AƩachment C
VICTORVILLE WATER DISTRICT
(A COMPONENT UNIT OF THE CITY OF VICTORVILLE,
CALIFORNIA)
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2023
VICTORVILLE WATER DISTRICT
(A COMPONENT UNIT OF THE CITY OF VICTORVILLE, CALIFORNIA)
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
INDEPENDENT AUDITORS’ REPORT 1
BASIC FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 5
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 7 STATEMENT OF CASH FLOWS 8
NOTES TO FINANCIAL STATEMENTS 10
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PLAN’S PROPORTIONATE SHARE OF NET PENSION LIABILITY 34 SCHEDULE OF PLAN CONTRIBUTIONS 35
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS 36
SUPPLEMENTARY INFORMATION
COMBINING SCHEDULE OF NET POSITION 39
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 40
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(1)
INDEP
ENDENT AUDITORS’ REPORT
Honorable Mayor and City Council
Victorville Water District
Victorville, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the Victorville Water District (the District), a component unit of the City of Victorville, California, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Victorville Water District’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 District as of June 30, 2023, and the changes in financial position, and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities 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 District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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 Victorville Water District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Honorable Mayor and City Council
Victorville Water District
(2)
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 opinion. Reasonable assurance is a hi gh level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial stat ements, whether due
to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosure s in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordin gly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those cha
rged 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.
Honorable Mayor and City Council
Victorville Water District
(3)
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the schedule of the plan’s proportionate share of the net pension liability, schedule of plan contributions, and schedule of the plan’s proportionate share of the total OPEB liability, be presented to supplement the basic financial statements. Such information is the res ponsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the informat ion because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has omitted management’s discussion and an alysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Supplementary Information
Our audit for the year ended June 30, 2023 was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the District’s basic financial statements. The combining schedule of net position and the combining schedule of revenues, expenses and changes in net position (supplementary information) for the year ended June 30, 2023 are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended June 30, 2023 and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole for the year ended June 30, 2023.
Honorable Mayor and City Council
Victorville Water District
(4)
We also previously audited, in accordance with GAAS, the basic financial statements of the District as of and for the year ended June 30, 2022 (not presented herein), and have issued our report thereon dated April 11, 2023, which contained an unmodified opinion on the financial statements of the District.
The combining schedule of net position and the combining schedule of revenues, expenses and changes in net position (supplementary information) for the year ended June 30, 2022, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the June 30, 2022 financial statements. The supplementary information has been subjected to the auditing procedures applied in the audit of the June 30, 2022 basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare those financial statements or to those financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole for the year ended June 30, 2022.
Report on Summarized Comparative Information
We have previously audited the District’s 2022 financial statements, and we expressed an unmodified opinion on the financial statements in our report dated April 11, 2023. In our opinion, the summarized comparative information presented herein as of and fo r the year ended June 30, 2022, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 10, 2024, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Victorville Water District’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
Irvine, California
June 10, 2024
VICTORVILLE WATER DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2023
(WITH COMPARATIVE DATA FOR JUNE 30, 2022)
See accompanying Notes to Financial Statements.
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2023 2022
ASSETS
CURRENT ASSETS
Cash and Investments 78,986,581$ 74,178,469$
Cash and Investments with Fiscal Agent 836,639 836,313 Accounts Receivable, Net 5,176,781 6,340,504
Interest Receivable 248,870 58,333
Due from Other Governments 19,946 34,652
Inventory 866,934 948,273
Total Current Assets 86,135,751 82,396,544
NONCURRENT ASSETS
Prepaid Deposits 28,306 21,523
Nondepreciable Capital Assets 40,643,195 35,176,126 Depreciable Capital Assets, Net 119,672,824 122,916,314 Total Noncurrent Assets 160,344,325 158,113,963
Total Assets 246,480,076 240,510,507
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows - OPEB Related 2,707,614 2,106,668 Deferred Outflows - Pension Related 6,095,478 2,876,885 Total Deferred Outflows of Resources 8,803,092 4,983,553
VICTORVILLE WATER DISTRICT
STATEMENT OF NET POSITION (CONTINUED)
JUNE 30, 2023
(WITH COMPARATIVE DATA FOR JUNE 30, 2022)
See accompanying Notes to Financial Statements.
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2023 2022
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 4,376,617$ 4,592,839$
Interest Payable 161,029 168,460
Prepaid Water Connection Fees 217,489 217,489
Deposits Payable 1,700,469 1,669,971
Total OPEB Liability - Due Within One Year 273,537 253,227 Long-Term Liabilities, Due Within One Year 962,094 841,847 Total Current Liabilities 7,691,235 7,743,833
NONCURRENT LIABILITIES
Total OPEB Liability 11,388,426 12,275,005
Net Pension Liability 16,156,738 9,263,027
Long-Term Liabilities, Due in More Than One Year 7,935,676 8,330,788 Total Noncurrent Liabilities 35,480,840 29,868,820
Total Liabilities 43,172,075 37,612,653
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - OPEB Related 3,985,338 2,420,187 Deferred Inflows - Pension Related 1,029,801 4,385,336 Total Deferred Inflows of Resources 5,015,139 6,805,523
NET POSITION
Net Investment in Capital Assets 151,942,967 150,031,812 Unrestricted 55,152,987 51,044,072
Total Net Position 207,095,954$ 201,075,884$
VICTORVILLE WATER DISTRICT
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2023
(WITH COMPARATIVE DATA FOR THE YEAR ENDED JUNE 30, 2022) See accompanying Notes to Financial Statements.
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2023 2022
OPERATING REVENUES
Utility Sales 30,269,489$ 36,135,804$
Meter and Service Fees 9,801,678 8,306,160
Pass-Thru Charges 1,211,013 991,164
Fines and Forfeitures 485,824 145,832
Arsenic Surcharge 285,035 275,274
Other 242,429 405,018
Total Operating Revenues 42,295,468 46,259,252
OPERATING EXPENSES
Personnel Services 11,648,542 9,681,920
Maintenance and Operations 19,228,008 13,118,928
Production Costs 5,434,263 11,026,983
Pass-Thru Production Costs 1,211,013 2,698,831
Depreciation and Amortization 6,524,962 7,194,999 Total Operating Expenses 44,046,788 43,721,661
OPERATING INCOME (LOSS) (1,751,320) 2,537,591
NONOPERATING REVENUES (EXPENSES)
Taxes 1,335,019 1,130,682
Intergovernmental - 634,939
Investment Income 1,898,079 (243,999)
In
terest Expense (381,764) (399,462)
Gain on
Disposition of Assets 338,923 16,201
Other Nonoperating Revenues (220,750) (8,427)
Settlement Proceeds - 843,920
Total Nonoperating Revenues (Expenses) 2,969,507 1,973,854 INCOME BEFORE CAPITAL CONTRIBUTIONS 1,218,187 4,511,445
CAPITAL CONTRIBUTIONS
Capital Restricted Use Fees 3,749,915 6,053,629
Alternate Water Source Fees 528,412 1,110,296
Contributions from the City of Victorville 586,681 813,860 Contributions to the City of Victorville (73,125) - Capital Contributions 10,000 198,457
Total Capital Contributions 4,801,883 8,176,242
CHANGE IN NET POSITION 6,020,070 12,687,687
Net Position - Beginning of Year 201,075,884 188,388,197 NET POSITION - END OF YEAR 207,095,954$ 201,075,884$
VICTORVILLE WATER DISTRICT
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2023
(WITH COMPARATIVE DATA FOR THE YEAR ENDED JUNE 30, 2022) See accompanying Notes to Financial Statements.
