
Cultural Development Construction $246,789.02
Total Available Balance $3,179,040.26
2021-2025 Strategic Targets and Goals
This project is consistent with Key Target No.1 - Improved Operational & Financial Capacity and Key Target No. 3 - Improved Quality of Life. Renovation of the Encanto Community Center will improve and preserve the existing facility and expand the recreational services available to the overall community.

Fiscal Impact
There is no General Fund impact associated with this item. This item will utilize previously allocated funding provided by Donation, Community Development Block Grant, and Cultural Development Construction Funds.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:

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2. Authorize Professional Services Contingencies in the amount of $33,000 for a total Project professional services budget of $362,580; and

3. Authorize the City Manager or designee to execute all documents with Miller Architectural Corporation; and

4. Authorize the City Manager or designee to expend the contingency fund, if necessary, to complete the project.

Attachments
Attachment 1 Amendment No 2. to the Agreement with Miller Architectural Corporation
Attachment 2 Amendment No 1. to the Agreement with Miller Architectural Corporation
Attachment 3 Professional Services Agreement Miller Architectural Corporation
Attachment 4 Location Map
Ward:

First Ward
Synopsis of Previous Council Actions:

January 20, 2021 Adopted Resolution No. 2021-1: 1. Approving the use of donated funds from the Estate of Sharell Paramo to support a project for renovation of the Encanto Community Center; and 2. Authorizing the Director of Finance to appropriate funds in the amount of $2,236,622 from Donations Fund No. 006 to the Encanto
Community Center Improvements Project (“Project”) and amend the FY 2020-21 Capital Improvement Plan to include the Project; and 3. Approving the award of a Professional Services
Agreement with Mille Architectural Corporation for Project design services in the amount of $178,385 from Encanto
Community Center Improvements Project Fund No. 006-380- 8748.

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November 15, 2023 Approved Amendment No. 1 to the Professional Services Agreement with Miller Architectural Corporation in the amount of $77,795, for a total contract amount of $256,180 from Encanto Community Center Improvement Project.

CC: Eric Levitt, City Manager

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AMENDMENT NO. 2 TO

PROFESSIONAL SERVICES

AGREEMENT

WITH MILLER ARCHITECTURAL CORPORATION

This Amendment No. 2 to the Professional Services Agreement is made and entered into as of December 17, 2025 ("Effective Date"), by and between the City of San Bernardino, a charter city and municipal corporation ("City") and Miller Architectural Corporation, a California corporation ("Consultant"). City and are sometimes referred to herein individually as a "Party" and collectively as "Parties."

RECITALS

A. WHEREAS, the City and the Consultant have entered into an agreement, dated January 6, 2021, for the purpose of providing professional services for the Encanto Community Center Improvements project (the “Master Agreement”).

B. WHEREAS, on November 15, 2023, the Parties executed Amendment No. 1 to the Master Agreement in order to revise the scope of work and incre ase the not -to-exceed compensation from $178,385.00 to $256,180.00;

C. WHEREAS, the Parties now desire to amend the Master Agreement in order to extend the term of the Master Agreement through July 31, 2027, add additional work to the Scope of Work, and to include additional funds for the continued performance of the services in accordance with the compensation provisions of the Master Agreement.

NOW, T HEREFORE, in consideration of the above recitals and the mutual covenants, conditions, and promises contained in this Amendment No. 2, Amendment No. 1, the Master Agreement, as previously amended, the Parties mutually agree as follows:

AGREEMENT

1. Incorporation of Recitals. The recitals listed above are true and correct and are hereby incorporated herein by this reference.

2. Additional Services. The Scope of Work shall be amended to include additional services as more particularly described in Attachment A -1, attached hereto to this Amendment No. 2 and incorporated herein by this reference.

3. Term. The term of the Master Agreement, as previously amended, is hereby extended through July 31, 2027, unless earlier terminated in accordance with the Agreement.

4. Compensation. The total not -to-exceed compensation amount is hereby increased by Seventy-Three Thousand Four Hundred Dollars and Zero Cents ($73,400), increasing the total not -to-exceed compensation amount from Two Hundred Fifty -Six Thousand One Hundred Eighty Dollars and Zero Cents ($256,180.00) to Three Hundred Twenty-Nine Thousand Five Hundred Eighty Dollars and Zero Cents ($329,580.00).

5. Full Force. Except as amended by this Amendment No. 2, all provisions of

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the Master Agreement, as previously amended, including without limitation the indemnity and insurance provisions, shall remain in full force and effect and shall govern the actions of the Parties under this Amendment No. 2.

6. Electronic Transmission. A manually signed copy of this Amendment No. 2, which is transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Amendment No. 2 for all purposes . This Amendment No. 2 may be signed using an electronic signature.

7. Counterparts. This Amendment No. 2 may be signed in counterparts, each of which shall constitute an original.

[SIGNATURES ON FOLLOWING PAGE]

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SIGNATURE PAGE TO
AMENDMENT NO. 2 TO

PROFESSIONAL SERVICES AGREEMENT

WITH MILLER ARCHITECTURAL CORPORATION

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 2 on the Effective Date first herein above written.

CITY OF SAN BERNARDINO CONSULTANT

APPROVED BY: MILLER ARCHITECTURAL

CORPORATION

Eric Levitt,
City Manager Signature

APPROVED AS TO FORM: Name

Best Best & Krieger LLP
City Attorney

Title

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Attachment A-1

Additional Scope and Fee

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FIRST AMENDMENT TO

PROFESSIONAL SERVICES AGREEMENT

WITH MILLER ARCHITECTURAL CORPORATION
(ENCANTO COMMUNITY CENTER IMPROVEMENTS)

This First Amendment to the Professional Services Agreement is made and entered into as of November 15, 2023 (“Effective Date”), by and between the City of San Bernardino, a charter city and municipal corporation (“City”) and Miller Architectural Corporation, a sole proprietorship (“Consultant”). City and Consultant are sometimes referred to herein individually as a “Party” and collectively as “Parties.”

RECITALS
A. WHEREAS, the City and the Consultant have entered into an agreement, dated January 6, 2021, for the purpose of providing professional services for the Encanto Community Center Improvements project (the “Master Agreement”).

B. WHEREAS, the Parties now desire to amend the Master Agreement in order to extend the term of the Master Agreement for an additional term of one year, and to include additional funds for the continued performance of the services in accordance with the compensation provisions of the Master Agreement.

NOW, THEREFORE, in consideration of the above recitals and the mutual covenants, conditions, and promises contained in this Amendment No.1 and the Master Agreement, the Parties mutually agree as follows:

AGREEMENT

1. Incorporation of Recitals. The recitals listed above are true and correct and are hereby incorporated herein by this reference.

2. T erm . The term of the Master Agreement shall commence on the Effective Date (January 6, 2021) and continue through the completion of services as set forth in Exhibit “A” or until December 30, 2024 , whichever occurs earlier, unless the Agreement is previously terminated as provided for herein (“Term”).

3. C ompensation. The total not to exceed compensation amount shall be increased by Seventy-Seven Thousand Seven Hundred Ninety-Five Dollars ($77,795.00) increasing the total not to exceed compensation amount from One Hundred Seventy- Eight Thousand Three Hundred Eighty-Five Dollars ($178,385.00) to Two Hundred Fifty- Six Thousand One Hundred Eighty Dollars ($256,180.00). Work shall be performed at the rates set forth in the Master Agreement.

There is no change to the total not to exceed compensation of the Master Agreement.

4. Full Force. Except as amended by this Amendment No. 1, all provisions of the Master Agreement, including without limitation the indemnity and insurance DocuSign Envelope ID: CEF3D506-3702-4477-9200-7FC70BC4D3AA

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provisions, shall remain in full force and effect and shall govern the actions of the Parties under this Amendment No. 1.

5. Electronic Transmission. A manually signed copy of this Amendment No. 1 which is transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Amendment No. 1 for all purposes. This Amendment No. 1 may be signed using an electronic signature.

6. C
ounterparts . This Amendment No.1 may be signed in counterparts, each of which shall constitute an original.
[SIGNATURES ON FOLLOWING PAGE]

DocuSign Envelope ID: CEF3D506-3702-4477-9200-7FC70BC4D3AA

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SIGNATURE PAGE FOR

FIRST AMENDMENT TO

PROFESSIONAL SERVICES AGREEMENT

MILLER ARCHITECTURAL CORPORATION
(ENCANTO COMMUNITY CENTER IMPROVEMENTS PROJECT)

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No.1 on the Effective Date first herein above written.

CITY OF SAN BERNARDINO
APPROVED BY:

Charles A. Montoya
City Manager

APPROVED AS TO FORM:

Best Best & Krieger LLP
City Attorney

CONSULTANT

MILLER ARCHITECTURAL

CORPORATION

Signature

Name

Title

DocuSign Envelope ID: CEF3D506-3702-4477-9200-7FC70BC4D3AA Kathy Oswalt
Kathy Owalt

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EXHIBIT A

ADDITIONAL SCOPE OF SERVICES

(ATTACHED)
DocuSign Envelope ID: CEF3D506-3702-4477-9200-7FC70BC4D3AA

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Location Map

400 ft
N➤➤
N

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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: December 17, 2025
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works
Department: Public Works
Subject: Approve Amendment No. 2 to the Progressive Design Build Contract with Tilden-Coil Constructors for the
California Theater Improvements Project in the amount of $125,000 (Ward 1)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California:

1. Find Amendment No. 2 to the Progressive Design-Build Contract with Tilden-Coil Constructors, Inc. in the amount of $125,000 for the California Theater Improvements (Project) exempt from the California Environmental Quality Act pursuant to State CEQA Guidelines section 15301 (Class 1 – Existing Facilities)

2. Adopt Resolution 2025-405 Authorizing the Director of Finance and Management Services to amend the FY 2024/25 Capital Improvement Plan budget with an additional $125,000 from the Cultural Development Construction Fund for the project; and

3. Approve Amendment No. 2 to the Progressive Design-Build Contract with Tilden-Coil Constructors, Inc. in the amount of $125,000 for the California Theater Improvements (Project); and

4. Authorize the City Manager or his designee to execute all necessary documents with Tilden-Coil Constructors.

City Manager's Comments
No Recommendation

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Executive Summary
Adopting the resolution will provide the additional funding needed to cover the remaining construction expenses for the current phase of improvements at the California Theater of the Performing Arts. During construction, change orders were approved for additional items such as the purchase of a new sound board, safety enhancements, and additional lighting. A portion of the funding will also be used to address some additional work as needed, such as the purchase of a new stage lighting motor.

Background
The Public Works Department, Fleet and Building Maintenance Division, is responsible for maintaining the California Theatre of the Performing Arts (the “California Theatre”), located at 562 West 4th Street, San Bernardino, California. The California Theatre opened in 1928, and was added to the National Register of Historic Places in 2009. It is an example of Spanish Colonial Revival architecture, or California Churrigueresque.

The California Theatre houses one of the only remaining Wurlitzer Style 216 pipe organs, which is original to the building.

The California Theatre has historically been a critical economic and social element for downtown San Bernardino, as well as the overall San Bernardino community. To facilitate further growth of the economy of downtown San Bernardino and the business community there, the City explored various opportunities to secure the necessary funding to renovate the California Theatre.

On April 6, 2022, the Mayor and City Council adopted Resolution No. 2022-074, awarding a Progressive Design Build contract with Tilden-Coil Constructors, Inc. in an amount of $309,031. The contract was used to start conducting the necessary studies to produce a list of required improvements within a reasonable budget. The resolution also accepted the California Arts Council Grant in the amount of $2,500,000 and amended the FY2021/22 CIP to include the California Theatre Improvements project (the “Project”) (item 31) (Ward 1).

On July 20, 2022, the Mayor and City Council adopted Resolution No. 2022-136, approving acceptance of grants funds from the California Arts Council for the California Theatre (item 13) (Ward 1).

On December 7, 2022, the Mayor and City Council approved an award to Tilden-Coil Constructors, Inc. in the amount of $4,561,400 for the renovation of the California Theater.

On June 26, 2024 the Mayor and City Council adopted Resolution No 2024-142 approving the operational budget and Capital Improvement Program and appropriating an additional $1,000,000 from the Measure S fund for these additional improvements.

On June 4, 2025 the Mayor and City Council adopted Resolution 2025-305 approving Amendment No. 1 to the Progressive Design-Build Contract with Tilden-Coil

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Constructors, Inc. in the amount of $1,747,404 for the California Theater Improvements, authorizing the Director of Finance and Management Services to amend the FY 2024/25 Capital Improvement Plan budget with an additional $960,255 from the Cultural Development Fund for the Project, and authorizing the City Manager or their designee to expend the contingency fund in the amount of $212,851, if necessary, to complete the Project.

Discussion
The California Theater Improvements Project aims to restore and modernize the historic theater. Tilden-Coil Constructors, Inc. was awarded a contract to have the following improvements designed and constructed at the California Theatre:
Organ Restoration
Hazardous Material Abatement limited to work areas
Mold removal
Street Front Facade
Lighting and Controls in Lobby
Front entry, Restroom and Audience Chamber ADA compliance Architectural Finishes, including painting inside, outside and carpeting replacement
Theatrical Sound System
HVAC replacement of six package units, plus one package unit added

After a successful reopening of the California theater, City staff is coordinating with Tilden-Coil Constructors, Inc. to complete the few remaining construction items for this phase of construction. To close out the Project, an additional $125,000 is estimated to be needed. This amount will be used to cover the cost of change orders for work that was completed in preparation for the California Theatre’s reopening, held on October 14, 2025, and for pending work that is anticipated to be completed near the end of 2025.

The additional change order work included several additional improvements, including, but not limited to:
Drinking Fountains
Additional Lighting
Additional Signage
LED Lobby Monitors
Fire Safety Improvements
Additional Electrical work
Additional Painting
New Sound Board
Roof Leak Repair
Design-Build Costs
Original Award $4,870,431
Amendment No. 1 $1,747,404

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Authorized Tilden-Coil Change Orders (Owner Contingency) $210,992 Plan Set Printing (Owner Contingency) $1,858.59
Total Existing Cost $6,830,685.59
Revised Design Build Costs
Total Existing Cost $6,830,685.59
Amendment No. 2 $125,000
Total Revised Cost $6,955,685.59
Due to both the previously authorized change orders ($210,992) and proposed Amendment No. 2 ($125,000), the total contract amount would be increased by $335,992.

During the ongoing phase of construction, improvements which require additional design and permitting were identified. City staff plans to bring an agenda item in January 2026 to recommend approval of an additional scope and fee for Tilden-Coil to provide design services for the next construction phase of the Project. 2021-2025 Strategic Targets and Goals
This Project is consistent with Key Strategic Target and Goal No. 1f: Improved Operational & Financial Capacity – Create an asset management plan. Approval of the proposed Amendment No. 2 will support economic growth by ensuring that essential renovations are carried out at the City-owned California Theater, a landmark with significant cultural and historical value. The improvements will not only preserve this important asset, but will also contribute to the City’s broader efforts to manage and maintain its facilities in a way that supports future growth and financial sustainability.

Environmental Impact
The proposed project is exempt from the requirements of California Environmental Quality Act pursuant to Section 15301 (Class 1 – Existing Facilities) of the CEQA Guidelines because it involves minor rehabilitations to the historic building, such as roof leak repair, lighting, and fire safety. Additionally, the City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

The application of the Class 1 categorical exemption is not barred by one of the exceptions set forth in the CEQA Guidelines Section 15300.2 because a historic building renovation does not present any unusual circumstances; would not damage scenic resources, including any resources in the area of a Scenic Highway; would not be utilized on a hazardous waste site; and would not impact historic resources of any kind.

Fiscal Impact

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There is no impact to the General fund. Funding will be provided from the Cultural Development Construction Fund.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:

1. Adopt Resolution 2025-405 Authorizing the Director of Finance and Management Services to amend the FY 2024/25 Capital Improvement Plan budget with an additional $125,000 from the Cultural Development Construction Fund for the project; and

2. Approve Amendment No. 2 to the Progressive Design-Build Contract with Tilden-Coil Constructors, Inc. in the amount of $125,000 for the California Theater Improvements (the “Project”); and

3. Authorize the City Manager or his designee to execute all necessary documents with Tilden-Coil Constructors, Inc.

Attachments
Attachment 1 Resolution No. 2025-405
Attachment 2 Amendment No. 2 with Tilden-Coil Constructors, Inc.

Attachment 3 Amendment No. 1 with Tilden-Coil Constructors, Inc.

Attachment 4 Progressive Design-Build Contract (Original Agreement) Attachment 5 Location Map
Ward:

First Ward
Synopsis of Previous Council Actions:

June 4, 2025 Adopted Resolution 2025-305 1. Approving Amendment No. 1 to Progressive Design Build Contract with Tilden-Coil
Constructors, Inc. for the California Theater Improvements Project increasing the total amount by $1,747,404 (Ward 1) 2.

Authorizing the Director of Finance and Management Services to amend the FY 2025/26 Capital Improvement Plan budget with an additional $960,255 from the Cultural Development Fund for the project.

June 26, 2024 Adopted Resolution No 2024-142 approving the operation budget and Capital improvements plans and appropriating the funds in the amount of $1.0 million from Measure S for the Project (item 1) (Ward 1)
December 7, 2022 Adopted Resolution No. 2022-261 approving an award of $4,561,400 to Tilden-Coil Constructors, Inc. for the renovation

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of the California Theatre Improvement Project Item 35 (Ward 1)
April 6, 2022 Adopted Resolution No. 2022-074 awarding a Progressive Design Build agreement with Tilden-Coil Constructors, Inc. in an amount of $309,031 to start conducting the necessary studies to produce a list of required improvements within a reasonable budget and accepting the California Arts Council Grant in the amount of $2,500,000 and amending the
FY2021/22 CIP to include the California Theatre
Improvements Project. (item 31) (Ward 1)
July 20, 2022 Adopted Resolution No. 2022-136 approving acceptance of Grants Funds from the California Arts Council for the California Theatre (item 13) (Ward 1)
CC: Eric Levitt, City Manager

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Resolution No. 2025-405
Resolution No. 2025-405
December 17, 2025

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RESOLUTION NO. 2025-405

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

AUTHORIZING THE DIRECTOR OF FINANCE AND
MANAGEMENT SERVICES TO AMEND THE FY 2024/25

CAPITAL IMPROVEMENT PLAN BUDGET WITH AN
ADDITIONAL $125,000 FROM THE CULTURAL

DEVELOPMENT CONSTRUCTION FUND FOR THE

CALIFORNIA THEATRE IMPROVEMENTS PROJECT

AND FINDING THE AMENDMENT EXEMPT FROM

REVIEW UNDER THE CALIFORNIA ENVIRONMENTAL

QUALITY ACT PURSUANT TO STATE CEQA
GUIDELINES SECTION 15301 (EXISTING FACILITIES).

WHEREAS, the Public Works Department, Fleet and Building Maintenance Division, is responsible for maintaining the California Theatre of the Performing Arts (the “California Theatre”), located at 562 West 4th Street, San Bernardino; and WHEREAS, the California Theatre opened in 1928, and was later added to the National Register of Historic Places in 2009. It is an example of Spanish Colonial Revival architecture, or California Churrigueresque. The California Theatre houses one of the only remaining Wurlitzer Style 216 pipe organs, which is original to the building; and WHEREAS, on October 7, 2021, the City released a Request for Prequalification Statement from Design -Build Entities for the California Theatre Improvements Project (the “Project”) with a deadline to submit by October 28, 2021; and WHEREAS, on January 27,2022 qualified Companies were invited to participate in a Request for Proposal (RFP) for the Project, with a deadline of February 24, 2022; and WHEREAS, Tilden-Coil Constructors, Inc. was the only company that submitted a proposal. After further evaluations of the proposals and contacting other cities that the company performed work for, it was determined that Tilden- Coil Constructors, Inc., was suitable to handle this Project on behalf of the City; and WHEREAS, on April 6, 2022, the Mayor and City Council approved a Progressive Design Built Contract with Tilden -Coil Constructors, Inc . an amount of $309,031 to start conducting the necessary studies to produce a list of required improvements within a reasonable budget; and

WHEREAS, on July 20, 2022, the Mayor and City Council approved Resolution No. 2022-74, accepting Grant Funds in the amount of $2,500,000 from the California Arts Council for the California Theatre; and

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Resolution No. 2025-405
Resolution No. 2025-405
December 17, 2025

Page 2 of 4 ends

WHEREAS, on December 7, 2022, the Mayor and City Council approved an award to Tilden-Coil Constructors, Inc. in the amount of $4,561,400 for the renovation of the California Theater; and
WHEREAS, on March 3, 2025, Tilde -Coil Constructors , Inc. opened bids for the Project, with Tilden-Coil Constructors, Inc. serving as the Design-Build contractor; and WHEREAS, on March 3, 2025, Tilden- Coil Constructors , Inc. received base bids including alternate bids increasing the total cost of work to $6,617,835; and WHEREAS, on December June 4, 2025, the Mayor and City Council Adopted Resolution 2025-305: 1. Approving Amendment No. 1 to Progressive Design Build Contract with Tilden-Coil Constructors for the California Theater Improvements Project increasing the total amount by $1,747,404 (Ward 1) ; and 2. Authorizing the Director of Finance and Management Services to amend the FY 2025/26 Capital Improvement Plan budget; and WHEREAS, t o cover the remaining costs, an additional Cultural Development Construction funding allocation of $125,000 is required.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2 The Director of Finance and Management Services is to record a budget amendment in the amount of $125,000 from Cultural Development Construction Fund to increase the purchase order to an amount not to exceed $6,742,835.

SECTION 3. CEQA. As the decision-making body for the project, the City Council has reviewed and considered the information contained in the administrative record for the proposed project. Based upon the facts and information contained in the administrative record, including all written and oral evidence presented to the City Council, the City Council finds, as follows:
(1) The administrative record has been completed in compliance with CEQA, the State CEQA Guidelines, and the City’s Local CEQA Guidelines.
(2) The proposed project is exempt from the requirements of California Environmental Quality Act pursuant to Section 15301 (Class 1 – Existing Facilities) of the CEQA Guidelines because it involves minor rehabilitations to the historic building, such as roof leak repair, lighting, and fire safety. Additionally, the City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

Packet Page. 476

Resolution No. 2025-405
Resolution No. 2025-405
December 17, 2025

Page 3 of 4 ends

(3) The application of the Class 1 categorical exemption is not barred by one of the exceptions set forth in the CEQA Guidelines Section 15300.2 because a historic building renovation does not present any unusual circumstances; would not damage scenic resources, including any resources in the area of a Scenic Highway; would not be utilized on a hazardous waste site; and would not impact historic resources of any kind; and (4) The determination of CEQA exemption reflects the independent judgment of the City Council.

SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 5. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 17
th day of December 2025.

Helen Tran, Mayor
City of San Bernardino

Attest:

Telicia Lopez, City Clerk

Approved as to form:

Sonia Carvalho, City Attorney

Packet Page. 477

Resolution No. 2025-405
Resolution No. 2025-405
December 17, 2025

Page 4 of 4 ends

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )

I, Telicia Lopez, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2025-405, adopted at a regular meeting held on the 17th day of December 2025, by the following vote:

Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ _____ _____ _______ _______
IBARRA _____ _____ _______ _______
FIGUEROA _____ _____ _______ _______
SHORETT _____ _____ _______ _______
KNAUS _____ _____ _______ _______
FLORES _____ _____ _______ _______
ORTIZ _____ _____ _______ _______

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____ 2025.

Telicia Lopez, City Clerk

Packet Page. 478

AMENDMENT NO. 2 TO

PROGRESSIVE DESIGN-BUILD CONTRACT BETWEEN THE CITY OF SAN BERNARDINO AND TILDEN-COIL CONSTRUCTORS, INC. FOR THE CALIFORNIA

THEATER IMPROVMENTS PROJECT

This Amendment No. 2 to the Progressive Design-Build Contract (“Contract”) for the turnkey design and construction is made and entered into as of December 17, 2025, by and between the City of San Bernardino, a California charter city and municipal corporation (“City”) and Tilden-Coil Constructors, Inc. (hereinafter collectively referred to as “Design Build Entity” or “DBE ”). City and DBE are sometimes referred to herein individually as a “Party” and collectively as “Parties.” A. WHEREAS, the City and DBE have entered into a Contract dated April 6, 2022, for the purpose of providing turnkey design and construction services for the California Theater Improvements Project (“Project”);

B. WHEREAS, on December 7, 2022, the Mayor and City Council approved an award of $4,561,400 to the DBE for the Project in accordance with the Contract.

C. WHEREAS, on June 4, 2025, the Mayor and City Council Adopted Resolution 2025-305, Approving Amendment No. 1 to Progressive Design Build Contract with the DBE for the California Theater Improvements Project, increasing the total amount by $1,747,404 (Ward 1)

D. WHEREAS the Parties now desire to amend the Progressive Design Build Contract with the DBE for the California Theater Improvements Project to increase the award amount due to additional change order work needed for the Project.

NOW, THEREFORE, in consideration of the above recitals and the mutual covenants, conditions, and promises contained in this Amendment No. 2 and the Contract, the Parties mutually agree as follows:

AGREEMENT

1. Incorporation of Recitals. The recitals listed above are true and correct and are hereby incorporated herein by this reference.

2. Increase to Contract Award Amount. The award amount is hereby increased by One Hundred Twenty-Five Thousand Dollars and Zero Cents ($125,000).

3. Full Force. Except as amended by this Amendment No. 2, all provisions of the Contract, as previously amended, including without limitation the indemnity and insurance provisions, shall remain in full force and effect and shall govern the actions of the Parties under this Amendment No. 2.

Packet Page. 479

4. Electronic Transmission. A manually signed copy of this Amendment No. 2 which is transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Amendment No. 2 for all purposes. This Amendment No. 2 may be signed using an electronic signature.

5. Counterparts. This Amendment No. 2 may be signed in counterparts, each of which shall constitute an original.
[SIGNATURES ON FOLLOWING PAGE]

Packet Page. 480

SIGNATURE PAGE FOR
AMENDMENT NO. 2 TO PROGRESSIVE DESIGN-BUILD CONTRACT BETWEEN THE CITY OF SAN BERNARDINO AND TILDEN-COIL CONSTRUCTORS, INC. FOR

THE CALIFORNIA THEATER IMPROVMENTS PROJECT

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 2 on the Effective Date first herein above written.

CITY OF SAN BERNARDINO
APPROVED BY:

Eric Levitt
City Manager

ATTESTED BY:

Telicia Lopez
City Clerk

APPROVED AS TO FORM:

Best Best & Krieger LLP
City Attorney

CONSULTANT
TILDEN-COIL CONSTRUCTORS, INC.

Signature

Name

Title

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Attachment 4

Location Map
500 ft
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3 0
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: December 17, 2025
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works
Department: Public Works
Subject: Ratify the Acceptance of the Extreme Heat and Community Resilience Program (EHCRP) Grant in the amount of
$175,000, for San Bernardino Community Resilience and
Greening Planning Project (All Wards)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2025-406:

1. Ratifying the acceptance of the Extreme Heat and Community Resilience Program grant award in the amount of $175,000.00 for the project titled San Bernardino Community Resilience and Greening Planning; and

2. Authorizing the City Manager, or designee, to execute the grant agreement and any subsequent amendments with the Governor’s Office of Land Use and Climate Innovation; and

3. Authorizing the City Manager, or designee, to execute all related agreements and documents with Tinkercraft: Design & Advocacy Group, the collaborative project partner, necessary to implement the project in accordance with the grant requirements; and

4. Authorizing the Interim Director of Finance & Management Services to establish all required revenue and expenditure accounts and to process all financial transactions necessary to implement the grant.

City Manager's Comments
The City Manager recommends approval.

Executive Summary

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The City of San Bernardino has been awarded $175,000.00 through the State of California’s Extreme Heat and Community Resilience Program (EHCRP) for a Small Planning Grant Project titled San Bernardino Community Resilience and Greening Planning.

This planning effort aims to build capacity and conduct pre-development activities to advance long-term resilience to the compounding effects of climate change, particularly in extreme heat, on historically underserved communities in San Bernardino.

Background
The Governor’s Office of Land Use and Climate Innovation’s (LCI) Extreme Heat and Community Resilience Program (EHCRP) recently announced $9.4 million in funding to support 32 California communities in building capacity for extreme heat action planning and project implementation. The awards are divided into 20 Small Planning Grants and 12 Small Implementation Grants, supporting local, regional, and tribal efforts to reduce the impacts of extreme heat through investments in infrastructure, planning, nature-based solutions, and emergency preparedness.

San Bernardino faces increasing impacts from extreme heat, particularly in historically underserved neighborhoods with limited access to shade and cooling infrastructure.

The EHCRP grant, administered by the Governor’s Office of Land Use and Climate Innovation, supports local and regional projects that reduce heat-related risks and improve long-term community resilience.

The EHCRP program is designed to help cities like San Bernardino build early-stage planning capacity, develop localized adaptation strategies, and prepare for future funding opportunities aimed at implementing cooling infrastructure and long-term resilience improvements.

Discussion
The City of San Bernardino received a state grant award in the amount of $175,000 under the Extreme Heat and Community Resilience Program for the San Bernardino Community Resilience and Greening Planning project. The project will focus on developing an Extreme Heat Adaptation Toolkit through a collaborative planning process led by the City of San Bernardino and Tinkercraft, and pre-development activities to prepare for the next round of funding for project implementation. The project will be implemented in four key phases: partnership development and community engagement, data collection and analysis, toolkit development, and final reporting.

During the first phase, the project team will formalize partnerships with Tinkercraft, community stakeholders, including San Bernardino Valley College (SBVC) . Focus groups will be conducted to gather input from frontline workers and residents most

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affected by extreme heat, ensuring that local perspectives guide the development of practical solutions. The City will also coordinate student participation from SBVC to support outreach, research, and design tasks, strengthening community-based capacity building.

The second phase will include data collection and analysis to assess current conditions, identify heat-vulnerable areas, and evaluate potential interventions. This information will form the foundation for the third phase, which focuses on the creation of the Extreme Heat Adaptation Toolkit. The toolkit will consolidate guidelines, design strategies, and implementation measures specific to San Bernardino’s urban environment, supporting future capital and policy decisions that reduce the impacts of rising temperatures.

The final phase will document project outcomes and lessons learned in a final report to the Governor’s Office of Land Use and Climate Innovation (LCI). The total project cost is fully funded through the Extreme Heat and Community Resilience Program (EHCRP). The grant budget includes expenses for community engagement materials, focus group facilitation, and translation services to ensure language accessibility throughout the process.

The project is expected to strengthen San Bernardino’s planning capacity to address the health and infrastructure challenges associated with extreme heat. The toolkit developed through this effort will serve as a model for integrating climate adaptation strategies into local policy, design, and capital improvement planning.

Due to the nearly seven-month delay in receiving the grant agreement, which required prompt execution upon receipt, staff requests that the Mayor and City Council, by Resolution, ratify the grant award agreement to carry out the project deliverables.

The City is requesting ratification at this time because the grant agreement was not executed within the original state-designated timeframe. Once the agreement was issued, staff prioritized securing the funding and ensuring the City remained eligible for the grant; however, the compressed turnaround period and competing operational deadlines delayed formal execution. As a result, the agreement now requires Council ratification to validate acceptance and allow the project to proceed in full compliance with state requirements. This step ensures transparency and proper administrative alignment without impacting the City’s grant funding or project eligibility. 2021-2025 Strategic Targets and Goals
This project aligns with Goal No. 3: Improved Quality of Life by enhancing community health, safety, and resilience through proactive planning for extreme heat. By developing strategies that improve shade, cooling, and urban design, the project supports a safer, more comfortable, and sustainable environment for all residents.

Fiscal Impact

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There is no General Fund impact associated with this item. All costs associated with the EHCRP grant will be covered by the $175,000. accepted.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2025-406:

1. Ratify the acceptance of the Extreme Heat and Community Resilience Program grant award in the amount of $175,000.00 for the project titled San Bernardino Community Resilience and Greening Planning; and

2. Authorize the City Manager, or designee, to execute the grant agreement and any subsequent amendments with the Governor’s Office of Land Use and Climate Innovation; and

3. Authorize the City Manager, or designee, to execute all related agreements and documents with Tinkercraft: Design & Advocacy Group, the collaborative project partner, necessary to implement the project in accordance with the grant requirements; and

4. Authorize the Interim Director of Finance & Management Services to establish all required revenue and expenditure accounts and to process all financial transactions necessary to implement the grant.

Attachments
Attachment 1 – Resolution 2025-406
Attachment 2 – Executed Agreement for ECHRP Project - CSB and LCI Ward:

All Wards
Synopsis of Previous Council Actions:

N/A
CC: Eric Levitt, City Manager

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Resolution No. 2025-406
Resolution 2025-406
December 17, 2025

Page 1 of 4 ends

RESOLUTION NO. 2025-406

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

RATIFYING THE ACCEPTANCE OF THE EXTREME

HEAT AND COMMUNITY RESILIENCE PROGRAM
(EHCRP) GRANT AWARD IN THE AMOUNT OF $175,000
FOR THE “SAN BERNARDINO COMMUNITY
RESILIENCE AND GREENING PLANNING PROJECT”;

AUTHORIZING THE CITY MANAGER, OR DESIGNEE, TO

EXECUTE THE GRANT AGREEMENT AND ANY
SUBSEQUENT AMENDMENTS; AND AUTHORIZING THE

CITY MANAGER, OR DESIGNEE, TO EXECUTE

RELATED DOCUMENTS AND AGREEMENTS WITH
TINKERCRAFT: DESIGN & ADVO CACY GROUP AS
PROJECT PARTNER.

