Victorville City Council
January 20, 2026

Attachment B

Victorville Water District
Basic Financial Statements
for Fiscal Year ended
June 30, 2025

Victorville Water
District
Victorville, California

Financial Statements and
Independent Auditor’s Report

For the year ended June 30, 2025

Victorville Water District
Table of Contents
For the year ended June 30, 2025

Page

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 ................................................................. 44 Schedule of Pension Plan Contributions ...................................................................................... ...................... 46 Schedule of Changes in Total OPEB Liability and Related Ratios ................................................................. 48

Supplementary Information:

Combining Statement of Net Position ......................................................................................... ....................... 54 Combining Statement of Revenues, Expenses, and Change in Net Position ................................................ 56

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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 Victorvi lle Water District (District), a component unit of the City of Victorville, California, as of and for the year ended June 30, 2025, 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, 2025, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing st andards generally accepted in the United States of America (GAAS) and the standards applicab le 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 Resp onsibilities 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 ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

In preparing the financial statements, management is re quired to evaluate whether 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 twelve months beyond the financ ial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

To the Board of Directors
of the Victorville Water District
Victorville, California

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 issu e an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolu te 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 aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstat ement of the financial statements, whether due to fraud or error, and design and pe rform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circ umstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting polic ies used and the reasonableness of significant accounting estimates made by management, as we ll as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.

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

2 To the Board of Directors
of the Victorville Water District
Victorville, California

Required Supplementary Information

Accounting principles generally accept ed 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 m anagement 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 accepted in the United States of America, which consisted of inquiries of managem ent 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 knowledge we obtained during our audit of the basic financial statements.

We do not express an opinion or provide any assuranc e 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 requir e 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 cons iders it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational , economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Supplementary Information

Our audit was conducted for the purpose of forming opinions 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 us ed 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 proc edures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themse lves, 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

We have previously audited the District’s June 30, 2024 financial statements, and we expressed an unmodified opinion on those statements in our report dated April 10, 2025. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2024 is consistent, in all material respects, with the audited financial statements from which it has been derived. 3 To the Board of Directors
of the Victorville Water District
Victorville, California

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 6, 2026 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Emeryville, California
January 6, 2026
4 BASIC

FINANCIAL STATEMENTS
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6 Victorville Water District
Statement of Net Position
June 30, 2025
(With Comparative Data for June 30, 2024)
2025 2024
ASSETS
Current Assets:

Cash and investments 87,916,131 $ 85,120,299 $ Cash with fiscal agent 877,517 836,588 Accounts receivable 6,564,940 5,640,186 Interest receivable - 371,279 Due from other governments 24,569 28,707 Inventory 1,366,384 1,604,610
Total current assets 96,749,541 93,601,669 Noncurrent:

Deposits and prepaid items 107,195 51,763 Capital assets:

Nondepreciable 39,013,730 37,054,907
Depreciable capital assets 289,137,104 285,159,860 Accumulated depreciation (171,170,032) (165,021,497) Depreciable or amortizable, net 117,967,072 120,138,363 Total noncurrent assets 157,087,997 157,245,033 Total assets 253,837,538 250,846,702

DEFERRED OUTFLOWS OF RESOURCES

Deferred outflows - OPEB related 1,881,231 2,287,149 Deferred outflow - pension related 5,857,836 6,305,417 Total deferred outflows of resources 7,739,067 8,592,566

LIABILITIES

Current liabilities:

Accounts payable 2,072,760 2,857,836
Interest payable 145,319 153,385
Deposits payable 1,799,099 1,748,554
Compensated absences - due within one year 425,241 561,302 Total OPEB liability - due within one year 537,320 338,738 Long-term liabilities - due within one year 465,000 454,620 Total current liabilities 5,444,739 6,114,435 Noncurrent liabilities:

Total OPEB liability 11,106,949 11,690,747 Net pension liability 18,462,040 17,610,716 Long-term debt 6,858,083 7,329,311
Compensated absences 691,178 154,792 Total noncurrent liabilities 37,118,250 36,785,566 Total liabilities 42,562,989 42,900,001

DEFERRED INFLOWS OF RESOURCES

Deferred inflows - OPEB related 3,168,283 3,234,388 Deferred inflows - pension related 357,648 851,599 Total deferred inflows of resources 3,525,931 4,085,987

NET POSITION
Net investment in capital assets 150,169,250 149,171,073 Unrestricted 65,318,435 63,282,207
Total net position 215,487,685$ 212,453,280$ See accompanying Notes to Basic Financial Statements.
7 Victorville Water District
Statement of Revenues, Expenses and Changes in Net Position For the year ended June 30, 2025
(With Comparative Data for the year ended June 30, 2024) 2025 2024
OPERATING REVENUES:

Utility sales 31,336,225$ 29,871,480 $
Meter and service fees 12,957,663 11,326,765 Pass-thru charges for services 1,167,675 1,149,312 Fines and forfeitures 650,365 386,446 Arsenic surcharge 303,997 301,506
Other 570,852 243,233
Total operating revenues 46,986,777 43,278,742 OPERATING EXPENSES:

Personnel services 13,034,357 12,737,893 Maintenance and operations 24,580,644 19,532,107 Production costs 5,472,548 6,411,631
Pass-thru production costs 1,138,475 1,178,512 Depreciation and amortization 6,213,339 6,570,505 Total operating expenses 50,439,363 46,430,648 Operating income (loss) (3,452,586) (3,151,906) NONOPERATING REVENUES (EXPENSES):

