Agenda packet — Victorville City Council, April 15, 2025 (part 2 of 3)

Taxes 19,781 24,879 25,918 29,07 0 24,659 20,77 2 22,405 22,862 23,408 23,44 3 Other Taxes 1 7 7 ---- -----
Investment income -1 , 0 0 2 726 1,828 2,37 4 1,918 21 6 1,266 6,775 12,746 Gain on sale of assets -1 2 5 17 29 0 -- 1 1 0 17 14,57 6 - Miscellaneous revenues 2,003 1,432 1,779 1,099 19 0 630 149 867 - - Impairment loss on Capital assets (24,090) ---- -----
Legal Settlement ----- -----
Transfers - 779 554 521 (26,795) - (1,685) (82) (95) - Total business-type activities (2,129) 28,217 28,993 32,808 429 23,320 21,196 24,930 44,664 36,189 Total primary government 72,686 83,874 83,985 90,748 91,890 86,714 103,628 129,682 157,942 158,138 Change in Net Position
Governmental activities 16,797 6,10 3 (4,803) (13,510) 27,564 (418) 16,929 64,78 5 75,644 52,757 Business-type activities (31,789) 6,604 (3,392) (4,171) (19,509) 2,262 11,051 20,936 35,034 23,888 Total primary government (14,992)$ 12,706 $ (8,195) $ (17,681)$ 8,056 $ 1,844 $ 27,980$ 85,721 $ 110,678$ 76,645 $ * Measure P Transactions and Use Tax was approved by voters in November 2020 election and went into effect April 1, 2021.

CITY OF VICTORVILLE

CHANGE IN NET POSITION

LAST TEN FISCAL YEARS
(accrual basis of accounting)
(in thousands)
Fiscal Year
185
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General fund
Reserved -$ $ - $ - $ - $ - $ - $ - $ - $ - $ - Unreserved - - - - - - - - - - Nonspendable 195 192 172 472 7,236 6,225 5,149 4,192 3,287 2,611 Restricted - - - - - - - - - - Unassigned 3,238 4,630 5,181 6,179 12,812 18,110 41,107 75,466 103,870 132,070 Total general fund 3,433 4,822 5,353 6,651 20,049 24,335 46,256 79,659 107,156 134,682 All other governmental funds
Reserved, reported in:

Special revenue funds -$ $ - $ - $ - $ - $ - $ - $ - $ - $ - Capital project funds - - - - - - - - - - Debt service funds - - - - - - - - - - Unreserved, reported in:

Special revenue funds - - - - - - - - - - Capital project funds - - - - - - - - - - Debt service funds - - - - - - - - - - Nonspendable 195 194 174 474 04 11 05 4,221 4,249 2,138 Restricted 44,922 56,305 58,108 60,819 62,198 75,962 83,555 76,510 97,941 106,208 Assigned - - - -----
Unassigned (3,111) (2,587) (882) (2,487) (7,599) (4,120) (2,946) (1,788) (12,747) (4,123) Total all other governmental funds 42,00 6 53,912 57,400 58,807 54,602 71,853 80,614 78,944 89,444 104,222

CITY OF VICTORVILLE

FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
(in thousands)
Fiscal Year
186
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Revenue
Taxes 50,287$ 55,96 6$ 54,877 $ 57,357 $ 65,402 $ 64,092 $ 83,17 0$ 108,45 5$ 113,043 $ 118,437 $ Licenses and permits 1,533 1,387 1,463 1,863 2,633 2,78 6 4,244 5,393 4,03 6 3,880 Intergovernmental 13,833 25,947 19,293 8,404 8,92 0 14,651 9,15 0 27,339 54,571 35,342 Charges for services 9,587 11,627 13,247 15,01 6 17,236 23,306 23,927 24,982 29,561 30,532 Fines and forefitures 1,308 737 793 514 473 418 704 829 88 0 1,494 Investment income 68 158 478 72 6 966 1,437 27 6 (357) 5,420 11,415 Sale of assets -- (3,544) --- 1 0 9 -
Legal Settlement -- - --- -
Other 314 201 192 464 532 849 3,942 582 1,074 915
Total revenues 76,930$ 96,022$ 86,798$ 84,345$ 96,164$ 107,539$ 125,523$ 167,222$ 208,585$ 202,015$ Expenditures
General government 11,171 9,67 6 9,272 11,10 5 10,625 11,650 11,978 16,722 19,909 21,148 Public safety 35,674 35,87 5 37,855 39,185 45,004 41,731 45,039 48,06 6 58,559 62,934 Community development 1,769 1,438 1,899 1,629 1,118 1,128 8,734 2,47 6 3,265 1,258 Public works 28,349 31,95 6 29,412 26,18 5 17,781 18,92 6 19,299 22,66 0 24,497 30,527 Park and recreation 2,956 3,363 3,74 6 3,739 4,047 4,238 4,308 4,267 5,607 6,467 Capital Outlay* - - - - 21,593 8,068 7,428 43,072 59,367 37,307 Debt services:

Principal - --- - 1 5 3 1 5 9 1 6 5 725 24
Interest & Fiscal agent
charges 63 102 177 44 74 109 57 38 36 04 Principal-SBITA 320 247
Interest-SBITA 00 26
SERAF Obligation - - - - - - - - - -
Total expenditures 79,982$ 82,411$ 82,362$ 81,887$ 100,243$ 86,003$ 97,001$ 137,466$ 172,286$ 159,941$ Excess of revenues
over (under)
expenditures (3,052) 13,611 4,437 2,458 (4,080) 21,536 28,521 29,755 36,299 42,074 Other financing sources
(uses):

SBITA Financing -- - ----- 7 9 8- $
Capital lease proceeds - - - - 1,201 - - - 90 0 220
Transfer in 1,289 218 24 6 80 18,424 41 1,757 4,32 5 55 311 Transfer out (2,200) (997) (800) (601) (6,649) (41) (73) (2,348) (55) (311) Gain (loss) on sale of
assets 55 1,058 156 28 - - - - - 10 Total other financing
sources
(uses) (856) 280 (398) (494) 12,977 - $ 1,685 1,977 1,699 230 Extraordinary gain(loss) -- - ------ -
Net change in fund
balances (3,908) 13,890 4,039 1,964 8,897 21,536 30,206 31,732 37,998 42,304 Debt service as a
percentage of noncapital
ex
penditures

0.1% 0.1% 0.2% 0.1% 0.1% 0.3% 0.2% 0.1% 0.4% 0.3%
*Starting in FY2019, Capital outlay was broken out of categorical expenditures

CITY OF VICTORVILLE

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
(in thousands)
Fiscal Year
187
Fiscal Year Secured Property Unsecured Property SBE Nonunitary Total Assessed Total Direct Tax Rate
2004 3,141,841,715 222,573,199 477,500,712 3,841,915,626 8.10% 2005 3,828,701,477 219,700,978 492,977,851 4,541,380,306 16.75% 2006 4,973,962,731 234,285,388 487,511,504 5,695,759,623 3.79% 2007 6,671,588,958 254,201,465 475,654,862 7,401,445,285 10.22% 2008 8,445,139,241 528,505,928 483,739,950 9,457,385,119 7.70% 2009 8,482,819,863 446,754,325 469,192,873 9,398,767,061 10.61% 2010 6,876,396,453 475,171,025 446,393,003 7,797,960,481 13.73% 2011 6,152,107,952 531,098,592 349,464,067 7,032,670,611 20.40% 2012 6,015,259,937 486,592,953 324,863,210 6,826,716,100 20.63% 2013 5,983,453,352 502,968,659 279,763,216 6,766,185,227 21.62% 2014 6,079,669,684 578,809,444 232,263,205 6,890,742,333 18.33% 2015 6,523,751,292 563,911,351 180,492,248 7,268,154,891 18.25% 2016 6,961,515,866 598,447,036 177,480,228 7,737,443,130 18.24% 2017 7,358,274,302 548,314,490 225,429,163 8,132,017,955 18.23% 2018 7,751,404,680 507,854,639 106,929,139 8,366,188,458 18.22% 2019 8,173,462,255 553,108,056 104,329,108 8,830,899,419 18.21% 2020 8,697,654,376 549,306,339 98,788,971 9,345,749,686 18.20% 2021 9,212,471,887 608,604,365 100,188,971 9,921,265,223 18.19% 2022 9,722,567,162 570,333,790 116,988,971 10,409,889,923 20.26% 2023 10,674,814,139 725,356,217 153,988,971 11,554,159,327 20.25% 2024 12,107,859,030 719,067,810 197,227,878 13,024,154,718 20.10% Source: County of San Bernardino Assessor and HdL, Coren & Cone assessed value of the property being taxed. Each year, the assessed value of the property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activitiy or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitation described above.

CITY OF VICTORVILLE

ASSESSED VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS
In 1978, the voters of the State of California passed Proposition 13 which limited taxes to a total Maximum rate of 1% based upon the $0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Secured Property Unsecured Property SBE Nonunitary
188
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Basic Levy* 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Adelanto Elementary Bond 0.0810 0.0797 0.0830 0.0871 0.0970 0.0835 0.0916 0.0912 0.0000 0.0000 Mojave Water Agency 0.1675 0.1675 0.1675 0.1675 0.1675 0.1675 0.1675 0.1675 0.1675 0.1675 Oro Grande Elementary Bond 0.0379 0.0378 0.0898 (0.0102) 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 Victor Elementary Bond 0.1022 0.1124 0.1162 0.1216 0.1204 0.0406 0.0611 0.0591 0.0574 0.5440 Victor High School Bond 0.0770 0.0716 0.0986 0.0915 0.0958 0.0703 0.0445 0.0532 0.053 7 0.0480 Victor Valley Community College Bond 0.0262 0.019 7 0.0174 0.0198 0.0181 0.0181 0.0198 0.0218 0.0206 0.0250 Total Direct and Overlapping Tax Rates 1.4918 1.4887 1.5725 1.4773 1.4988 1.3800 1.3845 1.3928 1.2992 1.7845 City's basic rate** 0.1605 0.1605 0.1605 0.1605 0.1605 0.1605 0.1605 0.1605 0.1605 0.1605 Total Direct Rate^ 0.1825 0.1824 0.1823 0.1822 0.1821 0.1820 0.1819 0.2026 0.2025 0.2010 Notes:

LAST TEN FISCAL YEARS
RATE PER $100 OF TAXABLE VALUE
* In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resideds within. In additon to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds. ** City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in the ratio figures. ^ Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforcible obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City in the same proportions as general fund revenue.

Fiscal Year

CITY OF VICTORVILLE

DIRECT AND OVERLAPPING PROPERTY TAX RATES
189
2024 2015
Taxpayer
Taxable
Assessed Value
Percentage of
Total City
Taxable
Assessed Value
Taxable
Assessed Value
Percentage of
Total City
Taxable
Assessed Value
Higcov-Sclc-Dc LLC 275,400,000$ 2.11%
High Desert Power Trust 196,400,000 1.51% 179,863,000$ 2.47% Prologis SCLC Investmnets LLC 156,321,196 1.20%
Macerich Victor Valley 150,451,875 1.16% 113,912,334 1.57% The American Bottling Company 119,869,165 0.92%
Striling Capital Investments 107,001,022 0.82% 79,410,874 1.09% Desert Valley Hospital Inc, 78,089,480 0.60%
Cemex Construction Materials Pacific 77,346,985 0.59% 55,390,152 0.76% Nutro Products Inc. 69,706,993 0.54% 90,480,365 1.24%
Veyron KDP I Partners LLC 68,641,958 0.53%
The American Bottling Company 116,111,944 1.60%
Prime A investments LLC 73,189,893 1.01%
Walmart Stores Inc 49,584,747 0.68%
Church And Dwight Company Inc 36,019,134 0.50%
Goodyear Tire And Rubber Company 32,834,571 0.45%
1,299,228,674$ 9.98% 826,797,014$ 11.37%
Data is only presented for the top ten property in each of the two years presented.

Source: HdL Coren & Cone

CITY OF VICTORVILLE

PRINCIPAL PROPERTY TAXPAYERS
Current Year and Nine Years Ago
190
Fire
District*** Tax Levy
Current Tax
Collections
Percent of
Total Tax
Collections to
Tax Levy
Park
District*** Tax Levy
Current Tax
Collections
Percent of
Total Tax
Collections to
Tax Levy
2015 -- 0 . 0 0 % 2015 -- 0 . 0 0 %
2016 -- 0 . 0 0 % 2016 -- 0 . 0 0 %
2017 -- 0 . 0 0 % 2017 -- 0 . 0 0 %
2018 -- 0 . 0 0 % 2018 -- 0 . 0 0 %
2019 -- 0 . 0 0 % 2019 -- 0 . 0 0 %
2020 -- 0 . 0 0 % 2020 -- 0 . 0 0 %
2021 -- 0 . 0 0 % 2021 -- 0 . 0 0 %
202
2 -- 0 .00% 2022 -- 0 .00%
2023 -- 0 .00% 2023 - - 100.00%
2024 -- 0 .00% 2024 - - 200.00%
Sanitary
District** Tax Levy
Current Tax
Collections
Percent of
Total Tax
Collections to
Tax Levy
Street
Lighting
District Tax Levy
Current Tax
Collections
Percent of
Total Tax
Collections to
Tax Levy
2015 -- 0 .00% 2015 751,196 737,646 98.20%
2016 -- 0 . 0 0 % 2016 814,455 764,955 93.92%
2017 -- 0 . 0 0 % 2017 725,345 723,72 0 99.78%
2018 -- 0 . 0 0 % 2018 706,459 704,679 99.75%
2019 -- 0 . 0 0 % 2019 735,987 734,99 6 99.87%
2020 -- 0 . 0 0 % 2020 756,545 754,972 99.79%
2021 -- 0 . 0 0 % 2021 765,513 764,053 99.81%
2022 -- 0 .00% 2022 804,802 803,15 6 99.80%
2023 -- 0 . 0 0 % 2023 788,274 786,490 99.77%
2024 -- 0 . 0 0 % 2024 803,591 801,80 4 99.78%
Source: San Bernardino County Assessor's Office

CITY OF VICTORVILLE
*In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. As the City of Victorville did not receive property taxes during the period of 1976-1978, the City negotiated its relative 1% share of taxes. Additional tax levy is based on the distric ts above.
** In fiscal year 2010, LAFCO approved consolidation of Sanitary District to the City. This property tax revenue is currently recorded in the General Fund.
*** In fiscal year 2011, LAFCO approved consolidation of Fire and Park Districts to the City. This property tax revenue is currently recorded in the General Fund.

PROPERTY TAX LEVIES AND COLLECTIONS BY DISTRICT

LAST TEN FISCAL YEARS
191
Fiscal
Year
Certificate of
Participation
Tax Allocation
Bonds*
Capital Lease
Agreement Other**
Total
Governmental
Activities
2015 -$ - $ - $ 44,078$ 44,078 $ 2016 -$ - $ - $ 33,111$ 33,111 $ 2017 -$ - $ - $ 59,50 3$ 59,503$ 2018 -$ - $ - $ 65,02 6$ 65,026$ 2019 -$ - $ 1,201 $ 62,59 4$ 63,795$ 2020 -$ - $ - $ 70,34 9$ 70,349$ 2021 -$ - $ - $ 76,22 3$ 76,223$ 2022 -$ - $ - $ 60,68 6$ 60,686$ 2023 -$ - $ - $ 81,48 9$ 81,489$ 2024 -$ - $ - $ 85,35 2$ 85,352$ the revenue bond for this fund also got reclass. - $

CITY OF VICTORVILLE

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(in thousands)
** In Fiscal Year 2015, the City implemented GASB68, which adjusted the amount for 2014 to reflect prior Net Pension Liability. In Fiscal Year 2018, the City implemented GASB75 which adjusted the amount for 2017 to reflect prior Net OPEB Liability.

Source: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
*In 2012, the Redevelopment Agency dissolution caused the bonds to go to the Successor Agency to the Redevelopment Agency, a private purpose trust.

Governmental Activities
^ In Fiscal Year 2007, the City reclass Solid Waste from Governmental activities to Business -
192
Fiscal
Year
Lease
Purchase
Agreement
Tax
Allocation
Bonds
Lease
Revenue
Bonds
Revenue
Bonds^
Certificate of
Participation Other
Total
Business-
Type
Activities
Total
Primary
Government
Debt Per
Capita*
% of
Personal
Income*
2015 347$ 318,564$ 53,07 0$ 1,155$ 12,465$ 13,651 $ 399,252$ 443,330$ 3,680 228.88 2016 -$ 314,93 6$ 53,070$ 945$ 12,035$ 13,86 6$ 394,851$ 427,962$ 3,465 225.42 2017 -$ 311,741$ 51,92 5$ 725$ 10,360$ 21,16 0$ 395,910$ 455,413$ 3,686 238.40 2018 -$ 308,40 0$ 50,720$ 495$ 10,025$ 35,661 $ 405,301$ 470,327$ 3,806 234.98 2019 -$ 300,964$ 49,45 0$ 253$ 9,675$ 20,481 $ 380,822$ 444,618$ 3,514 208.77 2020 -$ 294,282$ 48,214 $ -$ 9,310$ 40,902 $ 392,709$ 463,058$ 3,663 200.58 2021 -$ 289,77 6$ 46,710$ -$ 8,930$ 44,403 $ 389,819$ 466,042$ 3,665 192.45 2022 -$ 285,064$ - $ 48,044$ 8,622 $ 36,35 6$ 378,086$ 438,772$ 3,213 165.43 2023 -$ 280,133$ -$ 46,20 5$ 8,206$ 47,15 5$ 381,699$ 463,188$ 3,376 151.09 2024 -$ 274,981$ - $ 44,55 0$ 7,774$ 50,281 $ 377,586$ 462,938$ 3,350 138.81 ^ In Fiscal Year 2007, the City reclassed Solid Waste from Governmental activities to Business- type activities. Thus, the revenue bond for this fund was also reclassed.
* This ratio is calculated using population and personal income for the prior calendar year.

Source: Details regarding the City's outstanding debt can be found in the notes to the financial statements. ** In Fiscal Year 2015, the City implemented GASB68, which adjusted the amount for 2014 to reflect prior Net Pension Liability. In

CITY OF VICTORVILLE

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(in thousands)
Business-Type Activities
193
Fiscal
Year
Certificate of
Participation
Revenue
Bonds
Tax Allocation
Bonds¤ Total
Percentage
Assessed
Value*
2015 - - - - 0.00%
2016 - - - - 0.00%
2017 - - - - 0.00%
2018 - - - - 0.00%
2019 - - - - 0.00%
2020 - - - - 0.00%
2021 - - - - 0.00%
2022 - - - - 0.00%
2023 - - - - 0.00%
2024 - - - - 0.00%
Source: City of Victorville Annual Comprehensive Financial Reports FY24 * Assessed value has been used because the actual value of taxable property is not readily available in the State of California.

CITY OF VICTORVILLE

RATIO OF GENERAL BONDED DEBT OUTSTANDING

LAST TEN FISCAL YEARS
194
Fiscal Year
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Debt Limit 1,090,223$ 1,160,616$ 1,219,803$ 1,254,928$ 1,324,635$ 1,401,862$ 1,488,190$ 1,561,483$ 1,733,124$ 1,953,623$ Total net debt applicable to
limit - - - - - - - - - - Legal debt margin 1,090,223 1,160,616 1,219,803 1,254,928 1,324,635 1,401,862 1,488,190 1,561,483 1,733,124 1,953,623 Total net debt applicable to
the limit as a percentage of
d e b t l i m i t 0 %0 %0 %0 %0 %0 %0 %0 %0 % 0 %
Legal Debt Margin Calculation for Fiscal Year 2024
Assessed value
Debt Limit (15% of total
assessed value)
Debt applicable to limit:

General obligation bond
Total net debt applicable to
limit
Le
gal debt margin
Note: Under state finance law, the City of Victorville's outstanding general obligation debt should not exceed 15 percent of total assessed property value.

By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying obligation bonds.

Source: HdL Companies
Less: Amount set aside for
repayment of general
obligation debt

CITY OF VICTORVILLE

LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS
(amounts expressed in thousands)
195
2023-24 Assessed Valuation: $13,015,390,572
Total Debt City’s Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2024 % Applicable (1) Debt 6/30/24 Victor Valley Joint Community College District $165,055,575 29.59% $48,844,89 6 Victor Valley Joint Union High School District 116,553,734 62.821 73,220,221 Victor School District 44,002,770 84.339 37,111,49 6
Adelanto School District Community Facilities District No. 1, I.A. A 11,940,000 100 11,940,000 Adelanto School District Community Facilities District No. 2 3,525,000 100 3,525,000 Adelanto School District Community Facilities District No. 4 11,100,000 100 11,100,000 Hesperia Unified School District Community Facilities Districts 7,195,000 100 7,195,000 Snowline Joint Unified School District Community Facilities Districts 7,085,000 100 7,085,000 Victor School District Community Facilities Districts 27,743,900 100 27,743,900 Victor Valley Joint Union High School District Community Facilities Districts 4,755,000 100 4,755,000 City of Victorville Community Facilities Districts 4,800,000 100 4,800,000 California Statewide Community Development Authority Assessment District No. 22-02 760,000 100 760,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $238,080,513
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

San Bernardino County General Fund Obligations $131,565,000 4.09% $5,375,74 6 San Bernardino County Flood Control District General Fund Obligations 37,295,000 4.086 1,523,874 Hesperia Unified School District General Fund Obligations 113,810,000 8.527 9,704,579 Snowline Joint Unified School District General Fund Obligations 56,635,000 17.153 9,714,602 Victor Valley Joint Union High School District Certificates of Participation 16,440,000 62.821 10,327,77 2 Adelanto School District Certificates of Participation 5,435,000 46.21 2,511,51 4 Oro Grande School District Certificates of Participation 26,785,000 2.507 671,500 City of Victorville General Fund Obligations 01 00 0
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $39,829,587 OVERLAPPING TAX INCREMENT DEBT (Successor Agencies): $286,829,925 69.766- 100. % $208,015,957 TOTAL DIRECT DEBT $0
TOTAL OVERLAPPING DEBT $485,926,057
COMBINED TOTAL DEBT $485,926,057 (2)
Ratios to 2023-24 Assessed Valuation:

Total Overlapping Tax and Assessment Debt 1.83%
Total Direct Debt ($0) 0.00%
Combined Total Debt 3.73%
Ratios to Redevelopment Successor Agencies Incremental Valuation ($8,193,724,335) Total Overlapping Tax Increment Debt 2.54%
Source: California Municipal Statistics, Inc.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue bonds and non-bonded capital lease obligations. (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.