WHEREAS, the Governor’s Office of Land Use and Climate Innovation (LCI) administer the Extreme Heat and Community Resilience Program (EHCRP) to support local and regional projects that address extreme heat and strengthen long-term community resilience; and WHEREAS, the City of San Bernardino has been awarded a grant in the amount of $175,000 under the EHCRP Small Planning Grant category for the “San Bernardino Community Resilience and Greening Planning Project”; and
WHEREAS, the project will be implemented through a collaborative partnership between the City of San Bernardino and Tinkercraft: Design & Advocacy Group to develop an Extreme Heat Adaptation Toolkit, conduct community engagement and data collection, and prepare for future implementation phases to mitigate the impacts of extreme heat; and WHEREAS, the grant funds will fully cover eligible project costs with no local match required; and
WHEREAS, due to the timing of the state’s grant agreement release, execution of the agreement was required prior to formal City Council approval, and ratification is now necessary to maintain compliance with the grant conditions; and
WHEREAS, it is necessary for the City Council to authorize the City Manager, or designee, to execute the required grant agreement and all related documents necessary to accept and administer the grant, including partnership agreements with Tinkercraft: Design & Advocacy Group.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

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Resolution No. 2025-406
Resolution 2025-406
December 17, 2025

Page 2 of 4 ends

SECTION 1. The Mayor and City Council hereby ratify the acceptance of the Extreme Heat and Community Resilience Program (EHCRP) grant award in the amount of $175,000 for the San Bernardino Community Resilience and Greening Planning Project.

SECTION 2. The City Manager, or designee, is hereby authorized to execute the grant agreement and any subsequent amendments with the Governor’s Office of Land Use and Climate Innovation (LCI) necessary to implement the project.

SECTION 3. The City Manager, or designee, is hereby authorized to execute all related agreements and documents with Tinkercraft: Design & Advocacy Group, the project partner, necessary for the administration and delivery of the project.

SECTION 4 . The Mayor and City Council hereby authorize the Interim Director of Finance & Management Services to establish the appropriate revenue and expenditure accounts in the FY 2025/26 Operating Budget and to make all necessary budgetary adjustments and financial transactions required to implement the Extreme Heat and Community Resilience Program grant.

SECTION 5. The City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 6. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 7. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 17
th day of December 2025.

Helen Tran, Mayor
City of San Bernardino

Attest:

Telicia Lopez, CMC, City Clerk

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Resolution No. 2025-406
Resolution 2025-406
December 17, 2025

Page 3 of 4 ends

Approved as to form:

Sonia Carvalho, City Attorney

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Resolution No. 2025-406
Resolution 2025-406
December 17, 2025

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )

I, Telicia Lopez, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2025-406, adopted at a regular meeting held on the 17th day of December 2025 by the following vote:

WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2025.

Telicia Lopez, CMC, City Clerk

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3 0
9 1

CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: December 17, 2025
To: Honorable Mayor and City Council Members
From: Miguel J Guerrero, General Manager
Department: Water
Subject: Receive and File the City of San Bernardino Municipal Water Department Fiscal Year 2024-2025 Annual
Comprehensive Financial Report and Single Audit on
Federal Awards (All Wards)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, receive and file the City of San Bernardino Municipal Water Department Annual Comprehensive Financial Report and Single Audit on Federal Awards.

City Manager's Comments
No recommendation.

Executive Summary
The City of San Bernardino Municipal Water Department’s Annual Comprehensive Financial Report (ACFR) and Single Audit Report on Federal Awards for the fiscal year ended June 30, 2025, is presented to the Mayor and City Council to receive and file.

Background
Section 603(e) of the City of San Bernardino Charter requires that the Water Board provide for an “annual, independent audit of all water and wastewater accounts” and that “copies of all auditors’ reports shall be filed with the City Clerk and Council.” The audit firm of Lance Soll & Lunghard LLP (LSL) completed the Water Department’s annual audit and produced the attached ACFR and Single Audit Report for the fiscal year ended June 30, 2025.

The ACFR summarizes the Department's financial activities, with LSL providing an unmodified opinion on the report. Notably, both the Water and Sewer enterprise funds have reported a positive net income after capital contributions. A detailed overview of the Department's financial status is available in the Discussion and Analysis section of

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3 0
9 1
the ACFR, with additional insights throughout the document.

Discussion
N/A
2021-2025 Strategic Targets and Goals
This item aligns with the adopted 2021-2025 Key Strategic Targets and Goals, specifically Target 1: Increased Operational & Financial Capacity. The information in these reports is useful to the City Water Board in making operational and financial decisions to meet the Water Department’s goals and objectives.

Fiscal Impact
N/A
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, receive and file the City of San Bernardino Municipal Water Department’s Annual Comprehensive Financial Report and Single Audit Report on Federal Awards.

Attachments
Attachment 1 Water Board Staff Report – ACFR 24-25
Attachment 2 Annual Comprehensive Financial Report, Fiscal Year Ended June 30, 2025
Attachment 3 Single Audit Report on Federal Awards
Ward:

All Wards
Synopsis of Previous Council Actions:

N/A
CC: Eric Levitt, City Manager

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CIT Y OF SA N BE RNARDI NO

MUNICIPAL WATER DEPARTMENT
\'\'ATER BOARD

STAFF REPORT
TO:

FROM:

Receive
ij
l -17
SBMW �
Genera 1 a ager
SUBJECT:

DA TE:

Miguel _I. Guerrero, P.E., General l\fanager � �
Cynthia i\louser, Director of Finance

PRESENTATION OF THE RESULTS OF THE FISCAL YEAR
2024-25 AUDIT, ANNUAL COMPREHENSIVE FINANCIAL REPORT,

AND SINGLE AUDIT REPORT ON FEDERAL AW ARDS
\l ovember 17, 2025
R.-\CKGROL'ND:

The Department contracted with Lance Soll & I ,unghard LLP (LSL) in !'\larch 2025 to conduct the annual financial audit for the Water Department's two enterprise funds, RIX, and the Department's Federal programs (Single Audit).

On November 25, 2025, Riley Greenlee, Senior manager at LSL, will present the Annual Comprehensive Financial Report (ACFR) for the City of San Bernardino l'\lunicipal \X'ater Department, covering the fiscal year that concluded on June 30, 2025, to the \X'ater Board.

The
ACFR summarizes the Department's financial activities as of that date, with LSL providing an unmodified opinion on the report. Notably, both the \X'ater and Sewer enterprise funds have reported a positiYe net income after capital contributions. A detailed overview of the Department's financial status is available in the l\fanagement Discussion and Analysis section of the ACFR, with additional insights throughout the document.

The presentation will also outline the results of the Kater and Sewer Funds, emphasizing the variances between the budget and the audit.

GO,-\LS AND OB!ECTIVES:

This proposed ACFR for _I une 30, 2025, aligns with the Department's Strategic Plan under Goal 5:

Ensure Financial I Iealth & Transparency, Subgoal #5.4 - Optimize Debt and Reserves.

FISC-\L Il'\IP.-\CT:

There will be no financial impact associated with this item.

Agenda Item

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Miguel J. Guerrero, P.E., General Manager

Page 2 ends

November 17, 2025
SUBJECT: PRESENTATION OF THE RESULTS OF THE FISCAL YEAR 2024-25 AUDIT, ANNUAL COMPREHENSIVE FI ANCL\L REPORT, AND SINGLE AUDIT REPORT ON

FEDERAL AWARDS
RECOMMENDATION:

It is recommended that the Water Board make the following motion(s):
• Approve the Annual Comprehensive Financial Report and Single Audit Report on Federal Awards for the City of San Bernardino Municipal Water Department for the fiscal year ending June 30, 2025.
• Direct staff to file the Annual Comprehensive Financial Report and Single Audit on Federal Awards with the Mayor and City Council.

Respectfully submitted,
Cynthia Mouser
Director of Finance
Attachments:
• Annual Comprehensive Financial Report, Fiscal Year Ended June 30, 2025 • Single Audit Report
• Audit Communications Letter
• Report on Internal Controls
• Annual Comprehensive Financial Report PowerPoint
• LSL Audit Presentation

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2025
ANNUAL

COMPREHENSIVE

FINANCIAL
REPORT

SAN BERNARDINO, CA
FOR THE FISCAL YEAR ENDED JUNE 30,2025

OF THE CITY OF SAN BERNARDINO WATER

DEPARTMENT A COMPONENT UNIT OF THE

CITY OF SAN BERNARDINO
2025
ANNUAL

COMPREHENSIVE

FINANCIAL
REPORT
FOR THE FISCAL YEAR ENDED JUNE 30,2025

OF THE CITY OF SAN BERNARDINO WATER

DEPARTMENT A COMPONENT UNIT OF TH E

CITY OF SAN BERNARDINO

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CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT

A COMPONENT UNIT OF THE CITY OF SAN BERNARDINO
Annual Comprehensive Financial Report
For the Year Ended June 30, 2025
PREPARED BY:

THE FINANCE AND ACCOUNTING DIVISION

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7+,63$*(,17(17,21$//</()7%/$1.

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CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT

A COMPONENT UNIT OF THE CITY OF SAN BERNARDINO
Annual Comprehensive Financial Report
For the Year Ended June 30, 2025
Table of Contents
Page(s)

INTRODUCTO

RY SECTION
Letter of Transmittal ..................................................................................................................................................... i Organizational Chart
................................................................................................................................................. vii List of Elected and Appointed Officials .................................................................................................................... viii GFOA Certificate of Achievement for Excellence in Financial Reporting .................................................................. ix

FINANCIAL SECTION
Independent Auditors’ Report ..................................................................................................................................... 1 Management’s Discussion and Analysis .................................................................................................................... 5 Basic Financial Statements:

Statement of Net Position .................................................................................................................................. 15 Statement of Revenues, Expenses and Changes in Net Position ..................................................................... 16 Statement of Cash Flows ................................................................................................................................... 17 Notes to the Basic Financial Statements ........................................................................................................... 19 Required Supplementary Information:

Schedule of Proportionate Share of the Net Pension Liability ........................................................................... 47 Schedule of Changes in Net OPEB Liability/(Asset) and Related Ratios .......................................................... 48 Schedules of Plan Contributions ........................................................................................................................ 50

STATISTICAL SECTION
Changes in Net Position – Combined Funds ........................................................................................................... 55 Changes in Net Position – Water Fund .................................................................................................................... 56 Changes in Net Position – Sewer Fund ................................................................................................................... 57 Changes in Net Position – Sewer Collection Fund ................................................................................................... 58 Net Position by Component – Combined ................................................................................................................. 59 Net Position by Component – Water Fund ............................................................................................................... 60 Net Position by Component – Sewer Fund .............................................................................................................. 61 Net Position by Component – Sewer Collection Fund ............................................................................................. 62 Water Fund Revenue by Type .................................................................................................................................. 63 Sewer Fund Revenue by Type ................................................................................................................................. 64 Sewer Collection Fund Revenue by Type ................................................................................................................ 65 Water Fund Expenses by Type ................................................................................................................................ 66 Sewer Fund Expenses by Type ................................................................................................................................ 67 Sewer Collection Fund Expenses by Type ............................................................................................................... 69 Water Fund Debt Service Coverage ......................................................................................................................... 71 Sewer Fund Debt Service Coverage ........................................................................................................................ 72 Ratios of Outstanding Debt by Type ......................................................................................................................... 73 Demographic Statistics ............................................................................................................................................. 77 Major Employers ....................................................................................................................................................... 78

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CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT

A COMPONENT UNIT OF THE CITY OF SAN BERNARDINO
Annual Comprehensive Financial Report
For the Year Ended June 30, 2025
Table of Contents
Page(s)

STATISTICAL SECTION (CONTINUED)
Authorized Positions History ..................................................................................................................................... 79 Water Rates: Minimum Monthly Charge................................................................................................................... 83 Water Rates: Commodity Charges ........................................................................................................................... 84 Water Rates – Elevation Charges per $ HCF .......................................................................................................... 85 Water Connections and Revenues by User Type .................................................................................................... 86 Top Ten Water Consumers ...................................................................................................................................... 87 Sewer Treatment Rate History ................................................................................................................................. 88 Sewer Treatment Connections and Revenue by User Type .................................................................................... 90 Top Ten Sewer Treatment Customers ..................................................................................................................... 91 Sewer Collection Rate History .................................................................................................................................. 92 Sewer Collection Connections and Revenue by User Type .................................................................................... 93

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1350 South “E” Street, San Bernardino, California 92408 P.O. Box 710, 92402 Phone: (909) 384-5141 FACSIMILE NUMBERS: Administration: (909) 453-6399 Customer Service: (909) 453-6396 Finance: (909) 453-6383 Engineering: (909) 4 53-6385 Corporate Yards: (909) 453-6389 Water Reclamation Plant: (909) 453-6395 Environmental & Regulatory Compliance: (909) 453-6391 Environmental Control: (909) 453-6394

CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT

CITY OF S

AN BERNARDINO

WATER BOARD

TONI CALLICOTT
President
Commissioners

WAYNE HENDRIX
DAVID E. MLYNARSKI
RIKKE V. JOHNSON

THOMAS BRICKLEY
MIGUEL J. GUERRERO, P
.E.

General Manager
ROBIN L. OHAMA
Deputy General Manager
STEVE R. MILLER
Director of Water Utility
KEVIN T. STEWART, P.E.

Director of Water Reclamation
JENNIFER L. SHEPARDSON
Director of Environmental &
Regulatory Compliance
CYNTHIA J. MOUSER
Director of Finance
“Trusted, Quality Service since 1905”
November 25, 2025
To the Water Board Commissioners & ratepayers of the San Bernardino Municipal Water Department, Intr
oduction:

State law requires that every general-purpose government publish a complete set of audited financial statements within six months of the close of each fiscal year. This report is published to fulfill that requirement for the San Bernardino Municipal Water Department (“Department”) for the fiscal year ended June 30, 2025.

Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose.

Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.

LSL, LLP has issued an unmodified opinion on the Department’s financial statements for the year ended June 30, 2025. The independent auditor’s report is located at the front of the financial section of this report.

Management’s discussion and analysis (“MD&A”) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it.

Profile of the Department:

The San Bernardino Municipal Water Department and the Water Board of Commissioners (“Board”) were established on May 8th, 1905, by the Mayor and Common Council of the City of San Bernardino in accordance with the provisions specified in the City charter. The Board assembled for the first time on May 16th, 1905, to ensure water supply needs of the community are met by providing trusted, quality service to our customers. This service has grown through the years to include water supply, water reclamation, geothermal heating supply, sewer collection, and administrative support for the growing community.

The first water distribution system of San Bernardino included water supply for approximately six thousand citizens within a one square mile service area. Today, the Department’s service area is approximately 50 square miles and the water supply distribution network now encompasses over 45,000 service connections and i

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750 miles of water mains. Although the number of connections has increased during the past one hundred years, our commitment to providing trusted, quality service remains the same.

The City of San Bernardino receives the majority of its water supply from an underground aquifer called the Bunker Hill Groundwater Basin which is part of the San Bernardino Basin. The water contained in the Bunker Hill Basin is replenished with rain and snowmelt that filters through our local San Bernardino Mountains. This local water supply ensures that San Bernardino Municipal Water Department customers receive high quality, relatively inexpensive water as compared to other communities. Many other communities in Southern California must import their water supplies from remote locations via the Colorado River and State Water Project systems which adds cost. Many water supplies imported from distant locations can be impacted by certain man-made and natural contaminants as the water is transported to the customer. Reliability of imported supplies is also impacted by drought conditions and environmental impacts.

The Department has operated the Water Reclamation Plant (WRP) since 1973. The WRP is a 33 million gallons per day (MGD) regional secondary treatment facility that provides trusted, quality wastewater treatment services for the City of San Bernardino, City of Loma Linda, San Bernardino International Airport, Patton State Hospital, and unincorporated areas of San Bernardino County. The WRP serves over 60,000 customers/connections, of which 38,000 are located within the City’s boundaries.

The Sewer Collection section is responsible for maintaining more than 450 miles of sewer mains, several thousand maintenance holes, and lift stations. The system encompasses approximately 38,000 connections and conveys over 8 billion gallons of sewage annually to the Department’s Water Reclamation Plant for treatment.

Fiscal Management:

The Board annually adopts an operating and capital budget prior to the new fiscal year. The budget authorizes and provides the basis for reporting and control of financial operations and accountability for the Department’s functions, including the Water Utility and Sewer Funds. The budget and reporting treatment applied to a fund is consistent with the accrual basis of accounting and the financial statement basis. Each year the Department adopts a balanced budget.

Local Economy:

The Department’s offices are located in the City of San Bernardino (“the City”) in San Bernardino County.

According to the California Department of Finance, San Bernardino’s population as of June 30, 2025, was 222,727. The Water Department (“Department”) has been able to maintain a positive economic outlook despite rising inflationary costs, a reduction in sewer revenue and drought regulations through the long-term financial planning. The Department is currently in the fourth year of a four-year rate increase that was approved by the Water Board in March 2022. These adopted rate increases have allowed the Department to maintain revenue stability while experiencing increased inflationary costs for goods and services. The City has received funds from the American Rescue Plan Act (ARPA) that will help stimulate economic growth in the area. The City has given the Department $3 million in ARPA funds to fund the Department’s Lead Service Lateral capital project.

The Department has also received over $5.5 million in grant funding from Federal Emergency Management Act (FEMA) and the Department of Water Resources for the Department’s Steel Reservoir Seismic Retrofits capital project and installation of AMI meters throughout the Department’s service area. Development within the City continues, which encourages economic growth within the city and creates new capital projects for the Department.

Per the Lowe Institute of Political Economy from Claremont McKenna College, in the Inland Empire, the unemployment rate for the Inland Empire increased by a large number (1.1 percentage points), from 4.8 percent to 5.9 percent in June, compared to May 2025. It is also 0.5 percentage points higher than a year ago (June 2024: 5.4 percent, June 2025: 5.9 percent). However, much of the month-to-month increase is due to regularly occurring seasonal patterns in the data. The Employment Development Department (EDD) does not seasonally adjust data for the Riverside-San Bernardino-Ontario Metropolitan Statistical Area (MSA). The Lowe Institute employ standard statistical techniques to remove the seasonal fluctuations. Removing these results in ii

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a significantly better outlook: after seasonal adjustment, the Inland Empire unemployment rate stands at 5.6 percent, up 0.2 percentage points up from May 2025 (5.4 percent). Compared to a year ago, it still increased by over half a percentage point, from 5.0 percent to the current level of 5.6%. Bottom line, the alarm bells The Lowe Institute have been ringing over the last few months now sound much louder. We may be witnessing the forecasted regional downturn already. National labor market data, including the unemployment rate, are published earlier, typically on the first Friday of each month. Hence we know, by now, that the national unemployment rate for June 2025 fell by 0.1 percentage points from 4.2 percent to 4.1 percent. Changes in the unemployment rate are approximately equal to the difference between the growth rate of the labor force and the growth rate of employment. While the national news at the beginning of the month was good, it was achieved by positive employment growth coinciding with a slightly shrinking labor force. This could indicate discouraged workers dropping out of the labor force, or migrants deciding to leave the labor force. The unemployment rate is gathered from a household survey and hence does not involve employers indicating the number of jobs at their establishments.

State and regional data are made available in the middle of the month, and the EDD released the June numbers on Friday, July 18. The Lowe Institute had previously warned that the employment picture for both the state, but especially the Inland Empire, does not look very positive: employment gains from a year ago basically were the results of only three sectors generating more employment: Local Government (public education), Health, and Logistics. The remaining sectors are losing jobs. Moreover, the three pillars that hold up the building are threatened by national policies, which are about to impact all three of them to differing degrees.

The main question for the June employment report is to what extent the expected significant decline in regional employment materialized has. The answer is, not yet. After seasonal adjusting the data, employment still went up from May 2025, albeit by a relatively small number (about 250). The reason for the unemployment rate to increase was that the labor force grew by more (that is a good sign), namely by roughly 6,250. Ideally, both the labor force and employment would grow, with employment growth outpacing the labor force growth (in which case, the unemployment rate falls). Job gains from a year ago are still centered on three sectors: Health, and Local Government. Logistics (Transportation, Warehousing, and Wholesale) has stopped being a major contributor to employment growth in the Inland Empire.

Strategic planning and collaboration are essential to the long-term reliability of water supplies in the San Bernardino region. The San Bernardino Municipal Water Department has invested in efforts to secure and produce new water supply, encourage water use efficiency, and minimize water system losses. In addition to this long-standing commitment to water efficiency, SBMWD works collaboratively with water agencies in the San Bernardino Valley to preserve local water resources, ensuring adequate supply for the future. SBMWD and partnering agencies are building a more resilient portfolio of local water resources through regional groundwater management, as well as the execution of projects such as recycled water recharge, critical infrastructure and water storage, direct installation or efficient irrigation and fixtures, and water conservation education programs.

For the Department, the goal of water use efficiency remains paramount. Efficient water use is the most cost-effective and immediate way to achieve long-term conservation goals. As such, the Department is committed to sharing information, programs, and incentives to encourage and support water use efficiency for our customers.
30,000
40,000
50,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Water Production
In Acre Feet
iii

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Major Initiatives:

Advanced Metering Infrastructure
The Department was awarded a $500,000 grant from the U.S. Bureau of Reclamation to start phase one of the Department’s Advanced Metering Infrastructure (AMI) project. In addition to this grant, the Department was also awarded a $2 million grant by the CA Department of Water Resources Urban and Multibenefit Drought Relief Grant Program. The first phase of the AMI project will install and connect approximately one quarter of the Department’s water meters to an advanced communications network to gather water consumption data in real time. This water use data will reduce water waste by enabling the Department to identify and notify customers of leaks and abnormally high-water use more quickly. The first phase is close to completion.

Regional Recycled Water
The Department continues to develop its recycled water project. Construction of the Tertiary Treatment System commenced in 2023 and will be completed and operational in 2025. This initial phase will produce up to

2.5 million gallons per day (MGD) for treatment plant use and irrigation. At the same, the Department is working with its regional partners to develop a regional recycled water system that involves connecting recycled water systems in the region and will provide flexibility to deliver produce recycled water where it is most needed in the San Bernardino Basin. The Department has formed a recycled water coalition with San Bernardino Valley, East Valley Water District, and City of Redlands. The coalition will work collaboratively to mitigate water quality impacts that may arise from recycled water activity.

Long Term Financial Planning:

As part of the Department’s Strategic Plan, long-term financial plans were developed for the two Department’s enterprises: Water and Sewer Treatment. These financial plans assisted the Department with a cost of service study for the two enterprises. A cost of service/rate study conducted in FY 21-22 recommended an increase to the Department’s water and sewer rates. As a result of the study, the water Board adopted a four-year rate increase for the water and sewer funds with the first adjustment effective April 1, 2022. The remaining increases are effective annually on July 1 starting July 1, 2022 through July 1, 2025. With the last year of the rate increase starting July 1, 2025, the Department will initiate a request for proposal for a new rate study aimed to be completed and in effect for FY27.

The Department’s financial plan includes the revision of the existing Reserve Policy. The Department’s current Reserve policy was revised and adopted by the Board in September 2021. ¾ Operating Reserve: This reserve is established to ensure adequate cash flow is available to meet day-to-day expenses. The target balance is 45 days of the operating expenses budgeted for each respective f
und.
¾
Rate Stabilization Reserve: This reserve is established to offset revenue risk associated with low service demands years. The minimum target balance f or each fund is twenty percent (20%) of their respective budgeted sales.
¾
Emergency Replacement Reserve: The purpose of this reserve is to minimize the impact of unforeseen capital asset and operating expenses. The target balance for each fund shall be two percent (2%) of the total recorde
d value of capital assets as of the previous fiscal year. ¾
Capital Replacement Reserve: The Capital Replacement Reserve was set up in order to provide funding support of the Departme
nt’s capital program. The basis for calculating the target balance for this reserve is a ro
lling five-year average of the Department’s Capital Improvement Program projects, excluding those with external funding. The target balance will be assessed on an annual basis as part of the budgeting process.
iv

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The Department has expanded and updated the previous strategic plan. This updated Strategic Plan builds upon our past efforts and captures key priorities identified by the Water Board, staff, and stakeholders. The Strategic Plan, adopted by the Water Board on July 8, 2025, is derived from SBMWD's commitment to providing trusted quality service. The finished plan provides a clear road map for SBMWD's future development and achievements.

Debt Administration:

The Department’s outstanding debt as of June 30, 2025 consists of one Revenue Bond in the Water Utility Fund, and one Revenue Bond in the Sewer Utility Fund, as shown in the table below:

Water Fund Long-Term Debt Activity
Year of Issuance/Description Use of Proceeds
2016 California Municipal Finance Authority
Revenue Bond
Funding for facility construction, seismic retrofit
of reservoirs and other capital improvement
projects.

Sewer Fund Long-Term Debt Activity
Year of Issuance/Description Use of Proceeds
2016 California Municipal Finance Authority
Revenue Bond
Funding for primary influent flow equalization
project, facility construction, and recycled water
project.

Relevant Financial Policies:

Internal Control Structure
Department
management is responsible for the establishment and maintenance of the internal control structure that ensures that the assets of the Department are protected from loss, theft or misuse. The internal control structure also ensures that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The Department’s internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management.

Major Initiatives and Key Values:

The activities of the Board and Department staff are driven by our key value statements as outlined below:

1. Innovation: Applying practical and effective technologies and methods to enhance service delivery and operational efficiency.

2. Community Engagement: Delivering reliable, responsive services whole fostering trust and collaboration with our diverse community.

3. Environmental Stewardship: Protecting our natural resources and proactively adapting to the future challenges.

4. Integrity: Ensuring all actions are conducted with transparency, accountability, and ethical standards.

5. Collaboration: Nurturing strong partnerships with local, regional, and state organizations to address industry challenges and achieve common goals.

Awards and Acknowledgements:

The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the Department for its annual comprehensive financial v

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report for the fiscal year ended June 30, 2024. To be awarded a Certificate of Achievement, the Department must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe our current annual comprehensive financial report continues to meet the Certificate of Achievement program requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

Preparation of this report was accomplished by the combined efforts of Department staff. We appreciate the dedicated efforts and professionalism that these staff members contribute to the service of the Department’s customers. The contributions made by Andrea Parker, Senior Accountant, Garrett Van Leuven, Senior Accountant, Rob Medina, Accountant I, and Dustin Andolsen, Finance Manager deserve special recognition. We would also like to thank and recognize the members of the Board for their continued support in planning and implementation of the Department’s fiscal policies.

Respectfully submitted,
___________________________________ ___________________________________ Miguel J. Guerrero, P.E., General Manager Cynthia J. Mouser, Director of Finance vi

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City of San Bernardino Municipal Water Department
Mayor the City of San Bernardino
Eric Levitt
Water Board
Toni Callicott, President
Wayne Hendrix, P.E., Vice President
David E. Mlynarski, Commissioner
Rikke V. Johnson, Commissioner
Thomas Brickley, Commissioner
Administration
Miguel J. Guerrero, P.E., General Manager
Robin L. Ohama, Deputy General Manager
Steve R. Miller, Director of Water Utility
Kevin T. Stewart, P.E., Director of Water Reclamation
Cynthia J. Mouser, Director of Finance
Jennifer L. Shepardson, Director of Environmental & Regulatory Compliance Mission Statement
To meet the needs of the community by providing sustainable, high quality water supply and wastewater services in the most professional, environmentally responsible, and cost-effective manner possible.

Organization
The City of San Bernardino Municipal Water Department was formed in 1905 under the Charter of the City of San Bernardino and is governed by the Water Board who are appointed by the Mayor of the City of San Bernardino. The most recent Charter, approved by voters in November 2016, gave the Water Board “Responsibility to oversee and manage the City’s water supply, recycled water, wastewater collection and treatment functions in accordance with State Law.” The Department operated three enterprise funds: the Water Utility Enterprise Fund, the Sewer Utility Enterprise Fund and the Sewer Collection Utility Enterprise Fund. Water service encompasses the City, with the exception of the east end, which is served by East Valley Water District. Sewer treatment service encompasses all of the City of San Bernardino, the City of Loma Linda, the former Norton Air Force Base, Patton State Hospital, and portions of the City of Highland serviced by East Valley Water District. Sewer collection service is provided within the City of San Bernardino boundaries.
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of San Bernardino Municipal Water Department
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2024
Executive Director/CEO
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LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Water Board
City of San Bernardino Municipal Water Department
San Bernardino, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of each major fund of the City of San Bernardino Municipal Water Department, a component unit of the City of San Bernardino, (hereafter , the Department) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Department’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Department as of June 30, 2025, and the changes in fi nancial position, and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to f inancial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsi bilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Department and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Department’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

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To the Wate
r Board
City of San Bernardino Municipal Water Department
San Bernardino, California
Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance wit h generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards we:
x Exercise professional judgment and maintain pr ofessional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures respon sive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Department’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies us ed and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Department’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principl
es generally accepted in the United States of America require that the management’s discussion and analysis and required pension and other post-employment benefits schedules as listed on the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing st andards generally accepted in the United States of America, which consisted of inquiries of management ab out the methods of preparing the information and comparing the information for consistency with managem ent’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information be cause the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 Packet Page. 670

To the Wate
r Board
City of San Bernardino Municipal Water Department
San Bernardino, California
Other Information
Management is responsibl
e for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with G
overnment Auditing Standards, we have also issued our repo rt dated October 15, 2025, on our consideration of the Department’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Department’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Department’s internal c ontrol over financial reporting and compliance.

Irvine, California
October 15, 2025
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MANAGEMENT’S DISCUSSION AND ANALYSIS
The City of San Bernardino Municipal Water Department (Department) is a water, sewer collection and treatment utility responsible for delivering high quality, economically priced water, sewer treatment and sewer collections services to a quarter of a million customers in and around the City of San Bernardino, California. This section of the Department’s annual financial report presents management’s analysis of the Department’s financial performance during the fiscal year that ended on June 30, 2025. Please read it in conjunction with the basic financial statements which follow this section.

All amounts in the Management’s Discussion and Analysis within text areas are in thousands unless otherwise noted.

Financial Highlights:
x The Department’s overall net position increased by $28.6 million or 8.2%. x Operating revenues increased $2.7 million or 2.94% from the prior fiscal year. Water consumption was up approximately 8.0% in FY25 from FY24. Water revenues increased due to a rate increase effective July 1, 2024 along with the increased consumption. Sewer revenues decreased mainly due to East Valley Water District putting their treatment plant into service and now treat their own wastewater despite an increase effective July 1, 2024.
x Operating expenses decreased $11.3 million, 10.91% from the prior fiscal year. The most significant decreases were noted in the categories of depreciation and General, Administration and overhead.

Depreciation decreased due to one-time adjustments made to depreciation in the prior year. The Water department’s claims liabilities significantly decreased from the prior year and the offset to the annual entry is grouped in administration and overhead causing a reduction in overall expenditures. x Net income/loss before capital contributions increased by $16.7 million. x The Department’s current ratio (the ability to pay short-term obligations) was 3.9. x Cash available (the ability to cover current expenses with cash) was 470 days.

Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the Department’s basic financial statements.

The Department’s basic financial statements are comprised of two components: the Financial Statements and the Notes to the Basic Financial Statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Information providing citywide financial results is available in the City’s Annual Comprehensive Financial Report.

Required Financial Statements
The financial statements of the Department report information about the Department using accounting methods similar to those used by private sector companies. These statements offer short-term and long-term financial information about its activities. The Statement of Net Position (page 15) includes all of the Department’s investments in resources (assets) and the obligations to creditors (liabilities). It also provides the basis for evaluating the capital structure of the Department and assessing the liquidity and financial flexibility of the Department. All of the current year’s revenues and expenses are accounted for in the Statement of Revenues, Expenses and Changes in Net Position. (page 16) This statement measures the success of the Department’s operations over the past year and can be used to determine whether the Department has successfully recovered all its costs through its user fees and other charges, profitability, and credit worthiness. The final required financial statement is the Statement of Cash Flows (pages 17-18). The primary purpose of this statement is to provide information about the Department’s cash receipts and cash payments during the reporting period. The statement reports cash receipts, cash payments, 5 Packet Page. 673

and net changes in cash resulting from operations, investing, and financing activities and provides answers to questions such as “where did cash come from, what was cash used for, and what was the change in cash balance during the reporting period?”
Financial Analysis of the Department
Our analysis of the Department begins on page 6 of the financial statements. One of the most important questions to ask about the Department’s finances is “Whether the Department, as a whole, is better off or worse off as a result of the year’s activities?” The Statement of Net Position, and the Statement of Revenues, Expenses and Changes in Net Position report information about the Department’s activities in a way that will help answer this question.

These two statements report the net position of the Department and changes in them. Measuring the change in the Department’s net position - the difference between assets and liabilities - is one way to measure financial health or financial position. Over time, increases or decreases in the Department’s net assets are indications of whether its financial health is improving or deteriorating. However, one will need to consider other non-financial factors such as changes in economic conditions, population growth, and zoning and new or changed government legislation.

Water Utility Fund
To begin our analysis, a summary of the Water Utility Fund’s Statement of Net Position is presented in Table A-1.