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2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers 41,565,129$ 43,403,105$ Cash Payments to Employees for Services (11,108,779) (10,179,711) Cash Payments to Suppliers for Goods and Services (19,431,426) (14,339,984) Net Cash Provided by Operating Activities 11,024,924 18,883,410
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Cash Received from Other Governments 1,335,019 1,765,621 Cash Received from Settlements - 843,920
Net Cash Provided by Noncapital Financing Activities 1,335,019 2,609,541
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Cash Received from the Sale of Capital Assets 614,109 16,252 Cash Payments to the City of Victorville for Acquisition of Capital Assets (73,125) -
Cash Payments to Acquire Capital Assets and Other Assets (8,983,075) (7,591,359) SBITA Principal Payments (9,888) -
Principal Paid on Capital-Related Debt (410,000) (395,000) Interest Paid on Capital-Related Debt (395,388) (412,403) Net Cash Used by Capital and Related Financing Activities (9,257,367) (8,382,510)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment Purchases - (276,964)
In
terest Received on Investments 1,705,536 -
Net Cash Provided (Used) by Investing Activities 1,705,536 (276,964) NET INCREASE IN CASH AND CASH EQUIVALENTS 4,808,112 12,833,477 Cash and Cash Equivalents - Beginning of Year 74,178,469 61,344,992 CASH AND CASH EQUIVALENTS - END OF YEAR 78,986,581$ 74,178,469$
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:
Cash and Investments 78,986,581$ 74,178,469$
VICTORVILLE WATER DISTRICT
STATEMENT OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(WITH COMPARATIVE DATA FOR THE YEAR ENDED JUNE 30, 2022) See accompanying Notes to Financial Statements.
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2023 2022
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY OPERATING ACTIVITIES (1,751,320)$ 2,537,591 $ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities:
Depreciation 6,524,962 7,194,999
Nonoperating Miscellaneous Revenue (Expense) and
Capital Contributions 4,644,258 8,167,815
(Increase) Decrease in Assets:
Accounts Receivable, Net 1,163,723 (1,525,785)
Due from Other Governments 14,706 (19,941)
Inventory 81,339 299,405
Prepaid Deposits (6,783) 182,365
Deferred Outflows - OPEB (600,946) 179,130
Deferred Outflows - Pension (3,218,593) (153,563)
Increase (Decrease) in Liabilities:
Accounts Payable (216,222) 2,313,159
Prepaid Water Connection Fees - -
Deposits Payable 30,498 231,593
Compensated Absences 122,244 57,541
Total OPEB Liability (866,269) 724,239
Net Pension Liability 6,893,711 (4,813,818)
Deferred Inflows - OPEB 1,565,151 (616,273)
Deferred Inflows - Pension (3,355,535) 4,124,953
Net Cash Provided by Operating Activities 11,024,924$ 18,883,410$
NONCASH CAPITAL, FINANCING, AND
INVESTING ACTIVITIES
Developer/Tenant Contributed Capital Assets 10,000$ -$ SBITA Acquisition 30,652 -
Total 40,652$ -$
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOT
E 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Reporting Entity
On August 15, 2007, the Victor Valley Water District and th e Baldy Mesa Water District
were consolidated into a subsidiary district of the City of Victorville (the City), know n as the Victorville Water Di
strict (the District), per Resolution No. 2977 of the Executive Officer of the Local Agency Formation Commission (LAFCO) of San Bernardino County, which adopted a change of organization without election. All of the liabilities includi ng debt obligations of the
Victor Valley Water District and the Baldy Mesa Water District were assumed by this subsidiary district and the City upon consolidation. Upon consolidation of the two districts, the City consolidated the operations and activities of it s Water Department and Water Funds into the District to
serve all of the water custom ers
of the City
under this District. The basic operations of the District are financed by user charges plu
s capital contributions to finance growth of the water delivery system. The District
is governed by a five-member Board of Directors (the City Council), each holding staggered four-year terms.
The District
is an integral part of the reporting entity of the City of Victorville (the City ) and is refle
cted as a blended component unit within the City of Victorville. Blended component units are, in substance, part of the primary government’s operations, ev en though they are legally
separate entities. The District fund ha s been included within the scope of the basic fina
ncial statem ents of the City because the City Council is the governing b
oard and has financial accountability over the operations of the District. Only the District fund is included herein and these financial st atements, therefore, do not
purport to represent the financial position or results of operations of the City of Victorville, California.
B. Basic Financial Statements
The basic f
inancial statements are comprised of the statement of net position, the statement of revenues, expenses, and changes in net position, the statement of cash flows, and the notes to the basic financial statem
ents.
C. Basis of Accounting, Measurement Focus, and Financial Statement Presentation The District
reports its activities as an enterprise fund (proprietary fund type), which is used to account for operations that
are financed and operated in a manner similar to a
private business enterpr ise, where the intent of the District is that the costs of providing water to its
customers on a continuing basis be financed or recovered primarily through user charges (water sales and services), capital grants and similar funding.
The accou
nting and financial reporting treatment is de termined by the applicable measureme
nt focus and basis of accounting. Measurement focus indicates the ty pe of resources
being measured such as econom ic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(11)
NOT
E 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Accounting, Measurement Focus, and Financial Statement Presentation (Continued)
Proprietary f
unds are presented using the economic resources measurement focus. This means that all asset
s, deferred outflows of resources, liabilities, and def erred inflows of resources (
whether current or noncurrent) associated with their activity are included on their statement of net position.
Proprietary funds are presented using the accr
ual basis of accounting. Revenues are
recognized when they are earned and expenses are recognized when the related goods or services
are delivered, regardless of when the related cash flows take place. Amounts paid to acquire capital assets are capitalized as assets. Proceeds of long-term debt a nd acquisit
ions under leases and SBITAs are recorded as a liability. Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liability. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable b ond premium or
discount. Issuance costs, whether or not withheld from the actual debt proceeds received, ar
e reported as debt service expenses.
The District
distinguishes operating revenues and expenses from nonoperating items.
Operating revenues, such as water sales and service charges that include utility sales, meter and service fee
s, pass-thru charges, fines and forfeitures, arsenic surcharge, and other reimb
ursements, result from exchange transactions associat ed with the principal activit
ies of the District. Exchange transactions are those in which each party receives and gives
up essentially equal values. Nonoperating revenues, such as taxes and investment income, result from nonexchange transactions, in which, the District gives (receives) value without directly receiving (giving) value in e xchange.