CITY OF VICTORVILLE

DIRECT AND OVERLAPPING DEBT
FISCAL YEAR 2023-24
196
Pledged
Fiscal Year Revenue Principal Interest Coverage
2015 5,600 1,060 2,139 175%
2016 5,343 1,110 2,085 167%
2017 5,689 1,165 2,029 178%
2018 3,955 1,225 1,965 124%
2019 3,569 1,285 1,907 112%
2020 2,797 1,35 0 1,840 88%
2021 641 1,42 0 1,767 20%
2022 1,850 1,495 1,690 58%
2023 3,306 1,575 1,608 104%
2024 4,716 1,660 1,521 148%
Pledged
Fiscal Year Revenue Principal Interest Coverage
2015 18,554 4,410 17,150 86%
2016 25,176 4,635 16,950 117%
2017 24,649 4,865 16,746 114%
2018 28,983 4,405 17,580 132%
2019 23,801 5,36 5 16,208 110%
2020 20,407 5,63 5 15,845 95%
2021 23,021 5,92 0 15,551 107%
2022 22,410 6,225 15,238 104%
2023 22,583 6,550 14,907 105%
2024 21,434 6,885 14,555 100%
Pledged
Fiscal Year Revenue Principal Interest Coverage
2015 1,157 41 5 583 116%
2016 1,183 430 564 119%
2017 1,244 320 485 155%
2018 1,244 335 471 154%
2019 1,285 350 457 159%
2020 1,330 365 443 165%
2021 1,294 380 428 160%
2022 1,312 395 412 163%
2023 1,571 41 0 395 195%
2024 1,802 425 377 225%
Pledged
Fiscal Year Revenue Principal Interest Coverage
2022 4,131 1,48 0 108 260%
2023 8,749 1,715 2,130 228%
2024 8,106 1,525 2,171 219%

CITY OF VICTORVILLE

PLEDGE REVENUE COVERAGE

LAST TEN FISCAL YEARS
(in thousands)
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements
Fiduciary Trust Activities - Successor Agency Tax Allocation Bond Debt Service
Business Type Activities Debt - SCLAA Tax Allocation Bond Debt Service
Business Type Activities Debt - Water District Certificates of Participation Debt Service
Business Type Activities Debt - Electric
Debt Service
197
Fiscal Year
City of Victorville
Population
Personal Income
(in thousands)
Unemployment
Rate*
Per Capital
Personal Income
2014 120,485 1,936,917$ 8.6% 16,076$
2015 123,510 1,898,511$ 6.9% 15,371$
2016 123,565 1,910,290$ 6.1% 15,459$
2017 123,565 2,001,567$ 7.1% 16,198$
2018 126,543 2,129,706$ 5.7% 16,829$
2019 126,432 2,308,617$ 5.5% 18,259$
2020 127,170 2,421,637$ 12.4% 19,042$
2021 136,561 2,652,278$ 10.9% 19,421$
2022 137,193 3,065,677$ 6.2% 22,345$
2023 138,202 3,335,030$ 6.8% 24,131$
Source: HdL Coren & Cone; Decennial Census Data, CA State Department of Finance, CA EDD

CITY OF VICTORVILLE

DEMOGRAPHIC STATISTICS

LAST TEN FISCAL YEARS
100,000
105,000
110,000
115,000
120,000
125,000
130,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
City of Victorville Population

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Unemployment Rate*…
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Personal Income (in thousands)
$-
$3,000
$6,000
$9,000
$12,000
$15,000
$18,000
$21,000
$24,000
$27,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Per Capital Personal Income
198
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Function
General government 71 7 2 73 77 77 7 5 76 86 95 146
Public Safety* 0001 6 0 59 60 76 70 84
Public Works 108 11 0 113 116 113 118 11 6 138 12 0 104 C o m m u n i t y D e v e l o p m e n t44444 3335 1 3
Community Services 11 2 75 75 82 78 8 6 85 86 79 44
Airport 26 25 26 26 26 24 24 23 27 3 0
Water 53 57 6 3 66 66 59 56 56 57 91
Total 37 4 343 354 372 424 424 420 468 45 3 512
Source: City of Victorville Finance Department.
* Only includes Fire Services. In fiscal year 2018, fire staff were added for start up of new City fire department.

CITY OF VICTORVILLE

FULL-TIME CITY EMPLOYEES BY FUNCTION

LAST TEN FISCAL YEARS
Fiscal Year
199
Function 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Public Safety
Police
Physical arrests 4,096 5,389 5,194 5,716 5,733 3,531 2,793 2,860 2,76 1 1531 3256 Traffic Violations 9,404 6,759 4,070 5,561 3 ,635 **** 4 049 5621 Public works
Street Maintenance
Potholes repaired (number) 3,124 3,832 4,138 5 ,667 7,427 7,713 11,444 8,653 9,455 15,524 34,520 Graffiti removal (locations) 14,708 5 ,687 4,708 2 ,824 3,116 2,592 2,966 3,240 2,793 3,808 3 ,461 Streets sweeping (tons) 1,907 1,782 1,687 1,627 1,544 1,712 1,878 1 ,877 1,824 2,182 Sanitation
Refuse collected (tons/day) 166 182 202 206 210 220 228 23 6 240 233 233 Recyclables collected (tons/day) 28 3 2 33 32 32 33 35 39 40 40 27 Community Services
Park and Recreation
Athletic field permits issued 6,788 5 ,970 5,905 6,310 5,785 5,020 162 41*** 45*** 105 92 Community center enrollments 30 ,915 31,384 29,958 25 ,343 19,518 14 ,503 1,973 882** 1,667 6,382 2,436 Facilities rental used 2,062 2,036 2,388 2 ,469 2,252 1,803 62 9** 177** 74 132 Water
Residential 6,198,485 5,991,545 5,191,845 5,505,636 5,722,934 4,961,977 5,135,298 5,522,76 3 5,371,857 4,888,059 4,993,729 Multi Residential 483,968 467 ,812 405,373 444,737 490,302 752,766 781,018 840,41 4 844,824 786,059 792,172 Commercial 1,535,667 1,484,402 1,286,280 1,357,027 1,587,468 1,325,873 1,551,122 1,628,740 1,486,743 1,179,747 1,373,246 Institutional 465,354 449,819 389,782 437,698 470,500 773,125 857,134 852,178 944,44 2 870,590 869,838 Irrigation 623,574 602,757 522,308 491 ,157 471,954 460,627 486,095 541,868 592,47 5 523,424 520,834 Fire service 22 43 50 94 148 2,96 3 3,919 3,112 3,844 4,250 3,368 Recycled - 407,194 274,824 127,752 205,354 316,953 275,268 344,982 380,617 413,966 328,058 Total 9,307,070 9,403,572 8,070,462 8,364,101 8,948,660 8,594,284 9,089,854 9,734,057 9,624,802 8,666,095 8,881,245 Water Sold (in acre feet) 21,366 20,653 17,896 19,201 20,543 19,730 20,868 22,34 6 22,096 20,079 20,389 Number of Customer Connections
Residential 32,145 32,841 32 ,884 32,650 32,386 32,680 33,047 33,709 34,501 34,88 9 35,401 Multi Residential 195 195 198 19 7 776 768 75 9 762 762 763 770 Commercial 1,059 1,064 1,066 1,074 1,099 1,333 1,325 1,358 1,36 3 1,285 1,292 Institutional 204 205 206 207 169 256 225 226 226 226 225 Irrigation 235 236 236 239 266 331 371 38 6 396 410 419 Fire service 554 555 555 564 580 598 608 61 6 625 638 64 6 Recycled - 2 2 2 4 4 5 7 5 8 8
Total 34,392 35,098 35 ,147 34,933 35,280 35,970 36,340 37,064 37,878 38,21 9 38,761 19,074 19,272 16,540 17,142 16,917 17,614 18,629 19,950 19,726 17,925 18,202 Estimated Population 119,658 122 ,233 121,419 121,608 122,699 123,758 125 ,085 127,543 130,788 137 ,193 138,202 159 158 136 141 138 142 149 156 151 140 134 Rainfall in inches 1.90 2.75 0.92 5.69 4.92 0.69 4.16 4.95 1.63 2.00 2.41 Source: City of Victorville departments
Note: Indicators are not available for the general government function. * Indicator information unavailable at this time. San Bernarndino Count y changed reporting software for Police and information has not been retreivable . ** Parks and Recreation facilities and classes were closed throu gh most of the year related to COVID-19 restrictions. ***Athletic Permits issued for six month periods instead of the previous monthly periods.

Per Capita Average Daily
Consumption (in gallons)
Average Daily Consumption (in
thousands of gallons)
Water Consumption (in hundred
cubic feet)
Fiscal Year

CITY OF VICTORVILLE

OPERATION INDICATORS BY FUNCTION

LAST TEN FISCAL YEARS
200
2014 2015 2016* 2017 2018 2019 2020 2021 2022 2023 2024 Consumption (per hundred cubic feet)
Standard Domestic $ 1.53 $ 1.53 $ 1.75 $ 1.75 1.88$ $ 2.03 2.18$ $ 2.35 2.6 1$ $ 2.57 2.52 Construction Flow 2.47 2.47 2.77 2.77 2.9 4 3.12 3.32 3.51$ 3.5 6$ $ 3.67 3.78 Untreated Well 0.52 0.52 0.60 0.60 0.64 0.69 0.74 0.80$ 0.8 9$ $ 0.87 0.86 Recycled 0.92 0.92 1.05 1.05 1.13 1.2 2 1.31 1.41$ $ 1.57 1.54$ 1.51 Public Benefit 0.61 0.61 - - --- - -- -
Monthly Service Fee
Monthly per average
daily use 0.00-0.26 $ 17.25 $ 17.25 $ - $ - $ - $ - $ - $ - $ - $ - $ - Monthly per average
dail
y use 0.27-1.17 18.25 18.25 - - - - - - - - - Monthly per average
daily use 1.18-6.60 36.50 36.50 - - - - - - - - - Monthly per average
dail
y use > 6.60 130.50 130.50 - - - - - - - - - 3/4 inch meter $ - $ - 11.7 8$ 11.78$ $ 12.23 12.68$ $ 13.15 13.3 6$ 15.2 4$ 17.68$ $ 20.25 1 inch meter - - 18.5 9 18.59 19.30 20.02 20.75 21.0 9 23.31 27.04 30.97 1 1/2 inch meter - - 35.6 2 35.62 36.99 38.37 39.7 6 40.41 43.49 50.45 57.7 8 2 inch meter - - 56.0 6 56.06 58.21 60.39 62.58 63.60 67.71 78.54 89.96 3 inch meter - - 110.5 6 110.56 114.80 119.09 123.42 125.44 132.28 153.44 175.75 4 inch meter - - 171.8 8 171.88 179.47 185.1 4 191.87 195.0 1 204.93 237.7 1 272.27 6 inch meter - - 342.1 9 342.19 355.32 368.60 382.00 388.25 406.7 2 471.78 540.38 8 inch meter - - 955.3 4 955.34 991.99 1,029.07 1,066.4 8 1,083.92 1,133.18 1,314.45 1,505.5 8 > 8 inch meter - - 1,432.23 1,432.23 1,487.17 1,542.77 1,598.85 1,624.9 9 1,698.21 1,969.86 2,256.28 Fire Service Fee
1 inch meter 10.00$ 10.0 0$ 2.69$ 2.69$ 2.82$ 2.96$ 3.10$ 3.2 0$ 4.1 4$ $ 4.67 $ 5.23 2 inch meter 10.00 10.00 5.19 5.19 5.48 5.78 6.09 4.64 5.15 5.7 1 6.31 2 1/2 inch meter 10.00 10.00 5.19 5.19 5.48 10.65 6.0 9 6.37 6.3 6 6.96 7.60 3 inch meter 9.50 9.50 10.06 19.62 11.27 11.83 10.1 9 10.92 11.68 4 inch meter 10.00 10.00 17.45 17.45 18.5 0 42.68 20.80 21.90 17.26 18.20 19.19 6 inch meter 10.00 10.00 37.88 37.88 40.21 73.44 45.31 47.78 35.42 36.94 38.52 8 inch meter 10.00 10.00 65.13 65.13 69.1 6 114.45 77.9 9 82.30 59.63 61.9 1 64.28 > 8 inch meter 10.00 10.00 101.45 101.45 107.75 114.45 121.5 6 128.31 91.91 95.22 98.64 Source: Victorville Water District
* In 2016, the Water District changed billing method from Monthly Service Fee by usage to Monthly Service Fee by meter size.

CITY OF VICTORVILLE

OPERATION INDICATORS BY FUNCTION

LAST TEN FISCAL YEARS
Principal Water Rates
Fiscal Year
201
Function 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Public Safety
Police:

Stations 111111 1 1111
Patrol Units 52 52 52 55 5 4 54 54 70 70 86 86
Fire Stations 665555 5 5555
Public Works
Highways and streets:

Streets (miles) 448 448 449 449 449 449 449 449 449 45 1 467 Streetlights 392 392 396 40 4 408 418 418 428 428 428 527 Traffic Signals 87 87 88 9 0 91 94 94 97 97 97 10 0
Sewer:

Sanitary sewers (miles) 419 419 44 0 440 443 443 449 455 455 467 47 0 Storm sewers (miles) 473 473 473 473 473 473 473 473 473 474 474 Number of treatment plants 2 22222 2 2 222 Number of service connections 40,152 40,029 40,092 40,55 1 41,232 41,72 3 36,616 36,222 36,76 4 31,286 31,217 Community Services
Parks acreage 263 263 263 180 180 180 180 180 180 182 18 0 Park 18 18 18 19 19 19 19 19 19 19 19
Golf Courses 111111 1 1111
Swimming pools 111111 1 1111
Tennis courts 666666 6 6666
Community Centers 666777 7 7777
Airport
Runway length (miles) 555555 5 5 4 * 4 * 4
Sewer pipeline 30 30 30 30 30 30 30 30 30 30 30
Number of hangars 26 26 26 26 26 26 26 26 26 26 26
Number of buildings 52 52 52 52 52 52 52 52 52 52 52
Water
Water Production in Acre feet 23,830 22,030 20,905 22,476 24,38 3 21,755 22,017 23,487 22,468 20,627 20,982 Domestic Water Tanks (Reservoirs) 26 26 26 26 26 26 26 26 26 26 26 Domestic Storage in Millions of Gallons 74 74 74 74 74 74 74 74 74 74 74 Recycled Water Tanks (Reservoirs) 111111 1 1 111
Recycled Storage in Millions of Gallons 111112 2 2 21 . 6 2 Wells 32 32 32 32 32 3 4 34 34 34 34 33
Pipeline - Linear Feet (in thousands) 3,666 3,666 3,666 3,666 3,666 3,666 3,666 3666 4087 4087 8851 4 Pipeline - Miles 694 694 694 694 694 694 709 709 774 774 775 Booster Pumping Stations 444444 4 4 444
Pressure Regulating Stations 24 24 24 25 25 25 25 25 25 3 3 25 *Per request by FAA, Runway 17/35 was shortened resulting in a combined total of 4 miles.

Source: City of Victorville departments
Note: Indicators are not available for the general government function.

CITY OF VICTORVILLE

CAPITAL ASSET STATISTICS BY FUNCTION

LAST TEN FISCAL YEARS
Fiscal Year
202

Attachment B
Victorville Water District Basic Financial Statements
for Fiscal Year ended June 30, 2024

Victorville, California
Financial Statements and
Independent Auditor’s Report
For the year ended June 30, 2024
DRAFT
DRAFT
Victorville Water District
Table of Contents
For the year ended June 30, 2024
Page
i
Independent Auditor’s Report ................................................................................................................................... 1 Basic Financial Statements:

Statement of Net Position .................................................................................................. ................................. 7 Statement of Revenues, Expenses and Changes in Fund Net Position ........................................................ 8 Statement of Cash Flows .................................................................................................... ............................... 10 Notes to Basic Financial Statements ................................................................................................................ 15 Required Supplementary Information (Unaudited):

Schedule of the Proportionate Share of the Net Pension Liability ............................................................ ..... 42 Schedule of Pension Plan Contributions ...................................................................................... ...................... 44 Schedule of Changes in Total OPEB Liability and Related Ratios ................................................................. 46 Supplementary Information:

Combining Statement of Net Position ......................................................................................... ....................... 50 Combining Statement of Revenues, Expenses, and Change in Net Position ................................................ 52 DRAFT
ii
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DRAFT
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
of the Victorville Water District
Victorville, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the Victorville Water District (District), a component unit of the City of Victorville, California, as of and for the ye ar ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Di strict’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the District, as of June 30, 2024, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with a ccounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing st andards 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 Un ited States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be indepe ndent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethica l 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 The District’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accoun ting 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 substant ial doubt about the District’s ability to continue as a going concern for twelve months beyond the financ ial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

DRAFT
To the Board of Directors
of the Southern California Logistics Airport Authority
Victorville, California

Page 2 ends

Auditor’s 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 auditor’s 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 with GAAS 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 in volve 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 aggr egate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
x Exercise professional judgment and maintain professional 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 responsive to those risks. Such procedures include examining, on a test basis, evidence rega rding 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 District’s internal control. Accordingly, no such opinion is expressed. x 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.
x 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 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.
2 DRAFT
To the Board of Directors
of the Southern California Logistics Airport Authority
Victorville, California

Page 3 ends

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the required pension schedules and other post-employment benefit plan schedules 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 Govern mental Accounting Standards Board who considers it to be an essential part of financial reporting for pl acing 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 standards generally accept ed in the United States of America, which consisted of inquiries of manage ment about the methods of preparing the information and comparing the information for consistency with ma nagement’s responses to our inquiries, the basic financial statements, and other knowle dge we obtained during our audit of the basic financial statements.

We do not express an opinion or provide any assurance on the information 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 analysis 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 pa rt 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 financ ial statements in an appropriate op erational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Supplementary Information
Our audit was conducted for the purpose of forming opin ions on the financial statements that collectively comprise the District’s basic financial statements. The combining statements of the District are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining statements of the District are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlyi ng 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 auditing standards generally accepted in the Unit ed States of America. In our opinion, the combining statements of the District are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Report on Summarized Comparative Information
The prior year summarized comparative information ha s been derived from the District’s June 30, 2023 financial statements. The prior year financial statements of the District as of and for the year ended June 30, 2023, were audited by other auditors whose report da ted June 10, 2024, expressed an unmodified opinion on those statements.
3 DRAFT
To the Board of Directors
of the Southern California Logistics Airport Authority
Victorville, California

Page 4 ends

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April XX, 2025 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, cont racts, and grant agreements and other matters. The p u r p o s e o f t h a t r e p o r t i s s o l e l y t o d e s c r i b e t h e s cope 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 o f i n t e r n a l c o n t r o l o v e r f i n a n c i a l r e p o r t i n g o r o n c o m p l i a n c e . T h a t r e p o r t i s a n i n t e g r a l p a r t o f a n a u d i t performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Berkeley, California
April XX, 2025
4 DRAFT
BASIC

FINANCIAL STATEMENTS
5 DRAFT
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6 DRAFT
Victorville Water District
Statement of Net Position
June 30, 2024
(With Comparative Data for June 30, 2023)
2024 2023
ASSETS
Current Assets:

Cash and investments 85,120,299$ 78,986,58 1$
Cash with fiscal agent 836,588 836,639
Accounts receivable 5,640,186 5,176,781
Interest receivable 371,279 248,870
Due from other governments 28,707 19,946
Inventory 1,604,610 866,934
Total current assets 93,601,669 86,135,751
Noncurrent:

Deposits and prepaid items 51,763 28,306
Capital assets:

Nondepreciable 37,054,907 40,643,195
Depreciable or amortizable, net 120,138,363 119,672,824 Total noncurrent assets 157,245,033 160,344,325
Total assets 250,846,702 246,480,076

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows - OPEB related 2,287,149 2,707,614
Deferred outflow - pension related 6,305,417 6,095,478
Total deferred outflows of resources 8,592,566 8,803,092

LIABILITIES
Current liabilities:

Accounts payable 2,857,836 4,376,617
Interest payable 153,385 161,029
Prepaid water connection fees - 217,489
Deposits payable 1,748,554 1,700,469
Compensated absences - due within one year 561,302 527,666 Total OPEB liability - due within one year 338,738 273,537 Long-term liabilities - due within one year 454,620 434,428 Total current liabilities 6,114,435 7,691,235
Noncurrent liabilities:

Total OPEB liability 11,690,747 11,388,426
Net pension liability 17,610,716 16,156,738
Long-term debt 7,329,311 7,790,160
Compensated absences 154,792 145,516
Total noncurrent liabilities 36,785,566 35,480,840
Total liabilities 42,900,001 43,172,075

DEFERRED INFLOWS OF RESOURCES
Deferred inflows - OPEB related 3,234,388 3,985,338
Deferred inflows - pension related 851,599 1,029,801
Total deferred inflows of resources 4,085,987 5,015,139

NET POSITION
Net investment in capital assets 149,171,073 151,942,967 Unrestricted 63,282,207 55,152,987
Total net position 212,453,280$ 207,095,954$
See accompanying Notes to Basic Financial Statements.
7 DRAFT
Victorville Water District
Statement of Revenues, Expenses and Changes in Net Position For the year ended June 30, 2024
(With Comparative Data for the year ended June 30, 2023) 2024 2023
OPERATING REVENUES:

Utility sales 29,871,480$ 30,269,489 $
Meter and service fees 11,326,765 9,801,678
Pass-thru charges for services 1,149,312 1,211,013
Fines and forfeitures 386,446 485,824
Arsenic surcharge 301,506 285,035
Other 243,233 242,429
Total operating revenues 43,278,742 42,295,468
OPERATING EXPENSES:

Personnel services 12,737,893 11,648,542
Maintenance and operations 19,532,107 19,228,008
Production costs 6,411,631 5,434,263
Pass-thru production costs 1,178,512 1,211,013
Depreciation and amortization 6,570,505 6,524,962
Total operating expenses 46,430,648 44,046,788
Operating income (loss) (3,151,906) (1,751,320)
NONOPERATING REVENUES (EXPENSES):

Taxes 1,567,817 1,335,019
Investment income 5,013,463 1,898,079
Interest expense (1,387,860) (381,764)
Gain on disposal of assets - 338,923
Other nonoperating expenses (2,024,057) (220,750)
Total nonoperating revenues (expenses) 3,169,363 2,969,507 Income before contributions and transfers 17,457 1,218,187 CONTRIBUTIONS AND TRANSFERS:

Connection fees 4,242,660 3,749,915
Alternate water source fees 484,220 528,412
Capital restricted use fees 587,276 586,681
Capital contributions - 10,000
Transfers in 25,713 -
Contributions to the City of Victorville -( 7 3 , 1 2 5 ) Total contributions and transfers 5,339,869 4,801,883
Change in net position 5,357,326 6,020,070
NET POSITION:

Beginning of year 207,095,954 201,075,884
End of year 212,453,280$ 207,095,954 $
See accompanying Notes to Basic Financial Statements.
8 DRAFT
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9 DRAFT
Victorville Water District
Statement of Cash Flows
For the year ended June 30, 2024
(With Comparative Data for the Year Ended June 30, 2023) 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers and users 41,075,670$ 41,565,129$ Receipts from other operating activities 5,069,090 - Cash payments to employees for services (11,592,107) (11,108,779) Cash payments to suppliers for goods and services (29,619,653) (19,431,426) Net cash provided by (used in) operating activities 4,933,000 11,024,924 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Cash received from other governments 1,567,817 1,335,019 Transfers in 25,713 -
Net cash provided by (used in) noncapital financing activities 1,593,530 1,335,019 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Cash received from the sale of capital assets - 614,109 Cash payments to the City of Victorville for acquisition of capital assets -( 73,125) Cash payments to acquire capital assets and other assets (3,447,756) (8,983,075) SBITA principal payments (9,464) (9,888)
Principal paid on capital-related debt (431,193) (410,000) Interest paid on capital-related debt (1,395,504) (395,388) Net cash provided by (used in) capital and related financing activities (5,283,917) (9,257,367) CASH FLOWS FROM INVESTING ACTIVITIES:

Investment Purchase
s --
Interest received 4,891,105 1,705,536
Net cash provided by (used in) investing activities 4,891,105 1,705,536 Net cash flows 6,133,718 4,808,112
CASH AND INVESTMENTS - Beginning of year 78,986,581 74,178,469 CASH AND INVESTMENTS - End of year 85,120,299$ 78,986,581$ See accompanying Notes to Basic Financial Statements.
10 DRAFT
Victorville Water District
Statement of Cash Flows (Continued)
For the year ended June 30, 2024
(With Comparative Data for the Year Ended June 30, 2023) 2024 2023

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) (3,151,906)$ (1,751,320)$
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Depreciation 6,570,505 6,524,962
Nonoperating miscellaneous revenue (expense) and capital contributions 3,290,099 4,644,258 (Increase) decrease in assets and deferred outflows:

Accounts receivable (463,405) 1,163,723
Due from other governments (8,761) 14,706
Prepaid expense --
Inventories (737,676) 81,339
Prepaid deposits (23,457) (6,783)
Deferred outflows - OPEB 420,465 (600,946)
Deferred outflows - pension (209,939) (3,218,593)
Increase (decrease) in liabilities and deferred inflows:

Accounts payable (1,518,781) (216,222)
Prepaid water connection fees (217,489) -
Deposits payable 48,085 30,498
Compensated absences 42,912 122,244
Total OPEB liabilty 367,522 (866,269)
Net pension liability 1,453,978 6,893,711
Deferred inflows - OPEB (750,950) 1,565,151
Deferred inflows - pension (178,202) (3,355,535)
Net cash provided by (used in) operating activities 4,933,000$ 11,024,924$ NONCASH TRANSACTIONS:

Developer/tenant contributed capital assets -$ 10,000$ SBITA acquisition - 30,652
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NOTES TO BASIC

FINANCIAL STATEMENTS
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the Victorville Water District, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting princi ples. The more significant of the City’s accounting policies are described below.