The table highlights, the Water Utility total net position increased 11.7% or $22.3 million in fiscal year 2025. The favorable increase in net position is primarily related to the increase in total capital assets ($34.44 million). 2025 2024 $Change % Change
Currentandnoncurrentassets 105,015$ 119,269$ (14,254)$ Ͳ12.0% Capitalassets 247,991 213,546 34,445 16.1% Totalassets 353,006 332,815 20,191 6.1% Deferredoutflowsofresources 8,756 10,266 (1,510) Ͳ14.7% Currentliabilities 18,692 16,031 2,661 16.6% Noncurrentliabilities 123,502 129,021 (5,519) Ͳ4.3% Totalliabilities 142,194 145,052 (2,858) Ͳ2.0% Deferredinflowsofresources 6,684 7,471 (787) Ͳ10.5% Netinvestmentincapitalassets 204,647 180,169 24,478 13.6% Restricted 3,388 2,414 974 40.3% Unrestricted 4,849 7,975 (3,126) 39.2% Totalnetposition 212,884$ 190,558$ 22,326$ 11.7% TABLEAͲ1
Condensed StatementofNetPositionͲWaterUtility
(amountsexpressedinthousandsofdollars)
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Total revenu
es increased by 9.9% or $4.5 million. Capital grant revenue increased from the prior year due the FEMA grant monies and other state grants used for projects as intended. Investment income decreased in Water but increased in Sewer from the prior year but overall decreased due to poor market performance compared to the prior year. The Water Department sold a piece of land to the City of San Bernardino which resulted in a large gain on sale of asset. Water operating revenues also reflect a modest increase due to a rate increase effective July 1, 2024. Total operating expenses decreased 9.5% or $5.1 million. Significant variances were due to decreased depreciation expense as well as reduced administration and overhead. The Water departments claims liabilities significantly decreased from the prior year and the offset to the entry is grouped in Admin and overhead. 2025 2024 $Change % Change
Operatingrevenue 50,542$ 45,985$ 4,557$ 9.9% Operatingexpenses 48,868 53,997 (5,129) Ͳ9.5% TotalOperatingIncome(loss) 1,674 (8,012) 9,686 Ͳ120.9% InvestmentIncome 1,990 2,545 (555) Ͳ21.8% Noncapitalgrantfunds 9,106 5,567 3,539 63.6% Gain(loss)ondisposalofcapitalassets 2,716 85 2,631 3095.3% Othernonoperatingrevenue 769 567 202 35.6% Interestexpenseandfiscalcharges 1,728 1,784 (56) Ͳ3.1% TotalNonoperatingI ncome(Expenses) 12,853 6,980 258 3.7% Income(loss)beforecapitalcontributions 14,527 (1,032) 15,559 Ͳ1507.7% Capitalcontributions 8,408 5,130 3,278 63.9% Changeinnetposition 22,935 4,098 18,837 Ͳ459.7% NetpositionattheBeginningoftheYear 190,558 186,460 4,098 2.2% Restatement (609) Ͳ Totalnetposition 212,884$ 190,558$ 22,935$ 12.0% TABLEAͲ2
Condensed StatementofRevenues,ExpensesandChangesinNe tPositionͲWaterUtility (amountsexpressedinthousandsofdollars)
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Total capital assets, net increased by 16.1% or $34.4 million in fiscal year 2025. The Water fund capitalized $6.7 million in various capital projects completed and placed in service during FY2025. The increase is also attributed to an increase in Construction in progress (CIP) expenditures related to Re servoir Seismic upgrades ($9.3 million), SBMWD Administration Facility ($9.2 million), the Mountain Pressure Zone Main Replacement project ($5.6 million), the Advanced Metering Infrastructure project ($3.8 million) and the Muscoy Service Line Replacement project ($3.0 million). The department Additional information on capital assets is presented in Note 3 of the Notes to the Basic Financial Statements.

Total long-term debt decreased by 2.2% or $1.1 million due to annual debt service payments. Additional information on long-term debt is presented in Note 4-6 of the Notes to Basic Financial Statements. 2025 2024 $ Change % Change
Land and easements 5,838$ 5,869$ (31)$ -0.5% Construction in progress 58,715 25,803 32,912 127.6% Wells and pumping 105,491 105,758 (267) -0.3% Distribution 187,660 185,239 2,421 1.3% Right -of-use assets - 402 (402) -100.0% Plant and facilities 6,917 6,943 (26) -0.4% Other capital assets 14,078 11,377 2,701 23.7% Total capital assets 378,699 341,391 37,308 10.9% Less: accumulated depreciation (130,708) (127,846) (2,862) 2.2% Total capital assets, net 247,991$ 213,545$ 34,446$ 16.1% TABLE A-3
Capital Assets - Water Utility
(amounts expressed in thousands of dollars)
2025 2024 $Change % Change
BondsPayable 41,075$ 42,125$ (1,050)$ Ͳ2.5% BondPremium 4,216 4,414 (198) Ͳ4.5% Leasesandsubscriptions Ͳ 12 (12) 100.0% CompensatedAbsences 2,355 2,154 * 201 9.3% TotallongͲtermdebt 47,646$ 48,705$ (1,059)$ Ͳ2.2% *RestatedduetoimplementationofGASB101
TABLEAͲ4
LongͲtermDebtͲWaterUtility
(amountsexpressedinthousandsofdollars)
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Sewer Utility Fund
To begin our analysis, a summary of the Sewer Utility Fund’s Statement of Net Position is presented in Table B-1.

The table above highlights, the Sewer Utility net position increased 3.5% or $5.4 million in fiscal year 2025. The total net position increased as a result of current year operations. The increase in Capital Assets due to the increased activity in CIP projects for fiscal year 2025.

2025 2024 $Change % Change
Currentandnoncurrentassets 87,019$ 111,716$ (24,697)$ Ͳ22.1% Capitalassets 145,282 118,822 26,460 22.3% Totalassets 232,301 230,538 1,763 0.8% Deferredoutflowofresources 8,190 9,653 (1,463) Ͳ15.2% Currentliabilities 12,122 14,302 (2,180) Ͳ15.2% Noncurrentliabilities 62,043 64,543 (2,500) Ͳ3.9% Totalliabilities 74,165 78,845 (4,680) Ͳ5.9% Deferredinflowofresources 3,273 3,742 (469) Ͳ12.5% Netinvestmentincapitalassets 114,911 95, 673 19,238 20.1% Restricted 3,020 2,152 868 100.0% Unrestricted 45,122 59,779 (14,657) Ͳ24.5% Totalnetposition 163,053$ 157,604$ 5,449$ 3.5% TABLEBͲ1
Condensed StatementofNetPositionͲSewerUtility
(amountsexpressedinthousandsofdollars)
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Duri
ng fiscal year 2025, total revenues for the Sewer Utility decreased 3.8% or $1.8 million, from the prior year, primarily due to East Valley Water District putting their treatment plant into service and now treat their own wastewater when we had done so in the past. There was a decrease in operating costs by 12.2% or $6.1 million.

Significant variances were due to decreased depreciation expense as well as reduced administration and overhead.

The Water departments claims liabilities significantly decreased from the prior year and the offset to the entry is grouped in administration and overhead. Investment income decreased in Water but increased in Sewer from the prior year but overall decreased due to poor market performance compared to the prior year. 2025 2024 $ Change % Change
Operating revenue 45,596$ 47,385$ (1,789)$ -3.8% Operating expenses 44,207 50,351 (6,144) -12.2%
Total operating income(loss) 1,389 (2,966) (6,144) 207.1% Investment Income 1,914 1,521 393 25.8%
Gain(loss) on disposal of capital assets 13 600 (587) -97.8% Interest expense and fiscal charges 1,136 1,175 (39) -

3.3%
Total nonoperating income(loss) 791 946 432 45.7%
Income (loss) before capital contributions 2,180 (2,020) 4,200 -207.9% Capital contributions 3,515 2,725 790 29.0%
Change in net position 5,695 705 4,990 707.8%
Net position at the Beginning of the Year 157,604 156,899 705 0.4% Restatement (246) - (246)
Total net position 163,053$ 157,604$ 5,449$ 3.5% TABLE B-2
Condens ed Statement of Revenues , Expens es and Changes in Net Pos ition - Sewer Utility (amounts expressed in thousands of dollars)
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Total capital
assets increased by 22.3% or $26.4 million in fiscal year 2025, primarily due to increased in Capital Assets due to the increased activity in CIP projects for fiscal year 2025. More information relating to capital assets can be found in Note 3 of the Notes to the Basic Financial Statements.

During the year, the Sewer Utility’s long-term debt decreased 2.0% or $0.6 million which can be attributed to the annual debt service payments. Additional information on long-term debt is presented in Note 4-6 of the Notes to Basic Financial Statements.
2025 2024 $ Change % Change
Land and easements 17,603$ 17,603$ -$ 0 .0%
Construction in progress 50,214 31,343 18,871 60.2%
Pumping 3,949 3,958 (9) -0.2%
Buildings, plants and stores 187,004 181,029 5,975 3.3% Field and office equipment 15,428 13,510 1,918 14.2% Pipelines 28,967 27,019 1,948 7.2%
Total capital assets 303,165 274,462 28,703 10.5% Less: accumulated depreciation (157,883) (155,640) (2,243) 1.4% Total net assets 145,282$ 118,822$ 26,460$ 22.3% TABLE B-3
Capital Assets - Sewer Utility
(amounts expressed in thousands of dollars)
2025 2024 $ Change % Change
Bonds Payable 28,930 29,740 (810) -

2.7%
Bond Premium 137 1
44 (
7) -4.9%
Compensated absences 1,028 834
* 194 23.3%
Total long-term debt 30,095$ 30,718$ (623)$ -2.0% *Restated due to implementation of GASB 101
TABLE B-4
Long-term Debt - Sewer Utility
(amounts expressed in thousands of dollars)
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Economic Factors and Next Year’s Budgets and Rates

The Service Area (Service Area) economy served by the Department continues to grow and develop. Development in the City has increased as San Bernardino is one of the remaining affordable areas in the Inland Empire. The City has also received funds from the American Recovery Act that will help stimulate economic growth in the area.

The City has appropriated for the Department, approximately $3 million from the American Recovery Act funds, to fund the Department’s Lead Service Lateral capital project. Additionally, the Department was approved for a State Revolving Funds loan from the State Water Resource Control Board in May of 2022 and a federal grant from the Bureau of Reclamation and FEMA for designated capital projects. Development within the City continues, which has resulted in several new projects for the Department.

The Department adopted a balanced budget for Fiscal Year 2024-2025. The Fiscal Year 2024-2025 budget takes into consideration rising operational expenses, inflation, and funding our capital program to address aging infrastructure. Additional details regarding the Department’s budget can be found on the Department’s website.

Questions or requests for information regarding the Adopted Budget should be directed to the Finance Department.

The Department completed a rate study and a cost-of-service study for the water and sewer treatment. As a result of the study the water Board adopted a four-year rate increase for the water and sewer funds effective April 1, 2022.

The remaining increases are effective annually starting July 1, 2022, through July 1, 2025. With the last year of the rate increase starting July 1, 2025, the Department will initiate a request for proposal for a new rate study aimed to be completed and in effect for fiscal year 2027.

Contacting the Department’s Director of Finance

This financial report is designed to provide our customers and creditors with a general overview of the Department’s finances and to demonstrate the Department’s accountability for the money it receives. If you have questions about this report or need additional financial information, please contact the Department’s finance department at (909) 453-6009.

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Statement of Net Position
June 30, 2025
Total
ASSETS
Current assets:

Cash and investments 43,039,858$ 58,697,598$ 101,737,456$ Receivables:

Accounts, net 7,090,088 5,243,476 12,333,564 Accrued interest 324,990 482,529 807,519
Leases 211,681 - 211,681
Due from other entities 2,553,620 79,997 2,633,617 Inventories 1,602,680 - 1,602,680
Prepaid expenses 232,396 460,943 693,339
Total current assets 55,055,313 64,964,543 120,019,856 Noncurrent:

Leases 3,054,762 - 3,054,762
Investment in joint venture - RIX - 19,
026,271 19,026,271
Restricted assets:

Net OPEB asset 3,388,293 3,020,432 6,408,725
C
ash and investments:

Restricted for capital 2,531,867 8,017 2,539,884 I
nvestments:

Restricted for consent decree 26,172,408 - 26,172,408 Accrued interest - consent decree 124,205 - 124,205
Prepaid Insurance - consent decree 14,686,896 - 14,686,896 Capital assets:

Land and easements 5,837,963 17,603,413 23,441,376 Cons
truction in progress 58,714,981 50,213,606 108,928,587 Capit
al assets - being depreciated/amortized, net 183,439,031 77,465,002 260,904,033 Total noncurrent assets 297,950,406 167,336,741 465,287,147 Total assets 353,005,719 232,301,284 585,307,003

DEFERRED OUTFLOWS OF RESOURCES
Pension-related 6,594,668 6,262,943 12,857,611 OPEB-related 2,162,031 1,927,303 4,089,334 Total deferred outflows of resources 8,756,699 8,190,246 16,946,945

LIABILITIES
Current liabilities:

Accounts payable 8,109,250 5,420,242 13,529,492 Related parties payable 1,965,482 1,728,379 3,693,861 Accrued compensation 869,175 782,105 1,651,280
Claims payable 3,965,089 2,040,905 6,005,994 Current portion of compensated absences 1,884,180 822,738 2,706,918 Current portion of bonds, leases, and subscriptions 1,100,000 855,000 1,955,000 Accrued interest 799,222 472,717 1,271,939
Total current liabilities 18,692,398 12,122,086 30,814,484 Noncurrent liabilities:

Consumer deposits 2,449,436 - 2,449,436
Compensated absences 471,045 205,684 676,729
Unearned revenue - consent decree 40,983,509 - 40,983,509 Bonds, leases and subscriptions 44,191,281 28,212,134 72,403,415 Net pension liability 35,406,379 33,625,360 69,031,739 Total noncurrent liabilities 123,501,650 62,043,178 185,544,828 Total liabilities 142,194,048 74,165,264 216,359,312

DEFERRED INFLOWS OF RESOURCES
OPEB-related 3,672,169 3,273,527 6,945,696 Lease-related 3,011,630 - 3,011,630
Total deferred inflows of resources 6,683,799 3,273,527 9,957,326

NET POSITION
Net investment in capital assets 204,647,326 114,911,364 319,558,690 Restricted for postemployment benefits 3,388,293 3,020,432 6,408,725 Unrestricted 4,848,952 45,120,943 49,969,895 Total net position 212,884,571$ 163,052,739 $ 375,937,310 $ Water Sewer
See Notes to Financial Statements.
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Statement of Revenues, Expenses and Changes in Net Position For the Year Ended June 30, 2025
Interfund
Eliminations Total

OPERATING REVENUES
Sales and service charges 50,163,378$ 44,511,354 $ (684,060) $ 93,990,672$ Other operating revenues 379,135 1,084,288 - 1,463,423 Total operating revenues 50,542,513 45,595,642 (684,060) 95,454,095

OPERATING EXPENSES
Administration and customer service 11,080,475 7,905,078 (228,956) 18,756,597 Utility administration 1,714,760 668,811 (2,440) 2,381,131 Sewer collection and lift stations - 2,919,242 - 2,919,242 Plant operations 10,733,466 14,046,652 (289,530) 24,490,588 Maintenance 3,757,074 5,281,012 (144,625) 8,893,461 Environmental control - 691,159 - 691,159
Distribution 7,132,610 - - 7,132,610
Engineering and water quality 3,494,437 1,849,607 (18,509) 5,325,535 General, administration and overhead 2,228,830 6,248,285 - 8,477,115 Depreciation and amortization 8,726,491 4,596,972 - 13,323,463 Total operating expenses 48,868,143 44,206,818 (684,060) 92,390,901 Operating income (loss) 1,674,370 1,388,824 - 3,063,194

NONOPERATING REVENUES (EXPENSES)
Investment income 1,990,514 1,914,250 - 3,904,764 Rental income 353,483 - - 353,483
Noncapital grant funds 9,106,142 - - 9,106,142 Interest expense and fiscal charges (1,728,231) (1,136,264) - (2,864,495) Gain (loss) on disposal of capital assets 2,716,329 (54,801) - 2,661,528 Other 414,711 67,489 - 482,200
Total nonoperating revenues (expenses) 12,852,948 790,674 - 13,643,622 Income (loss) before capital contributions 14,527,318 2,179,498 - 16,706,816

CAPITAL CONTRIBUTIONS
Acquistion fees 1,725,331 - - 1,725,331
Capacity fees 1,753,520 1,601,407 - 3,354,927 Capital contributions 4,930,104 1,913,672 - 6,843,776 Total capital contributions 8,408,955 3,515,079 - 11,924,034 Change in net position 22,936,273 5,694,577 - 28,630,850 Net position-beginning 190,557,355 157,604,293 - 348,161,648 Restatement - change in accounting principle (609,057) (246,131) - (855,188) Net position-beginning, as restated 189,948,298 157,358,162 - 347,306,460 Net position-ending 212,884,571$ 163,052,739$ -$ 375,937,310$ Water Sewer
See Notes to Financial Statements.
16 Packet Page. 684

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Statement of Cash Flows
For the Year Ended June 30, 2025
Total

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 49,044,226$ 46,204,410 $ 95,248,636$ Payments to suppliers and service providers (25,349,127) (29,933,806) (55,282,933) Payments to employees for salaries and benefits (15,965,112) (13,248,375) (29,213,487) Net cash provided by (used for)
operating activities 7,729,987 3,022,229 10,752,216

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Consent Decree Insurance Drawdowns 1,693,655 - 1,693,655 Grants and contributions 9,917,043 - 9,917,043
Net cash provided by (used for)
noncapital financing activities 11,610,698 - 11,610,698

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Capital contributions 3,478,851 1,601,407 5,080,258 Acquisition and construction of capital assets (38,274,229) (29,206,233) (67,480,462) Principal paid on capital debt (1,061,994) (810,000) (1,871,994) Interest paid on capital debt (1,949,163) (1,159,542) (3,108,705) Proceeds from sales of assets 2,650,000 - 2,650,000 Net cash provided by (used for)
capital and related financing activities (35,156,535) (29,574,368) (64,730,903)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 1,544,555 3,154,762 4,699,317 Lease proceeds 232,194 - 232,194
Purchase of investments (1,723,756) - (1,723,756) Net cash provided by (used for)
investing activities 52,993 3,154,762 3,207,755 Net increase (decrease) in
cash and cash equivalents (15,762,857) (23,397,377) (39,160,234) Cash and cash equivalents-beginning 61,334,582 82,102,992 143,437,574 Cash and cash equivalents-ending 45,571,725 $ 58,705,615 $ 104,277,340 $ Water Sewer
See Notes to Financial Statements.
17 Packet Page. 685

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Statement of Cash Flows
For the Year Ended June 30, 2025
Total Water Sewer

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED BY (USED FOR)

OPERATING ACTIVITIES
Operating income (loss) 1,674,370$ 1,388,824 $ 3,063,194$ Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:

Depreciation/amortization expense 8,726,491 4,596,972 13,323,463 Residual nonoperating revenue and expenses 414,711 - 414,711 (Increase) decrease in accounts receivable (845,507) 608,768 (236,739) (Increase) decrease in inventories (62,802) - (62,802) (Increase) decrease in prepaid expenses 167,909 148,335 316,244 (Increase) decrease in net OPEB asset (1,957,873) (1,745,306) (3,703,179) Increase (decrease) in accounts payable 1,519,681 (3,746,539) (2,226,858) Increase (decrease) in accrued liabilities 186,261 137,572 323,833 Increase (decrease) in deposits payable (1,067,491) 109,559 (957,932) Increase (decrease) in compensated absences 810,334 410,745 1,221,079 Increase (decrease) in claims and judgments (2,021,440) 937,281 (1,084,159) Increase (decrease) in net pension liability 185,343 176,018 361,361 Total adjustments 6,055,617 1,633,405 7,689,022 Net cash provided by (used for)
operating activities 7,729,987$ 3,022,229$ 10,752,216$

SCHEDULE OF NON-CASH NONCAPITAL, CAPITAL,

AND INVESTING ACTIVITIES
Unrealized gain/(loss) on fair value of investments 392,014 $ 1,019,113 $ 1,411,127 $ Unrealized gain/(loss) on investments in joint ventures - 1,472,861 1,472,861 Contributions of capital assets 4,930,104 1,913,672 6,843,776 Amortization on bond discount/(premium) (197,638) (6,403) (204,041) Retainage payable related to capital assets 571,594 1,303,524 1,875,118 See Notes to Financial Statements.
18 Packet Page. 686

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Organization and Operations of the Reporting Entity
The San Bernardino Municipal Water Department (Department) is governed under the Charter of the City of San Bernardino (City). A Water Board appointed by the Mayor and approved by City Council, has Charter defined powers, with full authority for administration of the water utility and delegated authority for the sewer treatment utility. The Department has served the community since 1905.

B. Basis of Accounting and Measurement Focus
The Department reports its activities as enterprise funds, which are used to account for operations that are financed and operated in a manner similar to a private business enterprise, where the intent of the Department is that the costs (including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Revenues and expenses are recognized on an accrual basis.

Revenues are recognized in the accounting period in which they are earned, and expenses are recognized in the period incurred, regardless of when the related cash flow takes place.

Operating revenues, such as charges for services (water sales, sewer services and water services) result from exchange transactions associated with the principal activity of the Department. Exchange transactions are those in which each party receives and gives up equal values. Nonoperating revenues, such as property taxes and investment income, result from nonexchange transactions or ancillary activities in which the Department gives (receives) value without directly receiving (giving) equal value in exchange.

When both restricted and unrestricted resources are available for use, the Department uses restricted resources and then unrestricted resources.

The major funds of the Department are described below:
x Water Utility Fund – The Water Utility Enterprise Fund (Water Utility) is used to account for the operations of the Department’s water system and related revenues.
x Sewer Utility Fund – The Sewer Utility Enterprise Fund (Sewer Utility) is used to account for the operations of the City’s wastewater treatment system and collection system and related revenues.

Administrative and engineering services are provided by the Water Utility to the Sewer.

C. Financial Reporting
The Depart ment’s basic financial statements are presented in conformance with the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments” (GASB No. 34). This statement established revised financial reporting requirements for state and local governments throughout the United States for the purpose of enhancing the understandability and usefulness of financial reports.

GASB Statement No. 34 and its related GASB pronouncements provide for a revised view of financial information and restructure the format of financial information provided prior to its adoption. A statement of net position replaces the balance sheet and reports assets, liabilities, and the difference between them as net position, not equity. A statement of revenues, expenses and changes in net position replaces both the income statement and the statement of changes in retained earnings and contributed capital. GASB Statement No. 34 also requires that the statement of cash flows be prepared using the direct method. Under the direct method, cash flows from operating activities are presented by major categories.
19 Packet Page. 687

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. Assets, Liabilities and Net Position

1. Use of Estimates

The preparation of the basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported changes in net position during the reporting period. Actual results could differ from those estimates.

2. Cash and Investments

For the purpose of the statement of cash flows, cash and cash equivalents include highly liquid investments (including restricted assets) with a maturity of three months or less when purchased.

Investments are reported in the accompanying balance sheet at fair value, except for certain certificates of deposit and investment contracts that are reported at cost as they are not transferable and have terms that are not affected by changes in market interest rates.

Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value and any gains or losses realized upon the liquidation of investments.

3. Fair Value Measurements

Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:

Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:

x Quoted prices for similar assets or liabilities in active markets. x Quoted prices for identical or similar assets or liabilities in markets that are inactive. x Inputs other than quoted prices that are observable for the asset or liability. x Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect the Department’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the Department’s own data.

4. Accounts Receivable

Customer or trade receivables are shown net of an allowance for uncollectible accounts based on historical and management estimates. Transactions between funds that are representative of lending or borrowing arrangements outstanding at the end of the fiscal year are referred to as “interfund receivables / payables” or “advances to/from” other funds. All interfund transactions are eliminated for financial reporting. 20 Packet Page. 688

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

5. Inventory

Materials and supplies inventory consist primarily of water meters, pipes and pipefittings for construction and repair to the Department’s water transmission and distribution system and items necessary for maintenance at the sewer treatment facilities. Inventory is valued at cost using a weighted average method. Inventory items are charged to expense at the time that individual items are withdrawn from inventory or consumed.

Water inventory is stated at its purchase cost using the first in, first out method. Inventory is recorded when purchased and expensed at the time the inventory is consumed.

6. Prepaid Expense and Deposit

Certain payments to vendors reflect costs or deposits applicable to future accounting periods and are recorded as prepaid items in the basic financial statements.

7. Capital Assets and Intangible Right-to-Use Assets

Capital assets acquired or constructed are capitalized at historic cost. Department policy has set the capitalization threshold for reporting capital assets at $25,000 and a life expectancy of at least 3 years. Overhead is capitalized at the rate of 28.9% of labor and benefits, 10% of material and supplies and 2% of significant contracts.

Intangible right-to-use assets are defined by the Department as assets with an estimated useful life in excess of 3 years and with an initial, individual value of $25,000 or more. Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives of the assets as follows:

Source of supply plant 8 to 50 years
Disposal plant and interceptor lines 35 to 50 years
Other facilities (shops, leasehold & yards) 5 to 25 years Tools, office equipment & communications 4 to 20 years
Computer equipment 3 to 5 years
Automotive and fleet equipment 3 to 15 years
Intangible right-to-use assets Shorter of the useful life of the underlying asset or the term
of the arrangement

8. Compensated Absences

Department policy is to permit employees to accumulate a limited amount of earned vacation and sick leave. Various negotiation groups have different sell-back and cash out options. Additionally, cash out options upon retirement or death of the employee vary based on the negotiation group. Employees’ vacation and sick leave benefits are recognized as a liability of the Department.

9. Restricted Assets and Amounts Payable from Restricted Assets

Amounts shown as restricted assets have been restricted by bond indentures or are to be used for specified purposes based on contract provisions, such as bonded debt service. Certain liabilities which are currently payable have been classified as current liabilities payable from restricted assets since assets have been restricted for their payment.
21 Packet Page. 689

10. Pensions
For purpo
ses of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the Department.

For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

GASB 68 requires that the reported results must pertain to liability and asset information within certain defined time limits. For this report, the following periods are used:

11. Other Post-Employment Benefits (OPEB)
For pu
rposes of measuring the net OPEB asset, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB income/expense, information about the fiduciary net position of the Department’s plan (OPEB Plan), the assets of which are held by US Bank in an irrevocable trust, and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net position information within certain defined time limits. For this report, the following timeframes are used:

12. Deferred Outflows/Inflows
In addition to
assets, the Statement of Net Position will sometimes report a separate section of deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents consumption of net assets that applies to a future period and so will not be recognized as an outflow of resources (expenses/expenditures) until then. The Department has two items that qualify for reporting in this category: the deferred outflows related to pensions and OPEB.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and will not be recognized as inflow of resources (revenue) until that time. The Department has three items that qualify for reporting in this category, of which two relate to deferred inflows related to pensions and OPEB. Lastly, leases related items for the amount of the lease receivable plus any lease payments related to future periods, less any lease incentives paid to, or on behalf of, the lessee at or before the commencement of the lease term.

13. Interfund
Eliminations
The interfund eliminations column represents entries made to eliminate interfund income and expenditure transactions between the water utility fund and the sewer utility fund for the purposes of consolidated financial statements.

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
Valuation Date June 30, 2024
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
22 Packet Page. 690

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

14. Net Position

The financial statements utilize a net position presentation. Net position is categorized as follows:

x Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation/amortization and reduced by any debt outstanding against the acquisition, construction, or improvement of those assets.

x Restricted Net Position – This component of net position consists of constraints placed on net position use through external constraints imposed by creditors, grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation.

x Unrestricted Net Position – This component of net position consists of net position that does not meet the definition of restricted or net investment in capital assets.

15. Capital Contributions

Contributions in aid of construction represent cash and utility plant additions contributed to the Department by property owners or developers desiring services that require capital expenditures or capacity commitment. In accordance with Governmental Accounting Standards Board Statement No. 33, the capital contributions are recorded on the Statement of Revenues, Expenses and Changes in Net position.

16. Budgetary Policies

The Department adopts an annual budget for planning, control, and evaluation purposes. Budgetary control and evaluation are affected by comparisons of actual revenues and expenses with planned revenues and expenses for the period. Encumbrance accounting is not used to account for commitments related to outstanding contracts for construction and services.

17. Leases

Lessee: The Department is a lessee for a noncancellable lease of a building. The Department recognizes a lease liability and an intangible right -to-use lease asset (lease asset) in the statement of net position. The Department recognizes lease liabilities with an initial, individual value of $25,000 or more.

At the commencement of a lease, the Department initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs.

Subsequently, the lease asset is amortized on a straight-line basis over its useful life. Key estimates and judgments related to leases include how the Department determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.

x The Department uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the Department uses its estimated incremental borrowing rate as the discount rate for leases.

x The lease term includes the non-cancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the Department is reasonably certain to exercise.

23 Packet Page. 691

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Department monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease assets and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position.

Lessor: The Department is a lessor for various noncancellable leases of land. The Department recognizes a lease receivable and a deferred inflow of resources in the statement of net position.

At the commencement of a lease, the Department initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date.

Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the Department determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. x The Department uses its estimated incremental borrowing rate as the discount rate for leases. x The lease term includes the non-cancellable period of the lease. Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee.

The Department monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

18. Subscription-Based Information Technology Arrangements The Department is a subscriber for a noncancellable subscription of information technology services. The Department recognizes subscription liability and an intangible right-to-use subscription asset (subscription asset) in the government -wide financial statements. The Department recognizes subscription liabilities with an initial, individual value of $25,000 or more.

At the commencement of a subscription, the Department initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscription payments made at or before the subscription commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight-line basis over its useful life. Key estimates and judgments related to subscriptions include how the Department determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments. x The Department uses the interest rate charged by the vendor as the discount rate. When the interest rate charged by the vendor is not provid ed, the Department uses its estima ted incremental borrowing rate as the discount rate for subscriptions.
x The subscription term includes the noncancellable period of the subscription. Subscription payments included in the measurement of the subscription liability are composed of fixed payments that the Department is reasonably certain to exercise.
24 Packet Page. 692

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Department monitors changes in circumstances that would require a remeasurement of its subscriptions and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

Subscription assets are reported with other capital assets and subscription liabilities are reported with long-term debt on the statement of net position.

NOTE 2: CASH AND INVESTMENTS

Cash and investments are reported in the accompanying statement of net position as follows:

Cash and investments at June 30, 2025, consisted of the following:

A. Investments Authorized by the California Government Code and the Department’s Investment Policy

The table below identifies the investment types that are authorized by the Department and Consent Decree (see note 12) in accordance with the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. Due to its long-term nature, the Consent Decree has been explicitly exempted from maximum maturity requirements of the California Government Code, which limits maturity of most investments to five years. All other aspects of the Consent Decree investment policy are consistent with the City’s investment policy.

Investment Type* Department
Consent
Decree
Maximum %
of Portfolio
Maximum %
of Portfolio
US treasury 5 years 5 years None None
US agency 5 years 5 years None None
Bankers acceptances 180 days 180 days 40% 40%
Commercial paper 270 days 270 days 25% 25%
Negotiable CDs 5 years 5 years 30% 30%
Medium-term notes 5 years 5 years 30% 30%
Money market mutual funds N/A N/A 20% 20%
Mortgage pass through 5 years 5 years 20% 20%
Local Agency Investment Fund N/A N/A $40,000,000 $40,000,000 Guaranteed investment N/A N/A None None
Maximum Maturity
Water Utility Sewer Utility Total
Cash and investments 43,039,858 $ 58,697,598 $ 101,737,456 $ Restricted inv estments
Restricted for Consent Degree 26,172,408 - 26,172,408 Proceeds from bond issuances 2,531,867 8,017 2,539,884 Total cash and inv estments 71,744,133 58,705,615 130,449,748 Water Utility Sewer Utility Total
Cash and investments 7,000 $ - $ 7,000$ Deposits with financial institutions 16,546,275 3,415,773 19,962,048 Investments 26,486,583 55,281,825 81,768,408
Restricted inv estments 28,704,275 8,017 28,712,292 Total cash and investments 71,744,133 58,705,615 130,449,748 25 Packet Page. 693

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 2: CASH AND INVESTMENTS (CONTINUED)

B. Investments Authorized by Debt Agreements

Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. Investments authorized for funds held by bond trustee include, U.S. Treasury Obligations, U.S. Government Sponsored Enterprise Securities, the California Local Agency Investment Fund, Guaranteed Investment Contracts, Commercial Paper, Local Agency Bonds, Banker’s Acceptance and Money Market Mutual Funds. There are no limitations on the maximum amount that can be invested in one issuer, maximum percentage allowed or the maximum maturity of an investment, except for the maturity of Banker’s Acceptance which are limited to one year.

C. Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code requires that a financial institution secure deposit made by a state or local governmental unit by pledging securities in an undivided collateral pool held by a depository regulated under state law.

The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure the Department’s deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

For investment identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government.

D. Investment in State Investment Pool

The Department is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the Department’s investment in this pool is reported in the accompanying financial statements at amounts based upon the Department’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is not rated by a nationally recognized statistical rating organization, but as stated previously, it is regulated by the California Government Code, and is therefore exempt from rating requirements.

E. Interest Rate Risk

Interest rate risk is the possibility that fluctuations in market interest rates will adversely affect the fair value of an investment. The longer the maturity of an investment, the greater the sensitivity of its fair value will be to changes in market interest rates. One method that the Department uses to manage its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio matures or comes close to maturity evenly over time as necessary to provide requirements for cash flow and liquidity needed for operations.

26 Packet Page. 694

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 2: CASH AND INVESTMENTS (CONTINUED)
Information about the sensitivity of the fair values of the Department’s investments to market interest rate fluctuation
s is provided by the following table that shows the distribution of the Department’s investments by maturity date:

F. Credit Risk
Credit risk is the possibility that the issuer of an investment will not fulfill its obligation to the holder of the investment.

This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the Department’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type.

