Waterford City Council
December 4, 2025

AGENDA

WATERFORD CITY COUNCIL - REGULAR MEETING

WATERFORD CITY HALL, CITY COUNCIL
CHAMBERS 101 “E” STREET, WATERFORD, CA

CALL TO ORDER &
FLAG SALUTE: Mayor Goeken
INVOCATION: Pastor Dave McGaffee, Assembly of God Church ROLL CALL:

Mayor: Charlie Goeken
Vice Mayor: Jamie Hilton
Council Members: Guadalupe Gutierrez, Christine Harris, Elizabeth Talbott ADOPTION OF AGENDA:

A member of the City Council motions to accept the items on the agenda for consideration as presented, or motions for any additions, including emergency items, or items pulled from consideration.

CONFLICT OF INTEREST DECLARATION:

Declaration by City Council members who may have a direct Conflict of Interest on any scheduled agenda item to be considered.

1. 2.

This is the portion of the meeting specifically set aside to invite public comments regarding any matters not appearing on the agenda and within the jurisdiction of the City Council or the Successor Agency. Individual audience participation is limited to a maximum of 5 minutes. We encourage you to share your name and address or submit a speaker card to the City Clerk.

3. All Matters listed under the Consent Calendar are considered routine by the Council and will be adopted by one action of the Council unless any Council Member desires to discuss any item or items separately. In that event, the Mayor will remove that item from the Consent Calendar and action will be considered separately.
3a: MOTION: Waiving all Readings of Ordinances and Resolutions, except by title. 3b: RESOLUTION: Adopting Resolution 2025-66, Approving the Warrant Register in the Amount of $709,830.80 for the Period of November 18 to November 24, 2025.. 3c: MOTION: Approving Minutes of the Regular City Council Meeting held November 20, 2025.

WATERFORD CITY COUNCIL REGULAR MEETING – December 4, 2025 - 6:30 PM

COMMUNICATIONS FROM THE AUDIENCE

PRESENTATIONS

ADOPTION OF CONSENT CALENDAR

4. 4.
4a: ORDINANCE: 2nd Reading and Adoption of Ordinance 2025-05, Adopting the Prezoning of APN’s 080- 003-012, 015, 034, and 040 to RS, Single Family Residential, and APN’s 080-003-049 and 080-003- 050 to PC, Planned Community 2022-0001. (Niskanen)

5. 6.
6a: RESOLUTION: Approving Resolution 2025-67, Declaring the Intent to Modify the City of Waterford Water Rate Beginning March 1, 2026, Approving the Water Draft Tables City of Waterford Rate and Fee Study 2025 Option 1 or Option 2, and Directing Staff to Proceed with the Adoption of the proposed Fees in Conformance with the California Constitution, Article XIIID, Section 6 (Proposition 218). (Envia) 6b: MOTION: Accept and file the June 30, 2025 Basic Financial Statement of the City of Waterford and the Auditor’s Report on the Financial Statements including the reports on the Abandoned Vehicle Abatement Program, Appropriations Limit Schedule, Transportation Development Act Fund, Component Unit Statements and the Auditor’s Communication with Those Charged with Governance. (Envia)

7. 8.
8a: City Project List
8b: My Waterford Request Report

9. 9a: City Staff
9b: City Council

10. ADJOURNMENT / RECESS

STAFF/COUNCIL COMMENTS AND MEETING REPORTS

INFORMATIONAL ITEMS

SUCCESSOR AGENCY TO THE FORMER WATERFORD REDEVELOPMENT AGENCY

GENERAL BUSINESS

PUBLIC HEARING - FINAL READINGS
PUBLIC HEARINGS AND ELECTION:

11. 11a: “CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION” (Pursuant to Government Code Section 54956.9)
Burciago V. City of Waterford

12. NOTICE
REPORTS: Copies of the staff reports or other written documentation relating to each item of business referred to on the agenda are on file in the office of the City Clerk. Any writings or documents provided to a majority of the City Council regarding any item on this agenda (other than writings legally exempt from public disclosure) will be made available for public inspection at the front counter at City Hall during normal business hours.

COMMUNICATIONS FROM THE AUDIENCE: If you wish to address the City Council or the Successor Agency on any item not on the printed agenda, prior to the start of the meeting, or prior to addressing the City Council or the Successor Agency, complete and submit a speaker card and deliver it to the City Clerk. (Please note, speaker cards are not required, however completing a speaker card enables staff to better follow up with you later, if necessary and attribute your comments to you in the minutes of the meeting). When the Mayor calls for “Communications from the Audience,” stand or raise your hand and the Mayor will ask you to approach the podium and state your name and city of residence. It is the policy of the City Council that they will not act on any matter not appearing on the posted agenda. The purpose of the discussion is to permit a member of the public to raise an issue or problem and to permit the City Council to ask questions for clarification of the issue or problem, provide information to the public, provide direction of the City Staff, or schedule the matter for a future meeting. Please hold all comments to five (5) minutes.

PUBLIC COMMENTS RELATED TO AN ITEM ON THE PRINTED AGENDA: Members of the public are entitled to directly address the City Council or the Successor Agency concerning any item that is described on the agenda during consideration of that item. If during a public hearing, the Mayor will direct when the hearing has opened for public comment. If you wish to address the City Council or the Successor Agency on any item listed on this agenda, please complete a speaker card and deliver it to the City Clerk prior to discussion of that item. (Please note, speaker cards are not required, however completing a speaker card enables staff to better follow up with you later, if necessary and attribute your comments to you in the minutes of the meeting.) When your name is called proceed to the podium and state your name and city of residence.

WRITTEN MATERIAL INTRODUCED INTO THE RECORD: Citizens wishing to introduce written material into the record at the public hearing on any item are requested to provide a copy of the written material to the City Clerk prior to the public hearing date and/or prior to the opening of the public hearing so that the material may be distributed to the City Council prior to the public hearing.

NOTICE REGARDING CHALLENGES TO DECISIONS: Pursuant to all applicable laws and regulations, including without limitation, California Government Code Section 65009 and or California Public Resources Code Section 21177, if you wish to challenge in court any decisions (regarding planning, zoning and/or environmental decisions), you may be limited to raising only those issues you or someone else raised at the public hearing(s) described in this notice/agenda, or in written correspondence delivered to the City at, or prior to, the public hearing.

LIVE AND ON-DEMAND VIDEO RECORDINGS OF THE CITY COUNCIL/SUCCESSOR AGENCY: The meeting of the Waterford City Council/Successor Agency can be watched live and on-demand from the City’s website at www.cityofwaterford.org.

AMERICANS WITH DISABILITIES ACT (ADA): In compliance with the Americans with Disabilities Act, if you are a disabled person and you need a disabilityrelated modification or accommodation to participate in this meeting, please contact the City Clerk’s Office at (209) 874-2328 ext. 101 or email:
[email protected]. Requests must be made as early as possible and at least two-full business days before the start of the meeting General Information: The Waterford City Council meets on the 1st and 3rd Thursdays of each month at 6:30PM., unless otherwise noticed.

Council Agenda’s: Copies of City Council Agenda and agenda related writings or documents will be made available for public inspection at the front counter at City Hall located at 101 “E” Street, Waterford, CA 72 hours prior to the meeting, or at the time of the scheduled meeting. 11/25/2025
Patricia Krause, CMC, City Clerk Date

CLOSED SESSION

REPORT OUT OF CLOSED SESSION
Consent Calendar 3a
December 4, 2025
Patricia Krause, City Clerk / Administrative Services Director City Council Staff Report
Motion: Waive Readings of Ordinances and Resolutions, Except by Title.

SUMMARY:

It is recommended that the City Council approve the waiver of readings of Ordinances and Resolutions, except by title.

ANALYSIS:

Pursuant to California Government Code §36934, approval of the waiver of readings will allow Ordinances and Resolutions to be introduced by title only and acted upon without the need to read the entire text of the item into the public record. The documents related to proposed Ordinances and Resolutions are available for review by the public on the City’s website and in the City Clerk’s office at City Hall.

FISCAL IMPACT:

N/A
ENVIRONMENTAL REVIEW:

N/A
ALTERNATIVES:

1. Direct the City Clerk to read the entire text of resolutions and ordinances prior to approval and adoption.

2. Take no action.

ATTACHMENTS:

N/A
Consent Calendar 3b
December 4, 2025
Patricia Krause, City Clerk / Administrative Services Director City Council Staff Report
Resolution: Adopting Resolution 2025-66, Approving the Warrant Register in the Amount of $709,830.80 for the Period of November 18 to November 24, 2025.

SUMMARY:

Consider approving the Warrant Register for the period of November 18 to November 24, 2025.

ANALYSIS:

As per Government Code Section §41004, a listing of all payments the City has made for goods and services need to be approved by City Council on a regular basis. This Warrant Register includes payments and payroll made for the period of November 18 to November 24, 2025.

FISCAL IMPACT:

Payments for this period total $709,830.80.

ENVIRONMENTAL REVIEW:

N/A
ALTERNATIVES:

1. Take no action.

2. Provide staff with further direction.

ATTACHMENTS:
• Resolution #2025-66
• Check Register Report

WATERFORD CITY COUNCIL

DATE TOTAL
PAYROLL 11/24/2025 $ 49,370.32
ACCOUNTS PAYABLE 11/18/2025 $ 633,790.32
11/24/2025 $ 26,670.16
TOTAL $ 709,830.80
Passed and Adopted by the City Council of Waterford at a regular meeting held on By the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

PATRICIA KRAUSE, CMC, CITY CLERK CHARLIE GOEKEN, MAYOR
RESOLUTION 2025-66
RESOLUTION # 2025-66
December 4, 2025
The City of Waterford does hereby reserve, determine and order as follows:

SECTION 1: That in accordance with Section 37202 of the Government Code that the City Manager hereby certifies to the accuracy of the following demands and the availability of funds for the payment thereof.

SECTION 2: That the following claims and demands are subject to audit as required by law, and that the same are hereby set forth.

User:

Printed: 11/24/2025 - 10:30AM
'trish'
Payroll
Include Partial: FALSE
ACH Check Register
Batch: 00024.11.2025
Check Date Check Number Employee No Employee Name Amount 11/24/2025 0 1002 4,668.18
11/24/2025 0 1006 3,608.07
11/24/2025 0 1008 2,283.83
11/24/2025 0 1017 2,077.41
11/24/2025 0 1018 1,579.05
11/24/2025 0 1020 894.35
11/24/2025 0 2005 3,081.24
11/24/2025 0 2006 3,407.15
11/24/2025 0 2010 924.20
11/24/2025 0 2012 2,335.50
11/24/2025 0 2020 4,656.15
11/24/2025 0 2028 2,244.12
11/24/2025 0 2030 2,767.39
11/24/2025 0 2031 3,212.04
11/24/2025 0 2033 2,326.14
11/24/2025 0 2034 1,967.41
11/24/2025 0 2035 2,235.86
11/24/2025 0 2037 2,016.54
11/24/2025 0 2040 1,237.18
11/24/2025 0 2041 1,211.03
11/24/2025 0 3002 134.79
11/24/2025 0 3010 124.06
11/24/2025 0 3013 126.21
11/24/2025 0 3014 126.21
11/24/2025 0 3015 126.21
Total Employees: 25 Total: 49,370.32
PR- ACH Check Register (11/24/2025 - 10:30 AM) Page 1
User:

Printed: 11/19/2025 - 2:02PM
tina
Computer Check Proof List by Vendor
Accounts Payable
Batch: 00018.11.2025
Invoice No Description Amount Pmt Date Acct Number Reference Vendor: 103400 ANSWERNET Check Sequence: 1 ACH Enabled: False 112-94107 ANSWERING SERVICES: 10/20 THROUGH 12/15/25 46.11 11/18/2025 5050-700-7810 112-94107 ANSWERING SERVICES: 10/20 THROUGH 12/15/25 23.05 11/18/2025 1010-110-7810 112-94107 ANSWERING SERVICES: 10/20 THROUGH 12/15/25 46.11 11/18/2025 5071-800-7810 Check Total: 115.27
Vendor: 103450 AQUA-AEROBIC SYSTEMS INC Check Sequence: 2 ACH Enabled: False 1049842 AERATOR MOTOR & DIFFUSION HEAD FOR WWTP 4,416.18 11/18/2025 5050-700-7420 Check Total: 4,416.18
Vendor: 110900 AT&T MOBILITY Check Sequence: 3 ACH Enabled: False X10242025 IPAD CONNECTIVITY: 09/17 THRU 10/16/25 44.73 11/18/2025 1010-110-7811 Check Total: 44.73
Vendor: 1001035 DEBORAH BABB Check Sequence: 4 ACH Enabled: False 10182025 COMMUNITY CENTER DEPOSIT RETURN FOR RENTAL DATE 10/18/25 150.00 11/18/2025 1010-000-2510 Check Total: 150.00
Vendor: 104894 BADAWI & ASSOCIATES Check Sequence: 5 ACH Enabled: False 2016 AUDIT BILLING - FINAL 10% 3,439.50 11/18/2025 1010-110-7192 Check Total: 3,439.50
Vendor: 105600 BAY ALARM COMPANY Check Sequence: 6 ACH Enabled: False 22568450 WWTP SECURITY: 12/01/25 THRU 02/28/26 202.50 11/18/2025 5050-700-7730 22584493 MUSEUM ALARM MONITORING: 12/01/25 THRU 02/28/26 155.61 11/18/2025 1010-550-7730 22591850 PW BUILDING CAMERA SYSTEM: 12/01 THROUGH 12/31/25 251.73 11/18/2025 5050-700-7730 AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 1 Invoice No Description Amount Pmt Date Acct Number Reference 22591850 PW BUILDING CAMERA SYSTEM: 12/01 THROUGH 12/31/25 251.73 11/18/2025 5070-800-7730 22591850 PW BUILDING CAMERA SYSTEM: 12/01 THROUGH 12/31/25 251.73 11/18/2025 5071-800-7730 22591850 PW BUILDING CAMERA SYSTEM: 12/01 THROUGH 12/31/25 251.73 11/18/2025 5072-800-7730 Check Total: 1,365.03
Vendor: 105610 BAY CITY ELECTRIC WORKS Check Sequence: 7 ACH Enabled: False W320681 WELL #303: GENERATOR MAINTENANCE 1,707.68 11/18/2025 5071-800-7420 W320703 WWTP BAKER STREET: GENERATOR MAINTENANCE 1,746.13 11/18/2025 5050-700-7420 Check Total: 3,453.81
Vendor: 106401 BLUE SHIELD OF CALIFORNIA Check Sequence: 8 ACH Enabled: False 253170007487 DECEMBER INSURANCE PREMIUM 1,264.71 11/18/2025 1010-410-7120 253170007487 DECEMBER INSURANCE PREMIUM 265.94 11/18/2025 1010-560-7120 253170007487 DECEMBER INSURANCE PREMIUM 255.88 11/18/2025 5072-800-7120 253170007487 DECEMBER INSURANCE PREMIUM 664.85 11/18/2025 1010-580-7120 253170007487 DECEMBER INSURANCE PREMIUM 208.11 11/18/2025 2010-210-7120 253170007487 DECEMBER INSURANCE PREMIUM 2,004.22 11/18/2025 5050-700-7120 253170007487 DECEMBER INSURANCE PREMIUM 303.45 11/18/2025 2210-260-7120 253170007487 DECEMBER INSURANCE PREMIUM 596.84 11/18/2025 1010-110-7120 253170007487 DECEMBER INSURANCE PREMIUM 1,801.22 11/18/2025 5071-800-7120 253170007487 DECEMBER INSURANCE PREMIUM 930.79 11/18/2025 1010-310-7120 253170007487 DECEMBER INSURANCE PREMIUM 644.73 11/18/2025 5070-800-7120 253170007487 DECEMBER INSURANCE PREMIUM 170.49 11/18/2025 5090-110-7120 253170007487 DECEMBER INSURANCE PREMIUM 53.19 11/18/2025 1010-550-7120 Check Total: 9,164.42
Vendor: 1001043 DANIELA CASILLAS Check Sequence: 9 ACH Enabled: False 10122025 DEPOSIT REFUND - BEARD PARK RENTAL DATE 10/12/2025 50.00 11/18/2025 1010-000-2510 Check Total: 50.00
Vendor: 144410 CHARTER COMMUNICATIONS (7173) Check Sequence: 10 ACH Enabled: False 170080301110125 COMMUNITY CENTER INTERNET: 11/04 THRU 12/03/25 320.00 11/18/2025 1010-560-7811 Check Total: 320.00
AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 2 Invoice No Description Amount Pmt Date Acct Number Reference Vendor: 112781 COLUMBIA BANK Check Sequence: 11 ACH Enabled: False 10312025 INTEREST ONLY - WATER LOAN PAYMENT 16,096.96 11/18/2025 5075-800-9110 10312025 INTEREST ONLY - WATER LOAN PAYMENT 2,620.44 11/18/2025 5076-800-9110 Check Total: 18,717.40
Vendor: 200760 CSG CONSULTANTS, INC. Check Sequence: 12 ACH Enabled: False 63473 BUILDING INSPECTIONS: 09/27 THROUGH 10/31/2025 5,616.00 11/18/2025 1010-410-7190 Check Total: 5,616.00
Vendor: UB*01993 VERNON CURZON Check Sequence: 13 ACH Enabled: False Refund Check 011270-000, 13317 FOUNTAIN DR 13.53 11/07/2025 5070-000-2010 Check Total: 13.53
Vendor: 117630 EYEMED Check Sequence: 14 ACH Enabled: False 167045518 NOVEMBER INSURANCE PREMIUM 6.01 11/18/2025 1010-560-7120 167045518 NOVEMBER INSURANCE PREMIUM 18.08 11/18/2025 5070-800-7120 167045518 NOVEMBER INSURANCE PREMIUM 12.94 11/18/2025 1010-410-7120 167045518 NOVEMBER INSURANCE PREMIUM 0.58 11/18/2025 1010-550-7120 167045518 NOVEMBER INSURANCE PREMIUM 7.74 11/18/2025 5072-800-7120 167045518 NOVEMBER INSURANCE PREMIUM 6.01 11/18/2025 2210-260-7120 167045518 NOVEMBER INSURANCE PREMIUM 1.68 11/18/2025 2010-210-7120 167045518 NOVEMBER INSURANCE PREMIUM 17.85 11/18/2025 1010-110-7120 167045518 NOVEMBER INSURANCE PREMIUM 73.58 11/18/2025 5071-800-7120 167045518 NOVEMBER INSURANCE PREMIUM 29.92 11/18/2025 1010-310-7120 167045518 NOVEMBER INSURANCE PREMIUM 1.20 11/18/2025 1010-430-7120 167045518 NOVEMBER INSURANCE PREMIUM 90.64 11/18/2025 5050-700-7120 167045518 NOVEMBER INSURANCE PREMIUM 2.87 11/18/2025 5090-110-7120 167045518 NOVEMBER INSURANCE PREMIUM 16.28 11/18/2025 1010-580-7120 167045518 NOVEMBER INSURANCE PREMIUM 2.88 11/18/2025 1010-210-7120 Check Total: 288.26
Vendor: 118400 FERGUSON WATERWORKS #1423 Check Sequence: 15 ACH Enabled: False 0048049 WATER DEPARTMENT - PVC STOCK FOR LEAK REPAIRS 77.63 11/18/2025 5072-800-7510 0048049 WATER DEPARTMENT - PVC STOCK FOR LEAK REPAIRS 155.26 11/18/2025 5070-800-7510 AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 3 Invoice No Description Amount Pmt Date Acct Number Reference 0048049 WATER DEPARTMENT - PVC STOCK FOR LEAK REPAIRS 543.36 11/18/2025 5071-800-7510 Check Total: 776.25
Vendor: 1001045 VANESSA FIGUEROA Check Sequence: 16 ACH Enabled: False 10112025 BEARD PARK DEPOSIT REFUND - RENTAL DATE 10/11/2025 50.00 11/18/2025 1010-000-2510 Check Total: 50.00
Vendor: 118800 FINANCIAL CREDIT NETWORK, INC Check Sequence: 17 ACH Enabled: False 10232025 COLLECTION FEES AUGUST & SEPTEMBER 174.24 11/18/2025 5071-800-7190 10232025 COLLECTION FEES AUGUST & SEPTEMBER 87.11 11/18/2025 5072-800-7190 10232025 COLLECTION FEES AUGUST & SEPTEMBER 435.58 11/18/2025 5050-700-7190 10232025 COLLECTION FEES AUGUST & SEPTEMBER 174.24 11/18/2025 5070-800-7190 Check Total: 871.17
Vendor: 121000 GILTON SOLID WASTE MANAGEMENT, INC. Check Sequence: 18 ACH Enabled: False WATESS-0091 STREET SWEEPING SERVICES: OCTOBER 2025 2,500.96 11/18/2025 1010-310-7190 Check Total: 2,500.96
Vendor: 122560 GUARDIAN Check Sequence: 19 ACH Enabled: False 11122025 DECEMBER INSURANCE PREMIUM 13.70 11/18/2025 1010-410-7120 11122025 DECEMBER INSURANCE PREMIUM 1.82 11/18/2025 2010-210-7120 11122025 DECEMBER INSURANCE PREMIUM 100.34 11/18/2025 5071-800-7120 11122025 DECEMBER INSURANCE PREMIUM 6.10 11/18/2025 5072-800-7120 11122025 DECEMBER INSURANCE PREMIUM 47.57 11/18/2025 1010-110-7120 11122025 DECEMBER INSURANCE PREMIUM 114.56 11/18/2025 5050-700-7120 11122025 DECEMBER INSURANCE PREMIUM 16.68 11/18/2025 1010-550-7120 11122025 DECEMBER INSURANCE PREMIUM 10.09 11/18/2025 1010-580-7120 11122025 DECEMBER INSURANCE PREMIUM 36.52 11/18/2025 1010-560-7120 11122025 DECEMBER INSURANCE PREMIUM 1.43 11/18/2025 1010-430-7120 11122025 DECEMBER INSURANCE PREMIUM 3.65 11/18/2025 2210-260-7120 11122025 DECEMBER INSURANCE PREMIUM 17.00 11/18/2025 5070-800-7120 11122025 DECEMBER INSURANCE PREMIUM 34.09 11/18/2025 1010-210-7120 11122025 DECEMBER INSURANCE PREMIUM 17.39 11/18/2025 1010-310-7120 11122025 DECEMBER INSURANCE PREMIUM 1.21 11/18/2025 5090-110-7120 AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 4 Invoice No Description Amount Pmt Date Acct Number Reference Check Total: 422.15
Vendor: 122525 HACH COMPANY Check Sequence: 20 ACH Enabled: False 14735384 MAINTENANCE AGREEMENT - 10/24/25 THROUGH 10/23/26 290.30 11/18/2025 5072-800-7190 14735384 MAINTENANCE AGREEMENT - 10/24/25 THROUGH 10/23/26 2,032.10 11/18/2025 5071-800-7190 14735384 MAINTENANCE AGREEMENT - 10/24/25 THROUGH 10/23/26 964.00 11/18/2025 5050-700-7190 14735384 MAINTENANCE AGREEMENT - 10/24/25 THROUGH 10/23/26 580.60 11/18/2025 5070-800-7190 Check Total: 3,867.00
Vendor: 123700 HENSLEY'S PAVING & GENERAL ENGINEERING, INC. Check Sequence: 21 ACH Enabled: False 002 G STREET IMPROVEMENTS - CDBG 419,440.49 11/18/2025 2080-460-8290 Check Total: 419,440.49
Vendor: 124558 HUMANA INSURANCE CO Check Sequence: 22 ACH Enabled: False 581700780 DECEMBER PREMIUMS 95.73 11/18/2025 1010-580-7120 581700780 DECEMBER PREMIUMS 127.52 11/18/2025 5070-800-7120 581700780 DECEMBER PREMIUMS 7.15 11/18/2025 1010-430-7120 581700780 DECEMBER PREMIUMS 35.75 11/18/2025 2210-260-7120 581700780 DECEMBER PREMIUMS 52.61 11/18/2025 5072-800-7120 581700780 DECEMBER PREMIUMS 19.89 11/18/2025 1010-210-7120 581700780 DECEMBER PREMIUMS 590.79 11/18/2025 5050-700-7120 581700780 DECEMBER PREMIUMS 67.48 11/18/2025 1010-410-7120 581700780 DECEMBER PREMIUMS 525.05 11/18/2025 5071-800-7120 581700780 DECEMBER PREMIUMS 35.75 11/18/2025 1010-560-7120 581700780 DECEMBER PREMIUMS 122.00 11/18/2025 1010-110-7120 581700780 DECEMBER PREMIUMS 193.14 11/18/2025 1010-310-7120 581700780 DECEMBER PREMIUMS 19.91 11/18/2025 5090-110-7120 581700780 DECEMBER PREMIUMS 7.93 11/18/2025 2010-210-7120 581700780 DECEMBER PREMIUMS 3.98 11/18/2025 1010-550-7120 Check Total: 1,904.68
Vendor: 125675 INDUSTRIAL ELECTRIAL CO. INC. Check Sequence: 23 ACH Enabled: False PI-087589 AREATOR MOTOR DIAGNOSTICS 195.00 11/18/2025 5050-700-7420 AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 5 Invoice No Description Amount Pmt Date Acct Number Reference Check Total: 195.00
Vendor: 126570 J.B. ANDERSON LAND USE PLANNING Check Sequence: 24 ACH Enabled: False 556 FAHMY SUBDIVISION - OCTOBER 2025 8,832.50 11/18/2025 1010-430-7195 556* GENERAL PLANNING - OCTOBER 2025 4,496.20 11/18/2025 1010-430-7195 557 HOUSING ELEMENT - OCTOBER 2025 1,195.49 11/18/2025 1010-430-7197 Check Total: 14,524.19
Vendor: 129000 KRAUSE, PATRICIA Check Sequence: 25 ACH Enabled: False 11132025 MILEAGE REIMBURSEMENT: OCTOBER & NOVEMBER 2025 172.83 11/18/2025 1010-110-7750 Check Total: 172.83
Vendor: 138700 LINDE GAS & EQUIPMENT INC. Check Sequence: 26 ACH Enabled: False 52758935 CYLINDER RENTAL: 09/20 THROUGH 10/20/2025 54.91 11/18/2025 1010-310-7510 Check Total: 54.91
Vendor: 131900 MID-VALLEY PUBLICATIONS Check Sequence: 27 ACH Enabled: False 357177 PUBLIC HEARING - FAHMY ANNEXATION 207.20 11/18/2025 1010-110-7710 Check Total: 207.20
Vendor: 132700 MODESTO IRRIGATION DISTRICT Check Sequence: 28 ACH Enabled: False 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 53.00 11/18/2025 1010-110-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 96.18 11/18/2025 1010-550-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 1,521.13 11/18/2025 2210-260-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 577.53 11/18/2025 2230-260-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 496.02 11/18/2025 1010-310-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 65.64 11/18/2025 2240-270-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 824.94 11/18/2025 5050-700-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 648.14 11/18/2025 1010-580-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 745.31 11/18/2025 1010-210-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 12,197.27 11/18/2025 5071-800-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 2,343.46 11/18/2025 5070-800-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 6,931.16 11/18/2025 5050-700-7820 11042025 SERVICE PERIOD: 10/02 THROUGH 11/04/2025 522.42 11/18/2025 1010-560-7820 AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 6 Invoice No Description Amount Pmt Date Acct Number Reference Check Total: 27,022.20
Vendor: 134500 NBS GOVERNMENT FINANCE GROUP Check Sequence: 29 ACH Enabled: False 202511-3633 CFD 2019-1: ANNEXATION #2 2,570.00 11/18/2025 1010-430-7190 Check Total: 2,570.00
Vendor: 1001044 ISABEL NUNO Check Sequence: 30 ACH Enabled: False 10042025 BEARD PARK DEPOSIT REFUND - RENTAL DATE 10/04/2025 50.00 11/18/2025 1010-000-2510 Check Total: 50.00
Vendor: 136625 PIONEER MARKET WATERFORD Check Sequence: 31 ACH Enabled: False 11012025 BREAKROOM SUPPLIES & WATER 15.74 11/18/2025 5071-800-7510 11012025 BREAKROOM SUPPLIES & WATER 22.44 11/18/2025 1010-580-7510 11012025 BREAKROOM SUPPLIES & WATER 22.44 11/18/2025 1010-310-7510 11012025 BREAKROOM SUPPLIES & WATER 4.48 11/18/2025 5070-800-7510 11012025 BREAKROOM SUPPLIES & WATER 2.24 11/18/2025 5072-800-7510 11012025 BREAKROOM SUPPLIES & WATER 25.90 11/18/2025 5050-700-7510 11012025 BREAKROOM SUPPLIES & WATER 36.26 11/18/2025 1010-110-7510 Check Total: 129.50
Vendor: 139055 PROCLEAN SUPPLY Check Sequence: 32 ACH Enabled: False 610471 JANITORIAL SUPPLIES 34.98 11/18/2025 1010-560-7510 610471 JANITORIAL SUPPLIES 108.90 11/18/2025 1010-580-7510 610471 JANITORIAL SUPPLIES 10.89 11/18/2025 5072-800-7510 610471 JANITORIAL SUPPLIES 127.98 11/18/2025 1010-110-7510 610471 JANITORIAL SUPPLIES 76.21 11/18/2025 5071-800-7510 610471 JANITORIAL SUPPLIES 21.78 11/18/2025 5070-800-7510 610471 JANITORIAL SUPPLIES 108.90 11/18/2025 1010-310-7510 610471 JANITORIAL SUPPLIES 34.98 11/18/2025 1010-210-7510 Check Total: 524.62
Vendor: 209939 DYLAN SNAPP Check Sequence: 33 ACH Enabled: False 415 SECURITY PATROL: MOVEMBER 2025 175.00 11/18/2025 5050-700-7300 415 SECURITY PATROL: MOVEMBER 2025 100.00 11/18/2025 5070-800-7300 AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 7 Invoice No Description Amount Pmt Date Acct Number Reference 415 SECURITY PATROL: MOVEMBER 2025 50.00 11/18/2025 5072-800-7300 415 SECURITY PATROL: MOVEMBER 2025 175.00 11/18/2025 5071-800-7300 Check Total: 500.00
Vendor: 145750 STANISLAUS ANIMAL SERVICES AGENCY Check Sequence: 34 ACH Enabled: False R25-566101 F/Y 2025-2025: 2ND QUARTER OPERATIONAL COSTS 12,433.00 11/18/2025 1010-410-7160 Check Total: 12,433.00
Vendor: 145900 STANISLAUS COUNTY TAX COLLECTOR Check Sequence: 35 ACH Enabled: False 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 320.56 11/18/2025 5070-800-7730 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 2,179.82 11/18/2025 5072-800-7730 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 429.78 11/18/2025 5071-800-7730 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 288.80 11/18/2025 1010-550-7730 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 742.80 11/18/2025 1010-110-7730 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 6,959.16 11/18/2025 1010-580-7730 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 1,063.94 11/18/2025 1010-310-7730 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 991.54 11/18/2025 1010-210-7730 11192025 PROPERTY TAXES: 07/01/25 THROUGH 06/30/26 662.26 11/18/2025 5050-700-7730 Check Total: 13,638.66
Vendor: UB*01994 STANISLAUS PROPERTY MGMNT Check Sequence: 36 ACH Enabled: False Refund Check 012132-002, 290 TIM BELL RD # B 103.27 11/07/2025 5071-000-2010 Check Total: 103.27
Vendor: 149532 TENNYSON ELECTRIC, LLC Check Sequence: 37 ACH Enabled: False 4 YOSEMITE & PASADENA SIGNALIZATION IMPROVEMENTS 31,818.35 11/18/2025 6310-310-8293 5 YOSEMITE & PASADENA SIGNALIZATION IMPROVEMENTS 38,856.26 11/18/2025 6310-310-8293 Check Total: 70,674.61
Vendor: 149533 TESCO CONTROLS, INC. Check Sequence: 38 ACH Enabled: False 0087035-IN BAKER STREET - REPLACE RELAY PUMP #2 2,936.00 11/18/2025 5050-700-7420 Check Total: 2,936.00
Vendor: 152772 UMPQUA BANK COMMERCIAL CARD OPS Check Sequence: 39 ACH Enabled: False AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 8 Invoice No Description Amount Pmt Date Acct Number Reference 10312025 SEE AP FILE FOR INVOICE EXPLANATION 55.00 11/18/2025 1010-110-7740 10312025 SEE AP FILE FOR INVOICE EXPLANATION 147.32 11/18/2025 1010-110-7540 10312025 SEE AP FILE FOR INVOICE EXPLANATION 1,022.15 11/18/2025 5071-800-7510 10312025 SEE AP FILE FOR INVOICE EXPLANATION 108.86 11/18/2025 2290-600-7661 10312025 SEE AP FILE FOR INVOICE EXPLANATION 210.33 11/18/2025 1010-580-7510 10312025 SEE AP FILE FOR INVOICE EXPLANATION 61.98 11/18/2025 1010-110-7516 10312025 SEE AP FILE FOR INVOICE EXPLANATION 67.88 11/18/2025 2290-600-7510 10312025 SEE AP FILE FOR INVOICE EXPLANATION 330.92 11/18/2025 1010-110-7515 10312025 SEE AP FILE FOR INVOICE EXPLANATION 265.76 11/18/2025 1010-110-7510 10312025 SEE AP FILE FOR INVOICE EXPLANATION 2,433.65 11/18/2025 1010-310-7510 10312025 SEE AP FILE FOR INVOICE EXPLANATION 146.03 11/18/2025 5072-800-7510 10312025 SEE AP FILE FOR INVOICE EXPLANATION 222.57 11/18/2025 5071-800-7410 10312025 SEE AP FILE FOR INVOICE EXPLANATION 696.05 11/18/2025 1010-110-7730 10312025 SEE AP FILE FOR INVOICE EXPLANATION 83.98 11/18/2025 1010-110-7732 10312025 SEE AP FILE FOR INVOICE EXPLANATION 292.06 11/18/2025 5070-800-7510 10312025 SEE AP FILE FOR INVOICE EXPLANATION 155.67 11/18/2025 5050-700-7550 10312025 SEE AP FILE FOR INVOICE EXPLANATION 1,507.01 11/18/2025 1010-130-7750 Check Total: 7,807.22
Vendor: 101225 UNITED SITE SERVICES COMPANY (A & A PORTABLES) Check Sequence: 40 ACH Enabled: False 114-14152755 TRUCK OR TREAT BATHROOM FACILITIES 506.05 11/18/2025 1010-110-7731 Check Total: 506.05
Vendor: 131501 USA BLUEBOOK Check Sequence: 41 ACH Enabled: False INV00880204 WATER DEPARTMENT - OPERATING SUPPLIES 219.89 11/18/2025 5072-800-7510 INV00880204 WATER DEPARTMENT - OPERATING SUPPLIES 439.78 11/18/2025 5070-800-7510 INV00880204 WATER DEPARTMENT - OPERATING SUPPLIES 1,539.22 11/18/2025 5071-800-7510 INV00880501 WATER DEPARTMENT - OPERATING SUPPLIES 60.16 11/18/2025 5071-800-7510 INV00880501 WATER DEPARTMENT - OPERATING SUPPLIES 17.20 11/18/2025 5070-800-7510 INV00880501 WATER DEPARTMENT - OPERATING SUPPLIES 8.60 11/18/2025 5072-800-7510 INV00880546 WATER DEPARTMENT - OPERATING SUPPLIES 161.53 11/18/2025 5071-800-7510 INV00880546 WATER DEPARTMENT - OPERATING SUPPLIES 23.07 11/18/2025 5072-800-7510 INV00880546 WATER DEPARTMENT - OPERATING SUPPLIES 46.14 11/18/2025 5070-800-7510 INV00883989 WATER DEPARTMENT - OPERATING SUPPLIES 0.72 11/18/2025 5070-800-7510 AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 9 Invoice No Description Amount Pmt Date Acct Number Reference INV00883989 WATER DEPARTMENT - OPERATING SUPPLIES 0.36 11/18/2025 5072-800-7510 INV00883989 WATER DEPARTMENT - OPERATING SUPPLIES 2.50 11/18/2025 5071-800-7510 Check Total: 2,519.17
Vendor: 154141 VERIZON Check Sequence: 42 ACH Enabled: False 6128011006 SERVICE PERIOD: 10/09 THROUGH 11/108/2025 62.61 11/18/2025 5071-800-7810 6128011006 SERVICE PERIOD: 10/09 THROUGH 11/108/2025 56.14 11/18/2025 1010-110-7810 6128011006 SERVICE PERIOD: 10/09 THROUGH 11/108/2025 8.95 11/18/2025 5072-800-7810 6128011006 SERVICE PERIOD: 10/09 THROUGH 11/108/2025 89.46 11/18/2025 5050-700-7810 6128011006 SERVICE PERIOD: 10/09 THROUGH 11/108/2025 17.90 11/18/2025 5070-800-7810 Check Total: 235.06
Total for Check Run:

Total of Number of Checks:
633,790.32
42 AP-Computer Check Proof List by Vendor (11/19/2025 - 2:02 PM) Page 10 User:

Printed: 11/24/2025 - 11:34AM
trish
Computer Check Proof List by Vendor
Accounts Payable
Batch: 00024.11.2025
Invoice No Description Amount Pmt Date Acct Number Reference Vendor: 105201 BANK OF THE WEST (IRS TAXES) Check Sequence: 1 ACH Enabled: True PR Batch 00024.11.2025 Medicare Employee Portion 1,090.15 11/24/2025 1010-000-2240 PR Batch 00024.11.2025 Medicare Employee Portion PR Batch 00024.11.2025 FICA Employer Portion 283.39 11/24/2025 1010-000-2240 PR Batch 00024.11.2025 FICA Employer Portion PR Batch 00024.11.2025 Federal Income Tax 7,411.58 11/24/2025 1010-000-2220 PR Batch 00024.11.2025 Federal Income Tax PR Batch 00024.11.2025 Medicare Employer Portion 1,016.90 11/24/2025 1010-000-2240 PR Batch 00024.11.2025 Medicare Employer Portion PR Batch 00024.11.2025 FICA Employee Portion 283.39 11/24/2025 1010-000-2240 PR Batch 00024.11.2025 FICA Employee Portion Check Total: 10,085.41
Vendor: 108350 CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT Check Sequence: 2 ACH Enabled: True PR Batch 00024.11.2025 State Income Tax 2,641.97 11/24/2025 1010-000-2230 PR Batch 00024.11.2025 State Income Tax PR Batch 00024.11.2025 STATE UNEMPLOYMENT 10.92 11/24/2025 1010-000-2260 PR Batch 00024.11.2025 STATE UNEMPLOYMENT PR Batch 00024.11.2025 EDD TRAINING TAX 0.70 11/24/2025 1010-000-2260 PR Batch 00024.11.2025 EDD TRAINING TAX PR Batch 00024.11.2025 CALIFORNIA SDI 841.55 11/24/2025 1010-000-2260 PR Batch 00024.11.2025 CALIFORNIA SDI Check Total: 3,495.14
Vendor: 154101 MISSION SQUARE - 303352 Check Sequence: 3 ACH Enabled: False PR Batch 00024.11.2025 457 LOAN REPAY 385.27 11/24/2025 1010-000-2280 PR Batch 00024.11.2025 457 LOAN REPAY PR Batch 00024.11.2025 DEFERRED COMP-457 1,426.34 11/24/2025 1010-000-2280 PR Batch 00024.11.2025 DEFERRED COMP-457 PR Batch 00024.11.2025 DEFERRED COM-457 - EMPLOYER PD 238.18 11/24/2025 1010-000-2285 PR Batch 00024.11.2025 DEFERRED COM-457 - EM Check Total: 2,049.79
Vendor: 139400 PUBLIC EMPLOYEE RETIREMENT SYSTEM Check Sequence: 4 ACH Enabled: True PR Batch 00024.11.2025 EMPLOYEE PERS CONTRIBUTION 4,581.43 11/24/2025 1010-000-2270 PR Batch 00024.11.2025 EMPLOYEE PERS CONTR PR Batch 00024.11.2025 EMPLOYER PAID PERS 6,184.19 11/24/2025 1010-000-2270 PR Batch 00024.11.2025 EMPLOYER PAID PERS Check Total: 10,765.62
AP-Computer Check Proof List by Vendor (11/24/2025 - 11:34 AM) Page 1 Invoice No Description Amount Pmt Date Acct Number Reference Vendor: 148050 STATIONARY ENGINEERS LOCAL 39 Check Sequence: 5 ACH Enabled: False PR Batch 00024.11.2025 UNION DUES 274.20 11/24/2025 1010-000-2290 PR Batch 00024.11.2025 UNION DUES Check Total: 274.20
Total for Check Run:

Total of Number of Checks:
26,670.16
5 AP-Computer Check Proof List by Vendor (11/24/2025 - 11:34 AM) Page 2 Consent Calendar 3c
December 4, 2025
Patricia Krause, City Clerk / Administrative Services Director City Council Staff Report
Motion: Approving Minutes of the Regular City Council Meeting held November 20, 2025.

SUMMARY:

Consider approving minutes from the November 20, 2025 Regular City Council meeting.

ANALYSIS:

Approve Minutes of the Regular City Council Meeting held on November 20, 2025.

FISCAL IMPACT:

N/A
ENVIRONMENTAL REVIEW:

N/A
ALTERNATIVES:

1. Direct the City Clerk to make amendments to the minutes and bring them back for approval at a future City Council meeting.

2. Take no action.

ATTACHMENTS:
• City Council Regular Meeting Minutes of November 20, 2025.

MINUTES

WATERFORD CITY COUNCIL - REGULAR

MEETING WATERFORD CITY HALL, CITY
COUNCIL CHAMBERS 101 “E” STREET,

WATERFORD, CA
MEETING CALLED TO ORDER BY MAYOR GOEKEN AT: 6:30 pm
FLAG SALUTE: Mayor Goeken
INVOCATION: Pastor Dave McGaffee, Assembly of God Church ROLL CALL PRESENT:

Mayor Goeken
Vice Mayor Hilton
Councilmember Harris
Councilmember Gutierrez
Councilmember Talbott
ABSENT: None
STAFF PRESENT:

Michael Pitcock, City Manager
Patricia Krause, City Clerk / Administrative Services Director Lonnie Statzer, Public Works Director
Corbett Browning, City Attorney
Chief David Mullins
ADOPTION OF AGENDA:

ACTION: Moving and seconded by motion (VM Hilton / CM Harris / 5-0) to adopt the Agenda.

AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.

WATERFORD CITY COUNCIL REGULAR MEETING – November 20, 2025 - 6:30 PM CONFLICT OF INTEREST DECLARATION:

None.

1. 2.

None.

3. 3a: MOTION: Waiving all Readings of Ordinances and Resolutions, except by title. 3b: RESOLUTION: Adopting Resolution 2025-60, Approving the Warrant Register in the Amount of $706,162.24 for the Period of October 29 to November 10, 2025. 3c: MOTION: Approving Minutes of the Regular City Council Meeting held November 6, 2025. 3d: MOTION: Accept Compliance with Senate Bill 165 – Local Agency Special Tax and Bond Accountability Act for Fiscal Year 2025-2026.

ACTION: Moving and seconded by motion (VM Hilton/ CM Talbott/ 5-0) to adopt the Consent Calendar.

AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.

4. 4a: ORDINANCE: 2nd Reading and Adoption of Ordinance 2025-04 Amending Waterford Municipal Code Title 15, Entitled “Building and Construction,” Chapter 15.04 Entitled “California Building Codes,” by Amending Sections 15.04.010 and 15.04.020. (Pitcock) Public Hearing Opened: 6:33 pm
Public Hearing Closed: 6:33 pm
ACTION: Moving and seconded by motion (CM Talbott / VM Hilton/ 5-0) to approve the 2nd Reading and Adoption of Ordinance 2025-04 Amending Waterford Municipal Code Title 15, Entitled “Building and Construction,” Chapter 15.04 Entitled “California Building Codes,” by Amending Sections 15.04.010 and 15.04.020.

COMMUNICATIONS FROM THE AUDIENCE

PRESENTATION

FINAL READINGS

ADOPTION OF CONSENT CALENDAR

5. 5a: RESOLUTION: Adopting Resolution 2025-61 Approving Planning Commission Recommendation to certify a Mitigated Negative Declaration (SCH No. 2024090068) and associated Mitigation Monitoring and Reporting Plan and authorize staff to file a Notice of Determination in accordance with CEQA Guidelines.

ACTION: Moving and seconded by motion (CM Talbott / VM Hilton/ 5-0) to Adopt Resolution 2025-61 Approving Planning Commission Recommendation to certify a Mitigated Negative Declaration (SCH No. 2024090068) and associated Mitigation Monitoring and Reporting Plan and authorize staff to file a Notice of Determination in accordance with CEQA Guidelines.

AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.

ORDINANCE: First Reading and Introduction of Ordinance 2025-05 Approving Planning Commission Recommendation and Motion to introduce an Ordinance Approving the Prezoning of APN’s 080-003-012, 015, 034, and 040 to RS, Single Family Residential, and APN’s 080-003-049 and 080-003-050 to PC, Planned Community 2022-0001.

Public Hearing Opened: 6:56 pm
Blake Wall, a resident on N. Reinway gave statements about the project affecting the City.

Two more residents spoke about concerns regarding traffic in the project area.

Derek Tedore spoke about water supply and distribution concerns within the City and how the project could impact that.

Public Hearing Closed: 7:07 pm
ACTION: Moving and seconded by motion (CM Talbott / VM Hilton/ 5-0) to approve the First Reading and Introduction of Ordinance 2025-05 Approving Planning Commission Recommendation and Motion to introduce an Ordinance Approving the Prezoning of APN’s 080- 003-012, 015, 034, and 040 to RS, Single Family Residential, and APN’s 080-003-049 and 080- 003-050 to PC, Planned Community 2022-0001.

AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.

RESOLUTION: Adopting Resolution 2025-62 Approving Planning Commission Recommendation and Motion to Adopt a Resolution of Application to Initiate Proceedings for the Reorganization of the Project site.

ACTION: Moving and seconded by motion (CM Talbott / VM Hilton/ 5-0) to Adopt Resolution 2025-62 Approving Planning Commission Recommendation and Motion to Adopt a Resolution of Application to Initiate Proceedings for the Reorganization of the Project site.

PUBLIC HEARINGS
AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.

RESOLUTION: Adopting Resolution 2025-63 Approving Planning Commission Recommendation and Motion to Adopt a Resolution to approve Vesting Tentative Subdivision Map No. 2022-0001 to subdivide 19.21 acres into ninety-eight (98) single family residential lots.(Niskanen) ACTION: Moving and seconded by motion (CM Talbott / VM Hilton/ 5-0) to approve Adopting Resolution 2025-63 Approving Planning Commission Recommendation and Motion to Adopt a Resolution to approve Vesting Tentative Subdivision Map No. 2022-0001 to subdivide 19.21 acres into ninety-eight (98) single family residential lots.

AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.

6. 6a: RESOLUTION: Approving Resolution 2025-64, Accepting Improvements for Project No. 2025-02, “Old Police Substation Demo” and Authorizing the City Engineer to File a Notice of Completion with the Stanislaus County Recorder’s Office. (Statzer) ACTION: Moving and seconded by motion (VM Hilton / CM Talbott/ 5-0) to Approve Resolution 2025-64, Accepting Improvements for Project No. 2025-02, “Old Police Substation Demo” and Authorizing the City Engineer to File a Notice of Completion with the Stanislaus County Recorder’s Office.

AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.
6b: RESOLUTION: Adopting Resolution 2025-65, a Resolution of Intention Declaring the City Council’s Intention to Transition from At-Large to by District Elections and to Initiate Procedures for Establishing and Implementing By-District Elections for City Council Members. (Browning) ACTION: Moving and seconded by motion (VM Hilton/ CM Talbott/ 5-0) to Adopt Resolution 2025-65, a Resolution of Intention Declaring the City Council’s Intention to Transition from AtLarge to by District Elections and to Initiate Procedures for Establishing and Implementing ByDistrict Elections for City Council Members.

GENERAL BUSINESS
AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.

7. 8.
8a: City Project List
8b: My Waterford Request Report

9. 9a: City Staff
Public Works Director Statzer commended staff for the work they did during the severe storm during the week. Mr. Statzer gave an update on the ingoing projects in the City.

City Clerk Krause had no comments.

City Attorney Browning had no comments.

City Manager Pitcock advised the Council that a large tree next to the museum is diseased and will need to be removed.
9b: City Council
Vice Mayor Hilton had no comments.

Councilmember Talbot complimented the Veteran’s Day Celebration and wished everyone a Happy Thanksgiving.

Councilmember Gutierrez stated that she was hosting a river trail clean up day on Saturday at 9am and wished everyone a Happy Thanksgiving.

Councilmember Harris wished everyone a Happy Thanksgiving.

Mayor Goeken wished everyone a Happy Thanksgiving.

10. ACTION: By motion moved and seconded (VM Hilton / CM Harris / 5-0) to adjourn the meeting at 7:34 pm.

ADJOURNMENT / RECESS

STAFF/COUNCIL COMMENTS AND MEETING REPORTS

INFORMATIONAL ITEMS

SUCCESSOR AGENCY TO THE FORMER WATERFORD REDEVELOPMENT AGENCY AYES: Goeken, Gutierrez, Harris, Hilton, Talbott
NAYS: None
ABSENT: None
ABSTAIN: None
Motion passed 5-0.

11. 12. 12.

PASSED AND ADOPTED by the Waterford City Council at a regular meeting held on December 4, 2025, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

CITY OF WATERFORD:
________________________
Charlie Goeken, Mayor
ATTEST:
_________________________
Patricia Krause, CMC, City Clerk

CLOSED SESSION

REPORT OUT OF CLOSED SESSION
Public Hearing Item 4a
December 4, 2025
Mark Niskanen, Planning Manager
City Council Staff Report
Ordinance: Second Reading and Adoption of Ordinance 2025-05, Adopting the Prezoning of APN’s 080-003-012, 015, 034, and 040 to RS, Single Family Residential, and APN’s 080-003-049 and 080-003-050 to PC, Planned Community 2022-0001.

SUMMARY:

On November 20, 2025, the City Council held a noticed Public Hearing to consider Ordinance No. 2025-05, which consists of the prezoning of six (6) parcels to RS, Residential Single Family, and PC, Planned Community. The Project site is located beyond the current city limits, but within the City’s Primary Sphere of Influence, approved by the Stanislaus Local Agency Formation Commission (LAFCo) in 2007. At that time, the Project site was identified as an area potential for annexation into the City of Waterford. On November 20, 2025, the City Council adopted a Resolution authorizing City staff to submit an annexation request to the Stanislaus Local Agency Formation Commission (LAFCo).

ANALYSIS:

Prezone:

Combined with the proposed annexation application is a prezone application. The proposed prezoning designations are consistent with the City’s General Plan and correspond directly with the General Plan land use designations. The map below illustrates the proposed prezoning designations.

Prezoning Designations
As illustrated above, the prezoning designations consist of RS, Residential Single, and PC, Planned Community. Within the Project site, the City anticipates the following development assumptions based on General Plan land use designations and corresponding prezoning designations.

Pre--Zone Designations and Development Assumptions
APN No. Acres 2025 General Plan
Land Use
Designation
Pre-Zone
Designation
Development Capacity*
(# of residential units)
080-003-012 4.93 Low Density
Residential (LD)
RS, Residential
Single
25 080-003-015 1.98 LD RS 10
080-003-034 5.12 LD RS 26
080-003-040 6.15 LD RS 43**
(Space in the Shade Mobile
Home and RV Park
080-003-049 0.95 LD PC 5
080-003-050 19.13 LD PC 98
N/A (right-ofway, MID
Canal)

5.01 - - -
Sub-Total 43.27 - - 207 (164 new units)
Notes:
*Development capacity is based upon average Density per 2025 General Plan LD land use designation:
5 dwelling units per gross acre.
**Represents existing residential units.

The PC zoning designation applies to the portion of the Project site that is being proposed to be subdivided and developed. The PC zoning designation allows the Applicant to propose deviations from the development standards typically required of the RS zone district. The proposed development standards for the portion prezoned as PC is depicted below and compared to the development standards required by the City’s RS zone district. The Proposed Project will comply with all other development standards required of the RS zone district.

Development Standard RS Zone District Proposed PC
(PC 2022-0001)
Lot Dimensions
Lot Size (Minimum) 6,000 square feet 5,500 square feet
Lot Width (Minimum) Interior - 55 feet
Corner – 65 feet
Interior – 55 feet
Corner – 65 feet
Lot Coverage (Maximum) 40% 60%
Setbacks (Minimum)
Front 15 feet 15 feet
Rear 10 feet 10 feet
Side Interior – 5 feet
Corner – 10 feet
Interior – 5 feet
Corner – 10 feet
As illustrated above, the Proposed Project includes variations of development standards from the RS zone district including lot size, coverage, width, and setbacks. The Applicant is requesting deviated standards for lot size and lot coverage, both of which staff is in support of.

FISCAL IMPACT:

Staff time and resources have been utilized for the processing of this application. However, the applicant has paid the applicable application fees for the Proposed Project. In addition, as residential development occurs within the Project site, the Applicant and/or Project Proponent will be required to annex into the City’s Community Facilities District No. 2019-01 to fund long term maintenance of public facilities. The Proposed Project will also pay the applicable Building Permit Fees at the time of Building Permit issuance.

ODINANCE REVISION PROCESS:

The Introduction and First Reading by title only for Ordinance 2025-05 was heard an approved at the November 20, 2025 City Council meeting. Ordinance 2025-05 is before the City Council for consideration of the Second Reading and Adoption by title only. After adoption, an Ordinance Summary will be published in the Waterford News and will become effective and in full force on and after thirty (30) days of its passage and adoption.

ATTACHMENTS:
4a: City Council Ordinance No. 2025-05 (Rezone)
ORDINANCE 2025-05
ORDINANCE NO. 2025-05

AN ORDINANCE OF THE CITY OF WATERFORD CITY COUNCIL
APPROVING AND ADOPTING THE PREZONING OF 43.27-ACRES AS TO ASSESSOR PARCEL NUMBERS 080-003-050, 012, 015, 034, 040, AND 049 WHEREAS, the City of Waterford is authorized by Title 17 Chapter 17.77, to initiate a prezone whenever public necessity and convenience and the general welfare require such amendment; and
WHEREAS, the City of Waterford Planning Commission conducted a Public Hearing on October 21, 2025 to consider the proposed prezone.

WHEREAS, the City Council for the City of Waterford has made the following findings for adoption.

1. An application has been received from California Land Development (331 Santa Rosa Drive, Los Gatos, CA 95032) with a proposal to annex and prezone approximately 43.27± acres on property assigned the following assessor parcel number: 080-003-012, 015, 034, 040, 049, and 050; and,

2. The project site is currently under the zoning regulation of Stanislaus County and has a General Plan Land Use Designation of Low Density Residential (LD); and

3. The applicant is proposing to rezone the Subject Properties to RS and Planned Community 2022-01 (PC #2022-01); and

4. The Planning Commission held a noticed public hearing on October 21, 2025, and by a vote of 3-0, recommended to the City Council approval of the Prezone; and,

5. Notice of the public hearing on the proposed Prezone was published in the Waterford News, a newspaper of general circulation, on November 4, 2025; and

6. Notices of the public hearing on the proposed Prezone were mailed to all property owners within 300-feet of the property, according to the most recent assessor’s roll, on November 4, 2025; and

7. The City finds that pursuant to the California Environmental Quality Act (CEQA), the Lead Agency (Waterford) has prepared an Initial Study and concludes that the proposed project is within the scope of the previously certified City of Waterford Vision 2025 General Plan Environmental Impact Report, and in accordance with Section 15074 of the CEQA Guidelines, a Mitigated Negative Declaration has been prepared and considered.

WHEREAS, a public hearing was held on November 20, 2025 and all comments were heard and considered by the City Council.

ORDINANCE 2025-05

THE CITY COUNCIL OF THE CITY OF WATERFORD, COUNTY OF STANISLAUS, STATE OF CALIFORNIA, DOES ORDAIN AS FOLLOWS:

SECTION 1. ZONING MAP. The Zoning Map of the City of Waterford is hereby amended in the area described in Exhibit A attached hereto and by reference incorporated herein.

SECTION 2. FINDINGS. The approval of this ordinance is based on the following findings and determinations:

A. The Planning Commission, on October 21, 2025 held a noticed public hearing and made its written recommendation to the City Council to approve the rezoning to RS and Planned Community 2022-01 (PC #2022-01), as illustrated in Exhibit A of this Ordinance.

B. The proposed prezoning is consistent with the goals, policies, and implementation measures and Low Density Residential (LD) land use of the City of Waterford Vision 2025 General Plan.

C. A noticed Public Hearing before the City Council was given in the form and manner required by State statute and the Waterford Municipal Code.

SECTION 3. CONDITIONS. The development is subject to the conditions and standards adopted in the City’s Vision 2025 General Plan for development which includes the following terms and conditions:

SECTION 4. The Zoning Map of the City of Waterford, which is attached as part of Title 17 of the City Code, is hereby amended and changed, and from and after the effective date of the Ordinance, the property illustrated in Exhibit A hereof shall be referred to and described on said zoning map of the City of Waterford as RS and Planned Community 2022-01 (PC #2022-01).

A. Approval of this Prezone authorizes the Zoning Map of the City of Waterford to be amended to include APN 080-003-034, 012, 015, and 040 to be zoned RS, Residential Single. APN 080-003-049 and 050 are to be zoned PC, Planned Community (PC 2022-01).

B. Approval of Prezone to Planned Community 2022-01 authorizes a 98-lot singlefamily residential development shall expire within two years from the date of the annexation approval by the Stanislaus Location Agency Formation Commission unless acted upon or the applicant or property owner obtains a time extension for the subdivision map.

SECTION 5. DEVELOPMENT STANDARDS. The following development standards are hereby associated with Planned Community 2022-01 (PC #2022-01):

ORDINANCE 2025-05
Development Standard Planned Community 2022-01
Lot Dimensions
Lot Size (Minimum) 5,000 square feet
Lot Width (Minimum) Interior – 55-feet
Corner – 65-feet
Lot Coverage (Maximum) 60%
Setbacks (Minimum)
Front 15-feet
Rear 10-feet
Side Interior – 5-feet
Corner – 10-feet
For properties prezoned RS, development standards shall adhere to the City of Waterford Zoning Ordinance.

SECTION 6. AUTHORITY. This ordinance is adopted pursuant to the authority granted by the California Constitution and State law.

SECTION 7. If any section, subsection, subdivision, sentence, clause, phrase or portion of this Ordinance, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.

SECTION 8. To the extent the provisions of the Waterford Municipal Code as amended by this Ordinance are substantially the same as the provisions of that Code as they read immediately prior to the adoption of this Ordinance, then those provisions shall be construed as continuations of the earlier provisions and not as new enactments.

SECTION 9. The City Clerk shall certify as to the adoption of this Ordinance and shall cause a summary thereof to be published within fifteen (15) days of adoption and shall post a certified copy of this Ordinance, including the vote for and against same, in the Office of the City Clerk, in accordance with Government Code Section 36933.