Operating expenses, su
ch as the cost or providing water, include the personnel services, maintenance and operations, productions costs, pass-thru production costs, and depreciation and amortization on capital assets. All expenses not meeting this definit ion,
such as
interest expense, are reported as nonoperating expenses.
D. Cash and Investments
Investments are reporte
d in the accompanying statement of net position at fair value.
Fair value is the price th
at would be received to sell an asset or paid to transfer a lia bility in an orde
rly transaction between market participants at the measurement date.
Changes in fair value that occur during a fiscal year are recognized as invest ment income rep
orted for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upo n the liquidation or sale of investm
ents.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOT
E 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Cash Equivalents
For purpose
s of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments with original maturities of three months or less from the date of acquisition that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of change s in
interest rate
s. Cash equivalents include the cash and investments held by a fiscal agent.
F. Accounts
Receivable, Net
The District
extends credit to customers in the normal course of operations. W hen managemen
t deems customer accounts uncollectible, the District uses the allowance method for the reservation and directly write-off of those accounts.
G. Inventory
The District
uses the consumption method of accounting for inventories. In ventory consist
s primarily of water meters, pipe and pipe fittings for construction, and repair to the District’s water transmission and distribution system. Materials and supplie s are valued at co
st using a weighted average method.
H. Prepaid
Deposits
Certain payments to vendors reflect costs or d
eposits applicable to future accounting
periods and are recorded as prepaid items in the basic financial statements utilizing the consumption method.
I. Capital Assets
Tangible ca
pital assets are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated tangible ca pital assets
are recorded at estimated acquisition value at the date of donatio n. SBITA assets are initially
measured as the sum of the present value of payments expected to be made during the subscription term, payments associ ated with the SBITA contract made to the SBITA vendor at the
commencement of the subscription term, when applicable, and capitalizable implementation costs, less any SBITA vendor incentives received form the SBITA vend
or at the commencement of the SBITA term. SBITA assets are amortized in a systematic and rational manner over the shorter of the subscription te rm or the useful life of the un
derlying IT assets. The District capitalizes all assets with an initial individual cost of more than $5,000 and a u
seful life in excess of one year. The cost of normal
maintenance and repairs that do not add to the value of the assets or materially ex tend the life are n
ot capitalized.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(13)
NOT
E 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. Capital Assets (Continued)
Depreciatio
n is computed utilizing the straight-line method over the following useful lives:
Buildings and Improvements 10 to 50 Years
Computer and Communications 5 Years
Furniture and Equipment 3 to 7 Years
Infrastructur
e:
Transmission and Distribution Systems 40 Years
Source of Supply – Wells 10 to 40 Years
Water Treatment Systems 5 to 10 Years
Intangibles 5 to 25 Years
Vehicles 8 to 15 Years
J. Customer Deposits
Based on a
customer’s credit, the District may require a deposit deemed reasonable by the District
. These deposits are held to pay off close out bills or to cover delinq uent payments.
K. Compensated Absences
A liability i
s recorded for unused vacation and similar compensatory leave balan ces since the e
mployees’ entitlement to these balances is attributable to services alr eady rendered an
d it is probable that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement.
A liability is recorded for unused sick leave balances only to the extent that it is probable that the unused balan ces will result in termination payments. This is estimated by including
in the liability the unused balances of employees currently entitled to re ceive termination payment, as well as tho
se who are expected to become eligible to receive
termination benefits as a result of continuing th eir employment with the District. Other amounts of unused sick leave are
excluded from the liability since their payment is
contingent solely upon t
he occurrence of a future event (illness), which is outside the control of th
e District and the employee.
The balance
of unpaid vacation and vested sick leave at year-end is recorded as a long- term liability in the financial statements.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(14)
NOT
E 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L.
Deferred Outflows and Deferred Inflows of Resources
In addition
to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources , represents a consumption of net assets that applies to futu re periods and
so will not be recognized as an outflow of resources (expense) until that time. The category of
deferred outflow of resources reported in the statement of net position is related to pension and other postemployment benefits, which are more fully discussed in
Notes 6 and 5, respectively.
In addition to liabilities, the statement of net position reports a separate section for deferred inf
lows of resources. This separate financial statement element, deferred inflows of r
esources, represents an acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources (revenue) until that ti me.
The District
’s deferred inflows of resources reported on the statement of net position relate to pension and other postemployment benefits, which are more fully discusse d in Notes 6 and 5, respectively.
M. Prepaid Water Connection Fees
Prepaid con
nection fees were received before year-end but will not be earned until the properties are developed and connected to the District’s system.
N. Capital Contributions
Capital con
tributions represent cash and capital asset additions contributed to the District through the collection of AB-1600 connection fees, by property owners, gran ting agencies, or
real estate developers desiring services that require capital expenditures or capacity commitment.
O. Net Position
Net Position
is classified in the following categories:
Net Investm
ent in Capital Assets – This amount consists or capital assets net of accumulated depreciation and reduced by outstanding debt (including premiums and discounts) that attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Position – This amount is restricted by enabling legislation (such as external creditors, grantors, contributors, laws, or regulations of other governments).
Unrestricted Net Position – This amount is all of the net position that does not meet the definition of “net investment in capital assets” or “restricted net position.”
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(15)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Net Position (Continued)
Sometimes the District will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the District’s practice to consider restricted net position to have been depleted before unrestricted net position is applied, unless otherwise directed by Council.
P. Pensions
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by the CalPERS. 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. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Forms and Publications.
Q. Prior Year Data
Selected information regarding the prior year had been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the District’s prior year financial statements, from which this selected financial data was derived.
R. Estimates
The presentation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(16)
NOT
E 2 CASH AND INVESTMENTS
Cash and investments as of June 30, 2023, are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Investments 78,986,581 $
Cash and Investments with Fiscal Agent 836,639
Total Cash and Investments 79,823,220$
Cash and in
vestments as of June 30, 2023, consist of the following:
Deposits with Financial institutions 99,910$
Deposits Held in City Pool 47,670,086
Investments 32,053,224
Total Cash and Investments 79,823,220$
Investments Pool of the City of Victorville
The District’s equity in the cash and investment City pool is managed by the City of Victorville. The District is a voluntary participant in that pool. This pool is governed by and under the regulatory oversight of the Investment Policy adopted by the City Council of the City of Victorville. The District has not adopted an investment policy separate from that of the City of Victorville. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’s pro-rata share of the fair value calculated by the City for the entire City portfolio. The balance available for withdrawal is based on the accounting records maintained by the City, which are recorded on an original cost basis.