Less than 12 13-24 25-60 More than
Investment Type months months months 60 months Total
U.S. Agency Securities 2,949,943$ 2,031,822$ -$ -$ 4,981,765$ U.S. Treasuries 971,111 5,444,194 21,538,387 - 27,953,692
M
edium Term Corporate Notes 198,442 2,311,337 4,647,259 - 7,157,038
N
on - U.S. Government and Supranational Bonds 1,445,532 - 1,284,926 -
2,730,458
A
sset Backed Securities 13,431 159,999 400,678 - 574,108
Municipal Bonds - -
470,169 -
470,169
Money Market Funds 105,051 - -
-
105,051
Local Agency Investment Fund 37,796,127 - -
-
37,796,127
Consent Decree:

U.S. Treasuries -
270,102 12,480,299 -
12,750,401
U
.S. Agency Asset Backed Securities 133,224 921,685 3,033,161 136,312 4,224,382 U
.S. Agency Collateralized Mortgage Obligations - - -
40,290 40,290
U.S. Agency Securities 693,070 - -
-
693,070
Corporate Notes 1,090,240 687,549 2,705,430 - 4,483,219
C
ertificates of Deposit 702,479 - -
-
702,479
Bank Note - -
357,269 -
357,269
Asset Backed Securities -
1,104,625 1
,680,046 -
2,784,671
M
oney Market Funds 136,627 - - - 136,627 Investments with Fiscal Agent:

Money Market Funds 2,539,884 - -
-
2,539,884
Total Investments 48,775,161$ 12,931,313$ 48,597,624$ 176,602$ 110,480,700$ Maturities
27 Packet Page. 695

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 2: CASH AND INVESTMENTS (CONTINUED)
G. Fair Value Measurement
The
Department categorizes its fair value investments within the fair value hierarchy established by generally accepted accounting principles. The Department has the following recurring fair value measurements as of June 30, 2025:

Minimum
Investment Type Rating Rating Total
U.S. Agency Securities None AA+ 4,981,765 $
U.S. Treasuries Exempt Exempt 27,953,692
Medium Term Corporate Notes AA- AA+ 7,157,038
Non - U.S. Government and Supranational Bonds AA AAA 2,730,458 Asset Backed Securities AA- AAA 574,108
Municipal Bonds AA- AA 470,169
Money Market Funds None AAA 105,051
Local Agency Investment Fund Not Rated Not Rated 37,796,127 Consent Decree:

U.S. Treasuries No Limit Exempt 12,750,401
U.S. Agency Asset Backed Securities No Limit AA+ 4,224,382 U.S. Agency Collateralized Mortgage Obligations AA AA+ 40,290 U.S. Agency Securities No Limit AA+ 693,070
Corporate Notes A+ AAA 4,483,219
Certificates of Deposit A AA- 702,479
Bank Note A A+ 357,269
Asset Backed Securities AA AAA 2,784,671
Money Market Funds AA+ AA+ 136,627
Investments with Fiscal Agent:

Money Market Funds AA+ AA+ 2,539,884
Total Investments 110,480,700$
Investment Type Level 1 Level 2 Total
U.S. Agency Securities -$
4,981,765$ 4,981,765$
U.S. Treasuries -
27,953,692 2
7,953,692
Medium Term Corporate Notes -
7,157,038 7,157,038
Non - U.S. Government and Supranational Bonds -
2,730,458 2,730,458
Asset Backed Securities - 5
74,108 574,108
Consent Decree:

U.S. Treasuries 12,750,401 -
12,750,401
U
.S. Agency Asset Backed Securities -
4,224,382 4,224,382
U.S. Agency Collateralized Mortgage Obligations - 4
0,290 4
0,290
U
.S. Agency Securities - 6
93,070 693,070
Corporate Notes -
4,483,219 4,483,219
Certificates of Deposit - 7
02,479 702,479
Bank Note - 3
57,269 357,269
Asset Backed Securities -
2,784,671 2,784,671
Subtotal - investments subject to fair vale 12,750,401$ 56,682,441$ 69,432,842 Investments not sjubject to fair value 41,047,858
110,480,700$
28 Packet Page. 696

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 3: CAPITAL ASSETS
A. Water Utility Fund
Capital a
sset activity for the water utility for the fiscal year ended June 30, 2025:

Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Capital assets, not being depreciated or amortized:

Land and easements 5,869,462$ -$ 31,499$ -$ 5,837,963 $ Construction-in-progress 25,803,315 39,630,235 - (6,718,569) 58, 714,981
Total capital assets, not being depreciated or amortized: 31,672,777 39,630,235 31,499 (6,718,569) 64,552,944 Capital assets, being depreciated or amortized:

Water rights, wells, and pumping 105,757,409 239,772 (620,137) 114,104 105,491,148 Distribution system 185,239,166 1,471,111 (4,156,846) 5,107,101 187,660,532 Buildings, plants, and stores 6,942,613 - (25,235) - 6,917,378
Field and office equipment 11,377,306 1,863,215 (659,126) 1 ,497,364 14,078,759
Lease assets
Buildings 155,243 - (155,243) -
-
Subscription assets
Software 246,706 - (246,706) -
-
Total capital assets, being depreciated or amortized: 309,718,443 3,574,098 (5,863,293) 6,718,569 314,147,817 Less: accumulated depreciation and amortization:

Water rights, wells, and pumping (54,105,286) (3,042,150) 620,100 - (56,527,336) Distribution system (62,864,969) (4,650,897) 4,156,846 - (63,359,020) Buildings, plants, and stores (2,323,382) (171,315) 25,235 - (2,469,462) Field and office equipment (8,212,717) (799,377) 659,126 - (8,352,968) Lease assets
Buildings (143,302) (11,941) 155,243 - - Subscription assets
Software (195,895) (50,811) 246,706 - - Total accumulated depreciation and amortization: (127,845,551) (8,726,491) 5,863,256 - (130,708,786) Total capital assets, being depreciated or amortized, net 181,872,892 (5,152,393) (37) 6,718,569 183,
439,031
Total capital assets 213,545,669$ 34,477,842$ 31,462$ -$ 247,991,975 $ 29 Packet Page. 697

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 3: CAPITAL ASSETS (CONTINUED)

B. Sewer Utility Fund

Capital asset activity for the sewer utility for the fiscal year ended June 30, 2025:

NOTE 4: LONG-TERM LIABILITIES

Changes in long-term liabilities for the year ended June 30, 2025, are as follows:

Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Capital assets, not being depreciated or amortized:

Land and easements 17,603,413$ -$ -$ -$ 17,603,413$ Construction-in-progress 31,343,003 29,859,487 - (10,988,884) 50,213,606 Total capital assets, not being depreciated or amortized: 48,946,416 29,859,487 - (10,988,884) 67,817,019 Capital assets, being depreciated or amortized:

Pumping 3,958,057 - (9,073) - 3,948,984 Piplines 27,018,595 - - 1,948,847 28,967,442 Buildings, plants, and stores 181,029,083 242,090 (1,428,669) 7,161,265 187,003,769 Field and office equipment 13,510,298 1,018,328 (979,007) 1,878,772 15,428,391 Total capital assets, being depreciated or amortized: 225,516,033 1,260,418 (2,416,749) 10,988,884 235,348,586 Less: accumulated depreciation and amortization:

Pumping (2,910,765) (54,964) 9,073 - (2,956,656) Piplines (10,840,617) (545,205) - - (11,385,822) Buildings, plants, and stores (131,948,890) (3,189,212) 1,440,110 - (133,697,992) Field and office equipment (9,973,351) (807,591) 937,828 - (9,843,114) Total accumulated depreciation and amortization: (155,673,623) (4,596,972) 2,387,011 - (157,883,584) Total capital assets, being depreciated or amortized, net 69,842,410 (3,336,554) (29,738) 10,988,884 77,465,002 Total capital assets 118,788,826$ 26,522,933$ (29,738)$ -$ 145,282,021$ Balance Balance Long-term
July 1, 2024 Additions Deletions June 30, 2025 Current Portion Portion Water Utility
Bonds payable
2016 Water Revenue Bond 42,125,000$ -$ 1,050,000$ 41,075,000$ 1,100,000$ 39,975,000$ Premium 4,413,919 - 197,638 4,216,281 - 4,216,281 Total bonds payable 46,538,919 - 1,247,638 45,291,281 1,100,000 44,191,281 Leases 11,994 - 11,994 - - - Total Water Utility 46,650,913$ -$ 1,259,632$ 45,291,281$ 1,100,000$ 44,191,281$ Sewer Utility
Bonds payable
2016 Sewer Revenue Bond 29,740,000$ -$ 810,000$ 28,930,000$ 855,000$ 28,075,000$ Premium 143,537 - 6,403 137,134 - 137,134 Total Sewer Utility 29,883,537$ -$ 816,403$ 29,067,134$ 855,000$ 28,212,134$ 30 Packet Page. 698

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 4: LONG-TERM LIABILITIES (CONTINUED)
A.
2016 Water Revenue Bonds
On No
vember 3, 2016, the Water Utility issued $48,225,000 Water Revenue Bonds to finance the acquisition and construction of certain water system capital improvements and to refund outstanding obligations. The Water Revenue Bonds have interest rates ranging from 3% to 5% with maturities through August 2046. The bonds are secured by revenues pledged for the payment of debt service . In addition, a provision that in the event of default, the bond trustee may take whatever action, at law or in equity, as may appear necessary or desirable to collect the payments of the debt.

Debt service requirements on the 2016 Water Revenue Bond are as follows:

The Water Utility Fund is required to maintain net revenues adequate to cover 110% of annual debt service.

Net Revenues means the Revenues for the Fiscal Year less Operation and Maintenance Costs for such Fiscal Year. Debt service coverage for the Water Utility Fund for the year ended June 30, 2025, was as follows:

B.
2016 Sewer Revenue Bonds
On Dece
mber 8, 2016, the Sewer Utility issued $34,445,000 of Sewer Treatment Revenue Bonds to finance the acquisition and construction of additional capital improvements to the sewer utility. The Sewer Treatment Revenue Bonds have interest rates ranging from 3% to 5% with maturities through August 2046. The bonds are secured by revenues pledged for the payment of debt service. In addition, a provision that in the event of default, the bond trustee may take whatever action, at law or in equity, as may appear necessary or desirable to collect the payments of the debt.

Year Ending
June 30 Principal Interest Total
2026 1,100,000$ 1,890,638 $ 2,990,638 $
2027 1,160,000 1,834,138 2,994,138
2028 1,215,000 1,774,763 2,989,763
2029 1,280,000 1,712,388 2,992,388
2030 1,345,000 1,646,763 2,991,763
2031-2035 7,600,000 7,358,081 14,958,081 2036-2040 9,505,000 5,451,500 14,956,500 2041-2045 12,155,000 2,797,475 14,952,475 2046-2047 5,715,000 267,635 5,982,635 Totals 41,075,000$ 24,733,381$ 65,808,381$
Gross revenue 50,542,513$
Operating expenses (48,868,143)
Add back: depreciation/amortization expense 8,726,491
Non-operating income 14,581,179
Less: gain on disposal (2,716,329)
Net revenues 22,265,711$
Annual debt serv ice 2,994,388$
Actual coverage ratio 7.44
31 Packet Page. 699

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 4: LONG-TERM LIABILITIES (CONTINUED)
Debt service requirements on the 2016 Sewer Revenue Bond are as follows:

The Sewer Utility Fund is required to maintain net revenues adequate to cover 110% of annual debt service. Gross revenue is defined as Operating Revenue combined with non-operating revenue. Debt service coverage for the Sewer Utility Fund for the year ended June 30, 2025, was as follows:

NOTE 5: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS A.

Leases Receivable and Deferred Inflows of Resources
The Depa
rtment leases land to various companies for installation of cellular towers and fiberoptic communications.

The terms range from 27 months to 268 months as of the contract commencement date. The Department also leases land to Little League International to operate a sports complex. The term is 231 months as of the contract commencement date. Some leases have extension options ranging from 6 months to 20 years. as of June 30, 2025, the total combined value of the lease receivable is $3,266,443, the total combined value of the short-term lease receivable is $211,681, and the combined value of the deferred inflow of resources is $3,011,630.

Year Ending
June 30 Principal Interest Total
2026 855,000$ 1,113,150 $ 1,968,150 $
2027 895,000 1,069,400 1,964,400
2028 935,000 1,033,000 1,968,000
2029 965,000 1,003,897 1,968,897
2030 995,000 972,028 1,967,028
2031-2035 5,590,000 4,290,113 9,880,113 2036-2040 6,685,000 3,096,600 9,781,600 2041-2045 8,230,000 1,605,400 9,835,400 2046-2047 3,780,000 152,500 3,932,500 Totals 28,930,000$ 14,336,088$ 43,266,088$
Gross revenue 45,595,642$
Operating expenses (44,206,818)
Add back: depreciation/amortization expense 4,596,972
Non-operating income 1,926,938
Less: gain on disposal 54,801
Net revenues 7,967,535$
Annual debt service 1,964,775$
Actual coverage ratio 4.06
32 Packet Page. 700

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 5: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED)
The principal and interest payments that are expected to maturity are as follows:

NOTE 6: COMPENSATED ABSENCES
Compensated absences represent the amount of the accumulated vacation, which is expected to be liquidated with future resources. There is no fixed payment schedule for unpaid compensated absences; see Note 1 for additional information.

During the year ended June 30, 2025 the Department implemented GASB 101 Compensated Absences . The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The implementation of the GASB resulted in a prior period adjustment that is presented in note 13.

NOTE 7: PENSION PLAN
The Department is considered to be part of the City of San Bernardino PERS pension plan, therefore all related information included in this note refers to the City as a whole unless specifically indicating otherwise. All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, an agent multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and Local Government resolution.

CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Additional disclosures and required supplementary information regarding the City’s plan can be found in the City’s audited financial statements.

Principal Interest Total
20 26 211,681$ 49,755$ 270,413$
2027 231,942 46,412 278,353
2028 243,636 42,896 286,532
2029 253,024 39,202 292,226
2030 265,554 35,349 300,903
2031 - 2035 1,276,248 114,148 1,390,396
2036 - 2040 579,457 42,011 621,468
2041 - 2044 204,901 5,372 201,299
Totals 3,266,443$ 375,145$ 3,641,590$
Year Ending
June 30
Balance
July 1, 2024, Balance Long-term
as restated Net Change June 30, 2025 Current Portion Portion Water Utility Fund 2,153,948$ 201,277$ 2,355,225$ 1,884,180$ 471,045$ Sewer Utility Fund 863,808 164,614 1,028,422 822,738 205,684 Total 3,017,756$ 365,891$ 3,383,647$ 2,706,918$ 676,729$ 33 Packet Page. 701

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 7: PENSION PLAN (CONTINUED)
A. Bene
fits Provided
CalPERS pro
vides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. The Plans’ provisions and benefits in effect at the measurement date, are summarized as follows:

B. Employe
es Covered
As of the Jun
e 30, 2024 valuation date, the following employees were covered by the benefit terms of the Plan:

C. Con
tribution Description
Section 20
814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended.

Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Plan contributions for the year equaled $8,879,997.

Hire date
Prior to
October 3, 2011
On or after
October 4, 2011
On or after
January 1, 2013
Benefit formula 2.7% @ 55 2% @ 55 2% @ 62
Benefit v esting schedule 5 years serv ice 5 years serv ice 5 years serv ice Benefit payments monthly for life monthly for life monthly for life Retirement age 50-55 50-55 52-67
Monthly benefits, as a % of eligible
compensation 2.0% to 2.7% 2.0% to 2.7% 1.0% to 2.5%
Required employee contribution rates 11.68% 11.68% 11.68% Required employer contribution rates 7.75% 7.75% 7.75%
Miscellaneous
City-Wide Department
Inactive employees or beneficiaries currently receiving benefits 1,577 170 Inactiv e employees entitled to but not yet receiv ing benefits 1,163 35 Active employees 718 273
Total 3,458 478
34 Packet Page. 702

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 7: PENSION PLAN (CONTINUED)
D.

Actuarial Methods and Assumptions used to determine Total Pension Liability The Ju
ne 30, 2023 valuation was rolled forward to determine the June 30, 2024 total pension liability, based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal Cost Method
Actuarial Assumptions
Discount rate 6.90%
Inflation 2.30%
Salary increa
ses Varies by entry age and services
Mortality rate table Derived using CalPERS’ membership data for all funds Post-retirement benefit increase The lesser of contract COLA or 2.30% until purchasing power protection allowance floor on purchasing power applies,

2.30% thereafter
The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions . Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Long-Term Expected Rate of Return
The long
-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:

Asset Class
Assumed
Asset
Allocation
Real Return1, 2
Global Equity Cap-weighted 30.00% 4.54%
Global Equity Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
(1) A
n expected price inflation of 2.30% used for this period. (2) F
igures are based on the 2021-22 Asset Liability Management study.
35 Packet Page. 703

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 7: PENSION PLAN (CONTINUED)

F. Discount Rate

The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

G. Amortization of Deferred Outflows and Deferred Inflows of Resources

Under GASB Statement No. 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.

The amortization period differs depending on the source of the gain or loss:

Net difference between projected 5-year straight-line amortization and actual earnings on pension
plan investments
All other amounts Straight-line amortization over the expected average remaining service lifetime (EARSL) of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

The EARSL for the plan for the measurement period ending June 30, 2024, is 2.3 years, which was obtained by dividing the total service years of 8,078 (the sum of remaining service lifetimes of the active employees) by 3,458 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

H. Changes in Net Pension Liability

The following table shows the Department’s proportionate share of the net pension liability of the City’s plan over the measurement period:

The net pension liability of the plan is measured as of June 30, 2024, and the total pension liability for the plan used to calculate the net pension liability was determined by an actuarial valuation of June 30, 2023 rolled forward to June 30, 2024, using standard update procedures. The proportion of the net pension lability was based on a projection of the Department’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The Department’s proportionate share of the net pension lability for the plan as of June 30, 2025 and 2024 was 36 percent.

Net Pension
Total Pension Plan Fiduciary Liability
Liability (a) Net Position (b) (c) = (a) - (b)
Balance at 6/30/2024 (Measurement Date 6/30/2023) 242,663,139$ 173,634,400$ 69,028,739$ Balance at 6/30/2025 (Measurement Date 6/30/2024) 250,626,749 181,595,010 69,031,739 Net changes during 2023-2024 7,963,610$ 7,960,610$ 3,000$ Increase (Decrease)
36 Packet Page. 704

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 7: PENSION PLAN (CONTINUED)
I.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate The followi
ng presents the net pension liability of the Plan as of the Measurement Date, calculated using the discount rate of 6.90 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90 percent) or 1 percentage-point higher (7.90 percent) than the current rate: J.

Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the fiscal
year ended June 30, 2025, the Department recognized pension expense of $9,241,358.

As of June 30, 2025, the Department reports other amounts for the Plan as deferred outflow and deferred inflow of resources related to pensions as follows:

The $8,879,997 reported as deferred outflows of resources related to employer contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2026.

That and other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Discount Rate Current Discount Discount Rate
-1% (5.90%) Rate (6.90%) +1% (7.90%)
Plan's Net Pension Liability
-Department Allocation
(36%) 42,714,794$ 69,031,739$ 100,941,497$
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to
the measurement date 8,879,997 $ - $
Differences between expected and actual
experience 1,329,214 -
N
et difference between projected and actual
earnings on pension plan investments 2,648,400 - T
otal 12,857,611$ -$
Deferred Outflows/
Year Ended (Deferred Inflows)
June 30, of Resources
2026 832,572 $
2027 4,811,288
2028 (729,913)
2029 (936,333)
Total 3,977,614$
37 Packet Page. 705

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 7: PENSION PLAN (CONTINUED)
K.

Pension Plan Fiduciary Net Position
The plan fiduciary net po
sition disclosed in the GASB 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purp oses in the funding actuarial valuation. In addition, differences may result from early Annual Comprehensive Financial Report closing and final reconciled reserves.

NOTE 8: OTHER POST-EMPLOYMENT BENEFITS (OPEB)
A. Plan Description
The Depa
rtment provides health benefits to all qualifying retirees and their spouses in accordance with Memorandums of Understanding under various labor agreements. The other post-employment benefits plan is a single-employer plan administered by the Department.

B. Employe
es Covered
Employees are eligible for
retiree health benefits if they retire from the Department on or after age 50 with at least 10, 12, or 15 years of service, depending on bargaining unit, and are eligible for a PERS pension. As of the June 30, 2023 valuation date, the following current and former employees were covered by the benefit terms under the OPEB Plan:

C. Con
tributions
The contri
bution requirements of plan members and the Department are established and may be amended by the Board. The required contribution is based on projected pay-as-you-go financing requirements, with an additional amount to prefund benefits as may be determined annually by the Board. The Department has established an irrevocable trust to which pre-funding contributions are made. For the fiscal year ended June 30, 2025, the Department’s contributions were $1,948,530, which include the implicit subsidy of $668,652.

D. Net
OPEB Liability/(Asset)
The Departm
ent’s net OPEB liability/(asset) was measured as of June 30, 2024, and the total OPEB liability used to calculate the net OPEB liability/(asset) was determined by an actuarial valuation dated June 30, 2024, based on the following actuarial methods and assumptions:

Actuarial Cost Method: Entry Age Normal
Discount Rate 6.75%
Inflation 2.50%
Mortality Based on assumptions for Public Agency Miscellaneous members published in the 2021 CalPERS Experience Study. These tables include generational mortality improvement using 80% of scale MP-2020.

Healthcare Trend Rate 8.6% for not Medicare eligible and 6.3% for Medicare eligible for FY 2025, gradually decreasing over several decades to an ultimate rate of

3.9% in FY 2076 and later years.
38 Packet Page. 706

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 8: OTHER POST-EMPLOYMENT BENEFITS (OPEB) (CONTINUED) The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class
Target
Allocation
Expected Real Rate
of Return
Fixed income 40% 1.47%
Global Equity 60% 4.82%
Assumed long-term rate of inflation 2.75%
Expected long-term net rate of return 6.25%
Total 1
00%
E. Discou
nt Rate
The discount rate used to measure the total OPEB li
ability was 6.25 percent. The projection of cash flows used to determine the discount rate assumed that the Department’s contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Changes in the Net OPEB Liability/(Asset)
The changes
in the net OPEB liability/(asset) are as follows:

Net OPEB
Total OPEB Plan Fiduciary Liability (Asset)
Liability (a) Net Position (b) (c )
= (a) - (b)
Balance at 6/30/2024 (Measurement Date 6/30/2023) 34,351,738$ 38,917,823 $ (4,566,085) $ Changes for the year
Service cost 833,949 - 833,949
I
nterest 2,140,288 - 2,140,288
D
ifferences between expected and actual experience 1,788,888 - 1,788,888 E
mployer contributions 635,216 1,882,172 (1,246,956) Net inv estment income - 5,369,928
(5,369,928)
Benefit payments (1,882,172) (1,882,172)
-
Administrative expense - (11,119) 11,119
Net changes 3,516,169 5,358,809 (1,842,640)
Balance at 6/30/2025 (Measurement Date 6/30/2024) 37,867,907$ 44,276,632 $ (6,408,725) $ Increase (Decrease)
39 Packet Page. 707

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 8: OTHER POST-EMPLOYMENT BENEFITS (OPEB) (CONTINUED) G.

Sensitivity of the Net OPEB Liability/(Asset) to Changes in the Discount Rate The followi
ng presents the net OPEB liability/(asset) of the Department if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:

Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The followi
ng presents the net OPEB liability of the Department if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:

Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses
related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.

Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expenses.

The recognition period differs depending on the source of the gain or loss. The net difference between projected and actual earnings on OPEB plan investments are amortized over 5 years, while all other deferred outflows and inflows are amortized over the average expected remaining service life of plan participants.

OPEB Income and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal
year ended June 30, 2025, the Department recognized OPEB income of $1,656,107 As of fiscal year ended June 30, 2025, the Department reported deferred outflows of resources related to OPEB from the following sources:

Discount Rate Current Discount Discount Rate
-1% (5.75%) Rate (6.75%) +1% (7.75%)
Net OPEB Liability/(Asset) (1,536,252)$ (6,408,725)$ (10,461,526)$ 1% Decrease Current Rate 1% Increase
Net OPEB Liability/(Asset) (10,747,169)$ (6,408,725)$ (1,091,470)$ Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to
the measurement date 1,948,530$ -$
Differences between expected and actual
experience 1,593,446 3,751,103
Changes in assumptions 547,358 2,001,789
Net difference between projected and actual
earnings on OPEB plan investments -
1,192,804
T
otal 4,089,334$ 6,945,696$
40 Packet Page. 708

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 8: OTHER POST-EMPLOYMENT BENEFITS (OPEB) (CONTINUED) The $1,948,530 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability for the subsequent fiscal year. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

NOTE 9: JOINT VENTURES
A.

Colton/San Bernardino Regional Tertiary Treatment and Water Reclamation Authority On Augu
st 2, 1994, the City of San Bernardino, through the Department formed a joint powers authority with the City of Colton to construct, operate, use, and maintain tertiary wastewater treatment, disposal, and water reclamations systems, including the Regional Rapid Infiltration and Extraction Facility (RIX). This authority is governed by a separate board consisting of four members: two appointed by the City of San Bernardino through the Department’s BOWC and two appointed by the City Council of the City of Colton. Construction of RIX was administered by the Santa Ana Watershed Project Authority and was completed during 1996. Administration and operation were turned over at that time. The cities of San Bernardino and Colton each have a measurable equity interest in the net position of RIX in proportion to its contributions, which are based on an 80% / 20% split, respectively. Substantially all of the assets of RIX are in the form of capital assets. Annual revenues (in the form of contributions from the two member cities) are equal to annual expenses. The Department's equity interest in this joint venture has been reported as an investment in joint venture in the accompanying statement of net position. Below are the most currently available condensed audited financial statements of RIX as of June 30, 2025. The RIX complete financial statements may be obtained at City of San Bernardino Municipal Water Department at: 1350 South E. Street, San Bernardino, California 92418.

Deferred Outflows/
Year Ended (Deferred Inflows)
June 30, of Resources
2026 (2,222,425)$
2027 (1,035,361)
2028 (1,345,213)
2029 (961,801)
2030 345,224
Thereafter 414,684
Total (4,804,892)$
Assets 25,433,492$
Liabilities 1,548,216
Net position 23,885,276$
Revenues 5,761,193$
Expenses 7,520,875
Change in net position (1,759,682)
Net position-beginning 25,675,132
Restatement -
change in accounting
principal (30,174)
Net position-beginning,
as restated 25,644,958
Net position-ending 23,885,276$
41 Packet Page. 709

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 9: JOINT VENTURES (CONTINUED)
B.

West End Water Development, Treatment and Conservation Joint Powers Authority On Augu
st 15, 1990, the City of San Bernardino joined the West End Water Development, Treatment and Conservation Joint Powers Authority (WEJPA) as a financing vehicle for construction of water facilities. A three-member board consisting of one representative from each agency’s governing body governs the WEJPA.

This joint venture was formed to provide a financing vehicle for the three member agencies. This joint venture is currently inactive.

NOTE 10: COMMITMENTS AND CONTINGENCIES
A. Risk
Management
Risk ma
nagement activities are recorded in all utility funds. Significant losses are covered by insurance for all major events except workers’ compensation, for which the Department retains risk of loss in conjunction with the City of San Bernardino’s risk management program for workers compensation. Settlement amounts have not exceeded insurance coverage for the current year or the prior three years. Insurance coverage has been increased over the past several years.

The Department records an estimated liability for workers’ compensation. Claims liabilities are based on estimates of the ultimate cost of reported claims and an estimate for claims incurred but not reported based upon historical experience. Workers’ compensation claims liability is not discounted.

The following are the changes in approximate aggregate liabilities for the years ended June 30, 2023 and June 30, 2025. During the past three fiscal (claims) years, the Department had no settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in fiscal year 2024.

B. Litigation
In the ordina
ry course of operations, the Department is subject to claims and litigation from outside parties. After consultation with legal counsel, the Department believes the ultimate outcome of such matters, if any, will not materially affect its financial condition.

Claims Liabilities Water Utility Sewer Utility Total
Balance, June 30, 2023 7,051,451$ 1,304,226$ 8,355,677$ Claims and changes in estimates (1,064,922) (200,602) (1,265,524) Balance, June 30, 2024 5,986,529 1,103,624 7,090,153 Claims and changes in estimates (2,021,440) 937,281 (1,084,159) Balance, June 30, 2025 3,965,089$ 2,040,905$ 6,005,994$ 42 Packet Page. 710

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 10: COMMITMENTS AND CONTINGENCIES (CONTINUED)
C. Cons truction Commitments
The following schedule summarizes the major contractual commitments as of June 30, 2025:

NOTE 11: FEDERAL AND STATE GRANTS
Grant funds received by the Department are subject to audit by the grantor agencies. Such an audit could lead to requ
ests for reimbursements to the grantor agencies for expenditures disallowed under the terms of the grant. The management of the Department believes that such disallowances, if any, would not be significant. The Department produces a Single Audit that details the use of grant and Consent Decree funds (see note 12 for information on the Consent Decree).

NOTE 12: CONSENT DECREE
In 1996, the City of San Bernardino filed a complaint against the United States of America, Department of the Army to recover d
amages, response costs and other available remedies relating to contamination alleged to have originated at a World War II army installation known as Camp Ono. In March 2005, the United States District Court, Central Division entered judgment, in the form of a consent decree, in the matter of City of San Bernardino v. United States of America. The Consent Decree settles the City’s and the State’s claims arising from the groundwater contamination allegedly caused by the Army. The Consent Decree contains a number of provisions obligating the City (through the Department) to operate and maintain the Newmark Groundwater Superfund Site (Site). The Site consists of two operable units, the Newmark Operable Unit, and the Muscoy Operable Unit. The Newmark Operable Unit was declared operational and functional in 1998. The Muscoy Operable unit was declared operational and functional in 2007.

The Consent Decree provided for a payment of $69 million from the Army to the City for performance of the work outlined in th
e Consent Decree. Upon acceptance of the Consent Decree, the Department received title to all facilities constructed by the United States Environmental Protection Agency (EPA) of the Site and agreed to operate and maintain the groundwater extraction and treatment system for a period of 50 years. The $69 million payment consisted of $59 million for operations and maintenance and $10 million for the construction of certain capital facilities that would be required in the future; the funds are subject to strict limitations, contained in the Consent Decree, as to how the money may be spent.

Pursuant to the Consent Decree, $10 million, including interest earned, has been set aside to be used only for (i) fun
ding construction of treatment and directly related transmission systems that expand the Departme nt’s cap
acity to deliver potable water and (ii) funding work performed by the Department to complete construction of the Muscoy Operable Unit extraction system. These capital facility funds may not be used for costs incurred to operate, maintain, repair, or
retrofit components of the site extraction of treatment systems constructed by EPA.

CIP Project Name/Description CIP Project #
PO/Contract
Amount
Expenditures
to date
Remaining
Commitments
SBMWD WATER FACILITIES RELOCATION PHASE I PROJECT 420241790 24,644,242 20,943,500 3,700,742 TERTIARY TREATMENT SYSTEM PROJECT 420231723 14,475,363 13,992,231 483,132 EAST INFLUENT SIPHON-PHASES I AND II PROJECT 420231822 12,487,990 12,054,636 433,355 SYSTEMWIDE 2 PIPELINE REPLACEMENT 4202418462 11,600,977 1,647,330 9,953,647 VERDEMONT 2300 PZ EAST WATER FACILITIES PROJECT 420231811 10,627,336 6,883,120 3,744,216 AMI IMPLEMENTATION PROGRAM PHS 1 420241835 3,332,468 1,178,316 2,154,152 2021/2022 CONSULTANT CM AND INSPECTION SVCS 420221761 2,154,843 1,357,993 796,850 CM and Inspection Services for Verdemont 2300 PZ 420241795 1,437,311 728,744 708,567 GPA AGREEMENT WITH ITRON, INC FOR AMI PROJECT 420231792 1,317,743 642,775 674,968 INTERACTIVE O&M MANUAL PROJECT 420231783 1,250,000 1,065,086 184,914 ENG DSGN MULTIPLE CIP WATER PIPELINE REPLACEMENTS 420231777 1,074,638 877,101 197,537 Digester B Replacement 420201728 1,042,254 418,519 623,736 DESIGN OF TERTIARY TREATMENT SYSTEM 420181686 998,896 475,473 523,423 ENG SVS FOR MTN ZONE PUMP ST AND TRNSMSN MN RPLC 420241801 451,107 299,354 151,753 Verdemont East 2300 PZ Water System Design Updates 420181691 415,950 181,008 234,942 MOUNTAIN PRESSURE ZONE MAIN REPLACEMENTS PHASE II 420221645 311054 131699 179,355 Eng Design Svc for 58th & 59th St Area Pipeline 420251848 196576 34040.6 162,535 43 Packet Page. 711

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

NOTE 12: CONSENT DECREE (CONTINUED)
In March 2006, the Department entered into a Guaranteed Investment Contract with AIG Match Funding Corporation. The Department invested $16,482,039 of excess Consent Decree funds into an interest-bearing Escrow Fund investment with an interest rate of 4.95% per annum. These funds were invested to pay costs associated with the water facilities defined in the Consent Decree for the years 2035-2056. An additional $50 million was used to purchase a blended insurance policy to provide a financial vehicle that provides cost gap coverage for the first 30 years of expenses.

The terms of the Guaranteed Investment Contract only provided the Department with the position of a secured creditor with respect to an AIG bankruptcy. As concerns arose regarding AIG’s financial credibility, in October 2009, the Department negotiated and accepted a “payout” in the amount of $18,661,876 which represented the principal and accrued interest as of that date. These funds are currently invested in a diversified portfolio managed by PFM Asset Management and are presented in more detail in Note 3.

NOTE 13: PRIOR PERIOD ADJUSTEMENT
During the current year, the Department implemented GASB Statement No. 101, Compensated Absences. In addition to the value of unused vacation time owed to employees upon separation of employment, the Department now recognizes an estimated amount of sick leave earned as of year-end that will be used by employees as time off in future years as part of the liability for compensated absences. The effects of the change in accounting principle are summarized below in the “Adjustment - GASB 101 Implementation” column in the table below.