SECTION 10. ENACTMENT: Prior to the expiration of fifteen (15) days from the passage and adoption thereof, this ordinance shall be published in a newspaper of general circulation printed and published in the County of Stanislaus, State of California, together with names of the members of the City Council voting for and against the same.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Waterford this 20th day of November 2025, by the following vote:

ORDINANCE 2025-05
AYES:

NOES:

ABSTAIN:

ABSENT:

CITY OF WATERFORD
_______________________
CHARLIE GOEKIN, Mayor
ATTEST: APPROVED AS TO FORM:
__________________________ _________________________
PATRICIA KRAUSE CORBETT J. BROWNING
City Clerk City Attorney
ORDINANCE 2025-05

EXHIBIT A
General Business 6a
December 4th, 2025
Tina Envia, Finance Manager
City Council Staff Report
Resolution: Resolution 2025-67, Declaring the Intent to Modify the City of Waterford Water Rate Beginning March 1, 2026, Approving the Water Draft Tables City of Waterford Rate and Fee Study 2025 Option 1 or Option 2, and Directing Staff to Proceed with the Adoption of the proposed Fees in Conformance with the California Constitution, Article XIIID, Section 6 (Proposition 218)
SUMMARY:

The Council is being asked to declare it’s intent to modify the City of Waterford water rates beginning March 1, 2026, approve the Water Draft Tables City of Waterford Water Rate and Fee Study (2025) and direct staff to proceed with the adoption of the proposed rates under either Option 1 or Option 2 in conformance with California Constitution, Article XIIID, Section 6 (Proposition 218).

ANALYSIS:

Staff presented an initial evaluation of the Water rates at the November 6th, 2025, meeting. At that meeting Council requested that staff bring back two options that spread the rate impact out gradually and bring down the first year rate impact, which at that time was proposed at 45%.The two rate options retain the same Capital Improvement amount of $9,437,500, but they time the improvements differently to impact the rate in each fiscal year. In the updated Water Draft Tables City of Waterford Rate and Fee Study the rates proposed under the two options are as follows:

Proposed % 2026 2027 2028 2029 2030
November 6th Option 45% 25% 8% 5% 5%
Option 1 40% 25% 8% 5% 5%
Option 2 30% 25% 20% 5% 5%
Comparison of Proposed Wate Rate Options (Option 1 and Option 2):

Current
Proposed SFR Monthly Water Bill (Up to 1" Meter; 16 HCF) Mar 1,
2026
Mar 1,
2027
Mar 1,
2028
Mar 1,
2029
Mar 1,
2030
OPTION 1
Avg Revenue Increase 40.0% 25.0% 8.0% 5.0% 5.0%
Single Family Water Bill $64.86 $92.03 $113.20 $120.16 $124.05 $128.13 $ Change $27.17 $21.17 $6.96 $3.89 $4.08
% Change 41.9% 23.0% 6.1% 3.2% 3.3%
OPTION 2
Avg Revenue Increase 30.0% 25.0% 20.0% 5.0% 5.0%
Single Family Water Bill $64.86 $85.58 $105.11 $124.00 $128.10 $132.21 $ Change $20.72 $19.53 $18.89 $4.10 $4.11
% Change 31.9% 22.8% 18.0% 3.3% 3.2%
The Capital Improvement Plan for each option is shown below:

OPTION1 Capital Improvement Plan
No. Project 2026/27 2027/28 2028/29 2029/30 2030/31 5-Year Total Rate Funded Projects
3 Downtown Pipe Replacement 750,000 750,000 750,000 750,000 750,000 3,750,000 7 Misc. Well Improvements-Existing 287,500 287,500 287,500 287,500 287,500 1,437,500 8 New Equipment / Supplies 175,000 175,000 175,000 175,000 175,000 875,000 9 Master Plan and Rate Study 0 0 0 0 262,500 262,500
Total Rate Funded Projects 1,212,500 1,212,500 1,212,500 1,212,500 1,475,000 6,325,000 Debt Funded Projects [1]
2 Well 244 Replacement 375,000 2,125,000 0 0 0 2,500,000 6 Surface Water Project 91,875 520,625 0 0 0 612,500
Total Debt Funded Projects 466,875 2,645,625 0 0 0 3,112,500 Total Capital Projects $1,679,375 $3,858,125 $1,212,500 $1,212,500 $1,475,000 $9,437,500 OPTION 2 Capital Improvement Plan
No. Project 2026/27 2027/28 2028/29 2029/30 2030/31 5-Year Total Rate Funded Projects
3 Downtown Pipe Replacement 750,000 750,000 750,000 750,000 750,000 3,750,000 7 Misc. Well Improvements-Existing 0 359,400 359,400 359,400 359,400 1,437,600 8 New Equipment / Supplies 0 0 291,700 291,700 291,700 875,100 9 Master Plan and Rate Study 0 0 0 0 262,500 262,500
Total Rate Funded Projects 750,000 1,109,400 1,401,100 1,401,100 1,663,600 6,325,200 Debt Funded Projects [1]
2 Well 244 Replacement 375,000 2,125,000 0 0 0 2,500,000 6 Surface Water Project 91,875 520,625 0 0 0 612,500
Total Debt Funded Projects 466,875 2,645,625 0 0 0 3,112,500 Total Capital Projects $1,216,875 $3,755,025 $1,401,100 $1,401,100 $1,663,600 $9,437,700 1 – It is anticipated that the City will take on new debt in 2026/27, with payments beginning in 2028/29.

The total loan amount will be $4.25M, reflecting the full cost of the Surface Water Project of $1.75M plus $2.5M for the Well 244 Replacement. 65% of the project costs for the Surface Water Project will later be repaid by impact fees as new development occurs.

FISCAL IMPACT:

Both proposed options will provide rate structures that will support the operational costs of operating the Water System and sufficient funds to meet the $9,437,700 in capital improvements required for the system over the next 5 years. The two options both include a $4.25 million loan in the financing plan which will pay for the replacement of Well 244 and a Surface Water Project. The difference amongst the plans is the timing of the capital investments.

ENVIRONMENTAL REVIEW:

N/A
ALTERNATIVES:

1. The Council could choose not to declare the intent to modify the water rates. This is not recommended as revenues barely support operational and debt service costs and little to no funding is available to make capital investments and improvements to the existing water system.

2. The Council could direct Staff to return with further options for consideration. This option would further delay the rate implementation plan as outlined in the existing options.

ATTACHMENTS:
• Resolution 2025-67 Resolution of the City Council of the City of Waterford Declaring the Intent to Modify the City of Waterford Water Rate Beginning March 1, 2026, Approve the Water Draft Tables City of Waterford Rate and Fee Study (2025) and Direct Staff to Proceed with the Proposition 218 Rate and Fee Adoption Process.
• Water Draft Tables City of Waterford Water Rate and Fee Study • Proposition 218 Notice
• FAQ’s – Water Rate Change
1 WATER DRAFT TABLES
City of Waterford
Water Rate and Fee Study
November 14, 2025
Table 1: Current Rates (same for all systems)
Water System FY2022
3/4" $34.14
1" $54.30

1.5" $133.66
2" $212.71
3" $465.09
4" $801.99
6" $1,655.86
Use Charge per HCF $1.92
Table 2: Cash Balance of Water Operations
Water System
Beginning Cash Balance
(June 30, 2025)
River Pointe (16,550)
Waterford 378,456
Hickman (43,179)
Total Water Operations 318,727
Table 3: Cash Balance of Capital Reserves
CIP Account
Beginning Cash Balance
(June 30, 2025)
CIP Waterford 444,788
CIP Hickman (44,356)
Total Capital Reserves 400,432
2 Table 4: Estimated Annual Service Charge Revenues, 2024/25

BASE CHARGES
Meter Size No. of Meters
Monthly
Rate
Estimated Annual
Revenue % of Total
Waterford
3/4" 2,052 $34.14 $840,663 66%
1" 3 $54.30 $1,955 0%

1.5" 8 $133.66 $12,831 1%
2" 28 $212.71 $71,471 6%
3" 3 $465.09 $16,743 1%
4" 6 $801.99 $57,743 5%
6" 3 $1,655.86 $59,611 5%
Subtotal Waterford 2,103 $1,061,018 83%
River Pointe
3/4" 323 $34.14 $132,327 10%
Subtotal River Pointe 323
Hickman
3/4" 171 $34.14 $70,055 5%
1" 0 $54.30 $0 0%

1.5" 1 $133.66 $1,604 0%
2" 3 $212.71 $7,658 1%
3" 0 $465.09 $0 0%
4" 1 $801.99 $9,624 1%
6" 0 $1,655.86 $0 0%
Subtotal Hickman 176 $88,941 7%
Total Fixed Revenues 2,602 $1,282,285 100%

USE CHARGES
All Customers
Annual Consumption
(HCF)
Rate per
HCF
Estimated Annual
Revenue % of Total
Waterford 466,014 $1.92 $894,746 76%
River Pointe 94,621 $1.92 $181,672 15%
Hickman 50,338 $1.92 $96,650 8%
Total Use Charges 610,973 $1,173,068 100%

TOTAL WATER SERVICE CHARGE REVENUES
All Customers
Estimated Annual
Revenue % of Total
Fixed Charges $1,282,285 52%
Use Charges $1,173,068 48%
Total Water Service Charge Revenues $2,455,353 100%
3 Table 5: Comparison of Estimated Revenues to Actuals
LT Estimated City's Estimates [1] % Difference
Hickman Only $185,590 $188,514 1.6%
River Pointe Only $313,999 $290,800 -7.4%
Waterford Only $1,955,763 $1,943,750 -0.6%
$2,455,353 $2,423,064 -1.3%
1 - From Base Financial Information spreadsheet dated September 17, 2025 Table 6: Long Term Debt Obligations
The City entered into a Loan Agreement with Umpqua Bank to fund the acquisition of the Waterford and Hickman Water Systems. The total amount financed is $2,934,900. Bi-Annual payments of principal and interest are due through June 1, 2030. Payments total approximately $262,000 per year and include interest of 3.13%.

Lender Project Fund Payment Account Payment 2025-26
Principal Balance
July 1, 2025 Maturity Date
Umpqua Bank Water CIP Debt Service: Principal 193,242 $1,028,560 FY 2030 (Waterford 86% and Debt Service: Interest 32,194
Hickman 14%) Debt Service: Principal 31,458 $167,440
Debt Service: Interest 5,241
Water System
Acquisition
4 Table 7: OPTION 1 Capital Improvement Plan
No. Project 2026/27 2027/28 2028/29 2029/30 2030/31 5-Year Total Rate Funded Projects
3 Downtown Pipe Replacement 750,000 750,000 750,000 750,000 750,000 3,750,000 7 Misc. Well Improvements-Existing 287,500 287,500 287,500 287,500 287,500 1,437,500 8 New Equipment / Supplies 175,000 175,000 175,000 175,000 175,000 875,000 9 Master Plan and Rate Study 0 0 0 0 262,500 262,500
Total Rate Funded Projects 1,212,500 1,212,500 1,212,500 1,212,500 1,475,000 6,325,000 Debt Funded Projects [1]
2 Well 244 Replacement 375,000 2,125,000 0 0 0 2,500,000 6 Surface Water Project 91,875 520,625 0 0 0 612,500
Total Debt Funded Projects 466,875 2,645,625 0 0 0 3,112,500 Total Capital Projects $1,679,375 $3,858,125 $1,212,500 $1,212,500 $1,475,000 $9,437,500 1 - It is anticipated that the City will take on new debt in 2026/27, with payments beginning in 2028/29. The total loan amount will be $4.25M, reflecting the full cost of the Surface Water Project of $1.75M plus $2.5M for the Well 244 Replacement. 65% of the project costs for the Surface Water Project will later be repaid by impact fees as new development occurs.

Table 8: OPTION 2 Capital Improvement Plan
No. Project 2026/27 2027/28 2028/29 2029/30 2030/31 5-Year Total Rate Funded Projects
3 Downtown Pipe Replacement 750,000 750,000 750,000 750,000 750,000 3,750,000 7 Misc. Well Improvements-Existing 0 359,400 359,400 359,400 359,400 1,437,600 8 New Equipment / Supplies 0 0 291,700 291,700 291,700 875,100 9 Master Plan and Rate Study 0 0 0 0 262,500 262,500
Total Rate Funded Projects 750,000 1,109,400 1,401,100 1,401,100 1,663,600 6,325,200 Debt Funded Projects [1]
2 Well 244 Replacement 375,000 2,125,000 0 0 0 2,500,000 6 Surface Water Project 91,875 520,625 0 0 0 612,500
Total Debt Funded Projects 466,875 2,645,625 0 0 0 3,112,500 Total Capital Projects $1,216,875 $3,755,025 $1,401,100 $1,401,100 $1,663,600 $9,437,700 1 - It is anticipated that the City will take on new debt in 2026/27, with payments beginning in 2028/29. The total loan amount will be $4.25M, reflecting the full cost of the Surface Water Project of $1.75M plus $2.5M for the Well 244 Replacement. 65% of the project costs for the Surface Water Project will later be repaid by impact fees as new development occurs. 5 Table 9: OPTION 1 Operating Cash Flow
Budget Projected
2025/26 2026/27 2027/28 2028/29 2029/30 2030/31
Rate Increase % 40% 25% 8% 5% 5% 0%
Rate Increase Effective Date
Mar 1,
2026
Mar 1,
2027
Mar 1,
2028
Mar 1,
2029
Mar 1,
2030
Past 5-year
Timeline
Rate Revenues w/July 1 Increase 3,355,500 4,194,400 4,530,000 4,756,500 4,994,300 4,994,300 BEGINNING CASH BALANCE $318,700 $436,800 $602,400 $816,900 $900,100 $1,024,400

REVENUES
Service Charges 2,716,400 3,635,100 4,306,300 4,605,500 4,835,800 4,994,300 Delinquency (2.5%) (67,900) (90,900) (107,700) (115,100) (120,900) (124,900) Interest Earnings 18,100 13,100 18,100 24,500 27,000 30,700 Other Water Revenue 63,000 64,900 66,800 68,800 70,900 73,000 Subtotal Operations Revenue 2,729,600 3,622,200 4,283,500 4,583,700 4,812,800 4,973,100

EXPENSES
Operating Expenses
Salaries & Benefits 940,000 997,300 1,052,100 1,104,000 1,152,100 1,201,600 Maintenance & Operations 789,600 809,300 829,600 850,300 871,600 893,400 Professional Fees 201,200 207,200 213,400 219,800 226,400 233,200 Materials & Supplies 236,800 243,900 251,200 258,700 266,500 274,500 Subtotal Operating 2,167,600 2,257,700 2,346,300 2,432,800 2,516,600 2,602,700 Net Operating Revenues 562,000 1,364,500 1,937,200 2,150,900 2,296,200 2,370,400 Non-Operating Expenses
Transfer to CIP 443,900 1,198,900 1,722,700 2,067,700 2,171,900 2,276,400 Subtotal Non-Operating 443,900 1,198,900 1,722,700 2,067,700 2,171,900 2,276,400 Total Expenses 2,611,500 3,456,600 4,069,000 4,500,500 4,688,500 4,879,100 Total Net Revenues 118,100 165,600 214,500 83,200 124,300 94,000 Ending Cash Balance $436,800 $602,400 $816,900 $900,100 $1,024,400 $1,118,400 Target Reserve Balance 541,900 564,400 586,600 608,200 629,200 650,700 Target Met? (25% of O&M) no yes yes yes yes yes
See capital cash flow on next page
6 Table 10: OPTION 1 Capital Cash Flow
Budget Projected
2025/26 2026/27 2027/28 2028/29 2029/30 2030/31
BEGINNING CASH BALANCE $400,400 $556,700 $44,200 $51,700 $59,200 $166,700

REVENUES
Interest Earnings 7,500 7,500 7,500 7,500 7,500 7,500
Transfers In from Operations 443,900 1,198,900 1,722,700 2,067,700 2,171,900 2,276,400 Other Transfers 267,500 0 0 0 0 0
Total Revenues 718,900 1,206,400 1,730,200 2,075,200 2,179,400 2,283,900

EXPENSES
Professional Services 50,000 51,500 53,000 54,600 56,200 57,900 Maintenance & Repairs 75,000 77,300 79,600 82,000 84,500 87,000 Capital Purchases 60,000 1,212,500 1,212,500 1,212,500 1,212,500 1,475,000 Total Expenses 185,000 1,341,300 1,345,100 1,349,100 1,353,200 1,619,900 Umpqua Loan 262,100 262,100 262,100 262,100 262,200 0
New IBank Loan 115,500 115,500 115,500 115,500 115,500 115,500 Future Debt Service [1] 0 0 0 341,000 341,000 341,000
Debt Service 377,600 377,600 377,600 718,600 718,700 456,500 Net Revenues 156,300 (512,500) 7,500 7,500 107,500 207,500 Ending Cash Balance 556,700 44,200 51,700 59,200 166,700 374,200 1 - $4.25M loan to fund the Well 244 Replacement and Surface Water Project over 20 years at 5% interest.

Table 11: OPTION 1 Debt Service Coverage Calculation
Budget Projected
2025/26 2026/27 2027/28 2028/29 2029/30 2030/31
Net Operating Revenues 562,000 1,364,500 1,937,200 2,150,900 2,296,200 2,370,400 Umpqua Loan 262,100 262,100 262,100 262,100 262,200 0
New IBank Loan 115,500 115,500 115,500 115,500 115,500 115,500 Future Debt Service [1] 0 0 0 341,000 341,000 341,000
Total Debt Service 377,600 377,600 377,600 718,600 718,700 456,500 Coverage Ratio (Target is >1.2) 1.49 3.61 5.13 2.99 3.19 5.19 1 - $4.25M loan to fund the Well 244 Replacement and Surface Water Project over 20 years at 5% interest. 7 Table 12: OPTION 2 Operating Cash Flow
Budget Projected
2025/26 2026/27 2027/28 2028/29 2029/30 2030/31
Rate Increase % 30% 25% 20% 5% 5% 0%
Rate Increase Effective Date
Mar 1,
2026
Mar 1,
2027
Mar 1,
2028
Mar 1,
2029
Mar 1,
2030
Past 5-year
Timeline
Rate Revenues w/July 1 Increase 3,115,800 3,894,800 4,673,800 4,907,500 5,152,900 5,152,900 BEGINNING CASH BALANCE $318,700 $358,900 $611,600 $801,400 $838,000 $921,500

REVENUES
Service Charges 2,636,500 3,375,500 4,154,500 4,751,700 4,989,300 5,152,900 Delinquency (2.5%) (65,900) (84,400) (103,900) (118,800) (124,700) (128,800) Interest Earnings 18,100 10,800 18,300 24,000 25,100 27,600 Other Water Revenue 63,000 64,900 66,800 68,800 70,900 73,000 Subtotal Operations Revenue 2,651,700 3,366,800 4,135,700 4,725,700 4,960,600 5,124,700

EXPENSES
Operating Expenses
Salaries & Benefits 940,000 997,300 1,052,100 1,104,000 1,152,100 1,201,600 Maintenance & Operations 789,600 809,300 829,600 850,300 871,600 893,400 Professional Fees 201,200 207,200 213,400 219,800 226,400 233,200 Materials & Supplies 236,800 243,900 251,200 258,700 266,500 274,500 Subtotal Operating 2,167,600 2,257,700 2,346,300 2,432,800 2,516,600 2,602,700 Net Operating Revenues 484,100 1,109,100 1,789,400 2,292,900 2,444,000 2,522,000 Non-Operating Expenses
Transfer to CIP 443,900 856,400 1,599,600 2,256,300 2,360,500 2,365,000 Subtotal Non-Operating 443,900 856,400 1,599,600 2,256,300 2,360,500 2,365,000 Total Expenses 2,611,500 3,114,100 3,945,900 4,689,100 4,877,100 4,967,700 Total Net Revenues 40,200 252,700 189,800 36,600 83,500 157,000 Ending Cash Balance $358,900 $611,600 $801,400 $838,000 $921,500 $1,078,500 Target Reserve Balance 541,900 564,400 586,600 608,200 629,200 650,700 Target Met? (25% of O&M) no yes yes yes yes yes
See capital cash flow on next page
8 Table 13: OPTION 2 Capital Cash Flow
Budget Projected
2025/26 2026/27 2027/28 2028/29 2029/30 2030/31
BEGINNING CASH BALANCE $400,400 $556,700 $164,200 $151,700 $159,200 $266,700

REVENUES
Interest Earnings 7,500 7,500 7,500 7,500 7,500 7,500
Transfers In from Operations 443,900 856,400 1,599,600 2,256,300 2,360,500 2,365,000 Other Transfers 267,500 0 0 0 0 0
Total Revenues 718,900 863,900 1,607,100 2,263,800 2,368,000 2,372,500

EXPENSES
Professional Services 50,000 51,500 53,000 54,600 56,200 57,900 Maintenance & Repairs 75,000 77,300 79,600 82,000 84,500 87,000 Capital Purchases 60,000 750,000 1,109,400 1,401,100 1,401,100 1,663,600 Total Expenses 185,000 878,800 1,242,000 1,537,700 1,541,800 1,808,500 Umpqua Loan 262,100 262,100 262,100 262,100 262,200 0
New IBank Loan 115,500 115,500 115,500 115,500 115,500 115,500 Future Debt Service [1] 0 0 0 341,000 341,000 341,000
Debt Service 377,600 377,600 377,600 718,600 718,700 456,500 Net Revenues 156,300 (392,500) (12,500) 7,500 107,500 107,500 Ending Cash Balance 556,700 164,200 151,700 159,200 266,700 374,200 1 - $4.25M loan to fund the Well 244 Replacement and Surface Water Project over 20 years at 5% interest.

Table 14: OPTION 2 Debt Service Coverage Calculation
Budget Projected
2025/26 2026/27 2027/28 2028/29 2029/30 2030/31
Net Operating Revenues 484,100 1,109,100 1,789,400 2,292,900 2,444,000 2,522,000 Umpqua Loan 262,100 262,100 262,100 262,100 262,200 0
New IBank Loan 115,500 115,500 115,500 115,500 115,500 115,500 Future Debt Service [1] 0 0 0 341,000 341,000 341,000
Total Debt Service 377,600 377,600 377,600 718,600 718,700 456,500 Coverage Ratio (Target is >1.2) 1.28 2.94 4.74 3.19 3.40 5.52 1 - $4.25M loan to fund the Well 244 Replacement and Surface Water Project over 20 years at 5% interest. 9 Figure 1: OPTION 1 Cash Flow Projection
*Not every customer will receive exactly the % increases shown above due to rate structure changes and growth in the water system (i.e. new customers paying rates) Figure 2: OPTION 2 Cash Flow Projection
*Not every customer will receive exactly the % increases shown above due to rate structure changes and growth in the water system (i.e. new customers paying rates) 10 Table 15: Cost Allocation (same for both options)
Projected BASE CHARGE USE CHARGE
2026/27 Total
Meters &
Services
Customer
Service Base + Extra
Operating Expenses
Salaries & Benefits $997,300 90.0% 10.0% 0.0% 100%
Maintenance & Operations $809,300 25.0% 0.0% 75.0% 100% Professional Fees $207,200 100.0% 0.0% 0.0% 100%
Materials & Supplies $243,900 25.0% 0.0% 75.0% 100%
Subtotal Operating $2,257,700 $1,368,070 $99,730 $789,900 $2,257,700 Allocation % 60.6% 4.4% 35.0% 100.0%
Non-Operating Expenses
Capital Expenses [1] $1,401,700 10.0% 0.0% 90.0% 100%
Debt Service [1] $529,800 100.0% 0.0% 0.0% 100%
Subtotal Non-Operating $1,931,500 $669,970 $0 $1,261,530 $1,931,500 Allocation % 34.7% 0.0% 65.3% 100.0%
TOTAL EXPENSES $4,189,200 $2,038,040 $99,730 $2,051,430 $4,189,200 Total Allocation % 48.7% 2.4% 49.0% 100.0%
1 - Average 5-year costs
11 Table 16: Proposed Meter Equivalents (same for both options) Meter Size
Number of
Meters [1]
Maximum Flow
Rate (gpm) [2]
Meter
Ratio
Proposed Meter
Equivalents
Base Residential (Up to 1") [3] 2,643 25 1.00 2,643

1.5" 9 100 4.00 36
2" 33 160 6.40 211
3" 3 350 14.00 42
4" 7 600 24.00 168
6" 3 1,250 50.00 150
Total 2,698 3,250
1 - The number of meters is taken from the City's billing data for all three systems for July 2025. 2 - From 2018 Water Rate Study, Table A-17. Intermittent maximum flow rates, AWWA, M6 Water Meters - Fifth Edition, pages 63-65.
3 - The majority of base residential customers have a 3/4" meter. All single family residential customers with a 1" meter are currently billed at the 3/4" rate. The 3/4" and 1" categories are proposed to be combined into one category for billing purposes.

Table 17: Projected Customer Growth & Water Consumption (same for both options)

CURRENT PROJECTED - RATE STUDY PERIOD
2025/26 2026/27 2027/28 2028/29 2029/30

NUMBER OF METERS
Growth Increase % [1] 3.0% 3.0% 3.0% 3.0% 3.0%
Total Water Meters 2,698 2,779 2,862 2,948 3,036 3,127
Total Meter Equivalents 3,250 3,331 3,414 3,500 3,588 3,679

WATER CONSUMPTION
Annual Increase % 1.0% 1.0% 1.0% 1.0% 1.0%
Total Consumption (HCF) [2] 532,717 538,044 543,424 548,858 554,347 559,890 1 - Per input from City staff, it is estimated that there will be 3% growth in the customer base each year. To be conservative, it is estimated that all new customers connecting to the system will be served by a 1" meter. 2 - Based on average billed consumption from 2022/23, 2023/24, and 2024/25. Reflects estimated conservation + some delinquency of 2.5%.
12 Table 18: OPTION 1 Allocation of Annual Service Charge Revenue Requirement Cost
Allocation %

PROJECTED
2025/26 2026/27 2027/28 2028/29 2029/30
Total Revenue
Requirement [1] $3,355,500 $4,194,400 $4,530,000 $4,756,500 $4,994,300

BASE CHARGES
Meters & Services 48.7% $1,632,451 $2,040,576 $2,203,845 $2,314,037 $2,429,727 Customer Service 2.4% $79,861 $99,827 $107,814 $113,205 $118,864 Total Base Charges 51.0% $1,712,312 $2,140,402 $2,311,659 $2,427,242 $2,548,591

USE CHARGES
Base + Extra 49.0% $1,643,188 $2,053,998 $2,218,341 $2,329,258 $2,445,709 Total Use Charges 49.0% $1,643,188 $2,053,998 $2,218,341 $2,329,258 $2,445,709 TOTAL 100.0% $3,355,500 $4,194,400 $4,530,000 $4,756,500 $4,994,300 1 - From Cash Flow; Total Service Charges revenue requirement if rates were to be in effect for full 12 months per fiscal year
13 Table 19: OPTION 1 Base Charge Derivation

PROJECTED
2025/26 2026/27 2027/28 2028/29 2029/30

REVENUE REQUIREMENT
Meters & Services $1,632,451 $2,040,576 $2,203,845 $2,314,037 $2,429,727 Customer Service $79,861 $99,827 $107,814 $113,205 $118,864 Total Base Charge Revenue $1,712,312 $2,140,402 $2,311,659 $2,427,242 $2,548,591

METER EQUIVALENT CHARGE
Meters & Service Rev. Req. 7.8% $1,632,451 $2,040,576 $2,203,845 $2,314,037 $2,429,727 Number of Meter Equivalents 3,331 3,414 3,500 3,588 3,679 Meter Equivalent Charge $40.84 $49.81 $52.47 $53.74 $55.04 Meter Equiv. Charge by Size
Meter Size
Meter
Ratio
Up to 1" 1.0 $40.84 $49.81 $52.47 $53.74 $55.04

1.5" 4.0 $163.36 $199.24 $209.88 $214.96 $220.16
2" 6.4 $261.38 $318.78 $335.81 $343.94 $352.26
3" 14.0 $571.76 $697.34 $734.58 $752.36 $770.56
4" 24.0 $980.16 $1,195.44 $1,259.28 $1,289.76 $1,320.96 6" 50.0 $2,042.00 $2,490.50 $2,623.50 $2,687.00 $2,752.00

CUSTOMER SERVICE CHARGE
Customer Service Rev. Req. 7.8% $79,861 $99,827 $107,814 $113,205 $118,864 Number of Meters 2,779 2,862 2,948 3,036 3,127
Cust. Service Charge per Acct. $2.39 $2.91 $3.05 $3.11 $3.17 TOTAL MONTHLY BASE CHARGE [1]
Current
Meter Size Rates
Up to 1" $34.14 $43.23 $52.72 $55.52 $56.85 $58.21

1.5" $133.66 $165.75 $202.15 $212.93 $218.07 $223.33
2" $212.71 $263.77 $321.69 $338.86 $347.05 $355.43
3" $465.09 $574.15 $700.25 $737.63 $755.47 $773.73
4" $801.99 $982.55 $1,198.35 $1,262.33 $1,292.87 $1,324.13 6" $1,655.86 $2,044.39 $2,493.41 $2,626.55 $2,690.11 $2,755.17 1 - Total Monthly Base Charge is the sum of the "Meter Equivalent Charge" by meter size plus the "Customer Service Charge per Account"
14 Table 20: OPTION 1 Use Charge Derivation

PROJECTED
2025/26 2026/27 2027/28 2028/29 2029/30

REVENUE REQUIREMENT
Base + Extra $1,643,188 $2,053,998 $2,218,341 $2,329,258 $2,445,709