A. Description of the Reporting Entity
On August 15, 2007, the Victor Valley Water District and the Baldy Mesa Water District were consolidated into a subsidiary district of the City of Victorville (t he City), known as the Victorville Water District (the District), per Resolution No. 2977 of the Executiv e Officer of the Local Agency Formation Commission (LAFCO) of San Bernardino County, which adopted a change of organization without election. All of the liabilities including 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 its Water Department and Water Funds into the District to serve all of the water customers of the City under this District. The basic operations of the District are financed by user charges plus 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 reflected as a blended component unit within the City of Vict orville. Blended component units are, in substance, part of the primary government’s operations, even though they are legally separate entities. The District fund has been included within the scope of the basic financial statements of the City because the City Council is the governing board and has financial accoun tability over the operations of the District. Only the District fund is included herein and these financial statements, 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 financial 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 statements.

C. Basis of Accounting, Measurement Focus, and Financial Statement Presentation The District reports its activities as an enterprise fu nd (proprietary fund type), which is used to account for operations that are financed and operated in a manner similar to a private business enterprise, 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.
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Basis of Accounting, Measurement Focus, and Financial Statement Presentation, Continued The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.

Proprietary funds are presented using the economic resources measurement focus. This means that all assets, deferred outflows of resources, liabilities, and deferred inflows of resour ces (whether current or noncurrent) associated with their activity are included on their statement of net position.

Proprietary funds are presented using the accrual ba sis 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 and acquisitions 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 bond premium or discount. Issuance costs, whether or not withheld from the actual debt proceeds received, are 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 fees, pass- thru charges, fines and forfeitures, arsenic surcharge, and other reimbursements, result from exchange transactions associated with the principal activities 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 exchange.

Operating expenses, such as the cost or providing water, include the personnel services, maintenance and operations, productions costs, pass-thru production co sts, and depreciation and amortization on capital assets. All expenses not meeting this definition, such as interest expense, are reported as nonoperating expenses.

D. Cash and Investments
Investments are reported in the accompanying statement of net position at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Changes in fair value that occur during a fiscal year are recognized as investment income re ported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments.
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued E. Cash Equivalents
For purposes 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 changes in intere st rates. 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. When management 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. Inventory consists primarily of water meters, pipe and pipe fittings for construction, and repair to the District’s water transmission and distribution system. Materials and supplies are valued at cost using a weighted average method.

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

I. Capital Assets
Tangible capital assets are valued at cost where hi storical records are available and at an estimated historical cost where no historical records exist. Donated tangible capital assets are recorded at estimated acquisition value at the date of donation. SBITA assets are initially measured as the sum of the present value of payments expected to be made during th e subscription term, payments associated 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 vendor at the commencement of the SBITA term. SBITA assets are amortized in a systematic and rational manner over the shorter of the subscription term or the useful life of the underlying IT assets.

The District capitalizes all assets with an initial indi vidual cost of more than $5,000 and a useful 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 extend the life are not capitalized.
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued I. Capital Assets, Continued
Depreciation is computed utilizing the straight-line method over the following useful lives:

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 delinquent payments.

K. Compensated Absences
A liability is recorded for unused vacation and similar compensatory leave balances since the employees’ entitlement to these balances is attributable to servic es already rendered and 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 balances will result in termination payments. This is estimated by including in the liability the unused balances of employees currently entitled to receiv e termination payment, as well as those who are expected to become eligible to re ceive termination benefits as a result of continuing their employment with the District. Other amounts of unused sick leave are excluded from the liability since their payment is contingent solely upon the occurrence of a future event (illness), which is outside the control of the 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.

Buildings and Improvements 10 to 50 Years
Computer and Communications 5 Years
Furniture and Equipment 3 to 7 Years
Infrastructure:

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
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

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 future peri ods 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 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 an inflow of resources (revenue) until that time. The District’s deferred infl ows of resources reported on the statement of net position relate to pension and other postemployment benefits, which are more fully discussed in Notes 6 and 5, respectively.

M. Prepaid Water Connection Fees
Prepaid connection 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 contributions represent cash and capital asset additions contributed to the District through the collection of AB-1600 connection fees, by property owners, granting 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 Investment 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.” 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 Distri ct’s practice to consider restricted net position to have been depleted before unrestricted net position is applied, unless otherwise directed by Council. 19 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued 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) pl ans (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 refund s 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 av ailable reports that can be obtained at CalPERS’ website under Forms and Publications.

Q. Prior Year Data
Selected information regarding the prior year ha d 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 outflo ws 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.
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS
Cash and investments as of June 30, 2024, are classified in the accompanying financial statements The following is a summary of the cash and investments at June 30, 2024:

A. 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. Th is 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.

B. Investments Authorized by the California Gove rnment Code and the City’s Investment Policy The City adopts the investment policy for the Distri ct. 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. 21 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
B. Investments Authorized by the California Governme nt Code and the City’s Investment Policy, Continued C. 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.
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
D. 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 portfo lio 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 sensit ivity of the fair values of the District’s investments (including investments held by bond trustee) to market interest rate fluctu ations is provided by the following table that shows the distribution of these investments by maturity:
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
E. 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 Code, the City’s investment policy, or debt agreements, and the actual Standard & Poor’s rating as of year-end for each investment type.
* 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, 2024, FSA was not in default and the value of the collateral met the requirements.

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.
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
F. 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 pa rty. 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 co llateral 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, 2024, 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.

G. 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 a ccompanying 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.
25 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
H. Fair Value Measurements
The District categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally ac cepted in the United States of America. The fair value framework provides a hierarchy that prioritizes the inputs to va luation 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.

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 base d 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. 26 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

3. CAPITAL ASSETS
For the year ended June 30, 2024 the City’s capital asset activity was as follows:

Depreciation and amortization expense for the District was $6,570,505 for the year ended June 30, 2024. 27 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES
A summary of changes in long-term liabilities for the year ended June 30, 2024, is noted below:

A. SBITAs
The District has entered into subscription based- information technology ar rangements (SBITAs) for various software licenses. The SBITA arrangements expire at various dates through 2025 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:

Right-to-use assets acquired through SBITAs, net of accumulated amortization, are reported in Note 3, Capital Assets.

B. 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. Pr incipal 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, 2024 is $7,700,000.
28 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES, Continued
B. 2006 Certificates of Participation, Continued
The annual requirements to amortize outstanding debt of the District as of June 30, 2024, are as follows for each fiscal year ending June 30:

C. 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 District. The City performed the calculation that demonstrated compliance with rate covenant for the fiscal year ended June 30, 2024. The calculation was prepared using revenues and the proportionate expenses applicable to the Baldy Mesa Water District.

D. 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 procee ds 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:
29 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

5. OTHER POST EMPLOYMENT BENEFITS (OPEB)
A. 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 av ailable 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.

B. 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.

C. Employees Covered
As of the June 30, 2023 measurement date, the following current and former employees were covered by the benefit terms under the Plan:

D. 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, 2024, the District’s cash contributions were $251,494 for current premiums, administrative costs of $938, and the estimated implied subsidy was $69,000 resulting in total payments of $321,432.
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

5. OTHER POST EMPLOYMENT BENEFITS (OPEB), Continued
E. OPEB Liability
The District’s total OPEB liability was measured as of June 30, 2023 and was determined by an actuarial valuation dated June 30, 2023.

F. Discount Rate
The discount rate used to measure the total OPEB li ability was 3.65%. The discount rate is determined based on the Bond Buyer 20-Bond Index since the District has not established a trust.

G. Change in Actu arial Assumptions
The following actuarial assumption changes occurred form the measurement periods ended June 30, 2023 to 2024:

The discount rate changed from 3.54% to 3.65% based on changes in the index.

Inflation was same as prior year at 2.50%.

The healthcare trend rate remained unchanged as follows: Non-Medicare rate is 8.5%, Medicare (Non-Kaiser) is 7.5%, and Medicare (Kaiser) is 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. 31 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

5. OTHER POST EMPLOYMENT BENEFITS (OPEB), Continued
H. Changes in the Total OPEB Liability
The changes in the total OPEB liability for the District Plan are as follows:

I. 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:

J. 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:
32 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

5. OTHER POST EMPLOYMENT BENEFITS (OPEB), Continued
K. 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 are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as defe rred outflows and deferred inflows of resources related to OPEB and are recognized in future OPEB expense.

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

L. OPEB Expense and Deferred Outflows/In flows of Resources Related to OPEB For the fiscal year ended June 30, 2024, the District recognized OPEB expense of $358,469. As of the fiscal year ended June 30, 2024, the District reported deferred outflows/inflows of resources related to OPEB from the following sources:

The $321,432 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, 2025. Other amounts reported as deferred outflows/inflows of resources related to OPEB will be recognized as expense as follows:
33 DRAFT
Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

5. OTHER POST EMPLOYMENT BENEFITS (OPEB), Continued
M. Payable to the Pension Plan
At June 30, 2024, the District had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2024.

6. PENSION PLAN
A. General Information about the Pension Plans
Plan Description
All qualified permanent and probationary employee s are eligible to participate in the City’s Miscellaneous Plan, agent multiple-employer defi ned benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating 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 Governme nt 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 employ ees 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 fi ve 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, 2024, are summarized as follows:
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
A. General Information about the Pension Plans, Continued Contributions
Section 20814(c) of the California Public Employee s’ 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 identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. For the fiscal year ended June 30, 2024, the District made contributions of $1,827,835 to the plan.

B. 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, 2023 measurement period was determined by an actuarial valuation as of June 30, 2022, with standard update procedures used to roll forward the total pension liability to June 30, 2023. The total pension liability for the Miscellaneous Plan was based on the following assumptions:
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
B. Pension Liabilities, Pension Expen ses, 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:

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 fr om 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 l o n g -t e r m e xp e c t e d r at e o f r e t ur n o n pl a n in v e s t me nt s w a s ap p l i ed t o a ll p e r i o d s o f p r o je c t e d b e n e fi t payments to determine the total pension liability.
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
B. 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 pensio n liability for the Miscellaneous Plan as of the measurement date ended June 30, 2022 and 2023, was as follows:

Pension Expense and Deferred Outflows and Inflows of Resources For the year ended June 30, 2024, the District recognized pension expense of $3,287,393 for the Miscellaneous Plan. At June 30, 2024, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources for the Miscellaneous Plan:
$1,827,835 reported as deferred outflows of reso urces 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, 2025. 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
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Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
B. 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:

Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the District’s proportion ate share of the net pe nsion 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:

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, 2024, the District had no outstanding amount of contributions to the Miscellaneous Plan required for the year ended June 30, 2024.

Deferred
Measurement Period Inflows of
Ended June 30, Resources
2024 1,272,794 $
2025 594,414
2026 1,701,930
2027 56,846
2028 -
Thereafter -
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REQUIRED

SUPPLEMENTARY INFORMATION
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Victorville Water District
Required Supplementary Information
For the year ended June 30, 2024
CalPERS Cost Sharing Plan
Schedule of the Proportionate
Share of the Net Pension Liability - Last Ten Fiscal Years Reporting Fiscal Year 2015 2016 2017 2018
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 Plan's proportion of the net pension liability 24.28% 24.40% 24.63% 24.87% Plan's proportionate share of
the net pension liability 6,754,806$ 7,425,085$ 9,777,304$ 11,480,941$ Plan's covered payroll 4,707,026$ 4,824,221$ 4,860,190$ 5,506,946$ Plan's proportionate share of
the net pension liability as percentage
of its covered payroll 143.50% 153.91% 201.17% 208.48%
Fiduciary net position as a percentage of the
total pension liability 19.73% 19.55% 18.59% 18.52%
Notes to the schedule:

From fiscal year June 30, 2015 to June 30, 2016:

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 remain the same as the prior year at 6.90%, and the inflation rate is also unchanged from the prior year at 2.30%
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%.

Benefit Changes:

There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in the Plan may have provided a benefit improvement to their employees by granting Two Years Additional Service Credit to members retiring during a specified time period (a.k.a. Golden Handshakes).

Changes in Assumptions:

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. 42 DRAFT
2019 2020 2021 2022 2023 2024
6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023

24.95% 25.15% 25.07% 25.57% 23.60% 23.26%
11,526,434$ 12,996,097$ 12,569,004$ 9,263,027$ 16,156,738$ 17,610,719$ 5,598,545$ 5,546,115$ 6,177,914$ 6,148,247$ 6,657,109$ 205.88% 234.33% 203.45% 150.66% 242.70% #DIV/0!

18.88% 18.74% 18.47% 21.49% 16.97%
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Victorville Water District
Required Supplementary Information
For the year ended June 30, 2024
CalPERS Cost Sharing Plan
Schedule of Pensio
n Plan Contributions - Last 10 Fiscal Years
Fiscal Year Ended 2015 2016 2017 2018
Actuarially determined contribution 709,786$ 827,951$ 916,742$ 1,026,643$ Contributions in relation to actuarially
deemed contributions (709,786) ( 827,951) (916,742) (1,026,643) Contribution deficiency (excess) -$ -$ -$ -$
Covered payroll 4,824,221$ 4,860,190$ 5,506,946$ 5,598,545$ Contributions as a percentage of
covered payroll 14.71% 17.04% 16.65% 18.34%
Notes to Schedule:

Valuation Date 6/30/2012 6/30/2013 6/30/2014 6/30/2015
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age
Amortization method Level percentage of payroll, closed Asset valuation method Fair Value except for 2015 is Market Value of Assets Discount Rate 6.90%
Inflation 2.75% to 2.30%
Salary increases
Retirement age 50 and up
Annual increase vary by category, entry age and duration of service
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2019 2020 2021 2022 2023 2024
1,221,074$ 1,459,333$ 1,520,299$ 1,591,527$ 1,773,330$ 1,827,835$ (1,221,074) (1,459,333) (1,520,299) (1,591,527) (1,773,330) (1,827,835) -$ -$ -$ -$ -$ -$ 5,546,115$ 6,177,914$ 6,148,247$ 6,657,109$ 7,424,195$

22.02% 23.62% 24.73% 23.91% 23.89% #DIV/0!
6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020
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Victorville Water District
Required Supplementary Information
For the year ended June 30, 2024
Schedule of Changes in the Total OPEB Liability and Related Ratios - Last 10 Fiscal Years* Reporting Fiscal Year 2018 2019 2020 2021 2022 2023 2024 Measurement Date 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Total OPEB Liability
Service cost 583,831$ 494,095 $ 417,399 $ 474,890 $ 600,360 $ 626,941$ 455,359$ Interest 345,325 404,923 364,950 372,802 271,338 281,198 423,401 Changes of assumptions (1,452,630) (509,085) 601,978 1,795,864 105,768 (2,488,667) (197,575) Differences between expected
and actual experience - (1,985,311) - (904,000) - 987,796 - Benefit payments (185,817) (199,802) (216,889) (224,298) (253,227) (273,537) (313,663) Net change in the total OPEB
liability (709,291) (1,795,180) 1,167,438 1,515,258 724,239 (866,269) 367,522 Total OPEB liability - beginning 11,625,768 10,916,477 9,121,297 10,288,735 11,803,993 12,528,232 11,661,963 Total OPEB liabilty - ending (a) 10,916,477 9,121,297 10,288,735 11,803,993 12,528,232 11,661,963 12,029,485 Covered-employee payroll 4,577,527$ 6,818,328 $ 7,078,295 $ 7,618,996 $ 7,710,052 $ 7,778,497 $ Net OPEB liability as a
percentage of covered -
employee payroll 238.48% 133.78% 145.36% 154.93% 162.49% 149.93% #DIV/0! Notes to Schedule:

Changes in Assumptions:

Discount Rate 3.58% 3.87% 3.50% 2.21% 2.16% 3.54% 3.65% Mortality Improvement Rates
Scale MP-2016 Scale MP-2018 Scale MP-2018 Scale MP-2020 Scale MP-2020 Scale MP-2021 Scale MP-2021 In the June 30, 2018 measurement period, the pre-65 waived retiree re-election was updated to be 10% after age 65. * Fiscal year 2018 was the 1st year of implementation.

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, 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%.

In the June 30, 2023 measurement period, the following medical trend rates remained unchanged: Non-Medicare increased by 8.5%, Medicare increased by 7.5%, and Kaiser increased by 6.25%.

In the June 30, 2020 measurement period, the medical trend rate for Kaiser Senior Advantage plans decreased from 6.5% to 5.0%.
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SUPPLEMENTARY INFORMATION
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Victorville Water District
Combining Statement of Net Position
For the year ended June 30, 2024
(With Comparative Data for June 30, 2023)
Victorville
Wastewater
Reclamation Reclaimed
Water Facility Water Eliminations
ASSETS
Current Assets:

Cash and investments 69,640,396$ 11,951,308 $ 3,528,595 $ - $ Cash with fiscal agent 836,588 - - -
Accounts receivable 3,905,373 1,708,021 26,792 -
Interest receivable 371,279 - - -
Due from other governments 28,707 - - -
Inventory and other assets 1,604,610 - - -
Total current assets 76,386,953 13,659,329 3,555,387 -
Noncurrent:

Prepaid deposits 18,675 33,088 - -
Advances to other funds 23,713,443 - - (23,713,443 )
Capital assets:

Nondepreciable 35,813,652 942,051 299,204 -
Depreciable or amortizable, net 105,369,090 10,721,445 4,047,828 - Total noncurrent assets 164,914,860 11,696,584 4,347,032 (23,713,443 ) Total assets 241,301,813 25,355,913 7,902,419 (23,713,443)

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows - OPEB related 2,221,178 65,97 1 --
Deferred outflow - pension related 6,157,662 147,755 - - Total deferred outflows of resources 8,378,840 213,726 - -

LIABILITIES
Current liabilities:

Accounts payable 2,156,491 650,089 51,256 -
Interest payable 153,385 - - -
Prepaid water connection fees ----
Deposits payable 1,748,554 - - -
Compensated absences - due within one year 561,302
Total OPEB liability - due within one year 338,738 - - - Long-term liabilities - due within one year 454,620 - - - Total current liabilities 5,413,090 650,089 51,256 -
Noncurrent liabilities:

Advances from other funds - 23,713,443 - (23,713,443 )
Total OPEB liability 11,444,716 246,031 --
Net pension liability 17,320,116 290,600 - -
Long-term debt 7,329,311 ---
Compensated absences 154,792 - - -
Total noncurrent liabilities 36,248,935 24,250,074 - (23,713,443 ) Total liabilities 41,662,025 24,900,163 51,256 (23,713,443)

DEFERRED INFLOWS OF RESOURCES
Deferred inflows - OPEB related 3,165,532 68,856 - -
Deferred inflows - pension related 806,554 45,045 - -
Total deferred inflows of resources 3,972,086 113,901 - -

NET POSITION
Net investment in capital assets 133,160,545 11,663,496 4,347,032 - Unrestricted 70,885,997 (11,107,921) 3,504,131 - Total net position 204,046,542$ 555,575$ 7,851,163$ -$ 50 DRAFT
2024 2023
85,120,299$ 78,986,581$
836,588 836,639
5,640,186 5,176,78 1
371,279 248,870
28,707 19,946
1,604,610 866,934
93,601,669 86,135,751
51,763 28,306
--
37,054,907 40,643,195
120,138,363 119,672,824
157,245,033 160,344,325
250,846,702 246,480,076
2,287,149 2,707,614
6,305,417 6,095,478
8,592,566 8,803,092
2,857,836 4,376,617
153,385 161,029
- 217,489
1,748,554 1,700,469
561,302 527,666
338,738 273,537
454,620 434,428
6,114,435 7,691,235
--
11,690,747 11,388,426
17,610,716 16,156,738
7,329,311 7,790,160
154,792 145,516
36,785,566 35,480,840
42,900,001 43,172,075
3,234,388 3,985,338
851,599 1,029,80 1
4,085,987 5,015,139
149,171,073 151,942,967
63,282,207 55,152,987
212,453,280$ 207,095,954 $
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Victorville Water District
Combining Statement of Revenues, Expenses and Changes in Net Position For the year ended June 30, 2024
(With Comparative Data for the Year Ended June 30, 2023) Victorville
Wastewater
Reclamation Reclaimed
Water Facility Water Eliminations
OPERATING REVENUES:

Utility sales 20,801,733$ 8,737,426 $ 332,32 1$ -$ Meter and service fees 11,326,765 - - -
Pass-thru charges for services 1,149,312 - - -
Fines and forfeitures 386,446 - - -
Arsenic surcharge 301,506 - - -
Other 243,233 - - -
Total operating revenues 34,208,995 8,737,426 332,321 - OPERATING EXPENSES:

Personnel services 12,262,415 270,709 204,769 - Maintenance and operations 10,779,044 8,582,566 170,497 - Production costs and pass-thru production costs 6,405,146 - 6,485 - Pass-thru production costs 1,178,512 - - -
Depreciation and amortization 6,071,690 337,751 161,064 - Total operating expenses 36,696,807 9,191,026 542,815 - Operating income (loss) (2,487,812) (453,600) (210,494) - NONOPERATING REVENUES (EXPENSES):

Taxes 1,567,817 - - -
Investment income 4,272,348 583,426 157,689 -
Interest expense (363,799) (1,024,061) --
Gain on disposal of assets ----
Other nonoperating expenses (2,180,570) 156,513 - -
Total nonoperating revenues (expenses) 3,295,796 (284,122) 157,689 - Income before contributions and transfers 807,984 (737,722) (52,805) - CONTRIBUTIONS AND TRANSFERS:

Connection fees 1,904,448 2,338,212 - -
Alternate water source fees 484,220 - - -
Capital restricted use fees - 587,276 - -
Capital contributions ----
Transfers in 25,713 - - -
Contributions to the City of Victorville ----
Total contributions and transfers 2,414,381 2,925,488 - - Change in net position 3,222,365 2,187,766 (52,805) - NET POSITION:

Beginning of year 200,824,177 (1,632,191) 7,903,968 -
End of year 204,046,542$ 555,575$ 7,851,163$ -$ 52 DRAFT
2024 2023
29,871,480$ 30,269,489$
11,326,765 9,801,678
1,149,312 1,211,013
386,446 485,824
301,506 285,035
243,233 242,429
43,278,742 42,295,468
12,737,893 11,648,542
19,532,107 19,228,008
6,411,631 5,434,263
1,178,512 1,211,013
6,570,505 6,524,962
46,430,648 44,046,788
(3,151,906) (1,751,320)
1,567,817 1,335,019
5,013,463 1,898,079
(1,387,860) (381,764)
- 338,923
(2,024,057) (220,750)
3,169,363 2,969,507
17,457 1,218,187
4,242,660 3,749,915
484,220 528,412
587,276 586,68
1 - 10,000
25,713 -
-( 73,125)
5,339,869 4,801,883
5,357,326 6,020,070
207,095,954 201,075,884
212,453,280$ 207,095,954 $
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Attachment C
Southern California Logistics Airport Authority
Basic Financial Statements
for Fiscal Year ended June 30, 2024
Victorville, California
Financial Statements and
Independent Auditor’s Report
For the year ended June 30, 2024
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Southern California Logistics Airport Authority
Table of Contents
For the year ended June 30, 2024
Page
i
Independent Auditor’s Report ................................................................................................................................... 1 Basic Financial Statements:

Statement of Net Position .................................................................................................. ................................. 7 Statement of Revenues, Expenses and Changes in Net Position ................................................................ .. 8 Statement of Cash Flows .................................................................................................... ............................... 10 Notes to Basic Financial Statements ................................................................................................................ 15 Required Supplementary Information (Unaudited):

Schedule of the Proportionate Share of the Net Pension Liability ............................................................ ..... 52 Schedule of Pension Plan Contributions ...................................................................................... ...................... 54 Schedule of Changes in Total OPEB Liability and Related Ratios ................................................................. 56 Supplementary Information:

Combining Statement of Net Position ......................................................................................... ....................... 62 Combining Statement of Revenues, Expenses, and Change in Net Position ................................................ 64 DRAFT
ii
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INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
of the Southern California Logistics Airport Authority
Victorville, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the Southern California Logistics Airport Authority (SCLAA), a component unit of the City of Victorville, California, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the SCLAA’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the SCLAA, as of June 30, 2024, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with a ccounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing st andards 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 Un ited States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the SCLAA and to meet our other ethical responsibilities, in accordance with the relevant ethica l 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 The SCLAA’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accoun ting 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 SCLAA’s ability to continue as a going concern for twelve months beyond the financ ial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

DRAFT
To the Board of Directors
of the Southern California Logistics Airport Authority
Victorville, California

Page 2 ends

In performing an audit in accordance with GAAS, we:
x Exercise professional judgment and maintain professional 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 responsive to those risks. Such procedures include examining, on a test basis, evidence rega rding 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 SCLAA’s internal control. Accordingly, no such opinion is expressed. x 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.
x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the SCLAA’s ability to continue as a going concern for a reasonable period of time.

Page 3 ends

We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opin ions on the financial statements that collectively comprise the SCLAA’s basic financial statements. Th e combining statements of the SCLAA are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining statements of the SCLAA are the respon sibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlyi ng 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 auditing standards generally accepted in the Unit ed States of America. In our opinion, the combining statements of the SCLAA are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Report on Summarized Comparative Information
The prior year summarized comparative information has been derived from the SCLAA’s June 30, 2023 financial statements. The prior year financial statements of the SCLAA as of and for the year ended June 30, 2023, were audited by other auditors whose report da ted June 10, 2024, expressed an unmodified opinion on those statements.
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To the Board of Directors
of the Southern California Logistics Airport Authority
Victorville, California

Page 4 ends

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 o f i n t e r n a l c o n t r o l o v e r f i n a n c i a l r e p o r t i n g o r o n c o m p l i a n c e . T h a t r e p o r t i s a n i n t e g r a l p a r t o f a n a u d i t performed in accordance with Government Auditing Standards in considering the SCLAA’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Berkeley, California
April XX, 2025
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BASIC

FINANCIAL STATEMENTS
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Southern California Logistics Airport Authority
Statement of Net Position
June 30, 2024
(With Comparative Data for June 30, 2023)
2024 2023
ASSETS
Current Assets:

Cash and investments 41,290,155$ 37,577,125 $ Cash and investments with fiscal agent 26,097,008 24,761,205 Accounts receivable, net 401,630 390,776
Interest receivable 287,912 136,228
Due from other governments 864,253 152,472
Leases receivable 7,246,566 7,770,582
Inventory 3,612 13,878
Total current assets 76,191,136 70,802,266
Noncurrent:

Prepaid Items 4,149 55,594
Advances to City of Victorville 1,600,000 2,000,000 Leases 77,962,659 83,207,311
Nondepreciable capital assets 15,760,072 13,981,248 Depreciable capital assets, net 101,596,327 109,697,569 Total noncurrent assets 196,923,207 208,941,722
Total assets 273,114,343 279,743,988

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows - OPEB related 237,333 267,603 Deferred outflows - pension related 1,768,477 1,709,212 Deferred charge on refunding 1,263,381 1,397,897 Total deferred outflows of resources 3,269,191 3,374,712

LIABILITIES
Current liabilities:

Accounts payable 594,660 445,642
Interest payable 1,197,937 1,228,041
Deposits payable 742,742 720,696
Unearned revenue 850,360 1,063,573
Compensated absences - due within one year 133,833 117,127 Total OPEB liability - due within one year 8,504 30,446 Long-term debt - current portion 7,245,000 7,002,127
Total current liabilities 10,773,036 10,607,652
Noncurrent liabilities:

Advances from other governments 11,678,089 11,267,089
Total OPEB liability 2,115,912 2,009,638
Net pension liability 4,930,171 4,503,688
Long-term debt 267,735,859 273,130,418
Compensated absences 112,463 98,425
Total noncurrent liabilities 286,572,494 291,009,258
Total liabilities 297,345,530 301,616,910

DEFERRED INFLOWS OF RESOURCES
Deferred inflows - OPEB related 762,29 1 854,840
Deferred inflows - pension related 183,799 234,104
Deferred inflows - lease
s 80,139,808 87,570,873
Total deferred inflows of resources 81,085,898 88,659,817

NET POSITION
Net investment in capital assets (130,492,014) (130,315,399) Unrestricted 28,444,120 23,157,372
Total net position (102,047,894)$ (107,158,027)$ See accompanying Notes to Basic Financial Statements.
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Southern California Logistics Airport Authority
Statement Of Revenues, Expenses, and Changes in Net Position For the year ended June 30, 2024
(With Comparative Data for the year ended June 30, 2023) 2024 2023
OPERATING REVENUES:

Charges for services
Landing fees 1,492,219$ 1,992,027 $
Fuel flowage fees 382,140 309,239
Rent and lease revenue 10,424,249 10,907,800
Total charges for services 12,298,608 13,209,066
Fines and forfeitures 25,274 28,873
Other 851,560 438,339
Total operating revenues 13,175,442 13,676,278 OPERATING EXPENSES:

Personnel services 3,664,583 3,329,516 Maintenance and operations 7,034,343 7,432,535
Depreciation 9,480,389 9,744,648
Total operating expenses 20,179,315 20,506,699 Operating income (loss) (7,003,873) (6,830,421) NONOPERATING REVENUES (EXPENSES):

Taxes 21,875,148 22,072,684
Investment income 4,998,166 3,494,189
Interest expense (16,804,585) (16,864,762)
Gain on sale of capital assets - 14,236,886
Other nonoperating expenses 322,056 (19,137)
Proceeds from capital asset sold to City - 1,929,34 1
Capital asset sold to City - (1,895,090)
Total nonoperating revenues (expenses) 10,390,785 22,954,111 Income before contributions and transfers 3,386,912 16,123,690 CONTRIBUTIONS AND TRANSFERS:

Capital contributions - 183,723 Capital grants 1,723,221 183,722
Capital contribution from tenant - 1,814 Total contributions and transfers 1,723,221 369,259 Change in net position 5,110,133 16,492,949 NET POSITION:

Beginning of year (107,158,027) (123,650,976)
End of year (102,047,894)$ (107,158,027)$
See accompanying Notes to Basic Financial Statements.
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Southern California Logistics Airport Authority
Statement Of Cash Flows
For the year ended June 30, 2024
(With Comparative Data for the year ended June 30, 2023) 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 2,871,228$ 1,918,566$ Cash payments to employees for services (3,294,873) (3,200,698) Cash payments to suppliers for goods and services (6,823,614) (8,359,154) Net cash provided by (used in) operating activities (7,247,259) (9,641,286) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Cash received from other governments 21,574,367 22,500,969 Cash paid to City of Victorville (11,000) (2,233,072) Net cash provided by (used in)
Noncapital financing activities 21,563,367 20,267,897 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Cash received from sale of capital assets - 14,408,189 Capital grants 1,723,221 183,722
Cash received from City for acquisition of capital assets - 1,929,341 Cash received from leases and rent 8,761,852 9,129,103 Cash payments to acquire capital assets (3,157,971) (782,127) Principal paid on capital-related debt (6,885,000
) (6,550,000)
Interest paid on capital-related debt (14,555,859) (14,906,576) Net cash provided by (used in) capital and related
Financing activities (14,113,757) 3,411,652 CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received on investments 4,846,482 3,457,131
Net cash provided by (used) by investing activities 4,846,482 3,457,131 NET INCREASE IN CASH AND CASH EQUIVALENTS 5,048,833 17,495,394 CASH AND CASH EQUIVALENTS - Beginning of year 62,338,330 44,842,936 CASH AND CASH EQUIVALENTS - End of year 67,387,163$ 62,338,330$

RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:

Cash and investments 41,290,155 37,577,125 Cash and investments with fiscal agent 26,097,008 24,761,205 Cash and cash equivalents 67,387,163 62,338,330 See accompanying Notes to Basic Financial Statements.
10 DRAFT
Southern California Logistics Airport Authority
Statement Of Cash Flows (Continued)
For the year ended June 30, 2024
(With Comparative Data For The Year Ended June 30, 2023) 2024 2023

RECONCILIATION OF OPERATING LOSS TO NET CASH

PROVIDED (USED) BY OPERATING ACTIVITIES
Operating loss (7,003,873)$ (6,830,421)$
Adjustments to reconcile operating loss to net cash
Provided (used) by operating activities:

Depreciation 9,480,389 9,744,648
Operating rental and lease revenue (10,424,249) (10,907,800) Nonoperating miscellaneous expense 322,056 (19,137)
(Increase) decrease in assets:

Accounts receivable, net (10,854) 231,545
Inventory 10,266 16,027
Prepaid items 51,445 (1,839)
Deferred outflows - OPEB 30,270 33,753
Deferred outflows - pension (59,265) (879,487)
Increase (decrease) in liabilities:

Accounts payable 149,018 (940,807)
Deposits payable 22,046 (824,798)
Unearned revenue (213,213) (237,522)
Accrued compensated absences 30,744 (24,661)
Total OPEB liability 84,332 (323,701)
Net pension liability 426,483 1,904,161
Deferred inflows - OPEB (92,549) 335,660
Deferred inflows - pension (50,305 ) (916,907)
Net cash provided by (used in) operating activities (7,247,259)$ (9,641,286) $

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING

AND FINANCING ACTIVITY
Developer/tenant contributed capital assets - $ 185,537$ Interest accretion expenses 1,641,446 1,527,079
Amortization of bond discounts and premiums 91,868 91,868 Total $1,733,314 $1,804,484
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NOTES TO BASIC

FINANCIAL STATEMENTS
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the Southern Califor nia Logistics Airport Authority, California (City) have been prepared in conformity with generally accept ed accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establis hing governmental accounting and fina ncial reporting principles. The more significant of the City’s accounting policies are described below.

A. Description of the Reporting Entity
The Southern California Logistics Airport Authority (SCLAA), a component unit of the City of Victorville, was formed in June of 1997 by the City of Victorville and the former Victorville Redevelopment Agency.

Prior to the dissolution of the Victorville Redevelopm ent Agency in 2012, the Victorville Water District was added as a member of the JPA. The purpose of SCLAA is to provide for the coordination of long- range planning of the territory of George Air Force Base (now Southern California Logistics Airport, or the Airport). The Victor Valley Economic Development Authority (VVEDA), a Joint Powers Authority of the City of Victorville and other entities, was auth orized to exclusively exercise the powers of a redevelopment agency in the area including and surrounding the Airport. VVEDA subsequently delegated to the SCLAA all of its redevelopment auth ority over the portion of the VVEDA project area comprised of the Airport.

B. Relationship to the City of Victorville
The SCLAA is an integral part of the reporting entity of the City of Victorville (the City) and is reflected as a blended component unit within the City of Victorville. The SCLAA fund has been included within the scope of the basic financial statements of the City because, although it is a legally separate organization, the City Council is the governing board and has financial accountability over the operations of the SCLAA. Only the SCLAA fund is included herein and these financial statements, therefore, do not purport to represent the financial position or results of operations of the City of Victorville, California.

C. Basic Financial Statements
The basic financial 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 statements.

D. Basis of Accounting, Measurement Focus, and Financial Statement Presentation The SCLAA is accounted for as an enterprise fund (proprietary fund type). A fund is an accounting entity with a self-balancing set of accounts established to record the financial position and results of operations of a specific governmental activity. The activities of enterprise funds closely resemble those ongoing businesses in which the purpose is to conserve and add to basic resources while meeting operating expenses from current revenues. Enterprise funds account for operations that provide services on a continuous basis and are substantially financed by revenues derived from user charges. 15 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Basis of Accounting, Measurement Focus, and Financial Statement Presentation, Continued The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.

Proceeds of long-term debt and acquisitions under capital leases 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 for bonds issued through 2021 and the effective interest method for bonds issued thereafter. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenses.

The SCLAA distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from provid ing services and producing and delivering goods in connection with airport and rental operations. The principal operating revenues of the SCLAA are charges to customers for services, which includes landing fees, fuel flowage fees, and rent and lease revenue, fines and forfeitures, and other reimbursements. Operating expenses include personnel services, maintenance and operational costs, and depreciation of capital assets. All revenues and expenses not meeting this definition, such as taxes, investment income, and interest expense, are reported as nonoperating revenues and expenses.

E. Cash and Investments
Investments are reported in the accompanying statement of net position at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Changes in fair value that occur during a fiscal year are recognized as investment income re ported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued F. Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value be cause of changes in interest rates. Cash equivalents include the cash and investments held by a fiscal agent.

G. Accounts Receivable
The SCLAA specifically identifies accounts that are deemed uncollectable and offsets the receivable by an allowance for doubtful accounts. The amounts recorded as accounts receivable include various reimbursements and fees due to the SCLAA, net of an allowance for doubtful accounts totaling $125,642 as of June 30, 2024.

H. Due from Other Governments
The amounts recorded as a receivable due from other governments includes grant revenues collected or provided by Federal, State, County, and City Governments and unremitted to the City as of June 30, 2024.

I. Inventory and Prepaid Items
The SCLAA uses the consumption method of accounting for inventories. Inventory consists primarily of supplies for construction and repair that are valued at cost using the weighted average method. Certain payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid items utilizing the consumption method.

J. Leases
When the SCLAA is a lessee, a lease liability and a leas e asset is recognized at the commencement of the lease term, unless the lease is a short-term lease, or it transfers ownership of the underlying asset. The lease liability is measured at the present value of pa yments expected to be made during the lease term (less any lease incentives). The lease asset is measur ed at the amount of the initial measurement of the lease liability, plus any payments made to the lessor at or before the commencement of the lease term and certain direct costs.

When the SCLAA is a lessor, a lease receivable and a deferred inflow of resources is recognized at the commencement of the lease term, with certain exceptions for leases of assets held as investments, certain regulated leases, short-term leases, and leases that tr ansfer ownership of the underlying asset. The lease receivable is measured at the present value of lease payments expected to be received during the lease term. The deferred inflow of resources is measured at the value of the lease receivable plus any payments received at or before the commencement of the lease term that relate to future periods. 17 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued K. Capital Assets
Tangible capital assets (including infrastructure) are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated tangible capital assets are valued at acquisition value on the date of donation. SBITA assets are initially measured as the sum of the present value of payments expected to be made during the subscription term, payments associated 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 vendor at the commencement of the SBITA term. SBITA assets are amortized in a systematic and rational manner over the shorter of the subscription term or the useful life of the underlying IT assets.

SCLAA capitalizes all assets with an initial individual cost of more than $5,000 and a useful 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 extend the life are not capitalized.

Depreciation is computed utilizing the straight-line method over the following useful lives for tangible capital assets:

L. Compensated Absences
A liability is recorded for unused vacation and similar compensatory leave balances since the employees’ entitlement to these balances is attributable to servic es already rendered and 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 balances will result in termination payments. This is estimated by including in the liability the unused balances of employees currently entitled to receiv e termination payment, as well as those who are expected to become eligible to re ceive termination benefits as a result of continuing their employment with the City. Other amounts of unused sick leave ar e excluded from the liability since their payment is contingent solely upon the occurrence of a future even t (illness), which is outside the control of the City 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.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued M. Unearned Revenue
Unearned revenue is recorded when the SCLAA receives funds for which the goods or services have not yet been provided and, therefore, revenue has not yet been earned. The balance in unearned revenue for the SCLAA primarily consists of funds received in advance from tenants in which the City serves as the lessor.

N. 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 future peri ods 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 a loss on re funding, pension, and other postemployment benefits.

A deferred loss on refunding results from the difference in the carrying value of the refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Deferred outflows on pension and other postemployment benefits are more fully discussed in Notes 6 and 7, respectively.

The SCLAAs deferred inflows of resources reported on the statement of net position relate to leases, pension and other postemployment benefits. Amounts for leases are for amounts not yet received that are deferred and recognized as an inflow of resources in the period that the amounts are available or earned.

Pension and other postemployment benefits deferred inflows of resources are more fully discussed in Notes 9 and 10, respectively.

O. Net Position
Net position is classified in the following categories:

Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt (including premiu ms and discounts) and capital related payables that are 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 the remaining net position that does not meet the definition of “invested in capital assets” or “restricted net position.” 19 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued O. Net Position, Continued
Sometimes the SCLAA 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 SCLAA’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 th e fiduciary net position of the SCLAA’s California Public Employees’ Retirement System (CalPERS) pl ans (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.

CalPERS audited financial statements are publicly av ailable reports that can be obtained at CalPERS’ website under Forms and Publications.

Q. Prior Year Data
Selected information regarding the prior year ha s 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 SCLAA’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 outflo ws 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.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS
Cash and investments as of June 30, 2024, are classified in the accompanying financial statements as follows:

Cash and investment as of June 30, 2024, consist of the following:

A. Investments Pool of the City of Victorville
The SCLAA has no separate bank accounts or investments other than investments held by bond trustee, and their investment in LAIF. The SCLAA’s equity in the cash and investment pool is managed by the City of Victorville. The SCLAA is a voluntary participant in that pool. This pool is governed by and under the regulatory oversight of the Investment Policy adop ted by the City Council of the City of Victorville.

The SCLAA has not adopted an investme nt policy separate from that of the City of Victorville. The fair value of the Authority’s investment in this pool is reported in the accompanying financial statements at amounts based upon the SCLAA’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.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
B. Investments Authorized by the California Go vernment Code and the City’s Investment Policy The City adopts the investment policy for the SCLAA. The table below identifies the investment types that are authorized for the SCLAA 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.

B. Investments Authorized by Debt Agreements
Investment 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 SCLAA’s investment policy.

The table below 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.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
C. 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 Authority 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 portfo lio 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 values of the Authority’s investments (including investments held by bond trustee) to market interest rate fluctu ations is provided by the following table that shows the distribution of these investments by maturity.

D. 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 Code, the City’s investment policy, or debt agreements, and the actual Standard & Poor’s rating as of year-end for each investment type.

E. Concentration of Credit Risk
The investment policy of the SCLAA contains no limitat ions on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The SCLAA 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.
23 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
F. 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 re gulated 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 SCLAA deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2024, the SCLAA’s deposits (bank balances) were equity in the City of Victorville’s pool, which was insured by the fede ral depository insurance limits or collateralized as required under California Law.

For investments identified herein as held by bond tr ustee, 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.

G. Investment in State Investment Pool
The SCLAA is a voluntary participant in the Local Agen cy 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 SCLAA’s investment in this pool is re ported in the accompanying financial statements at amounts based upon the SCLAA’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.

H. Fair Value Measurements
The SCLAA categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally accepted in the Un ited 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:
24 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS, Continued
H. Fair Value Measurements, Continued
Level 1 – Inputs to the valuation methodology are un adjusted 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; - I n p u t s t h a t a r e d e r i v e d p r i n c i p a l l y f r o m o r c o r r o b o r a t e d b y o b s e r v a b l e m a r k e t d a t a b y 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 SCLAA’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 SCLAA’s own data.

The SCLAA’s investments in LAIF and money market mutual funds (held by bond trustee) are not subject to the fair value measurement hierarchy.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

3. CAPITAL ASSETS
The following is a summary of changes in capital assets for SCLAA at June 30, 2024:

Depreciation expense for the SCLAA was $9,480,389 for the year ended June 30, 2024. 26 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES
A summary of changes in long-term liabilities for the year ended June 30, 2024, is noted below:

See pledged revenue information at the end of this note.