NOTE 14: SUBSEQUENT EVENTS
The Department evaluated subsequent events for recognition and disclosure through October 15, 2025, the date on which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2025, that required recognition or disclosure in these financial statements.

Net Position
balance at Net Position
June 30, 2024 Adjustment balance at
as previously GASB 101 June 30, 2024
reported Implementation as reported
Water Utility 190,557,355$ (609,057) $ 189,948,298$ Sewer Utility 157,604,293 (246,131) 157,358,162 Total 348,161,648 (855,188) 347,306,460
44 Packet Page. 712

5(48,5('6833/(0(17$5<,1)250$7,21
45 Packet Page. 713

7+,63$*(,17(17,21$//</()7%/$1.
46 Packet Page. 714

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Proportationate Share of Net Pension Liability As of June 30, for the Last Ten Fiscal Years
Proportionate Share Plan's Fiduciary
Proportion of the Proportionate of the Net Pension Net Position as a Reporting Date 1 Net Pension Share of Net Liability as a % of % of the Total as of June 30, Liability Pensi on Liability Covered Payroll Covered Payroll Pension Liability 2025 36% 69,031,739$ 24,086,933$ 287% 72% 2024 36% 72,510,649 22,022,839 329% 70% 2023 36% 70,141,831 20,821,422 337% 70% 2022 36% 40,743,630 20,103,974 203% 82% 2021 36% 64,101,577 18,770,894 341% 71% 2020 36% 60,531,689 17,169,126 353% 72% 2019 36% 56,856,346 15,357,635 370% 72% 2018 36% 58,595,075 14,876,739 394% 71% 2017 36% 53,652,216 14,177,779 378% 72% 2016 36% 44,917,863 14,087,004 319% 76% Notes to Schedule of Proportionate Share of the Net Pension Liability:
1 The proportions and proportionate share of the net pension liab ility are measured as of one year behind the reporting date. Refer to notes to basic financial statements.

Benefit Changes : None
Changes of Assumptions : None
47 Packet Page. 715

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Changes in Net OPEB Liability (Asset) and Related Ratios As of June 30, for the Last Ten Fiscal Years 1
2025 2024 2023 2022
Measurement Date 6/30/2024 6/30/2023 6/30/2022 6/30/2021

TOTAL OPEB LIABILITY
Service cost 833,949$ 809,659 $ 984,915 $ 956,228$ Interest on total pension liability 2,140,288 2,066,543 2,336,141 2,240,570 Changes of benefit terms - - - -
Changes
of assumptions 635,216 - (2,619,432) -
Di
fference between expected and actual experience 1,788,888 71,864 (3,119,394) - Benefi
t payments, including refunds of employee
contributions (1,882,172) (1,702,700) (1,738,412) (1,654,270) Net change in total OPEB liability 3,516,169 1,245,366 (4,156,182) 1,542,528 Total OPEB liability-beginning 34,351,738 33,106,372 37,262,554 35,720,026 Total OPEB liability-ending (a) 37,867,907 34,351,738 33,106,372 37,262,554

PLAN FIDUCIARY NET POSITION
Contributions-employer 1,882,172 2,331,720 1,738,412 2,737,270 Net investment income 5,369,928 2,970,846 (4,469,586) 7,886,756 Benefit payments, including refunds of employee
contributions (1,882,172) (1,702,700) (1,738,412) (1,654,270) Administrative expense (11,119) (10,161) (11,068) (10,052) Net change in fiduciary net position 5,358,809 3,589,705 (4,480,654) 8,959,704 Plan fiduciary net position-beginning 38,917,823 35,328,118 39,808,772 30,849,068 Plan fiduciary net position-ending (b) 44,276,632 38,917,823 35,328,118 39,808,772 Net OPEB liability/(asset) (a) - (b) (6,408,725) $ (4,566,085) $ (2,221,746) $ (2,546,218) $ Plan fiduciary net position as a percentage of the
total OPEB liability 117% 113% 107% 107%
Covered-employee payroll 26,706,880$ 28,172,331 $ 25,597,944 $ 21,203,035$ Plan net OPEB liability/(asset) as a percentage of
covered-employee payroll -24% -16% -9% -12%
Notes to Schedule of Changes in the Net OPEB Liability and Related Ratios:

Benefit Changes : None
Changes of Assumptions : None
1 Fiscal year 2018 was the first year of GASB Statement No. 75 implementation; therefore only eight years are shown. 48 Packet Page. 716

2021 2020 2019 2018
6/30/2020 6/30/2019 6/30/2018 6/30/2017
1,352,161$ 1,312,778 $ 1,067,080 $ 1,036,000$ 2,651,878 2,512,269 2,449,681 2,322,000 - - (640,849) -
(1,784,735) - (1,065,369) -
(6,747,960) - 523,834 -
(1,658,421) (1,602,932) (1,554,389) (1,118,000) (6,187,077) 2,222,115 779,988 2,240,000 41,907,103 39,684,988 38,905,000 36,665,000 35,720,026 41,907,103 39,684,988 38,905,000 2,602,421 2,615,932 2,673,389 2,602,000 1,564,423 2,036,956 1,848,262 2,204,000 (1,658,421) (1,602,932) (1,554,389) (1,118,000) (8,657) (8,061) (7,855) (7,000)
2,499,766 3,041,895 2,959,407 3,681,000 28,349,302 25,307,407 22,348,000 18,667,000 30,849,068 28,349,302 25,307,407 22,348,000 4,870,958$ 13,557,801 $ 14,377,581 $ 16,557,000 $ 86% 68% 64% 57%
19,691,462$ 17,981,957 $ 16,768,495 $ 19,132,000$ 25% 75% 86% 87%
49 Packet Page. 717

CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedules of Plan Contributions
As of June 30, for the Last Ten Fiscal Years 1
Covered/ Contribution as a
Fiscal Year Actuarially Actual Contribution Covered- % of Covered/ Ending Determined Employer Deficiency Employee Covered Employee June 30, Contribution Contributions (Excess) Payroll Payroll 2025 8,879,997$ 8,879,997$ - 26,742,138$ 33%
2024 7,744,386 7,744,386 - 24,086,933 32%
2023 7,304,613 7,304,613 - 22,022,839 33%
2022 6,656,656 6,656,656 - 20,821,422 32%
2021 6,492,199 6,492,199 - 20,103,974 32%
2020 5,814,288 5,814,288 - 18,770,894 31%
2019 5,251,737 5,251,737 - 17,169,126 31%
2018 4,467,847 4,467,847 - 15,357,635 29%
2017 3,886,888 3,886,888 - 14,876,739 26%
2016 3,607,950 3,607,950 - 14,177,779 25%
2025 925,317$ 1,948,530$ (1,023,213) 30,934,538 $ 6% 2024 898,426 1,783,630 (885,204) 26,706,880 7%
2023 1,559,000 2,327,743 (768,743) 28,172,331 8%
2022 1,572,000 1,738,412 (166,412) 25,597,944 7%
2021 1,652,000 2,737,270 (1,085,270) 21,203,035 13%
2020 2,728,000 2,602,421 125,579 19,691,462 13%
2019 2,760,000 2,615,932 144,068 17,981,957 15%
2018 2,592,000 2,673,000 (81,000) 16,768,495 16%
Notes to Schedule of Plan Contributions:

Valuation Date: June 30, 2023 (pension plan); June 30, 2024 (OPEB plan) Actuarial Cost Method: Entry Age Actuarial Cost Method
Asset Valuation Method: Fair Value of Assets
Inflation: 2.3% (pension plan); 2.5% (OPEB plan)
Salary Increases: Varies by entry age and service
Payroll Growth: 2.8% (pension plan)
Investment Rate of Return: 6.8% (pension plan); 6.25% (OPEB plan) Retirement Age: Based on 2021 CalPERS Experience Study, available at CalPERS website (pension) Mortality: 2021CalPERS Experience Study (pension); 2021 CalPERS Experience Study (OPEB) Mortality Improvement (OPEB): 80% of Scale MP-2020
The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2023-24 were derived from the following:

Medical Trend (OPEB):8.6% for Non-Medicare and 6.3% for Medi care decreasing to an ultimate rate of 3.9% in 2076 and later years.
1 Fiscal year 2018 was the first year of GASB Statement No. 75 im plementation; therefore only eight years for the Other Post- Employment Benefits Plan are shown.

Other Post-Employment Benefits Plan
Pension Plan
50 Packet Page. 718

67$7,67,&$/6(&7,21
51 Packet Page. 719

7+,63$*(,17(17,21$//</()7%/$1.
52 Packet Page. 720

FINANCIAL TRENDS
These schedules contain trend informaton to help the
reader understand how the Department's financial performance and well-being have changed over time.
53 Packet Page. 721

7+,63$*(,17(17,21$//</()7%/$1.
54 Packet Page. 722

City of San Bernardino Municipal Water Department
Changes in Net Position
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Total
Operating
Expense
Operating
Income
Total Non-
Operating
Income
(Expense)
Total
Contributed
Capital
Changes in
Net Position
6/30/2016 55,376,650 53,529,824 1,846,826 2,059,111 4,271,325 8,177,262 6/30/2017 * 64,488,587 61,895,872 2,592,715 8,431,207 21,995,016 33,018,938 6/30/2018 76,620,620 68,734,958 7,885,662 (1,872,712) 4,854,784 10,867,734 6/30/2019 77,094,723 66,921,125 10,173,598 (7,553,171) 10,121,344 12,741,771 6/30/2020 78,184,698 70,778,987 7,405,711 748,213 4,604,699 12,758,623 6/30/2021 80,831,467 77,247,428 3,584,039 (1,980,043) 6,605,556 8,209,552 6/30/2022 83,517,341 72,109,935 11,407,406 (2,315,279) 8,071,944 17,164,071 6/30/2023 89,113,376 87,785,516 1,327,860 1,397,918 8,613,085 11,338,863 6/30/2024 92,725,810 103,703,223 (10,977,413) 7,923,929 7,855,349 4,801,865 6/30/2025 95,454,095 92,390,901 3,063,194 13,643,622 11,924,034 28,630,850 Source: Department's annual reports
*Fiscal Years 2014-2016 contain only the Sewer Treatment and Water Utility Funds. The Sewer Collections Fund was transferred to the Department on May 1, 2017.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

THOUSANDS
Changes in Net Position- Combined Funds
Changes in Net Position
55 Packet Page. 723

City of San Bernardino Municipal Water Department
Water Fund
Changes in Net Position
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Total
Operating
Expense
Operating
Income
Total Non-
Operating
Income
(Expense)
Total
Contributed
Capital
Changes in
Net Position
6/30/2016 30,001,871 34,834,362 (4,832,491) 2,283,230 2,812,192 262,931 6/30/2017 33,358,907 37,074,670 (3,715,763) (546,280) 2,194,093 (2,067,950) 6/30/2018 38,280,016 34,446,105 3,833,911 1,198,161 3,323,031 8,355,103 6/30/2019 39,099,960 33,995,037 5,104,923 1,829,448 2,737,031 9,671,402 6/30/2020 40,267,376 38,626,151 1,641,225 1,655,628 2,002,637 5,299,490 6/30/2021 42,758,192 42,480,855 277,337 791,527 3,861,010 4,929,874 6/30/2022 43,150,124 37,626,046 5,524,078 483,961 4,718,864 10,726,903 6/30/2023 44,091,833 46,710,892 (2,619,059) 1,380,979 5,976,186 4,738,106 6/30/2024 45,985,090 53,996,580 (8,011,490) 6,977,920 5,130,185 4,096,615 6/30/2025 50,542,513 48,868,143 1,674,370 12,852,948 8,408,955 22,936,273 Source: Department's annual reports
(3,000)
(1,000)
1,000
3,000
5,000
7,000
9,000
11,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

THOUSANDS
Changes in Net Position-Water Fund
Changes in Net Position
56 Packet Page. 724

City of San Bernardino Municipal Water Department
Sewer Fund
Changes in Net Position
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Total
Operating
Expense
Operating
Income
Total Non-
Operating
Income
(Expense)
Total
Contributed
Capital
Changes in
Net Position
6/30/2016 25,410,740 18,731,423 6,679,317 (224,119) 1,459,133 7,914,331 6/30/2017 28,612,019 24,139,878 4,472,141 (3,624,658) 1,355,494 2,202,977 6/30/2018 30,733,453 22,697,491 8,035,962 (3,275,704) 1,280,280 6,040,538 6/30/2019 30,546,181 24,866,681 5,679,500 (9,967,309) 7,092,785 2,804,976 6/30/2020 30,397,092 24,648,411 5,748,681 (1,537,179) 2,257,330 6,468,832 6/30/2021 30,361,116 26,986,385 3,374,731 (2,782,481) 2,502,263 3,094,513 6/30/2022 34,171,160 26,794,390 7,376,770 (2,288,006) 2,294,541 7,383,305 6/30/2023 * 45,544,260 41,597,341 3,946,919 16,939 2,636,899 6,600,757 6/30/2024 * 47,385,433 50,351,356 (2,965,923) 946,009 2,725,164 705,250 6/30/2025 * 45,595,642 44,206,818 1,388,824 790,674 3,515,079 5,694,577 Source: Department's annual reports
* The FY 2023 budget ha s combined the Sewer Treat ment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.
(2,000)
-
2,000
4,000
6,000
8,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

THOUSANDS
Changes in Net Position-Sewer Fund
Changes in Net Position
57 Packet Page. 725

City of San Bernardino Municipal Water Department
Sewer Collection Fund
Changes in Net Position
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Total
Operating
Expense
Operating
Income
Total Non-
Operating
Income
(Expense)
Total
Contributed
Capital
Changes in
Net Position
6/30/2016 n/a n/a n/a n/a n/a n/a
6/30/2017 * 2,891,203 1,054,866 1,836,337 12,602,145 18,445,429 32,883,911 6/30/2018 7,682,946 11,667,157 (3,984,211) 204,831 251,473 (3,527,907) 6/30/2019 7,562,097 8,172,922 (610,825) 584,690 291,528 265,393 6/30/2020 7,666,309 7,650,504 15,805 629,764 344,732 990,301 6/30/2021 7,794,418 7,862,447 (68,029) 10,911 242,283 185,165 6/30/2022 6,394,623 7,888,065 (1,493,442) (511,234) 1,058,539 (946,137) 6/30/2023 ** - - - - - -
6/30/2024 - - - - - -
6/30/2025 - - - - - -
** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.

Source: Department's annual reports
* The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so p rior year data is unavailable.
(5,000)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

THOUSANDS
Changes in Net Position-Sewer Collection Fund
Changes in Net Position
58 Packet Page. 726

City of San Bernardino Municipal Water Department
Net Position by Component
Last Ten Fiscal Years
Fiscal Year
Ended
Net Investment in
Capital Assets
Restricted Net
Position
Unrestricted
Net Position
Total Net
Position
6/30/2016 235,670,073 7,814,086 7,890,390 251,374,549 -
6/30/2017 * 250,399,481 7,944,758 26,049,248 284,393,487 6/30/2018 248,653,963 8,363,037 23,912,311 280,929,311 6/30/2019 259,671,498 - 33,999,894 293,671,392 6/30/2020 255,270,720 - 51,158,985 306,429,705 6/30/2021 253,288,732 - 61,350,525 314,639,257 6/30/2022 250,324,366 - 81,696,554 332,020,920 6/30/2023 251,609,753 2,221,746 89,528,284 343,359,783 6/30/2024 275,842,317 4,566,085 67,753,246 348,161,648 6/30/2025 319,558,690 6,408,725 49,969,895 375,937,310 Source: Department's annual reports
* Fiscal Years 2014-2016 contain only Sewer Treatment and Water Utility Funds. The Sewer Collections Fund was transferred to the Department on May 1, 2017. -
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

THOUSANDS

NET POSITION BY COMPONENT
COMBINED (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 59 Packet Page. 727

City of San Bernardino Municipal Water Department
Net Position by Component - Water Fund
Last Ten Fiscal Years
Fiscal Year
Ended
Net Investment in
Capital Assets
Restricted Net
Position
Unrestricted Net
Position
Total Net
Position
6/30/2016 169,730,998 n/a (17,657,766) 152,073,232 6/30/2017 169,569,746 n/a (19,564,464) 150,005,282 6/30/2018 171,794,031 n/a (20,699,066) 151,094,965 6/30/2019 177,158,535 n/a (16,391,858) 160,766,677 6/30/2020 168,992,121 n/a (2,926,264) 166,065,857 6/30/2021 168,553,917 n/a 2,441,814 170,995,731 6/30/2022 168,172,810 n/a 13,549,824 181,722,634 6/30/2023 172,417,321 1,152,463 12,890,956 186,460,740 6/30/2024 180,168,996 2,414,089 7,974,270 190,557,355 6/30/2025 204,647,326 3,388,293 4,848,952 212,884,571 Source: Department's annual reports
(50,000)
-
50,000
100,000
150,000
200,000
250,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

THOUSANDS
NET POSITION BY COMPONENT:

WATER FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 60 Packet Page. 728

City of San Bernardino Municipal Water Department
Net Position by Component - Sewer Fund
Last Ten Fiscal Years
Fiscal Year
Ended
Net Investment in
Capital Assets
Restricted Net
Position
Unrestricted
Net Position
Total Net
Position
6/30/2016 65,939,075 7,814,086 25,548,156 99,301,317 6/30/2017 62,633,783 7,944,758 30,925,753 101,504,294 6/30/2018 59,011,109 8,363,037 33,041,181 100,415,327 6/30/2019 63,243,033 n/a 40,040,285 103,283,318 6/30/2020 66,906,874 n/a 42,845,276 109,752,150 6/30/2021 64,650,540 n/a 48,196,123 112,846,663 6/30/2022 60,853,472 n/a 59,251,320 120,104,792 6/30/2023 * 79,192,432 1,069,283 76,637,328 156,899,043 6/30/2024 95,673,321 2,151,996 59,778,976 157,604,293 6/30/2025 114,911,364 3,020,432 45,120,943 163,052,739 Source: Department's annual reports
* Th e FY 2023 budget has combined the Sewer Treatment Fun d and the Sewer Collection Fund into one fund. Now called the Sewer Fund. -
50,000
100,000
150,000
200,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

THOUSANDS
NET POSITION BY COMPONENT:

SEWER FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 61 Packet Page. 729

City of San Bernardino Municipal Water Department
Net Position by Component - Sewer Collection Fund
Last Ten Fiscal Years
Fiscal Year
Ended
Net Investment in
Capital Assets
Restricted Net
Position
Unrestricted
Net Position
Total Net
Position
6/30/2016 n/a n/a n/a n/a
6/30/2017 * 18,195,952 n/a 14,687,959 32,883,911 6/30/2018 17,848,823 n/a 11,507,181 29,356,004 6/30/2019 19,269,930 n/a 10,351,467 29,621,397 6/30/2020 19,371,725 n/a 11,239,973 30,611,698 6/30/2021 20,084,275 n/a 10,712,588 30,796,863 6/30/2022 21,298,084 n/a 8,895,410 30,193,494 6/30/2023 ** - - - -
6/30/2024 ** - - - -
6/30/2025 ** - - - -
** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.

Source: Department's annual reports
* The Sewer Collection Utility was transferred to th e Water Department on May 1, 2017 so prior year data is unavailable.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025

THOUSANDS
NET POSITION BY COMPONENT: SEWER
COLLECTION FUND (IN 1000S)
Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position 62 Packet Page. 730

City of San Bernardino Municipal Water Department
Water Fund Revenue by Type
Last Ten Fiscal Years
Fiscal Year
Ended Water Sales Service
Charges/Fees
Other
Services
Total Operating
Revenue
Interest
Income
Rental
Income Other Income Gain on asset
disposition
Noncapital
grant funds
Total Non
Operating
Income
6/30/2016 28,293,790 1,604,472 103,609 30,001,871 63,566 134,845 495,298 - 1,696,219 2,389,928 6/30/2017 31,893,209 1,347,993 117,705 33,358,907 31,504 203,186 301,833 - 2,047,946 2,584,469 6/30/2018 36,825,634 1,350,623 103,753 38,280,010 975,144 208,925 206,645 46,356 1,776,883 3,213,953 6/30/2019 37,775,285 1,237,903 86,772 39,099,960 903,399 206,360 867,763 12,669 1,891,729 3,881,920 6/30/2020 39,162,485 1,020,818 84,073 40,267,376 747,477 245,784 651,031 - 1,991,747 3,636,039 6/30/2021 41,760,745 910,628 86,819 42,758,192 29,541 286,553 306,785 83,682 2,011,099 2,717,660 6/30/2022 42,175,623 905,674 68,828 43,150,124 - 347,849 530,326 28,846 1,910,435 2,817,456 6/30/2023 42,635,542 1,427,234 29,057 44,091,833 1,126,039 267,668 140,266 4,859 1,684,006 3,222,838 6/30/2024 44,697,545 1,252,884 34,661 45,985,090 2,544,768 358,472 206,697 85,041 5,566,773 8,761,751 6/30/2025 49,145,878 1,350,144 46,491 50,542,513 1,990,514 353,483 414,711 2,716,329 9,106,142 14,581,179 Source: Department's annual reports
-
10,000
20,000
30,000
40,000
50,000
60,000Thousands
Operating Revenue by Type-Water Fund
Other Services
Service Charges/Fees
Water Sales
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000Thousands
Non-Operating Revenue by Type: Water Fund
Noncapital grant funds
Gain on asset disposition
Other Income
Rental Income
Interest Income
63 Packet Page. 731

City of San Bernardino Municipal Water Department
Sewer Fund Revenue by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Sewer Treatment
Revenue Industrial Waste
Other
Operating
Revenue
Total Operating
Revenue
Interest
Income
Rental
Income Other Income
Gain on Asset
Disposition
/Joint Venture
Total Non
Operating
Income
6/30/2016 25,030,569 380,171 - 25,410,740 658,456 41,498 359,800 - 1,059,754 6/30/2017 28,022,259 589,760 - 28,612,019 23,391 15,908 - - 39,299 6/30/2018 30,039,110 694,342 - 30,733,452 - 12,481 - 6,063 18,544 6/30/2019 29,861,192 684,989 - 30,546,181 1,361,936 - - 9,417 1,371,353 6/30/2020 29,712,734 684,358 - 30,397,092 1,322,367 - - - 1,322,367 6/30/2021 29,587,597 773,519 - 30,361,116 19,472 - - - 19,472 6/30/2022 33,347,882 823,278 - 34,171,160 - - - - - 6/30/2023 * 44,519,998 1,024,262 - 45,544,260 1,251,526 - (15,420) - 1,236,106 6/30/2024 * 46,224,150 1,161,283 - 47,385,433 1,521,068 - - 599,981 2,121,049 6/30/2025 * 44,511,354 1,084,288 - 45,595,642 1,914,250 - 67,489 - 1,981,739 Source: Department's annual reports
* The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection F
und into one fund. Now called the Sewer Fund.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000Thousands
Operating Revenue by Type-Sewer Fund
Other Operating Revenue
Industrial Waste
Sewer Treatment Revenue
(500)
-
500
1,000
1,500
2,000
2,500Thousands
Non-Operating Revenue by Type - Sewer Treatment Fund
Gain on Asset Disposition
/Joint Venture
Other Income
Rental Income
Interest Income
64 Packet Page. 732

City of San Bernardino Municipal Water Department
Sewer Collection Fund Revenue by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Sewer Collection
Revenue
Service
Charges/Fees
Other
Operating
Revenue
Total Operating
Revenue
Interest
Income Rental Income Other
Income
Gain on asset
disposition/Cont
ribution from
City
Total Non
Operating
Income
6/30/2016 n/a n/a n/a n/a n/a n/a n/a n/a n/a
6/30/2017 * 2,860,627 30,576 - 2,891,203 28,315 - - 12,580,781 12,609,096 6/30/2018 7,679,020 3,926 - 7,682,946 201,663 - 251,473 3,168 456,304 6/30/2019 7,555,960 6,137 - 7,562,097 584,685 - 5 - 584,690 6/30/2020 7,656,675 9,634 - 7,666,309 626,761 - - 3,003 629,764 6/30/2021 7,759,318 35,100 - 7,794,418 1,605 - 9,306 - 10,911 6/30/2022 6,306,843 87,780 - 6,394,623 - - - 6/30/2023 ** - - - - - - - - - 6/30/2024 ** - - - - - - - - - 6/30/2025 ** - - - - - - - - - ** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.

Source: Department's annual reports
* The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so prior year data is unavailable.
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 6/30/2025 Thousands
Operating Revenue by Type-Sewer Collection
Fund
Other Operating Revenue
Service Charges/Fees
Sewer Collection Revenue
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000Thousands
Non-Operating Revenue by Type - Sewer Collections Fund
Gain on asset
disposition/Contribution from
City
Other Income
Rental Income
65 Packet Page. 733

City of San Bernardino Municipal Water Department
Water Fund Expenses by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Administration &
Customer Service
Plant Operations
and Distribution Engineering Maintenance
Depreciation
and
Amortization
Total Operating
Expense
Interest
Expense
Loss on asset
disposition
Other Non-
operating
expense
Total Non-
Operating
Expense
6/30/2016 13,313,085 11,406,861 2,326,551 1,978,534 5,809,331 34,834,362 106,698 - - 106,698 6/30/2017 13,971,106 12,436,501 2,329,142 1,859,871 6,478,050 37,074,670 3,130,749 - - 3,130,749 6/30/2018 11,300,091 12,337,763 1,943,659 2,292,625 6,571,957 34,446,095 2,015,792 - - 2,015,792 6/30/2019 9,987,198 12,853,400 2,253,333 2,387,889 6,512,907 33,994,727 1,993,624 - - 1,993,624 6/30/2020 13,418,886 12,472,633 2,641,641 2,528,441 7,564,550 38,626,151 1,955,317 25,094 - 1,980,411 6/30/2021 14,405,557 14,045,232 3,064,623 3,126,556 7,838,887 42,480,855 1,926,133 - - 1,926,133 6/30/2022 11,921,394 14,603,130 3,001,100 2,846,997 5,253,425 37,626,046 1,877,325 - 456,170 2,333,495 6/30/2023 17,923,515 15,374,571 2,976,680 3,138,031 7,298,095 46,710,892 1,841,859 - - 1,841,859 6/30/2024 17,630,159 17,829,965 3,074,606 3,330,387 12,131,463 53,996,580 1,783,831 - - 1,783,831 6/30/2025 15,024,065 17,866,076 3,494,437 3,757,074 8,726,491 48,868,143 1,728,231 - - 1,728,231 Source: Department's annual reports
-
10,000
20,000
30,000
40,000
50,000
60,000Thousands
Operating Expenses by Type-Water Fund
Depreciation and Amortization
Maintenance
Engineering
Plant Operations and Distribution
Administration & Customer Service
-
500
1,000
1,500
2,000
2,500
3,000
3,500
6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 6/30/2025 Thousands
Non-Operating Expense by Type: Water Fund
Other Non-operating expense
Loss on asset disposition
Interest Expense
66 Packet Page. 734

City of San Bernardino Municipal Water Department
Sewer Fund Expenses by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Administration &
Customer Service Plant Operations Engineering Maintenance Depreciation
and
Amortization
Total Operating
Expense
Interest
Expense
Loss on Asset
Disposition
/Joint Venture
Other Non-
operating
expense
Total Non-
Operating
Expense
6/30/2016 4,299,808 9,800,283 464,554 2,874,352 1,292,426 18,731,423 167,795 1,116,078 - 1,283,873 6/30/2017 6,799,639 9,620,639 480,951 3,135,686 4,102,963 24,139,878 1,300,263 2,321,485 42,209 3,663,957 6/30/2018 5,690,507 9,056,518 500,009 3,281,446 4,157,550 22,686,030 1,376,009 1,247,670 733,583 3,357,262 6/30/2019 6,775,552 10,118,506 617,855 3,041,620 4,313,147 24,866,681 1,367,375 1,553,261 - 2,920,635 6/30/2020 5,702,973 10,470,501 369,422 3,508,534 4,596,980 24,648,411 1,313,151 1,546,396 - 2,859,546 6/30/2021 6,292,313 11,986,858 387,932 3,811,413 4,507,869 26,986,385 1,283,861 1,479,729 38,363 2,801,953 6/30/2022 * 3,666,547 14,648,530 385,517 3,764,618 4,329,178 26,794,390 1,249,715 - * 1,038,291 2,288,006 6/30/2023 ** 12,396,331 17,749,049 1,657,022 4,434,120 5,360,819 41,597,341 1,219,167 - * - 1,219,167 6/30/2024 ** 14,539,325 17,524,663 2,030,808 4,845,501 11,411,059 50,351,356 1,175,040 - * - 1,175,040 6/30/2025 ** 14,822,174 17,657,053 1,849,607 5,281,012 4,596,972 44,206,818 1,136,264 54,801 - 1,191,065 Source: Department's annual reports
* Joint Venture expense relating to RIX operations are now classified as Operations beginning in 2022. ** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.
-
10,000
20,000
30,000
40,000
50,000
60,000Thousands
Operating Expenses by Type-Sewer Fund
Depreciation and Amortization
Maintenance
Engineering
Plant Operations
Administration & Customer Service
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000Thousands
Non-Operating Expense by Type: Sewer Fund
Other Non-operating expense
Loss on Asset Disposition /Joint Venture
Interest Expense
67 Packet Page. 735

City of San Bernardino Municipal Water Department
Sewer Collection Fund Expenses by Type
Last Ten Fiscal Years
Fiscal Year
Ended
Administration &
Customer Service Plant Operations Engineering Maintenance Depreciation and Amortization
Total Operating
Expense
Interest
Expense
Loss on Asset
Disposition
Other Non-
operating
expense
Total Non-
Operating
Expense
6/30/2016 * - - - - - - - - - - 6/30/2017 * 314,265 492,675 - - 247,926 1,054,866 - - 6,951 6,951 6/30/2018 2,211,188 354,423 8,071,891 - 1,029,648 11,667,150 - - - - 6/30/2019 1,608,074 439,660 5,051,773 - 1,073,415 8,172,922 - - - - 6/30/2020 1,898,461 483,316 4,124,631 - 1,144,096 7,650,504 - - - - 6/30/2021 3,497,969 533,619 2,549,257 - 1,281,602 7,862,447 - - - - 6/30/2022 2,535,314 590,600 3,333,804 - 1,428,347 7,888,065 - - 511,234 511,234 6/30/2023 ** - - - - - - - - - - 6/30/2024 ** - - - - - - - - - - 6/30/2025 ** - - - - - - - - - - ** The FY 2023 budget has combined the Sewer Treatment Fund and the Sewer Collection Fund into one fund. Now called the Sewer Fund.

