Financial reviews, water service fees, wastewater plant sale on tonight’s agenda
March 19, 2012 5:24 PM
Brooke Edwards Staggs, City Editor

VICTORVILLE • A bleak audit, price hikes for some water services and discussion about selling the city’s wastewater treatment plant are all on the agenda for Victorville’s City Council Tuesday night.

For the third year in a row, an independent audit of Victorville’s finances came with a warning about whether the city will be able to stay afloat.

Citing recurring losses, a lack of cash and negative fund balances, auditing firm Mayer Hoffman McCann expressed “substantial doubt about the city’s ability to continue as a going concern.”

The city expects to have just $543,779 now in its general fund reserve, used to cover any shortfalls or unexpected expenses that pop up throughout the year. Accepted practice is to carry at least 10 percent of the general fund operating budget in reserve, which for Victorville would be more than $4.8 million.

An audit of the city’s Southern California Logistics Airport Authority came with the same warning. While SCLAA’s aviation operations are finally posting positive revenues, the authority overall lost another $5.7 million over the last fiscal year for a total deficit of $100 million.

The city’s municipal utility fund is also upside-down, carrying a deficit of $75 million.

Victorville has $87 million in outstanding interfund loans and hundreds of millions of dollars in bond debt, with the auditor noting the city’s recent default on a bond payment and ongoing investigations by the Securities and Exchange Commission and San Bernardino County Grand Jury as concerns.

Along with discussing the audits, the City Council Tuesday night will vote to extend a letter of credit on one of its $83 million bonds, taken out in 2007 to build the failed Foxborough power plant. Since that project doesn’t exist, Victorville hasn’t been able to secure permanent financing. Victorville is hoping a pending $52 million settlement with the power plant’s designer, Carter & Burgess, will improve the city’s credit standing.

To help right some of the city’s cash issues, during closed session the council will discuss its goal to sell Victorville’s wastewater treatment plant to the regional Victor Valley Wastewater Reclamation Authority. The deal has been on VVWRA’s agenda a number of times over the past year, though the two parties have reportedly been far apart in price.

The City Council will also vote on staff’s recommendation to increase charges related to water service, such as hiking meter installation fees by between 4 and 14 percent and raising administrative fees for such things as service calls or returned payments by $1 or $2 each.

These issues are up for discussion during the meeting that starts at 7 p.m. Tuesday in Victorville City Hall, at 14343 Civic Drive. The full agenda and live streaming video are available at the city’s website,

Brooke Edwards Staggs may be reached at (760) 955-5358 or at

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