USE CHARGE DERIVATION
Revenue Requirement $1,643,188 $2,053,998 $2,218,341 $2,329,258 $2,445,709 Projected Consumption (HCF) [1] 538,044 543,424 548,858 554,347 559,890 Use Charge per HCF $3.05 $3.78 $4.04 $4.20 $4.37
* 1 HCF = 748 gallons
1 - Based on average consumption over the past three fiscal years, less 2.5% for estimated conservation and delinquency
Table 21: OPTION 1 Proposed Monthly Water Rates

PROPOSED
Current 2025/26 2026/27 2027/28 2028/29 2029/30
Effective Date Jul 1, 2021 Mar 1, 2026 Mar 1, 2027 Mar 1, 2028 Mar 1, 2029 Mar 1, 2030

BASE CHARGE
Meter Size
3/4" [1] $34.14 $43.23 $52.72 $55.52 $56.85 $58.21
1" [1] $54.30 $43.23 $52.72 $55.52 $56.85 $58.21

1.5" $133.66 $165.75 $202.15 $212.93 $218.07 $223.33
2" $212.71 $263.77 $321.69 $338.86 $347.05 $355.43
3" $465.09 $574.15 $700.25 $737.63 $755.47 $773.73
4" $801.99 $982.55 $1,198.35 $1,262.33 $1,292.87 $1,324.13 6" $1,655.86 $2,044.39 $2,493.41 $2,626.55 $2,690.11 $2,755.17

USE CHARGE
per HCF [2] $1.92 $3.05 $3.78 $4.04 $4.20 $4.37
1 - The 3/4" and 1" meters are currently billed at different rates, but are proposed to be combined into one category going forward.
2 - 1 HCF = 748 gallons
15 Table 22: OPTION 1 Sample Residential Monthly Water Bill Impacts, 3/4" Meters Monthly Current PROPOSED
Use (HCF) Bill
Mar 1,
2026
Mar 1,
2027
Mar 1,
2028
Mar 1,
2029
Mar 1,
2030
9 HCF (Winter Bill)
Base Charge - 3/4" $34.14 $43.23 $52.72 $55.52 $56.85 $58.21 Use Charge 9 $17.28 $27.45 $34.02 $36.36 $37.80 $39.33
Monthly Water Bill $51.42 $70.68 $86.74 $91.88 $94.65 $97.54 $ Change $19.26 $16.06 $5.14 $2.77 $2.89
% Change 37.5% 22.7% 5.9% 3.0% 3.1%
16 HCF (Average Bill)
Base Charge - 3/4" $34.14 $43.23 $52.72 $55.52 $56.85 $58.21 Use Charge 16 $30.72 $48.80 $60.48 $64.64 $67.20 $69.92 Monthly Water Bill $64.86 $92.03 $113.20 $120.16 $124.05 $128.13 $ Change $27.17 $21.17 $6.96 $3.89 $4.08
% Change 41.9% 23.0% 6.1% 3.2% 3.3%
24 HCF (Summer Bill)
Base Charge - 3/4" $34.14 $43.23 $52.72 $55.52 $56.85 $58.21 Use Charge 24 $46.08 $73.20 $90.72 $96.96 $100.80 $104.88 Monthly Water Bill $80.22 $116.43 $143.44 $152.48 $157.65 $163.09 $ Change $36.21 $27.01 $9.04 $5.17 $5.44
% Change 45.1% 23.2% 6.3% 3.4% 3.5%
16 Table 23: OPTION 2 Allocation of Annual Service Charge Revenue Requirement Cost
Allocation %

PROJECTED
2025/26 2026/27 2027/28 2028/29 2029/30
Total Revenue
Requirement [1] $3,115,800 $3,894,800 $4,673,800 $4,907,500 $5,152,900

BASE CHARGES
Meters & Services 48.7% $1,515,837 $1,894,820 $2,273,804 $2,387,499 $2,506,886 Customer Service 2.4% $74,156 $92,696 $111,236 $116,799 $122,639 Total Base Charges 51.0% $1,589,993 $1,987,516 $2,385,040 $2,504,297 $2,629,525

USE CHARGES
Base + Extra 49.0% $1,525,807 $1,907,284 $2,288,760 $2,403,203 $2,523,375 Total Use Charges 49.0% $1,525,807 $1,907,284 $2,288,760 $2,403,203 $2,523,375 TOTAL 100.0% $3,115,800 $3,894,800 $4,673,800 $4,907,500 $5,152,900 1 - From Cash Flow; Total Service Charges revenue requirement if rates were to be in effect for full 12 months per fiscal year
17 Table 24: OPTION 2 Base Charge Derivation

PROJECTED
2025/26 2026/27 2027/28 2028/29 2029/30

REVENUE REQUIREMENT
Meters & Services $1,515,837 $1,894,820 $2,273,804 $2,387,499 $2,506,886 Customer Service $74,156 $92,696 $111,236 $116,799 $122,639 Total Base Charge Revenue $1,589,993 $1,987,516 $2,385,040 $2,504,297 $2,629,525

METER EQUIVALENT CHARGE
Meters & Service Rev. Req. 7.8% $1,515,837 $1,894,820 $2,273,804 $2,387,499 $2,506,886 Number of Meter Equivalents 3,331 3,414 3,500 3,588 3,679 Meter Equivalent Charge $37.92 $46.25 $54.14 $55.45 $56.78 Meter Equiv. Charge by Size
Meter Size
Meter
Ratio
Up to 1" 1.0 $37.92 $46.25 $54.14 $55.45 $56.78

1.5" 4.0 $151.68 $185.00 $216.56 $221.80 $227.12
2" 6.4 $242.69 $296.00 $346.50 $354.88 $363.39
3" 14.0 $530.88 $647.50 $757.96 $776.30 $794.92
4" 24.0 $910.08 $1,110.00 $1,299.36 $1,330.80 $1,362.72 6" 50.0 $1,896.00 $2,312.50 $2,707.00 $2,772.50 $2,839.00

CUSTOMER SERVICE CHARGE
Customer Service Rev. Req. 7.8% $74,156 $92,696 $111,236 $116,799 $122,639 Number of Meters 2,779 2,862 2,948 3,036 3,127
Cust. Service Charge per Acct. $2.22 $2.70 $3.14 $3.21 $3.27 TOTAL MONTHLY BASE CHARGE [1]
Current
Meter Size Rates
Up to 1" $34.14 $40.14 $48.95 $57.28 $58.66 $60.05

1.5" $133.66 $153.90 $187.70 $219.70 $225.01 $230.39
2" $212.71 $244.91 $298.70 $349.64 $358.09 $366.66
3" $465.09 $533.10 $650.20 $761.10 $779.51 $798.19
4" $801.99 $912.30 $1,112.70 $1,302.50 $1,334.01 $1,365.99 6" $1,655.86 $1,898.22 $2,315.20 $2,710.14 $2,775.71 $2,842.27 1 - Total Monthly Base Charge is the sum of the "Meter Equivalent Charge" by meter size plus the "Customer Service Charge per Account"
18 Table 25: OPTION 2 Use Charge Derivation

PROJECTED
2025/26 2026/27 2027/28 2028/29 2029/30

REVENUE REQUIREMENT
Base + Extra $1,525,807 $1,907,284 $2,288,760 $2,403,203 $2,523,375

USE CHARGE DERIVATION
Revenue Requirement $1,525,807 $1,907,284 $2,288,760 $2,403,203 $2,523,375 Projected Consumption (HCF) [1] 538,044 543,424 548,858 554,347 559,890 Use Charge per HCF $2.84 $3.51 $4.17 $4.34 $4.51
* 1 HCF = 748 gallons
1 - Based on average consumption over the past three fiscal years, less 2.5% for estimated conservation and delinquency
Table 26: OPTION 2 Proposed Monthly Water Rates

PROPOSED
Current 2025/26 2026/27 2027/28 2028/29 2029/30
Effective Date Jul 1, 2021 Mar 1, 2026 Mar 1, 2027 Mar 1, 2028 Mar 1, 2029 Mar 1, 2030

BASE CHARGE
Meter Size
3/4" [1] $34.14 $40.14 $48.95 $57.28 $58.66 $60.05
1" [1] $54.30 $40.14 $48.95 $57.28 $58.66 $60.05

1.5" $133.66 $153.90 $187.70 $219.70 $225.01 $230.39
2" $212.71 $244.91 $298.70 $349.64 $358.09 $366.66
3" $465.09 $533.10 $650.20 $761.10 $779.51 $798.19
4" $801.99 $912.30 $1,112.70 $1,302.50 $1,334.01 $1,365.99 6" $1,655.86 $1,898.22 $2,315.20 $2,710.14 $2,775.71 $2,842.27

USE CHARGE
per HCF [2] $1.92 $2.84 $3.51 $4.17 $4.34 $4.51
1 - The 3/4" and 1" meters are currently billed at different rates, but are proposed to be combined into one category going forward.
2 - 1 HCF = 748 gallons
19 Table 27: OPTION 2 Sample Residential Monthly Water Bill Impacts, 3/4" Meters Monthly Current PROPOSED
Use (HCF) Bill
Mar 1,
2026
Mar 1,
2027
Mar 1,
2028
Mar 1,
2029
Mar 1,
2030
9 HCF (Winter Bill)
Base Charge - 3/4" $34.14 $40.14 $48.95 $57.28 $58.66 $60.05 Use Charge 9 $17.28 $25.56 $31.59 $37.53 $39.06 $40.59
Monthly Water Bill $51.42 $65.70 $80.54 $94.81 $97.72 $100.64 $ Change $14.28 $14.84 $14.27 $2.91 $2.92
% Change 27.8% 22.6% 17.7% 3.1% 3.0%
16 HCF (Average Bill)
Base Charge - 3/4" $34.14 $40.14 $48.95 $57.28 $58.66 $60.05 Use Charge 16 $30.72 $45.44 $56.16 $66.72 $69.44 $72.16 Monthly Water Bill $64.86 $85.58 $105.11 $124.00 $128.10 $132.21 $ Change $20.72 $19.53 $18.89 $4.10 $4.11
% Change 31.9% 22.8% 18.0% 3.3% 3.2%
24 HCF (Summer Bill)
Base Charge - 3/4" $34.14 $40.14 $48.95 $57.28 $58.66 $60.05 Use Charge 24 $46.08 $68.16 $84.24 $100.08 $104.16 $108.24 Monthly Water Bill $80.22 $108.30 $133.19 $157.36 $162.82 $168.29 $ Change $28.08 $24.89 $24.17 $5.46 $5.47
% Change 35.0% 23.0% 18.1% 3.5% 3.4%
20 Table 28: Comparison of Proposed Water Rate Options
Current
Proposed SFR Monthly Water Bill (Up to 1" Meter; 16 HCF) Mar 1,
2026
Mar 1,
2027
Mar 1,
2028
Mar 1,
2029
Mar 1,
2030
OPTION 1
Avg Revenue Increase 40.0% 25.0% 8.0% 5.0% 5.0%
Single Family Water Bill $64.86 $92.03 $113.20 $120.16 $124.05 $128.13 $ Change $27.17 $21.17 $6.96 $3.89 $4.08
% Change 41.9% 23.0% 6.1% 3.2% 3.3%
OPTION 2
Avg Revenue Increase 30.0% 25.0% 20.0% 5.0% 5.0%
Single Family Water Bill $64.86 $85.58 $105.11 $124.00 $128.10 $132.21 $ Change $20.72 $19.53 $18.89 $4.10 $4.11
% Change 31.9% 22.8% 18.0% 3.3% 3.2%
Table reflects proposed rate design changes.

Figure 3: Comparison of Proposed Water Rate Options
21 Figure 4: Single Family Residential Water Bill Survey, 3/4" Meters 22 Figure 5: Single Family Residential Water Bill Survey, 1" Meters Both the City’s current 3/4” and 1” average bills are included in the chart for comparison purposes because single family residential customers with a 1” meter are currently billed the 3/4” rate. A number of local agencies bill all single family residential customers or all meters 1” and smaller at the same rates. Therefore, the monthly bills shown for many agencies are the same as those shown on the 3/4” bill survey chart.

City of Waterford
101 E Street
Waterford, CA 95386
(209) 874-2328
Name
Address
City, State ZIP

NOTICE OF PUBLIC HEARING REGARDING

PROPOSED ADJUSTMENTS TO WATER RATES
Thursday, February 5, 2026 at 6:30 pm
at Waterford City Hall, Council Chambers, 101 E Street, Waterford CA The City of Waterford (City) currently provides water service to approximately 2,600 customers including homes and businesses throughout the Waterford, River Pointe, and Hickman service areas. These three areas make up the Waterford Water System. You are receiving this notice because you are either a City utility customer or you own property receiving City water service.

The City Council will hold a public hearing on February 5, 2026 to consider water rate changes for the next five years. The water system relies on water rate revenues to fund its operations and is not funded by property taxes or any other tax revenues. A rate increase has not been implemented since July 1, 2021.

Why is a water rate change needed?
The City acquired the Waterford and Hickman systems from the City of Modesto in 2015 and has since invested over $11 million dollars in infrastructure improvements and consolidation costs. The system came to the City in a state of neglect, and it has been a constant source of financial pressure to address planned and unplanned needs that come up. The strains of previous neglect and extensive cost of capital needs are the driving forces for an adjustment to the water rates. Rate revenues will fund pipe replacements, well improvements, new equipment, and a water master plan. By funding these expenses, the City will avoid costly emergency repairs and help the system to run more efficiently. Rate revenues will also be used to pay down debt related to making improvements to the water system and to pay for operating costs such as pumping water from the City’s groundwater wells, maintenance, upkeep, and supplies.

Proposed Monthly Water Rates
The City hired a rate consultant to review how different types of customers use the water system and how much they should be charged. Customers that heavily use the water system are proposed to be charged more than customers who use less water. The City’s monthly water rate structure includes two components: 1) a fixed Base Charge which is billed based on meter size and 2) a Use Charge that is billed per hundred cubic feet (HCF; 1 HCF = 748 gallons) of metered water use.

The proposed water rates are shown in the table on the following page. The same schedule of rates applies to all customers in the three services areas: Hickman, River Pointe, and Waterford.

It is proposed that the use charge per HCF increase as well as the base charge for most meter sizes. Currently, the 3/4” base charge and the 1” base charge pay different rates. It is proposed that these two rate categories be combined into one category and pay the same rate. Most residential customers have 3/4” meters and all new residential development is required to have 1” meters or larger due to California Building Code regulations. By combining these categories, the 3/4” base charge will increase compared to the current 3/4” rate and the 1” base charge will decrease compared to the current 1” rate.

The bill impacts to each customer will vary based on meter size and water usage. The typical residential customer in the City is served by a 3/4” meter and uses 16 HCF of water per month.

For this typical customer, the current monthly water bill is $64.86 and the proposed March 1, 2026 water bill would equal $85.58, an increase of $20.72. If you would like additional information on how the proposed changes in water rates and charges will affect your water bill, please contact the City Office at (209) 874-2328. If adopted by City Council, the new rates would go into effect March 1 of each year through 2030. The first increase would occur March 1, 2026.

Please see the next page.

Proposed Monthly Water Rates
Current

PROPOSED
Effective Date Mar 1, 2026 Mar 1, 2027 Mar 1, 2028 Mar 1, 2029 Mar 1, 2030

BASE CHARGE
Meter Size
3/4" [1] $34.14 $40.14 $48.95 $57.28 $58.66 $60.05
1" [1] $54.30 $40.14 $48.95 $57.28 $58.66 $60.05

1.5" $133.66 $153.90 $187.70 $219.70 $225.01 $230.39
2" $212.71 $244.91 $298.70 $349.64 $358.09 $366.66
3" $465.09 $533.10 $650.20 $761.10 $779.51 $798.19
4" $801.99 $912.30 $1,112.70 $1,302.50 $1,334.01 $1,365.99 6" $1,655.86 $1,898.22 $2,315.20 $2,710.14 $2,775.71 $2,842.27

USE CHARGE
per HCF [2] $1.92 $2.84 $3.51 $4.17 $4.34 $4.51
[1] The 3/4” and 1” meters are currently billed at different rates, but are proposed to be combined into one category going forward
[2] 1 HCF = 748 gallons
Bill Assistance
The City offers a utility bill assistance program for seniors and low-income residents. Qualifying customers receive a $10 per month discount on their total utility bill. Additional information is provided on the reverse side of your City of Waterford utility bill or call (209) 874-2328.

How do I file a protest or participate in the public hearing? The provisions of Proposition 218 provide that certain types of “Property Related Fees” such as water rates are subject to a “majority protest” process. Under the majority protest process, any property owner or customer of record may submit a written protest for the proposed increases; provided, however, that only one protest will be counted per identified parcel. If protests are filed on behalf of a majority of the parcels subject to the rates, the City cannot adopt the proposed rates. Please see the next page for a description of protest procedures.

Please see the next page.

Every written protest MUST include ALL of the following to be counted:

1. A statement against the proposed water rates

2. Name of the recorded owner or customer of record who is submitting the protest;

3. Identification of assessor’s parcel number or street address of the parcel with respect to which the protest is made; and an

4. Original signature and legibly printed name of the record owner or customer of record who is submitting the protest.

Written protests may be submitted by:

1. Mail to - Prop 218 Protest, 101 E Street, Waterford, CA 95386; or

2. In-person delivery during normal business hours to, 101 E Street, Waterford, CA 95386; or

3. In-person at the Public Hearing, prior to the conclusion of the Public Hearing.

Regardless of how the written protest is submitted, it must be received by the City prior to the conclusion of the public comment portion of the Public Hearing on February 5, 2026. (Postmark dates will not be accepted.) Any protest submitted via e‐mail or other electronic means will not be accepted. Please identify on the front of the envelope for any written protest, whether mailed or submitted in person to the City, that the enclosed protest is for the Public Hearing on Water Rate Increases. Oral comments at the Public Hearing will not qualify as formal protests unless accompanied by a written protest.

The City will hold the Public Hearing on February 5, 2026 at 6:30 pm. The City Council will review the amount of the rates as well as the methodology for calculating the proposed rates. At the conclusion of the hearing, protests will be counted and validated. If protests are filed on behalf of a majority of the parcels subject to the rates before the end of the Public Hearing, the City cannot adopt the proposed rates. If a majority of the parcels do not protest the proposed increase, the City has the authority to adopt the proposed water rates. The first rate change, if enacted, will go into effect on or after March 1, 2026.

Pursuant to California Government Code 53759, a 120-day statute of limitations applies to any legal challenge to a new, increased, or extended fee adopted by the City Council pursuant to this notice.

Frequently Asked Questions
Public Notice of Proposed Adjustments to Water Rates

1. What is the City doing to improve the water system?
The City of Waterford owns and operates a water system consisting of three service areas. The City has operated the River Pointe system since 2005 and purchased the Hickman and Waterford systems from the City of Modesto in 2015. The water infrastructure was in bad condition, and the City has invested $11 million in capital projects and consolidation costs. In recent years, the City has incurred several hundred thousand dollars in repairs to the Hickman service area, which relies on only two wells, one of which has been down on and off. More investment is needed. Over the next five years, about $9.4 million in funding from ratepayers is needed for pipe replacements, well improvements, new equipment, and a water master plan.

2. What is the City doing to keep the rates low and why is the City adjusting the water rates now? The City has not adjusted the water rates since July 1, 2021 in order to keep costs down for residents over the past four years. The City recently completed a rate study and financial plan for the water system. The plan projects operating costs and the infrastructure improvement costs noted above. About $4.25 million of future project costs will be debt funded over 20 years using low-cost loans. Of this total, $3.15 million will be paid by existing ratepayers, while about $1.1 million will be paid by connection fees from new customers.

The remaining $6.3 million in project costs will be funded through rate revenues over the next five years.

The City is engaged in proactive maintenance to avoid costly emergency repairs.

3. Is the proposed residential rate increase comparable with other jurisdictions? Yes. The proposed single-family residential rate is less than Ceres and compares closely to those of Lathrop, Turlock, and Manteca.

4. How can I receive rate assistance?
The City offers a utility bill assistance program for seniors and low-income residents. Qualifying customers receive a $10 per month discount on their total utility bill. Additional information is provided on the reverse side of your City of Waterford utility bill or by calling (209) 874-2328.

5. How can I comment on the proposed rates?
You may provide comments to City Council regarding the rates either in-person or by submitting a protest letter. City Council will hold a public hearing to consider the rate adjustment on Thursday, February 5, 2026 at 6:30 pm at City Hall. At the hearing, you may make verbal comments to City Council during the public comment period.

You may also submit a formal protest letter in opposition to the rate adjustment. You may mail or handdeliver your written protest in advance of the public hearing to: City Clerk, 101 E Street, Waterford, CA 95386. Or, you may hand-deliver your protest to the City Clerk at the public hearing. Only written protests received prior to the conclusion of the hearing will be counted and only one protest per parcel will be counted. More details regarding how to submit a protest are included in the Notice of Public Hearing. If more than 50% of property owners or ratepayers submit protests, City Council cannot adopt the rate adjustment.

6. When would the new rates be effective?
If adopted by the City Council, they will become effective on March 1, 2026. 1 Water Rate Study
City of Waterford
December 4, 2025
Background
 In 2015, the City of Waterford acquired the Waterford and Hickman water systems. The City has provided service to River Pointe since 2005.  Currently the City serves about 2,600 customers made up of:
 2,100 customers in the City of Waterford
 175 customers in Hickman
 325 customers in River Pointe
 The City last conducted a water rate study in 2016 and rates were last increased in 2021
 Since 2015, the City has invested over $11M in consolidating and making improvements to the system, but additional investment is needed to continue addressing previous neglect from before the City acquired the systems  This rate update is a 5-year plan with new rates proposed to go into effect each March 1 from 2026 through 2030
2 1
2 2
Legal Requirements: Proposition 218
3  Governs how water service charges can be calculated and adopted  Rates can be adopted over a maximum 5-year period with a single study  Rates must be based on the reasonable cost of providing service  Rates must proportionally recover costs based on how customers take service  Procedural requirements for adopting rate adjustments: mail a notice of hearing and conduct hearing at least 45 days later
 Ratepayers can block the increase with a 50% protest
Current Monthly Rates – All Areas
4 Fee Description Monthly Charge [1]
BASE CHARGE (fixed)
Meter Size
3/4" $34.14
1" $54.30

1.5" $133.66
2" $212.71
3" $465.09
4" $801.99
6" $1,655.86

USE CHARGE
per HCF [2] $1.92
1 – The most recent rate increase was July 1, 2021
2 – HCF = one hundred cubic feet; 1 HCF = 748 gallons
3 4
3 Current Financial Standing
5  The goal of the rate study is to collect sufficient funds to cover the full cost of providing service
 This includes operations and maintenance, infrastructure (capital) improvements, debt payments, and maintaining prudent reserves
 Current rates are sufficient to fund operating costs; cash balance is low (about $700,000)
 Rates must be increased to keep up with inflation, meet debt coverage obligations, and fund critical capital improvements
 The water system has major capital needs
 The proposed Capital Improvement Plan consists of about $1.2M in annual funding for pipe replacements, improvements to existing wells, supplies, and equipment  A proposed new debt issuance in 2026/27 will fund a new well at Well Site 244 ($2.5M) and the Surface Water Project ($1.75M)
Revised Rate Options
6 PROPOSED
2026/27 2027/28 2028/29 2029/30 2030/31
Effective Date Mar 1, 2026 Mar 1, 2027 Mar 1, 2028 Mar 1, 2029 Mar 1, 2030 OPTION 1 40% 25% 8% 5% 5%
OPTION 2 30% 25% 20% 5% 5%
 2 rate plan options:
 OPTION 1: Fund proposed Capital Improvement Plan on schedule (same proposal as November 6 presentation, with slight revisions to reflect March 1 rate change date)  OPTION 2: Delay capital spending on well improvements and new equipment so that rate increases can be phased in more gradually. However, rates will be higher at the end of the five-year plan.
 Total capital spending over five years is the same for both options; Well 244 and the Surface Water Project will be funded on-schedule for both options  Both options result in the same amount of operating and capital reserves at the end of the five-year rate plan
 Proposed Annual Rate Revenue Increases: % increase shown here = total rate revenue
increase; not every
customer will receive
exactly the % shown
here due to rate
structure changes, water
usage, and a small % of
growth in the City
5 6
4 Financial Projection – OPTION 1
7 *Not every customer will receive exactly the % increases show here due to different cost increases to the fixed base charge and use charge. Rate revenue increases shown above include revenues from new customers projected to connect to the system
Financial Projection – OPTION 2
8 *Not every customer will receive exactly the % increases show here due to different cost increases to the fixed base charge and use charge. Rate revenue increases shown above include revenues from new customers projected to connect to the system
7 8
5 Proposed Monthly Rates – OPTION 1
9 PROPOSED Current 2026/27 2027/28 2028/29 2029/30 2030/31 Effective Date Jul 1, 2021 Mar 1, 2026 Mar 1, 2027 Mar 1, 2028 Mar 1, 2029 Mar 1, 2030

BASE CHARGE
Meter Size
3/4“ [1] $34.14 $43.23 $52.72 $55.52 $56.85 $58.21
1“ [1] $54.30 $43.23 $52.72 $55.52 $56.85 $58.21

1.5" $133.66 $165.75 $202.15 $212.93 $218.07 $223.33
2" $212.71 $263.77 $321.69 $338.86 $347.05 $355.43
3" $465.09 $574.15 $700.25 $737.63 $755.47 $773.73
4" $801.99 $982.55 $1,198.35 $1,262.33 $1,292.87 $1,324.13 6" $1,655.86 $2,044.39 $2,493.41 $2,626.55 $2,690.11 $2,755.17

USE CHARGE
per HCF [2] $1.92 $3.05 $3.78 $4.04 $4.20 $4.37
1 - The 3/4” and 1” meters are proposed to be combined into one category. 2 - HCF = one hundred cubic feet; 1 HCF = 748 gallons
Proposed
to be
combined
Proposed Monthly Rates – OPTION 2
10 PROPOSED Current 2026/27 2027/28 2028/29 2029/30 2030/31 Effective Date Jul 1, 2021 Mar 1, 2026 Mar 1, 2027 Mar 1, 2028 Mar 1, 2029 Mar 1, 2030

BASE CHARGE
Meter Size
3/4“ [1] $34.14 $40.14 $48.95 $57.28 $58.66 $60.05
1“ [1] $54.30 $40.14 $48.95 $57.28 $58.66 $60.05

1.5" $133.66 $153.90 $187.70 $219.70 $225.01 $230.39
2" $212.71 $244.91 $298.70 $349.64 $358.09 $366.66
3" $465.09 $533.10 $650.20 $761.10 $779.51 $798.19
4" $801.99 $912.30 $1,112.70 $1,302.50 $1,334.01 $1,365.99 6" $1,655.86 $1,898.22 $2,315.20 $2,710.14 $2,775.71 $2,842.27

USE CHARGE
per HCF [2] $1.92 $2.84 $3.51 $4.17 $4.34 $4.51
1 - The 3/4” and 1” meters are proposed to be combined into one category. 2 - HCF = one hundred cubic feet; 1 HCF = 748 gallons
Proposed
to be
combined
9 10
6 Sample Bill Impact Comparison
11 AVERAGE SINGLE FAMILY RESIDENTIAL BILL (16 HCF*)
PROPOSED Current 2026/27 2027/28 2028/29 2029/30 2030/31 Effective Date Jul 1, 2021 Mar 1, 2026 Mar 1, 2027 Mar 1, 2028 Mar 1, 2029 Mar 1, 2030 OPTION 1
Monthly SFR Bill $64.86 $92.03 $113.20 $120.16 $124.05 $128.13 $ Change $27.17 $21.17 $6.96 $3.89 $4.08
% Change 41.9% 23.0% 6.1% 3.2% 3.3%
OPTION 2
Monthly SFR Bill $64.86 $85.58 $105.11 $124.00 $128.10 $132.21 $ Change $20.72 $19.53 $18.89 $4.10 $4.11
% Change 31.9% 22.8% 18.0% 3.3% 3.2%
* HCF = one hundred cubic feet; 1 HCF = 748 gallons
Sample Bill Impact Comparison
12 11
12 7
Survey
13 Tentative Schedule
14  December 4, 2025: Present draft rates to City Council; Council chooses preferred rate option
 December 18, 2025: Present final rate report to City Council; Initiate Proposition 218 process
 December 22, 2025: Mail notice of public hearing (45 days in advance)  February 5, 2026: Proposition 218 Hearing
 March 1, 2026: New rates go into effect
13 14
8 Wrap Up
15 15
General Business 6b
December 4th, 2025
Tina Envia, Finance Manager
City Council Staff Report
Motion: Accept and file the June 30, 2025 Basic Financial Statement of the City of Waterford and the Auditor’s Report on the Financial Statements including the reports on the Abandoned Vehicle Abatement Program, Appropriations Limit Schedule, Transportation Development Act Fund, Component Unit Statements and the Auditor’s Communication with Those Charged with Governance.

SUMMARY:

Accept and file the City of Waterford Basic Financial Statements for the year ended June 30, 2025 including all the related supplementary reports as listed above.

ANALYSIS:

On November 13th, 2025 our Auditor’s, Badawi & Associates, CPAs, issued the following statements and reports for the City of Waterford:

1. City of Waterford Basic Financial Statements for the Fiscal Year Ended June 30, 2025 and the Independent Auditor’s Report thereon.

2. Independent Accountant’s Report on the Appropriations Limit Schedule for the Year Ended June 30, 2026

3. Auditor’s Communication with Those Charged with Governance For the Year Ended June 30, 2025

4. Financial Statement and Independent Auditors’ Report on the Transportation Development Act Fund for the Year Ended June 30, 2025.

5. Financial Statement and Independent Auditors’ Report on the Abandoned Vehicle Abatement Program for the Year Ended June 30, 2025

6. Component Unit Basic Financial Statements for the Waterford Public Financing Authority for the Year Ended June 30, 2025.

The Auditors’ opinions on the listed reports were that the statements were presented fairly in all material respects.