Taxes 1,624,692 1,567,817
Investment income 4,846,425 5,013,463
Interest expense (1,423,832) (1,387,860) Gain on disposal of assets 9,326 - Other nonoperating expenses (98,879) (2,024,057) Total nonoperating revenues (expenses) 4,957,732 3,169,363 Income before contributions and transfers 1,505,146 17,457 CONTRIBUTIONS AND TRANSFERS:

Connection fees 1,028,886 4,242,660
Alternate water source fees 70,928 484,220 Capital restricted use fees 595,214 587,276 Capital contributions 175,287 -
Transfers in - 25,713
Total contributions and transfers 1,870,315 5,339,869 Change in net position 3,375,461 5,357,326 NET POSITION:

Beginning of year 212,453,280 207,095,954
Restatements - due to implementation of GASB 101 (341,056) - Beginning of year, as restated 212,112,224 207,095,954 End of year 215,487,685$ 212,453,280$
See accompanying Notes to Basic Financial Statements.
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9 Victorville Water District
Statement of Cash Flows
For the year ended June 30, 2025
(With Comparative Data for the Year Ended June 30, 2024) 2025 2024
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers and users 47,888,142 $ 45,927,271 $ Cash payments to employees for services (12,215,537) (11,592,107) Cash payments to suppliers for goods and services (31,793,949) (29,402,164) Net cash provided by (used in) operating activities 3,878,656 4,933,000 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Cash received from other governments 1,624,692 1,567,817 Transfers in - 25,713
Net cash provided by (used in) noncapital financing activities 1,624,692 1,593,530 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Cash received from the sale of capital assets 9,326 - Cash payments to acquire capital assets and other assets (6,000,871) (3,447,756) SBITA principal payments (9,655) (9,464)
Principal paid on capital-related debt (451,193) (431,193) Interest paid on capital-related debt (1,431,898) (1,395,504) Net cash provided by (used in) capital and related financing activities (7,884,291) (5,283,917) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 5,176,775 4,891,105
Net cash provided by (used in) investing activities 5,176,775 4,891,105 Net cash flows 2,795,832 6,133,718
CASH AND INVESTMENTS - Beginning of year 85,120,299 78,986,581 CASH AND INVESTMENTS - End of year 87,916,131$ 85,120,299$ 10 See accompanying Notes to Basic Financial Statements.

Victorville Water District
Statement of Cash Flows (Continued)
For the year ended June 30, 2025
(With Comparative Data for the Year Ended June 30, 2024) 2025 2024

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

Operating income (loss) (3,452,586) $ (3,151,906) $ Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Depreciation 6,213,339 6,570,505
Nonoperating miscellaneous revenue (expense) and capital contributions 1,771,436 3,290,099 (Increase) decrease in assets and deferred outflows:

Accounts receivable (924,754) (463,405)
Due from other governments 4,138 (8,761)
Inventories 238,226 (737,676)
Prepaid deposits (55,432) (23,457)
Deferred outflows - OPEB 405,918 420,465
Deferred outflows - pension 447,581 (209,939)
Increase (decrease) in liabilities and deferred inflows:

Accounts payable (785,076) (1,518,781)
Prepaid water connection fees - (217,489)
Deposits payable 50,545 48,085
Compensated absences 59,269 42,912
Total OPEB liabilty (385,216) 367,522
Net pension liability 851,324 1,453,978
Deferred inflows - OPEB (66,105) (750,950)
Deferred inflows - pension (493,951) (178,202)
Net cash provided by (used in) operating activities 3,878,656$ 4,933,000$ 11 This page intentionally left blank
12 NOTES TO BASIC

FINANCIAL STATEMENTS

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14 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The basic financial statements of the Victorville Water District (District) 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 principles. The more significant of the District’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 Executive Officer of the Local Agency Formation Commission (LAFCO) of San Bernardino County, which adopted a change of organization without election. All of the liabilities 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 Bo ard 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 basi c financial statements of the City because the City Council is the governing board and has financial accountability 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 st atement 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 prov iding 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.

15 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT AC COUNTING 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 timi ng of transactions or events for recognition in the financial statements.

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

Proprietary funds are presented using the 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 se rvice charges that include utility sa les, meter and service fees, pass- thru charges, fines and forfeiture s, arsenic surcharge, and other reim bursements, result from exchange transactions associated with the prin cipal activities of the District. Exchange transactions are those in which each party receives and give s up essentially equal values. Nono perating 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 costs, and deprec iation 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 du ring a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments.
16 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT AC COUNTING 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 no rmal 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 do nation. SBITA assets are initially me asured 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 wi th 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.
17 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT AC COUNTING 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 services 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 that have been earned for service previously rendered by employees, along with the related costs.

Compensated absences (unpaid vacation and sick leave) are recorded in the statements of net position.

Liabilities for leave are assumed to be accrued using the First In, First Out (FIFO) method, meaning the leave that was earned first is used or paid first. Th e City has recorded a liability only when it is more likely than not the leave will be taken or paid for. All compensated absences and related costs are reported as incurred in the governmental-wide and proprietar y fund financial statements, as these amounts will be recorded as fund expenditures in the year in which they are paid or become due on demand to terminated employees. The liability for compensated absences is determined annually.

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
18 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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 periods and so will not be recognized as an outflow of resources (expense) until that time. The category of deferred outflow of resources reported in the statement of net position is related to pension and other postemployment benefits, which are more fully discussed in Notes 6 and 5, respectively.