A. Tax Allocation Parity Bonds, Series 2005A
In June 2005, the SCLAA issued $42,185,000 principa l amount of Tax Allocation Parity Bonds, Series 2005A. This debt was issued to finance certain public capital improvements benefiting the SCLAA.

On February 8, 2006, $1.8 million of bond proceeds was invested in land for the construction of a new City library. Prior to this purchase (on November 3, 2005), the Board of Directors of the SCLAA adopted a resolution with the intent of entering into a loan agreement between the SCLAA and the City with respect to this land purchase. On September 21, 2010, City Council approved this loan agreement. Legal counsel for the City has indicated that approval by the bond insurer is not required for the investment of proceeds not held by the bond trustee.

Bonds maturing on December 1, 2010, December 1, 2016, December 1, 2020, December 1, 2025, December 1, 2030, and December 1, 2035 in the amounts of $2,765,000, $3,365,000, $5,140,000, $6,335,000, $7,870,000, and $15,335,000, respectively, are term bonds. The outstanding bonds bear interest at 3.50% to 5.00% due June 1 and December 1 of each year.

The bonds are subject to redemption prior to maturity as described in the bond covenants. The bonds maturing on or after June 1, 2016 are subject to optional redemption in whole or in part by lot, without premium.
27 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES, Continued
A. Tax Allocation Parity Bonds, Series 2005A, Continued The bonds maturing on December 1, 2010, December 1, 2016, December 1, 2020, December 1, 2025, December 1, 2030, and December 1, 2035 are subject to mandatory redemption in part by lot, without premium, commencing December 1, 2007, December 1, 2012, December 1, 2016, December 1, 2021, December 1, 2026, and December 1, 2031, respectively, from sinking fund payments made by SCLAA.

In the fiscal year ended June 30, 2006, these bonds were partially defeased by the issuance of the Tax Allocation Revenue Parity Bonds, Refunding Series 2005 (Non-Housing). As of June 30, 2024, the required reserve for the Bonds was met with fiscal agent cash. The Bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2024 is $10,565,000.

B. Tax Allocation Revenue Parity Bonds, Refunding Series 2006 (Non-Housing) In June 2006, the SCLAA issued $62,780,000 principal amount of Tax Allocation Revenue Parity Bonds, Refunding Series 2006. The proceeds were used to refund the 2001 Tax Allocation Bonds, the 2003 Tax Allocation Bonds, and a portion of 2005 Tax Allocation Bonds. As a result, the 2001 and 2003 Tax Allocation Bonds are considered to be defeased, and the 2005 Tax Allocation Bonds are considered to be partially defeased. The respective liabilities have been removed from the statement of net position.

Bonds maturing on December 1, 2026, December 1, 2031, December 1, 2036, and December 1, 2043 in the amounts of $6,895,000, $8,595,000, $10,810,000, an d $20,335,000, respectively, are term bonds. The outstanding bonds bear interest at 4.50% to 5.00% due June 1 and December 1 of each year.

The bonds maturing on December 1, 2026, December 1, 2031, December 1, 2036, and December 1, 2043 are subject to mandatory redemption in part by lot, without premium, commencing December 1, 2022, December 1, 2027, December 1, 2032, and December 1, 2037, respectively, from sinking fund payments made by SCLAA.

As of June 30, 2024, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2024 is $44,055,000.

C. Tax Allocation Revenue Parity Bonds, Refunding Series 2006 (Housing Set-Aside) In June 2006, the SCLAA issued $16,855,000 principal amount of Housing Set-Aside Revenue Bonds, Refunding Series 2006. The proceeds were used to refund all of the 2003 Tax Allocation Bonds and a portion of the 2005 Tax Allocation Parity Bonds. As a result, the 2003 Tax Allocation Bond is considered to be defeased and the liability has been removed from the statement of net position.

Bonds maturing on December 1, 2026, December 1, 2031, December 1, 2036, and December 1, 2043 in the amounts of $1,855,000, $2,305,000, $2,905,000, and $5,460,000, respectively, are term bonds. The outstanding bonds bear interest at 4.50% to 5.00% due June 1 and December 1 of each year. 28 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES, Continued
C. Tax Allocation Revenue Parity Bonds, Refund ing Series 2006 (Housing Set-Aside), Continued The bonds are subject to redemption prior to maturity as described in the bond covenants. The bonds maturing on or after June 1, 2016 are subject to opti onal redemption in whole or in part by lot without premium.

D. Tax Allocation Revenue Parity Bonds, Taxable Series 2006 In June 2006, the SCLAA issued $45,020,000 principal amount of Tax Allocation Revenue Parity Bonds, Taxable Series 2006. The proceeds were used to finance certain redevelopment activities benefiting the SCLAA.

Bonds maturing on December 1, 2036 and December 1, 2043 in the amounts of $20,080,000, and $24,940,000, respectively, are term bonds. The outsta nding bonds bear interest at 6.10% due June 1 and December 1 of each year.

The bonds are subject to redemption prior to maturity as described in the bond covenants. The bonds are subject to optional redemption in whole or in part by lot, subject to a premium.

The bonds maturing on December 1, 2036 and December 1, 2043 are subject to mandatory redemption in part by pro-rata, without premium, commencing December 1, 2006 and December 1, 2037, respectively, from sinking fund payments made by SCLAA.

E. Taxable Tax Allocation Revenue Parity Bonds, Forward Series 2006 In November 2006, SCLAA issued $34,980,000 principal amount of Taxable Tax Allocation Revenue Parity Bonds, Forward Series 2006. The proceeds were used to finance and refinance certain redevelopment activities benefiting the SCLAA.

The bonds mature from December 1, 2007 to December 1, 2043 in varying amounts. Principal is payable in annual installments ranging from $50,000 to $2,320,000, commencing December 1, 2007. The bonds accrue interest at rates between 6.25% and 6.30%. Interest on the bonds is payable semi-annually on each June 1 and December 1, commencing June 1, 2007.
29 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES, Continued
E. Taxable Tax Allocation Revenue Parity Bonds, Forward Series 2006, Continued The bonds are subject to optional and mandatory redemption prior to maturity.

F. Taxable Subordinate Tax Allocation Revenue Bonds, Series 2006 In November 2006, the SCLAA issued $64,165,000 principal amount of Taxable Subordinate Tax Allocation Revenue Bonds, Series 2006. The proceeds were used to finance certain redevelopment activities benefiting the SCLAA.

The bonds mature from December 1, 2007 to December 1, 2043 in varying amounts. Principal is payable in annual installments ranging from $395,000 to $4,135,000, commencing December 1, 2007. The bonds accrue interest at 6.05%. Interest on the bonds is payable semiannually on each June 1 and December 1, commencing June 1, 2007.

The bonds are subject to optional and mandatory redemption prior to maturity. As of June 30, 2024, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2024 is $50,120,000.

G. Taxable Housing Set-Aside Revenue Parity Bonds, Series 2007 In March 2007, the SCLAA issued $41,460,000 princi pal amount of Taxable Housing Set-Aside Revenue Parity Bonds, Series 2007. The proceeds were used to finance certain low-and moderate-income housing programs of the Authority. On July 7, 2009, $20,000,000 of bond proceeds were invested in a loan to the Victorville Water District. Legal counsel for the City has indicated that approval by the bond insurer is not required for the investment of proceeds not held by the bond trustee. In February 2013, this loan was repaid in full with interest.

Bonds maturing on December 1, 2012, December 1, 2017, December 1, 2022, December 1, 2027, and December 1, 2043 in the amounts of $3,265,000, $2,800,000, $3,620,000, $4,685,000, and $27,090,000, respectively, are term bonds. The outstanding bond s bear interest at 5.00%, 5.20%, 5.25%, 5.40%, and

5.55% due June 1 and December 1 of each year.

The bonds are subject to optional redemption in whole or in part by lot, without premium.

As of June 30, 2024, the required reserve for the Bonds was met with fiscal agent cash and an insurance policy. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2024 is $30,935,000. 30 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES, Continued
H. Subordinate Tax Allocation Revenue Bonds, Series 2007 (Non-Housing) In December 2007, the SCLAA issued $42,000,000 principal amount Subordinate Tax Allocation Revenue Bonds, Series 2007. The proceeds were used to fin ance certain redevelopment activities benefiting the SCLAA.

Bonds maturing on December 1, 2008, December 1, 2009, December 1, 2012, December 1, 2017, December 1, 2022, December 1, 2027, December 1, 2032, Decemb er 1, 2032, December 1, 2037, December 1, 2037, December 1, 2037, December 1, 2043 and December 1, 2043 in the amounts of $480,000, $425,000, $1,395,000, $2,805,000, $3,640,000, $4,745,000, $3,000 ,000, $3,275,000, $3,325,000, $3,800,000, $1,250,000, $9,210,000, and $4,650,000, respectively, are term bonds. The outstanding bonds bear interest at 4.000%,

4.200%, 4.375%, 5.250%, 5.375%, 5.600%, 5.900%, 6.000%, 5.900%, 6.000%, 6.100%, 5.900%, and 6.150% due June 1 and December 1 of each year.

The bonds are subject to redemption prior to maturity at the option of the Authority, on or after December 1, 2017, in whole or in part by lot, without premium.

The bonds maturing on the dates described above are subject to mandatory redemption in part by lot, without premium, commencing Decemb er 1, 2010, December 1, 2013, December 1, 2018, December 1, 2023, December 1, 2028, December 1, 2028, December 1, 2033, December 1, 2033, December 1, 2033, December 1, 2038, and December 1, 2038, respectively, from sinking fund payments made by SCLAA.

I. Subordinate Tax Allocation Revenue Bonds, Series 2008A In May 2008, the SCLAA issued $13,334,925 principa l amount of Subordinate Tax Allocation Revenue Bonds, Series 2008A. The proceeds were used to finance certain redevelopment activities benefiting the SCLAA and to partially refund the $35,000,000 principal amount of Subordinate Tax Allocation Revenue Notes, Series 2008.

Bonds maturing on December 1, 2010, December 1, 2013, December 1, 2018, December 1, 2023, December 1, 2033, December 1, 2038, and December 1, 2043 in the amounts of $130,000, $215,000, $340,000, $530,000, $1,675,000, $1,285,000, and $1,720,000, respectively, are Current Interest Bonds. The outstanding bonds bear interest at 4.25%, 4.50%, 5.00%, 5.25%, 6.00%, 6.00%, and 6.00% due June 1 and December 1 of each year.

Bonds maturing on December 1 of each year beginning 2044 through 2050 in the initial principal amounts of $1,316,266, $1,216,397, $1,123,621, $1,037,536, $957,600, $883,633, and $814,910 are Capital Appreciation Bonds. The outstanding bonds bear yields to maturity of 7.300%, 7.320%, 7.340%, 7.360%, 7.380%, 7.400%, and 7.420%. All of the bonds have a future maturity value of $131,805,000 at June 30, 2024. 31 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES, Continued
I. Subordinate Tax Allocation Revenue Bonds, Series 2008A The current interest bonds are subject to redemption pr ior to maturity at the option of the Authority, on or after December 1, 2018, in whole or in part by lot, without premium. The Capital Appreciation Bonds are subject to optional redemption in whole or in part by lot, without premium.

J. Debt Service Requirements to Maturity
The annual requirements to amortize outstanding SCLAA debt as of June 30, 2024, are as follows for each fiscal year ending June 30:

K. Pledged Revenue
All of the above Tax Allocation Bonds are collateralized by the pledging of certain revenues. The amount and term of the remainder of these commitments are indicated in the debt service to maturity tables presented in the accompanying notes. The purposes for which the proceeds of the related debt issuances were utilized are disclosed in the debt descriptions in the accompanying notes.

The SCLAA contains a portion of the Victor Valley Economic Development Authority (VVEDA) Successor Agency (see Note 8 for additional information). The RPTTF (tax increment distributions) from VVEDA represent the primary revenue of the SCLAA.
32 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

4. LONG-TERM LIABILITIES, Continued
K. Pledged Revenue, Continued
As a result of the state’s action to dissolve all re development agencies in the state of California, the VVEDA Successor Agency no longer receives the full amount of tax increment previously pledged by the dissolved redevelopment agency to its bondholders. In its place is a new revenue stream (RPTTF distributions) provided to the VVEDA Successor Agency that represents only that portion of tax increment that is necessary to pay the approved enforceable obligations that come due for that fiscal year.

For the current year, pledged gross revenue (net of certain expenses were so required by the debt agreement) as a percentage of debt service payments are indicated in the table below:

5. ADVANCES TO/FROM
A. Advances to/from the City
a) Per a loan agreement approved on September 15, 2009 by the Board of Victorville RDA, a $10,000,000 advance was made from the Bear Valley Road Redeve lopment Project Area (RDA Capital Project Fund) to the SCLAA. The advance is to be used to continue redevelopment at SCLAA and to fund prior years’ capital improvements and redevelopment project expenses. The advance bears interest at 3% using the simple interest method in accordance with SB-107. The outstanding balance of the advance as of June 30, 2024, is $11,678,089.
33 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

5. ADVANCES TO/FROM, Continued
A. Advances to/from the City, Continued
b) A loan agreement was signed on April 18, 2023 by the City Council that authorizes the SCLAA to loan $2,000,000 to the City’s nonmajor gas utility enterprise fund for the construction of new gas infrastructure that will allow for the purchase of lower priced natural gas and future growth at SCLAA. The loan principal shall be repaid in five equal installments of $400,000 to commence in the year ending June 30, 2024 and conclude in the year ending June 30, 2028. Interest shall begin to accrue on the total principal amount commencing on July 1, 2023, and shall thereafter be calculated annually on the balance of the outstanding principal and shall be payable each year on June 30 at the annualized (averaged) LAIF rate of return. The outstanding balance of the advance as of June 30, 2024 is $1,600,,000. Due to the uncertainty on when sufficient tax increment will be available to make payments on this loan, the obligation has not yet been included on the ROPS to re quest funding for repayment. In future fiscal years, the loan will be added to the ROPS.

6. PENSION PLAN
A. General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employee s are eligible to participate in the City’s Miscellaneous Plan, agent multiple-employer defi ned benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. The SCLAA’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 Governme nt 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 employ ees 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 fi ve 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.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
A. General Information about the Pension Plan, Continued The Plan’s provisions and benefits in effect as of the measurement period ended June 30, 2023, are summarized as follows:

Contributions
Section 20814(c) of the California Public Employee s’ 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 a ccrued liability. The SCLA A is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. SCLAA 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 contributions requirements are classified as plan member contributions. For the fiscal year ended June 30, 2024, SCLAA made contributions totaling $515,986.
35 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
B. 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, 2023 measurement period was determined by an actuarial valuation as of June 30, 2022, with update procedures used to roll forward the total pension liability to June 30, 2023. The total pension liability for the Miscellaneous Plan was based on the following assumptions:

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. 36 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
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:

Change in Assumptions
The discount rate and long-term rate of return remained the same as prior year from 6.90% to 6.90% and the inflation rate remained the same as 2.30% from the measurement date June 30, 2022 to June 30, 2023. 37 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
B. 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 SCLAA
The SCLAA’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The SCLAA’s proportionate share of the net pension liability was based on a projection of the SCLAA’s long-term share of contributions to the Miscellaneous Plan relative to the projected contributions of the City, actuarially determined.

The SCLAA’s proportionate share of the net pension liability for the Miscellaneous Plan as of the measurement dates ended June 30, 2022 and 2023, was as follows:

Pension Expense and Deferred Outflows and Inflows of Resources For the year ended June 30, 2024, the SCLAA recognized pension expense of $669,532 for the Miscellaneous Plan. At June 30, 2024, the SCLAA reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources for the Miscellaneous Plan:
$515,986 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, 2025. 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.
38 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

6. PENSION PLAN, Continued
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, 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:

Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the SCLAA’s proportionate share of the net pension liability for the Miscellaneous Plan, calculated using the discount rate of 6.90%, as well as what the SCLAA’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:

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, 2024, the SCLAA had no outstanding amount of contributions to the Miscellaneous Plan required for the year ended June 30, 2024.
39 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

7. OTHER POST-EMPLOYMENT BENEFTIS PLAN
A. Plan Descriptions
The SCLAA participates in the City’s Other Postemployment Benefits Defined Benefit Pension Plan and the SCLAA’s share of the total OPEB liability is reported as a cost-sharing plan in these financial statements.

The City Plan provides medical benefits to eligible retired City employees and beneficiaries in accordance with various labor agreements. The plan covers employ ees who retire directly from the City with eight years of service. The City provides a contribution up to a certain amount (a portion of the HMO single premium). The percentage varies based on years of service.

B. Funding Policy
The contribution requirements of plan members and the City 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 City has not established a trust that is administered by the City for the purpose of holding assets accumulated for plan C. Contributions
The City Plan and its contribution requirements ar e established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the City 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, 2024, the SCLAA’s cash contributions were $15,213 in cash benefit payments, $90 in administrative costs, and the estimated implied subsidy was $7,724, resulting in total payments of $23,027.

D. Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2023 and determined by an actuarial valuation as of June 30, 2022.
40 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

7. OTHER POST-EMPLOYMENT BENEFTIS PLAN, Continued
E. Discount Rate
The discount rate used to measure the total OPEB liability was 3.65%. The discount rate is determined based on the Bond Buyer 20-Bond Index since the City has not established a trust.

G. Change in Actuarial Assumptions
The following actuarial assumption changes occurred form the measurement periods ended June 30, 2022 to 2023:
x The discount rate changed from 3.54% to 3.65% based on changes in the index. x Inflation remained unchanged at 2.50%.
x The healthcare trend rate remained unchanged as follows: Non-Medicare rate is 8.5%, Medicare (Non-Kaiser) is 7.5%, and Medicare (Kaiser) is 6.25%.
x Demographic assumptions were updated from the CalPERS 1997-2015 Experience Study to the CalPERS 2000-2019 Experience Study.
x Mortality improvement was updated from Scale MP-2020 to Scale MP-2021.

H. Allocation of Total OPEB Liability
The SCLAA’s proportionate share of the total OPEB liability as of the measurement dates ended June 30, 2022 and 2023, was as follows:

I. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the SCLAA’s proportionate share of the total OPEB liability if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
41 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

7. OTHER POST-EMPLOYMENT BENEFTIS PLAN, Continued
J. Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the SCLAA’s proportionate share of the total OPEB liability if it were calculated using health care cost trend rates that are one pe rcentage 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 2 024 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:

K. Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability 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 outflo ws and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.

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

L. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2024, the SCLAA recognized OPEB expense of $84,694. As of fiscal year ended June 30, 2024, the SCLAA reported deferred ou tflows/inflows of resources related to OPEB from the following sources:
42 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

7. OTHER POST-EMPLOYMENT BENEFTIS PLAN, Continued
L. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB, Continued The $33,992 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 of resources related to OPEB will be recognized as expense as follows:

M. Payable to the Pension Plan
At June 30, 2024, the SCLAA had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2024.

8. COMMITMENT AND CONTINGENCIES
A. Litigation
The SCLAA is a defendant in certain legal actions arising in the normal course of operations. The accompanying basic financial statements reflect a liab ility for the probable amounts of loss associated with these claims.

B. Southern California Logistics Airport Authority and Stirling Enterprise LLC In the early 1990s, the U.S. Air Force closed George Air Force Base (former Base). In response the local communities formed the Victor Valley Economic Development Authority (VVEDA). VVEDA and the Air Force entered into agreements to lease and ultimately transfer title to the former Base to VVEDA. The subject land is designated as either Public Bene fit Transfer (PBT) Parcels or Economic Development Conveyance (EDC) Parcels. The PBT Parcels are made up of approximately 2,200 acres previously used by the U.S. Air Force and are restricted to use as an airport. These parcels were transferred to SCLAA at no cost.

The EDC Parcels are made up of approximately 1,800 acres of adjacent property which may be developed for use as commercial property. SCLAA paid $1,636,489 and is required to pay additional $37,176 for these EDC Parcels. In 1993 a Redevelopment Plan was adopted by VVEDA establishing a redevelopment project area encompassing the former Base as well as approximately 55,000 additional acres. VVEDA delegated its decision-making authority relative to the former Base, now known as SCLAA. 43 DRAFT
Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

8. COMMITMENT AND CONTINGENCIES, Continued
B. Southern California Logistics Airport Auth ority and Stirling Enterprise LLC, Continued SCLAA adopted a Specific Plan in conformity with the Redevelopment Plan and adopted a Master Development Plan establishing its goal to develop th e area as a cargo and aircraft maintenance facility and a business/industrial center thereby creating jobs and improving economic conditions in the Victor Valley.

In July 1998, SCLAA and Stirling Enterprises, LLC and its related entities (Stirling) entered into the first of several agreements for the marketing, acquisition, operation, and development of SCLAA. The Fourth Amended and Restated Master Agreement (Stirling Agreement) is the current agreement superseding all previous versions.

C. Revenues from Sales of Land
In August 2016, three agreements with Stirling were approved by the SCLAA Board of Directors that were intended to serve as a framework that encourages development before the expiration of the Master Agreement (MA). The three agreements are a Satisfac tion and Termination Agreement, a Disposition, Exchange, and Development Agreement (#2), and an Option and Development Agreement.

The Disposition, Exchange, and Development Agreement allows for the removal of approximately 280- acres of Airport-owned property from the definition of EDC Parcels and the title transfer in fee to Stirling, of approximately 280 acres. The Airport-owned pr operty will become available for the Airport for revenue-producing purposes and the Airport will have the flexibility to develop the subject property on a ground-lease basis with aviation and nonaviation (Section 2.01 of the Development and Exchange Agreement). Revenue sharing will only exist relating to these parcels if the respective transaction is procured by Stirling and be split 80/20 with the larger share to benefit SCLAA.

The Agreement also provides for the disposition of additional off-airport property. In addition to the Stirling Exchange Parcels, SCLAA will then transfer, in fee, 200 acres of property for the $.0203/psf purchase price ($176,448) and participate in revenue sharing for net proceeds in an amount equal to 30% (Section 2.03 of the Development and Exchange Agre ement). Net proceeds are generally defined to be revenues generated from the eventual sale by Stirling that are residual to infrastructure costs, EIR costs and developer credits. The Agreement also transfers the public infrastructure obligations of the Authority pursuant to the MA and DDA to Stirling.

Finally, the Option Agreement, in connection with performance obligations related to the Development and Exchange Agreement, will provide Stirling th e ability to acquire additional acreage currently provided for in the Master Agreement. Such an exercise of option will occur in 50-acre increments based on Stirling having developed 500,000 square feet of property owned by it. The Option Agreement is set up to run through December 2050 and can terminate sooner due to nonperformance described in Section

1.5 of the Option and Development Agreement.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

8. COMMITMENT AND CONTINGENCIES, Continued
D. Management
Stirling is allowed to lease or cause to be leased the EDC Parcels and shall participate in 20% of the Net Lease Revenue from any such leases. The Authority has retained the right to lease the PBT Parcels and retain revenues from those leases, but shall allow Stir ling to participate in 20% of any net lease revenues from tenants who may be procured by Stirling and approval by the Authority. Any revenues from other interim uses on the former Base such as filming will be shared on a 50%/50% basis between Stirling and Authority.