FISCAL IMPACT:
• The General Fund ended the year with a balance of $3,662,080 for the fiscal year. Of that amount, $388,388 is designated “nonspendable” for amounts advanced to other funds leaving $3,273,692 unassigned. The net change in Fund Balance for the year was a decrease of ($319,317). At mid-year Staff had projected a decrease of ($376,390) and a fund balance of $3,518,576.
• The City Impact Fee Special Revenue Fund has a fund balance of $1,474,612. This fund accounts for the Developer Impact Fees collected by the City through the building permit process. The fees are required to be used according to the Capital Facility Fees Nexus Study.

The fees are tracked individually depending on the required use. Currently the Fee balances are as follows: Administration and Planning $26,181, Water $12,531, Drainage $6,184, Wastewater Collection $41,615, Parks and Recreation $148,270, Police $2,154, Traffic $833,859, and Wastewater Treatment $403,818.
• The Community Development Special Revenue Fund has a balance of $1,543,654. The balance is comprised of housing loans receivable of $1,122,279 and restricted cash of $421,375.
• All other Non-major Governmental Funds had a balance of $1,115,687 at June 30, 2025.

Activities represented in this fund group include Gas Tax, Local Transportation, Lighting and Landscaping Districts, Abandoned Vehicle Abatement, Special Business Pilot Program, CFD 2019-1 Maintenance District, CIP Measure L, CIP Parks, and CIP Streets and Roads. • The Wastewater Treatment Fund ended the year with $349,379 in unrestricted net position.

The fund generated $725,598 in net income and spent $1,053,987 on capital and related financing activities.
• The Water Enterprise Fund ended the year with a deficit of ($22,369) in unrestricted net position. The fund had a loss of ($185,728) and spent $849,583 on capital and related financing activities.
• The Waterford Public Financing Authority Fund ended the year with $134,747 in unrestricted net position.

ENVIRONMENTAL REVIEW:

N/A
ALTERNATIVES:

1. Accept and file the June 30, 2025 Audited Basic Financial Statements for the City of Waterford and all related items as listed in the motion.

2. Provide staff with directions as to the modifications desired and request a subsequent modified report.

3. Not accept the audited basic financial statements as presented and give no further direction for changes. This alternative would limit the Auditor’s ability to issue further reports without modifications to their opinion of the statement’s accuracy.

ATTACHMENTS:
• City of Waterford Basic Financial Statements for the Fiscal Year Ended June 30, 2025 • City of Waterford Abandoned Vehicle Abatement Report for Fiscal Year Ended June 30, 2025 • City of Waterford Transportation Development Act Report for Fiscal Year Ended June 30, 2025 • City of Waterford Appropriations Limit Schedule for Fiscal Year Ended June 30, 2026 • Auditor’s Communication with Those Charged with Governance • Presentation Slides

CITY OF WATERFORD, CALIFORNIA

BASIC FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED
June 30, 2025
Prepared by:

Tina Envia
Finance Manager

City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Table of Contents
Page

FINANCIAL SECTION
Independent Auditors’ Report ............................................................................................................................... 1 Management’s Discussion and Analysis (Required Supplementary Information) ..................................... 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ............................................................................................................................. 21 Statement of Activities ................................................................................................................................... 22 Fund Financial Statements:

Governmental Funds:

Balance Sheet ............................................................................................................................................... 28 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position ....................................................................................................................... 30 Statement of Revenues, Expenditures, and Changes
in Fund Balances – Governmental Funds ............................................................................................ 32 Reconciliation of Fund Basis Balance Sheet to Government-wide Statement of Net position – Governmental Activities ........................................................................ 34 Proprietary Funds:

Statement of Net Position – Proprietary Funds ...................................................................................... 36 Statement of Revenues, Expenses, and Changes in Fund Net position – Proprietary Funds .................................................................................................................................... 37 Statement of Cash Flows – Proprietary Funds ....................................................................................... 38 Fiduciary Funds:

Statement of Fiduciary Net Position ........................................................................................................ 40 Statement of Changes in Fiduciary Net Position.................................................................................... 41 Notes to Basic Financial Statements ................................................................................................................... 44 Required Supplementary Information:

Budgets and Budgetary Accounting
Budgeting Procedures ...................................................................................................................................... 77 Budgetary Comparison Schedules
General Fund .................................................................................................................................................. 78 Impact Fee Special Revenue Fund ............................................................................................................... 79 Community Development Special Revenue Fund .................................................................................... 80 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Table of Contents
Page
FINANCIAL SECTION, Continued
Required Supplementary Information, Continued:

Defined Benefit Pension Plan
Schedule of the City’s Proportionate Share of the Net Pension Liability .................................................. 81 Schedule of Contributions ................................................................................................................................ 82 Other Supplemental Information:

Combining and Individual Fund Financial Statements and Schedules:

Nonmajor Governmental Funds:

Combining Balance Sheet ................................................................................................................................. 86 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ............................... 87 Nonmajor Special Revenue Funds:

Combining Balance Sheet ................................................................................................................................. 90 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ............................... 92 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – Gas Tax Special Revenue Fund .................................................................................. 94 Budget to Actual – Local Transportation Special Revenue Fund ............................................................ 95 Budget to Actual – Lighting District Special Revenue Fund .................................................................... 96 Budget to Actual – Abandoned Vehicle Abatement Special Revenue Fund ......................................... 97 Budget to Actual – Lighting and Landscaping Special Revenue Fund .................................................. 98 Budget to Actual – Special Business Pilot Program Special Revenue Fund .......................................... 99 Budget to Actual – CFD 2019-1 Maintenance Service Special Revenue Fund .................................... 100 Nonmajor Capital Projects Funds:

Combining Balance Sheet ............................................................................................................................... 103 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .......................................................................................................................................... 104 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – CIP Streets Measure L Capital Projects Fund ......................................................... 105 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – CIP Parks Capital Projects Fund .............................................................................. 106 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – CIP Streets and Roads Capital Projects Fund ......................................................... 107 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................................... 109 INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Waterford
Waterford, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Waterford (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise City’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 respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City 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 City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

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

To the Honorable Mayor and Members
of the City Council of the City of Waterford
City, 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 issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, pension information, and budgetary comparison information on pages 5-16 and 77-82 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with 2 To the Honorable Mayor and Members
of the City Council of the City of Waterford
City, California

management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements on pages 86-107 are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements on pages 86-107 are the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements on pages 86- 107 are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 13, 2025 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.

The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Emeryville, California
November 13, 2025
3 This page intentionally left blank
4 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
This section provides a narrative overview and analysis of the financial activities of the City of Waterford (City) for the fiscal year ended June 30, 2025. It should be read in conjunction with the accompanying transmittal letter and basic financial statements.

FINANCIAL HIGHLIGHTS
 The City's total net position increased by $623,593 over the course of this year’s operations after conducting all City operations and programs. The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources by $41,539,307 at the end of the 2025 fiscal year. Of that amount, $3,401,080 (the unrestricted net position) may be used to meet the City's ongoing obligations and operating expenses for the next fiscal year.  Overall City-wide program revenues from all governmental and business-type activities decreased by $3,634,602 compared to the 2024 fiscal year. The City's total expense for all programs increased by $1,891,393 compared to the 2024 fiscal year.
 The general fund reported a fund balance of $3,662,080, a decrease of $319,317 from June 30, 2024.

The unrestricted portion of the General Fund’s fund balances is $3,273,693. The General Fund’s cash and investments, including restricted amounts, at June 30, 2025 was $3,554,760.  The City also ended the fiscal year with $14,687,114 in the proprietary enterprise funds net position.

OVERVIEW OF THE ANNUAL FINANCIAL REPORT
This Annual Financial Report includes the Management’s Discussion and Analysis (this part), the Basic Financial Statements, which include the Government-wide and the Fund Financial Statements along with the notes to these financial statements, the Required Supplementary Information and the Combining and Individual Fund Financial Statements and Schedules.

The Basic Financial Statements
The Basic Financial Statements are comprised of the Government-wide Financial Statements and the Fund Financial Statements; these two sets of financial statements provide two different views of the City’s financial activities and financial position.
5 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
OVERVIEW OF THE ANNUAL FINANCIAL REPORT, Continued
Government-wide Financial Statements
The Government-wide Financial Statements provide a broad overview of the City’s activities as a whole and comprise the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities on the full accrual basis, similar to that used by corporations. The Statement of Activities provides information about all the City’s revenues and all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each the City’s programs. The Statement of Activities explains in detail the change in Net Position for the year.

All of the City’s activities are grouped into Governmental Activities and Business-type activities, as explained below. All the amounts in the Statement of Net position and the Statement of Activities are separated into Governmental Activities and Business-type Activities in order to provide a summary of these two activities of the City as a whole.
♦ Governmental activities – All of the City’s basic services are considered to be governmental activities, including general government, public ways and facilities, police services, parks and recreation, community development, planning and zoning, and general administrative services.

These services are supported by general City revenues such as taxes and by specific program revenues such as developer fees.
♦ Business-type activities – All the City’s enterprise activities are reported here, including Wastewater Treatment, Water System, and the Public Financing Authority. Unlike governmental services, these services are supported by charges paid by users based on the amount of the service they use.

Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the Government-wide Financial Statements. However, unlike the Government-wide Financial Statements, Governmental Fund Financial Statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
6 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
OVERVIEW OF THE ANNUAL FINANCIAL REPORT, Continued
Because the focus of the Governmental Fund Financial Statements is narrower than that of the Government-wide Financial Statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the Governmentwide Financial Statement. By doing so, readers may better understand the long-term impact of the government’s near-term financial decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The Governmental Fund Financial Statements provide detailed information about each of the City’s most significant funds, called major funds. The concept of major funds, and the determination of which are major funds, was established by GASB Statement No. 34 and replaces the concept of combining like funds and presenting them as one total. Instead, each major fund is presented individually, with all nonmajor funds summarized and presented only in a single column. Subordinate schedules present the detail of these nonmajor funds. Major funds present the major activities of the City for the year, and may change from year to year as a result of changes in the pattern of the City’s activities.

For the fiscal year ended June 30, 2025, the City’s major funds are as follows:

GOVERNMENTAL FUNDS:
 General Fund
 Impact Fee Special Revenue Fund
 Community Development Special Revenue Fund
PROPRIETARY FUNDS:
 Wastewater Treatment Enterprise Fund
 Water System Enterprise Fund
 Public Financing Authority Fund
For the fiscal year ended June 30, 2025, the City adopted annual appropriated budgets for all governmental funds.

Proprietary funds. The City maintains Enterprise-type proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the Government-wide Financial Statements. The City uses enterprise funds to account for Water and Wastewater activities. Proprietary funds provide the same type of information as the Government-wide Financial Statements, only in more detail. The proprietary fund financial statements provide separate information for all of these operations.
7 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
OVERVIEW OF THE ANNUAL FINANCIAL REPORT, Continued
Notes to the Basic Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the Government-wide and Fund Financial Statements. The notes to the basic financial statements can be found in the details of this report.

Other Information
In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information concerning the City’s pension contributions and proportionate share of the net pension liability. Required supplementary information can be found in the details of this report.

The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the notes to the financial statements.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $41,539,307 as of June 30, 2025. The Summary of Net position as of June 30, 2025, and 2024, follows:

Govern- Business- Govern- Businessmental type mental type Activities Activities Total Activities Activities Total Current and other assets $ 8,410,810 $ 2,351,294 $ 10,762,104 $ 7,398,021 $ 4,244,801 $ 11,642,822 Noncurrent assets 21,751,263 15,946,636 37,697,899 22,258,433 15,181,904 37,440,337 Deferred outflows 453,312 381,040 834,352 609,712 511,389 1,121,101 Total assets and deferred
outflows 30,615,385 18,678,970 49,294,355 30,266,166 19,938,094 50,204,260 Current and other liabilities 835,500 1,014,169 1,849,669 769,454 2,276,210 3,045,664 Long-term liabilities 2,860,721 2,936,641 5,797,362 2,968,336 3,435,165 6,403,501 Deferred inflows 66,971 41,046 108,017 93,697 57,426 151,123 Total liabilities and deferred
inflows 3,763,192 3,991,856 7,755,048 3,831,487 5,768,801 9,600,288 Net position:

Net Investment in capital
assets 20,176,899 13,490,732 33,667,631 20,602,854 12,290,904 32,893,758 Restricted 4,048,982 421,614 4,470,596 2,862,201 413,039 3,275,240 Unrestricted 2,626,312 774,768 3,401,080 2,969,624 1,465,350 4,434,974 Total net postion $ 26,852,193 $ 14,687,114 $ 41,539,307 $ 26,434,679 $ 14,169,293 $ 40,603,972 2025 2024
Summary of Net Position
8 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued
Overall, total net position increased by $623,593 of this amount, net position for governmental activities increased by $105,772 and net position for business-type activities increased by $517,821.

Revenues
The City’s total revenues for governmental and business-type activities were $10,968,490 for the fiscal year ended June 30, 2025. Significant revenues for the City for fiscal year 2025 were derived from charges from services (50%), operating grants and contributions (15%), and taxes and general revenues (35%).

The following discusses variances in key revenues from the prior fiscal year:

1. Charges for Services. Charges for services increased $502,355 or 12% due to several new developments that are in the planning stages.

2. Operating Grants and Contributions. Annual revenues decreased $2,365,290. This represents a 75% decrease over the prior fiscal year. The decrease was primarily due to the allocation of the American Rescue Plan Funds to the Tim Bell Water and Sewer Line Extension Project in fiscal year 2024.

3. Capital Grants and Contributions. Annual revenues decreased $1,771,667. This represents a 53% decreased over the prior fiscal year. The decrease was primarily due to contributed capital assets in fiscal year 2024.

The chart on the following page outlines the year over year change in revenues, expenses, and changes in net position.
9 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued
The change in net position for the fiscal years ended June 30, 2025 and 2024, follows:

Govern- Business- Govern- BusinessGovernmental Business-type Governmental Business-type Activities Activities Total Activities Activities Total Revenues:

Program revenues:

Charges for services $ 278,477 $ 4,520,869 $ 4,799,346 $ 152,544 $ 4,144,447 $ 4,296,991 Grants and contributions:

Operating 780,754 780,754 - 3,146,044 3,146,044 -
Capital 867,493 699,436 1,566,929 2,611,926 726,670 3,338,596 General revenues:

Property taxes
and assessments 551,931 551,931 - 532,907 532,907 -
Sales taxes 750,477 750,477 - 755,591 755,591 -
Franchise taxes 162,974 162,974 - 179,577 179,577 -
Utility users tax 743,079 743,079 - 656,667 656,667 -
Other taxes 1,130,387 1,130,387 - 1,082,820 1,082,820 - Use of money and property 238,176 127,196 365,372 230,060 83,974 314,034 Other general 117,241 117,241 - 101,398 101,398 -
Total revenues 5,620,989 5,347,501 10,968,490 9,449,534 4,955,091 14,404,625 Expenses:

Governmental activities:

General government 472,803 472,803 - 391,763 391,763 -
Public ways and facilities 1,431,530 1,431,530 - 1,328,254 1,328,254 - Police services 2,435,381 2,435,381 - 2,239,519 2,239,519 - Parks and recreation 602,960 602,960 - 504,376 504,376 - Community development 525,320 525,320 - 356,365 356,365 - Interest and fiscal charges 57,223 - 57,223 62,785 - 62,785 Business-type activities:

Wastewater Treatment 1,945,683 - 1,945,683 1,330,101 - 1,330,101 Water System 2,772,364 - 2,772,364 2,132,767 - 2,132,767 Public Financing Authority 101,633 - 101,633 107,574 - 107,574 Total expenses 5,525,217 4,819,680 10,344,897 4,883,062 3,570,442 8,453,504 Excess (Deficiency) of revenues over
expenditures before transfers 95,772 527,821 623,593 4,566,472 1,384,649 5,951,121 Transfers 10,000 (10,000) (1,607,738) - 1,607,738 -
Change in net position 105,772 517,821 623,593 2,958,734 2,992,387 5,951,121 Net Positions:

Beginning of year, previously stated 26,434,679 14,169,293 40,603,972 23,475,945 11,176,906 34,652,851 Restatements 311,742 311,742 - - - -
End of year $ 26,852,193 $ 14,687,114 $ 41,539,307 $ 26,434,679 $ 14,169,293 $ 40,603,972 2025 2024
Changes in Net Position
10 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued
Expenses
Governmental and business-type activity expenses of the City for the year totaled $10,364,996.

Governmental activity expenses totaled $5,545,316 or 54% of total expenses. Business-type activities incurred $4,819,680 of expenses during the fiscal year or 46% of total expenses.

Governmental Activities
The following table shows the cost of each of the City’s major programs and the net cost of the programs. Net cost is the total cost less fees and other direct revenue generated by the activities. The net cost reflects the financial burden that was placed on the City’s taxpayers by each of the programs.

The total cost of services and the net cost of services for the fiscal years ended June 30, 2025 and 2024, are as follows:

Total Cost Net Cost Total Cost Net Cost
of Services of Services of Services of Services
General government $ 472,803 $ 446,579 $ 391,763 $ 391,763 Public ways and facility 1,431,530 155,768 1,328,254 (3,526,379) Police services 2,435,381 2,143,883 2,239,519 1,943,881 Parks and recreation 602,960 581,215 504,376 463,073
Community development 525,320 213,825 356,365 (362,575) Interest and fiscal charges 57,223 57,223 62,785 62,785 Total $ 5,525,217 $ 3,598,493 $ 4,883,062 $ (1,027,452) 2025 2024
11 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued
Revenues by source for the fiscal years ended June 30, 2025 and 2024, are as follows:

Charges for services
$278,477 5%
Operating grants
$1,628,149 29%
Capital grants $40,198
1%
Property taxes
$551,931 10%
Sales taxes $750,477
13%
Franchise taxes
$162,974 3%
Utility users tax
$743,079 13%
Other taxes
$1,130,387 20%
Use of money and
property $238,175 4%
Other general
$117,241 2%
Revenues by Source - Governmental Activities
2025
Charges for services
$152,544 2%
Operating grants
$4,188,546 44%
Capital grants
$1,569,424 17%
Property taxes
$532,907 6%
Sales taxes $755,591
8%
Franchise taxes
$179,577 2%
Utility users tax
$656,667 7%
Other taxes $1,082,820
11%
Use of money and
property $230,060 2%
Other general $101,398
1%
Revenues by Source - Governmental Activities
2024
12 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued
Business-type activities. Business-type activities increased the City’s net position by $517,821 . The City has three business-type activities: Wastewater Treatment, Water System, and Public Financing Authority. The operating revenues and expenses for the business-type activities for the fiscal years ended June 30, 2025, and 2024, are as follows:
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
Wastewater
Treatment
Water System Public
Financing
Authority
Operating revenues
Operating expenses
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
Wastewater
Treatment
Water System Public
Financing
Authority
Operating revenues
Operating expenses
Operating Revenues and Expenses
Business-type Activities
2024
Operating Revenues and Expenses
Business-type Activities
2025
13 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued
Financial Analysis of the Government’s Funds
The City of Waterford uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. The fund financial statements focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide financial statements.

Governmental funds. The City’s governmental funds provide information on near-term inflows, outflows, and balances of spending resources. At the fiscal year ended June 30, 2025, the City’s governmental funds reported combined fund balances of $7,384,495. This is an increase of $632,463.

The General Fund is the chief operating fund of the City. At the fiscal year ended June 30, 2025, General Fund unassigned fund balance totaled $3,273,692. This is a decrease of $339,216 from the prior year.

Proprietary funds. The City’s proprietary funds net position increased by $517,821 during the fiscal year ended June 30, 2025.

Capital Assets
The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2025, amount to $37,697,900. This investment in capital assets includes land, construction in progress costs for road and median improvements, buildings and structures, equipment, vehicles, and infrastructure.
2025 2024 2025 2024 2025 2024
Land $ 5,399,530 $ 5,399,530 $ 427,672 $ 427,672 $ 5,827,202 $ 5,827,202 Construction in progress 2,027,671 1,158,186 590,939 2,639,057 2,618,610 3,797,243 Buildings and structures 4,878,950 5,120,335 4,316,921 962,118 9,195,871 6,082,453 Equipment 3,430,521 3,364,711 13,009,752 4,392,010 16,440,273 7,756,721 Vehicles 754,283 798,635 4,421,275 501,955 5,175,558 1,300,590 Infrastructure 18,934,140 19,087,954 501,955 13,009,752 19,436,095 32,097,706 Less Accum. Deprec. (13,673,832) (12,670,918) (7,321,877) (6,750,660) (20,995,709) (19,421,578) Total $ 21,751,263 $ 22,258,433 $ 15,946,637 $ 15,181,904 $ 37,697,900 $ 37,440,337 Governmental Activities Business-type Activities Totals More detail of the capital assets and current activity can be found in the notes to the financial statements.

Long Term Debt
The City’s total long-term debt as of June 30, 2025 and 2024 was $4,133,471 ($1,574,364 for Governmental Activities and $2,559,107 for Business-type Activities) and $4,684,273 ($1,655,579 for Governmental Activities and $3,028,694 for Business-type Activities) respectively. More detail of long-term debt and current activity can be found in Note 7. to the financial statements. 14 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
Economic Outlook
The City of Waterford is located in the eastern portion of Stanislaus County, in the heart of the California’s Central Valley. It lies along the Tuolumne River and is about 15 minutes east of the City of Modesto. The City currently occupies a land area of approximately 2.4 square miles and serves a population of approximately 9,300 persons. The City was incorporated in 1969 as a municipal corporation and operates under a Council - Manager form of government. Policy-making and legislative authority are vested in a five-member governing council consisting of the Mayor and four Council Members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, approving nominees to commissions and hiring the City Manager, City Attorney, and the Police Chief. The Council is elected on a non-partisan basis. Council Members serve four-year staggered terms, with two Council Members elected every two years. The Mayor is elected and serves a two-year term. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City and for hiring and appointing the heads of the various departments.

Governmental revenues of the City consist of charges for services, franchise fees, utility users taxes, property taxes, and revenue sources from the State of California and federal government including capital grants, motor vehicle license fees and motor vehicle fuel and sales taxes. Many of the City’s revenues are dependent on the local and State economy and generally follow with changes and trends of the County and the State.2026 is not expected to see much growth with most increases in taxes relatively flat.

The City’s outlook for 2026 is cautiously optimistic. The City’s revenue sources are stable and consistent but growth, as usual, is very minimal. With upward trends in costs across the board due to inflation and rising costs of living net revenue growth is not keeping pace with rising costs. As a result, capital projects, particularly in the General Fund will be limited as operating costs are taking up more of the available dollars. The General Fund is anticipating limited expenditure growth in capital and expanded services to address the rising costs of employment costs. In the area of development, the City is anticipating substantial growth over a 5–10-year timeline with the build out of the Lake Pointe Master Plan area which is currently in the initial stages of development. As this development progresses the City will see increased collection of building and development fees but also increased costs of infrastructure. Substantial up-front investments will be required through a collaborative effort with the City and the Developer. The City’s Enterprise Funds are expecting increases in most services areas particularly relating to employment costs and infrastructure maintenance. The Water Fund, in particular, has extensive capital needs that are burdening the system. The City is evaluating customer charges and financing options to address those needs.
15 City of Waterford, California
Basic Financial Statements
For the year ended June 30, 2025
Management’s Discussion and Analysis
Requests for Information
This Annual Financial Report is intended to provide citizens, taxpayers, investors, and creditors with a general overview of the City’s finances. If you have any questions about this report, need additional financial information, or would like to obtain component unit financial statements, contact the City of Waterford Finance Department, 101 E Street, Waterford, CA 95386, or visit the City’s web page at www.cityofwaterford.org.
16 BASIC

FINANCIAL STATEMENTS
17 This page intentionally left blank
18 GOVERNMENT-WIDE

FINANCIAL STATEMENTS
19 This page intentionally left blank
20 City of Waterford
Statement of Net Position
June 30, 2025
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments $ 1,826,986 6,337,480 $ 8,164,466 $ Restricted cash and investments 421,614 - 421,614
Receivables:

Accounts 386,082 562,663 948,745
Loans/Notes receivable 1,122,279 1,122,279 -
Loans receivable from fiduciary activities - 105,000 105,000 Internal balances 388,388 (388,388) -
Capital assets:

Nondepreciable 7,427,201 1,018,611 8,445,812
Depreciable 14,324,062 14,928,025 29,252,087
Total assets 30,162,073 18,297,930 48,460,003

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 103,203 - 103,203
Deferred outflows related to pension 453,312 277,837 731,149 Total deferred outflows of resources 453,312 381,040 834,352

LIABILITIES
Accounts payable and accrued liabilities 674,790 147,728 822,518 Interest payable 35,537 24,578 60,115
Due to other governments 14,620 - 14,620
Deposits payable 1,313 181,630 182,943
Unearned revenue 9,025 142,527 151,552
Current portion of long-term debt 86,651 491,230 577,881 Compensated absences - current portion 13,564 26,476 40,040 Long-term liabilities:

Compensated absences 20,347 39,714 60,061
Long-term debt, due after one year 1,487,713 2,067,877 3,555,590 Net pension liability 1,352,661 829,050 2,181,711
Total liabilities 3,696,221 3,950,810 7,647,031

DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pension 66,971 41,046 108,017 Total deferred inflows of resources 66,971 41,046 108,017

NET POSITION
Net investment in capital assets 20,176,899 13,490,732 33,667,631 Restricted 4,048,982 421,614 4,470,596
Unrestricted (deficit) 2,626,312 774,768 3,401,080
$ 26,852,193 $ 14,687,114 $ 41,539,307
Primary Government
Total net position
See accompanying Notes to Basic Financial Statements.
21 Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary Government:

Governmental activities:

General government 472,803 $ 5,541 $ 20,683 $ - $ 26,224 $ Public ways and facilities 44,522 1,431,530 363,747 867,493 1,275,762 Police services 15,709 2,435,381 275,789 - 291,498
Parks and recreation 21,745 602,960 - - 21,745
Community development 190,960 525,320 120,535 - 311,495 Interest and fiscal charges - 57,223 - - -
Total governmental activities 5,525,217 278,477 780,754 867,493 1,926,724 Business-type activities:

Wastewater 1,945,683 1,959,691 - 673,613 2,633,304
Water 2,772,364 2,509,203 - 25,823 2,535,026
Public Financing Authority 101,633 51,975 - - 51,975
Total business-type activities 4,819,680 4,520,869 - 699,436 5,220,305 Total primary government $ 4,799,346 10,344,897 $ 780,754 $ 1,566,929 $ 7,147,029 $ General Revenues:

Taxes:

Property taxes, levied for general purposes
Sales taxes
Franchise taxes
Utility users taxes
Other taxes
Use of money and property
Other general revenues
Total general revenues
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year, as previously stated
Restatements
Net position - beginning of year, as restated
Net position - end of year
City of Waterford
Statement of Activities
For the year ended June 30, 2025
Program Revenues
See accompanying Notes to Basic Financial Statements.
22 Governmental Business-Type
Activities Activities Total
$ (446,579) $ (446,579) - $
(155,768) (155,768) -
(2,143,883) (2,143,883) -
(581,215) (581,215) -
(213,825) (213,825) -
(57,223) (57,223) -
(3,598,493) (3,598,493) -
687,621 - 687,621
(237,338) - (237,338)
(49,658) - (49,658)
400,625 - 400,625
(3,598,493) 400,625 (3,197,868)
551,931 551,931 -
750,477 750,477 -
162,974 162,974 -
743,079 743,079 -
1,130,387 1,130,387 -
238,176 127,196 365,372
117,241 117,241 -
3,694,265 127,196 3,821,461
10,000 (10,000) -
3,704,265 117,196 3,821,461
105,772 517,821 623,593
26,434,679 14,169,293 40,603,972
311,742 311,742 -
26,746,421 14,169,293 40,915,714
$ 26,852,193 $ 14,687,114 $ 41,539,307 $ 14,687,114
and Changes in Net Position
Net (Expense) Revenue
Primary Government
23 This page intentionally left blank
24 FUND

FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Funds Financial Statements
25 This page intentionally left blank
26 GOVERNMENTAL FUND FINANCIAL STATEMENTS
General Fund Primary operating fund of the City, accounts for all activities except those legally or administratively required to be accounted for in other funds.

Impact Fee Fund accounts for capital facility fees collected through building and development activity.

Their use is specified in the City's Capital Facility Fee Nexus Study.

Community Development used to account for monies received from the US Department of Housing & Urban Development and expended principally for programs and activities to benefit low-income residents through a first time homebuyers program to produce affordable housing and rehabilitate existing residential units and infrastructure improvements in low/moderate income neighborhoods. 27 City of Waterford
Balance Sheet
Governmental Funds
June 30, 2025
Community
General Impact Fee Development
Fund Special Revenue Special Revenue
ASSETS
Cash and investments 3,554,760 $ 1,489,232 $ 421,375 $
Receivables:

Account receivables 13,042 - -
Intergovernmental 297,555 - -
Loans/Notes receivable - - 1,122,279
Other receivable 8,492 - -
Due from other funds 64,876 - -
Advances to other funds 388,388 - -
Total assets $ 1,489,232 4,327,113 $ 1,543,654 $

LIABILITIES, DEFERRED

INFLOW OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ - 654,695 $ 4,950 $ Due to other funds - - -
Unearned revenue 9,025 - -
Deposits payable 1,313 - -
Due to other governments 14,620 - -
Total liabilities 14,620 665,033 4,950
Deferred Inflow of Resources:

Unavailable revenue - - 326,567
Fund Balances:

Nonspendable - Advances 388,388 - -
Restricted - 1,474,612 1,212,137
Unassigned 3,273,692 - -
Total fund balances 1,474,612 3,662,080 1,212,137
Total liabilities, deferred inflow
of resources, and fund balances $ 1,489,232 4,327,113 $ 1,543,654 $ Major Funds
See accompanying Notes to Basic Financial Statements.
28 Non-Major
Governmental
Funds Totals
$ 872,113 $ 6,337,480
- 13,042
243,574 541,129
- 1,122,279
- 8,492
- 64,876
- 388,388
$ 1,115,687 $ 8,475,686
$ 15,145 $ 674,790
64,876 64,876
- 9,025
- 1,313
- 14,620
80,021 764,624
- 326,567
- 388,388
1,035,666 3,722,415
- 3,273,692
1,035,666 7,384,495
$ 1,115,687 $ 8,475,686
See accompanying Notes to Basic Financial Statements.
29 Total Fund Balances - Total Governmental Funds $ 7,384,495

Capital assets used in governmental activities were not current financial resources.