Investments Authorized by the California Government Code and the City’s Investment Policy
The City adopts the investment policy for the District. The table on the following page identifies the investment types that are authorized for the District by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(17)
NOT
E 2 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by the California Government Code and the City’s Investment Policy (Continued)
Authorized by Maximum Maximum
Investment Types Investment Maximum Percentage Investment Authorized by State Law Policy Maturity* of Portfolio* in One Issuer* Local Agency Bonds Yes 5 Years 70% None
U.S. Treasury Obligations Yes 5 Years 70% None
U.S. Agency Securities Yes 5 Years 75%** None
Banker’s Acceptances No 180 Days 40% 30%
Commercial Paper - Nonpooled Funds No 270 Days 25% 10%
Commercial Paper - Pooled Funds No 270 Days 40% 10%
Negotiable Certificates of Deposit Yes 2 Years 30% None Repurchase Agreements No 1 Year None None
Reverse Repurchase Agreements No 92 Days 20% of Base Value None Medium-Term Notes No 5 Years 30% None
Mutual Funds*** Yes 5 Years 20%* 10%
Money Market Mutual Funds*** Yes 5 Years 20%* None
Mortgage Pass-Through Securities No 5 Years 20% None
County Pooled Investment Funds No N/A None None
Local Agency Investment Fund (LAIF) Yes N/A None $75M
JPA Pools (Other Investment Pools) No N/A None None
* B
ased on state law requirements or investment policy requirements, whichever is more restrictive. ** Ginnie Mae is not to exceed 20% of the total portfolio. *** Fund must be an AAA rated Government or U.S. Treasury money fund.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the District’s investment policy. The following table identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.
Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity Allowed in One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 360 Days None None
Commercial Paper 270 Days None None
Money Market Mutual Funds None None None
Repurchase Agreements None None None
Investment Contracts None None None
Certificate of Deposit None None None
Local Agency Investment Fund (LAIF) None None None
California Common Law Trust Shares None None None
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(18)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District manages 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 is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair val ues of the District’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of these investments by maturity:
Remaining
Maturities
(in Months)
Investment Type Total Within 12 60+
LAIF 31,216,585 $ 31,216,585 $ - $
Held by Bond Trustee:
Guaranteed Investment
Contract (GIC)* 816,500 - 816,500 Money Market Mutual Funds 20,139 20,139 - Total 32,053,224 $ 31,236,724 $ 816,500
* The District's GIC is with Financial Security Assurance (FSA). The contract required FSA to deposit cash, governmental securities, or governmental bonds as collateral with Bank of New York, at a value of at least 100%, 104%, or 105%, respectfully, of the investment balance. the termination of the investment contract and release of collateral would occur in the event of default by FSA. As of June 30, 2023, FSA was not in default and the value of the collateral met the requirements.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an 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 C ode, the City’s investment policy, or debt agreements, and the actual Standard & Poor’s rating as of year-end for each investment type.
Minimum
Investment Type Total Legal Rating AAA Not Rated
LAIF 31,216,585 $ N/A - $ 31,216,585$ Held by Bond Trustee:
Guaranteed Investment
Contract (GIC) 816,500 N/A - 816,500 Money Market Mutual Funds 20,139 AAA 20,139 - Total 32,053,224 $ 20,139 $ 32,033,085$
Ratings as of Year-End
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(19)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The investment policy of the District contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The District has no investments in any one issuer (other than LAIF and money market mutual funds) that represent 5% or more of the City’s investments.
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 (e.g., broker-dealer) 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 and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit).
The market 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 District deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2023, the District’s deposits (bank balances) were insured by the federal depository insurance limits or collateralized as required under California Law.
For investments 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.
Investment in State Investment Pool
The District 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 District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’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.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(20)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurements
The District categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally accepted in the United States of America.
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 the 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:
- Quoted prices for similar assets or liabilities in active markets; - Quoted prices for identical or similar assets or liabilities in markets that are inactive;
- Inputs other than quoted prices that are observable for the asset or liability; - Inputs that are derived principally from or corroborated by observable market data by correlation of other items.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurements. These unobservable inputs reflect the District’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 District’s own data.
The District’s investments in LAIF and money market mutual funds (held by bond trustee) are not subject to the fair value measurement hierarchy. The District’s investment in the GIC are included in Level 3 since they are not actively traded. To value the GIC, the District verified the collateral required was held at a minimum of 100% of the value reported above and recorded the investment at that amount.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(21)
NOTE 3 CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2023, is as follows:
Balance Balance
July 1, 2022 Additions Deletions June 30, 2023
Nondepreciable Assets:
Land 8,884,171 $ 17,876 $ - $ 8,902,047$ Intangibles 18,337,872 646,966 (24,974) 18,959,864 Idle Assets 3,017,958 - - 3,017,958 Land Improvements 536,342 - - 536,342 Construction in Progress 4,399,783 7,678,850 (2,851,649) 9,226,984 Total Nondepreciable Assets 35,176,126 8,343,692 (2,876,623) 40,643,195 Depreciable Assets:
Buildings and Improvements 28,358,403 130,561 (734,495) 27,754,469 Computer and Communication 672,671 67,337 - 740,008 Furniture and Equipment 37,900,013 58,078 - 37,958,091 Infrastructure 202,968,269 2,831,156 - 205,799,425 Intangibles 1,542,724 - - 1,542,724 Vehicles 3,992,529 413,900 (102,547) 4,303,882 Total Depreciable Assets 275,434,609 3,501,032 (837,042) 278,098,599 Less Accumulated Depreciation:
Buildings and Improvements (11,457,140) (685,265) 484,283 (11,658,122) Computer and Communication (649,958) (14,903) - (664,861) Furniture and Equipment (31,267,784) (753,226) - (32,021,010) Infrastructure (105,059,887) (4,810,549) - (109,870,436) Intangibles (1,542,725) - - (1,542,725) Vehicles (2,540,801) (258,454) 102,547 (2,696,708) Total Accumulated Depreciation (152,518,295) (6,522,397) 586,830 (158,453,862) Total Depreciable Assets, Net 122,916,314 (3,021,365) (250,212) 119,644,737 Subscription Based Information
Technology Arrangement (SBITA)
Assets Being Amortized:
SBITA Assets - 30,652 - 30,652 Accumulated Amortization - (2,565) - (2,565) Total SBITA Assets,
Being Amortized, Net - 28,087 - 28,087 Total Capital Assets Being
Depreciated or Amortized, Net 122,916,314 (2,993,278) (250,212) 119,672,824 Capital Assets, Net 158,092,440 $ 5,350,414 $ (3,126,835) $ 160,316,019 $
Depreciation and amortization expense for the District was $6,524,962 for the year ended June 30, 2023.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(22)
NOTE 4 LONG-TERM LIABILITIES
A summary of changes in long-term liabilities for the year ended June 30, 2023, is noted below:
Balance Balance Due Within
July 1, 2022 Additions Retirements June 30, 2023 One Year Other Long-Term Liabilities:
Compensated Absences 550,938 $ 506,823 $ (384,579) $ 673,182 $ 527,666 $ SBITAs - 28,972 (9,888) 19,084 9,428 Other Debt:
2006 Certificate of Participation 8,535,000 - (410,000) 8,125,000 425,000 Unamortized Discounts/Premiums 86,697 - (6,193) 80,504 - Total 9,172,635 $ 535,795 $ (810,660) $ 8,897,770 $ 962,094 $
SBITAs
The District has entered into subscription based-information technology arrangements (SBITAs) for various software licenses. The SBITA arrangements expire at various dates through 2027 and do not provide for renewal options. The interest rates vary from 2.4% to
2.7% and there are no variable payments.