9. SCLAA’S FINANCIAL CONDITION, SIGNIFICANT FINANCIAL OBLIGATIONS, AND MANAGEMENT’S PLANS
In fiscal year 08/09, the assessed value for the Victor Valley Redevelopment Project Area was approximately $9.49 billion. Beginning in fiscal year 09/10, there were significant decreases in assessed value for the Victor Valley Redevelopment Project Area . Assessed values for the Project Area reached a low point of $6.6 Billion in fiscal year 12/13. The decrease was largely the result of the Great Recession.

Since fiscal year 12/13, assessed values have increased steadily. For fiscal year 20/21, the assessed value for the Project Area was approximately $9.99 billion. The steady increase in assessed values have resulted in the SCLAA paying all past due debt service in the previous fiscal year. As of the December 1, 2018 tax distribution, the SCLAA was no longer in default. In 2018, Moody’s issued an upgraded rating on the Successor Agency to the Victor Valley Economic Development Authority (VVEDA) Housing Set-Aside Tax Allocation Bonds and the Non-Housing Tax Alloca tion Bonds to “stable” outlook as a result of resolving the outstanding defaults, and the prospectiv e analysis on increasing assessed values in the project area.

During fiscal year 19/20 and 20/21, SCLAA had result s that were not as favorable as fiscal year 18/19 with a net loss of $3.5 million and $2.5 million, respectively. However, in fiscal years 22/23 and 23/24, SCLAA had a positive net income of $16,492,949 and $5,110,133, respectively. A summary of the financial condition of the SCLAA enterprise fund is as follows:

A. Management’s Plans with Respect to its Financial Condition Management plans to ensure that annual expenditures do not exceed annual revenues and to build the reserves that are necessary to provide for economic uncertainties.

The SCLAA has continued to maintain a balance budget since 2007-2008 and all revenues are projected to cover current liabilities.
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

8. COMMITMENT AND CONTINGENCIES, Continued
A. Management’s Plans with Respect to its Financial Condition, Continued Regarding the SCLAA’s financial condition, an Interfund loan agreement was signed July 1, 2016 by the Board of SCLAA and a $10,000,000 advance was made available from the 2007 SCLA Housing bond fund to the Airport Operations Fund and has been used to subsidize operations. The advance had a term repayment of five years, with an annualized Wall Street Journal Prime Rate as the interest rate. In October 2022, the outstanding balance of the loan was repaid. The advance was within the fund itself.

10. JOINTLY GOVERNED ORGANIZATIONS
A. Victor Valley Economic Development Authority
The Victor Valley Economic Development Authority (VVEDA) was formed in 1992 by the Cities of Victorville and Hesperia, the Town of Apple Valley, and the County of San Bernardino to provide the mechanism and funding to manage development of the property formerly known as the George Air Force Base, facilitate the successful reuse of the property, and promote economic development within the area surrounding the Air Base. In 2000, the City of Adelanto was added as a member of the Authority. In December 2011, Assembly Bill 1X 26 (the Bill) disso lved VVEDA, and as such all assets of the former VVEDA have been transferred to the VVEDA Successor Agency and are subject to the distribution’s provisions of the Bill. The SCLAA contains a portion of the VVEDA Successor Agency with the Town of Apple Valley and City of Adelanto comprising the rest of the VVEDA Successor Agency. The RPTTF (tax increment distributions) from VVEDA represent the primary revenue of the SCLAA. Financial statements may be obtained by sending a written request to Vi ctor Valley Economic Development Authority, 18374 Phantom Street, Victorville, CA 92394.
11 SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (the Bill) that provides for the dissolution of all redevelopment agencies in the state of California. This action impacted the SCLAA because the SCLAA has historically funded its operations and debt service using significant tax increment revenue from the Victor Valley Economic Development Agency (VVEDA). VVEDA has acted as a pass-through agency for the various recipients of tax increment revenue in the Victor Valley and is subject to the dissolution requirements of the Bill.

The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On Januar y 17, 2012, the Victorville City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 12-005.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the state of California cannot enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
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Southern California Logistics Airport Authority
Notes to Basic Financial Statements
For the Year Ended June 30, 2024

12. LEASES
The SCLAA, acting as lessor, leases buildings and land under long-term, noncancelable lease agreements. The leases expire at various dates through 2056 and provide for renewal options ranging from 1 year to 55 years. During the year ended June 30, 2024, the SCLAA recognized $7,770,582 and $1,784,891 in lease revenue and interest revenue, respectively, pursuant to these contracts.

Certain leases provide for increases in future mi nimum annual rental payments based on a defined percent in the contract or increases in the Consumer Price Index, subject to certain minimum increases.

Lease revenue comprises a majority of the SCLAA’s operating revenues, therefore, this activity is considered to be the principal operation of the SCLAA.

Total future minimum lease payments to be received under lease agreements are as follows:
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REQUIRED

SUPPLEMENTARY INFORMATION
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Southern California Logistics Airport Authority
Required Supplementary Information
For the year ended June 30, 2024
CalPERS Cost Sharing Plan
Schedule of the Proportionate Share of the Net Pension Liability - Last Ten Fiscal Years Reporting Fiscal Year 2015 2016 2017 2018
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 Plan's proportion of the net pension liability 6.67% 6.87% 7.07% 6.95% Plan's proportionate share of
the net pension liability 1,880,791 $ 2,090,587 $ 2,805,052 $ 3,210,086 $ Plan's covered payroll 1,310,612 $ 1,343,244 $ 1,368,422 $ 1,579,911 $ Plan's proportionate share of
the net pension liability as percentage
of its covered payroll 143.50% 155.64% 204.98% 203.18%
Fiduciary net position as a percentage of the
total pension liability 6.67% 5.50% 5.33% 5.18%
Notes to the schedule:

From fiscal year June 30, 2015 to June 30, 2016:

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:

From fiscal year June 30, 2023 to June 30, 2024:

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%.

The discount rate and long-term rate of return remain the same as the prior year at 6.90%, and the inflation rate is also unchanged from the prior year at 2.30%
Benefit Changes:

There were no changes to benefit terms that applied to all members of the Public Agency Pool.

However, individual employers in the Plan may have provided a benefit improvement to their employees by granting Two Years Additional Service Credit to members retiring during a specified time period (a.k.a. Golden Handshakes).

Changes in Assumptions:
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2019 2020 2021 2022 2023 2024
6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023

6.90% 6.86% 6.84% 7.18% 6.58% 6.51%
3,189,455$ 3,546,936$ 3,838,581$ 2,599,527$ 4,503,687$ 4,930,169$ 1,565,360$ 1,534,654$ 1,686,096$ 1,676,551$ 1,868,216$ 203.75% 231.12% 227.66% 155.05% 241.07% #DIV/0!

5.22% 5.11% 5.04% 6.03% 4.73%
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Southern California Logistics Airport Authority
Required Supplementary Information
For the year ended June 30, 2024
CalPERS Cost Sharing Plan
Schedule of Pension Plan Contributions - Last 10 Fiscal Years Fiscal Year Ended 2015 2016 2017 2018
Actuarially determined contribution 197,631$ 233,116 $ 273,075 $ 275,299 $ Contributions in relation to actuarially
deemed contributions (197,631) (233,116) (273,075) (275,299) Contribution deficiency (excess) - $ - $ - $ - $ Covered payroll 1,343,244 $ 1,368,422 $ 1,579,911 $ 1,565,360 $ Contributions as a percentage of
covered payroll 14.71% 17.04% 17.28% 17.59%
Notes to Schedule:

Valuation Date 6/30/2012 6/30/2013 6/30/2014 6/30/2015
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age
Amortization method Level percentage of payroll, closed Asset valuation method Fair Value except for 2015 is Market Value of Assets Discount Rate 6.90%
Inflation 2.75% to 2.30%
Salary increases
Retirement age 50 and up
Annual increase vary by category, entry age and duration of service
54 DRAFT
2019 2020 2021 2022 2023 2024
279,699$ 345,578$ 381,393$ 414,447$ 484,566$ 515,986$ (279,699) (345,578) (381,393) (414,447) (484,566) (515,986) -$ -$ -$ -$ -$ -$ 1,534,654$ 1,686,096$ 1,676,551$ 1,868,216$ 2,069,493$

18.23% 20.50% 22.75% 22.18% 23.41% #DIV/0!
6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2022 55 DRAFT
Southern California Logistics Airport Authority
Required Supplementary Information
For the year ended June 30, 2024
OPEB Plan
Schedule of the Proportionate Share of Total OPEB Liability - Last Ten Fiscal Years* Reporting Fiscal Year 2018 2019 2020 2021
Measurement Date 6/30/2017 6/30/2018 6/30/2019 6/30/2020 Plan's proportion of the total OPEB liability 8.43% 8.57% 8.19% 7.99% Plan's proportionate share of
the total OPEB liability 2,014,829$ 1,888,372$ 2,093,649$ 2,214,981$ Plan's covered payroll 1,494,600$ 1,735,340$ 1,993,268$ 2,348,399$ Plan's proportionate share of
the total OPEB liability as percentage
of its covered payroll 134.81% 108.82% 105.04% 94.32%
Notes to Schedule:

Changes in Assumptions:

Discount Rate 3.58% 3.87% 3.50% 2.21%
Mortality Improvement Rates Scale MP-2016 Scale MP-2018 Scale MP-2018 Scale MP-2020 In the June 30, 2018 measurement period, the pre-65 waived retiree re-election was updated to be 10% after age 65. * Fiscal year 2018 was the 1st year of implementation.

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%.

In the June 30, 2023 measurement period, the following medical trend rates remained unchanged: Non-Medicare increased by 8.5%, Medicare increased by 7.5%, and Kaiser increased by 6.25%. 56 DRAFT
2022 2023 2024
6/30/2021 6/30/2022 6/30/2023

7.75% 8.64% 8.40%
2,363,785$ 2,040,084$ 2,124,416$
2,396,424$ 2,827,400$

98.64% 72.15% #DIV/0!
2% 3.54%
Scale MP-2020 Scale MP-2021
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SUPPLEMENTARY INFORMATION
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Southern California Logistics Airport Authority
Combining Statement of Net Position
June 30, 2024
(With Comparative Data for June 30, 2023)
Non Other
Aeronautical Aeronautical Services
ASSETS
Current assets:

Cash and investments 12,642,311$ 3,730,529$ 24,917,315$ Cash with fiscal agent - - 26,097,008
Accounts receivable 408,539 (6,909) -
Interest receivable 287,237 475 200
Due from other governments 864,253 - -
Leases 7,246,566 - -
Inventory 3,612 - -
Total current assets 21,452,518 3,724,095 51,014,523
Noncurrent:

Prepaid deposits 4,149 - -
Advances to City of Victorville - 1,600,000 -
Leases 77,908,435 54,224 -
Capital assets:

Nondepreciable capital assets 1,966,890 - 13,793,182
Depreciable capital assets 45,908,816 - 253,600,515
Accumulated depreciation (22,298,754) - (175,614,250)
Depreciable capital assets, net 23,610,062 - 77,986,265 Total noncurrent assets 103,489,536 1,654,224 91,779,447 Total assets 124,942,054 5,378,319 142,793,970

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows - OPEB related 237,333 - -
Deferred outflow - pension related 1,768,477 - -
Deferred charge on refunding - - 1,263,381
Total deferred outflows of resources 2,005,810 - 1,263,381

LIABILITIES
Current liabilities:

Accounts payable 593,575 1,085 -
Interest payable - - 1,197,937
Deposits payable 722,327 20,415 -
Unearned revenue 850,360 - -
Compensated absences - due within one year 133,833
Total OPEB Liability - due within one year 8,504 - -
Long-term liabilities - due within one year - - 7,245,000 Total current liabilities 2,308,599 21,500 8,442,937
Noncurrent liabilities:

Advances from other governments - - 11,678,089
Total OPEB liability 2,115,912 - -
Net pension liability 4,930,171 --
Long-term debt - - 267,735,859
Compensated absences 112,463 - -
Total noncurrent liabilities 7,158,546 - 279,413,948
Total liabilities 9,467,145 21,500 287,856,885

DEFERRED INFLOWS OF RESOURCES
Deferred inflows - OPEB related 762,291 --
Deferred inflows - pension related 183,799 - -
Deferred Inflows - leases 79,343,682 47,025 749,101
Total deferred inflows of resources 80,289,772 47,025 749,101

NET POSITION
Net investment in capital assets 25,349,010 - (155,841,023) Unrestricted 11,841,937 5,309,794 11,292,388
Total net position 37,190,947$ 5,309,794$ (144,548,635)$ 62 DRAFT
Eliminations 2024 2023
-$ 41,290,155$ 37,577,125$ - 26,097,008 24,761,205
- 401,630 390,776
- 287,912 136,228
- 864,253 152,472
- 7,246,566 7,770,582
- 3,612 13,878
- 76,191,136 70,802,266
- 4,149 55,594
- 1,600,000 2,000,000
- 77,962,659 83,207,311
- 15,760,072 13,981,248
- 299,509,33 1 -
- (197,913,004) -
- 101,596,327 109,697,569
- 196,923,207 208,941,722
- 273,114,343 279,743,988 - 237,333 267,603
- 1,768,477 1,709,212
- 1,263,38 1 1,397,897
- 3,269,191 3,374,712 - 594,660 445,642
- 1,197,937 1,228,041
- 742,742 720,696
- 850,360 1,063,573
133,833 117,127
- 8,504 30,446
- 7,245,000 7,002,127
- 10,773,036 10,607,652
- 11,678,089 11,267,089
- 2,115,912 2,009,638
- 4,930,171 4,503,688
- 267,735,859 273,130,418
- 112,463 98,425
- 286,572,494 291,009,258
- 297,345,530 301,616,910 - 762,29
1 854,840
- 183,799 234,104
- 80,139,808 87,570,873
- 81,085,898 88,659,817 - (130,492,014) (130,315,399)
- 28,444,120 23,157,372
-$ (102,047,894)$ (107,158,027)$ 63 DRAFT
Southern California Logistics Airport Authority
Statement of Revenues, Expenses and Changes in Net Position For the year ended June 30, 2024
(With Comparative Data for the year ended June 30, 2023) Non Other
Aeronautical Aeronautical Services
OPERATING REVENUES:

Charges for services:

Landing fees 1,492,219$ - $ - $ Fuel flowage fees 382,140 - -
Rent and lease revenue 10,878,570 295,979 (750,300)
Total charges for services 12,752,929 295,979 (750,300) Fines and forfeitures 25,274 - - Other 799,243 52,317 -
Total operating revenues 13,577,446 348,296 (750,300) OPERATING EXPENSES:

Personnel services 3,663,390 1,193 -
Maintenance and operations 6,930,442 80,957 22,944
Depreciation 3,565,973 - 5,914,416
Total operating expenses 14,159,805 82,150 5,937,360 Operating income (loss) (582,359) 266,146 (6,687,660) NONOPERATING REVENUES (EXPENSES):

Taxes 399,213 - 21,475,935
Investment income 2,302,905 234,023 2,461,238
Interest expense - - (16,804,585 )
Gain on sale of capital aAssets ---
Other nonoperating exepenses 341,393 - (19,337) Proceeds from capital asset sold to City - - - Capital asset sold to City - - - Total nonoperating revenues (expenses) 3,043,511 234,023 7,113,251 Income before contributions and transfers 2,461,152 500,169 425,591 CONTRIBUTIONS AND TRANSFERS:

Capital contributions - - - Capital grants 1,723,221 - - Capital contribution from tenant - - - Transfers in 2,145,657 - - Transfers out - - (2,145,657) Total contributions and transfers 3,868,878 - (2,145,657) Change in net position 6,330,030 500,169 (1,720,066) NET POSITION:

Beginning of year 30,860,917 4,809,625 (142,828,569 )
End of year 37,190,947$ 5,309,794 $ (144,548,635)$ 64 DRAFT
Eliminations 2024 2023
-$ 1,492,219$ 1,992,027 $ - 382,140 309,239
- 10,424,249 10,907,800
- 12,298,608 13,209,066
- 25,274 28,873 - 851,560 438,339
- 13,175,442 13,676,278 - 3,664,583 3,329,516
- 7,034,343 7,432,535
- 9,480,389 9,744,648
- 20,179,315 20,506,699 - (7,003,873) (6,830,421) - 21,875,148 22,072,684
- 4,998,166 3,494,189
- (16,804,585 ) (16,864,762)
- - 14,236,886
- 322,056 (19,137) - - 1,929,341 - - (1,895,090) - 10,390,785 22,954,111 - 3,386,912 16,123,690
- - 183,723 - 1,723,221 183,722 - - 1,814 (2,145,657) - - 2,145,657 - - - 1,723,221 369,259 - 5,110,133 16,492,949 - (107,158,027 ) (123,650,976)
-$ (102,047,894)$ (107,158,027) $ 65 DRAFT
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Item Number: 10
City Council / Board of Directors
Written Communications
Meeting of: April 15, 2025
Submitted By:

Carmen Cun, Finance Director / City Treasurer

Subject:

Annual Single Audit Report on Federal Grants for Year Ended June 30, 2024 Recommendation:

That the Honorable City Council receive and file the Fiscal Year 2023-2024 Single Audit Report.

Fiscal Impact:

There is no fiscal impact from this receive and file item.

Strategic Plan Goal:

Annual single audit and reporting is part of Goal A: Financial Sustainability as this report acts as a tool for management to monitor Federal program activities.

Background:

The Single Audit Act of 1984 establishes uniform audit requirements for local governments expending federal awards greater than $750,000 a year. The audit is on an entity wide basis and imposes additional requirements in relation to testing of and reporting on, internal control and compliance with laws and regulations. These rules are listed in Title 2 US Code of Federal Regulations (CFR) Part 200.

The purpose of the single audit is to evaluate the City’s internal controls and compliance and report any findings to those charged with governance. Additionally, the single audit provides confirmation to the federal agencies granting the funds that funds are being utilized in accordance with program requirements and Uniform Guidance. In response to any identified deficiencies, the City develops a corrective action plan to address issues and implement recommended improvements. Consequently, audit findings serve as valuable opportunities to enhance internal controls, improve operational efficiencies, and establish best practices within our business processes. 4 0
7 9
Discussion:

The City's independent auditors, Badawi & Associates, CPAs (Badawi), have completed the annual single audit of the City's federal activities for the fiscal year ended June 30, 2024. The auditing firm Badawi conducted an audit of one major program in accordance with the requirements set forth in 2 CFR 200; which is a set of regulations that establishes unform administrative requirements, cost principles, and audit requirements for all federal awards. The primary federal program that underwent auditing was the American Rescue Plan Act (ARPA), which is associated with the Coronavirus Relief Fund. The Federal Single Audit resulted in no internal control weakness or instances of non-compliance.

Staff remains available for any questions the Council may have.

Attachments: A. Single Audit of Federally Assisted Grant Programs Year Ended June 30, 2024

Attachment A
Single Audit of Federally Assisted Grant
Programs Year Ended June 30, 2024
Victorville, California
Single Audit Report
For the year ended June 30, 2024
City of Victorville
Single Audit Report
For the year ended June 30, 2024
Table of Contents
Page
Independent Auditor’s 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 Auditor’s Report on Compliance for Each
Major Program and on Internal Control over Compliance
Required by the Uniform Guidance .................................................................................................................... 3 Schedule of Expenditures of Federal Awards .......................................................................................................... 7 Notes to Schedule of Expenditures of Federal Awards .......................................................................................... 8 Schedule of Findings and Questioned Costs ............................................................................................................ 9 This page intentionally left blank.

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
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of Victorville
Victorville, California
We have audited, in accordance with the auditing st andards 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 the governmental activities, the business-type activities, each major fund, and the ag gregate remaining fund information of City of Victorville, California (City) as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 31, 2025.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures 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 City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’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 assigned 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 material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limi ted purpose described in the first paragraph of this section and was not designed to identify all deficien c i e s i n i n t e r n a l c o n t r o l t h a t m i g h t b e m a t e r i a l weaknesses or significant deficiencies. Given these li mitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

To the Honorable Mayor and Members of City Council
of the City of Victorville
Victorville, California

Page 2 ends

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City’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 complia nce with those provisions was not an objective of our audit and, accordingly, we do not express such 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.

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 entity’s internal control or on compliance. This report is an integr al part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Badawi & Associates, CPAs
Berkeley, California
March 31, 2025
2 REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND REPORT ON INTERNAL

CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM

GUIDANCE AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of Victorville
Victorville, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Victorville, California (City)’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 City’s major federal programs for the year ended June 30, 2024. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material re spects, with the 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, 2024.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance w i t h a u d i t i n g s t a n d a r d s g e n e r a l l y a c c e p t e d i n t h e United States of America; the standards ap plicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S.

Code of Federal Regulations Part 200, Uniform Administrative Requiremen ts, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Audit or’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with 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 opinion on compliance for each major federal program. Our audit does not provide a lega l determination of the Ci ty’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s federal programs.
3 To the Honorable Mayor and Members of City Council
of the City of Victorville
Victorville, California

Page 4 ends

Auditor’s 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 City’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 GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncomp liance 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 compliance requirements referred to above is considered material, if there is a substantial likelihoo d that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards , and the Uniform Guidance, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material noncomplia nce, 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 City’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 Example Entity’s internal control 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 accordan ce with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectivenes s of the City’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 deficiencies 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 compliance exis ts when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned f u n c t i o n s , t o p r e v e n t , o r d e t e c t a n d c o r r e c t , n o n c o m p l i a n c e w i t h a t y p e o f c o m p l i a n c e r e q u i r e m e n t o f a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or 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 de ficiencies, 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. 4 To the Honorable Mayor and Members of City Council
of the City of Victorville
Victorville, California

Page 5 ends

Our consideration of internal control over complia nce was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above 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 limitations, during our audit we did not identify any deficiencies in internal control over comp liance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that have not been identified.

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.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the govern mental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated March 31, 2025, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying 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 financ ial statements. Such information is the responsibility of management and was derived from and relates direct ly to the underlying accounting and other records used to prepare the basic financia l statements. The information has been subjected to the auditing 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 the basic financial statements or to th e basic financial statements themselves, and other a d d i t i o n a l p r o c e d u r e s i n a c c o r d a n c e w i t h a u d i t i n g s t a n d a r d s g e n e r a l l y a c c e p t e d i n t h e U n i t e d S t a t e s o f 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.