Therefore, they were not reported in the Governmental Funds' Balance Sheet. 21,751,263 Interest payable is not due and payable in the current period and, therefore, are not reported in the governmental funds balance sheet. (35,537) Unavailable revenue recorded in the fund financial statements resulting from activities in which revenues were earned but unavailable are reclassified as revenues in the Government-Wide Financial Statements. 326,567
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds balance sheet.

Compensated absence $ (33,911)
Due within one year (86,651)
Due after one year (1,487,713)
Net pension liability (1,352,661)
Deferred outflows of resources - pensions 453,312
Deferred inflows of resources - pensions (66,971)
Total long-term liabilities $ (2,574,595) (2,574,595)
Net Position of Governmental Activities $ 26,852,193
Amounts reported for governmental activities in the Statement of Net Position were different because:

City of Waterford
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2025
See accompanying Notes to Basic Financial Statements.
30 This page intentionally left blank
31 Statement of Revenues, Expenditures and Changes in Fund Balances For the year ended June 30, 2025
Community
General Impact Fee Development
Fund Special Revenue Special Revenue
REVENUES:

Taxes and assessments 3,315,904 $ 67,934 $ - $
Licenses and permits 203,957 - -
Intergovernmental 257,833 - 83,719
Fines and forfeitures 12,458 - -
Charges for services 7,454 - -
Use of money and property 135,120 50,211 22,845
Other revenues 71,861 - -
Total revenues 118 4,004,587 106 ,145 ,564
EXPENDITURES:

Current:

General government 213,140 - -
Public ways and facilities 339,966 - -
Police services 2,392,818 - -
Parks and recreation 424,860 - -
Community development 523,761 - 1,559
Capital outlay 644,818 - 24,854
Debt service:

Principal 60,855 - -
Interest and fiscal charges 46,752 - -
Total expenditures - 4,646,970 26 ,413

REVENUES OVER (UNDER)
EXPENDITURES 118,145 (642,383) 80,151
OTHER FINANCING SOURCES (USES):

Transfers in 343,496 - -
Transfers out (20,430) (4,985) -
Total other financing
sources (uses) (4,985) 323,066 -
Net change in fund balances 113,160 (319,317) 80,151
FUND BALANCES:

Beginning of year, as previously stated 3,981,397 1,361,452 - Restatements - - 1,131,986
Beginning of year, as restated 3,981,397 1,361,452 1,131,986 End of year 3,662,080 $ 1,474,612 $ 1,212,137 $
City of Waterford
Governmental Funds
Major Funds
See accompanying Notes to Basic Financial Statements.
32 CIP Streets Non-Major
and Roads Governmental
Capital Projects Funds Totals
$ 123,004 - $ 3,506,842 $
- - 203,957
1,180,539 - 1,522,091
- - 12,458
- - 7,454
11,510 - 219,686
61,815 - 133,676
1 - 5 ,376,868 ,606,164
- - 213,140
124,316 - 464,282
37,849 - 2,430,667
- - 424,860
- - 525,320
122,778 - 792,450
-
20,360 - 81,215
5,015 - 51,767
310 - 4 ,318 ,983,701
1,066,550 - 622,463
319,457 - 662,953
(627,538) - (652,953)
(308,081) - 10,000
758,469 - 632,463
1,500,749 (91,566) 6,752,032
(1,223,552) 91,566 -
277,197 - 6,752,032
$ 1,035,666 - $ 7,384,495 $
See accompanying Notes to Basic Financial Statements.
33 Net Change in Fund Balances - Total Governmental Funds $ 632,463 Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets:

Capital asset purchases capitalized $ 781,481
Capital asset disposals (28,828)
Depreciation expense (1,259,823) (507,170)
Revenues that did not meet the availability criteria for governmental funds are recognized as revenue in the Government-Wide Financial Statements 14,825 Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds:

Principal retirement of debt 81,215
Changes in interest payable (5,456)
Change in compensated absences (3,488)
Change in net pension liability and related accounts (106,617) (34,346)

Change in Net Position of Governmental Activities $ 105,772 Amounts reported for governmental activities in the Statement of Activities are different City of Waterford
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the year ended June 30, 2025
See accompanying Notes to Basic Financial Statements.
34 PROPRIETARY FUND FINANCIAL STATEMENTS
Wastewater Treatment Fund accounts for all financial transactions relating to the City's wastewater collection and treatment.

Water System Fund all financial transactions relating to the City’s three water systems, River Pointe, Waterford and Hickman.

Public Financing Authority Fund accounts for the accumulation of resources from lease payments and the payment of long-term debt incurred by the Financing Authority. 35 City of Waterford
Statement of Net Position
Proprietary Funds
June 30, 2025
Wastewater
Treatment
Fund
Water
System Fund
Public
Financing
Authority
Fund Totals
ASSETS
Current assets:

Cash and investments 781,072 $ 719,159 $ 326,755 $ 1,826,986 $ Restricted cash and investments - - 421,614 421,614
Receivables:

Account receivables 184,435 201,647 - 386,082
Advances to other funds - - 49,109 49,109
Total current assets 965,507 920,806 797,478 2,683,791
Noncurrent assets:

Loan to Successor Agency private purpose trust - 105,000 - 105,000 Capital assets, net 5,130,310 10,816,326 15,946,636 -
Total noncurrent assets 5,130,310 10,816,326 105,000 16,051,636 Total assets 6,095,817 11,737,132 902,478 18,735,427

DEFERRED OUTFLOW OF RESOURCES
Deferred loss on refunding - 46,214 56,989 103,203
Deferred outflows related to pension 160,853 102,361 14,623 277,837 Total deferred outflows of resources 207,067 102,361 71,612 381,040

LIABILITIES
Current liabilities:

Accounts payable and accrued liabilities 3,693 144,035 147,728 - Interest payable 19,804 4,774 - 24,578
Deposits payable 81,688 99,942 181,630 -
Unearned revenue 142,527 - 142,527 -
Current portion of long-term debt 266,530 224,700 491,230 - Compensated absences - current portion 10,212 15,490 774 26,476 Total current liabilities 524,454 488,941 1,014,169 774 Noncurrent liabilities:

Compensated absences 15,317 23,236 1,161 39,714
Long-term debt, due after one year 971,300 726,577 370,000 2,067,877 Advance from general fund 437,497 - 437,497 -
Net pension liability 305,440 479,976 43,634 829,050
Total noncurrent liabilities 1,221,870 1,737,473 414,795 3,374,138 Total liabilities 1,746,324 2,226,414 415,569 4,388,307

DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pension 23,764 15,122 2,160 41,046 Total deferred inflows of resources 23,764 15,122 2,160 41,046

NET POSITION
Net investment in capital assets 4,183,417 9,620,326 13,803,743 - Restricted - 421,614 - 421,614
Unrestricted (deficit) 349,379 (22,369) 134,747 461,757 Total net position $ 4,532,796 $ 9,597,957 $ 556,361 $ 14,687,114 See accompanying Notes to Basic Financial Statements.
36 Wastewater
Treatment
Fund
Water System
Fund
Public
Financing
Authority
Fund Totals
OPERATING REVENUES:

Charges for services 1,956,507 $ 2,509,203 $ 51,975 $ 4,517,685 $ Other operating revenue 3,184 - - 3,184
Total operating revenues 2,509,203 1,959,691 51,975 4,520,869 OPERATING EXPENSES:

Salaries and benefits 587,628 885,123 25,161 1,497,912
Maintenance and operations 430,974 1,046,641 6,371 1,483,986 Professional fees 606,024 195,569 5,340 806,933
Materials and supplies 32,295 228,315 - 260,610
Depreciation 221,171 350,046 571,217 -
Total direct operating expenses 2,705,694 1,878,092 36,872 4,620,658 OPERATING INCOME (LOSS): (196,491) 81,599 15,103 (99,789) NONOPERATING REVENUES (EXPENSES):

Intergovernmental 673,613 25,823 - 699,436
Interest revenue 40,477 59,110 27,609 127,196
Interest expense (67,591) (66,670) (64,761) (199,022)
Total Nonoperating revenues (expenses) 18,263 646,499 (37,152) 627,610 NET INCOME (LOSS) BEFORE 728,098 (178,228) (22,049) 527,821

TRANSFERS AND CONTRIBUTIONS
Transfers out (2,500) (7,500) (10,000) -
Total capital contributions and transfers (2,500) (7,500) - (10,000) Change in net position 725,598 (185,728) (22,049) 517,821 NET POSITION:

Beginning of year 3,807,198 9,783,685 578,410 14,169,293 End of year $ 4,532,796 $ 9,597,957 $ 556,361 $ 14,687,114 City of Waterford
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For the year ended June 30, 2025
See accompanying Notes to Basic Financial Statements.
37 City of Waterford
Statement of Cash Flows
Proprietary Funds
Wastewater
Treatment Fund
Water System
Fund
Public
Financing
Authority
Fund Totals
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers/users for services provided $ 1,905,819 $ 2,454,069 $ 51,975 $ 4,411,863 Cash payments to suppliers for goods and services (1,182,319) (1,982,841) (11,711) (3,176,871) Cash payments to employees for services (547,446) (850,962) (21,573) (1,419,981) Net cash provided by operating activities 176,054 (379,734) 18,691 (184,989) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Cash disbursements to other funds (2,500) (7,500) - (10,000) Net cash provided by (used in) noncapital
financing activities (2,500) 14,915 - 12,415

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition and construction of capital assets (745,113) (590,836) (1,335,949) - Proceeds from capital grants - 25,823 - 25,823
Principal paid on long term debt (256,687) (212,900) (469,587) - Interest paid on long term debt (52,187) (71,670) (40,674) (164,531) Net cash used in capital and related financing activities (1,053,987) (849,583) (40,674) (1,944,244) CASH FLOWS FROM INVESTING ACTIVITIES:

Repayments from Successor Agency - 74,717 - 74,717
Investment income received 40,477 59,110 25,093 124,680 Net cash provided by (used in) investing activities 40,477 59,110 99,810 199,397

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (839,956) (1,155,292) 77,827 (1,917,421) CASH AND CASH EQUIVALENTS:

Beginning of year 1,621,028 1,874,451 670,542 4,166,021 End of year $ 781,072 $ 719,159 $ 748,369 $ 2,248,600

PRESENTATION IN STATEMENT OF NET POSITION
Cash and investments $ 781,072 $ 719,159 $ 326,755 $ 1,826,986 Restricted cash and investments - 421,614 - 421,614
Total $ 781,072 $ 719,159 $ 748,369 $ 2,248,600
CASH FLOWS FROM OPERATING ACTIVITIES:

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

Operating income (loss) $ 81,599 $ (196,491) $ 15,103 $ (99,789) Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:

Depreciation 221,171 350,046 - 571,217
Pension plan 37,832 24,075 3,439 65,346
(Increase) decrease in assets:

Accounts receivable (57,047) (61,483) (118,530) -
Increase (decrease) in liabilities:

Accounts payable (113,026) (512,316) (625,342) -
Deposits payable 3,175 6,349 - 9,524
Compensated absences 2,350 10,086 149 12,585
Net cash provided by (used in) operating activities $ 176,054 $ (379,734) $ 18,691 $ (184,989) For the year ended June 30, 2025
See accompanying Notes to Basic Financial Statements.
38 FIDUCIARY FUND FINANCIAL STATEMENTS
Successor Agency - Former Waterford Redevelopment Agency accounts for funds collected and disbursed for the dissolution of the former Waterford Redevelopment Agency related to Administration and Retirement of enforceable obligations
39 Private Purpose
Trust Fund
Successor
Agency -
Former
Waterford
Redevelopment
Agency
ASSETS
Cash and investments 2,314 $
Total assets 2,314

LIABILITIES
Loan payable 105,000
Total liabilities 105,000

NET POSITION
Net position held in trust for
redevelopment dissolution (102,686)
Total net position (deficit) $ (102,686)
City of Waterford
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2025
See accompanying Notes to Basic Financial Statements.
40 Private Purpose
Trust Fund
Successor
Agency -
Former
Waterford
Redevelopment
Agency
ADDITIONS:

Property taxes 81,892 $
Total additions 81,892
DEDUCTIONS:

Interest and trustee fees 9,100
Total Deductions 9,100
Change in fiduciary net position 72,792
NET POSITION:

Beginning of year (175,478)
End of year (102,686) $
City of Waterford
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2025
See accompanying Notes to Basic Financial Statements.
41 This page intentionally left blank
42 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

INDEX TO NOTES TO BASIC FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES .......................................................................... 44

2. CASH AND INVESTMENTS .............................................................................................................................. 54

3. ACCOUNTS RECEIVABLE ................................................................................................................................ 59

4. LOANS RECEIVABLE ......................................................................................................................................... 59

5. CAPITAL ASSETS ................................................................................................................................................ 60

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES ............................................................................... 61

7. LONG-TERM LIABILITIES ................................................................................................................................. 62

8. NET POSITION/ FUND BALANCES ............................................................................................................... 65

9. INTERFUND TRANSACTIONS ........................................................................................................................ 66

10. RISK MANAGEMENT ........................................................................................................................................ 68

11. PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ............................................................................................. 69

12. COMMITMENTS AND CONTINGENCIES .................................................................................................... 73

13. PRIOR PERIOD ADJUSTMENTS ....................................................................................................................... 74 43 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

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

A. Financial Reporting Entity
The City of Waterford (City) was chartered in 1969, under the laws and regulations of the State of California (State). The City operates under a City Council/Manager form of government and provides the following services: general government, public ways and facilities, police services, parks, community development, wastewater treatment facilities, and water.

The City operates as a self-governing local government unit within the State. It has limited authority to levy taxes and has the authority to determine user fees for the services that it provides. The City’s main funding sources include taxes, other intergovernmental revenue from state and federal sources, user fees, and federal and state financial assistance.

The financial reporting entity consists of (a) the primary government, the City, (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the primary government is not accountable, but for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. Financial accountability is defined as the appointment of a voting majority of the component unit’s board, and either (a) the City has the ability to impose its will on the organization, or (b) there is a potential for the organization to provide a financial benefit to or impose a financial burden on the City.

As required by GAAP, these financial statements present the government and its component units, entities for which the government is considered to be financially accountable. These component units are reported on a blended basis. Blended component units, although legally separate entities, are, in substance, part of the government’s operations and so data from these units are combined with data of the primary government. The financial statements of the individual component units, if applicable as indicated below, may be obtained by writing to the City of Waterford, Finance Department, 101 E Street, Waterford, CA 95386.

The City’s reporting entity includes the following blended component unit:

The Waterford Public Financing Authority was established to provide for financing of public capital improvements for the City, the Agency and other local agencies. The City Council members serve as the Governing Board of the Authority and all accounting and administrative functions are performed by the City, which records all activity of the Authority in an enterprise fund. Financial statements for the Authority may be obtained from the City's finance department. 44 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity with its own self-balancing set of accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses. These funds are established for the purpose of carrying out specific activities or certain objectives in accordance with specific regulations, restrictions or limitations. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Government-Wide Financial Statements
The City’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column.

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred inflows/outflows of resources, and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liabilities are incurred.

Certain types of transactions reported as program revenues for the City are reported in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
 Due to/from other funds
 Transfers in/out
The City applies all applicable GASB pronouncements including all NCGA Statements and Interpretations currently in effect.
45 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The City has presented all major funds that meet specific qualifications.

All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

The City reports the following funds as major governmental funds of the City:

General Fund accounts for resources traditionally associated with governmental activities that are not required legally or by sound financial management to be accounted for in another fund.

Impact Fees Special Revenue Fund accounts for Development Impact Fees collected and expended.

Community Development Special Revenue Fund accounts for First Time Home Buyer and Rehabilitation loans made to homeowners under previous US Department of Housing & Urban Development funding. The fund is currently not actively making any new loans. The Fund accounts for the balance of the loans receivable and repayment as it occurs.

The City reports the following funds as non-major governmental funds of the City:

Gas Tax Special Revenue Fund accounts for funds received and expended for street maintenance purposes as defined in Sections 2105, 2106, 2107, and 2107.5 of the Streets and Highway Code.

Local Transportation Special Revenue Fund accounts for funds received and expanded for streets and road under the Transportation Development Act.

Lighting District Special Revenue Fund accounts for Assessments collected and expended for the City of Waterford Lighting District.

Abandoned Vehicle Abatement Special Revenue Fund accounts for funds received and expended for Abandoned Vehicle Abatement.

Lighting and Landscaping Special Revenue Fund accounts for Assessments collected and expended for the City of Waterford Lighting and Landscaping District.

Special Business Pilot Program Special Revenue Fund accounts for cannabis pilot program revenue. 46 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued CFD 2019-1 Maintenance Service Fund accounts for the services, administrative expenditures and other maintenance expenditures for the Community Facility District CIP Streets Measure L Capital Projects Fund accounts for Measure L monies received by the City for local streets and roads construction projects.

CIP Parks Capital Projects Fund accounts for all parks related construction projects.

CIP Streets and Roads Capital Projects Fund accounts for all streets and roads construction projects.

The City considers all revenues reported in the governmental funds to be available if the revenues are collected within 60 days after year end, with the exception of grant revenues. Grant revenues are considered to be available if collected within 180 days of the end of the current fiscal period.

Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal year.

All other revenue items are considered to be measurable and available only when cash is received by the government. Expenditures (including capital outlay) are recorded when the related fund liability is incurred.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided.

Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Position, a Statement of Revenues, Expenses and Change in Net Position, and a Statement of Cash Flows for all proprietary funds.

Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which a liability is incurred.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.

The City reports the Wastewater Treatment, Water System and Public Financing Authority Funds as proprietary funds of the City.

Wastewater Treatment Fund accounts for all financial transaction relating to the City’s wastewater collection and treatment.

Water System Fund accounts for all the financial transactions relating to the city’s three water systems, River Pointe, Waterford and Hickman.
47 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Proprietary Fund Financial Statements, Continued
Public Financing Authority Fund accounts for the accumulation of resources from lease payments and the payment of long-term debt incurred by the financing Authority.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements consist of a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The City has one types of fiduciary fund, a private-purpose trust fund. Private-purpose trust funds account for resources of all other trust arrangements in which principal and income benefit individuals, private organizations, or other governments (i.e. unclaimed property/escheat property). Fiduciary funds are accounted for using the accrual basis of accounting.

The City reports the following fiduciary fund:

Successor Agency-Former Waterford Redevelopment Agency-Trust Fund – accounts for funds collected and disbursed for the dissolution of the former Waterford Redevelopment Agency related to administration and retirement of enforceable obligations.

C. Cash, Cash Equivalents, and Investments
The City pools cash resources from all funds in order to facilitate the management of cash. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms.

In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment of GASB No. 3), certain disclosure requirements for Deposits and Investment Risks were made in the following areas:
 Interest Rate Risk
 Credit Risk
o Overall
o Custodial Credit Risk
o Concentrations of Credit Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other disclosures. 48 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Cash, Cash Equivalents, and Investments, Continued
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. The City categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

The City participates in an investment pool managed by the State of California entitled Local Agency Investment Fund (LAIF) which has invested a portion of the pooled funds in Structured Notes and AssetBacked Securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to the change in interest rates.

Cash equivalents are considered amounts in demand deposits and short-term investments with a maturity date within three months of the date acquired by the City and are presented as “Cash and Investments” in the accompanying Basic Financial Statements.

For the purpose of the statement of cash flows, the City considers all pooled cash and investments (consisting of cash and investments and restricted cash and investments) held by the City as cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all non-pooled cash and investments (consisting of cash with fiscal agent and restricted cash and investments held by fiscal agent) as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.

D. Restricted Cash and Investments
Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt, for acquisition and construction of capital projects, and to meet bond indenture debt reserve requirements.

Cash and investments are also restricted for deposits held for others within the enterprise funds.

E. Capital Assets
Capital assets, which include land, buildings, improvements, equipment, furniture, and infrastructure assets (e.g. roads, sidewalks, and similar items), are reported in the applicable governmental or businesstype activities in the Government-Wide Financial Statements. Capital assets are recorded at historical cost or estimated historical cost if actual cost is not available. Donated assets are valued at acquisition value on the date donated.

Prior to July 1, 2003, governmental funds’ infrastructure assets were not capitalized, since then these assets have been valued at estimated historical cost.
49 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued E. Capital Assets, Continued
City policy has set the capitalization threshold for reporting capital assets at the following:

The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets. GASB Statement No. 34 requires that all capital assets with limited useful lives be depreciated over their estimated useful lives. Depreciation is provided using the straight line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. No depreciation is recorded in the year of acquisition or in the year of disposition.

The City has assigned the useful lives listed below to capital assets.

Buildings and Improvements 15 - 30 years
Equipment and Vehicles 5 – 15 years
Treatment Plant 50 years
Infrastructure – Streets 10 – 40 years
Infrastructure – Parks 10 – 40 years
Public domain (infrastructure) capital assets include roads, bridges, curbs and gutters, streets, sidewalks, drainage systems, and lighting systems.

Interest accrued during capital assets construction, if any, is capitalized for the business-type activities as part of the asset cost.

F. Compensated Absences
The City recognizes a liability for compensated absences for leave time that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used as time off or settled (for example paid in cash to the employee) during or upon separation from employment. Based on the criteria listed, two types of leave qualify for liability recognition for compensated absences – vacation and sick leave. The liability for compensated absences is reported as incurred in the government-wide and proprietary fund financial statements. A liability for compensated absences in recorded in the governmental funds only if the liability has matured because of employee resignations or retirements. The liability for compensated absences includes salary-related benefits, where applicable. The flow assumption used by the City in estimating compensated absence amounts is that most recently accrued leave is used first by employees.

General Capital Assets $ 10,000
Infrastructure Capital Assets $ 25,000
50 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued G. Long Term Debt
Government-Wide Financial Statements – Long-term debt and other long-term obligations are reported as liabilities in the appropriate activities.

Bond premiums and discounts are amortized over the life of the bonds using the effective interest method. Bonds payable is reported net of the applicable bond premium or discount. Bond issuance costs, except any portion related to prepaid insurance costs, are recognized as an expense in the period incurred.

Fund Financial Statements – The governmental fund financial statements do not present long-term debt.

As such, long-term debt is shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.

Bond premiums and discounts are recognized during the current period as other financing sources or uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Bond proceeds are reported as other financing sources.

Proprietary Fund and Fiduciary Fund Financial Statements use the same principles as those used in the Government-Wide Financial Statements.

H. Property Taxes
Property taxes in the State of California are administered for all local agencies at the county level and consist of secured, unsecured, and utility tax rolls. The following is a summary of major policies and practices relating to property taxes.

Stanislaus County assesses properties and it bills, collects, and distributes property taxes to the City. The County remits the entire amount levied and handles all delinquencies, retaining penalties. Secured and unsecured property taxes are levied on January 1 of the preceding fiscal year.

Secured property tax is due in two installments, on November 1 and February 1, and becomes a lien on those dates. It becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is due on July 1, and becomes delinquent on August 31. Collection of delinquent accounts is the responsibility of the County, which retains all penalties collected.

The term “unsecured” refers to taxes on personal property other than real estate, land and buildings.

These taxes are secured by liens on the property being taxed. Property tax revenues are recognized by the City in the fiscal year they are assessed provided they become available as defined above.

I. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position (balance sheet) will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. 51 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued I. Deferred Outflows/Inflows of Resources, Continued
In addition to liabilities, the statement of net position (balance sheet) will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

J. Net Position
Government-Wide Financial Statements
In the Government-Wide Financial Statements, net position are 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 that is attributed to the acquisition, construction, or improvement of the assets.

Restricted – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of governments.

Unrestricted – This amount is all net position that does not meet the definition of “net investment in capital assets” or “restricted net position” as defined above.

When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first.

K. Fund Balances
Fund Financial Statements
In February 2009, the Governmental Accounting Standards Board (GASB) issued Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54). The new classifications of fund balances are listed below:

Non-spendable Fund Balances
These include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact, e.g., the principal of an endowment fund.

Examples of “not in spendable form” include inventory, prepaid amounts, long-term notes and loans, property held for resale and other items not expected to be converted to cash. However, if the proceeds from the eventual sale or liquidation of the items would be considered restricted, committed or assigned (as defined further on) then these amounts would be included in the restricted, committed or assigned instead of the non-spendable classification. A debt service reserve fund held by a trustee is an example of fund balance in non-spendable form that is classified as restricted instead of non-spendable since the reserve is eventually liquidated to make the final debt service principal payment. 52 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued K. Fund Balances, Continued
Restricted Fund Balances
Restricted fund balances have externally enforceable limitations on use. The limitations on use can be imposed by creditors, grantors, or contributors as well as by constitutional provisions, City charter, enabling legislation, laws and government regulations.

Committed Fund Balances
Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action (Resolution) of the City Council are classified as committed fund balances. The formal action that is required to be taken to establish, modify, or rescind the fund balance commitment is resolution.

Assigned Fund Balances
Fund balance amounts for which the City Council has expressed intent for use but not taken formal action to commit are reported as assigned under GASB 54. These include funds encumbered by purchase order in the General Fund for which the authorization has not lapsed, interest accrued to restricted or committed fund balances when such interest is not required to be classified as restricted or committed.

Assigned amounts for a specific purpose are authorized by the City Manager through its fund balance policy.

Unassigned Fund Balance
The residual classification for the General Fund is unassigned fund balance. The General Fund is the only fund that may report a positive unassigned balance.

Hierarchy of Expenditures to Classify Fund Balance Amounts To determine the composition of ending fund balances, the Council established the order in which restricted and unrestricted (committed, assigned and unassigned) funds are to be expended. To this purpose, for expenditures made in any governmental fund, the restricted amounts will be reduced first, followed by committed amounts, assigned amounts, and then unassigned amounts.

L. Pension
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plan (Plan) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS.

For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 53 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued M. Use of Estimates
The preparation of the Basic Financial Statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amounts of revenues and expenses. Actual results could differ from these estimates and assumptions.

N. New Pronouncements
In 2025, the City adopted new accounting standards to confirm to the following Governmental Accounting Standard 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. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The City evaluated its policies and applied this standard to the calculation of compensated absences.

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 constraints.

2. CASH AND INVESTMENTS
The City maintains a cash and investment pool for all funds. Certain restricted funds that are held and invested by independent outside custodians through contractual agreements are not pooled. These restricted funds include cash and investment held by trustees.

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

Governmental Business-Type Fiduciary
Activities Activities Funds Total
Deposits and investments 6,337,480 $ 1,826,986 $ 2,314 $ 8,166,780 $ Restricted cash and investments - 421,614 - 421,614
Total cash and investments $ 2,248,600 6,337,480 $ 2,314 $ 8,588,394 $ Government-Wide Statement
54 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
A. Summary of Cash and Investments
Cash and investments as of June 30, 2025 consist of the following:

B. Deposits
The carrying amount of the City’s cash deposit was $2,666,663 at June 30, 2025. Bank balances before reconciling items were a positive amount of $3,060,592 at June 30, 2025. The City’s cash deposit was fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The remaining amount was collateralized with securities held by the pledging financial institutions in the City’s name.

The California Government Code (Code) Section 53652 requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. The Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.

The fair value of pledged securities must equal at least 110% of the City’s cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits.

The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated to the various funds based on the period-end cash and investment balances.

Interest income from cash and investments with fiscal agents is credited directly to the related fund.

Cash on hand $ 626
Deposits with financial institution 2,666,663
Total cash on hand and deposits 2,667,289
Investments 5,499,491
Subtotal City Treasury 8,166,780
Restricted cash and investments 421,614
Total cash and investments $ 8,588,394
55 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
C. Investments
Under the provisions of the City’s investment policy, and in accordance with the Code, the following investments are authorized:

Authorized Investment Type
Maximum
Maturity
Maximum
Percentage of
Portfolio
Maximum
Investment in
One Issuer
Bankers' Acceptance 180 days 30% 30%
Negotiable Certificates of Deposit N/A 10% 10%
Commercial Paper 270 days 15%
Lesser of
$3 Million
or 10%
State of California Local Agency Upon Demand $75 Million per entity
N/A
Investment Fund (State Pool) Upon Demand $75 Million per entity
N/A
Medium Term Notes 5 years 10% None
Money Market Funds N/A Unlimited Unlimited
U.S. Treasury Obligations 10 years Unlimited None
U.S. Government Agency Issues 10 years Unlimited None
Municipal Notes or Bonds N/A 10 None
Repurchase Agreements 1 year Unlimited None
Mutual Funds N/A 20% 10%
56 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
C. Investments, Continued
The City’s portfolio value fluctuates in an inverse relationship to any change in interest rate.

Accordingly, if interest rates rise, the portfolio value will decline. If interest rates fall, the portfolio value will rise. The portfolio for year-end reporting purposes is treated as if it were all sold. Therefore, fund balance must reflect the portfolio’s change in value. These portfolio value changes are unrealized unless sold. Generally the City’s practice is to buy and hold investments until maturity dates. Consequently, the City’s investments are carried at fair value.