In addition to liabilities, the statement of net position reports a separate section for deferred 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 inflows 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 of 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 District’s practice to consider restricted net position to have been depleted before unrestricted net position is applied, unless otherwise directed by Council. 19 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT AC COUNTING 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 refu nds of employee contributions) are recognized when currently due and payable in accordanc e with the benefit terms. Investments are reported at fair value.

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

Q. Prior Year Data

Selected information regarding the prior year had been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the District’s prior year financial statements, from which this selected financial data was derived.

R. Estimates

The presentation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of asse ts, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

S. Adoption of New Accounting Standards
In 2025, the District adopted new accounting st andards in order to conform with the following Government Accounting Standards Board Statements:
 GASB Statement No. 101, Compensated Absences - The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. The District has recognized accruals for compensated time, administrative leave, and vacation. Beginning net po sition and compensated absences balances as of June 30, 2024, were restated upon implementation of this Statement. Please refer to Notes 4 and 7 for more details.
 GASB Statement No. 102, Certain Risk Disclosures - The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or co nstraints. The District had no adjustments or new disclosures as a result of this Statement.

20 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS

Cash and investments as of June 30, 2025, are classified in the accompanying financial statements

The following is a summary of the cash and investments at June 30, 2025:

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 a ccounting records maintained by the City, which are recorded on an original cost basis.

B. Investments Authorized by the California Government Code and the City’s Investment Policy

The City adopts the investment policy for the District. The table on the following page outlines the type of investment that are authorized for the District under the California Government Code and the City’s investment policy. The table also highlights 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 in clude investments of debt proceeds held by bond trustees which are governed by the provisions of the City’s debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy.

Statement of Net Position:

Cash and Investments 87,916,131 $
Cash and Investments with Fiscal Agent 877,517
Total Cash and Investments 88,793,648 $
Deposits with Financial institutions 101,159 $
Deposits Held in City Pool 53,334,655
Investments 35,357,834
Total Cash and Investments 88,793,648 $
21 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued

B. Investments Authorized by the California Government Code and the City’s Investment Policy, Continued

C. Investments Authorized by Debt Agreements

Investments of debt proceeds held by bond trustee ar e 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.

Authorized by Maximum Maximum
Investment Type Investment Maximum Percentage Investment Authorized by State Law Policy Maturity* of Portfolio* in One Issuer Local Agency Bonds Yes 5 Years 70% None
U.S. Treasury Obligations Yes 5 Years 70% None
U.S. Agency Securities Yes 5 Years 75%** None
Banker's Acceptances No 180 Days 40% 30%
Commercial Paper - Nonpooled Funds No 270 Days 25% 10%
Commercial Paper - Pooled Funds No 270 Days 40% 10%
Negotiable Certificates of Deposit Yes 2 Years 25% None Repurchase Agreements No 1 Year 20% of Base Value None
Reverse Repurchase Agreements No 92 Days 30% None
Medium-Term Notes No 5 Years 20%* None
Mutual Funds*** Yes 5 Years 20%* 10%
Money Market Mutual Funds*** Yes 5 Years 20% None
Mortgage Pass-Through Securities No 5 Years 20% None
County Pooled Investment Funds No N/A None None
Local Agency Investment Fund (LAIF) Yes N/A None $75M
JPA Pools (Other Investment Pools) No N/A None None
* Based on state law requirements or investment policy requirements, whichever is more restrictive. ** Ginnie Mae is not to exceed 20% of the total portfolio. *** Fund must be an AAA rated Government or U.S. Treasury money fund.

Authorized Maximum Maximum % Investment
Investment Type Maturity Allowed in One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 360 Days None None
Commercial Paper 270 Days None None
Money Market Mutual Funds None None None
Repurchase Agreements None None None
Investment Contracts NoneN oneN one
Certificate of Deposit None None None
Local Agency Investment Fund (LAIF) None None None
California Common Law Trust Shares None None None
22 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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- te rm 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 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:

Remaining Maturities
(in Months)
Investment Type Total Within 12 60+
LAIF 34,480,317 $ 34,480,317 $ - $ Held by Bond Trustee:

Guaranteed Investment
Contract (GIC)* 816,500 - 816,500 Money Market Mutual Funds 61,017 61,017 - Total 35,357,834 $ 34,541,334 $ 816,500 $ * The District's GIC is with Financial Security Assurance (FSA). The contract required FSA to deposit cash, governmental securities, or governmental bonds as collateral with Bank of New York, at a value of at least 100%, 104%, or 105%, respectfully, of the investment balance the termination of the investment contract and release of collateral would occur in the event of default by FSA. As of June 30, 2025, FSA was not in default and the value of the collateral met the requirements. 23 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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 nationa lly 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%, respectively, of the investment balance. the termination of the investment contract and release of collateral would occur in the event of de fault by FSA. As of June 30, 2025, FSA was not in default and the value of the collateral met the requirements.

The investment policy of the District contains no limit ations on the amount that can be invested in any one issuer beyond that stipulated by the Californi a 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.

Minimum
Investment Type Total Legal Rating AAA Not Rated
LAIF 34,480,317 $ N/A - $ 34,480,317$ Held by Bond Trustee:

Guaranteed Investment
Contract (GIC)* 816,500 N/A - 816,500 Money Market Mutual Funds 61,017 AAA 61,017 - Total 35,357,834 $ 61,017 $ 35,296,817$ Ratings as of Year-End
24 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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 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, 2025, 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 accompanying financial statements at amounts based upon the District’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF.