The purpose of this report on internal control over co mpliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Badawi & Associates, CPAs
Berkeley, California
March 31, 2025
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6 City of Victorville
Schedule of Expenditures of Federal Awards
For the year ended June 30, 2024
Assistance State/Other FY 2024
Listing Pass-through Program
Grantor Agency and Grant Title Number Number Expenditures U.S. Department of Housing and Urban Development
Direct Program:

CDBG Entitlement Grants Cluster:

Commnuity Development Block Grants (CDBG) 14.218 n/a 1,031,661$ COVID-19 CDBG 14.218 n/a 42,447
Program Subtotal 1,074,108
Pass-through the Town of Apple Valley:

Home Investment Partnerships Program 14.239 n/a 365,117 Total U.S. Department of Housing and Urban Development 1,439,225 U.S. Department of Homeland Security
Pass-through from County of San Bernardino:

Emergency Management Performance 97.042 2022-0005 25,715 Homeland Security Fire Equipment Expenses 97.067 2021-0081 & 2020-0095 81,138 Total U.S. Department of Homeland Securiry 106,853
U.S. Department of Justice
Passed-through from County of San Bernardino:

Edward Byrne Memorial Justice Assistance Grant Program 16.738 n/a 138,079 Total U.S. Department of Justice 138,079
U.S. Department of Transportation
Direct Program:

Airport Improvement Program 20.106 n/a 1,762,162
Passed-through from California Department of Transportation:

Highway Planning & Construction
State Transportation Improvement Program (STIP) 20.205 BHLS-5380 (026) 1,991,651 Highway Safety Improvement Program (HSIP) HSIPL-5380 (037) 293,965 Highway Safety Improvement Program (HSIP) 20.205 HSIPL-5380 (038) 10,553 Program Subtotal 2,296,169
Total U.S. Department of Transportation 4,058,331
U.S. Department of Treasury
Direct Program:

COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 n/a 13,912,967 Total U.S. Department of Justice 13,912,967
Total Federal Expenditures 19,655,455$
See accompanying Notes to Schedule of Expenditures of Federal Awards 7 City of Victorville
Single Audit Report
Notes to Schedule of Expenditures of Federal Awards
For the year ended June 30, 2024

1. REPORTING ENTITY
The financial reporting entity, as defined by Governmental Accounting Standards Board (GASB), consists of the primary government, which is the City of Victorville (City), organizations for which the primary government is financially accountable, and other orga nizations for which the nature and significance of their relationship with the primary government are su ch that exclusion would cause the reporting entity’s financial statements to be misleadi ng or incomplete. The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City and its component units as disclosed in the notes to the Basic Financial Statements. Federal awards expended by this entity, if any, are excluded from the Schedule and are subject to a separate Single Audit.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
Funds received under the various grant programs have be en recorded within the general, special revenue, and enterprise funds of the City. The City utilizes th e modified accrual basis of accounting for the general and special revenue. The accrual basis of accounting is used for the enterprise fund. The accompanying Schedule of Expenditures of Federa l Awards (Schedule) is presented in accordance with the requirements of the U niform Administrative Requirements, Cost Princi ples, and Audit Requirements for Federal Awards (Uniform Guidance).

Schedule of Expenditures of Federal Awards
The accompanying Schedule presents the activity of a ll Federal financial assistance programs of the City.

Federal financial assistance received directly from Fe deral agencies as well as Federal financial assistance passed through the State of California and other agenci es are included in the Schedule. The Schedule of Expenditures of Federal Awards was prepared from only the accounts of various grant programs and, therefore, does not present the financial position or results of operations of the City.

3. INDIRECT COSTS
The City did not elect to use the 10% de minimis indirect cost rate. 8 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section I - Summary of Auditor’s Results
Financial Statements
Types of auditors’ report issued: Unmodified
Internal control over financial reporting:
x Material weakness(es) identified? No
x Significant deficiency(ies) identified? None noted Any noncompliance material to the financial statements noted: No Federal Awards
Internal control over major programs:
x Material weakness(es) identified? No
x Significant deficiency(ies) identified? None noted Types of auditors’ report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with section 200.516(a): No Identification of major programs:

Dollar threshold used to distinguish between type A and type B program: $750,000 Auditee qualified as low-risk auditee under
section 200.520? No
9 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section II - Current Year Findings
A. Current Year Findings – Financial Statement Audit
None reported.

B. Current Year Findings and Questioned Costs – Major Federal Award Program Audit None reported.
10 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III - Prior Year Findings
A. Prior Year Findings – Financial Statement Audit
2023-001: Material Weakness in Internal Control Over Financial Reporting – Capital Assets Criteria:

An essential part of the reporting process is main taining accurate, up-to-date schedules for account balances. General ledger amounts shou ld be updated to reflect current-ye ar balances for accurate financial reporting. Year-end closing processes should include a review and approval step to identify and correct material differences and errors before the information is submitted for audit.

Condition:

During the review of capital assets, it was noted that discrepancies existed between the detail schedules, the capital asset roll-forward, and the general ledger balances, which were material. As a result, the City was requested to re-perform the year-end capital asset close process, with a focus on a review and approval step for the employee performing the work. Additionally, it was identified that an asset sold from the Southern California Logistics Airport Authority (SCLA) to the Water District was capitalized at the purchase price instead of the book value. Furthermore, the Victorville Water District enterprise fund expensed $4.985 million in capital project costs that should have been capitalized as construction in progress.

Cause:

The City did not adequately follow year-end closing procedures to identify the above errors. It was unaware that accounting standards require intra-entity sa les to be capitalized at the book value recorded in the previous fund. Additionally, the City did not properly identify all capital expenses when closing year- end capital assets for the Water District.

Context and Effect:

The adjustments made after the City re-performed the year-end close had the following impact:

Business-type activities saw a decrease of $105 thousand in construction in progress, an increase of $7 thousand in buildings and improvements, an increase of $359 thousand in accumulated depreciation, an increase of $352 thousand in depreciation expense, and an increase of $105 thousand in expenses.

Specifically, the Victorville Water District had a decrease of $105 thousand in construction in progress, an increase of $7 thousand in buildings and improvements, an increase of $25 thousand in accumulated depreciation, an increase of $18 thousand in deprecia tion expense, and an increase of $105 thousand in expenses.

The Southern California Logistics Airport Authority saw an increase of $857 thousand in accumulated depreciation and depreciation expense.
11 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III - Prior Year Findings, Continued
A. Prior Year Findings – Financial Statement Audit, Continued 2023-001: Material Weakness in Internal Control Over Financial Reporting – Capital Assets, Continued Recommendation:

The City should implement policies and procedures to review capital assets at year-end for proper classification and ensure that management, who di d not perform the work, reviews and approves the results. Additionally, the City should establish procedures to review intra-entity asset sales and ensure they are capitalized at book value. Finally, the City shou ld implement policies to ensure the completeness of capital asset additions.

Current Status:

Implemented.
2023-002: Material Weakness in Internal Control Over Financial Reporting – Grants Receivable, Expenditures/Expenses, and Unavailable Revenue
Criteria:

Grant receivables should be equal to the eligible project expenditures less any amounts previously reimbursed by the grantor. For governmental funds, deferred inflows of resources, unavailable revenues, should be recorded instead of revenue when those amou nts are received after the City’s availability period, which is 60 days. In addition, in the cases when revenu es must be returned if no t utilized, cash received should be offset by unearned revenue.

Grant expenditures should be carefully matched to g rant revenues to record amounts in the correct fund originally. Should corrections in subsequent years be required, the history of all journal entries for grant revenues and expenditures should be performed to determine where transactions have been recorded before recording restatements.

Condition:

The City has various projects that are grant funded on a reimbursement basis, which means that the City incurs the cost and then requests for reimbursement from the funding source. During our audit, we reviewed these projects and had numerous inqu iries when grant receivables did not equal the unreimbursed eligible expenditures. This led to numerous adjustments to correct the balances.

In addition, the City had a restatement to correct the fu nding source for capital expenditures that reverses a restatement the City recorded in the prior year. The original restatement provided by the City for fiscal year 2022-2023 required an audit adjustment to correct the restatement. 12 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III - Prior Year Findings, Continued
A. Prior Year Findings – Financial Statement Audit, Continued 2023-002: Material Weakness in Internal Control Over Financial Reporting – Grants Receivable, Expenditures/Expenses, and Unavailable Revenue, Continued Cause:

The City did not perform an analysis on each project to verify the balances in these accounts prior to commencement of the audit procedures. Regarding the restatement, the City did not perform adequate research to identify the impact of all previously re corded journal entries since the funds were originally recorded in 2020.

Context and Effect:

Approximate changes in the general ledger balances due to the adjustments are as follows:

Other aggregate governmental funds had a net increase in receivables of $267 thousand, increase in revenue of $340 thousand, and an decrease in deferred inflow s of resources, unavailable revenues of $73 thousand; other state and local grants major special revenue fund had a decrease in receivables of $186 thousand, decrease in deferred inflows of resources, unavaila ble revenues, of $372 thousand and an increase in revenues of $186 thousand; other federal grants majo r special revenue had a decrease in both receivables and deferred inflows of resources, unavailable revenues of $109 thousand.

The restatement to correct the funding source for capi tal expenditures was $494 thousand that impacted the measure I special revenue fund (decrease) and the tran sportation tax special revenue fund (increase). This restatement is appropriately not disclosed in the notes to the financial statements in accordance with generally accepted accounting principles since both funds are included in the other aggregate governmental funds, which nets the restatement to zero for the financial statement presentation of other aggregate governmental funds.

Recommendation:

The City should implement policies and procedures to review all project activity and verify the amounts recorded for grants receivable and deferred inflows of resources, unavailable revenues, are accurate prior to the commencement of the audit. In addition, we recommend that the City implement policies and procedures to ensure all grant revenues and expenditures are recorded in the appropriate fund that contains the funding source at the time the original receipt occurs. Should corrections be required in subsequent years, we recommend that the City perform an analysis that will show all activity of the grant before recording restatements
Current Status:

Implemented
13 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III - Prior Year Findings, Continued
A. Prior Year Findings – Financial Statement Audit, Continued 2023-003: Material Weakness in Internal Control Over Financial Reporting – Cash Criteria:

Bank reconciliations should not contain unidentified va riances. Also, cash transactions should be recorded in the correct fiscal year. May 2023 cash activity should be recorded in fiscal year 2022-2023 and July 2023 cash activity should be recorded in fiscal year 2023-2024.

Condition:

The City provided a bank reconciliation as of June 30, 2023 that had an unidentified variance of $27 thousand. In addition, the bank reconciliation contained reconciling items for May 2023 bank activity that were not posted to the general ledger until fiscal year 2023-2024 instead of recorded when the transactions occurred in fiscal year 2022-2023. The bank reconcilia tion also contained reconciling items for July 2023 bank activity that were recorded as cash activity in June 2023 instead of fiscal year 2023-2024.

Cause:

The City did not complete the bank reconciliation process by identifying all reconciling items and ensuring transactions were recorded in the appropriate fiscal year.

Context and Effect:

The unreconciled variance of $27 thousand required an audit adjustment to increase cash by this amount in order to match the general ledger to the bank reco nciliation. Audit adjustments were also required to decrease cash by $193 thousand for May 2023 bank activity and increase cash by $346 thousand to remove July 2023 bank activity.

Recommendation:

The City should implement policies and procedures to ensure that all reconciling items are identified and recorded in the appropriate fiscal year.

Current Status:

Implemented
14 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III - Prior Year Findings, Continued
A. Prior Year Findings – Financial Statement Audit, Continued 2023-004: Material Weakness in Internal Control Ov er Financial Reporting – Prepaid Water Connection Fees
Criteria:

The City collects connection fees in advance for large ca pital projects that will result in connections to the City’s water lines. As the individual homes or units are connected to the City’s system, the amounts collected should be recognized as revenue.

Condition:

Due to the audit inquiry, the City identified homes or units that were connected to the City’s water system during the fiscal year for which connection fees ha d been collected in advance. These amounts were not recognized as revenue and remained a liability on the water enterprise fund’s statement of net position.

Cause:

The City did not perform the analysis on the connections for the prepaid water connection fees account until after audit inquiry occurred.

Context and Effect:

The liability was decreased, and revenues were increased by approximately $0.2 million.

Recommendation:

The City should perform the analysis required on this account prior to the commencement of the audit.

Current Status:

Implemented
15 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III - Prior Year Findings, Continued
A. Prior Year Findings – Financial Statement Audit, Continued 2023-005: Material Weakness in Internal Control over Financial Reporting – Land Held for Resale Criteria:

Land held for resale is required to be recorded at the lower of cost or market value.

Condition:

During our review of land held for resale, we noted th at the general ledger did not agree to the City’s detail schedule, which provided an analysis of lower of cost or market.

Cause:

The City performed the analysis over land held for resale but did not ensure that the general ledge reflected the required value.

Context and Effect:

An audit adjustment was required to reduce land held for resale and increase expenditures by approximately $454 thousand.

Recommendation:

The City should develop policies and procedures to ensure that land held for resale is recorded at the lower of cost or market value.

Current Status:

Implemented
16 City of Victorville
Single Audit Report
Schedule of Findings and Questioned Costs
For the year ended June 30, 2024
Section III - Prior Year Findings, Continued
B. Prior Year Findings and Questioned Co sts – Major Federal Award Program Audit 2023-006: Material Weakness in Internal Control Over Financial Reporting – Preparation of the Schedule of Expenditures of Federal Awards (SEFA)
Criteria:

The SEFA should reflect all federal expenditures in th e appropriate fiscal year, corresponding to the period in which the expenditures were incurred.

Condition:

The City were incorrectly reported federal expenditur es totaling $6,355,730 under Assistance Listing 21.027 (Coronavirus State and Local Fiscal Recovery Fund s) and $199,999 under 14.231 (Emergency Solutions Grant Program) in the fiscal year 2022-2023 SEFA, despite being incurred in fiscal year 2021-2022.

Cause:

The City did not verify that grants provided by non-federal entities were not derived from federal funding when preparing the fiscal year 2021-2022 SEFA.

Context and Effect:

The SEFA for fiscal year 2021-2022 was materially misstated due to the exclusion of these amounts, and the SEFA for fiscal year 2022-2023 is materially misstated due to the inclusion of these amounts in the incorrect fiscal year.

Recommendation:

The City should implement policies and procedures to investigate the source of funding for all grants to identify federal expenditures. In addi tion, to ensure the ease of identification of federal funding in the general ledger and include the federal program assistan ce listing number and name in the general ledger account titles to ensure the ease of identification of federal funds and completeness of the SEFA.

Current Status:

Implemented.
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18 Item Number: 11
City Council / Board of Directors
Written Communications
Meeting of: April 15, 2025
Submitted By:

Tony C. Camargo, Deputy City Manager

Subject:

Amendment No. 1 to the Consultant/Professional Services Provider Agreement with Ninyo & Moore Geotechnical and Environmental Sciences Consultants Recommendation:

That the Honorable City Council acting as the City as Housing Assets Successor approve Amendment No. 1 to the Consultant/Professional Services Provider Agreement by and between the City as Housing Assets Successor (“CHAS”) of the former Victorville Redevelopment Agency and Ninyo & Moore Geotechnical and Environmental Sciences Consultants (“Ninyo & Moore”) in the amount not to exceed $252,494.31.

Fiscal Impact:

There is no fiscal impact associated with this item, as the City Council adopted Resolution No. CHAS 25-001 on February 18, 2025, approving a mid-year budget modification by increasing Fund 205 (“CHAS”) expenditures for said amendment in the amount of $192,494.31 to support ongoing remediation efforts at the former Nuway Dry Cleaners Site (Account Code 2053080-52300-89001 CHAS NuWay Contract Services).

Strategic Plan Goal:

This item aligns with Strategic Goal A, Financial Sustainability by planning and controlling costs associated with the remediation of the Former Nuway Dry Cleaners site until such a time as a new funding source can be identified, and Goal E, Investment in Infrastructure by maintaining City assets and continuing environmental clean-up efforts as required by the Lahontan Regional Water Quality Control Board (“LRWQCB”).

Background:

In February 2007, the former Victorville Redevelopment Agency (“RDA”) funded the acquisition of the former Nuway Dry Cleaners site located at 8th and C Street (the “Site”) through a property tax lien sale conducted by the County of San Bernardino. The Site previously had been identified as a catalyst for redevelopment in the Strategic Action Plan 4 0
5 7
for the Old Town/Midtown Project Area. Although the former RDA purchased the property with RDA funds, the property was vested in the name of the City of Victorville. After acquisition, the City/RDA became aware of site contamination and since that time has completed various site assessment and remediation studies, monitoring, and reporting through its environmental consultant, Ninyo & Moore.

In January 2013, the Site was transferred to the Victorville Housing Trust (later to be corrected and identified as the City as Housing Assets Successor (“CHAS”) as a part of the RDA dissolution process since it had been purchased for mixed use/affordable housing purposes. Because the RDA tax increment was no longer available to fund remediation activities of the Site, the City needed to look for other funding sources, such as grant funds to be able to successfully continue the required investigation and ongoing remediation of the Site.

In October 2018, the City Council approved Resolution No. 18-086 accepting grant funds related to the California State Water Resources Control Board (“CSWRCB”) Site Cleanup Subaccount Program (“SCAP”) Grant in the amount of $1,457,598. This funding source helped with the ongoing assessment and remediation of groundwater contamination from the Site. The City entered into a SCAP Grant Agreement in August 2019 and subsequently entered into a Consultant/Professional Services Provider Agreement with Ninyo & Moore in the same amount to carry out the work identified in the SCAP Grant Agreement scope of work (“Ninyo & Moore SCAP Grant Agreement”).

Discussion:

On or around January 2021, the LRWQCB requested the City to conduct a soil vapor survey of neighboring properties adjacent to the Site. This additional work was not identified in the SCAP Grant Agreement scope of work and could not be reimbursed by the CSWRCB. Therefore, on April 13, 2021, the City approved Amendment No. 1 to the Ninyo & Moore SCAP Grant Agreement in the amount of $50,000, to conduct the soil vapor survey.

Since the SCAP Grant was set to expire in March 2024, and the remediation at the Site would not be completed by this date, in July 2023, staff began discussions with the Grant Manager from the CSWRCB as well as LRWQCB staff on the possibility of obtaining a new SCAP Grant to complete and close out the remediation of the Site. The City, with the assistance of Ninyo & Moore, proposed the continued funding by the CSWRCB to fund the remaining tasks to close out the Site. In the meantime, the City was still required to continue remediation.

As the City was anticipating the continued remediation efforts in Fiscal Year 2024-25, the City Council approved, through the adoption of the budget, $60,000 in Fund 205 for CHAS Nuway Contract Services on June 4, 2024. At the council meeting of June 18, 2024, the City Council approved a new Consultant/Professional Services Provider Agreement with Ninyo & Moore in the amount not to exceed $66,000, which included a $6,000 contingency. The term of this agreement is July 1, 2024, expiring on June 30, 2025, with the purpose of funding the remediation for July, August and September 2024. In addition, 4 0
5 7
because there were sufficient funds in Fund 205, services provided in October 2024 could also be paid under this contract. Therefore, the total amount paid to Ninyo & Moore for the months of July through October 2024 was $54,518.31.

However, due to a delay in the State’s review and approval of the new SCAP Grant, and through the approval by the CSWRCB and LRWQCB, staff requested Ninyo & Moore provide a proposal for the minimum monitoring and remediation efforts required at the Site through June 2025. The proposal was received on December 4, 2024, totaling $198,000 for services from October 2024 through June 2025.

Subsequently, at its regular meeting on February 18, 2025, the City Council approved an additional appropriation of $192,494.31 as part of the mid-year budget approval process to fund the work identified in the proposal and to demonstrate the City’s desire to continue remediation. As the October 2024 invoice from Ninyo & Moore, in the amount of $5,505,69, was paid previously, staff reduced the proposal amount from $198,000 to the requested amount of $192,494.31. In addition, the above-mentioned $6,000 in contingency was not utilized. Therefore, staff revised the total cumulative sum of the agreement to $252,494.31 and prepared the attached Amendment No. 1 to the Consultant/Professional Services Provider Agreement with Ninyo & Moore (Attachment A) for your review. If approved, the invoices for November 2024 through June 2025 will be processed under the amendment.

As a companion staff report, staff are requesting the Council adopt Resolution No. 25- 019 to accept the grant award of $483,353, and to designate the City Manager to execute the SCAP Grant Agreement with the CSWRCB. Portions of the invoices totaled above may be reimbursable through the new grant if the CSWRCB determines that services performed after December 13, 2024, fell within the grant scope of work. However, reimbursement of any charge is not permitted until the SCAP Grant Agreement has been fully executed. The Ninyo & Moore Consultant/Professional Services Provider Agreement (Attachment A) will be utilized for any non-SCAP related services performed during November 2024 through June 2025; however, staff is hopeful that the new SCAP Grant, once processed, will cover the majority of these expenses.

Staff remains available for any questions you may have.

Attachments: A. Amendment No. 1 to the Consultant/Professional Services Provider Agreement with Ninyo & Moore Geotechnical and Environmental Sciences Consultants
Attachment A
Amendment No. 1 to the Consultant/Professional Services Provider Agreement with Ninyo & Moore Geotechnical and
Environmental Sciences Consultants
Consultant/Professional Services Provider Agreement/Ninyo & Moore Geotechnical & Environmental Sciences Consultants/Project ESC25-026/Amendment 1
Pag
e 1 of 3
AMENDMENT NUMBER: ONE
TO

CONSULTANT/PROFESSIONAL SERVICES PROVIDER AGREEMENT

BY AND BETWEEN

CITY OF VICTORVILLE, A MUNICIPAL CORPORATION,

AS SUCCESSOR TO THE HOUSING ASSETS

OF THE VICTORVILLE REDEVELOPMENT AGENCY
AND

NINYO & MOORE GEOTECHNICAL AND

ENVIRONMENTAL SCIENCES CONSULTANTS
FOR

ENVIRONMENTAL CONSULTING SERVICES OF
FORMER NUWAY DRY CLEANERS’ PROPERTY,
PROJECT ESC25-026
THI
S AMENDMENT (the “Amendment”) is made and entered into this ____ day of _______, 2025, by and between The City of Victorville, a municipal corporation, on its own behalf and in its capacity as the Successor to the Housing Assets of the Victorville Redevelopment Agency, a California redevelopment agency, located in the County of San Bernardino, State of California, hereinafter referred to as the “City”, and Ninyo & Moore Geotechnical & Environmental Sciences Consultants, a design firm located in the State of California, hereinafter referred to as “Consultant.” City and Consultant are sometimes hereinafter referred to individually as a “Party” and collectively referred to as the “Parties.” Reci
tals

1. WHEREAS, th e City has a Consultant/Pr ofessional Services Provider Agreement (hereinafter referred to as the “Or iginal Agreement” ) with the Consultant to provide Environmental Consulting Services related to the f ormer NuWay Dry Cleaners Property; and

2. WHEREAS, it is the desire of the Parties to issue Amendm ent One (1) to the Original Agreement to increase Section 3., Compensation, revising the total cumulative sum from $66,000.00 to $252,494.31; Section 4., Proposal to include additional services; and

3. NOW THEREFORE, in cons ideration of the covenants, conditions, and pr omises contained herein and for s uch other good and valuable consideration, r eceipt of which is hereby acknowledged, the Parties are willing to amend the Original Agreem ent as stated below.