The future subscription payments under SBITA agreements are as follows:
Year Ending June 30, Principal Interest
2024 9,428 $ 465 $
2025 9,656 235
Total 19,084 $ 700 $
SBITAs
Right-to-use assets acquired through SBITAs, net of accumulated amortization, are reported in Note 3, Capital Assets.
2006 Certificates of Participation
On March 1, 2006, the City of Victorville’s Baldy Mesa Water District issued 2006 Certificates of Participation. The proceeds were used to finance public improvements within the Baldy Mesa Water District service area.
The Certificates of Participation had a stated interest rates ranging from 3.20% to 5.00%.
The annual debt service is a special limited obligation of the District payable from and secured by a pledge of and lien on the net revenues of the District - see end of note.
Principal and interest payments are due each August 1 and interest only payments are due each February 1. The amount of Certificates of Participation outstanding at June 30, 2023 is $8,125,000.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(23)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
The annual requirements to amortize outstanding debt of the District as of June 30, 2023, are as follows for each fiscal year ending June 30:
Year Ending June 30, Principal Interest
2024 425,000 $ 377,226 $
2025 445,000 358,304
2026 465,000 338,511
2027 485,000 317,849
2028 505,000 295,938
2029-33 2,910,000 1,094,263
2034-37 2,890,000 297,750
Subtotal 8,125,000 3,079,840 $
Premium 80,504
Total 8,205,504 $
Certificates of Participation
Rate Covenant
The 2006 Certificates of Participation require that the Baldy Mesa Water District to generate sufficient net revenues which are at least equal to 110% of the amount of the installment payments and Parity Obligation coming due and payable in each fiscal year. The 2006 Certificates of Participation were issued before Baldy Mesa and Victor Valley Water District were consolidated into Victorville Water Dist rict. The City performed the calculation that demonstrated compliance with rate covenant for the fiscal year ended June 30, 2023. The calculation was prepared using revenues and the proportionate expenses applicable to the Baldy Mesa Water District.
Pledged Revenues
The District has a debt issuance outstanding that is collateralized by the pledging of certain revenues. The amount and term of the remainder of this commitment is indicated in the debt service to maturity table presented previously. The purpose for which the proceeds of the related debt issuance was utilized are disclosed in the debt description noted previously.
For the current year, pledged gross revenue (or net of certain expenses where so required by the debt agreement) as a percentage of the debt service payments are indicated in the table below:
Annual Amount Annual Debt
of Pledged Service Payment Pledged
Revenue (Net (of All Debt Revenue as
of Expenses, Secured by a Percentage
Description of Pledged Revenue Where Required) This Revenue) of Debt Service Net Revenues Pledged by the
District for the 2006
Certificates of Participation 1,570,863 $ 805,388 $ 195%
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(24)
NOTE 5 OTHER POSTEMPLOYMENT BENEFITS PLAN
Plan Description
The District Plan provides medical benefits to eligible retired Water District employees and beneficiaries in accordance with various labor agreements. The plan covers employees who retire directly from the District with five years of service. The District Plan also provides Dental and Vision benefits to eligible former Water District employees with 15 years of service. The District also pays life insurance premium for eight Water District retirees and no benefit is available for future retirees. The District provides a contribution up to a certain amount (a portion of the Health Net HMO single premium). The percentage varies based on years of service.
Funding Policy
The contribution requirements of plan members and the District are established and may be amended by City Council. The contribution required to be made under City Council and labor agreement requirements is based on a pay-as-you-go basis (i.e., as medical insurance premiums become due). The District has not established a trust for the purpose of holding assets accumulated for plan benefits.
Employees Covered
As of the June 30, 2022 measurement date, the following current and former employees were covered by the benefit terms under the Plan:
Active Employees 85
Inactive Employees or Beneficiaries Currently
Receiving Benefits 38
Inactive Employees Entitled to, But Not Yet
Receiving Benefits 6
Total 129
Contributions
The District Plan and its contribution requirements are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the District and the bargaining units.
The annual contribution is based on the year’s retiree medical premiums (pay-as-you-go basis). For the fiscal year ended June 30, 2023, the District’s cash contributions were $247,663 for current premiums, administrative costs of $965, and the estimated implied subsidy was $66,000 resulting in total payments of $314,628.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(25)
NOTE 5 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
OPEB Liability
The District’s total OPEB liability was measured as of June 30, 2022 and was determined by an actuarial valuation dated June 30, 2022.
Actuarial Cost Method Entry Age Normal
Actuarial Assumptions:
Discount Rate 3.54%
Inflation 2.50%
Salary Increases 2.75% per annum, in aggregate
Investment Rate of Return N/A
Mortality, Retirement, Disability,
and Termination 2000-2019 Experience Study
Mortality Improvement Postretirement mortality projected fully generational with Scale MP-2021
Healthcare Trend Rate Non-Medicare: 8.5% for 2024, decreasing to an ultimate rate of 3.45% in 2076
Medicare (Non-Kaiser) - 7.5% for 2024, decreasing to an ultimate rate of 3.45% in 2076
Medicare (Kaiser) - 6.25% for 2024, decreasing to an
ultimate rate of 3.45% in 2076
Discount Rate
The discount rate used to measure the total OPEB liability was 3.54%. The discount rate is determined based on the Bond Buyer 20-Bond Index since the District has not established a trust.
Change in Actuarial Assumptions
The following actuarial assumption changes occurred form the measurement periods ended June 30, 2021 to 2022:
The discount rate changed from 2.16% to 3.54% based on changes in the index. Inflation was lowered from 2.75% to 2.50%.
The healthcare trend rate was updated as follows: Non-Medicare increased from
7.0% to 8.5%; Medicare (Non-Kaiser) increased from 6.1% to 7.5%; and Medicare (Kaiser) increased from 7.0% to 6.25%.
Demographic assumptions were updated from the CalPERS 1997-2015 Experience Study to the CalPERS 2000-2019 Experience Study.