Source: Department's annual reports
* The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so prior year data is unavailable.
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000Thousands
Operating Expenses by Type-Sewer Collection Fund
Depreciation and Amortization
Maintenance
Engineering
Plant Operations
Administration & Customer Service
-
100
200
300
400
500
600Thousands
Non-Operating Expense by Type: Sewer Collection Fund
Other Non-operating expense
Loss on Asset Disposition
Interest Expense
68 Packet Page. 736

DEBT CAPACITY INFORMATION
These schedules contain information to help the reader assess the affordability of the Department's current level of
outstanding debt and ability to issue debt in the future. 69 Packet Page. 737

7+,63$*(,17(17,21$//</()7%/$1.
70 Packet Page. 738

City of San Bernardino Municipal Water Department
Water Fund Debt Service Coverage
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Net Operating
Expenses
(Excluding)
Depreciation
Net Operating
Income (Loss)
Net Non-
Operating
Income/
(Expense)
Amount
Available for
Debt Service
Principal Interest Total Debt
Service
Coverage
Ratio
6/30/2016 30,001,871 29,025,031 976,840 2,283,230 3, 260,070 1,813,594 523,274 2,336,868 1.40 6/30/2017 33,358,907 30,596,620 2,762,287 2,584,468 5,346,755 246,887 218,819 465,706 11.48 6/30/2018 38,280,016 27,874,148 10,405,868 3,167,597 13,573,465 770,000 2,223,838 2,993,838 4.53 6/30/2019 39,099,960 27,482,130 11,617,830 3,810,403 15,428,233 795,000 2,196,388 2,991,388 5.16 6/30/2020 40,267,376 31,061,601 9,205,775 3,636,039 12,841,814 830,000 2,163,888 2,993,888 4.29 6/30/2021 42,758,192 34,641,968 8,116,224 2,633,978 10,750,202 860,000 2,130,088 2,990,088 3.60 6/30/2022 43,150,124 32,372,621 10,777,503 2,332,440 13,109,943 900,000 2,090,388 2,990,388 4.38 6/30/2023 44,091,833 39,412,797 4,679,036 3,217,979 7, 897,015 950,000 2,044,138 2,994,138 2.64 6/30/2024 45,985,090 41,865,117 4,119,973 8,676,710 12,796,683 995,000 1,995,513 2,990,513 4.28 6/30/2025 50,542,513 40,141,652 10,400,861 11,864,850 22,265, 711 1,050,000 1,944,388 2,994,388 7.44 Source: Department's annual reports
71 Packet Page. 739

City of San Bernardino Municipal Water Department
Sewer Fund Debt Service Coverage
Last Ten Fiscal Years
Fiscal Year
Ended
Total
Operating
Revenue
Net Operating
Expenses
(Excluding)
Depreciation
Net Operating
Income (Loss)
Net Non-
Operating
Income/
(Expense)
Amount
Available for
Debt Service
Principal Interest Total Debt
Service
Coverage
Ratio
6/30/2016 25,410,740 17,438,997 7,971,743 (224,119) 7,747,624 300,000 - 300,000 25.83 6/30/2017 28,612,019 20,036,916 8,575,103 39,299 8,61 4,402 300,000 132, 659 432,659 19.91 6/30/2018 30,733,453 18,539 ,941 12,193,512 (721,103) 11,472,409 890,000 1,382,782 2,272,782 5.05 6/30/2019 30,546,181 20,841,699 9,704,482 1,361,93 5 11,066,417 910,000 1,356,125 2,266,125 4.88 6/30/2020 30,397,092 20,051 ,431 10,345,661 1,32 2,367 11,668,028 935,000 1,331,225 2,266,225 5.15 6/30/2021 30,361,116 22,478,516 7,882,600 19,472 7,902,072 665,000 1,301,9 00 1,966,900 4.02 6/30/2022 34,171,160 22,4 65,212 11,705,948 (1,021,981) 10, 683,967 700,000 1,267,775 1,967,775 5.43 6/30/2023 45,544,260 36,236,522 9,307,738 1,251,52 6 10,559,264 735,000 1,231,900 1,966,900 5.37 6/30/2024 47,385,433 38,940,297 8,445,136 1,521,068 9,966,204 770,000 1,194,275 1,964,275 5.07 6/30/2025 45,595,642 39,609,846 5,985,796 1,981,739 7,967,535 810,000 1,154,775 1,964,775 4.06 Source: Department's annual reports
72 Packet Page. 740

City of San Bernardino Municipal Water Department
Ratios of Outstanding Debt by Type (In Thousands of Dollars) Last Ten Fiscal Years
Fiscal Year
Ended
Revenue
Bonds
Notes/Loans
Payable
Certificates of
Participation Leases Total
Percentage of
Personal
Income
Debt Per
Capita

6/30/2016 - 20,569 - - 20,569 0. 3% 0.10 6/30/2017 88,656 900 - - 89,556 1.0% 0.39 6/30/2018 87,092 600 - - 87,692 1.0% 0.37 6/30/2019 85,483 300 - - 85,783 1.0% 0.39 6/30/2020 83,814 - - - 83,814 1. 0% 0.39 6/30/2021 82,085 - - - 82,085 1. 1% 0.38 6/30/2022 80,221 - - - 80,221 1. 7% 0.36 6/30/2023 78,391 - - 183 78,574 1.7% 0.35 6/30/2024 76,422 - - 12 76,434 1.7% 0.34 6/30/2025 74,358 - - - 74,358 1. 6% 0.33 Source: Department's annual reports
73 Packet Page. 741

7+,63$*(,17(17,21$//</()7%/$1.
74 Packet Page. 742

DEMOGRAPHIC AND ECONOMIC INFORMATION
These schedules offer demographic and economic indicators to help the reader understand the environment within which the Department's financial activities take place.
75 Packet Page. 743

7+,63$*(,17(17,21$//</()7%/$1.
76 Packet Page. 744

City of San Bernardino Municipal Water Department
Demographic Statistics
Last Ten Fiscal Years
Fiscal Year
Ended
Estimated
Population (1)
Personal
Income (In
Thousands) (2)
Per Capita
Personal
Income (2)
Unemployment
Rate (3)
6/30/2016 215,491 7,931,577 36,807 6.30% 6/30/2017 216,972 8,459,304 38,988 5.50% 6/30/2018 221,130 8,523,677 38,546 0 6/30/2019 219,233 8,509,748 38,816 4.10% 6/30/2020 217,671 8,159,289 37,485 11.30% 6/30/2021 216,291 7,723,319 35,708 8.10% 6/30/2022 220,840 4,596,122 20,812 4.80% 6/30/2023 223,230 4,608,807 20,646 6.30% 6/30/2024 226,541 5,179,860 22,865 6.30% 6/30/2025 222,727 5,727,648 25,716 6.60% (1) California Department of Finance
(2) City of San Bernardino Economic Development Dept
(3) State of California, Economic Development Department; City of San Bernardino Economic Development Dept 208,000
210,000
212,000
214,000
216,000
218,000
220,000
222,000
224,000
226,000
228,000
Population
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
Personal Income
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Per Capita Personal Income

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%
Unemployment
77 Packet Page. 745

City of San Bernardino Municipal Water Department
Major Employers
Current Year and Nine Years Ago
Fiscal Year 2025 Fiscal Year 2016
Employer Ranking Number of Employees Ranking Number of Employees* Patton State Hospital 1 2,283 1 1,000+ California State Unversity- San Bernardino 2 2,100 2 1,000+ Amazon Fullfilment Center 3 2,000 3 1,000+ Burlington Distribution Center 4 2,000 4 1,000+ San Bernardino County Superintendent of Schools 5 2,000 5 1,000+ Dignity Health - St. Bernardine Medical Center 6 1,548 6 1,000+ Stater Bros Markets 7 1,539 7 1,000+ SB County Transportation Department 8 1,450 8 1,000+ Dignity Health - Community Hospital of SB 9 1,136 9 1,000+ Metropolitan Auto Warehouse 10 1,001 10 1,000+
Source: City of San Bernardino Economic Development Department , Data Axle and City's Annual Financial Report. 78 Packet Page. 746

City of San Bernardino Municipal Water Department
Authorized Positions History
Last Ten Fiscal Years
Year End Water Fund
Sewer Treatment
Fund
Sewer Collection
Fund Total
2016 188.5 83.5 0.0 272.0
2017 216.8 70.3 13.0 300.0
2018 215.0 72.0 12.0 299.0
2019 215.0 72.0 12.0 299.0
2020 215.0 72.0 12.0 299.0
2021 199.0 85.0 12.0 296.0
2022 199.0 84.5 12.0 295.5
2023 202.0 85.0 12.0 299.0
2024 205.0 85.0 12.0 302.0
2025 206.0 82.0 16.0 304.0
Source: Department's records
Note: The Sewer Collection Utility was transferred to the Department on May 1, 2017. Prior year data is unavailable.

0.0 50.0
100.0
150.0
200.0
250.0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Authorized Position History
Water Fund Sewer Treatment Fund Sewer Collection Fund
79 Packet Page. 747

7+,63$*(,17(17,21$//</()7%/$1.
80 Packet Page. 748

REVENUE CAPACITY
These schedules contain information to help the reader assess the Department's significant revenue sources.

81 Packet Page. 749

7+,63$*(,17(17,21$//</()7%/$1.
82 Packet Page. 750

City of San Bernardino Municipal Water Department
Water Rates: Minimum Monthly Charge
Last Ten Fiscal Years
Effective
Date 1/2" 5/8" 3/4" 1" 1-1/2" 2" 3" 4" 6" 8" 10" 12"
10/1/2016 16.09 16.09 20.15 28.19 48.40 72.60 129.12 197.36 411.68 653.88 936.44 * 7/1/2017 19.58 19.58 24.51 34.30 58.88 88.32 157.06 240.07 500.78 795.40 1,139.12 * 7/1/2018 23.39 23.39 29.28 40.98 70.35 105. 52 187.66 286.63 598.33 950.34 1,361.01 * 7/1/2019 23.39 23.39 29.28 40.98 70.35 105. 52 187.66 286.63 598.33 950.34 1,361.01 * 7/1/2020 23.39 23.39 29.28 40.98 70.35 105. 52 187.66 286.63 598.33 950.34 1,361.01 * 7/1/2021 23.39 23.39 29.28 40.98 70.35 105. 52 187.66 286.63 598.33 950.34 1,361.01 * 4/1/2022 20.49 20.49 28.17 43.51 81.87 127.91 388.77 772.38 1,232. 72 2,153.40 4,224.92 4,224.92 7/1/2022 21.72 21.72 29.87 46.13 86.79 135.59 412.10 818.73 1,306. 69 2,282.61 4,478.42 4,478.42 7/1/2023 22.59 22.59 31.07 47.98 90.27 141.02 428.59 851.48 1,358. 96 2,373.92 4,657.56 4,657.56 7/1/2024 23.27 23.27 32.01 49.42 92.98 145.26 441.45 877.03 1,399. 73 2,445.14 4,797.29 4,797.29 7/1/2025 23.97 23.97 32.98 50.91 95.77 149.62 454.70 903.35 1,441. 73 2,518.50 4,941.21 4,941.21 Source: Department's Records
($/month)
* Information not reported.
83 Packet Page. 751

Municipal Water Department
Water Rates: Commodity Charges
Last Ten Fiscal Years
7/1/2016 7/1/2017 7/1/2018 7/1/2019 7/1/2020 7/1/2021 4/1/2022 7/1/2022 7/1/2023 7/1/2024 7/1/2025 Customer Class
Single Family Residential
Tier 1 (0-13 HCF) 1.37 1.40 1.43 1.43 1.43 1.43 1.35 1.44 1.50 1.55 1.60 Tier 2 (14-23 HCF) 1.37 1.40 1.43 1.43 1.43 1.43 1.83 1.94 2.02 2.09 2.16 Tier 3 (24+ HCF) 1.86 1.89 1.92 1.92 1.92 1.92 2.33 2.47 2.57 2.65 2.73 Multi-Faimly Residential 1.37 1.40 1.43 1.43 1.43 1.43 1.51 1.61 1.68 1.74 1.80 Commercial 1.37 1.40 1.43 1.43 1.43 1.43 1.65 1.75 1.82 1.88 1.94 Irrigation 1.37 1.40 1.43 1.43 1.43 1.43 2.32 2.46 2.56 2.64 2.72 Institutional 1.37 1.40 1.43 1.43 1.43 1.43 2.06 2.19 2.28 2.35 2.43 Other 1.37 1.40 1.43 1.43 1.43 1.43 3.82 4.05 4.22 4.35 4.49 * Prior years (07/01/14 - 07/01/21) commodity charges reflect rates including conservation, replenishment and elevation zone charges which were consolidated with the rates adopted on 04/01/22. 84 Packet Page. 752

City of San Bernardino Municipal Water Department
Water Rates: Elevation Charges $ per HCF
Last Ten Fiscal Years
Effective Date Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 10/01/16 0.11 0.19 0.17 0.14 0.23 0.23
07/01/17 0.11 0.19 0.17 0.14 0.23 0.23
07/01/18 0.11 0.19 0.17 0.14 0.23 0.23
07/01/19 0.11 0.19 0.17 0.14 0.23 0.23
07/01/20 0.11 0.19 0.17 0.14 0.23 0.23
07/01/21 0.11 0.19 0.17 0.14 0.23 0.23
4/1/2022* N/A N/A N/A N/A N/A N/A
7/1/2022* N/A N/A N/A N/A N/A N/A
7/1/2023* N/A N/A N/A N/A N/A N/A
7/1/2024* N/A N/A N/A N/A N/A N/A
7/1/2025* N/A N/A N/A N/A N/A N/A
Source: Department's records
* Elevation charge was eliminated with the rate adoption on 04/01/22. 85 Packet Page. 753

City of San Bernardino Municipal Water Department
Water Connections and Revenues by User Type
Last Ten Fiscal Years
*Rev from Water Spreadsheet used and difference plugged in to add up to Water Totals User Type Connections Revenue Connections Revenue Connections Revenue Connections Revenue Single family 36,170 $23,557,581 36,140 $22,210,799 36,063 $21,652,852 35,744 $23,761,145 Multiple family 2,953 6,352,591 2,932 6,148,207 2,916 5,835,444 2,905 5,562,012 Commercial 3,128 9,044,456 3,158 8,976,290 3,164 8,454,199 3,151 6,976,893 Landscape 1,192 7,922,591 1,189 6,957,544 1,196 6,742,399 1,184 5,515,046 Other 2,859 3,665,294 2,671 1,692,251 2,574 860,736 2,296 811,219 Total all users 46,302 50,542,513 46,090 45,985,090 45,913 43,545,629$ 45,280 42,626,315$ Connections Revenue Connections Revenue Connections Revenue Connections Revenue Single family 35,995 $23,875,761 36,042 $22,909,054 36,006 $21,579,693 35,824 $20,476,866 Multiple family 2,908 5,569,436 2,907 5,222,345 2,903 5,157,997 2,904 4,944,978 Commercial 3,154 6,579,373 3,117 6,482,560 3,104 6,320,900 3,111 6,117,493 Landscape 1,192 5,277,114 1,181 4,542,108 1,150 4,256,390 1,159 4,694,704 Other 2,241 811,833 2,174 781,428 2,056 808,227 2,018 748,141 Total all users 45,490 42,113,517$ 45,421 39,937,495$ 45,220 38,123,207$ 45,016 36,982,182$ Connections Revenue Connections Revenue
Single family 35,825 $17,346,414 35,729 $15,688,749 Multiple family 2,899 4,449,204 2,873 4,225,832 Commercial 3,131 5,750,672 3,092 4,913,942 Landscape 1,121 3,789,527 1,129 3,203,907 Other 1,956 557,392 1,905 677,180 Total all users 44,932 31,893,209$ 44,728 28,709,610$ Source: Department's records
2016
2025 2024 2023
2017
2022
2021 2020 2019 2018
47%
12%
18%
16%
7%
Water Service Revenue by User Type FY 2024
Single family
Multiple family
Commercial
Landscape
Other
78%
6%
%
%
%
%
7%
%%%%%%%%
%%%%%%%%
%%%%%%%%%
%%
3%
%
%%%%%%%%
%
%%%%%%%6%
Water Service Connections per Customer Type
FY 2024
Single family
Multiple family
Commercial
Landscape
Other
86 Packet Page. 754

City of San Bernardino Municipal Water Department
Top Ten Water Customers
Fiscal Year 2022
City of SB 1,839,579$
San Bernardino City Unified School District 1,728,622
Cal State San Bernardino 696,121
County of San Bernardino 364,937
Housing Authority 280,338
Cott Beverages 274,607
Rialto School District 262,661
W Dean Weidner 221,102
SB Community Hospital Site #373 193,671
Crest Haven Apartments 193,445
Top Ten Customers Total 6,055,082$
Total Water Revenue 50,542,513$

Top Ten Customers Percent of Total 11.98%
2025 Top 10 Customers
87 Packet Page. 755

City of San Bernardino Municipal Water Department
Sewer Treatment Rate History
Last Ten Fiscal Years
7/1/2016 7/1/2017 7/1/2018 7/1/ 2019 7/1/2020 7/1/2021 4/1/2022 * 7/1/2022* 7/1/2023* 7/1/2024* 7/1/2025* Residential (monthly per EDU)
Residential 22.38 23.10 23.10 23.10 23.10 23.10 37.83 41.99 45.35 48.98 52.90 Multi-Family (2 units) 44.76 46.20 ` 66.05 66.05 66.05 75.66 83.98 90.70 97.96 105.80 Multi-family (3 units) 67.14 69.29 99.04 99.04 99.04 99.04 113.49 125.98 136.05 146.94 158.69 All Non-Residential (including multi-family (4 or
more units) and mobile home parks) 3.42 3.52 6.62 6.62 6.62 6.62 16.56 18.38 19.85 21.44 23.16 Industrial 1.78 1.83 4.93 4.93 4.93 4.93 16.56 18.38 19.85 21.44 23.16 * The Sewer Collection rate was combined with the Sewer Treatment rate to become the sewer rate that was effective 04/01/22.

Source: Department's records
88 Packet Page. 756

Low Strength Non-Residiential
Laundromats 1.77 1.83 1.83 1.83 1.83 1.83 2.15 2.39 2.58 2.78 3.01 Schools, churches, nursery schools 1.29 1.33 1.33 1.33 1.33 1.33 2.15 2.39 2.58 2.78 3.01 Medium Strength Non-Residiential
Multi-family, mobile home parks 1.48 1.53 1.53 1.53 1.53 1.53 2.71 3.01 3.25 3.51 3.79 Retail, commercial, light industrial 2.47 2.55 2.55 2.55 2.55 2.55 2.71 3.01 3.25 3.51 3.79 Auto repair, car wash 1.53 1.58 1.58 1.58 1.58 1.58 2.71 3.01 3.25 3.51 3.79 Offices, motels (w/o restaurants) 1.77 1.83 1.83 1.83 1.83 1.83 2.71 3.01 3.25 3.51 3.79 Hospitals, convalescent homes 1.58 1.63 1.63 1.63 1.63 1.63 2.71 3.01 3.25 3.51 3.79 High Strength Non-Residiential
Restaurants, hotels 3.18 3.28 3.28 3.28 3.28 3.28 6.42 7.13 7.7 8.31 8.98 Domecstic Liquid Waste (per gallon) 0.0470 0.0490 0.0490 0.0490 0.0490 0.0490 0.0714 0.0793 0.0856 0.0925 0.0998 Industrial:

Discharge Flow (per million gallons) 1,060.00 1,094. 00 1,094.00 1,094.00 1,094.00 1,094.00 1,420.83 1,577. 12 1703.29 1,839.55 1,986.72 Biological Oxygen demand (per 1,000 lbs) 424.00 438.00 438.00 438.00 438.00 438.00 648.28 719.59 777.16 839.33 906.48 Suspended Solids (per 1,000 lbs) 753.00 778.00 778.00 778.00 778.00 778.00 648.50 719.84 777.42 839.62 906.78 * The Sewer Collection rate was combined with the Sewer Treatment rate to become the sewer rate that was effective 04/01/22.

Source: Department's records
89 Packet Page. 757

City of San Bernardino Municipal Water Department
Sewer Treatment Connections and Revenue by User Type
Last Ten Fiscal Years
User Type Connections Revenue Connections Re venue Connections Revenue Connections Revenue San Bernardino Residential 35,383 $33,303,765 33,398 $29,810,174 33,050 $30,834,983 33,230 $14,359,415 San Bernardino Nonresidential 2,877 8,482,768 5,598 7,008,332 5,576 2,113,002 5,566 7,279,215 East Valley Residential - - - 3,660,647 18,735 5,003,034 18,636 5,011,215 East Valley Nonresidential - - - 2,338,956 1,089 3,329,085 1,106 3,805,558 Loma Linda Residential 2,690 1,655,293 2,690 1,513,264 3,185 1,239,524 3,039 1,219,034 Loma Linda Nonresidential 171 2,153,816 171 1,892,777 170 2,000,370 169 1,673,445 Total all users 41,121 $45,595,642 41,857 $46,224,150 61,805 $44,519,998 61,746 $33,347,882 Connections Revenue Connections Revenue C onnections Revenue Connections Revenue San Bernardino Residential 32,365 $10,165,765 31,828 $10,191,482 33,051 $10,146,660 32,945 $10,135,132 San Bernardino Nonresidential 5,436 8,292,874 5,340 8,463,554 5,531 8,645,032 5,526 8,834,641 East Valley Residential 18,710 4,797,833 18,477 4,778,152 18,477 4,778,152 18,477 4,765,218 East Valley Nonresidential 1,087 3,456,827 1,050 3,483,724 1,050 3,550,973 1,050 3,579,348 Loma Linda Residential 3,010 1,232,048 2,856 1,163,501 2,799 1,171,706 4,824 1,167,823 Loma Linda Nonresidential 169 1,642,250 168 1,622,872 345 1,557,119 703 1,548,574 Total all users 60,777 $29,587,596 59,719 $29,703,284 61,253 $29,849,643 63,525 $30,030,737 Connections Revenue Connections Revenue
San Bernardino Residential 32,960 $9,756,592 32,889 $8,746,617 San Bernardino Nonresidential 5,471 8,010,240 5,377 7,125,053 East Valley Residential 18,477 4,622,944 18,477 4,008,039 East Valley Nonresidential 1,050 3,083,475 1,060 2,825,971 Loma Linda Residential 4,723 1,107,201 5,948 1,008,071
Loma Linda Nonresidential 593 1,441,807 591 1,308,474
Total all users 63,274 $28,022,259 64,342 $25,022,225
Source: Department's records
2022
2021 2020 2019 2018
2017 2016
2025 2024 2023
35,383, 86%
2,877, 7%
-, 0 %
-, 0 %
8 8
8 888877777788
777
8 88
2,690, 7%
7 7
,,,,
, ,
7%%
%%
%%
,
,6
666666669
90 0
6 6666666699
90 0
,
,
7 7%
%
7 7%
%171, 0%
Sewer Utility Connections per
Customer Type FY 2025
San Bernardino
Residential
San Bernardino
Nonresidential
East Valley Residential
East Valley
Nonresidential
73%
18%
0%
%
%
0%
%
00000000
00000000
0000000
00 00
4%
4%%%
%%%%%%%%%
4%%%
%%%%%%%%%5%
Sewer Utility Revenue by User Type
FY 2025
San Bernardino Residential
San Bernardino
Nonresidential
East Valley Residential
East Valley Nonresidential
Loma Linda Residential
90 Packet Page. 758

City of San Bernardino Municipal Water Department
Top Ten Sewer Treatment Customers
Fiscal Year 2022
County of San Bernardino 494,620$
San Bernardino City Unified School District 464,791
City of SB 358,313
Housing Authority 263,247
PAMA Management Co. 220,700
St. Bernardine's Hospital 201,491
SB Comm Hospital Site #373 195,820
Broadstone Investors LLC 193,081
LIDO Condominiums 169,237
W Dean Weidner 165,966
Top Ten Customers Total 2,727,264$
Total Sewer Revenue 45,595,642$
Top Ten Customers Percent of Total 5.98%
Source: Department's records
2025 Top 10 Customers
91 Packet Page. 759

City of San Bernardino Municipal Water Department
Sewer Collection Rate History
Last Ten Fiscal Years
7/1/2016 7/1/2017 7/1/2018 7/1/2019 7/1/2020 7/1/2021 4/1/2022*7/1/2022* 7/1/2023* 7/1/2024* Residential (monthly per EDU) 9.45 9.90 9.90 9.90 9.90 9.90 N/A N/A N/A N/A Multi-Family
Multi-family, 2 units 18.90 19.85 19.85 19.85 19.85 19.85 N/A N/A N/A N/A Multi-family, 3 units 28.35 29.75 29.75 29.75 29.75 29.75 N/A N/A N/A N/A Multi-family, 4 or more units, Non-res.

Monthly Charge 2.95 3.10 3.10 3.10 3.10 3.10 N/A N/A N/A N/A Usage Charge (per HCF) 0.83 0.87 0.87 0.87 0.87 0.87 N/A N/A N/A N/A * The Sewer Collection rate was combined with the Sewer Treatment rate to become the sewer rate that was effective 04/01/22.

Source: Department's records
The Sewer Collection Utility was transferred to the Water Department on May 1, 2017 so details for prior years is unavailable. 92 Packet Page. 760

City of San Bernardino Municipal Water Department
Sewer Collection
Connections and Revenue by User Type
Last Ten Fiscal Years
User Type Connections Consumption Revenue Connections Consumption Revenue Connections Consumption Revenue Connections Consumption Revenue Residential-Single Family - - - - - - 4 2 - - 2 7,748 - 3,061,513 Residential-Multi Family - - - - - - - - - 1 ,345 - 356,051 Residential- Multi Family 4 Units + - - - - - - - - - 1 8 78,494 68,975 Comm/Land/Lt. Industrial/Non-Res. - - - - - - 3 7 - - 2 ,670 2,594,640 2,310,986 Education-Public - - - - - - 2 - - 4 3 127,279 110,588 Education-Private - - - - - - - - - 1 24 5 8,932 55,859 Hospital/Convalescent Homes - - - - - - - - - 2 9 164,836 144,462 Office/Motel-No Restaurant - - - - - - 1 0 - - 8 5 76,768 57,800 Restaurant/ Hotel w/ Restaurant - - - - - - 1 - - 5 1 43,587 39,632 Auto Repair/Car Wash - - - - - - - - - 1 97 7 8,293 75,390 Laundromat - - - - - - - - - 4 29,232 25,587 CS Irrigation - - - - - - - - - - - -
To
tals IVDA - - - - - - - - - 4 9 62,340 -
Total all users - - -$ - - -$ 92 - -$ 32, 363 3,314,401 6,306,843$ Connections Consumption Revenue Connections Consumption Revenue Connections Consumption Revenue Connections Consumption Revenue Residential-Single Family 32,418 - $3,997,513 31,889 - $4,054,020 33,127 - $3,927,784 32,939 - $3,916,946 Residential-Multi Family 1,576 - 418,545 1 ,555 - 412,095 1,606 - 424,665 1 ,607 - 424,024 Residential- Multi Family 4 Units + 19 80,400 70,647 18 63,529 55,921 17 50,331 44,420 16 51,092 44,945 Comm/Land/Lt. Industrial/Non-Res. 3,138 3,051,177 2,726,198 3,069 2,893,018 2,588,912 3,180 2,904,054 2,601,804 3,198 2,997,422 2,668,497 Education-Public 49 124,047 109,205 37 54,207 48,082 27 24,293 21,700 27 29,478 26,118 Education-Private 149 72,141 68,086 150 63,715 60,941 152 64,643 61,858 150 72,936 67,985 Hospital/Convalescent Homes 35 197,360 172,771 35 197,787 173,367 35 190,191 166,768 35 194,560 170,063 Office/Motel-No Restaurant 93 78,338 59,307 92 79,321 61,027 94 88,632 69,280 94 85,397 66,015 Restaurant/ Hotel w/ Restaurant 51 36,181 33,232 52 38,762 35,480 47 41,583 37,750 41 39,909 35,963 Auto Repair/Car Wash 226 81,945 78,971 221 75,027 73,487 229 76,587 74,854 231 93,474 89,565 Laundromat 5 28,349 24,843 5 24,821 21,771 5 26,639 23,362 5 26,464 23,160 CS Irrigation - - - 21 255,400 71,571 43 423,688 115,905 45 540,444 145,737 Totals IVDA 48 65,559 - 48 56,072 - 50 54,387 - 49 57,057 - Total all users 37,806 3,815,497 7,759,318$ 37,192 3,801,659 7,656,675$ 38,613 3,945,028 7,570,150$ 38,438 4,188,233 $7,679,020 Connections Consumption Revenue Connections Consumption Revenue Residential-Single Family 32,899 - $3,719,798 - - - Residential-Multi Family 1,609 - 405,007 - - - Residential- Multi Family 4 Units + 15 45,146 41,351 - - - Comm/Land/Lt. Industrial/Non-Res. 3,204 2,626,645 2,467,470 - - - Education-Public 27 29,586 27,420 - - - Education-Private 150 61,381 61,779 - - - Hospital/Convalescent Homes 35 175,241 161,182 - - - Office/Motel-No Restaurant 96 71,092 58,587 - - - Restaurant/ Hotel w/ Restaurant 37 34,788 32,509 - - - Auto Repair/Car Wash 229 73,436 75,421 - - - Laundromat 5 24,091 21,824 - - - CS Irrigation 46 503,780 158,834 - - - Totals IVDA 51 54,874 - - - -
Total all users 38,402 3,700,060 $7,231,183 - - -
Source: Department's records
2022
2021 2020 2019 2018
2017 2016
* The Sewer Collection Utility was transferred to the Water Depar tment on May 1, 2017 so prior year data is unavailable. Data provided for 2017 represents the entire year.
2025 2024 2023
93 Packet Page. 761

CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT

Single Audit Report

For the Year Ended June 30, 2025

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CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT

Single Audit Report

For the Year Ended June 30, 2025
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CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT
Single Audit Report
For the Year Ended June 30, 2025
Table of Contents
Page
Number
Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .......................................................................................... 1 Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ........................................................................................................ 3 Schedule of Expenditures of Federal Awards for the
Year Ended June 30, 2025 ....................................................................................................................... 6 Notes to the Schedule of Expenditures of Federal Awards .................................................................................... 7 Schedule of Findings and Questioned Costs for the
Year Ended June 30, 2025 ................................................................................................................................. 8 Summary Schedule of Prior Year Findings and Questioned Costs for the Year Ended June 30, 2024 ............................................................................................................................... 10 DRAFT

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LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Water Board
San Bernardino Municipal Water Department
San Bernardino, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of each major fund of the San Bernardino Municipal Water Department (hereafter, the “Department”) , a component unity of the City of San Bernardino, California, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Department’s basic financial statements, and have issued our report thereon dated __________, 2025.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Department’s internal control over financial reporting (internal control) as a basis for designing audit pr ocedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Department’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Department’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their ass igned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a ma terial weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or signif icant deficiencies may exist that were not identified. We identified a certain deficiency in internal control, described in the accompanying schedule of findings and questioned costs as item 2025-001 that we consider to be a material weakness.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance ab out whether the Department’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express su ch an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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To the Water Board
San Bernardino Municipal Water Department
San Bernardino, California

Department’s Response to Findings

Government Auditing Standards requires the auditor to perform limited procedures on the Department’s response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs.

The Department’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of This Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Department’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Department’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Irvine, California
_________, 2025
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INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM

AND ON INTERNAL CONTROL OVER COMPLIANCE AND REPORT ON SCHEDULE OF EXPENDITURES OF

FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
To the Water Board
San Bernardino Municipal Water Department
San Bernardino, California
Report on Compliance for Each Major Federal Program

Opinion on Each Major Federal Program
We have audited the San Bernardino Municipal Water Department (hereafter, the Department)’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the Depart ment’s major federal programs for the year ended June 30, 2025. The Department’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

In our opinion, the Department complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United Stat es; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsi bilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the Department and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relat ing to our audit. We believe that the a udit evidence we have obtained is sufficient and appropriate to provide a basis for our o pinion on compliance for each major federal program. Our audit does not provide a legal determination of the Depart ment’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for complian ce with the requirements referr ed to above and for the design, implementation, and maintenance of effective internal contr ol over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Department’s federal programs.

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To the Water Board
San Bernardino Municipal Water Department
San Bernardino, California
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Department’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards , and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compli ance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Department’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
x Exercise professional judgment and maintain pr ofessional skepticism throughout the audit. x Identify and assess the risks of ma terial noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the Department’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. x Obtain an understanding of the Department’s internal co ntrol over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Unifor m Guidance, but not for the purpose of expressing an opinion on the effectiveness of the Department’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficien cies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance

A deficiency in internal control over com
pliance exists when the design or operat ion of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.

A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our con
sideration of internal control over compliance was for the limited purpos e described in the Auditor’s Responsibilities for the Audit of Compliance section abov e and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitation s, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

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To the Water Board
San Bernardino Municipal Water Department
San Bernardino, California
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the re quirements of the Uniform Guidance.

Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of each major fu nd of the Department, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Department’s basic financial statements. We issued our report thereon dated _________, 2025, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The ac companying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such inf ormation is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the audit ing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare th e basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Irvine, California
_________, 2025
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SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2025
Federal
Assistance Program
Federal Grantor/Pass-Through Grantor/Program Title Listing Number Expenditures U.S. Department of Treasury
Direct Award:

Coronavirus State and Local Fiscal Recovery Funds * 21.027 3,000,000$ Total U.S. Department of Treasury 3,000,000
Environmental Protection Agency
Consent Decree * 66.000
Operations and maintenance:

Newmark 732,663
Muscoy 491,239
Site wide monitoring 102,521
Project management 253,829
Subtotal - Consent Decree 1,580,252
Total Environmental Protection Agency 1,580,252
U.S. Department of Homeland Security
Direct Award:

Hazard Mitigation Grant Program 97.039 2,511,525
Total U.S. Department of the Homeland Security 2,511,525 Total Federal Expenditures 7,091,777$
* Major Program
Note a: Refer to Note 1 to the schedule of expend itures of federal awards for a description of significant accounting policies used in preparing this schedule.

Note b: There was no federal awards expended in the form of noncash assistance and insurance in effect during the year.

Note c: Total amount provided to subr ecipients during the year was $0.

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2025
NOTE
1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO THE SCHEDULE OF

EXPENDITURES OF FEDERAL AWARDS
A. Sco
pe of Presentation
Th
e accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activity of the San Bernardino Municipal Water Department (the "Department"), a component unit of the City of San Bernardino, California (the “City”), under programs of the federal government for the year ended June 30, 2025. The information in this Schedule is presented in accordance with the requir ements of the Uniform Guid ance. Because the Schedule presents only a selected portion of the operations of the Department, it is not intended to and does not present the financial position, changes in net position or cash flows of the Department, nor does it present all federal programs of the City of San Bernardino as a whole.

B. Basis
of Accounting
Expen
ditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance. Under the accrual basis of accounting, expenditures are recognized when incurred. Expenditures reported include any property or equipment acquisitions incurred under the federal program. The Department did not use the de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance.

NOTE 2: BACKGROUND OF THE CONSENT DECREE
In 1996, the City filed a complaint against the United States of America, Department of the Army (Army) to recover damages, response costs and other available remedies relating to contamination alleged to have originated at a World War II Army installation known as Camp Ono. In March 2005, the United States Department Court, Central Department, entered judgment, in the form of a consent decree (Consent Decree), in the matter of City of San Bernardino v. United States of America. The consent decree settles the City’s and the State’s claims arising from the groundwater contamination allegedly caused by the Army. The Consent Decree contains a number of provisions obligating the City (through the Municipal Water Department) to operate and maintain the Newmark Groundwater Superfund site (Site). The Site consists of two operable units, the Newmark Operable Unit and the Muscoy Operable Unit. The Newmark Operable Unit was declared operational and functional in 1998.

The Consent Decree provided for a payment of $69 million fr om the Army to the City for performance of the work outlined in the consent decree. Upon entry of the Consent Decree, the City, through the Department, received title to all facilities constructed by the United States Environmental Protection Agency (EPA) for the Site and agreed to operate and maintain the groundwater extraction and treatment system for a period of 50 years. The $69 million payment consisted of $59 million for operation and maintenance and $10 million for the construction of certain capital facilities that would be required in th e future. The funds are subject to strict limitations, contained in the Consent Decree, as to how they may be spent.

Pursuant to the Consent Decree, $10 million, including interest earned, has been set aside to be used only for (i
) fu
nding construction of treatment and directly related transmission systems that expanded the Departmen t’s ca
pacity to deliver potable water, and (ii) funding work performed by the Department to complete construction of the Muscoy Operabl
e Unit extraction system. These “capital facility” funds may not be used for costs incurred to operate, ma
intain, repair or retrofit components of the Site extraction or treatment systems constructed by EPA.

