Item Number: 17
City Council / Board of Directors
Written Communications
Meeting of: January 20, 2026
Submitted By:
Carmen Cun, Finance Director / City Treasurer
Subject:
Annual Financial Reports for the Fiscal Year Ended June 30, 2025 Recommendation:
That the Honorable City Council and Board of Directors approve a motion to receive and file the following:
(1) City of Victorville Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2025;
(2) Victorville Water District Basic Financial Statements for the Fiscal Year ended June 30, 2025; and
(3) Southern California Logistics Airport Authority Basic Financial Statements for the Fiscal Year ended June 30, 2025.
Fiscal Impact:
There is no fiscal impact for this item as it is information only to receive and file.
Strategic Plan Goal:
Annual financial audits and reporting is part of Goal A: Financial Sustainability as these reports are indicators of our past performance and convey valuable information to future planning and forecasting.
Background:
The City's financial statements for the Fiscal Year ended June 30, 2025, were audited by the independent audit firm Badawi & Associates, Certified Public Accountants (Badawi).
The City of Victorville's Audit Committee, which includes Mayor Pro Tem Bob Harriman, Councilmember Tiffany Gaudin, the Executive Team, the Director of Finance, and the Assistant Director of Finance met on January 8, 2026, to review and discuss the final draft of the City's Annual Comprehensive Financial Report (ACFR) for Fiscal Year ended June 30, 2025.
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After discussion, the final version of the ACFR is being presented to the City Council and the Board of Directors for receipt and filing. Also being presented to the City Council and the Board of Directors for receipt and filing are the audited Victorville Water District Basic Financial Statements and the Southern California Logistics Airport Authority Basic Financial Statements for the Fiscal Year ended June 30, 2025. The Victorville Water District and the Southern California Logistics Airport Authority issue separate financial statements since they are considered component units of the City; however, the financial information for these component units is also in the ACFR.
Discussion:
The American Institute of Certified Public Accountants (AICPA) defines an Unmodified Opinion as “the opinion expressed by the auditor when the auditor concludes that the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework” (2021 AICPA Professional Standards AU-C §700.10). The auditors have issued unmodified opinions on all three financial statements for the City, Victorville Water District, and Southern California Logistics Airport Authority, this means they are “clean” audits.
Below are some financial highlights:
General Fund
For financial reporting purposes, the General Fund is a combination of six funds:
General Fund (fund 100), Measure P (fund 105), Technology (fund 111), Fueling Stations (fund 120), Victor Valley Transportation Center (fund 470), and Sidewalk Assessments (fund 620). For our purposes, in the next paragraphs, we are referring to the General Fund as only those items located in fund 100.
The General Fund is the chief operating fund of the City of Victorville. At the end of Fiscal Year 2024-25, the unassigned fund balance of the General Fund was $93.3 million, while the total fund balance was $94.8 million. This is an increase of $18.3 million in total fund balance from Fiscal Year 2024. As a measure of the General Fund’s liquidity, the unassigned fund balance represents 96.4% of the total General Fund expenditures. The General Fund reserve policy established a target that the unrestricted fund balance represents 17% of the total General Fund expenditures.
General Fund revenue increased by $7.2 million during this FY 2024-25 over the prior fiscal year, mainly due to $3.4 million increase in charges for services and $2.9 million increase in taxes and assessments. General Fund expenditures increased by $5.1 million as compared to the prior fiscal year. Primary factors were a $2.8 million increases in general government and a $2.1 million increase in public safety.
Measure P
Measure P is a 1% Transactions and Use Tax adopted by the voters of Victorville in November 2020. The tax went into effect April 1, 2021. Revenue received for this transactions tax in Fiscal Year 2025 was $29.1 million. Per the Public Safety Plan presented to council in May 2020 and the committee formed to review and 4 5
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comment on revenue and expenditures in this fund, expenditures for the year included public safety staffing of additional code enforcement, animal control, and fire departments as well as several park improvement projects, Green Tree Library, equipment for the fire department and training. This fund also has a reserve policy matching that of the General Fund at 17%.
Capital Accomplishments
Several capital projects made major milestones in FY 2025 including the reconstruction of Bear Valley Road between Amethyst Road and US Highway 395, with total project costs of approximately $8.5 million, new traffic signals at the intersection of Mojave and Condor Road, major advancements in the City’s new Library located at the former clubhouse of the Green Tree Golf Course, and various other road pavement projects. Other special revenue funds such as Measure I, and Federal and State Grants have also aided in funding the completion and advancement of other capital projects.
Enterprise Funds
The Victorville Municipal Utility Services (VMUS) electric fund continues to expand its services and improve its infrastructure throughout the Southern California Logistics Airport (SCLA). The fund remained flat with a $141 thousand increase in revenues in FY 2025 as compared to FY 2024. The utility did not have a rate increase during the fiscal year and there was a minimal fluctuation in the number of customers. The expenses for this fund decreased by $3.2 million from the prior year. The cost savings is due to a reduction in cost afforded by new power purchase agreements and a reduction of $1.7 million in operations and maintenance.
The City’s Solid Waste fund experienced an increase in revenues of $4.3 million from the prior fiscal year. This increase is due to an increase in the rates per the latest rate study, ensuring revenue stabilization for the fund. Expenses increased by $2.1 million primarily due to higher costs in maintenance and operations because of inflation and the cost to implement state mandates.
The Victorville Water District (VWD) fund is primarily supported by user charges and other fees. In FY 2025, revenues increased by $3.7 million when compared to the prior year. VWD experienced an increase of $3.1 million in service charges and a slight increase in fines and forfeitures and other revenues in the amount of $610,000. Expenses increased by $4 million from the prior year. The major contributing factors were an increase to maintenance and operations for $5 million.
This was in large part due to inflation and an increase in contract services.
However, this was offset by a decrease of just under $1 million in production costs.
VWD remains committed to its efforts, having completed numerous capital improvement projects during the fiscal year while maintaining a healthy fund balance.
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The Southern California Logistics Airport Authority (SCLAA) continued to improve and rehabilitate its infrastructure to allow for additional building leases. Revenues in FY 2025 remained flat as compared to the prior year reflecting a small decreased of $290 thousand. The decrease was primarily due to a decrease of $392 thousand in charges for services and an offset of $102 thousand in fines and forfeitures and other revenues. SCLAA expenditures also decreased by $2.6 million. The primary cause of this decrease is a $1.7 million reduction in depreciation expenses and $1 million in operations and maintenance. These two decreases were offset by an increase of $109 thousand in personnel expenses.
As the City’s annual audit process for the Fiscal Year ended June 30, 2025, has been completed and the City’s independent auditor has issued an “unmodified opinion” or “clean” opinion for the reports, staff recommends the Council and Board of Directors receive and file the following reports:
(1) City of Victorville Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2025,
(2) Victorville Water District Basic Financial Statements for the Fiscal Year ended June 30, 2025, and
(3) Southern California Logistics Airport Authority Basic Financial Statements for the Fiscal Year ended June 30, 2025.
Staff remains available for any questions or comments.
Prepared By:
Carmen Cun, Director of Finance
Attachments: A. City of Victorville ACFR for Fiscal Year ended June 30, 2025 B. Victorville Water District Basic Financial Statements for Fiscal Year ended June 30, 2025
C. Southern California Logistics Airport Authority Basic Financial Statements for Fiscal Year ended June 30, 2025