25 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued

H. Fair Value Measurements

The District categorizes its fair value measuremen t 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 valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements ) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:

Level 1 – Inputs to the valuation methodology are u nadjusted 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 in directly, and fair value is determin ed through the use of models or other valuation methodologies including:

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

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurements. These unobservable inputs reflect the District’s own assumptions about the inputs market participants would use in pricing the asset or liability (including a ssumptions 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 mark et mutual funds (held by bond trustee) are not subject to the fair value measuremen t 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 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

3. CAPITAL ASSETS

For the year ended June 30, 2025 the City’s capital asset activity was as follows:

Depreciation and amortization expense for the District was $6,213,339 for the year ended June 30, 2025.

Balance Balance
July 1, 2024 Additions Deletions June 30, 2025
Nondepreciable Assets:

Land 8,902,047$ -$ -$ 8,902,047$ Intangibles 21,581,836 632,826 - 22,214,662 Idle Assets 3,017,958 - - 3,017,958 Land Improvements 536,342 - - 536,342 Construction in progress 3,016,724 2,426,299 (1,100,302) 4,342,721 Total Nondepreciable Assets 37,054,907 3,059,125 (1,100,302) 39,013,730 Depreciable Assets:

Buildings and Improvements 27,821,867 473,576 - 28,295,443 Computer and Communication 855,218 - - 855,218 Furniture and Equipment 38,437,382 76,168 - 38,513,550 Infrastructure 211,718,567 3,010,365 - 214,728,932 Intangibles 1,542,724 - - 1,542,724 Vehicles 4,753,450 481,939 (64,804) 5,170,585 Total Depreciable Assets 285,129,208 4,042,048 (64,804) 289,106,452 Less Accumulated Depreciation:

Buildings and Improvements (12,345,245) (688,746) - (13,033,991) Computer and Communication (693,025) (31,662) - (724,687) Furniture and Equipment (32,631,395) (616,867) - (33,248,262) Infrastructure (114,789,925) (4,539,937) - (119,329,862) Intangibles (1,542,725) - - (1,542,725) Vehicles (3,006,400) (325,910) 64,804 (3,267,506) Total Accumulated Depreciation (165,008,715) (6,203,122) 64,804 (171,147,033) Total Depreciable Assets, Net 120,120,493 (2,161,074) - 117,959,419 Subscription Based Information
Technology Arrangement (SBITA)
Assets Being Amortized:

SBITA Assets 30,652 - - 30,652 Accumulated Amortization (12,782) (10,217) - (22,999) Total SBITA Assets,
Being Amortized, Net 17,870 (10,217) - 7,653 Total Capital Assets Being
Depreciated or Amortized, Net 120,138,363 (2,171,291) - 117,967,072 Capital Assets, Net 157,193,270$ 887,834 $ (1,100,302)$ 156,980,802$ 27 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

4. LONG-TERM LIABILITIES

A summary of changes in long-term liabilities for the year ended June 30, 2025, is noted below:

A. SBITAs

The District has entered into subscription based- information technology arrangements (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 SBITA was fully paid off in FY2025.

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. Principal and interest payments are due each August 1 and interest only payments are due each February 1. The amount of Certificates of Participation outstanding at June 30, 2025 is $7,255,000.

Balance Restatement Balance Due Within
July 1, 2024 (GASB 101) Additions Retirements June 30, 2025 One Year Other Long-Term Liabilities:

Compensated Absences 716,093$ 341,056$ 426,591$ (367,321)$ 1,116,419$ 425,241$ SBITAs 9,620 - - (9,620) - - Other Debt:
2006 Certificate of Participation 7,700,000 - - (445,000) 7,255,000 465,000 Unamortized Discounts/Premiums 74,311 - - (6,228) 68,083 - Total 8,500,024$ 341,056$ 426,591$ (828,169)$ 8,439,502$ 890,241$ 28 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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, 2025, 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, 2025. 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 proc eeds 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:

Year Ending
June 30, Principal Interest
2026 465,000 $ 338,511 $
2027 485,000 317,849
2028 505,000 295,938
2029 530,000 272,650
2030 555,000 248,238
2031-35 3,200,000 794,500
2036-37 1,515,000 76,625
Subtotal 7,255,000 2,344,311 $
Premium 68,083
Total 7,323,083$
Certificates of Participation
Annual Amount Annual Debt
of Pledged Service Payment Pled ged
Revenue (Net (of All Debt Revenue as
of Expenses, Secured b y a Percentage
Description of Pled ged Revenue Where Required) This Revenue) of Debt Service Net Revenues Pledged by the
District for the 2006
Certificates of Participation 1,849,600$ 803,304$ 43% 29 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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 Dent al and Vision benefits to eligible former Water District employees with 15 years of serv ice. The District also pa ys 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, 2024 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 requiremen ts 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, 2025, the District’s cash contribution s were $275,972 for current premiums, administrative costs of $811, and the estimated implied subsidy was $66,000 resulting in total payments of $342,783.

Active employees 87
Inactive employees or beneficiaries currently
receiving benefit payments 37
Inactive employees entitled to but not yet
receiving benefit payments 8
Total 132
30 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

5. OTHER POST EMPLOYMENT BENEFITS (OPEB), Continued

E. OPEB Liability

The District’s total OPEB liability was measured as of June 30, 2024 and was determined by an actuarial valuation dated June 30, 2024.