Consultant/Professional Services Provider Agreement/Ninyo & Moore Geotechnical & Environmental Sciences Consultants/Project ESC25-026/Amendment 1
P
age 2 of 3
Contract Amendment
S
ection 3. – COMPENSATION – is amended as follows:
“
The City shall pay to Consultant a sum not to exceed Two Hundred Fifty -two Thousand Four Hundred Ninety -four and 31/100 dollars ($ 252,494.31) for faithful performance of the services to be rendered under this Agreement, subject to the Fee Schedule provisions of Section 4, below.”
S
ection 4. – PROPOSAL – is amended as follows:
“
The City shall pay Consultant for those additional services set forth in Consultant’s Proposal dated December 4, 2024, attached hereto as Exhibit A, Amendment 1, and hereby incorporated as part of this agreement by this reference.” E
xcept as amended herei n, t he terms and conditions of the O riginal Agreement and all previous amendments remain in full force and effect.
(

SIGNATURES ON NEXT PAGE)
Consultant/Professional Services Provider Agreement/Ninyo & Moore Geotechnical & Environmental Sciences Consultants/Project ESC25-026/Amendment 1

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IN WITNESS WHEREOF, the parties hereto have caused the A mendment to the Original Agreement to be entered as of the dates written below.

PARTY OF THE FIRST PART PARTY OF THE SECOND PART

CITY OF VICTORVILLE, A MUNICIPAL NINYO & MOORE GEOTECHNICAL

CORPORATION, AS SUCCESSOR TO ENVIRONMENTAL SCIENCES, THE

HOUSING ASSETS OF THE CONSULTANTS

VICTORVILLE REDEVELOPMENT AGENCY

By: ______________________________ By: ____________________________ Elizabeth Becerra, Prasad Thimmappa, PE, QSD,
Mayor Principal Engineer

Dated: ____________________________ Dated: _________________________

By: ______________________________
Jennifer Thompson,
City Clerk

Dated: ___________________________

By: ______________________________
Sandra Bostick,
Risk Manager

Dated: ___________________________

APPROVED AS TO STANDARD FORM:

By: ______________________________
Andre de Bortnowsky,
City Attorney

Dated: ___________________________

475 Goddard, Suite 200 | Irvine, California 92618 | p. 949.753.7070 | www.ninyoandmoore.com December 4, 2024
Project No. 208008006
Mr. Keith Metzler
City Manager
City of Victorville
18374 Phantom West
Victorville, California 92394
Subject: Amendment for Environmental Consulting Services Former NuWay Dry Cleaners Property
15595 8
th Street
Victorville, California 92392
Dear Mr. Metzler:

In accordance with your request, we are pleased to submit this amendment to the City of Victorville, (City) to continue providing Environmental Consulting Services related to the former NuWay Dry Cleaners Property, 15595 8 th Street in Victorville, California. Our proposed scope of services will include assisting the City with remedial activities related to the NuWay property for a duration of approximately nine (9) months (October 2024 to June 2025) while the City is awaiting processing/approval of the new grant application. Our scope of services will include project management, continuing operation of the Soil Vapor Extraction (SVE) system, including replacement of a faulty blower, conducting three (3) groundwater monitoring and sampling events, and preparation of two (3) quarterly Groundwater Monitoring and SVE progress reports.

SCOPE OF SERVICES
A brief description of the major tasks that Ninyo & Moore will be performing are provided below.

Task 1 - Project Management
Ninyo & Moore will provide project coordination, attend meetings with City representatives, and Lahontan Regional Water Board staff as necessary, provide correspondence and updates as necessary related to project scope, schedule and budget, and submit monthly invoices in accordance with the City’s requirements.

Task 2 – SVE System Operation and Maintenance (9 Months) Ninyo & Moore will monitor the SVE system once a week in accordance with the requirements of the Mohave Desert Air Quality Management District (MDAQMD) permit. In accordance with the permit, influent and effluent vapor samples will be collected monthly and analyzed for VOCs by an analytical EXHIBIT A, AMENDMENT 1, COST PROPOSAL, PROJECT ESC5-026 Ninyo & Moore | Former NuWay Dry Cleaners, Victorville, California | 208008006 | December 4, 2024 2 laboratory
. These samples will be used to estimate pounds of contaminants removed from the subsurface.

In addition, Ninyo & Moore will coordinate with t he SVE unit vendor to replace a faulty blower and perform periodic maintenance on the system.

Task 3 –Quarterly Groundwater Moni toring and Sampling (3 Events, 10 Wells)
Ninyo & Moore will perform groundwater monitoring and sampling of ten (10) existing monitoring wells at the site. This event will be performed in December 2024 and March and June of 2025. The following procedures will be followed.
 Ninyo & Moore will collect static water level measurements followed by purging and sampling of wells using low flow techniques. Groundwater samples will be collected in appropriate sample containers for volatile organic compound (VOC) analysis (full scan, including fuel oxyg enates by
United States Environ
mental Protection Agency (EPA) Method 8260B. Field water quality parameters
will be collected including potassium permanganate concentrations, prior to sample collection using field instruments. In addition, selected groundwater samples will be analyzed for various parameters requested in the Waste Discharge Requirements as part of the in-situ chemical oxidation (ISCO) remedial injection. Samples will be submitted to a California State- certified laboratory for analysis under standard chain-of-custody protocols. Laboratory reports will include electronic deliverable format to upload data to Geotracker.  Quality Assurance/ Quality Control (QA/QC ) samples will be collected, including equipment blank, trip blank, and duplicate samples (rate of 10 percent). QA/QC samples will be analyzed for VOCs and total petroleum hydrocarbons as gasoline by EPA Methods 8260B and 8015M.

Development water and purge water will be stored in Department of Transportatio n-approved 55-gallon dr
ums pending proper disposal. Disposal of two drums of non-hazardous waste is included.

Task 4 – Quarterly Groundwater and SVE Progress Report Preparation Following receipt of analytical data, a groundwater monitoring report will be prepared. The quarterly report will include a description of field and laboratory protocols, a summary of analytical data, a sitewide groundwater contour map, iso-concentra tion plume maps for major contaminants of concern, and conclusions and recommendations. In addition, the report will include data tables related to the ISCO WDR sampling requirement s. The SVE progress report portion will include the weekly O&M data, analytical laboratory results of influent and effluent samples to document compliance with MDAQMD permit requirement, and calculations of pounds of chemicals removed.

Ninyo & Moore will submit draft quarterly reports to the City for review. Following approval by the City, comments will be incorporated and the report will be finalized and the monitoring report will be EXHIBIT A, AMENDMENT 1, COST PROPOSAL, PROJECT ESC25-026 Ninyo & Moore | Former NuWay Dry Cleaners, Victorville, California | 208008006 | December 4, 2024 3 uploaded to GeoTracker
. These reports will be submitted by January 31, and April 30 and June 30, 2025.

Ninyo and Moore will include a technical memorandum providing justification and request revision of the groundwater monitoring frequency from quarterly to semi-annual in the January 2025 Groundwater Monitoring and SVE Progress report submission to the Water Board.

SCHEDULE
The subject tasks will be performed by Ninyo & Moore between October 1, 2024 through June 30, 2025.

BUDGET
The following table provides a list of the tasks and associated budget for the remediation activities proposed for the treatment of PCE-impacted soil and groundwater at the site.

Task Description Budget
1 Project Management $ 9,000
2 SVE System O&M (9 months including blower replacement) $74,000 3 Groundwater Monitoring and Sampling (3 events, 10 wells) $80,000 4 Quarterly GW and SVE Progress Reports (3) (including Tech Memo) $ 17,000 Contingency (10%) $18,000
ESTIMATED TOTAL COST $198,000
We appreciate the opportunity and look forward to continue working with the City on this project.

If
you have any questions, please contact the undersigned at your convenience.

Respectfully submitted,

NINYO & MOORE
Prasad Thimmappa, PE, QSD
Principal Engineer
PT/
**Proposal reduced by $5,505.69 for previosly paid October 2024 invoice: $192,494.31 **
EXHIBIT A, AMENDMENT 1, COST PROPOSAL, PROJECT ESC25-026 Item Number: 12
City Council / Board of Directors
Written Communications
Meeting of: April 15, 2025
Submitted By:

Tony C. Camargo, Deputy City Manager

Subject:

Acceptance of Site Cleanup Subaccount Program Grant Agreement and Funds Recommendation:

That the Honorable City Council:
(1) Adopt Resolution No. 25-019 Entering into a Site Cleanup Subaccount Program (”SCAP“) Grant Agreement with the California State Water Resources Control Board accepting the grant award in the amount of $483,353 for the purposes of funding site investigation and remedial action at the Former Nuway Dry Cleaners Site; (2) Authorize the City Manager to execute the Agreement and amendments, subject to minor non-substantive changes, and designating the Deputy City Manager as an additional signing agent of the City authorized to sign and submit any and all documents related to request for reimbursements; and
(3) Adopt Resolution No. 25-020 Amending the Annual Budget for Fiscal Year 2024-2025 approving additional revenue and expenditures in the amount of $483,353.

Fiscal Impact:

An additional revenue and expenditure appropriation in the amount of $483,353 in Fund 2707501E-43110-89043 (Revenue) and Fund 2707501E-52300-89043 (Expenditure) is required for Fiscal Year 2024-2025 to record expenditures and revenues related to carrying out the scope defined in the grant application and award for a period of three years.

Strategic Plan Goal:

This item aligns with Strategic Plan Goal A, Financial Sustainability by controlling costs and increasing revenue through the acceptance of the SCAP grant. 4 0
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Background:

In February 2007, the former Victorville Redevelopment Agency (“RDA”) funded the acquisition of the Former Nuway Dry Cleaners site located at 8th and C Street (the “Site”) through a property tax lien sale conducted by the County of San Bernardino. The Site previously had been identified as a catalyst for redevelopment in the Strategic Action Plan for the Old Town/Midtown Project Area. Although the former RDA purchased the property with RDA funds, the property was vested in the name of the City of Victorville. After the acquisition, the City/RDA became aware of site contamination and since that time has completed extensive site assessment and remediation work and reporting to various federal and state environmental agencies. In January 2013, the Site was transferred to the Victorville Housing Trust (later to be corrected and identified as the City as Housing Assets Successor or “CHAS”) as a part of the RDA dissolution process since it had been purchased for mixed use/affordable housing purposes.

Through Phase 1 and Phase II assessment reports, conducted in early 2009, the RDA learned that high levels of Perchloroethylene (“PCE”) and Trichloroethylene (“TCE”) were found on the Site. These chemicals were a common solvent used in dry cleaning, among other uses, to dissolve grease, oil and other stains but was later discovered to be potentially harmful to humans.

In 2012, the oversight of site remediation was transferred from the Environmental Protection Agency to the Lahontan Regional Water Quality Control Board (“LRWQCB”).

The following remediation efforts were completed under the LRWQCB’s oversight and direction:
•2012-2013 – Preparation of Groundwater Remediation Workplan to determine extent of chemical impact to groundwater and remediation of groundwater impacts, more commonly referred to as “the groundwater plume.” •2014 – Work conducted consisting of advancing four cone-penetration test soundings and four soil borings to determine the geological properties of the soils. These borings were subsequently converted to groundwater monitoring wells.
•2015 – Groundwater Investigation Report was completed, and it was reported that PCE and TCE concentrations in the wells exceeded the California and U.S.

Maximum Contaminant Levels. As such, quarterly groundwater monitoring and sampling started on the initial four groundwater monitoring wells and continues to date with quarterly reports submitted to the LRWQCB. •2015 – LRWQCB requested an additional assessment in an adjacent area referred to as the “Tailor Shop” that was also owned and operated by the Former Nuway Cleaners owners.
•2016 – Seven new soil borings were subsequently advanced in the vicinity of the Tailor Shop and soil gas probes were installed at various depths below the ground surface. Gas samples were analyzed for Volatile Organic Compounds (“VOCs”). The samples indicated that elevated concentrations of PCE were also detected within the footprint of the former dry cleaner building. In addition, PCE concentrations were also detected in the soil gas indicating an increasing 4 0
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trend with depth suggesting potential off-gassing from impacted groundwater beneath the Site.
•In 2016, staff worked with its environmental consultant, Ninyo & Moore, and identified the California State Water Resources Control Board’s (“CSWRCB”) SCAP grant as a potential funding source to help with assessment and remediation of groundwater contamination from the Site. •In 2018, the City was advised of the award of grant funds from the CSWRCB in the amount of $1,457,598 over a three-year term. On October 16, 2018, the City adopted Resolution 18-086 accepting the grant funds in the amount of $1,457,598.
•The City entered into a SCAP Grant Agreement in August 2019 to continue the assessment and implementation of groundwater clean-up and remediation to remove PCE from groundwater found within and in the vicinity of the Site. •The SCAP Grant ended in March 2024 and the City was successful in carrying out an extensive amount of remediation work through State grant funds. Below is a summary highlighting the most significant work and findings:
In December 2019, a Soil Vapor Extraction (“SVE”) Work Plan was completed to assess the soil gas concentrations in the vicinity of the Site.

The SVE Work Plan has been subsequently updated, revised, and amended to include the installation of new soil gas probes, near and on the Site, install and operate an SVE system (as of June 2020) which would extract soil vapor and mitigate VOCs, to connect the SVE system to a monitoring well and to report quarterly monitoring and reporting. As of the last reporting period and monitoring event conducted by Ninyo & Moore, VOCs continued to be removed from the subsurface soils consisting mostly of PCE.
Also in December 2019, an additional Groundwater Assessment Work Plan was prepared to delineate the extent of PCE contamination in the groundwater. Pursuant to this work plan, in April 2020, five additional groundwater monitoring wells, one on-site and four off-site, were installed. In August 2020, an In-Situ Chemical Oxidation (“ISCO”) Pilot Test Work Plan was prepared by the City’s environmental consultant, Ninyo & Moore, under the oversight and recommendation of the LRWQCB. The purpose of this pilot program was to evaluate the feasibility of using potassium permanganate, a chemical oxidant, as a way to remediate PCE in the soil and shallow groundwater onsite and in the vicinity of the Site. The process involved introducing the chemical oxidant by mixing and strategically injecting into a specific well, having the highest concentration of PCE, into the subsurface to transform the contaminants in soil or groundwater into less harmful chemicals. As this process was demonstrated to be successful, staff worked with Ninyo & Moore and LRWQCB to carry out a full ISCO injection in 2023 specifically targeting the area with the elevated PCE concentrations.
Subsequently, quarterly groundwater monitoring has been conducted at the Site to evaluate the efficacy of the ISCO remediation and to monitor groundwater PCE levels and other chemicals per the LRWQCB’s permit. 4 0
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Results of continued groundwater monitoring have indicated the presence of a “hotspot” within the footprint of the Tailor Shop that needs further treatment.
Further, the LRWQCB has mandated continued monitoring of the groundwater and soil vapor concentrations in the vicinity of the Site to evaluate closure and destruction of the groundwater and soil vapor wells.

All requests related to the 2019 SCAP Grant have been reimbursed by the CSWRCB totaling $1,253,916, respectively. The amount remaining, totaling $203,682, was released back to the City’s General Fund as the grant expired, and the term could not be extended.

Since the SCAP Grant, the Site has continued to reduce the contamination of PCE and TCE in the groundwater at the Site. At the beginning of the project, the levels were significantly higher than the allowable concentration levels for PCE and TCE in the Site groundwater monitoring wells. Currently, all wells are reporting non-detect except one monitoring point.

Discussion:

As the original SCAP grant expired in March 2024, and the remediation at the Property has not been completed, in July 2023, staff began discussions with staff from the CSWRCB and LRWQCB on the possibility of obtaining a new SCAP grant to complete and close out the remediation of the Property. The City, with the assistance of its environmental consultant, proposed the continued funding by the CSWRCB to fund the remaining tasks to close out the Site. Due to the Site’s significant importance to the LRWQCB and CSWRCB, the City’s application was prioritized with a grant award of $483,353.

In February 2025, the CSWRCB contacted City staff to schedule a Joint Execution Team (“JET”) grant kick-off meeting to review the Grant Agreement language, scope of work expectations and timelines. Following this meeting, the State representatives indicated the need for the City to adopt a resolution so they can move forward with finalizing a grant agreement. As such, staff has prepared Resolution 25-019 and Resolution No. 25-020.

If approved, Resolution No. 25-019 allows the City to enter into a SCAP Grant Agreement with the CSWRCB, accepting the grant award in the amount of $483,353 for the purposes of remediation at the Former Nuway Dry Cleaners Site, authorizes the City Manager to execute the Grant Agreement and any related amendments, subject to minor non- substantive changes, and designates the Deputy City Manager to submit any and all documents related to the request for reimbursement.

Resolution No. 25-020 amends the annual budget for Fiscal Year 2024-2025 and approves additional revenue and expenditures in the amount of $483,353. It is important to note that the acceptance of this grant does not require a match of funds by the City.

While the expenditures will be carried by the City, the CSWRCB has committed to reimbursing the City for the work identified in the City’s grant application.

Staff remains available for any questions you may have. 4 0
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Attachments: A. Resolution No. 25-019
B. Resolution No. 25-020
C. SCAP Grant Agreement
D. Map of Property

ATTACHMENT A
RESOLUTION NO. 25-019

RESOLUTION NO. 25-019

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VICTORVILLE ENTERING INTO (1) A SITE CLEANUP SUBACCOUNT PROGRAM (“SCAP”) GRANT AGREEMENT WITH THE CALIFORNIA

STATE WATER RESOURCES CONTROL BOARD, ACCEPTING THE
GRANT AWARD IN THE AMOUNT OF $483,353 FOR THE PURPOSES OF

FUNDING SITE INVESTIGATION AND REMEDIAL ACTION AT THE
FORMER NUWAY DRY CLEANERS SITE, (2) AUTHORIZING THE CITY

MANAGER TO EXECUTE THE AGREEMENT AND AMENDMENTS ,
SUBJECT TO MINOR NON- SUBSTANTIVE CHANGES , AND (3)

DESIGNATING THE DEPUTY CITY MANAGER AS AN ADDITIONAL

SIGNING AGENT OF THE CITY AUTHORIZED TO SIGN AND SUBMIT

ANY AND ALL DOCUMENTS RELATED TO REQUEST FOR

REIMBURSEMENTS

WHEREAS, in 2014 Senate Bill 445 was adopted establishing the Site Cleanup Subaccount Program (“SCAP”), allowing the State Water Resources Control Board to issue grants for projects that remediate the harm or threat of harm to human health, safety, or the environment caused by existing or threatened surface water or groundwater contamination; and WHEREAS, the City of Victorville (the “City”) has applied to the State Water Resources Control Board for funding site investigation, remedial action, groundwater monitoring, soil vapor and indoor air monitoring and sampling at the Former NuWay Dry Cleaners (“Project”); and WHEREAS, prior to the State Water Resources Control Board’s executing a SCAP Grant Agreement (“Agreement”), the City is required to certify by resolution (i) the acceptance of the award of grant funds as proposed in the scope of work submitted with said SCAP grant application, (ii) to authorize a City agent to sign funding Agreement and amendments, and (iii) designate and authorize a representative execute and submit requests for reimbursements on behalf of the City; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. That the City Council of the City of Victorville accepts the award of the Site Cleanup Subaccount Grant Funds for funding site investigation, remedial action, groundwater monitoring, soil vapor and indoor air monitoring and sampling at the Project in the amount of $483,353 over a three year term and authorizes City Manager to execute the Agreement and any amendments, including any minor non-substantive changes.

SECTION 2. That the City Council of the City of Victorville designates the Deputy City Manager to execute any and all documents related to requests for reimbursements and implement and carry out the purposes specified in the grant application, including approving, and signing invoices and requests for reimbursements of Project costs.

ATTACHMENT B
RESOLUTION NO. 25-020

RESOLUTION NO. 25-020

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

VICTORVILLE AMENDING THE ANNUAL BUDGET FOR FISCAL
YEAR 2024 -2025; APPROVING ADDITIONAL REVENUE AND
EXPENDITURES IN THE AMOUNT OF $483,353

WHEREAS, the City Manager of the City of Victorville did heretofore submit to the City Council an estimate of expenditures and revenues of the City departments and offices, together with a proposed budget for fiscal year 2024-2025; and
WHEREAS, copies of said budget were prepared and distributed to the City Council and approved by the City Council on June 4, 2024, and have been available for inspection by the public in the office of the City Clerk of the City of Victorville; and WHEREAS, in 2014 Senate Bill 445 was adopted establishing the Site Cleanup Subaccount Program (“SCAP”), allowing the State Water Resources Control Board to issue grants for projects that remediate the harm or threat of harm to human health, safety, or the environment caused by existing or threatened surface water or groundwater contamination; and

WHEREAS, the City of Victorville (the “City”) has applied to the State Water Resources Control Board for funding site investigation, remedial action, groundwater monitoring, soil vapor and indoor air monitoring and sampling at the Former NuWay Dry Cleaners (“Project”); and

WHEREAS, the City State Grant Fund (Fund 270) is the revenue source and source of funding for City State Grants revenue and expenditure; and

WHEREAS, the City was awarded grant funds from the SCAP in the amount of $483,353 over a three year term and anticipates expending that same amount for items defined in the grant application; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. That the annual budget for the fiscal year 2024- 2025 for the City of Victorville be hereby amended to reflect an increase in budget revenue and expenditures as shown below and as described in the corresponding agenda item dated April 15, 2025.

Account Amount Adjusted
Grants SCAP Nuway Fund
(Fund 2707501E-43110-89043)
$483,353 (Revenue)
SCAP Nuway Contract Services
(Fund 2707501E-52300-89043)
$483,353 (Expenditure)

SECTION 2. That copies of such amended budget, certified by the City Clerk, shall be filed with the auditors of the City of Victorville and in the office of the City Clerk for public inspection and certified copies thereof shall be made available for use by the City departments, offices and subsidiary districts of the City.

ATTACHMENT C

SCAP GRANT AGREEMENT

SITE CLEANUP SUBACCOUNT PROGRAM (SCAP) GRANT

AGREEMENT No. D2410048
by and between
CITY OF VICTORVILLE (“Recipient”)
AND
CALIFORNIA STATE WATER RESOURCES CONTROL BOARD (“State Water Board”)

for the purpose of the

S0048, NUWAY (FORMER) DRY CLEANERS (“Project”)

• Health and Safety Code section 25299.50.6 and Resolution No. 2024-0023

PROJECT FUNDING AMOUNT: $483,353
ABILITY TO PAY CONTRIBUTION: $0

ESTIMATED REASONABLE PROJECT COST: $483,353
ELIGIBLE WORK START DATE: December 13, 2024
WORK COMPLETION DATE: February 29, 2028
FINAL REIMBURSEMENT REQUEST DATE: March 31, 2028
RECORDS RETENTION END DATE: February 28, 2031

City of Victorville
Agreement No.: D2410048
Project No. S0048

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Victorville City CouncilApril 15, 2025

Victorville City Council
April 15, 2025