Mortality improvement was updated from Scale MP-2020 to Scale MP-2021.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(26)
NOTE 5 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
Changes in the Total OPEB Liability
The changes in the total OPEB liability for the District Plan are as follows:
Total OPEB
Liability
Total OPEB Liability at June 30, 2021 (MD) 12,528,232 $ Service Cost 626,941
Interest 281,198
Differences Between Expected and Actual Experience 987,796 Changes of Assumptions (2,488,667)
Benefit Payments (273,537)
Net Changes During 2021-2022 (866,269)
Total OPEB Liability at June 30, 2022 (MD) 11,661,963 $
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the District if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
1% Decrease Current Rate 1% Increase
(2.54%) (3.54%) (4.54%)
Total OPEB Liability 13,625,698 $ 11,661,963 $ 10,082,917 $ Discount Rate
Sensitivity of the Total OPEB Liability to Changes in Health Care Cost Trend Rates The following presents the total OPEB liability of the District if it were calculated using health care cost trend rates that are one percentage point lower (Non-Medicare: 7.5% for 2024 decreasing to 2.45% in 2076; Medicare (Non-Kaiser): 6.5% for 2024, decreasing to an ultimate rate of 2.45% in 2076; Medicare (Kaiser): 5.25% for 2024, decreasing to an ultimate rate of 2.45% in 2076) or one percentage point higher (Non-Medicare: 9.5% for 2024 decreasing to 4.45% in 2076; Medicare (Non-Kaiser): 8.5% for 2024, decreasing to an ultimate rate of 4.45% in 2076; Medicare (Kaiser): 7.25% for 2024, decreasing to an ultimate rate of 4.45% in 2076) than the current rate:
1% Decrease Current Rate 1% Increase
Total OPEB Liability 9,896,799 $ 11,661,963 $ 13,927,124 $ Healthcare Trend Rate
Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in the total OPEB liability are recognized in OPEB expense systematically over time. Amounts ar e 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 recognized in future OPEB expense.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(27)
NOTE 5 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
Recognition of Deferred Outflows and Deferred Inflows of Resources (Continued) The recognition period differs depending on the source of the gain or loss:
Net Difference Between Projected and Actual
Earnings on OPEB Plan Investments
Plan Investments 5 Years
All Other Amounts Expected average remaining
service lifetime (EARSL) (8.1
Years at June 30, 2022
measurement date)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2023, the District recognized OPEB expense of $412,564. As of the fiscal year ended June 30, 2023, the District reported deferred outflows/inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Employer Contributions Subsequent to the
Measurement Date 314,628 $ - $
Differences Between Expected and Actual Experience 865,846 (1,285,944) Changes of Assumptions 1,527,140 (2,699,394)
Total 2,707,614 $ (3,985,338) $
The $314,628 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability during the fiscal year ending June 30, 2024. Other amounts reported as deferred outflows/inflows of resources related to OPEB will be recognized as expense as follows:
Deferred
Measurement Period Inflows of
Ended June 30, Resources
2024 (496,247) $
2025 (458,997)
2026 (246,056)
2027 9,782
2028 (48,948)
Thereafter (351,886)
Payable to the Pension Plan
At June 30, 2023, the District had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2023.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(28)
NOTE 6 PENSION PLAN
General Information about the Pension Plans
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its partic ipating member employers. The District’s share of the net pension liability is reported as a cost-sharing plan in these financial statements. 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 plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides 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. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of services. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plan’s provisions and benefits in effect as of the measurement period ended June 30, 2022, are summarized as follows:
Prior to On or After
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.5%@55 2.0%@62
Benefit Vesting Schedule 5 Years 5 Years
of Service of Service
Benefit Payments Monthly for Life Monthly for Life
Retirement Age 50 to 55 52 to 67
Required Employee Contribution Rates 8.00% 6.75%
Required Employer Contribution Rates:
Normal Cost Rate
10.34% 10.25%
Payment of Unfunded Liability $1,067,050 N/A
Miscellaneous
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(29)
NOTE 6 PENSION PLAN (CONTINUED)
General Information about the Pension Plans (Continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law 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 Authority is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Authority contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identifi ed by the pension plan terms as plan member contributions requirements are classified as plan member contributions. For the fiscal year ended June 30, 2023, the District made contributions of $1,773,330 to the plan.
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
Actuarial Assumptions
The total pension liability for the Miscellaneous Plan for the June 30, 2022 measurement period was determined by an actuarial valuation as of June 30, 2021, with standard update procedures used to roll forward the total pension liability to June 30, 2022. The total pension liability for the Miscellaneous Plan was based on the following assumptions:
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal
Cost Method
Asset Valuation Method Market Value of Assets
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.30%
Salary Increases (1)
Mortality Rate Table (2)
Post Retirement Benefit Income (3)
(1) Varies by entry age and service.
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include 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 CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.
(3) The lesser of contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.30% thereafter.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(30)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
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 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:
Assumed
Asset Real Return
Asset Class (a) Allocation (a) (b)
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)
Total 100.00 %
(a) An expected inflation of 2.30% used for this period (b) Figures are based on the 2021 Asset Liability Management study.
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 c ontribution 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.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(31)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Proportionate Share of Net Pension Liability – City’s Miscellaneous Agent Multiple-Employer Plan Allocation to the District
The District’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The District’s proportionate share of the net pension liability was based on a projection of the District’s long-term share of contributions to the Miscellaneous Plan relative to the projected contributions of the City, actuarially determined.
The District’s proportionate share of the net pension liability for the Miscellaneous Plan as of the measurement date ended June 30, 2021 and 2022, was as follows:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability Proportionate
(a) (b) (c) = (a) - (b) Share
Balance at June 30, 2021 (MD) 58,087,047$ 48,824,020 $ 9,263,027 $ 25.57% Balance at June 30, 2022 (MD) 57,476,037 41,319,299 16,156,738 23.60% Net Changes During 2021-22 (611,010)$ (7,504,721) $ 6,893,711 $ -1.97% Increase (Decrease)
Pension Expense and Deferred Outflows and Inflows of Resources For the year ended June 30, 2023, the District recognized pension expense of $2,401,909 for the Miscellaneous Plan. At June 30, 2023, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources for the Miscellaneous Plan:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Pension Contributions Subsequent to the
Measurement Date 1,773,330 $ - $
Changes of Assumptions 1,646,774 -
Differences Between Expected and Actual Experience 420,763 (1,029,801) Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 2,254,611 - Total 6,095,478 $ (1,029,801) $
$1,773,330 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2024. Differences between projected and actual investment earnings are amortized on a five-year straight-line basis and all other amounts are amortized over the expected average remaining service lives of all members that are provided with benefits.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(32)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Pension Expense and Deferred Outflows and Inflows of Resources (Continued) Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred
Measurement Period Inflows of
Ended June 30, Resources
2024 937,371 $
2025 763,085
2026 359,657
2027 1,232,234
2028 -
Thereafter -
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the District’s proportionate share of the net pension liability for the Miscellaneous Plan, calculated using the discount rate for the Plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
1% Decrease Current Rate 1% Increase
(5.90%) (6.90%) (7.90%)
Net Pension Liability 24,473,392 $ 16,156,738 $ 9,355,658 $ Discount Rate
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separate issued CalPERS financial reports.
Payable to the Pension Plan
At June 30, 2023, the District had no outstanding amount of contributions to the Miscellaneous Plan required for the year ended June 30, 2023.
(33)
REQUIRED SUPPLEMENTARY INFORMATION
VICTORVILLE WATER DISTRICT
SCHEDULE OF PLAN’S PROPORTIONATE SHARE OF NET PENSION LIABILITY (COST SHARING PLAN)
LAST TEN FISCAL YEARS*
(34)
2023 2022 2021 2020 2019 2018 2017 2016 2015
(2022) (2021) (2020) (2019) (2018) (2017) (2016) (2015) (2014) Plan’s Proportion of the
Net Pension Liability 23.60% 25.57% 25.07% 25.15% 24.95% 24.87% 24.63% 24.40% 24.28% Plan’s Proportionate
Share of the
Net Pension Liability 16,156,738$ 9,263,027 $ 14,076,845 $ 12,996,097 $ 11,526,434 $ 11,480,941 $ 9,777,304 $ 7,425,085 $ 6,754,806 $ Plan’s Covered Payroll 6,657,109$ 6,148,247 $ 6,177,914 $ 5,546,115 $ 5,598,545 $ 5,506,946 $ 4,860,190 $ 4,824,221 $ 4,707,026 $ Plan’s Proportionate Share
of the Net Pension Liability
as a Percentage of
Covered Payroll 242.70% 150.66% 227.86% 234.33% 205.88% 208.48% 201.17% 153.91% 143.50% Plan’s Proportionate Share
of the Fiduciary Net
Position as a Percentage
of the Plan’s Total
Pension Liability 16.97% 21.49% 18. 47% 18.74% 18.88% 18.52% 18.59% 19. 55% 19.73% Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2022:
There were no significant changes in assumptions.