F. Discount Rate

The discount rate used to measure the total OPEB lia bility was 3.93%. The discount rate is determined based on the Bond Buyer 20-Bond Index since the District has not established a trust.

G. Change in Actuarial Assumptions

The following actuarial assumption changes occurred form the measurement periods ended June 30, 2023 to 2024:

 The discount rate changed from 3.65% to 3.93% based on changes in the index.  Inflation was same as prior year at 2.50%.
 The healthcare trend rate was updated as follows : Non-Medicare rate decreased from 8.5% to

7.9%, Medicare (Non-Kaiser) decreased from 7.5% to 6.9%, and Medicare (Kaiser) decreased from

6.25% to 5.65%.
 Demographic assumptions were updated from th e CalPERS 1997-2015 Experience Study to the CalPERS 2000-2019 Experience Study.
 Mortality improvement was updated from Scale MP-2020 to Scale MP-2021.

Actuarial Cost Method Entry Age Normal
Actuarial Assumptions:

Discount Rate 3.93%
Inflation 2.50%
Salary Increases 2.75% per annum, in aggregate
Investment Rate of Return N/A
Mortality, Retirement, Disa bility,
and Termination 2000-2019 Experience Study
Mortality Improvement Postretirement mortality projected fully generational with Scale MP-2021
Healthcare Trend Rate Non-Medicare: 7.9% for 2026, decreasing to an ultimate
rate of 3.45% in 2076
Medicare (Non-Kaiser): 6.9% for 2026, decreasing to an
ultimate rate of 3.45% in 2076
Medicare (Kaiser): 5.65% for 2026, decreasing to an
ultimate rate of 3.45% in 2076
31 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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 Di strict 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: 6.9% for 2026 decreasing to 2.45% in 2076; Medicare (Non-Kaiser): 5.9% for 2026, decreasing to an ultimate rate of 2.45% in 2076; Medicare (Kaiser): 4.65% for 2026, decreasing to an ultimate rate of 2.45% in 2076) or one percentage point higher (Non-Medicare: 8.9% for 2026 decreasing to 4.45% in 2076; Medicare (Non-Kaiser): 7.9% for 2026, decreasing to an ultimate rate of 4.45% in 2076; Medicare (Kaiser): 6.65% for 2026, decreasing to an ultimate rate of 4.45% in 2076) than the current rate:

Total OPEB
Liability
Total OPEB Liability at June 30, 2023 (MD) 12,029,485$
Service Cost 454,907
Interest 449,831
Differences Between Expected and Actual Experience (480,564) Changes of Assumptions (488,896)
Benefit Payments (320,494)
Net Changes During 2023-2024 (385,216)
Total OPEB Liability at June 30, 2024 (MD) 11,644,269$
1% Decrease Current Rate 1% Increase
-2.93% -3.93% -4.93%
13,535,539$ 11,644,269$ 10,115,347$ Discount Rate
1% Decrease Current Rate 1% Increase
9,930,989$ 11,644,269$ 13,830,358$ Healthcare Trend Rate
32 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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 tota l OPEB liability are recognized in OPEB expense systematically over time. Amounts are first recogniz ed in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as de ferred 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/Inflows of Resources Related to OPEB

For the fiscal year ended June 30, 2025, the District recognized OPEB expense of $297,380. As of the fiscal year ended June 30, 2025, the District reported deferred outflows/inflows of resources related to OPEB from the following sources:

The $342,783 reported as deferred outflows of reso urces 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, 2026. Other amounts reported as deferred outflows/inflows of resources related to OPEB will be recognized as expense as follows:

Net Difference Between Projected and Actual
Earnings on OPEB Plan Investments
Plan Investments 5 Years
All Other Amounts Expected avera
ge remainin g service
lifetime (EARSL) (7.7 Years at
June 30, 2024 measurement date)
Deferred Outflows Deferred Inflows
of Resources of Resources
Employer Contributions Subsequent to the
Measurement Date
Differences Between Expected and Actual Experience 621,946 (975,355) Changes of Assumptions 916,502 (2,192,928) Total 1,881,231 $ (3,168,283) $ -$ 342,783$
Measurement Period
Deferred
Outflows/(Inflows)
Ended June 30, of Resources
2026 (395,355)$
2027 (139,517)
2028 (198,247)
2029 (299,941)
2030 (332,016)
Thereafter (264,759)
Total
33 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

5. OTHER POST EMPLOYMENT BENEFITS (OPEB), Continued

M. Payable to the OPEB Plan

At June 30, 2025, the District had no outstanding am ount of contributions to the OPEB plan required for the year ended June 30, 2025.