In
September 2007, the Muscoy Operable Unit was declared operational and functional .

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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025

SECTION I -

SUMMARY OF AUDITORS' RESULTS
Financial Statements
Ty
pe of auditors' report issued: Unmodified Opinion
Internal control over financial reporting:
x Material weaknesses iden tified? X yes no x
Significant deficiencies identified? yes X none reported Nonc
ompliance material to financial
statements noted? yes X no
Feder
al Awards
Int
ernal control over major programs:
x Material weaknesses identified? yes X no
x
Significant deficiencies identified? yes X none reported T
ype of auditors' report issued on compliance for major programs: Unmodified Opinion Any audit findings disclosed that are required to be
reported in accordance with Title 2 U.S. Code of
Federal Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform
Guidance)? yes X no
Ide
ntification of major programs:

Assistance Listing Number(s) Name of Federal Program or Cluster

66.000 Consent De cree

27.027 Coronavirus State and Local Fiscal Recovery Funds Dollar threshold used to distinguish
between type A and type B program $750,000
Auditee qualified as low risk auditee? yes X no DRAFT
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CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025

SECTION II - FINANCIAL

STATEMENT FINDINGS
Reference Number
2025-001
Evaluation of Finding
Material Weakness
Condition
The Department received $3,000,000 in Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) for the year ended June 30, 2025 passed through the City of San Bernardino as a part of the American Rescue Plan Act (“ARPA”) Program. These funds were not included in the original Schedule of Expenditures of Federal Awards (“SEFA”) submitted for Single Audit Reporting purposes.

The Department received $1,586,000 in Hazard Mitigation Program Funds for the year ended June 30,2025 passed through the U.S. Department of Homeland Security. Due to an error, the program revenue was duplicated within the general ledger accounts, and a receivable was improperly recorded.

Criteria
Title 2, Subtitle A, Chapter II, Part 200, Subpart F, Section 200.510 of the Code of Federal Regulations requires that “the auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with Section 200.502.”
Cause of Condition
During the review of federal grants by the Department, the Department failed to include ARPA program expenditures on the SEFA for the current fiscal year. In addition, due to internal miscommunication, the Department double counted federal grant revenues.

Effect or Potential Effect of Condition
The Department’s Schedule of Expenditures of Federal Awards was understated by $3,000,000 due to the omission of federal ARPA grant. As a result of the internal miscommunic ation for the Hazard Mitigation Program, federal grant revenues, grants receivables, and ending Net Position were overstated by $1,586,000.

Recommendation
We recommend that the Department implement procedures to ensure proper identification of federal awards during the grant application or acceptance process to ensure that Federal Single Audit requirements are complied with for the Department major programs. We also recommend the Department add additional review procedures over the collection of grant revenue and receivable to ensure proper recognition and recording.

Client Response
[RESPONSE]

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.

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1350 South “E” Street, San Bernardino, California 92408 P.O. Box 710, 92402 Phone: (909) 384-5141 FACSIMILE NUMBERS: Administration: (909) 453-6399 Customer Service: (909) 453-6396 Finance: (909) 453-6383 Engineering: (909) 453-6385 Corporate Yards: (909) 453-6389 Water Reclamation Plant: (909) 453-6395 Environmental & Regulatory Compliance: (909) 453-6391 Environmental Control: (909) 453-6394

CITY OF SAN BERNARDINO

MUNICIPAL WATER DEPARTMENT
CITY

OF SAN BERNARDINO

WATER BOARD

TONI CALLICOTT
President
Commissioners

WAYNE HENDRIX
DAVID E. MLYNARSKI
RIKKE V. JOHNSON

THOMAS BRICKLEY
MIGUEL J.

GUERRERO, P.E.

General Manager
ROBIN L. OHAMA
Deputy General Manager
STEVE R. MILLER
Director of Water Utility
KEVIN T. STEWART, P.E.

Director of Water Reclamation
JENNIFER L. SHEPARDSON
Director of Environmental &
Regulatory Compliance
CYNTHIA J. MOUSER
Director of Finance
“Trusted, Quality Service since 1905”

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2024
2024-001 – This matter is considered resolved.

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DISCUSSION
City of San Bernardino
Request for Council Action
Date: December 17, 2025
To: Honorable Mayor and City Council Members
From: Eric Levitt, City Manager
Department: City Manager's Office
Subject: Election of Mayor Pro Tempore (All Wards)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, open nominations for a member of the City Council to serve as Mayor Pro Tempore.

City Manager's Comments
No recommendation.

Executive Summary
The position of Mayor Pro Tempore is established by the City Charter. Each year, the City Council elects one of its members to serve in this role. In accordance with the San Bernardino Municipal Code (SBMC), the election of the Mayor Pro Tempore is to be held at the second regularly scheduled meeting in December.

Background
The position of Mayor Pro Tempore is outlined in Section 302 of the City Charter, which provides that the City Council shall select a Mayor Pro Tempore from among one of its own members. In the event the Mayor is temporarily unable to perform the duties of office due to absence from the City, illness, or any other cause, the Mayor Pro Tempore shall assume all powers and authority otherwise vested in the Mayor, subject to certain exceptions. When presiding over a City Council meeting in the Mayor’s absence, the Mayor Pro Tempore may not cast an additional vote in the event of a tie or exercise veto powers over Council action; the Mayor Pro Tempore may only continue to exercise his or her vote as a Council Member.

Juan Figueroa is currently the City’s Mayor Pro Tempore, where he has served in the position for the past one (1) year. Mayor Pro Tempore Figueroa was elected to the position by his fellow Council Members on December 18, 2024.

Packet Page. 775

Discussion
In accordance with Section 2.01.010 of the San Bernardino Municipal Code (SBMC), the City Council shall elect a Council Member to serve as Mayor Pro Tempore. The SBMC specifies that this election is to occur at the second regular meeting in December. The Council Member serving as Mayor Pro Tempore shall continue in this role until a successor is elected by the City Council or until the Council Member is no longer a member of the City Council, whichever occurs first. 2021-2025 Strategic Targets and Goals
Electing a Council Member to serve as Mayor Pro Tempore is in alignment with all of the Key Strategic Targets and Goals: (1) Improved Operational & Financial Capacity; (2) Focused, Aligned Leadership and Unified Community; (3) Improved Quality of Life; and (4) Economic Growth and Development.

Fiscal Impact
There is no fiscal impact associated with the nomination of a Mayor Pro Tempore.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, open nominations for a member of the City Council to serve as Mayor Pro Tempore.

Attachments
Attachment 1 - City Charter Section 302
Attachment 2 - Municipal Code Section 2.01.010
Ward:

All Wards
Synopsis of Previous Council Actions:

December 15, 2021 The Mayor and City Council elected Juan Figueroa to serve as Mayor Pro Tempore until the second regularly scheduled Mayor and City Council meeting in December 2022
December 7, 2022 Mayor and City Council elected Fred Shorett as Mayor Pro Tempore.

January 17, 2024 Mayor and City Council elected Fred Shorett as Mayor Pro Tempore.

December 18, 2024 Mayor and City Council elected Juan Figueroa as Mayor Pro Tempore.

CC: Eric Levitt, City Manager

Packet Page. 776

Section 302. Powers and Duties of the Council
The Council, in collaboration with the Mayor, shall ensure fundamental municipal services are provided to protect and promote public health, safety, and welfare. The Council and Mayor shall operate together to serve the best interests of the City.

The Council, in collaboration with the Mayor, will develop and implement a Code of Conduct to guide and direct their interactions and duties, including measures to hold one another accountable for deviations from the goals and principles set forth in this Charter and the City Code of Conduct.

The Council, in collaboration with the Mayor, shall create and implement a plan to maintain the City's fiscal integrity.

Each Council member shall be entitled to vote on all matters coming before the Council. The Council shall have the power to override any veto of the Mayor by a vote of five (5) or more Council members.

The Council shall select a Mayor Pro Tempore from one of its own members. In the event of a temporary absence from the City, illness, or any other cause that makes the Mayor temporarily unable to perform the duties of his or her office, the Mayor Pro Tempore shall have all powers and authority that the Mayor would have possessed if present to perform his or her duties.

However, the Mayor Pro Tempore may not cast an additional vote in the event of a tie or exercise veto powers over Council action, but may continue to exercise his or her vote as a Council member.

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Chapter 2.01

MAYOR PRO-TEMPORE
Section:

2.01.010 Mayor Pro-Tempore

2.01.010 Mayor Pro-Tempore
San Bernardino City Charter Section
302 identifies the position of Mayor Pro Tempore. At the first regularly scheduled meeting of the City Council following the effective date of this ordinance, the City Council shall elect a Council Member to serve as Mayor Pro Tempore. At the second regularly scheduled meeting of the City Council in December of each year, the City Council shall elect a Council Member to serve as Mayor Pro Tempore.

If the Mayor Pro Tempore is absent or otherwise unavailable to serve in such capacity, the Council Member present in the City with the most consecutive days of service as a member of the City Council of the City of San Bernardino shall serve as the Mayor Pro Tempore for that period of absence or unavailability only. "Consecutive days of service" shall be calculated by counting backward in time starting from the day on which the calculation is being made.

In the event that there are two or more Council Members with the exact same number of consecutive days of service as a member of the City Council of the City of San Bernardino, the temporary filling of the position of Mayor Pro Tempore shall be determined by lot, pursuant to the general procedure established in Section 15651 of the Elections Code of the State of California, specifically by flipping a coin in the case of two members with the exact same number of consecutive days of service as a member of the City Council of the City of San Bernardino, or the drawing of straws in the case of three or more members with the exact same number of consecutive days of service as a member of the City Council of the City of San Bernardino. The City Clerk shall be responsible for conducting the coin toss or conducting the drawing of straws whenever either event is required by this Section.

The Council Member holding the position of Mayor Pro Tempore shall continue to hold said position until his/her successor is elected by the City Council or until said Council Member is no longer a member of the City Council, whichever occurs first.

Pursuant to Charter Section
302, in the absence of the Mayor from any Council meeting, the Mayor Pro Tempore shall preside over that Council meeting.

In addition, at all other times that the Mayor is temporarily unable to perform the duties of his or her office, the Mayor Pro Tempore shall have all powers and authority that the Mayor would have possessed if present to perform his or her duties.

However, the Mayor Pro Tempore may not cast an additional vote in the event of a tie or exercise veto powers over City Council action, but may continue to exercise his or her vote as a Council member. (Ord. MC-1441, 4-03-17; Ord. MC-1289, 11-04-08; Ord. MC-1267, 4-08-08)

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DISCUSSION
City of San Bernardino
Request for Council Action
Date: December 17, 2025
To: Honorable Mayor and City Council Members
From: Gabriel Elliott, Director of Community Development & Housing Department: Community Development & Housing
Subject: Conditional Commitment of $5M in HOME Funds, a $1.2M Loan in Low-Mod Funds for Impact Fees; and a Land Loan
in the amount of $3.59 Million for the Purchase Price of the City Property; and Approving an Option to Purchase the
Real Property to JHC Acquisitions LLC for the
Development of Affordable Housing at Surplus Land Act
Site 12 located at 5th Street and Meridian Ave (Ward 6) Recommendation:

It is recommended that the Mayor and City Council of San Bernardino, California adopt Resolution No.2025-407:

1. Authorize a Conditional Funding Commitment of $5 million in HOME Investment Partnerships Program funds to West Fifth Street Housing Partners LP, (“Partnership”) an affiliate of Jamboree Housing Corporation, a California nonprofit public benefit corporation (“JHC”) for the development of affordable housing. The 106 unit affordable housing project (“Project”) will be located on approximately 3.5 acres of City-owned surplus land, identified as Site 12 (the “Property”), along with an adjacent privately owned parcel to be purchased by JHC (APN 0142-522-10);

2. Authorize the issuance of a City Promissory Note to the Partnership in the amount of $1.2 million to be funded with Low- and Moderate-Income Housing Asset Funds (“Low-Mod Funds”), to cover eligible project-related impact and permit fees, to be repaid from a portion of the residual receipts of the Project’s operations;

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under which the purchase price will be paid from residual receipts of the Project's operations in accordance with a Promissory Note secured against the Property with a deed of trust. The Option to Purchase Agreement is intended to provide “site control” of the Property and thereby enable the Partnership to apply for necessary project financing while the City will maintain ownership of the Property until all Project financing is secured; provided, however, that the exercise of the option is subject to the City Council's approval of a final disposition and development agreement; and

4. Authorize the City Manager and City Attorney, or their designees, to take any further actions and execute any further agreements or documents as necessary including minor and substantive changes; provided that a final Disposition Development Agreement and the City HOME Loan, the City Land Loan, and the City Impact Fee Deferral Loan shall return to City Council for final approval.

City Manager's Comments
This appears to be a good project that will add a critical affordable housing project to the City.

Executive Summary
The City currently owns the properties located at 5th Street and North Meridian Avenue, collectively known as “Site 12,” (hereafter also referred to as the "Property") which includes Assessor’s Parcel Numbers (APNs): 0142-522-08, 0142-522-09, 0142- 522-11, 0142-522-12, 0142-522-13, 0142-522-14, 0142-522-15, 0142-522-16, 0142- 522-17, 0142-522-25, 0142-522-35, 0142-522-36, 0142-522-37, 0142-522-38, 0142- 522-41, and 0142-522-42. Site 12, situated just north of Foothill Boulevard, has been designated as excess property under the Surplus Land Act (“SLA”), indicating it is no longer needed for public use and may be made available for development. Specifically, it has been slated for affordable housing in partnership with Jamboree Housing Corporation (“JHC”).

The Project will include 106 apartment units that will be restricted to 12 extremely-low income households (earning at or below 30% of the San Bernardino County Area Median Income (“AMI”)), 12 households earning at or below 50% AMI, 34 households earning at or below 60% AMI, 47 households earning at or below 70% AMI, and one (1) unit reserved for an on-site manager.

To help facilitate the development of this Project, staff recommends approval of a Conditional Funding Commitment of $5 million in HOME Investment Partnership Program (“HOME”) funds.

Additional components of this commitment include a $3.59 million land carry-back loan from the City for purchase of Site 12, a $1.2 million development impact fee loan from the City’s Low-Mod Fund to help maintain the project’s construction schedule, and an Option to Purchase Real Property Agreement to provide the Partnership with the right

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to purchase Site 12 with the land carry-back loan, and providing site control rights while maintaining City ownership until the transaction is closed. There is no impact to the General Fund and both the land loan and development impact fee loan will be repaid from a portion of the project’s residual receipts.

Background
The City owns 16 parcels, totaling 3.5 acres, located at 5th Street and Meridian Avenue, collectively known as Site 12. Site 12 has been designated for disposal under the Surplus Land Act (“SLA”), meaning it is considered excess property that the City no longer needs for public use and may be made available for development or other purposes. Site 12 includes the following Assessor’s Parcel Numbers (APNs): 0142- 522-08, 0142-522-09, 0142-522-11, 0142-522-12, 0142-522-13, 0142-522-14, 0142- 522-15, 0142-522-16, 0142-522-17, 0142-522-25, 0142-522-35, 0142-522-36, 0142- 522-37, 0142-522-38, 0142-522-41, and 0142-522-42.

On November 16, 2022, the City Council of the City of San Bernardino adopted Resolution No. 2022-234, which declared Site 12 surplus, pursuant to Government Code Section 54220 and issued Notices of Availability (“NOA”) on February 27, 2024.

On July 10, 2024, the City selected Jamboree Housing Corporation, a California non- profit corporation (“JHC”), to partner with the City to develop Site 12 for affordable housing. The proposed Project also includes adjacent parcel APN 0142-522-10, which is privately owned, for a total of approximately 3.8 acres (collectively, the “Site”). JHC is currently under contract to purchase the adjacent parcel.

On or about October 18, 2024, the California Department of Housing and Community Development (HCD) issued a letter to the City determining that the City had met all the requirements under the SLA for the purposes of disposing of Site 12.

On or about January 15, 2025, Site 12 was appraised at $3.59 million.

On or about March 5, 2025, the City approved the Exclusive Negotiating Agreement (“ENA”) between the City and JHC Acquisitions LLC, an affiliate of JHC, for the negotiation of the proposed development of Site 12 for affordable housing. With the inclusion of the adjacent parcel, the Proposed project will include 106 apartment units, with 105 units restricted to households earning below 80% AMI.

Discussion
Founded in 1990 and headquartered in Irvine, CA, Jamboree Housing Corporation is an award-winning nonprofit development company specializing in creating and operating affordable housing with supportive services for working families, children, seniors, and people with special needs. As a recognized Community Housing Development Organization (“CHDO”) at the State level and in various California cities, Jamboree has an established track record of delivering high-quality developments that enhance communities.

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The Project, as proposed, will consist of a 106-unit development that is contemplated as one phase, but may be developed in two phases due to financing constraints. The development will consist of 35 one-bedroom units, 30 two-bedroom units, 41 three- bedroom units. Restricted by the County of San Bernardino, approximately 22 units will be targeted for transitional age youth (“TAY”) individuals experiencing homelessness or at risk of homelessness at or below 30% of the AMI, complementing the City’s SB HOPE Campus Navigation Center development and other initiatives aimed at addressing homelessness. The remaining 93 units will serve large families with incomes at or below 70% AMI. One (1) three-bedroom unit will be set-aside for the on- site manager. Surface parking will be provided at a ratio of approximately 1.5 stalls per unit. Proposed community amenities include a community room and kitchen, a computer lounge, a swimming pool, and a tot lot.

The Conditional Funding Commitment of $5 million of HOME funds includes a future City HOME Loan, which will be structured as a residual receipts loan and secured by the Site to support the Project’s development. Approval of the final HOME Loan documents will be determined following completion of all federal HOME requirements under 24 CFR 92.2 and 24 CFR 92.250(b), including the market demand assessment, environmental review, financing plan, and subsidy layering analysis. HOME funds are necessary to close the remaining gap between total development costs and available equity and debt, ensuring the Project meets feasibility thresholds required for construction. Repayment will occur only from available cash flow after operating expenses and senior obligations, which is consistent with federal guidelines and typical for affordable housing developments. The City HOME Regulatory Agreement will restrict 20 units as follows: four (4) Low HOME units and 16 High HOME units.

The Conditional Funding Commitment also includes the City Land Loan secured by the Site and equates to the sales price established for Site 12 to the Partnership. The site was appraised at $3.59 million on January 15, 2025, and this value constitutes the City’s financial participation through the land. The City Land Loan will maintain project feasibility by reducing the cost burden associated with land acquisition. The terms of the land conveyance will be finalized through further negotiations pursuant to an Option to Purchase Real Property Agreement and will require City Council approval. The City Land Loan Regulatory Agreement will restrict 51 units to Low Income households.

The Project is required to pay several City-imposed impact and permit fees prior to the issuance of building permits. To avoid financing delays and ensure the Project remains feasible, staff recommend providing a $1.2 million Impact Fee Loan funded with Low Mod Funds, secured by the Property, to cover eligible City fees. Using Low Mod funds for this purpose supports the Project and ensures it can satisfy fee obligations without jeopardizing construction timelines. This loan would also allow the Developer to pay required fees at the appropriate time while preserving limited construction financing for direct development costs. The loan will be memorialized through a Promissory Note and repaid from a portion of residual receipts generated by the Project. The Impact Fee Loan Regulatory Agreement will restrict 24 units as follows: 12 units restricted to extremely-low income households earning up to 30% AMI and 12 units restricted to

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very-low income households earning up to 50% AMI.

The Option to Purchase Real Property Agreement governs the terms under which the Partnership may acquire Site 12 and forms the framework for completing the City Land Loan. The Option provides the Partnership with necessary site control to advance financing and meet program requirements, while allowing the City to ensure all due diligence, negotiations, and protections are satisfied prior to conveyance. Final terms will be returned to the City Council for approval. The Option structure is appropriate for this type of development, balancing the City’s stewardship responsibilities with the need to facilitate affordable housing production.

With the land appraised at $3.59 million and the City’s combined conditional funding commitments including the HOME loan, City Land Loan and City Impact Fee Loan through Low-Mod Funds, the City’s proposed investment in the Project is approximately $9.79 million subject to final underwriting and approvals. 2021-2025 Strategic Targets and Goals
Approving the conditional commitment of funding aligns with Key Strategic Target and Goal No. 3: Improved Quality of Life. Partnering with the Partnership to develop affordable housing will reduce the number of blighted city-owned properties while providing essential affordable housing opportunities to the community.

Fiscal Impact
There is no impact on the General fund, the Conditional approval of the $3.59 million loan for the value of Site 12, and of the $5M HOME Investment Partnership Program funding commitment. The $1.2 million impact fee loan will be funded from the City’s Low- and Moderate-Income Housing Asset Funds but repaid from residual receipts from the Project.

Conclusion
It is recommended that the Mayor and City Council of San Bernardino, California adopt Resolution No.2025-407:

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3. Authorize the City to enter an Option to Purchase Agreement with the Partnership for Site 12, to provide the Partnership with a right to purchase the Property for fair market value ($3.59 million), using seller carryback financing under which the purchase price will be paid from residual receipts of the Project's operations in accordance with a Promissory Note secured against the Property with a deed of trust. The Option to Purchase Agreement is intended to provide “site control” of the Property and thereby enable the Partnership to apply for necessary project financing while the City will maintain ownership of the Property until all Project financing is secured; provided, however, that the exercise of the option is subject to the City Council's approval of a final disposition and development agreement; and

Attachments
Attachment 1 Exclusive Negotiating Agreement
Attachment 2 Resolution No. 2025-407
Attachment 3 Option to Purchase Real Property
Ward:

Sixth Ward
Synopsis of Previous Council Actions:

On November 16, 2022, the City Council of the City of San Bernardino adopted Resolution No. 2022-234, which declared the Property surplus, pursuant to Government Code Section 54220 and issued Notices of Availability (“NOA”) on February 27, 2024.

On July 10, 2024, the City selected Jamboree Housing Corporation, a California non- profit corporation, to partner with the City to develop approximately 3.5 acres of the Property for affordable housing (“Project”).

On or about January 15, 2025, the 3.5 acres of city-owned surplus land known as site 12 was appraised at $3.59 million.

On or about March 5, 2025, the City approved the Exclusive Negotiating Agreement (ENA) between the City and JHC Acquisitions LLC, an affiliate of Jamboree Housing

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Corporation, a California non-profit public benefit corporation, for the development of approximately 3.5 acres of city-owned surplus land, known as site 12, for affordable housing.

CC: Eric Levitt, City Manager

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EXCLUSIVE NEGOTIATING AGREEMENT

BY AND BETWEEN

THE CITY OF SAN BERNARDINO
AND

JHC-ACQUISITIONS LLC
THIS EXCLUSIVE NEGOTIATING AGREEMENT ("Agreement") is dated as of February 18th, 2025 for reference purposes only, and is entered into by and between the CITY OF SAN BERNARDINO, a California municipal corporation ("City") and JHC ACQUISITIONS LLC, a California limited liability company ("Developer"). City and Developer are sometimes referred in this Agreement individually, as a "Party" and, collectively, as the "Parties." This Agreement is entered into by the Parties with reference to the following recited facts (each, a "Recital"):

RECITALS
A. City, acting in the capacity as the Successor Housing Agency to the former Redevelopment Agency of the City of San Bernardino, is the fee owner of that certain real property located at 5th Street and Meridian Avenue, known as Site 12 for Surplus Land Act (the "Act") disposal purposes, (APN: 0142-522-08, 0142-522-09, 0142-522-11, 0142- 522-12, 0142-522-13, 0142-522-14, 0142-522-15, 0142-522-16, 0142-522-17, 0142-522- 25, 0142-522-35, 0142-522-36, 0142-522-37, 0142-522-38, 0142-522-41 and 0142-522- 42), in the City of San Bernardino and State of California more specifically described in Exhibit A ("Property"); and

8. On November 16, 2022, the City Council of the City of San Bernardino adopted Resolution No. 2022-234, which declared the Property surplus, pursuant to Government Code Section 54220 of the Act and issued Notices of Availability ("NOA") on February 27, 2024; and
C. On or about October 18, 2024, the California Department of Housing and Community Development ("HCD") issued a letter to the City determining that the City had met all the requirements under the Act for the purposes of disposing the Property; and D. On July 10, 2024, City selected Jamboree Housing Corporation, the Manager of Developer, to partner with City to develop approximately 3.5 acres of the Property for affordable housing ("Project"); and
E. City and Developer wish to negotiate to reach agreement on the terms and conditions for the sale of the Property by City, the design, construction, and development of the Project, continued maintenance and security for the Property, as well as the operation of the Property to fulfill requirements of the Project and the intent to provide affordable housing. The negotiated agreement(s) would provide the terms and conditions 02/14/25
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for the design, financing, construction, operation, and maintenance of the proposed Project; and
F. The intent of both City and Developer in entering into this Agreement is to establish a specific, period of time to negotiate regarding a future agreement between them governing the potential acquisition of the Property and development of the Project on the Property, all subject to mutually agreeable terms, conditions, covenants, restrictions and agreements to be negotiated and documented in a future disposition and development agreement ("ODA");

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS

AND PROMISES SET FORTH HEREIN, DEVELOPER AND CITY HEREBY AGREE, AS FOLLOWS:

AGREEM ENT

1. Agreement to Negotiate in Good Faith. City and Developer agree that for the term of the "Negotiating Period" (as defined in Section 2 hereof) each Party shall diligently and in good faith attempt to negotiate the terms of the DOA for consideration by the San Bernardino City Council (the "City Council"). During the Negotiating Period, City agrees to negotiate exclusively with Developer, and not to negotiate with any other person or entity, with regard to the sale or other disposition of the Property.

1.1 Without limitation, among the issues to be addressed in the negotiations for the DOA are: (1) the transfer of the Property by the City to Developer; (2) the proposed design for the Project, architectural drawings detailing the Project, including, but not limited, to the design and type of required structures to be constructed; (3) the development schedule for the proposed Project; (4) a budget that sets forth the costs and fees to design, build, operate, and maintain the Project (including a sources and uses budget) ("Project Budget"); (5) the operational procedures for selecting tenants and managing the Project as affordable housing; (6) terms and conditions for the continued maintenance of the Property and operation of the Project; (7) a commitment by City to provide Developer with a loan of funds from the HOME Investment Partnerships Program (HOME) in the amount of Five Million Dollars ($5,000,000), and Developer's compliance with the HOME program; (8) terms and conditions for Developer seeking outside funding; (9) a regulatory agreement, or other similar agreement, that provides for a eligibility for occupancy based on income, affordability, and any other special need restrictions; (10) design or architectural requirements; (11) a schedule of performance; and (12) terms and conditions for regulatory compliance, including, but not limited to, the requisite environmental analysis under the California Environmental Quality Act ("CEQA").

2. Negotiating Period. The rights and duties of the Parties established by this Agreement shall commence on the date that the Parties each execute this Agreement (the "Effective Date"). The negotiating period (the "Negotiating Period") shall be for a period of seven hundred thirty (730) days, commencing on the Effective Date. The City Manager of City, or his or her designee, shall have the right, in his or her sole discretion, to extend the Negotiating Period for up to an additional one hundred twenty (120) days, 02/14/25
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resulting in a total potential Negotiating Period of up to eight hundred fifty (850) days.

Upon the expiration of the Negotiating Period, or upon the Parties' signing the DOA for the Property, this Agreement shall automatically terminate, without further written notice or action by either Party. Upon such automatic termination, the Parties acknowledge and agree that neither Party shall have any further rights or remedies as to the other, except as specifically set forth herein.

3. Developer Acknowledgments. The Developer hereby acknowledges and agrees that no provision of this Agreement shall be del3med to be an offer by the City (or an acceptance by the City of any offer or proposal from the Developer to convey any interest in the Property to the Developer. The Developer further agrees and understands that any sale of the Property is contingent upon final approval of such sale by the City Council of the City of San Bernardino, in its sole and absolute discretion, and that by entering into this Agreement the City cannot and does not guarantee such approval by the City Council of the City of San Bernardino. Any studies relating to the Property that may hereafter be undertaken by the Developer, in its sole discretion, shall be the sole responsibility of the Developer and shall not be deemed to be undertaken for the benefit of the City.

3.1 The qualifications of Developer are of particular interest to City.

Consequently, with the exception of an "Affiliate" (as defined below) or a limited partnership in which Developer or an Affiliate of Developer is the general partner, no person or entity, whether a voluntary or involuntary successor of Developer, shall acquire any rights or powers under this Agreement, nor shall Developer assign all or any part of this Agreement, without the pr_ior written approval of City. Any such approval by City may be granted, withheld or denied at City's sole and absolute discretion. Any other purported transfer, voluntarily or by operation of law, shall be absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. As used in this Agreement, the term "Affiliate" means any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer. The term "control" as used in the immediately preceding sentence, means, with respect to a person or entity that is a corporation, the right to the exercise, directly or indirectly, of more than fifty percent (50%) of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person or entity that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person or entity.

3.2 The Developer shall promptly notify the City in writing of any proposed assignment of Developer's interest in the Agreement. Upon the occurrence of any material change in interest or control, whether voluntary or involuntary, in membership, ownership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual) unless approved in writing, in advance, by the City Manager, the City may terminate this Agreement by serving written notice of such termination on the Developer referencing this Section. 02/14/25
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3.3 In carrying out its tasks and obligations under this Agreement, the Developer shall comply with all applicable federal, state, and local laws and regulations.

3.4 Developer agrees, notwithstanding anything to the contrary in this Agreement, the completion of the environmental review required under 24 CFR Part 58 and approval of the U.S. Department of Housing and Urban Development ("HUD") is a condition precedent to Closing. City agrees that Developer reserves the absolute right to terminate this Agreement in the event Purchaser receives notice that HUD disapproves of the environmental review or the environmental review demonstrates the Property is not suitable for Developer's purposes by sending written notice thereof to City, in which event neither party shall have any further rights, duties, or obligations hereunder, except as expressly provided in this Agreement.

4. REQUIRED ACTIONS AND NEGOTIATION TASKS. Within ninety (90) calendar days after the Effective Date, Developer shall, at its sole cost and expense, provide the City with a detailed financial analysis for the Project containing, among other matters, the development costs of the proposed Project, a detailed development budget, an operations budget, including but not limited to costs for maintenance, property management, and supportive services, and other costs that will be associated with the Project ("Financing Proposal"). The Financing Proposal shall be refined by the Parties during the Negotiating Period, as appropriate, and will be used to evaluate the financial feasibility of the proposed Project, to assist in the negotiation of terms, and assist with finalizing a Project Budget. The Financing Proposal shall also include the terms, scope, and limits to annual financing from City, as well as a schedule of financing for the proposed Project.

4.1 The DOA will provide that Developer will be solely responsible for all development (including site development ), continual maintenance of the site (following Developer's acquisition thereof), and operational costs of the proposed Project, except insofar as Developer receives funding from other sources as set forth in a Project Budget.

Developer acknowledges that the construction and future maintenance of the proposed Project may be subject to the State of California's prevailing wage requirements and/or federal prevailing wage requirements. The ODA will include a provision that establishes Developer is solely responsible for compliance with all local, state, and federal laws.

4.2 The negotiations for the ODA will address, among other items, the terms; the form, amount, and financing considerations for the proposed Project; the scope and schedule of development; the affordable housing regulatory agreement or covenant; maintenance and operation of the Property; the selection process for individuals referred to or eligible for occupancy of the units in the Project; the funding obligations from the HOME Funding, and any other sources of funding for the Project; and any other requirements for Developer and operation of the Project. The affordability restrictions set forth in the regulatory agreement by the City for use of the Property will be senior in priority to any construction and permanent financing or other monetary liens; provided, however, that the regulatory agreement will include language setting forth a process by which Developer may request certain rent and income limits to increase to specified levels in 02/14/25
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order to achieve a specified debt service coverage ratio in the event of a foreclosure, deed in lieu of foreclosure or similar event, or in the event that due to no fault of Developer any rental subsidy provided to the Project is reduced, terminated, or not renewed; provided, further, however, that no such increases may exceed the maximum levels allowable under applicable HOME regulations. Notwithstanding the foregoing, the City may agree to subordinate its regulatory agreement to other governmental regulatory agreements, in accordance with an intercreditor and/or subordination agreement to be mutually negotiated by the Parties.

4.3 The DOA will be subject to the City's insurance requirements (set forth below) and all other applicable and customary City policies. The DOA may require appropriate performance and payment bonds (consistent with industry standards involving public-private projects) with regard to the construction of the proposed Project or another form of assurance that is acceptable to the City.

4.4 The DOA such other provisions as the City and Developer determine to be necessary or appropriate to implement the proposed Project.

5. Development Documents. The DOA must include a scope of development, site plan, design and planning drawings, grading documents, utility connections, parking locations and other documents that identify the development of the Property for the purpose of operating the Project.

5.1 If this ENA is terminated for any reason other than a default by the City, Developer shall, at its sole cost and expense, provide the City, without any representation or warranty with true and correct copies of all final, reports, studies, analyses, and similar documents prepared or commissioned by Developer with respect to this Agreement and the proposed Project, excluding any confidential financial information prepared by Developer.

5.2 Within fifteen (15) days of the Effective Date, the City will, without any representation or warranty, provide Developer with all documents relating to the Property (including, but not limited to, environmental, property physical condition, geological studies, engineering and structural analyses, and geotechnical reports and soil tests and analyses) to the extent reasonably known to be in City's possession or control.

5.3 The City reserves the right, during the Term of this Agreement, to request reasonable additional information and data from Developer that it considers necessary for review and evaluation of the Property and the proposed Project, which Developer will provide in a timely manner provided that such information has been obtained by Developer pursuant to this Agreement or is otherwise in Developer's possession and control.