From fiscal year June 30, 2022 to June 30, 2023:
The discount rate and long-term rate of return decreased from 7.15% to 6.90% and the inflation rate decreased from 2.50% to 2.30%. *Fiscal year 2015 was the first year of implementation, therefore, only nine years are shown. (Measurement Date)
Reporting Fiscal Year
VICTORVILLE WATER DISTRICT
SCHEDULE OF PLAN CONTRIBUTIONS
(COST SHARING PLAN)
LAST TEN FISCAL YEARS*
(35)
2022-2023 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 Actuarially Determined
Contribution 1,773,330 $ 1,591,527 $ 1,520,299 $ 1,459,333 $ 1,221,074 $ 1,026,643 $ 916,742 $ 827,951 $ 709,786 $ Contributions in Relation to
the Actuarially Determined
Contribution (1,773,330) (1,591,527) (1,520,299) (1,459,333) (1,221,074) (1,026,643) (916,742) (827,951) (709,786) Contribution Deficienc
y
(Excess) - $ - $ - $ - $ - $ - $ - $ - $ - $ Covered Payroll 7,424,195 $ 6,657,109 $ 6,148,247 $ 6,177,914 $ 5,546,115 $ 5,598,545 $ 5,506,946 $ 4,860,190 $ 4,824,221 $ Contributions as a Percentage
of Covered Payroll 23.89% 23.91% 24.73% 23.62% 22.02% 18.34% 16.65% 17.04% 14.71% Notes to Schedule:
Valuation Date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions
Used to Determine
Contribution Rates:
Actuarial Cost Method Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Amortization Method (1) (1) (1) (1) (1) (1) (1) (1) (1) Asset Valuation Method Fair Value Fair Value Fair Value Fai r Value Fair Value Fair Value Fair Value Fair Value 15-Year Smoothed
Market Method
Inflation 2.30% 2.50% 2.50% 2.63% 2.75% 2.75% 2.75% 2.75% 2.75% Salary Increases (2) (2) (2) (2) (2) (2) (2) (2) (2)
Investment Rate of Return 6.90% (3) 7.00% (3) 7.00% (3) 7.25% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement Age (4) (4) (4) (4) (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 - 55 for 2.5%@55; 52 - 67 for 2.0%@62
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
*Fiscal year 2015 was the first year of implementation, therefore, only nine years are shown.
Fiscal Year
VICTORVILLE WATER DISTRICT
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS LAST TEN FISCAL YEARS*
(36)
2023
(2022)
Total OPEB Liability:
Service Cost 626,941$
Interest on the Total OPEB Liability 281,198
Changes of Assumptions (2,488,667)
Differences Between Expected and Actual
Experience 987,796
Benefit Payments, Including Refunds and the
Implied Subsidy Benefit Payments (273,537)
Net Change in Total OPEB Liability (866,269)
Total OPEB Liability - Beginning 12,528,232
Total OPEB Liability - Ending 11,661,963$
Covered-Employee Payroll 7,778,497$
Total OPEB Liability as a Percentage of
Covered-Employee Payroll 149.93%
Notes to Schedule:
Changes in Assumptions:
Discount Rate 3.54%
Mortality Improvement Rates Scale MP-2021
The mortality, retirement, disability, and termination rates for the measurement periods ended June 30, 2017 and 2018 were based on the CalPERS 1997-2011 Experience Study and CalPERS 1997-2015 Experience Study, respectively.
In the June 30, 2018 measurement period, the pre-65 waived retiree re-election was updated to be 10% after age 65.
In the June 30, 2020 measurement period, the medical trend rate for Kaiser Senior Advantage plans decreased from 6.5% to 5.0%.
In the June 30, 2022 measurement period, the following medical trend rates changed: Non-Medicare increased from
7.0% to 8.5%; Medicare increased from 6.1% to 7.5%; and Kaiser increased from 7.0% to 6.25%. *Fiscal year 2018 was the first year of implementation, therefore, only six years are shown.
Fiscal Year Ended
(Measurement Date)
VICTORVILLE WATER DISTRICT
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS (CONTINUED) LAST TEN FISCAL YEARS*
(37)
2022 2021 2020 2019 2018
(2021) (2020) (2019) (2018) (2017)
Total OPEB Liability:
Service Cost 600,360 $ 474,890 $ 417,399 $ 494,095 $ 583,831 $ Interest on the Total OPEB Liability 271,338 372,802 364,950 404,923 345,325 Changes of Assumptions 105,768 1,795,864 601,978 (509,085) (1,452,630) Differences Between Expected and Actual
Experience - (904,000) - (1,985,311) - Benefit Payments, Including Refunds and the
Implied Subsidy Benefit Payments (253,227) (224,298) (216,889) (199,802) (185,817) Net Change in Total OPEB Liability 724,239 1,515,258 1,167,438 (1,795,180) (709,291) Total OPEB Liability - Beginning 11,803,993 10,288,735 9,121,297 10,916,477 11,625,768 Total OPEB Liability - Ending 12,528,232$ 11,803,993 $ 10,288,735 $ 9,121,297 $ 10,916,477 $ Covered-Employee Payroll 7,710,052 $ 7,618,996 $ 7,078,295 $ 6,818,328 $ 4,577,527 $ Total OPEB Liability as a Percentage of
Covered-Employee Payroll 162.49% 154.93% 145.36% 133.78% 238.48% Notes to Schedule:
Changes in Assumptions:
Discount Rate 2.16% 2.21% 3.50% 3.87% 3.58%
Mortality Improvement Rates Scale MP-2020 Scale MP-2020 Scale MP-2018 Scale MP-2018 Scale MP-2016 The mortality, retirement, disability, and termination rates for the measurement periods ended June 30, 2017 and 2018 were based on the CalPERS 1997-2011 Experience Study and CalPERS 1997-2015 Experience Study, respectively.
In the June 30, 2018 measurement period, the pre-65 waived retiree re-election was updated to be 10% after age 65.
In the June 30, 2020 measurement period, the medical trend rate for Kaiser Senior Advantage plans decreased from 6.5% to 5.0%.