The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2025, include a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments include the following:

Structured Notes – are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or have embedded forwards or options.

Asset-Backed Securities – the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables.

As of June 30, 2025, the City had $3,672,008 invested in LAIF, which had invested 3.81% of the pool investment funds in Structured Notes and Asset-Backed Securities as compared to 3.00% in the previous year. The LAIF fair value factor of 1.00119831 was used to calculate the fair value of the investments in LAIF.

The City is a voluntary participant in the Central San Joaquin Valley Risk Management Authority investment pool. The Authority has established an investment pool to allow its members to participate in the same investments in which the Authority’s excess funds are invested. The pool is meant as a longterm investment tool for the member cities. The minimum contribution to the pool is $100,000. Interest is apportioned quarterly, based on each member’s pool balance. 57 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
D. Risk disclosure
Interest Risk: Interest rate risk is the market value fluctuation due to overall changes in the interest rates.

It is mitigated by limiting the average maturity of the City’s portfolio not to exceed three years.

Investments held in the City Treasury grouped by maturity date at June 30, 2025, are shown below:

Credit Risk: Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. According to the City’s investment policy, no more than 10% of the total portfolio may be invested in securities of any single issuer, other than the US Government, its agencies and instrumentalities, and LAIF. If a security is downgraded by either Moody’ or S&P to a level below the minimum quality required by the City, it shall be the City’s policy to sell that security as soon as practicable.

At June 30, 2025, the City’s deposits and investments were rated as follows:

Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. None of the City’s investments were subject to custodial credit risk.

E. Investment Valuation
Investments (except for money market accounts, time deposits, and commercial paper) are measured at fair value on a recurring basis. Recurring fair value measurements, are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City’s investments were not subject to levelling disclosure.

Investment Type Total 1 year or Less 1 - 2 years 2- 3 years State Of California Local Agency Investment Fund 3,672,008 $ $ 3,672,008 $ - -$ CSJVRMA Investment Pool 1,827,483 1,827,483 - -
Total $ 5,499,491 $ 5,499,491 $ - -$
Investment Maturities (in years)
Investment Type Moody's S&P
State Of California Local Agency Investment Fund Not Rated Not Rated Investment Pool Not Rated Not Rated
Credit Quality Ratings
58 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

3. ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following at June 30, 2025:

Amounts do not indicate a significant concentration (greater than 25%) with any single individual, business or agency.

4. LOANS RECEIVABLE
Community Development Block Grant Program Loans – The City participates in a CDBG Revolving loan program. The program is federally funded and provides housing rehabilitation loans to eligible applicants.

The City makes loans to resident homeowners who qualify as low income, some of which are deferred and are not repaid until the title to property changes. The balance of these loans at June 30, 2025 including accrued interest was $1,122,279.

During the fiscal year, the City did not issue any new loans.

Governmental
Activities
Business-type
Activities Total
Current:

Accounts receivable 562,663 $ 386,082 $ 948,745 $
Total current 562,663 386,082 948,745
Noncurrent:

Loans/notes receivable 1,122,279 1,122,279 -
Loans receivable from Private Purpose Trust 105,000 - 105,000 Total noncurrent 1,122,279 105,000 1,227,279
Total receivables $ 1,684,942 $ 491,082 $ 2,176,024
59 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

5. CAPITAL ASSETS
Governmental capital asset activity for the year ended June 30, 2025, was as follows:

Balance Balance
7/1/2024 Additions Deletions Adjustments 6/30/2025
Governmental activities:

Nondepreciable assets:

Land $ 5,399,530 $ - $ - $ 5,399,530 - $
Construction in progress 1,158,186 715,671 153,814 - 2,027,671 Total nondepreciable assets 6,557,716 715,671 153,814 - 7,427,201 Depreciable assets:

Buildings and structures 5,120,335 (241,385) - 4,878,950 - Equipment 3,364,711 65,810 - 3,430,521 -
Vehicles 798,635 (44,352) - 754,283 -
Infrastructure 19,087,954 - (153,814) - 18,934,140
Total depreciable assets 28,371,635 65,810 (285,737) (153,814) 27,997,894 Total 34,929,351 781,481 (285,737) 35,425,095 -
Accumulated depreciation:

Buildings and improvements (2,596,478) (238,100) 212,557 (2,622,021) - Equipment (2,414,466) (179,552) - (2,594,018) -
Vehicles (670,036) (38,702) 44,352 (664,386) -
Infrastructure (6,989,938) (803,469) - (7,793,407) -
Total accumulated depreciation (12,670,918) (1,259,823) 256,909 (13,673,832) - Net depreciable assets 15,700,717 (1,194,013) (28,828) (153,814) 14,324,062 Total net capital assets $ 22,258,433 $ (478,342) $ (28,828) $ 21,751,263 - $ General government $ 149,558
Public ways and facilities 956,279
Police services 4,714
Parks and recreation 149,272
Total $ 1,259,823
Depreciation expense for capital assets was charged to functions as follows:
60 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

5. CAPITAL ASSETS, Continued
Business-type capital asset activity for the year ended June 30, 2025, was as follows:

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consisted of the following at June 30, 2025:

Amounts do not indicate a significant concentration (greater than 25%) with any single vendor or employee.

Balance Balance
7/1/2024 Additions Deletions Transfers 6/30/2025
Business-type activities
Nondepreciable assets:

Land 427,672 $ - $ - $ - $ 427,672 $
Construction in progress 2,639,057 1,247,185 (3,295,303) - 590,939 Total nondepreciable assets 3,066,729 1,247,185 (3,295,303) - 1,018,611 Depreciable assets:

Buildings and improvements 962,118 59,500 3,295,303 - 4,316,921 Treatment plant 13,009,752 - - 13,009,752 -
Equipment 4,392,010 29,264 - 4,421,274 -
Vehicles 501,955 - - 501,955 -
Total depreciable assets 18,865,835 88,764 3,295,303 - 22,249,902 Total 21,932,564 1,335,949 - 23,268,513 -
Accumulated depreciation:

Buildings and improvements (423,524) (6,554) - (430,078) - Treatment plant (3,844,583) (22,674) - (3,867,257) -
Equipment (2,055,613) (390,044) - (2,445,657) -
Vehicles (426,940) (151,945) - (578,885) -
Total accumulated depreciation (6,750,660) (571,217) - (7,321,877) - Net depreciable assets 12,115,175 (482,453) 3,295,303 - 14,928,025 Total net capital assets $ 15,181,904 $ 764,732 $ - $ 15,946,636 - $ $ 221,171
350,046
Total $ 571,217
Depreciation expense for capital assets was charged to functions as follows:

Wastewater Treatment
Water System
Governmental
Activities
Business-type
Activities
Fiduciary
Activities Total
Accounts payable 674,790 $ 147,728 $ - $ 822,518 $
Interest payable 35,537 24,578 - 60,115
Deposits payable 1,313 181,630 $ - 182,943
Total 711,640 $ 353,936 $ - $ 1,065,576 $
61 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

7. LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for the year ended June 30, 2025:

Issue Amount
Balance
June 30, 2024 Retirements Transfers
Balance
June 30, 2025
Current
Portion
Noncurrent
Portion
Governmental Activity Debt:

Capital Lease
PNC Equipment Finance, LLC Lease Payable 297,678 $ $ 153,958 $ (22,131) $ 131,827 - $ $ 26,176 $ 105,651 USDA Loan 1,160,727 1,418,497 (42,789) 1,375,708 - 44,180 1,331,528 California Energy Commission Loan Payable 220,624 83,124 (16,295) 66,829 - 16,295 50,534 Total Governmental Activity Debt $ 1,679,029 $ 1,655,579 $ (81,215) $ 1,574,364 - $ $ 86,651 $ 1,487,713 Business-type Activity Debt:

Wastewater Treatment Facility
Series 2012 Refunding Bonds,
7%, due 9/15/27 (Publicly Placed) $ 1,930,000 $ 690,000 $ (150,000) $ (5,000) $ 535,000 $ 160,000 $ 375,000 PNC Equipment Finance, LLC Lease Payable 297,678 153,956 (22,130) 131,826 - 26,176 105,650 California Energy Commission Loan Payable 1,077,166 405,838 (79,557) 326,281 - 80,354 245,927 Total Wastewater Treatment Facility 3,304,844 1,249,794 (251,687) (5,000) 993,107 266,530 726,577 Water System Fund
Water Purchase Loan 3,100,000 1,413,900 (217,900) 1,196,000 - 224,700 971,300 Total Water System Fund 3,100,000 1,413,900 (217,900) 1,196,000 - 224,700 971,300 Public Financing Authority
Series 2012 Refunding Bonds,

1.0-4.75%, due 9/15/27 (Publicly Placed) 2,165,000 365,000 5,000 - 370,000 370,000 - Total Public Financing Authority 2,165,000 365,000 5,000 - 370,000 370,000 - Total Business-Type Activity Debt $ 8,569,844 $ 3,028,694 $ (469,587) $ 2,559,107 - $ $ 491,230 $ 2,067,877 Total Primary Government $ 4,684,273 10,248,873 $ (550,802) $ - $ 4,133,471 $ 577,881 $ 3,555,590 $ 62 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

7. LONG-TERM LIABILITIES, Continued
A. PNC Equipment Finance Purchase Agreement
The City entered into a Lease Agreement with PNC Equipment Finance to fund a portion of the Solar Energy Project. The total amount financed is $595,356. The obligation funded solar energy improvements in the Wastewater Enterprise Fund, the City’s General Fund, and the Special Revenue Funds Lighting District and Lighting and Landscaping District. Amounts due under the lease obligation started in January of 2015. Annual payments ranging from $26,194 to $82,908 will be due each January thereafter until maturity in 2029.

B. USDA Loan
In August of 2017 the City of Waterford entered in an agreement with the USDA to provide Certificates of Participation in the amount of $1,750,000. The funds were used for the construction of a new police facility. The amount will be paid back over 30 years and accrue interest of 3.25%. The final payment will be due in August of 2047.

C. California Energy Commission Loan Payable
The City entered into a Loan Agreement with the California Energy Commission to fund a portion of the Solar Energy Project. The total amount financed is $1,297,790. The obligation funded solar energy improvements in the Wastewater Enterprise Fund and the City’s General Fund. Bi-annual payments of $50,251 will be due through maturity. The loan is at a stated rate of interest of 1% and matures in 2029.

D. Revenue Bonds
In September 2003 the Public Financing Authority issued Refunding Revenue Bonds in the principal amount of $5,795,000 to refund the aggregate outstanding principal amount of the 1996A and 1997A Revenue Bonds which were called on September 15, 2003. Principal payments were due annually; interest payments were due semi-annually on March 15 and September 15. The 2003 Bonds were refunded in fiscal year 2012 with the 2012 Bonds discussed below, and the 2003 Bonds were called in March 2012.

In February 2012, the Authority issued the 2012 Refunding Revenue Bonds in the principal amount of $4,095,000 to refund the outstanding principal amount of the 2003 Bonds. The refunding reduced total debt service by $211,109, resulting in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $191,639.
63 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

7. LONG-TERM LIABILITIES, Continued
D. Revenue Bonds, Continued
The 2012 Bonds are repayable from former Redevelopment Agency tax increment revenues, Wastewater Enterprise charges for services, and the revenues received from the special assessment district debt.

However, since the former Redevelopment Agency's portion of the Bonds is now repayable by the Successor Agency, the Public Financing Authority has recorded a receivable from the Successor Agency in the amount of its share of the Bonds, which was $535,000 at June 30, 2012. The balance at June 30, 2025 is $905,000. The 2012 Revenue Bonds have been recorded as liabilities of the enterprise funds from which repayment is expected.

E. Loan Payable - Water Purchase
The City entered into a Loan Agreement with Umpqua Bank to fund the acquisition of the Waterford and Hickman Water Systems. The total amount financed is $2,934,900. Bi-Annual payments of principal interest are due through June 1, 2030. Payments total approximately $259,000 per year and include interest of 3.13%.

F. Debt Service Requirement
Annual debt service requirements are shown below:

Principal Interest Principal Interest Principal Interest 2026 52,352 $ 9,333 $ $ 44,180 $ 43,987 $ 96,649 $ 4,196 2027 60,998 7,480 45,616 42,527 98,116 2,729
2028 70,227 5,321 47,098 41,021 99,096 1,750
2029 80,076 2,831 48,629 39,575 99,249 752
2030 - 50,210 - 37,858 - -
2031-2035 - 276,612 - 163,401 - -
2036-2040 - 324,579 - 114,627 - -
2041-2045 - 380,865 - 57,417 - -
2046-2048 - 157,919 - 4,955 - -
Total $ 263,653 $ 24,965 $ 1,375,708 $ 545,368 $ 393,110 $ 9,427 Due within one year $ 52,352 $ 9,333 $ 44,180 $ 43,987 $ 96,649 $ 4,196 Due after one year 211,301 15,632 1,331,528 501,381 296,461 5,231 Total $ 263,653 $ 24,965 $ 1,375,708 $ 545,368 $ 393,110 $ 9,427 Year Ending
June 30,
PNC Equipment Finance
Purchase Agreement USDA Loan
California Energy Commission
Loan Payable
64 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

7. LONG-TERM LIABILITIES, Continued
F. Debt Service Requirement, Continued
G. Compensated Absences
The City records employee absences, such as vacation, illness, and holidays, for which it is expected that employees will be paid as compensated absences within the current year. Compensated absences had a balance of $33,911 for governmental funds and $66,190 for proprietary funds at June 30, 2025.

8. NET POSITION/ FUND BALANCES
A. Net Position
Principal Interest Principal Interest Principal Interest 2026 160,000 $ 38,775 $ 224,700 $ 37,076 $ 577,881 $ 133,367 $ 2027 170,000 31,244 231,700 30,110 606,430 114,090
2028 575,000 13,656 239,000 22,928 1,030,421 84,676
2029 - - 246,400 15,518 474,354 58,676
2030 - - 254,200 7,880 304,410 45,738
2031-2035 - - - - 276,612 163,401
2036-2040 - - - - 324,579 114,627
2041-2045 - - - - 380,865 57,417
2046-2048 - - - - 157,919 4,955
Total 905,000 $ 83,675 $ 1,196,000 $ 113,512 $ 4,133,471 $ 776,947 $ Due within one year 160,000 $ 38,775 $ 224,700 $ 37,076 $ 577,881 $ 133,367 $ Due after one year 745,000 44,900 971,300 76,436 3,555,590 643,580 Total 905,000 $ 83,675 $ 1,196,000 $ 113,512 $ 4,133,471 $ 776,947 $ Revenue Bonds
Loan Payable -
Year Ending Water Purchase Total
June 30,
Governmental
Activities
Business-type
Activities Total
Net Investment in Capital Assets 20,176,899 $ 13,490,732 $ 33,667,631 $ Restricted:

Community Development 1,538,704 - 1,538,704
Impact Fees 1,474,612 - 1,474,612
Debt Service - 421,614 421,614
Streets and Roads 841,079 - 841,079
Other Programs 194,587 - 194,587
Unrestricted 2,626,312 774,768 3,401,080
Total 26,852,193 $ 14,687,114 $ 41,539,307 $
65 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

8. NET POSITION/ FUND BALANCES, Continued
B. Fund Balance
Nonspendable, Restricted, Assigned, and Unassigned fund balance consisted of the following at June 30, 2025:

9. INTERFUND TRANSACTIONS
Due to and from balances result from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made.

Due to and due from other funds consisted of the following as of June 30, 2025:

Nonspendable:

Advances 388,388 $
Total Nonspendable $ 388,388
Restricted:

Lighting District 114,734
Abandoned Vehicle Abatement 47,427
Lighting and Landscaping 1,063
Impact Fee 1,474,612
Community Development 1,212,137
Special Business Pilot Program 12,327
CFD 2019-1 Maintenance Service 19,036
CIP Measure L 670,257
CIP Streets and Roads 170,822
Total Restricted $ 3,722,415
Unassigned (deficit):

General Fund 3,273,692 $
Total Unassigned $ 3,273,692
Due from
Other Funds
Due to
Other Funds
Governmental Funds
Major Funds:

General Fund 64,876 $ - $
Total Major Funds 64,876 -
Nonmajor Funds:

Special Revenue Funds:

Gas Tax - 64,876
Total Special Revenue Funds - 64,876
Total governmental funds $ 64,876 64,876 $
66 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

9. INTERFUND TRANSACTIONS, Continued
Advances to and from balances are recorded for interfund loans between funds. The General Fund Advances to and from other funds reported in the General Fund and Water Fund represent interfund loans made by the General Fund to the Water Fund for the River Pointe Water System for capital related financing as follows:
 $100,000 on October 18, 2012
 $51,298 on June 30, 2014
 $131,595 on June 30, 2015
These loans were consolidated into one borrowing on October 1, 2015. The loan has an interest rate equal to the June 30 quarterly Local Agency Investment Fund (LAIF) rate of return plus 1.00%. Repayment of the loan was to be made in fiscal year 2016 if adequate monies were available, otherwise repayment terms are to be reevaluated. The City does not anticipate the River Pointe Water System will have sufficient monies in the near future due to anticipated capital project spending, and hence repayment terms of the loan are pending re-evaluation. Accrued interest on the loan as of June 30, 2025 was $105,494.

Advances to and from other funds reported in the Public Financing Authority Fund and the Water Fund represents an interfund loan made by the Public Financing Authority to the Water Fund to cover cash deficits incurred by the River Pointe Water System in the amount of $36,370. Repayment is to occur when revenues are sufficient to repay the loan. Accrued interest on the loan as of June 30, 2025 was $12,739.

Advances to
Other Funds
Advances From
Other Funds
Governmental Funds
General Fund $ 388,387 $ -
Total governmental funds $ 388,387 $ -
Proprietary Funds
Water Fund $ - $ 437,496
Public Financing Authority Fund 49,109 -
Total proprietary funds $ 49,109 $ 437,496
67 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

9. INTERFUND TRANSACTIONS, Continued
Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, and (2) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

10. RISK MANAGEMENT
The City participates with other public entities in a joint venture under a joint powers agreement which established the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and the CSJVRMA is such that the CSJVRMA is not a component unit of the City for financial reporting purposes.

The City is covered for the first $1,000,000 of each general liability claim and $500,000 of each workers’ compensation claim through the CSJVRMA. The City has the right to receive dividends or the obligation to pay assessments based on a formula which, among other expenses, charges the City’s account for liability losses under the City’s self-insurance retention of $10,000 and workers’ compensation losses under the City’s self-insurance retention of $10,000. The CSJVRMA participates in an excess pool, which provides general liability coverage from $1,000,001 to $29,000,000. The CSJVRMA participates in an excess pool, which provides workers’ compensation coverage from $500,001 to $5,000,000 and also purchases excess insurance above the $5,000,000 to the statutory limit.

The CSJVRMA is a consortium of fifty-four (54) cities in San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500 et seq. The CSJVRMA is governed by a Board of Directors, which meets three to four times per year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA.

Detailed financial information may be obtained from the CSJVRMA.

At the termination of the joint powers agreement and after all claims have been settled, any excess or deficit will be divided among the cities in accordance with the governing documents. There were no excess claims over premiums for any of the City’s risk management programs in fiscal year 2024, and there were no changes to the City’s insurance coverage from the prior year.

Transfers Out: General Fund
Non-Major
Gov't Funds Total
Governmental Funds:

General Fund $ - $ 20,430 $ 20,430
Impact Fee Fund 4,985 - 4,985
Non-Major
Governmental Funds 328,511 299,027 627,538
Enterprise Funds:

Wastewater System 2,500 - 2,500
Water System 7,500 - 7,500
Total $ 343,496 $ 319,457 $ 662,953
Governmental Funds
Transfers In:
68 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

11. PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
General Information about the Pension Plans
Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous risk pools.

Accordingly, rate plans within the safety or miscellaneous risk pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The Agency sponsors three rate plans (two miscellaneous and one closed safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS’ website.

Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan provisions and benefits in effect at June 30, 2025, are summarized as follows:

On January 1, 2013, the Public Employee Pension Reform Act (PEPRA) went into effect. This State law applies to employees hired after January 1, 2013 who are new to PERS. These employees are termed PEPRA members and employees that were enrolled in PERS (without significant separation) prior to January 1, 2013 are now referred to as classic members. PEPRA miscellaneous members will be enrolled in a 2% at 62 plan and PEPRA safey members will be enrolled in a 2.7% at 57 plan. PEPRA members will be required to pay half the normal cost of their plan.

Safety*
Hire Date
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payment Monthly for life Monthly for life Monthly for life Retirement age 50 - 55 52 - 67 55
Monthly benefits, as a % of annual salary 2.0% to 2.5% 1.0% to 2.5% 0.50% Required employee contribution rates 8.00% 6.75% 0.00%
Required employer contribution rates 13.41% 7.87% 0.00% Required payment on unfunded liability $155,781 $2,043 $8,167 * Closed rate plan, no active members
Miscellaneous
Prior to
January 1, 2013
Prior to
January 1, 2013
Prior to
January 1, 2013
69 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

11. PUBLIC EMPLOYEES’ RETIREMENT SYSTEM, Continued
Contributions – Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by CaIPERS. 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 City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

The City’s contributions to the Plan for the measurement period ended June 30, 2024 were $241,994.

Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2025, the City reported a net pension liability for its proportionate shares of the net pension liability of the Plan as follows:

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

The City’s proportionate share of the net pension liability for the Plan as of measurement dates June 30, 2023 and 2024 was as follows:

Proportionate Share of Net
Pension Liability
Miscellaneous Risk Pool 1,950,152 $
Safety Risk Pool 231,559
Total Net Pension Liability 2,181,711 $
Proportion - June 30, 2023 0.01779%
Proportion - June 30, 2024 0.01799%
Change - Increase (Decrease) 0.00020%
70 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

11. PUBLIC EMPLOYEES’ RETIREMENT SYSTEM, Continued
For the year ended June 30, 2025, the City recognized pension expense of $475,170. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
$303,207 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 ended June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Actuarial Assumptions - The total pension liabilities in the June 30, 2023 actuarial valuations were determined using the following actuarial assumptions:

Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between Expected and Actual Experience $ 187,506 $ 7,193 Changes of Assumptions 55,826 -
Differences between Projected and Actual Investment Earnings 123,461 - Differences between Employer's Contributions and
Proportionate Share of Contributions - 100,824
Change in Employer's Proportion 61,149 -
Pension Contributions Made Subsequent to Measurement Date 303,207 - $ 731,149 $ 108,017
Year Ended
June 30
2026 $ 116,091
2027 253,828
2028 (7,691)
2029 (42,303)
Investment rate of return 6.90%
Inflation 2.30%
Salary increases Varies by Entry Age and Service
Mortality rate table1 Derived using CalPERS' Membership Data for all Funds Contract COLA up to 2.30% until Purchasing Power
Post Retirement Benefit Increase Protection Allowance Floor on Purchasing Power applies 1 The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website.
71 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

11. PUBLIC EMPLOYEES’ RETIREMENT SYSTEM, Continued
Discount Rate - Discount Rate – The discount rate used to measure the total pension liability for the Plan was

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

In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was formed by the long-term projected portfolio return.

The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.

These rates of return are net of administrative expenses.

(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021-22 Asset Liability Management Study.

Asset Class
New Strategic
Allocation Real Return(1)(2)
Global Equity 30.00% 4.54%
Global Fixed Income 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 Estate 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
72 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

11. PUBLIC EMPLOYEES’ RETIREMENT SYSTEM, Continued
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (5.90) or 1-percentage point higher (7.90) than the current rate:

Pension Plan Fiduciary Net Position -Detailed information about the pension plan's fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan
At June 30, 2025 the City reported a payable of $0 for outstanding amount of contributions to the pension plan required for the year ended June 30, 2025.

12. COMMITMENTS AND CONTINGENCIES
Litigation
The City is involved in litigation incurred in the normal course of conducting City business. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City’s counsel, the resolution of these matters will not have a material adverse effect on the financial condition of the City.

Commitments
The City had no significant unexpended contractual commitments as of June 30, 2025. 1% Decrease
(5.90%)
Current Discount
Rate
(6.90%)
1% Increase
(7.90%)
Net Pension Liability as of
June 30, 2025
Miscellaneous Risk Pool 3,085,704 $ 1,950,152 $ $1,015,424 Safety Risk Pool 462,445 231,559 42,726
Total 3,548,149 $ $ 2,181,711 $ 1,058,150
73 City of Waterford, California
Notes to Basic Financial Statements
For the year ended June 30, 2025

13. PRIOR PERIOD ADJUSTMENTS
The City recorded the following prior period adjustments:
1) Changes to or within the financial reporting entity – The City’s Community Development Special Revenue Fund met the criteria for major funds in fiscal year ended June 30, 2025 and was reclassified from the Nonmajor Governmental Funds reporting unit. The City’s CIP Streets and Roads Capital Project Fund no longer met the criteria for major funds in fiscal year ended June 30, 2025 and was reclassified to the Nonmajor Governmental Funds reporting unit. 2) Error correction – The City recorded prior period adjustments to recognize interest accrued on outstanding loans receivable in the Community Development Special Revenue Fund with corresponding deferred inflow of resources for unavailable revenue of $311,742. Prior year revenues and change in net position for governmental activities were understated by $14,286.

The table below presents the impact on fund balance or net position as a result of these adjustments:

Changes to or
Previously within the
Reported Financial Loans Unavailable Restated at
at June 30, 2024 Reporting Entity Receivable Revenues June 30, 2024 Fund Financial
CIP Streets and Roads
Capital Projects (91,566) $ 91,566 $ 1 $ - - $ - $
Community Development
Special Revenue $ 1,131,986 - $ 1 $ 311,742 2 $ (311,742) 2 $ 1,131,986 Non-Major Governmental Funds 1,500,749 $ (1,223,552) $ 1 $ - - $ 277,197 $ Governmental-Wide Financial
Governmental Activities 26,434,679 $ - $ 311,742 $ 2 $ - 2 $ 26,746,421 Prior Period Adjustments
Error Correction
74 REQUIRED

SUPPLEMENTARY INFORMATION
75 This page intentionally left blank
76 City of Waterford, California
Required Supplementary Information
For the year ended June 30, 2025

1. BUDGETS AND BUDGETARY ACCOUNTING
A. Budgeting Procedures
The City Council establishes budgets for the General Fund and all Special Revenue Funds, except for certain Special Revenue Funds for which expenditures are controlled by grant funding or by assessments received. Budgetary control is legally maintained at the fund level for these funds. Department heads submit budget requests to the City Manager. The City Manager prepares an estimate of revenues and prepares recommendations for the next year’s budget. The preliminary budget may or may not be amended by the City Council and is adopted by resolution by the City Council on or before June 30 in accordance with the municipal code.

The City Council may amend the budget by motion during the fiscal year. Only the Council can authorize transfers between funds and approve inter-fund loans. The City Manager is authorized to transfer budgeted amounts within a fund without formal council action or approval. The City Manager is authorized to increase expenditures in relation to revenues in funds receiving assigned revenues without approval by the City Council.

Expenditures may not legally exceed appropriations at the fund level, which is the legal level of control.

Supplemental appropriations, which increase appropriations, may be made during the fiscal year. There were no material supplemental appropriations made for the fiscal year ended June 30, 2025. Budget information is presented for the General and Special Revenue Funds in the fund financial statements.

The budget information is presented on a basis consistent with generally accepted accounting principles.