6. PENSION PLAN

A. General Information about the Pension Plans

Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, agent multiple-employer defi ned benefit pension plans administered by the California Public Employees’ Retirement System (C alPERS), 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 fi ve years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of services. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five years of service. The death benefit is one of the following: the Basic Death Be nefit, 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, 2025, are summarized as follows:

Prior to On or After
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.5%@55 2.0%@62
Benefit Vesting Schedule 5 Years 5 Years
of Service of Service
Benefit Payments Monthly for Life Monthly for Life
Retirement Age 50 to 55 52 to 67
Required Employee Contribution Rates 8.00% 7.75%
Required Employer Contribution Rates:

Normal Cost Rate 11.23% 11.23%
Payment of Unfunded Liability 1,240,281$ N/A
Miscellaneous
34 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

6. PENSION PLAN, Continued

A. General Information about the Pension Plans, Continued

Contributions
Section 20814(c) of the California Public Employees ’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The Authority is required to contribute the difference between the actuarially determined rate and the contribution rate of employees . Authority contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension pl an terms as plan member contributions requirements are classified as plan member cont ributions. For the fiscal year ende d June 30, 2025, the District made contributions of $2,135,455 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, 2024 measurement period was determined by an actuarial valuation as of June 30, 2023, with standard update procedures used to roll forward the total pension liability to June 30, 2024. The total pension liability for the Miscellaneous Plan was based on the following assumptions:

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Normal
Cost Method
Asset Valuation Method Market Value of Assets
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases (1)
Mortality Rate Table (2)
Post Retirement Benefit Income (3)
(1) Varies by entry age and service.
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.
(3) The lesser of contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.30% thereafter. 35 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

6. PENSION PLAN, Continued

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

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

In determining the long-term expected rate of return , CalPERS took into account both short- term and long-term market return expectations. Using historical returns all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach.

The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:

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 long-term expected rate of return on plan investme nts was applied to all periods of projected benefit payments to determine the total pension liability.

Assumed
Asset Real Return
Asset Class (a) Allocation (a) (b)
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.84
Private Equity 13.00% 7.28
Treasury 5.00% 0.27
Mortgage-backed Securities 5.00% 0.50
Investment Grade Corporates 10.00% 1.56
High Yield 5.00% 2.27
Emerging Market Debt 5.00% 2.48
Private Debt 5.00% 3.57
Real Assets 15.00% 3.21
Leverage -5.00% (0.59)
Total 100.00%
(a) An expected inflation of 2.30% used for this period (b) Figures are based on the 2021 Asset Liab ility Management Study 36 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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 pens ion liability for the Miscellaneous Plan as of the measurement date ended June 30, 2023 and 2024, was as follows:

Pension Expense and Deferred Outflows and Inflows of Resources For the year ended June 30, 2025, the District recognized pension expense of $3,249,629 for the Miscellaneous Plan. At June 30, 202 5, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources for the Miscellaneous Plan:

$2,135,455 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, 2026. 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

Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability Proportionate
(a) (b) (c) = (a) - (b) Share
Balance at June 30, 2023 (MD) 60,704,859$ 43,094,143 $ 17,610,716 $ 23.60% Balance at June 30, 2024 (MD) 65,372,414 46,910,374 18,462,040 23.15% Net Changes During 2023-24 4,667,555$ 3,816,231 $ 851,324 $ -0.45% Increase (Decrease)
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension Contributions Subsequent to the
Measurement Date 2,135,455 $ - $
Changes of Assumptions 402,432 - Differences Between Expected and Actual Experience 2,587,791 (357,648) Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 732,158 - Total 5,857,836 $ (357,648) $
37 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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 reso urces and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Sensitivity o
f the Net Pension Liability to Changes in the Discount Rate The following presents the District’s proporti onate share of the net pension liability for the Miscellaneous Plan, calculated using the discount ra te 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, 2025, the District had no outstanding amount of contributions to the Miscellaneous Plan required for the year ended June 30, 2025.

Deferred
Measurement Period Inflows of
Ended June 30, Resources
2025 1,179,064 $
2026 2,086,912
2027 361,082
2028 (262,325)
2029 -
Thereafter -
1% Decrease Current Rate 1% Increase
-5.90% -6.90% -7.90%
27,845,093$ 18,462,040$ 10,777,940$
Discount Rate
38 Victorville Water District
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

7. RESTATEMENT OF NET POSITION
During the fiscal year en
ded June 30, 2025, the District recorded the following restatement:
(1) The District implemented GASB Statement No . 101 Compensated Absences, which requires recognition of a liability as leave is earned likely to be used or paid. This resulted in a restatement of the prior year’s compensated absences liability balance in order to include additio nal types of time off that were previo
usly not included in the liability.

Victorville Water
District
June 30, 2024, as previously reported 212,453,280$
Implementation of GASB 101 (1) (341,056)
June 30, 2024, as restated 212,112,224$
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40 REQUIRED

SUPPLEMENTARY INFORMATION
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43 Victorville Water District
Required Supplementary Information
For the year ended June 30, 2025
CalPERS Cost Sharing Plan
Schedule of the Proportionate Share of the Net Pension Liability - Last Ten Fiscal Years Reporting Fiscal Year 2016 2017 2018 2019
Measurement Date 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Plan's proportion of the net pension liability 24.40% 24.63% 24.87% 24.95% Plan's proportionate share of
the net pension liability 7,425,085$ 9,777,304$ 11,480,941$ 11,526,434$ Plan's covered payroll 4,824,221$ 4,860,190$ 5,506,946$ 5,598,545$ Plan's proportionate share of
the net pension liability as percentage
of its covered payroll 153.91% 201.17% 208.48% 205.88%
Fiduciary net position as a percentage of the
total pension liability 19.55% 18.59% 18.52% 18.88%
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:

From fiscal year June 30, 2024 to June 30, 2025:
*Fiscal year 2015 was the 1st year of implementation, therefore ten years are shown.

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:

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%.

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.