In the June 30, 2022 measurement period, the following medical trend rates changed: Non-Medicare increased from
7.0% to 8.5%; Medicare increased from 6.1% to 7.5%; and Kaiser increased from 7.0% to 6.25%. *Fiscal year 2018 was the first year of implementation, therefore, only six years are shown. (Measurement Date)
Fiscal Year Ended
(38)
SUPPLEMENTARY INFORMATION
VICTORVILLE WATER DISTRICT
COMBINING SCHEDULE OF NET POSITION
JUNE 30, 2023
(WITH SUMMARIZED DATA FOR JUNE 30, 2022)
(39)
Victorville
Wastewater
Reclamation Reclaimed
Water Facility Water Eliminations 2023 2022
ASSETS
CURRENT ASSETS
Cash and Investments 64,452,883 $ 11,043,533 $ 3,490,165 $ - $ 78,986,581$ 74,178,469 $ Cash and Investments with Fiscal Agent 836,639 - - - 836,639 836,313 Accounts Receivable, Net 3,600,079 1,568,597 8,105 - 5,176,781 6,340,504 Interest Receivable 248,870 - - - 248,870 58,333 Due from Other Governments 19,946 - - - 19,946 34,652 Inventory 866,934 - - - 866,934 948,273 Total Current Assets 70,025,351 12,612,130 3,498,270 - 86,135,751 82,396,544
NONCURRENT ASSETS
Prepaid Deposits 28,306 - - - 28,306 21,523 Advances to Other Funds 24,916,324 - - (24,916,324) - - Capital Assets:
Not Being Depreciated 39,494,260 942,051 206,884 - 40,643,195 35,176,126 Being Depreciated or Amortized, Net 104,708,882 10,755,049 4,208,893 - 119,672,824 122,916,314 Total Noncurrent Assets 169,147,772 11,697,100 4,415,777 (24,916,324) 160,344,325 158,113,963 Total Assets 239,173,123 24,309,230 7,914,047 (24,916,324) 246,480,076 240,510,507
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows - OPEB Related 2,630,254 77,360 - - 2,707,614 2,106,668 Deferred Outflow - Pension Related 5,954,022 141,456 - - 6,095,478 2,876,885 Total Deferred Outflows of
Resources 8,584,276 218,816 - - 8,803,092 4,983,553
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 3,745,256 621,282 10,079 - 4,376,617 4,592,839 Interest Payable 161,029 - - - 161,029 168,460 Prepaid Water Connection Fees 217,489 - - - 217,489 217,489 Deposits Payable 1,700,469 - - - 1,700,469 1,669,971 Total OPEB Liability - Due Within One Year 268,006 5,531 - - 273,537 253,227 Long-Term Liabilities, Due Within One Year 962,094 - - - 962,094 841,847 Total Current Liabilities 7,054,343 626,813 10,079 - 7,691,235 7,743,833
NONCURRENT LIABILITIES
Advances from Other Funds - 24,916,324 - (24,916,324) - - Total OPEB Liability 11,158,150 230,276 - - 11,388,426 12,275,005 Net Pension Liability 15,909,758 246,980 - - 16,156,738 9,263,027 Long-Term Liabilities, Due in More
Than One Year 7,935,676 - - - 7,935,676 8,330,788 Total Noncurrent Liabilities 35,003,584
25,393,580 - (24,916,324) 35,480,840 29,868,820 Total Liabilities 42,057,927 26,020,393 10,079 (24,916,324) 43,172,075 37,612,653
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - OPEB Related 3,895,885 89,453 - - 3,985,338 2,420,187 Deferred Inflows - Pension Related 979,410 50,391 - - 1,029,801 4,385,336 Total Deferred Inflows of Resources 4,875,295 139,844 - - 5,015,139 6,805,523
NET POSITION
Net Investment in Capital Assets 135,830,090 11,697,100 4,415,777 - 151,942,967 150,031,812 Unrestricted 64,994,087 (13,329,291) 3,488,191 - 55,152,987 51,044,072 Total Net Position 200,824,177 $ (1,632,191) $ 7,903,968 $ - $ 207,095,954$ 201,075,884 $ Totals
VICTORVILLE WATER DISTRICT
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2023
(WITH SUMMARIZED DATA FOR YEAR ENDED JUNE 30, 2022)
(40)
Victorville
Wastewater
Reclamation Reclaimed
Water Facility Water Eliminations 2023 2022
OPERATING REVENUES
Utility Sales 20,797,930 $ 8,801,887 $ 669,672 $ - $ 30,269,489$ 36,135,804 $ Meter and Service Fees 9,801,678 - - - 9,801,678 8,306,160 Pass-Thru Charges 1,211,013 - - - 1,211,013 991,164 Fines and Forfeitures 485,824 - - - 485,824 145,832 Arsenic Surcharge 285,035 - - - 285,035 275,274 Other 239,663 2,766 - - 242,429 405,018 Total Operating Revenues 32,821,143 8,804,653 669,672 - 42,295,468 46,259,252
OPERATING EXPENSES
Personnel Services 11,286,592 207,643 154,307 - 11,648,542 9,681,920 Maintenance and Operations 11,873,031 7,303,475 51,502 - 19,228,008 13,118,928 Production Costs 5,417,279 - 16,984 - 5,434,263 11,026,983 Pass-Thru Production Costs 1,211,013 - - - 1,211,013 2,698,831 Depreciation 5,880,674 479,681 164,607 - 6,524,962 7,194,999 Total Operating Expenses 35,668,589 7,990,799 387,400 - 44,046,788 43,721,661 OPERATING INCOME (LOSS) (2,847,446) 813,854 282,272 - (1,751,320) 2,537,591
NONOPERATING REVENUES (EXPENSES)
Taxes 1,335,019 - - - 1,335,019 1,130,682 Intergovernmental - - - - - 634,939 Investment Income 2,141,955 302,264 86,600 (632,740) 1,898,079 (243,999) Interest Expense (381,764) (632,740) - 632,740 (381,764) (399,462) Gain on Disposal of Assets 338,923 - - - 338,923 16,201 Other Nonoperating Revenues (44,951) (175,799) - - (220,750) (8,427) Settlement Proceeds - - - - - 843,920 Total Nonoperating Revenues
(Expenses) 3,389,182 (506,275) 86,600 - 2,969,507 1,973,854
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 541,736 307,579 368,872 - 1,218,187 4,511,445
CAPITAL CONTRIBUTIONS
Connection Fees 1,652,715 2,097,200 - - 3,749,915 6,053,629 Alternate Water Source Fees 528,412 - - - 528,412 1,110,296 Capital Restricted Use Fees - 586,681 - - 586,681 813,860 Capital Contributions 10,000 - - - 10,000 198,457 Transfer In 3,809,669 - - (3,809,669) - - Transfers Out - - (3,809,669) 3,809,669 - - Contributions to The City of Victorville (73,125) - - - (73,125) - Total Capital Contributions 5,927,671 2,683,881 (3,809,669) - 4,801,883 8,176,242 CHANGE IN NET POSITION 6,469,407 2,991,460 (3,440,797) - 6,020,070 12,687,687 Net Position - Beginning of Year 194,354,770 (4,623,651) 11,344,765 - 201,075,884 188,388,197 NET POSITION - END OF YEAR 200,824,177$ (1,632,191) $ 7,903,968 $ - $ 207,095,954$ 201,075,884 $ Totals