Appropriations, except open project appropriations, and unexpended grant appropriations, lapse at the end of each fiscal year.
77 City of Waterford, California
Required Supplementary Information
For the year ended June 30, 2025

1. BUDGETS AND BUDGETARY ACCOUNTING, Continued
B. Budgetary Comparison Schedules
Budgetary Comparison Schedule, General Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes and assessments $ 3,432,693 $ 3,229,606 $ 3,315,904 $ 86,298 Licenses and permits 115,420 130,420 203,957 73,537
Fines and forfeitures 19,500 19,500 12,458 (7,042)
Intergovernmental 245,500 274,355 257,833 (16,522)
Use of money and property 45,500 81,500 135,120 53,620
Charges for services 8,250 9,250 7,454 (1,796)
Other revenues 75,662 62,042 71,861 9,819
Total revenues 3,942,525 3,806,673 4,004,587 197,914
EXPENDITURES:

Current:

General government 267,428 196,558 213,140 (16,582)
Public safety 2,437,178 2,437,178 2,392,818 44,360
Public ways and facilities 270,529 305,779 339,966 (34,187) Community development 365,208 495,793 523,761 (27,968)
Culture and recreation 383,371 385,393 424,860 (39,467) Capital outlay 682,000 - 644,818 37,182
Debt service:

Principal 60,854 60,854 60,855 (1)
Interest and fiscal charges 46,754 46,754 46,752 2
Total expenditures 3,831,322 4,610,309 4,646,970 (36,661)

REVENUES OVER (UNDER)
EXPENDITURES 111,203 (803,636) (642,383) 161,253
OTHER FINANCING SOURCES (USES):

Transfers in 285,032 336,725 343,496 6,771
Transfers out (10,000) (20,430) (20,430) -
Total other financing sources (uses) 275,032 316,295 323,066 6,771 Net change in fund balances $ 386,235 $ (487,341) (319,317) $ 168,024 FUND BALANCES:

Beginning of year 3,981,397
End of year $ 3,662,080
Budget Amounts
78 City of Waterford, California
Required Supplementary Information
For the year ended June 30, 2025

1. BUDGETS AND BUDGETARY ACCOUNTING, Continued
B. Budgetary Comparison Schedules, Continued
Budgetary Comparison Schedule, Impact Fee Special Revenue Fund Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes and assessments 105,000 $ 15,027 $ 67,934 $ 52,907 $ Use of money and property 4,550 36,310 50,211 13,901
Total revenues 51,337 109,550 118,145 66,808
EXPENDITURES:

Capital outlay 250,000 250,000 - 250,000
Total expenditures 250,000 250,000 - 250,000

REVENUES OVER (UNDER)
EXPENDITURES (198,663) (140,450) 118,145 316,808
OTHER FINANCING SOURCES (USES):

Transfers out (18,000) (3,000) (4,985) (1,985)
Total other financing sources (uses) (3,000) (18,000) (4,985) (1,985) Net change in fund balances $ (201,663) (158,450) $ 113,160 314,823 $ FUND BALANCES:

Beginning of year 1,361,452
End of year $ 1,474,612
Budget Amounts
79 City of Waterford, California
Required Supplementary Information
For the year ended June 30, 2025

1. BUDGETS AND BUDGETARY ACCOUNTING, Continued
B. Budgetary Comparison Schedules, Continued
Budgetary Comparison Schedule, Community Development Special Revenue Fund Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental 670,875 $ 737,886 $ 83,719 $ (654,167) $ Use of money and property 1,500 1,500 22,845 21,345
Total revenues 739,386 672,375 106,564 (632,822)
EXPENDITURES:

Current:

Community development - - 1,559 (1,559)
Capital outlay 670,875 670,875 24,854 646,021
Total expenditures 670,875 670,875 26,413 644,462
Net change in fund balances $ 68,511 1,500 $ 80,151 11,640 $ FUND BALANCES:

Beginning of year 1,131,986
End of year $ 1,212,137
Budget Amounts
80 City of Waterford, California
Required Supplementary Information
For the year ended June 30, 2025

2. DEFINED BENEFIT PENSION PLAN
A. Schedule of the City’s Proportionate Share of the Net Pension Liability – Last 10 Years Fiscal year 2025 2024 2023 2022 2021
Measurement date 6/30/2024 6/30/2023 6/30/2022 6/30/2021 6/30/2020 Plan's Proportion of the Net Pension Liability 0.01799% 0.01779% 0.01756% 0.01253% 0.01534% Plan's Proportionate Share of the Net Pension
Liability $ 2,181,711 $ 2,218,900 $ 2,028,134 $ 677,465 $ 1,669,249 Plan's Covered Payroll $ 1,166,932 $1,170,674 1,174,882 $ $ 1,045,602 $ 1,041,898 Plan's Proportionate Share of the Net Pension
Liability as a Percentage of its Covered Payroll 186.96% 189.54% 172.62% 64.79% 160.21% Plan's Proportionate share of the Fiduciary Net
Position as a Percentage of the Plan's Total
Pension Liability 78.08% 76.21% 76.68% 88.29% 75.10%
Fiscal year 2020 2019 2018 2017 2016
Measurement date 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 Plan's Proportion of the Net Pension Liability 0.01482% 0.01420% 0.01410% 0.01363% 0.01253% Plan's Proportionate Share of the Net Pension
Liability $ 1,368,310 1,518,686 $ 1,398,481$ $ 1,179,354 $ 860,166 Plan's Covered Payroll $ 1,109,165 $ 1,075,104 $ 1,011,690 $ 958,704 $ 851,746 Plan's Proportionate Share of the Net Pension
Liability as a Percentage of its Covered Payroll 136.92% 127.27% 138.23% 123.02% 100.99% Plan's Proportionate share of the Fiduciary Net
Position as a Percentage of the Plan's Total
Pension Liability 75.26% 75.26% 73.31% 74.06% 78.40%
Notes to Schedule
The CalPERS mortality assumptions were adjusted in fiscal year 2019.

The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016, decreased from 7.65% to 7.15% in fiscal year 2018, and then decreased from 7.15% to 6.9% in fiscal year 2023. 81 City of Waterford, California
Required Supplementary Information
For the year ended June 30, 2025

2. DEFINED BENEFIT PENSION PLAN, Continued
B. Schedule of Contributions – Last 10 Years
Fiscal year 2025 2024 2023 2022 2021
Actuarially determined contribution $303,207 $241,994 258,856 $ $ 250,572 $ 246,090 Contribution in relation to the actuarially determined
contributions 303,207 241,994 258,856 250,572 246,090
Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered payroll $ 1,411,421 $1,166,932 $1,174,882 $1,045,602 1,045,602 $ Contributions as a percentage of covered payroll N/A 20.74% 22.03% 23.96% 23.54% Fiscal year 2020 2019 2018 2017 2016
Actuarially determined contribution $ 201,672 $ 186,766 $153,802 138,668 $ $ 124,798 Contribution in relation to the actuarially determined
contributions 201,672 186,766 $153,802 138,668 124,798
Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered payroll $1,109,165 $1,075,104 1,011,690 $ $ 958,704 $851,746 Contributions as a percentage of covered payroll 18.18% 17.37% 15.20% 14.46% 14.65% Note s to S c he dule
Me thods a nd a ssumptions use d to de te rmine c ontribution ra te s:

Fisc a l ye a r: 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Va lua tion da te : 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 Ac tua ria l c ost
me thod: Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Amortiza tion
me thod: (1) (1) (1) (1) (1) (1) (1) (1) (1) (1)
Asse ts va lua tion
me thod:

Ma rke t Va lue Ma rke t Va lue Ma rke t
Va lue
Ma rke t
Va lue
Ma rke t
Va lue
Ma rke t
Va lue
Ma rke t
Va lue
Ma rke t
Va lue
Ma rke t
Va lue
Ma rke t
Va lue
Infla tion: 2.30% 2.30% 2.50% 2.50% 2.50% 2.63% 2.75% 2.75% 2.75% 2.75% S a la ry inc re a se s: (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) Inve stme nt ra te
of re turn: 6.80% 6.80% 7.00% 7.00% 7.00% 7.25% 7.375% 7.50% 7.50% 7.50% Re tire me nt a ge : (3) (3) (3) (3) (3) (3) (3) (3) (3) (3) Morta lity: (4) (4) (4) (4) (4) (4) (4) (4) (4) (4)
(1) Le ve l pe rc e nta ge of pa yroll, c lose d
(2) De pe nding on a ge , se rvic e , a nd type of e mployme nt (3) 50 for a ll pla ns, with the e xc e ption of 52 for Misc e lla ne ous P EP RA 2%@62 (4) Morta lity a ssumptions a re ba se d on morta lity ra te s re sulting from the most re c e nt Ca lP ERS Expe rie nc e S tudy a dopte d by the Ca lP ERS Boa rd. 82 SUPPLEMENTARY INFORMATION
83 This page intentionally left blank
84 Special Revenue accounts for restricted revenues (for specified purposes).

City Capital Projects Fund accounts for construction or acquisition of governmental capital assets (capital outlay).

NON-MAJOR GOVERNMENTAL FUNDS
85 Special Capital Non-Major
Revenue Projects Funds
Funds Funds Total
ASSETS
Cash and investments $ 148,887 $ 723,226 $ 872,113
Receivables:

Intergovernmental 110,576 132,998 243,574
Total assets $ 259,463 $ 856,224 $ 1,115,687

LIABILITIES

AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ - $ 15,145 $ 15,145 Due to other funds 64,876 - 64,876
Total liabilities 64,876 15,145 80,021
Fund Balances:

Restricted 194,587 841,079 1,035,666
Unassigned - 841,079 841,079
Total fund balances 194,587 1,682,158 1,876,745
Total liabilities
and fund balances $ 259,463 $ 1,697,303 $ 1,956,766
City of Waterford
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
Governmental Fund
86 Special Capital Non-Major
Revenue Projects Funds
Funds Funds Total
REVENUES:

Taxes and assessments 123,004 $ - $ 123,004 $
Intergovernmental 580,848 599,691 1,180,539
Use of money and property 11,510 - 11,510
Other revenues 61,815 - 61,815
Total revenues 599,691 777,177 1,376,868
EXPENDITURES:

Current:

Public ways and facilities 111,571 12,745 124,316
Police services 37,849 - 37,849
Capital outlay - 122,778 122,778
Debt service:

Principal 20,360 - 20,360
Interest and fiscal charges 5,015 - 5,015
Total expenditures 135,523 174,795 310,318
REVENUES OVER (UNDER) EXPENDITURES 464,168 602,382 1,066,550 OTHER FINANCING SOURCES (USES):

Transfers in 31,000 288,457 319,457
Transfers out (627,538) - (627,538)
Total other financing sources (uses) (596,538) 288,457 (308,081) Net change in fund balances 5,844 752,625 758,469
FUND BALANCES:

Beginning of year, as previously stated 1,320,729 180,020 1,500,749 Restatement - change in major funds (1,131,986) (91,566) (1,223,552) Beginning of year, as restated 188,743 88,454 277,197
End of year $ 194,587 $ 932,645 $ 1,035,666
Governmental Fund
City of Waterford
Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds
For the year ended June 30, 2025
87 This page intentionally left blank
88 NON-MAJOR SPECIAL REVENUE FUNDS
Gas Tax accounts for funds received and expended for street maintenance purposes as defined in Sections 2105, 1206, 2107, and 2107.5 of the Streets and Highways Code.

Local Transportation accounts for funds received and expended for streets and roads under the Transportation Development Act.

Lighting District Accounts for Assessments collected and expended for the City of Waterford Lighting District.

Lighting and Landscaping accounts for Assessments collected and expended for the City of Waterford Lighting and Landscaping District.

Abandoned Vehicle accounts for funds received and expended for Abandoned Vehicle Abatement.

Special Business Pilot Program accounts for the cannabis pilot program revenue.

CFD 2019-1 Maintenance Service accounts for the services, administrative expenditures and other maintenance expenditures for the Community Facility District 89 Abandoned
Gas Local Lighting Vehicle
Tax Transportation District Abatement
Fund Fund Fund Fund
ASSETS
Cash and investments - $ - $ 113,416 $ 8,698 $
Receivables:

Intergovernmental 64,876 - 1,318 38,729
Loan receivable - - - -
Total assets $ - 64,876 $ 114,734 $ 47,427 $

LIABILITIES

AND FUND BALANCES
Liabilities:

Due to other funds $ 64,876 $ - $ - $ -
Total liabilities 64,876 - - -
Fund Balances:

Restricted - 114,734 - 47,427
Total fund balances - 114,734 - 47,427
Total liabilities
and fund balances $ 64,876 $ 114,734 - $ $ 47,427
City of Waterford
Combining Balance Sheet
Non-Major Special Revenue Funds
June 30, 2025
Special Revenue Funds
90 Lighting Special
and Business CFD 2019-1
Landscaping Pilot Program Maintenance
Fund Fund Service Fund Totals
$ 7,274 463 $ 19,036 $ 148,887 $
5,054 599 - 110,576
- - - -
$ 12,328 1,062 $ 19,036 $ 259,463 $
$ - - $ - $ 64,876 $
- - - 64,876
1,062 12,328 19,036 194,587
1,062 12,328 19,036 194,587
$ 1,062 $ 12,328 $ 19,036 $ 259,463
Special Revenue Funds
91 Gas Local Community Lighting
Tax Transportation Development District
Fund Fund Fund Fund
REVENUES:

Taxes and assessments $ - $ - $ 36,388 - $
Intergovernmental 506,509 20,099 - 163
Use of money and property 6,155 224 - 3,514
Other revenues - - - -
Total revenues 512,664 20,323 40,065 -
EXPENDITURES:

Current:

Public ways and facilities - - 11,097 -
Police services - - - -
Debt service: -
Principal - - 10,180 -
Interest and fiscal charges - - - 2,507
Total expenditures - - 23,784 -
REVENUES OVER (UNDER) EXPENDITURES 512,664 20,323 16,281 - OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out (512,664) (20,323) (31,000) -
Total other financing sources (uses) (512,664) (20,323) (31,000) - Net change in fund balances - - (14,719) -
FUND BALANCES:

Beginning of year, as previously stated - 1,131,986 - 129,453 Restatement - change in major funds - (1,131,986) - -
Beginning of year, as restated - - 129,453 -
End of year $ - $ - $ 114,734 - $
Special Revenue Funds
City of Waterford
Non-Major Special Revenue Funds
For the year ended June 30, 2025
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 92 Abandoned Lighting Special
Vehicle and Business CFD 2019-1
Abatement Landscaping Pilot Program Maintenance
Fund Fund Fund Service Fund Totals
$ 68,392 - $ - $ 18,224 $ 123,004 $
- 54,077 - - 580,848
- 615 1,002 - 11,510
- - 61,815 - 61,815
68,392 54,692 62,817 18,224 777,177
91,709 - - 8,765 111,571
- 37,849 - - 37,849
10,180 - - - 20,360
2,508 - - - 5,015
104,397 37,849 - 8,765 174,795
(36,005) 16,843 62,817 9,459 602,382
31,000 - - - 31,000
- - (60,000) (3,551) (627,538)
31,000 - (60,000) (3,551) (596,538)
(5,005) 16,843 2,817 5,908 5,844
6,067 30,584 9,511 13,128 1,320,729
- - - (1,131,986) -
30,584 6,067 9,511 13,128 188,743
$ 47,427 $ 1,062 $ 12,328 $ 19,036 $ 194,587
Special Revenue Funds
93 City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Gas Tax Special Revenue Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental 486,848 $ 506,509 $ 506,509 $ - $
Use of money and property - 6,155 6,155 -
Total revenues 512,664 486,848 512,664 -
OTHER FINANCING SOURCES (USES):

Transfers out (486,848) (512,664) (512,664) -
Total other financing sources (uses) (512,664) (486,848) (512,664) - Net change in fund balances $ - - $ - - $
FUND BALANCES:

Beginning of year -
End of year $ -
Budget Amounts
For the year ended June 30, 2025
94 City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Local Transportation Special Revenue Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental 12,500 $ 20,099 $ 20,099 $ - $
Use of money and property - 224 224 -
Total revenues 20,323 12,500 20,323 -

REVENUES OVER (UNDER)
EXPENDITURES 20,323 12,500 20,323 -
OTHER FINANCING SOURCES (USES):

Transfers out (12,500) (20,323) (20,323) -
Total other financing sources (uses) (20,323) (12,500) (20,323) - Net change in fund balances $ - - $ - - $
FUND BALANCES:

Beginning of year -
End of year $ -
For the year ended June 30, 2025
Budget Amounts
95 City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Lighting District Special Revenue Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes and assessments 39,400 $ 36,600 $ 36,388 $ (212) $ Intergovernmental 100 100 163 63
Use of money and property 500 3,410 3,514 104
Total revenues 40,110 40,000 40,065 (45)
EXPENDITURES:

Current:

Public ways and facilities 11,700 13,300 11,097 2,203
Debt service:

Principal 10,180 10,180 10,180 -
Interest and fiscal charges 2,507 2,507 2,507 -
Total expenditures 25,987 24,387 23,784 2,203
Net change in fund balances $ (19,877) (18,387) $ (14,719) 5,158 $ FUND BALANCES:

Beginning of year 129,453
End of year $ 114,734
For the year ended June 30, 2025
Budget Amounts
96 City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Abandoned Vehicle Abatement Special Revenue Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental 48,000 $ 48,000 $ 54,077 $ 6,077 $
Use of money and property 200 200 615 415
Total revenues 48,200 48,200 54,692 6,492
EXPENDITURES:

Current:

Police services 46,750 46,750 37,849 8,901
Total expenditures 46,750 46,750 37,849 8,901
Net change in fund balances $ 1,450 1,450 $ 16,843 15,393 $ FUND BALANCES:

Beginning of year 30,584
End of year $ 47,427
For the year ended June 30, 2025
Budget Amounts
97 City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Lighting and Landscaping Special Revenue Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes and assessments 69,000 $ 69,900 $ 68,392 $ (1,508) $ Use of money and property - 60 - (60)
Total revenues 69,960 69,000 68,392 (1,568)
EXPENDITURES:

Current:

Public ways and facilities 93,365 93,365 91,709 1,656
Debt service:

Principal 10,180 10,180 10,180 -
Interest and fiscal charges 2,507 2,507 2,507 -
Total expenditures 106,052 106,052 104,396 1,656

REVENUES OVER (UNDER)
EXPENDITURES (36,092) (37,052) (36,004) 88
OTHER FINANCING SOURCES (USES):

Transfers in 34,000 34,000 31,000 3,000
Total other financing sources (uses) 34,000 34,000 31,000 3,000 Net change in fund balances $ (2,092) (3,052) $ (5,004) 3,088 $ FUND BALANCES:

Beginning of year 6,067
End of year $ 1,063
For the year ended June 30, 2025
Budget Amounts
98 City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Special Business Pilot Program
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property 500 $ 500 $ 1,002 $ 502 $
Other revenues 30,000 57,000 61,815 4,815
Total revenues 57,500 30,500 62,817 5,317
EXPENDITURES:

Current:

General government 3,000 3,000 - 3,000
Total expenditures 3,000 3,000 - 3,000

REVENUES OVER (UNDER)
EXPENDITURES 54,500 27,500 62,817 8,317
OTHER FINANCING SOURCES (USES):

Transfers out (60,000) (60,000) (60,000) -
Total other financing sources (uses) (60,000) (60,000) (60,000) - Net change in fund balances $ (5,500) (32,500) $ 2,817 8,317 $ FUND BALANCES:

Beginning of year 9,511
End of year $ 12,328
For the year ended June 30, 2025
Budget Amounts
99 City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual CFD 2019-1 Maintenance Service Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes and assessments 18,269 $ 18,269 $ 18,224 $ (45) $ Total revenues 18,269 18,269 18,224 (45)
EXPENDITURES:

Current:

Public ways and facilities 11,000 11,000 8,765 2,235
Total expenditures 11,000 11,000 8,765 2,235

REVENUES OVER (UNDER)
EXPENDITURES 7,269 7,269 9,459 2,190
OTHER FINANCING SOURCES (USES):

Transfers out - - (3,551) (3,551)
Total other financing sources (uses) - - (3,551) (3,551) Net change in fund balances $ 7,269 7,269 $ 5,908 (1,361) $ FUND BALANCES:

Beginning of year 13,128
End of year $ 19,036
For the year ended June 30, 2025
Budget Amounts
100

NON-MAJOR CAPITAL PROJECTS FUNDS
CIP Streets Measure L Account for streets and roads projects funded by Stanislaus County Measure L. A 25 year 1/2 cent sales tax measure enacted in 2017-2018 CIP Parks is used to account for all parks related construction projects in 2017-2018.

CIP Streets and Roads Fund This fund is used to account for all streets and roads construction projects. 101
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102
City of Waterford
Combining Balance Sheet
Non-Major Capital Projects Funds
June 30, 2025
CIP
Measure L
CIP
Parks
CIP
Streets and
Roads Totals
ASSETS
Cash and investments 537,259 $ - $ 185,967 $ 723,226 $
Receivables:

Intergovernmental 132,998 - 132,998 -
Total assets $ 670,257 $ 185,967 - $ $ 856,224

LIABILITIES

AND FUND BALANCES
Liabilities:

Accounts payable $ - $ 15,145 - $ $ 15,145
Total liabilities - - 15,145 15,145
Fund Balances:

Restricted 670,257 170,822 - 841,079
Total fund balances 670,257 170,822 - 841,079
Total liabilities
and fund balances $ 670,257 $ 185,967 - $ $ 856,224
103
Combining Statement of Revenues, Expenditures and Changes in Fund Balances CIP
Measure L
CIP
Parks
CIP
Streets and
Roads Totals
REVENUES:

Intergovernmental 490,237 $ - $ 109,454 $ 599,691 $
Total revenues 490,237 - 109,454 599,691
EXPENDITURES:

Current:

Public ways and facilities - 12,745 - 12,745
Capital outlay - 122,778 - 122,778
Total expenditures - 135,523 - 135,523
REVENUES OVER (UNDER) EXPENDITURES 490,237 (26,069) - 464,168 OTHER FINANCING SOURCES (USES):

Transfers in - 288,457 - 288,457
Transfers out - - - -
Total other financing sources (uses) - - 288,457 288,457 Net change in fund balances 490,237 262,388 - 752,625
FUND BALANCES:

Beginning of year, as previously stated 180,020 - 180,020 - Restatement - change in major funds - (91,566) - (91,566) Beginning of year, as restated 180,020 (91,566) - 88,454 End of year $ 670,257 $ 170,822 - $ $ 841,079
City of Waterford
Non-Major Capital Projects Funds
For the year ended June 30, 2025
104
City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual CIP Streets Measure L Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental 595,585 $ 595,585 $ 490,237 $ (105,348) $ Total revenues 595,585 595,585 490,237 (105,348)
OTHER FINANCING SOURCES (USES):

Transfers out - (100,000) - 100,000
Total other financing sources (uses) (100,000) - - 100,000 Net change in fund balances $ 495,585 595,585 $ 490,237 (5,348) $ FUND BALANCES:

Beginning of year 180,020
End of year $ 670,257
For the year ended June 30, 2025
Budget Amounts
105
City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual CIP Parks Capital Projects Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental - $ - $ - $ - $
Total revenues - - - -
EXPENDITURES:

Capital outlay - - - -
Total expenditures - - - -

REVENUES OVER (UNDER) EXPENDITURES - - - -
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Total other financing sources (uses) - - - -
Net change in fund balances $ - $ - - $ -
FUND BALANCES:

Beginning of year -
End of year $ -
For the year ended June 30, 2025
Budget Amounts
106
City of Waterford
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual CIP Streets and Roads Capital Projects Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 1,631,000 $ 1,631,000 $ 109,454 $ (1,521,546) Total revenues 1,631,000 1,631,000 109,454 (1,521,546)
EXPENDITURES:

Current:

Public ways and facilities - - 12,745 (12,745)
Capital outlay 2,181,000 2,181,000 122,778 2,058,222
Total expenditures 2,181,000 2,181,000 135,523 2,045,477 REVENUES OVER (UNDER) EXPENDITURES (550,000) (550,000) (26,069) 523,931 OTHER FINANCING SOURCES (USES):

Transfers in 345,366 350,120 288,457 (61,663)
Total other financing sources (uses) 345,366 350,120 288,457 (61,663) Net change in fund balances $ (204,634) $ (199,880) 262,388 $ 462,268 FUND BALANCES:

Beginning of year (91,566)
End of year $ 170,822
For the year ended June 30, 2025
Budget Amounts
107
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108

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
of the City of Waterford
Waterford, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Waterford, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated November 13, 2025
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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

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

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

Badawi & Associates, CPAs
Emeryville, California
November 13, 2025
110
City of
Waterford
Waterford, California
Abandoned Vehicle Abatement
Program Financial Statements
For The Year Ended June 30, 2025

City of Waterford Abandoned Vehicle Abatement Program
Financial Statements
For the year ended June 30, 2025
Table of Contents
Page
Independent Auditor’s Report ............................................................................................................................... 1 Financial Statements:

Governmental Fund Balance Sheet .................................................................................................................... 7 Statement of Governmental Fund Revenues, Expenditures, and Changes in Fund Balance ................................................................................................................................. 8 Notes to Financial Statements ........................................................................................................................... 11 Supplementary Information ................................................................................................................................. 17 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................................................................................................. 19 This page intentionally left blank
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and City Council
of the City of Waterford
Waterford, California
Opinions
We have audited the accompanying financial statements of the Abandoned Vehicle Abatement Program (Program) of the City of Waterford, California, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise Program’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 respective financial position of the Program, as of June 30, 2025, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority 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 Program’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

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

To the Honorable Mayor and City Council
Of the City of Waterford
Waterford, 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 issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence 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 circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements.

Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. 2 To the Honorable Mayor and City Council
Of the City of Waterford
Waterford, California

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Program’s basic financial statements. The budgetary comparison information on pages 14 are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The budgetary comparison information on page 17 is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary comparison information on pages 14 is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Emphasis of Matter
As discussed in Note 1, the financial statements present only the Program and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2025, and the changes in its financial position, for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 13, 2025 on our consideration of the Authority’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 Authority’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Emeryville, California
November 13, 2025
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4 FINANCIAL STATEMENTS
5 This page intentionally left blank
6 Special Revenue
Fund
ASSETS
Cash and investments $ 8,698
Intergovernmental receivable 38,729
Total Assets 47,427

LIABILITIES AND FUND BALANCES
Liabilities:

Due to City of Waterford -
Total liabilities -
Fund balances:

Restricted for police service: 47,427
Total fund balances 47,427
Total liabilities and fund balances $ 47,427
City of Waterford Abandoned Vehicle Abatement Program
Governmental Fund Balance Sheet
June 30, 2025
The accompanying notes are an integral part of these financial statements 7 Special Revenue
Fund
REVENUES:

Intergovernmental $ 54,077
Use of money and property 616
Total revenues 54,693
EXPENDITURES:

Police services 37,850
Total expenditures/expenses 37,850
REVENUES OVER (UNDER) EXPENDITURES 16,843

FUND BALANCE
Beginning of the year 30,584
End of the year $ 47,427
City of Waterford Abandoned Vehicle Abatement Program
Statement of Governmental Fund Revenues, Expenditures, and Changes in Fund Balance
For the year ended June 30, 2025
The accompanying notes are an integral part of these financial statements 8 NOTES TO FINANCIAL STATEMENTS
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10 City of Waterford Abandoned Vehicle Abatement Program Notes to Financial Statements
For the year ended June 30, 2025

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Abandoned Vehicle Abatement Program (Program) is a statewide program administered by the California Highway Patrol (CHP). The City of Waterford (City) administers and operates the local vehicle abatement program pursuant to Section 22710 of the Vehicle Code, Waterford Municipal City Ordinance Chapter 10.54, and the Stanislaus Council of Governments (StanCOG) Abandoned Vehicle Program and Plan.

Section 9250.7 of the Vehicle Code establishes the funding source for the abatement of abandoned vehicles by a county-based Service Authority (Authority), pursuant to the provisions of Section 22710 of the Vehicle Code.

The Vehicle Code imposes a service fee of one dollar on vehicles registered to an owner with an address in the County that established the Authority. This fee is paid to the Department of Motor Vehicles (DMV) at the time of registration or renewal of registration. The DMV transmits the net amount collected to the State Controller’s Office (SCO) for deposit in the Abandoned Vehicle Trust Fund quarterly. All money in the fund is continuously appropriated to the SCO for allocation to an Authority that has an approved Program pursuant to Section 22710 of the Vehicle Code, and for payment of the administrative costs of the SCO. The Authority established pursuant to Vehicle Code Section 22710, distributes Program funds to participating entities based on the allocations determined in the Vehicle Abatement Services Agreement. The revenues and expenditures/expenses of the Program are included in the Abandoned Vehicle Abatement Special Revenue Fund of the City’s financial statements.

A. Basis of Accounting
Governmental Fund Financial Statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded in the accounting period in which the related liability is incurred.

Intergovernmental revenues and investment earnings are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal year.

B. Financial Statement Presentation
The financial statements present only the financial activities of the Program and are not intended to present fairly the financial position or changes in financial position of the City in accordance with accounting principles generally accepted in the United States of America. 11 City of Waterford Abandoned Vehicle Abatement Program Notes to Financial Statements
For the year ended June 30, 2025

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates and assumptions.

D. Budgets
Budgets are prepared on the modified accrual basis of accounting. • The Program follows these procedures in establishing the budgetary data reflected in the financial statements:
• By June 30, management recommends to the Council a proposed operating budget for the year commencing July 1. The operating budget includes proposed expenditures and the means of financing them.
• The budget is legally enacted through passage of a motion during a City Council meeting prior to the commencement of the new fiscalyear.
• Formal budgeting is employed as a management control device during theyear. • Budgets for the Special Revenue Fund are adopted on a basis consistent with accounting principles generally accepted in the United States (GAAP).

Budgeted amounts are as originally adopted or as amended by the Board.

E. Cash and Investments
For the purposes of the Statement of Net Position, “cash and investments” includes all demand, savings accounts, and certificates of deposits, or short-term investments with an original maturity of three months or less.

The City of Waterford currently maintains a $19,026 of Program funds in the City’s pooled cash deposits.

The City/Program has oversight responsibility for all Program cash and investments.

2. CASH AND INVESTMENTS
A. Cash Deposits
At June 30, 2025, the Program had funds with the City in the amount of $8,698 as adjusted to fair value. 12 City of Waterford Abandoned Vehicle Abatement Program Notes to Financial Statements
For the year ended June 30, 2025

3. FUND BALANCE
Fund balance consists of restricted amounts. Restricted fund balance consists of resources that are subject to externally enforceable legal restrictions imposed by parties altogether outside the government. As of June 30, 2025 the Program had a restricted fund balance of $47,427 for police services. 13 This page intentionally left blank
14 SUPPLEMENTARY INFORMATION
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16 City of Waterford Abandoned Vehicle Abatement Program Supplementary Information
For the year ended June 30, 2025
Budgetary Comparison Schedule Special Revenue Fund
For the Year Ended June 30, 2025
Original Final Actual
Budgetary fund balance, July 1, 2024 $ 30,584 $ 30,584 $ 30,584 $ - Resources (inflows):

Intergovernmental 48,000 48,000 54,077 6,077
Use of money and property 200 200 616 416
Amounts available for appropriation 78,784 78,784 85,277 6,493 Charges to appropriations (outflows):

Police services 46,750 46,750 37,850 8,900
Total charges to appropriations 46,750 46,750 37,850 8,900 Budgetary fund balance, June 30, 2025 32,034$ 32,034$ 47,427$ 15,393$ Budgeted Amounts
Variance
w/Final
Positive
(Negative)
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18 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT

AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and City Council
of the City of Waterford
Waterford, California
We have audited, in accordance with the auditing standard generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Abandoned Vehicle Abatement Program (Program) of the City of Waterford, California as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Program’s financial statements, and have issued our report thereon dated November 13, 2025.

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

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

Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we considered to be material weaknesses. However, material weaknesses may exist that we have not identified.

To the Honorable Mayor and City Council
of the City of Waterford
Waterford, California