6. Due Diligence. During the Negotiating Period, Developer and its employees, contractors, agents, representatives, architects, engineers and consultants (collectively, the "Developer Entities"), at Developer's sole cost and expense, shall have S
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the right to enter and inspect the Property, make surveys and conduct such soils, engineering, hazardous or toxic material, pollution, seismic or other tests, studies and investigation as Developer may require (collectively, the "Inspections"), pursuant to the terms of this Section 6.

6.1 Developer shall conduct Inspections during regular business hours (Monday through Friday, 7:00 AM to 6:00 PM ) upon no less than twenty-four (24) hours' prior written notice to City. City may have a representative present at any Inspections of the Property.

6.2 In conducting its Inspections at the Property, Developer and the Developer Entities shall: (i) not damage any part of the Property (other than invasive testing conducted in accordance with Sections 6.3 and 6.4 below) or any personal property owned or held by any third party; (ii) promptly repair any damage to the Property resulting from the entry by Developer or the Developer Entities or from any such Inspections; provided that Developer shall not be obligated to repair conditions merely discovered by Developer or the Developer Entities in conducting their inspections (iii) comply with all applicable laws; and (iv) not permit any liens to attach to the Property by reason of the exercise of Developer's rights hereunder.

6.3 Notwithstanding anything to the contrary in this Section 6, Developer shall not undertake any invasive testing, including, without limitation, taking samples of any kind or type from the Property, without City's prior written approval, which approval shall not be unreasonably withheld or delayed.

6.4 Promptly upon the completion of each Inspection, Developer shall cause the portion of the Property subject to such Inspection to be restored to the condition existing immediately prior to such Inspection, to the extent reasonably practicable; provided that Developer shall not be obligated to repair conditions merely discovered by Developer or the Developer Entities in conducting their inspections or caused by the City or the City Personnel. If this ENA is terminated for any reason other than a default by the City, Developer shall provide City, at no additional charge and without representation or warranty of any kind, with copies of non-proprietary reports prepared by third parties for Developer in connection with the Inspections within ten (10) business days of the termination of the ENA.

6.5 Developer hereby indemnifies, defends, and holds harmless City and City's officers, officials, members, employees, agents, and representatives (collectively, the "City and City Personnel"), and the Property, free and harmless from and against any and all claims, damages, liabilities, demands, injury, actions, liens, stop notices, losses, costs and expenses (including without limitation reasonable attorneys' fees and court costs) arising from or as a result of conducting Inspections, except to the extent caused by an indemnified party's active negligence, recklessness or intentional misconduct or merely discovered by Developer or the Developer Entities in conducting their inspections. 02/14/25
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6.6 Developer's obligations under this Section 6 shall survive the expiration or termination of this Agreement.

7. Environmental Review. Developer will be responsible for compliance with the requirements of the CEQA pursuant to California Public Resources Code Sections 21000 et seq. and California Code of Regulations Sections 15000 et seq., in connection with the proposed use of the Property and the development of the proposed Project.

Nothing in this Agreement shall be construed to compel the City to approve or make any particular findings with respect to such CEQA documentation. Developer shall provide such information about the proposed Project as may be required to enable the City to consider any CEQA-required document and shall otherwise generally cooperate with the City to complete this task.

7.1 If the City, in its sole discretion, determines that the future approval of the ODA requires non-feasible mitigation measures, or fails to yield benefits that outweigh significant unavoidable impacts, or the City otherwise determines, in its sole discretion, that it is unable to make any finding required by CEQA as a prerequisite to approval of the ODA, the City may terminate this Agreement, without penalty. Upon such termination, neither Party shall have any further duties, obligations, rights, or liabilities under this Agreement, except for those rights and obligations that expressly survive termination of this Agreement.
7 .2 The Parties intend this Agreement to reflect the basic understanding between them, but agree that the ODA contemplated herein shall be subject to, and contingent on, the City's approval, in its sole discretion, of a final CEQA determination. This Agreement does not constitute a legally binding commitment to a specific project, to the proposed Project, to any transfer of the Property, or to the ODA.

8. Progress Reports. From time to time as reasonably requested by the City, the Developer agrees to make oral and written progress reports advising the City on all matters related to the proposed Project, including financial feasibility analyses, construction cost estimates, marketing studies, and similar due diligence matters

9. Community Engagement. The City and Developer shall confer and seek agreement on an appropriate strategy to obtain input from community members regarding the proposed Project.

10. Insurance. Without limiting Developer's indemnification obligations under this Agreement, Developer shall procure and maintain, at its sole cost and for the duration of this Agreement, insurance coverage as provided below, against all claims for injuries against persons or damages to property which may arise from or in connection with the performance of the work hereunder by Developer and/or the Developer Entities, including without limitation conducting Inspections. In the event that Developer subcontracts any portion of the work, the contract between Developer and such subcontractor shall require the subcontractor to maintain the same types (with the same endorsements) and amounts of insurance that Developer is required to maintain pursuant to this Section. ?
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Packet Page. 792

10.1 Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 00 01 including completed operations and contractual liability, with limits of liability of not less than $1,000,000 per occurrence and $2,000,000 annual aggregate for liability arising out of Developer's performance of this Agreement, including without limitation conducting Inspections. Such insurance shall be endorsed to:
(1) Name the City and City Personnel as additional insureds for claims arising out of Developer's performance of this
Agreement, including without limitation Developer's conducting of the Inspections.
(2) Provide that the insurance is primary and non-contributing with any other valid and collectible insurance or self-insurance available to City.

10.2 Automobile Liability Insurance with a limit of liability of not less than $1,000,000 per each occurrence and $1,000,000 annual aggregate. Such insurance shall include coverage for all "owned," "hired" and "non-owned" vehicles, or coverage for "any auto." Such insurance shall be endorsed to:
(1) Name the City and City Personnel as additional insureds for claims arising out of Developer's performance of this
Agreement, including without limitation Developer's conducting of the Inspections.
(2) Provide that the insurance is primary and non-contributing with any other valid and collectible insurance or self-insurance available to City.

10.3 Workers' Compensation Insurance in accordance with the Labor Code of California and covering all employees of Developer providing any service in the performance of this Agreement; provided, however, that Developer shall not be required to obtain workers' compensation insurance because Developer does not have any employees, so long as Developer executes a Workers' Compensation Waiver in the substantially the form set forth in Exhibit "B" to this Agreement. Such insurance shall be endorsed to waive the insurer's right of subrogation against the City and City Personnel.

10.4 Evidence of Insurance: Developer shall provide City a Certificate(s) of Insurance evidencing such coverage, together with copies of the required policy endorsements, no later than five (5) business days prior to commencement of any inspections and prior to the expiration of any policy. Statements on an insurance certificate will not be accepted in lieu of the actual endorsements required.

Coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits, non-renewed, or materially changed for any reason, without thirty (30) days prior written 02/14/25
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8 Packet Page. 793

notice thereof given by the insurer to City by U.S. mail, or by personal delivery, except for nonpayment of premiums, in which case ten (10) days prior notice shall be provided.

10.5 Acceptability of Insurers. Each policy shall be from a company with current A.M. Best's rating of A- VII or higher and authorized to do business in the State of California, or otherwise allowed to place insurance through surplus lines brokers under applicable provisions of the California Insurance Code or any federal law. Any other rating must be approved in writing by City.

11. No Predetermination of City Discretion. The Parties acknowledge and agree that nothing in this Agreement in any respect does or shall be construed to affect or prejudge the exercise of City's discretion concerning the consideration of the DOA.

The Parties do not intend for this Agreement to be a DOA or lease or conveyance, of the Property. The Parties acknowledge and agree that they have not agreed upon the essential terms of the subject matter of the transaction, and that such essential terms will be the subject matter of further negotiations. The Parties acknowledge and agree that any final agreement, if an agreement is reached, would be in the form of a DOA, and any such Agreement would not be effective until it has been considered and formally approved by the City Council and Developer, and thereafter has been executed by authorized representatives of each Party. Notwithstanding anything in this Agreement to the contrary, City does not intend this Agreement to commit to a definite course of action with respect to the Property, and City retains full discretion with respect to (i) the Property, (ii) the DOA, (iii) any determination under the California Environmental Quality Act of 1970, Public Resources Code Section 21000, et seq. ("CEQA") with respect to the consideration of a DOA and/or any proposed development of the Property.

12. Costs and Expenses. Each Party shall be responsible for its own costs and expenses in connection with any activities and negotiations in connection with the performance of its obligations under this Agreement.

13. Lead Negotiators. The City Manager, or his or her designee, shall be the lead negotiator for the City with respect to the subject matter of this Agreement. Tish Kelly, the Senior Vice President, Development, of Developer, or her designee, shall be the lead negotiator for Developer with respect to the subject matter of this Agreement.

14. Address for Notices. Any notices pursuant to this Agreement shall be in writing and delivered (i) in person, (ii) by reputable overnight delivery service that provides a receipt with the time and date of delivery, such as Federal Express, or (iii) by United States Mail, certified or registered, postage prepaid, return receipt requested, to the following addresses:

To City: City of San Bernardino
290 N D Street,
San Bernardino, CA 92401
Attn.: City Manager
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Packet Page. 794

To Developer:

With a copy to:

JHC-Acquisitions LLC
c/o Jamboree Housing Corporation
17701 Cowan, Suite 200
Irvine, CA 92614
Attn: Tish Kelly
Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attn: Patrick McCalla
Any Party may designate a different address for itself by notice. Any notice, demand, or document so given, delivered, or made by United States mail, shall be deemed to have been given seventy-two (72) hours after the same is deposited in the United States mail as registered or certified mail, addressed to addresses above, with postage thereon fully prepaid. Any notice, demand, or document delivered by overnight delivery service shall be deemed complete upon actual delivery or attempted delivery, provided such attempted delivery is made on a business day. Any such notice, demand, or document not given by registered or certified mail or by overnight delivery service as aforesaid shall be deemed to be given, delivered, or made upon receipt of the same by the Party to whom the same is to be given or delivered.

15. Default. Failure by either Party to negotiate in good faith or to perform any of its obligations as provided in this Agreement shall constitute a default under this Agreement. The non-defaulting Party shall give written notice of a default to the defaulting Party, specifying the nature of the default and the action required to cure the default. If the default remains uncured thirty (30) days after the date of such notice or such longer period of time as is reasonably necessary to cure the default, provided that the defaulting party commences to cure the default within said thirty (30) day period and, thereafter, reasonably diligently prosecutes the cure to completion, the non-defaulting Party may exercise the remedies set forth in Section 16 of this Agreement.

16. Remedies for Breach of Agreement. In the event of an uncured default under this Agreement, the sole remedies of the non-defaulting Party shall be to (a) terminate this Agreement, (b) institute an action for specific performance of this Agreement, or (c) institute legal action to recover actual damages for the default (limited to actual, documented out-of-pocket costs incurred by the non-defaulting Party as a result of such default) . Following the termination of this Agreement, neither Party shall have any further rights, remedies, or obligations under this Agreement, except as specifically set forth herein. Neither Party shall have any liability to the other for monetary damages for failure to reach agreement on the DOA, and each Party hereby waives and releases any such rights or claims it may otherwise have at law or at equity. The Parties' rights and obligations under this Section 16 shall survive the expiration or termination of this Agreement.
l O
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Packet Page. 795

17. Termination. This Agreement shall: (i) automatically terminate at the time(s) set forth in Section 2 above, and (ii) shall terminate upon a default and failure to cure the default as provided in Section 15 above ..

18. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the Parties, integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof.

19. Time of Essence. Time is of the essence of every portion of this Agreement in which time is a material part.

20. Agreement Does Not Constitute Development Approval. City reserves final discretion and approval as to any proposed development of the Property and any DOA and all proceedings and decisions in connection therewith. This Agreement shall not be construed as a grant of development rights or land use entitlements to construct the Project or any other development on the Property. All design, architectural, and building plans for any proposed development shall be subject to the review and approval of City and any other Federal, State or local entity with jurisdiction over the Property and/or proposed development. By its execution of this Agreement, City is not committing itself to or agreeing to undertake any disposition of the Property to Developer, or any other acts or activities requiring the subsequent independent exercise of discretion by City or any agency or department thereof.

21. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California, and venue for any action initiated by a Party to interpret or enforce this Agreement shall lie exclusively in the state and federal courts in the County of San Bernardino.

22. Attorneys' Fees. Each Party shall be responsible for payment of its own attorneys' fees and expenses with respect to negotiation and preparation of this Agreement. In the event any action is brought to enforce or interpret any of the provisions of this Agreement, the prevailing Party in such action or proceeding, shall be entitled to have and recover its reasonable attorneys' fees and expenses.

23. Amendments. This Agreement may not be altered, amended, changed, waived, terminated or modified in any respect or particular unless the same shall be in writing and signed by the Parties.

24. Implementation of Agreement. City shall maintain authority to implement this Agreement through the City Manager (or his or her designee). The City Manager shall have the authority to make approvals, waive provisions and/or enter into certain amendments of or implementing agreements for this Agreement on behalf of City so long as such actions do not materially or substantially change the substantive business terms of this Agreement, or add to the costs incurred or to be incurred by City as specified 02/14/25
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11 Packet Page. 796

herein. All other material and/or substantive approvals, waivers, or amendments shall require the consideration, action and written consent of the City Council.

25. Real Estate Commissions. Each of the Parties represents and warrants to the other Party that no real estate commission, broker's fees, or finder's fees which may accrue by means of the acquisition of the Property is due to any person, firm or entity.

City shall indemnify, protect, defend and hold harmless Developer from any loss, liability, damage, cost, claim or expense (including reasonable attorneys' fees) incurred by reason of any broker fee, commission or finder's fee that is payable or alleged to be payable to any broker or finder which results from any act or agreement of City. Developer shall indemnify, protect, defend and hold harmless City from any loss, liability, damage, cost, claim or expense (including reasonable attorneys' fees) incurred by reason of any broker fee, commission or finder's fee that is payable or alleged to be payable to any broker or finder which results from any act or agreement of Developer.

26. Conflict of Interest. No member, official or employee of City having any conflict of interest, direct or indirect, related to this Agreement shall participate in any decision relating to this Agreement. The Parties represent and warrant that they do not have knowledge of any such conflict of interest.

27. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but which when taken together shall constitute one and the same instrument. This Agreement may be executed by electronic transmission (in pdf form) or by electronic signature (such as DocuSign.) . [End of Agreement- Signature page follows]
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12 Packet Page. 797

NOW THEREFORE, City and Developer have executed this Excl usi ve Negotiating Ag reemen t as of the date first set forth ab ove.

ATTES T:
______ , Ci ty Cl erk
APPRO VED AS TO FORM :
________ , City Attorney
02/1 4/25
55600.00203\43 125 9l4.6
CIT Y:

CIT Y OF SAN BERNAR DINO, a Cal ifornia
muni cipal corpor ation
By:

DEVEL OPER:

JH C-AC QUIS ITIONS LLC, a Cal iforn ia limi ted
liabi lity co mpany
By: Jamb oree Housing Corpor ation, a
Cal iforn ia nonp rofit public benefit
Its : �
o
;��
o
/J
w /
By : 1 � �
Mi chael Mas Jie
Its : Execu tive Vice President and Ch ief
Development Officer
13 Packet Page. 798

EXHIBIT "A"

LEGAL DESCRIP TION OF PROP ERTY
Real property located in the City of San Bernardino, County of San Bernardino, State of California, described as follows:

APN: 0142-522-08:

Pa rce l 1:

Lot 10 of Tract No. 7050, in the City of San Bernar dino, County of San Bernardino, State of California, as per Map recorded in Book 90 Page(s) 44 of Maps, in the Office of the County Recorder of said County.

Together with that portion of the south 1/2 of 5th Street adjoining said land, as vacated by Resolution of the City Counc il of the City of San Bernardino, a Certified Copy of which would pass by normal operation of law.

Par cel 2:

An easement for ingress and egress and rights incidental thereto over that portion of said land described in that certain Resolution No. 87-56 of the City Council of the City of San Bernardino, County of San Bernardino, State of California, a Certified copy thereof
recorded April 3, 1987 as Instrument No. 87-110057 of Official Records of said County. Except therefrom any portion lying within Parcel 1 above.

Pa rcel 3:

An easement for ingress, egress and rights incidental thereto over that portion of said land described in that certain Resolution No. 87-56 of the City Council of the City of San Bernardino, State of California, a certified copy thereof recorded April 3, 1987 as
Instrument No. 87-110057 of Official Records of said County lying within Lot 1 of Trac t 7050.

APN : 0142-522-09:

Lot 9 of Tract no. 7050 in the City of San Bernardino, County of San Bernar dino, State of California, as shown by map on file in Book 90, Page(s) 44 of Maps , in the Office of the County Recorder of said County.

Together with that portion of the South 1 /2 of 5th Street adjoining said land, as vacated by Resolution of the City Counc il of the City of San Bernardino. A Certified Copy of which
recorded April 3, 1987 as instrument No. 87-110057 of Official Records, which would pass by normal operation of law.
556 00.00203\431259 14.6

Packet Page. 799

APN: 01 42-522-1 1:

Parcel 1:

Lot(s) 7 of Tract No. 7050, in the City of San Bernard ino, County of San Bernard ino, State of California, as per Map recorded in Book 90 Page(s) 44 of Maps, in the Office of the County of said County.

Together with that portion of the south 1/2 of 5th Street adjoining said land, as vacated by Resolution of the City Council of the City of San Bernardino, a Certified Copy of which
recorded April 3, 1987 as Instrument No. 87-110057, Official Records, which would pass by normal operation of law.

Parcel 2:

An easement for ingress and egress and rights incidental thereto over that portion of said land described in the certain Resolution No. 87-56 of the City Counc il of the City of San Bernardino, County of San Bernardino, State of California, a Certified copy thereof
recorded April 3, 1987 as Instrument No. 87-110057 of the Official Records of said County, except therefrom any portion lying within Parcel 1 above.

APN: 01 42-522-1 2:

Parcel 1:

Lot 6 of tract No. 7050, in the City of San Bernardino, County of San Bernar dino, State of California, as per Map recorded in Book 90 Page(s) 44 of maps, in the Office of the County Recorder of said County.

Together with that portion of the south 1 /2 of the 5th Street adjoining said land, as vacated by Resolution of the City Counc il of the City of San Bernardino, a Certified Copy of which
recorded April 3, 1987 as Instrument No. 87-110057, Official Records, which would pass by normal operation of law.

Par cel 2:

An easeme nt for ingress and egress and rights incidental thereto over that portion of said land described in that certain Resolut ion No. 87-56 of the City Coun cil of the City of San Bernardino, County of San Bernardi no, State of California, a Certified copy thereof
recorded April 3, 1987 as Instrument No. 87-110057 of the Official Records of said County. Except therefrom any portion lying within Parcel 1 above. 55 600.00203\43125914.6

Packet Page. 800

Reserv ing therefrom, for the ben efit of the Gra ntor an easement for ingress and egress an d rights incidental thereto over that portion of said land described in that certain Resolution
No. 87-56 of the City Coun cil of the City of San Bernardino, State of California, a certified copy thereof recorded April 3, 1987 as Ins trument No. 87-11005 7 of Official records of said County.

APN: 0142-522-13:

Parcel 1:

Lot 5 of Tract No. 7050, in the City of San Bern ardino, County of San Bernardino , State of California, as per Map recorded in Book 90, Page 44 of Maps , in the Office of the County Recorder of said County, together with that portion of the North 1/2 of 5th Street adjoining said land, as vacated by Resolution of the City Coun cil of the City of San Bernardino, a Certified Copy of which recorded April 3, 1987 as Instrument No. 87- 110057, Official Records, which would pass by normal operation
of law. Parcel 2:

An easement for ingress and egress and right s incidental thereto over that portion of said land described in that certain Resol ution No. 87-56 of the City Coun cil of the City of San Bernardino, County of San Bernardino, State of Californ ia, a Certified copy thereof
recorded April 3, 1987 as Ins trument No. 87-11 0057 of Official Records of said Coun ty, except therefrom any portion lying within Parcel 1 above.

APN: 0142-522-14:

Parcel 1:

Lot(s) 4 of Tract No. 7050, in the City of San Bern ardino, County of San Berna rdino, State of California, as per Map recorded in Book 90, page(s) 44 of Maps, in the Office of the County Recorder of said County, together with that portion of the North 1/2 of 5th Street adjoining said land, as vacated by Resolution of the City Coun cil of the City of San Bernardino, a Certified Copy of which recorded April 3, 1987 as Ins trument No. 87 -110057, Official Records, which would pass by normal operation
of law. Parcel 2:

An easement for ing ress and egress and rights in cidental thereto over that portion of said land described in that certain Resolution No. 87-56 of the City 55600.00203\43 125914.6

Packet Page. 801

Counc il of the City of San Bernardino, County of San Bernardino, State of California, a Certified Copy thereof
recorded April 3, 1987 as In strument No. 87-110057 of Official Records of said Cou nty. Except therefrom any portion lying within Parel 1 above.

APN: 0142-522-15:

Parcel 1:

Lot(s) 3 of Tract no. 7050, in the City of San Bernardino, Count y of San Bernardino, State of California, as per Map recorded In Book 90, Page(s) 44 of Maps, in the Office of the County Recorder of said County.

Toget her with that portion of the North 1/2 of 5th Street adjoining said land, as vacated by Resolution of the City Cou ncil of the City of San Bernardino, a Certified copy of which
recorded April 3, 1987 as Ins trument no. 87-1 10057, Official Records, which would pass by normal operation of law.

Parc el 2:

An easement for ingress and egress and rights incidental thereto, over that portion of said land described in that certain Resolution No. 87-56 of the City Coun cil of the City of San Bernardino, County of San Bernardino, State of California, a Certified copy thereof
recorded April 3, 1987 as Instrument No. 87-110057 of Official Records of said Count y. Except therefrom, any portion lying within Parcel 1 above.

AP N: 0142-522-16:

Parcel 1:

Lot(s) 2 of Tract no. 7050, in the City of San Bernardino, County of San Bernardino, State of California, as per Map recorded In Book 90, Page(s) 44 of Maps, in the Office of the County Recorder of said County.

Together with that portion of the North 1/2 of 5th Street adjoining said land, as vacated by Resolution of the City Coun cil of the City of San Bernard ino, a Certified copy of which
recorded April 3, 1987 as Ins trument no. 87-1 10057, Official Records, which would pass by normal operation of law.

Parcel 2:
55 600.00203\43125914.6

Packet Page. 802

An easement for ingress and egress and rights incidental thereto, over that portion of said land described in that certain Resolut ion No. 87-56 of the City Counc il of the City of San Bernard ino, County of San Bernardino, State of California, a Certified copy thereof
recorded April 3, 1987 as Instrument No. 87-11 0057 of Official Records of said County. Except therefrom, any portion lying within Parcel 1 above.

AP N: 0142-522-17:

Parcel 1:

Lot 1 of Tract no. 7050, in the City of San Bernardino, County of San Bern ardino, State of California, as per Map recorded in Book 90, Page(s) 44 of Maps, in the Office of the County Recorder of said County.

Toget her with that portion of the North 1 /2 of 5th Street adjoining said land, as vaca ted by Resolution of the City Council of the City of San Bernardino, a Certified copy of which
recorded April 3, 1987 as Instrument no. 87-110057, Official Records, which would pass by normal operation of law.

Parcel 2:

An ea sement for ingress and egress and rights incidental thereto over that portion of said land described in that certain Resolution No. 87-56 of the City Counc il of the City of San Bernardino, County of San Bernard ino, State of California, a Certified copy thereof
recorded April 3, 1987 as Instrument No. 87-11 0057 of Official Records of said County. Except therefrom, any portion lying within Parcel 1 above.

APN : 0142-522-25 :

Parcel 1:

That portion of the East 5 acres of the Southwest 1 /4 of Government Lot 7 of Section 6, Township 1 South, Range 4 West, San Bernardino Base and Meridian, in the City of San Bernardino, County of San Bernardino, State of California 1 according to the Official Map of said land, described as follows:

Begin ning at a point on the North line of said Southwest 1/4 of Government Lot 7, said point being distant North 89'49'15" East 100.00 feet from the Northeast corner of Lot 5 of Tract No. 7050, as per map recorded in Book 90, Page 44 of Maps, records of said County;
55600.00203\43125914.6

Packet Page. 803

Then ce North 89'49'15" East 50.00 feet;
Thence South O' 04' 38" East 148. 00 feet;
Thenc e South 89' 49' 15" West 50. 00 feet;
Then ce North O' 03' 38" West 148. 00 feet to the point of beginni ng.

Together with that portion of the North ½ of 5th Street adjoi ning said land on the South, as vacated by Resolution of the City Cou ncil of the City of San Berna rdino, a certified copy of which recorded April 3, 1987 as Instrument no. 87-110 057, Official Records, which would pass by normal operation of law.

Parcel 2:

An easement for ingress and egress and rights incident al thereto over that portion of said land described in that certain Resolution No. 87-56 of the City Cou ncil of the City of San Bernardino, County of San Bernardino, State of Californi a, a Certified copy thereof
recorded April 3, 1987 as Ins trument No. 87-11 0057 of Official Records of said County except therefrom any portion lying within Parcel 1 above.

APN : 0142-522-35:

Parcel 1 of Parcel Map No. 3525, in the City of San Bernardino, County of San Bernar dino, State of California, as per map recorded in Book 32, Page 19 of Parcel Maps, in the Office of the County Recorder of said County.

Together with that portion of the South 1 /2 of 5th Street adjoining said land on the North, as vacated by Resolution of the City Coun cil of the City of San Bern ardi no, a Certified Copy of which recorded April 3, 1987 as Instru ment No. 87-110057, Official Records, which would pass by normal operation of law.

Excepting therefrom all oil, gas, min erals and other hydrocarbons below a depth of 500 feet, without the rights of surface entry, as reserved in the deed from Glen dale Federal
Savi ngs and Loan Associatio n, as Un ited States Corporation, recorded December 10, 1981 as In strument No. 81-269 245, Official Reco rds.

Parcel 2:

Packet Page. 804

recorded April 3, 1987 as Ins trument No. 87-110057 of Official Records of said Count y. Except therefrom, any portion lying within Parcel 1 above.

APN: 0142-522-36:

Parcel 1:

Parcel 2 of Parcel Map No. 3525, in the City of San Bernardino, Count y of San Bern ardino, State of California, as per Map recorded in Book 32 Pag e(s) 19 of Parcel Maps, in the Office of the Count y Recorder of said Count y.

Tog ether with that portion of the South 1/2 of 5th Street adjoining said land to the North, as vacated by Resolution of the City Counc il of the City of San Bernardino, a Cert ified Copy of which recorded April 3, 1987, as Ins trument No. 87-110057, Official Records, which would pass by normal operation of law.

Except therefrom all oil, gas, min erals, and other hydrocarbon substances lying below the surface of said land , but with no right of surface entry, as provided in Deeds of Record.

Parcel 2:

An easement for ingress and egress and rights inc idental thereto over that portion of said land described in that certain Resolution No. 87-56 of the City Counc il of the City of San Bernardino, County of San Bernard ino, State of California, a Certified copy thereof
recorded April 3, 1987 as Instrument No. 87-110057 of the Official Records of said Count y.

Except therefrom any portion lying within Parcel 1 above reserving therefrom, for the
benef it of the Grantor an easement for ingr ess and egress and rights incidental theret o over that portion of said land described in that certain Resolution No. 87- 56 of the City Counc il of the City of San Bernardino, State of Californi a, a certified copy thereof recorded April 3, 1987 as In strume nt No. 87-110057 of official record s of said County.

APN: 0142-522-37 :

Parcel 3, inclusive of Parcel Map No. 3525, in the City of San Bernar dino, County of San Berna rdino, State of California, as per plat recorded in Book 32 of Parcel Maps , Page( s) 19, records of said Cou nty, together with the South 1 /2 of the 5th Street adjo ining said land on the North, as vacated by Resolution of the City 55600.00203\43 125914.6

Packet Page. 805

Coun cil of the City of San Berna rdino, a Certified Copy of which recorded April 3, 1987 as Instrument No. 87-110 057, Official
Reco rds.

APN : 0142-522-38:

Parcel 1:

Parcel 4 of Parcel Map No. 3525, in the City of San Bernard ino, County of San Bernardino, State of Califor nia, as per Map recorded in Book 32 Page(s) 19 of Maps, in the Office of the Cou nty Recorder of said County.

Together with that portion of the South 1/2 of 5th Street adjoining said land, as vacated by Resolution of the City Coun cil of the City of San Bernardino, a Certified Copy of which
recorded April 3, 1987 as Instrument No. 87-110 057, Official Records, which would pass by normal operation of law.

Parcel 2:

An eas ement for ingress and egress and rights in cidental thereto over that portion of said land described in that certain Resolution No. 87-56 of the City Coun cil of the City of San Bernardino, County of San Bernardino, State of California, a Certified copy thereof
recorded April 3, 1987 as Instrument No. 87-110057 of the Official Records of said Count y. Except therefrom any portion lying within Parcel 1 above.

APN: 0142-522-41:

PARCEL 1:

THAT PORTION OF THE EAST 5 ACRE S OF THE SOU THW EST 1/4 OF GOVER NMENT LOT 7 OF SE CTIO N 6, TOWNS HI P 1 SOUTH , RAN GE 4

WEST, SAN BERN ARDINO BASE AND ME RI DIAN , IN THE CITY OF SAN

BERNA RDINO, COU NTY OF SAN BERN ARDINO, STATE OF CALIF ORN IA,

ACC OR DIN G TO THE OFF ICIAL MAP OF SAID LA ND, DESCRIBED AS FOL LOWS:

BEG IN NI NG AT THE NO RTHEAST CORNER OF LOT 5 OF TRACT NO. 7050, AS PER MAP RECORDED IN THE BOOK 90 OF MAPS, PAGE 44, OF REC ORD S OF SAID CO UN TY; THENC E SOUTH O DEGRE ES 03' 38" EAST 55600. 00203\43125914.6

Packet Page. 806

ALO NG THE EAST LINE OF SAID LOT 5, 14 8.0 0 FEE T TO THE SOUTH EAST CORN ER THER EOF; THENCE NOR TH 89 DEGREE S 49' 5" EAST, 50.0 0
FEE T; THEN CE NOR TH O DEGREES 03' 38" WEST, 14 8.0 0 FE ET; TH ENCE SOU TH 89 DEGREE S 49' 15 " WEST, 50.0 0 FEE T TO THE PO IN T OF BE GINNIN G.

TOGE THER WITH THE NOR TH 1/ 2 OF 5TH STREET ADJOIN ING SAID

LAND ON THE SOUTH, AS VACATED BY RE SO LUTI ON OF THE CI TY

CO UN CIL OF THE CI TY OF SAN BE RNARD IN O, A CER TI FIED COPY OF WHICH RECORDED APRI L 3, 1 987 AS IN STRU MEN T NO. 87-1 1 0057 , OFFICI AL RECO RDS, WH ICH WOUL D PASS BY OPER ATION OF LAW.

APN: 0142-522-42:

THAT POR TION OF THE EAST 5 ACRES OF THE SOUTH WES T 1/4 OF GOVE RNM ENT LOT 7 OF SE CTI ON 6, TOWNS HIP 1 SOUTH , RANGE 4

WES T, SAN BERN ARD IN O BASE AN D MERIDI AN , IN THE CIT Y OF SAN

BER NARD IN O, COU NTY OF SAN BERN ARDINO, STATE OF CALIF ORN IA,

ACC ORDIN G TO THE OFFI CI AL MAP OF SAID LAND DE SC RIBED AS FOL LOWS :

BE GINN IN G AT A POIN T ON THE NOR TH LINE OF SAI D SOUT HWEST 1/4 OF GO VE RNMEN T LOT 7, SAID POI NT BEING DI STANT NOR TH 89 DEG REE S 49' 15 " EAST 50.0 0 FEE T FR OM THE NOR TH EAST COR N ER OF LOT 5, TRACT NO. 7050 , AS PER MAP RECO RDED IN BOOK 90, OF MAP S, PAG E 44, RECORDS OF SAID COU NTY; THENCE NOR TH 89 DEGREES 49' 15 "
EAST, 50.00 FE ET; TH ENCE SOUTH O DEG REES 03' 38" EAST, 14 8.0 0 FEET; TH ENCE SOUTH
89 DEG REE S 49' 15 " WEST, 50.00 FEE T; THENCE NOR TH O DEGREES 03' 38" WEST, 14 8.0 0 FEE T TO TH E PO IN T OF TH E BE GINNING.

TOG ETH ER WITH THE NOR TH 1/ 2 OF 5TH STR EET ADJ OININ G SAI D LAND

ON THE SO UTH , AS VACATED BY RESOLU TION OF THE CIT Y CO UNCIL OF

TH E CIT Y OF SAN BER NARD IN O, A CER TI FIED COP Y OF WH ICH RECORDED APRI L 3, 19 87 AS IN STRUMENT NO. 87-1 1 0057, OFFI CI AL RECO RDS, THAT WOUL D PASS BY OPER ATION OF LAW. 55600.00203 \43125914.6

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EXH IBIT "B "

WORKER S' COMPE NSATION WAIVER
I, ;v1 ,c,h ac\ /vl� , on beh al f of Deve loper, hereby, certify and ackno wledge that Developer is awa re of the workers' com pensation laws of the State �f Cali forn ia and that Developer cu rrently has no emp loyees who would be sub ject to the protection of the Workers Comp en sation Act. Fu rther mor e, Developer ag rees that, if at any time dur ing the term of the Agreement, any empl oyees are hir ed by Deve loper, tha t Developer will comp ly with the requir ement of the workers' com pen sation laws . At that �:
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Title: Y \}f kChcf'])e�@r'V-�J a-ff
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55 600.002031 43 12 5914.6

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Resolution No. 2025-407
Resolution 2025-407
December 17, 2025

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Mayor and City CouncilDecember 17, 2025

Mayor and City Council
December 17, 2025