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%
44 2020 2021 2022 2023 2024 2025
6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024

25.15% 25.07% 25.57% 23.60% 23.26% 23.15%
12,996,097$ 12,569,004$ 9,263,027$ 16,156,738$ 17,610,719$ 18,462,040$ 5,546,115$ 6,177,914$ 6,148,247$ 6,657,109$ 7,424,195$ 8,105,155$ 234.33% 203.45% 150.66% 242.70% 237.21% 227.78%

18.74% 18.47% 21.49% 16.97% 16.51% 16.61%
45 Victorville Water District
Required Supplementary Information
For the year ended June 30, 2025
CalPERS Cost Sharing Plan
Schedule of Pension Plan Contributions - Last 10 Fiscal Years Fiscal Year Ended 2016 2017 2018 2019
Actuarially determined contribution 827,951 $ 916,742 $ 1,026,643 $ 1,221,074 $ Contributions in relation to actuarially
deemed contributions (827,951) (916,742) (1,026,643) (1,221,074) Contribution deficiency (excess) - $ - $ - $ - $ Covered payroll 4,860,190 $ 5,506,946 $ 5,598,545 $ 5,546,115 $ Contributions as a percentage of
covered payroll 17.04% 16.65% 18.34% 22.02%
Notes to Schedule:

Valuation Date 6/30/2013 6/30/2014 6/30/2015 6/30/2016
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
46 2020 2021 2022 2023 2024 2025
1,459,333$ 1,520,299$ 1,591,527$ 1,773,330$ 1,827,835$ 2,135,455$ (1,459,333) (1,520,299) (1,591,527) (1,773,330) (1,827,835) (2,135,455) -$ -$ -$ -$ -$ -$ 6,177,914$ 6,148,247$ 6,657,109$ 7,424,195$ 8,105,155$ 8,673,982$

23.62% 24.73% 23.91% 23.89% 22.55% 24.62%
6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2023 47 Victorville Water District
Required Supplementary Information
For the year ended June 30, 2025
Schedule of Changes in the Total OPEB Liability and Related Ratios - Last 10 Fiscal Years* Reporting Fiscal Year 2018 2019 2020 2021 2022 2023
Measurement Date 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 Total OPEB Liability
Service cost 583,831$ 494,095 $ 417,399$ 474,890$ 600,360$ 626,941$ Interest 345,325 404,923 364,950 372,802 271,338 281,198 Changes of assumptions (1,452,630) (509,085) 601,978 1,795,864 105,768 (2,488,667) 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) Net change in the total OPEB
liability (709,291) (1,795,180) 1,167,438 1,515,258 724,239 (866,269) Total OPEB liability - beginning 11,625,768 10,916,477 9,121,297 10,288,735 11,803,993 12,528,232 Total OPEB liabilty - ending (a) 10,916,477$ 9,121,297 $ 10,288,735$ 11,803,993$ 12,528,232$ 11,661,963$ 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% Notes to Schedule:

Changes in Assumptions:

Discount Rate 3.58% 3.87% 3.50% 2.21% 2.16% 3.54%
Mortality Improvement Rates
Scale MP-2016 Scale MP-2018 Scale MP-2018 Scale MP-2020 Scale MP-2020 Scale MP-2021 * 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%.

In the June 30, 2024 measurement period, the following medical trend rates changed: Non-Medicare rate decreased from 8.5% to 7.9%, Medicare decreased from 7.5% to 6.9%, and Kaiser decreased from 6.25% to 5.65%.

In the June 30, 2018 measurement period, the pre-65 waived retiree re-election was updated to be 10% after age 65. 48 2024 2025
6/30/2023 6/30/2024
455,359$ 454,907$
423,401 449,831
(197,575) (488,896)
- (480,564)
(313,663) (320,494)
367,522 (385,216)
11,661,963 12,029,485
12,029,485$ 11,644,269$
8,679,777$ 8,136,649$
138.59% 143.11%

3.65% 3.93%
Scale MP-2021 Scale MP-2021
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50 SUPPLEMENTARY INFORMATION
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53 Victorville Water District
Combining Statement of Net Position
For the year ended June 30, 2025
(With Comparative Data for June 30, 2024)
Victorville
Wastewater
Reclamation Reclaimed
Water Facility Water
ASSETS
Current Assets:

Cash and investments 73,911,537$ 10,353,365$ 3,651,229$ Cash with fiscal agent 877,517 - - Accounts receivable 3,951,637 2,585,058 28,245 Interest receivable - - - Due from other governments 24,569 - - Inventory and other assets 1,366,384 - - Total current assets 80,131,644 12,938,423 3,679,474 Noncurrent:

Prepaid deposits 72,536 34,659 - Advances to other funds 22,498,237 1,215,206 - Capital assets:

Nondepreciable 36,955,131 1,716,606 341,993 Depreciable capital assets 249,508,875 33,553,457 6,074,772 Accumulated depreciation (145,795,752) (23,186,274) (2,188,006) Depreciable or amortizable, net 103,713,123 10,367,183 3,886,766 Total noncurrent assets 163,239,027 13,333,654 4,228,759 Total assets 243,370,671 26,272,077 7,908,233 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows - OPEB related 1,826,356 54,875 - Deferred outflow - pension related 5,736,936 120,900 - Total deferred outflows of resources 7,563,292 175,775 -

LIABILITIES
Current liabilities:

Accounts payable 1,335,485 734,432 2,843 Interest payable 145,319 - - Deposits payable 1,799,099 - - Compensated absences - due within one year 425,241 - - Total OPEB liability - due within one year 537,320 - - Long-term liabilities - due within one year 465,000 - - Total current liabilities 4,707,464 734,432 2,843 Noncurrent liabilities:

Advances from other funds - 23,713,443 - Total OPEB liability 10,871,491 235,458 - Net pension liability 18,119,951 342,089 - Long-term debt 6,858,083 - - Compensated absences 691,178 - - Total noncurrent liabilities 36,540,703 24,290,990 - Total liabilities 41,248,167 25,025,422 2,843 DEFERRED INFLOWS OF RESOURCES Deferred inflows - OPEB related 3,101,247 67,036 - Deferred inflows - pension related 342,240 15,408 - Total deferred inflows of resources 3,443,487 82,444 -

NET POSITION
Net investment in capital assets 133,856,702 12,083,789 4,228,759 Unrestricted 72,385,607 (10,743,803) 3,676,631 Total net position 206,242,309$ 1,339,986$ 7,905,390$ 54 Eliminations 2025 2024
-$ 87,916,131$ 85,120,299 $ - 877,517 836,588 - 6,564,940 5,640,186 - - 371,279 - 24,569 28,707 - 1,366,384 1,604,610 - 96,749,541 93,601,669 - 107,195 51,763 (23,713,443) - - - 39,013,730 37,054,907 - 289,137,104 285,159,860 - (171,170,032) (165,021,497) - 117,967,072 120,138,363 (23,713,443) 157,087,997 157,245,033 (23,713,443) 253,837,538 250,846,702 - 1,881,231 2,287,149 - 5,857,836 6,305,417 - 7,739,067 8,592,566 - 2,072,760 2,857,836 - 145,319 153,385 - 1,799,099 1,748,554 - 425,241 561,302 - 537,320 338,738 - 465,000 454,620 - 5,444,739 6,114,435 (23,713,443) - - - 11,106,949 11,690,747 -
18,462,040 17,610,716
- 6,858,083 7,329,311 - 691,178 154,792 (23,713,443) 37,118,250 36,785,566 (23,713,443) 42,562,989 42,900,001 - 3,168,283 3,234,388 - 357,648 851,599 - 3,525,931 4,085,987 - 150,169,250 149,171,073 - 65,318,435 63,282,207 -$ 215,487,685$ 212,453,280 $ 55 Victorville Water District
Combining Statement of Revenues, Expenses and Changes in Net Position For the year ended June 30, 2025
(With Comparative Data for the Year Ended June 30, 2024) Victorville
Wastewater
Reclamation Reclaimed
Water Facility Water
OPERATING REVENUES:

Utility sales 21,122,046$ 9,732,622$ 481,557$ Meter and service fees 12,957,663 - -
Pass-thru charges for services 1,167,675 - -
Fines and forfeitures 650,365 - -
Arsenic surcharge 303,997 - -
Other 570,852 - -
Total operating revenues 36,772,598 9,732,622 481,557 OPERATING EXPENSES:

Personnel services 12,519,729 294,775 219,853
Maintenance and operations 15,277,805 9,168,731 134,108 Production costs and pass-thru production costs 5,458,404 - 14,144 Pass-thru production costs 1,138,475 - -
Depreciation and amortization 5,698,014 354,261 161,064 Total operating expenses 40,092,427 9,817,767 529,169 Operating income (loss) (3,319,829) (85,145) (47,612) NONOPERATING REVENUES (EXPENSES):

Taxes 1,624,692 - -
Investment income 4,152,520 537,506 156,399
Interest expense (344,278) (1,079,554) -
Gain on disposal of assets 9,326 - -
Other nonoperating expenses (88,638) (10,241) -
Total nonoperating revenues (expenses) 5,353,622 (552,289) 156,399 Income before contributions and transfers 2,033,793 (637,434) 108,787 CONTRIBUTIONS AND TRANSFERS:

Connection fees 196,486 832,400
-
Alternate water source fees 125,488 - (54,560)
Capital restricted use fees - 595,214 -
Capital contributions 181,056 (5,769) -
Transfers in - - -
Transfers out - - -
Total contributions and transfers 503,030 1,421,845 (54,560) Change in net position 2,536,823 784,411 54,227
NET POSITION:

Beginning of year 204,046,542 555,575 7,851,163 Restatements - due to implementation of GASB 101
(341,056) - -
Beginning of year, as restated 203,705,486 555,575 7,851,163 End of year 206,242,309$ 1,339,986$ 7,905,390$ 56 Eliminations 2025 2024
-$ 31,336,225$ 29,871,480$
- 12,957,663 11,326,765
- 1,167,675 1,149,312
- 650,365 386,446
- 303,997 301,506
- 570,852 243,233
- 46,986,777 43,278,742
- 13,034,357 12,737,893
- 24,580,644 19,532,107
- 5,472,548 6,411,631
- 1,138,475 1,178,512
- 6,213,339 6,570,505
- 50,439,363 46,430,648
- (3,452,586) (3,151,906)
- 1,624,692 1,567,817
- 4,846,425 5,013,463
- (1,423,832) (1,387,860)
- 9,326 -
- (98,879) (2,024,057)
- 4,957,732 3,169,363
- 1,505,146 17,457
- 1,028,886 4,242,660
- 70,928 484,220
- 595,214 587,276
- 175,287 -
- - 25,713
- - -
- 1,870,315
5,339,869
- 3,375,461 5,357,326
- 212,453,280 207,095,954
- (341,056) -
- 212,112,224 207,095,954
-$ 215,487,685$ 212,453,280$
57