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ANNUAL COMPREHENSIVE FINANCIAL REPORT For the Fiscal Year Ended June 30, 2025

City of Suffolk, Virginia

Annual Comprehensive Financial Report AS OF AND FOR THE FISCAL YEAR ENDED June 30, 2025

Prepared by: The Department of Finance

TABLE OF CONTENTS

INTRODUCTORY SECTION

Letter of Transmittal �� i GFOA Certificate of Achievement for Excellence in Financial Reporting ��viii Directory of Principal Officials �� ix Organizational Chart �� x

FINANCIAL SECTION

Report of Independent Auditor �� 1 Management’s Discussion and Analysis �� 5 Basic Financial Statements: Government-wide Financial Statements: Exhibit 1: Statement of Net Position �� 17 Exhibit 2: Statement of Activities �� 18 Fund Financial Statements: Exhibit 3: Balance Sheet – Governmental Funds �� 19 Exhibit 3: Reconciliation of Governmental Funds Balance Sheet to the Statement Of Net Position ��20 Exhibit 4: Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement Of Activities ��22 Exhibit 5: Statement of Net Position – Proprietary Funds ��23 Exhibit 6: Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds ��24 Exhibit 7: Statement of Cash Flows Proprietary Funds �� 25 Exhibit 8: Statement of Fiduciary Net Position �� 26 Exhibit 9: Statement of Changes in Fiduciary Net Position ��27 Notes to the Basic Financial Statements ��30 Required Supplementary Information (Unaudited): Exhibit 10: Budget and Actual – General Fund ��90 Exhibit 11: Budget and Actual – Capital Projects ��94 Exhibit 12: Budget and Actual – Road Maintenance Fund �� 95 Exhibit 13: Budget and Actual – Consolidated Grants �� 96 Exhibit 14: Budget and Actual – Debt Service Fund �� 97 Exhibit 15: Schedule of Changes in the City’s Net Pension Liability and Related Ratios ��98 Exhibit 16: Schedule of Changes in the School Board’s (Non-Teacher) Net Pension Liability and Related Ratios ��99 Exhibit 17: Schedule of Employer’s Proportionate Share of Net Pension Liability – School Board Teacher Retirement Plan ��100

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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FINANCIAL SECTION (CONTINUED)

Exhibit 18: Schedule of Contributions, City and School Board Pension Plans �� 101 Notes to Required Supplementary Information Pension Plans ��102 Exhibit 19: Schedule of Changes in the City’s Net OPEB Liability (Asset) and Related Ratios – City OPEB Medical Plan ��103 Exhibit 20: Schedule of Changes in the School Board’s Net OPEB Liability (Asset) and Related Ratios – School OPEB Medical Plan ��104 Exhibit 21: Schedule of Contributions – OPEB Plan – City and School OPEB Medical Plan �� 105 Exhibit 22: Schedule of Annual Money Weighted Rate of Return on OPEB Plan Investments – City and School Board OPEB Medical Plan ��106 Notes to Required Supplementary Information Plan City and School OPEB Medical Plan �� 107 Exhibit 23: Schedule of Employer’s Proportionate Share of Net OPEB Liability – Line of Duty Act Program (LODA) for the City ��108 Exhibit 24: Schedule of Employer’s Proportionate Share of Net OPEB Liability – Group Life Insurance (GLI) for the City ��108 Exhibit 25: Schedule of Employer’s Proportionate Share of Net OPEB Liability – Group Life Insurance (GLI) for the School Board ��109 Exhibit 26: Schedule of Employer’s Proportionate Share of Net OPEB Liability – Health Insurance Credit Plan (HIC) – School Board Teachers ��109 Exhibit 27: Schedule of Employer’s Proportionate Share of Net OPEB Liability – Virginia Local Disability Program (VLDP) – School Board Teachers �� 110 Exhibit 28: Schedule of Contributions OPEB – City State VRS Plans �� 111 Exhibit 29: Schedule of Contributions OPEB – School Board VRS Plans �� 112 Notes to Required Supplementary Information OPEB City and School Board State VRS Plans �� 113 Exhibit 30: Schedule of Changes in the School Board’s Net OPEB Liability and Related Ratios – School Board Non-Teacher HIC Single Employer Plan �� 114 Exhibit 31: Schedule of Contributions OPEB – School Board Non-Teacher HIC Single Employer Plan �� 115 Notes to Required Supplementary Information OPEB School Board Non-Teacher HIC Plan �� 116 Other Supplementary Information Non-major Governmental Funds: Exhibit 32: Combining Balance Sheet – Non Major Governmental Funds �� 119

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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FINANCIAL SECTION (CONTINUED)

Exhibit 33: Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-Major Governmental Funds �� 120 Exhibit 34: Budget and Actual – Downtown Business Overlay District � 121 Exhibit 35: Budget and Actual – Law Library �� 122 Exhibit 36: Budget and Actual – Route 17 Taxing District �� 123 Exhibit 37: Budget and Actual – Cemetery �� 124 Exhibit 38: Budget and Actual – Transit �� 125 Exhibit 39: Budget and Actual – Aviation �� 126 Non-major Proprietary Funds Exhibit 40: Combining Statement of Net Position - Enterprise Funds �� 128 Exhibit 41: Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Enterprise Funds �� 129 Exhibit 42: Combining Statement of Cash Flows Nonmajor Enterprise Funds �� 130 Exhibit 43: Combining Statement of Net Position - Internal Service Funds �� 132 Exhibit 44: Combining Statement of Statement of Revenues, Expenses, and Changes in Net Position - Internal Service Funds �� 133 Exhibit 45: Combining Statement of Cash Flows Internal Service Funds ��134 Fiduciary Net Position Exhibit 46: Combining Statement of Fiduciary Net Position Custodial Funds �� 136 Exhibit 47: Combining Statement of Changes in Fiduciary Net Position - Custodial Funds �� 137 Discretely Presented Component Unit – City of Suffolk School Board � 138 Exhibit 48: Combining Balance Sheet �� 139 Exhibit 49: Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ��140 Exhibit 50: Budgetary Reconciliation Schedule Governmental Funds - School Operating Fund �� 141 Exhibit 51: Budgetary Reconciliation Schedule Governmental Funds - School Grants Fund �� 142 Exhibit 52: Budgetary Reconciliation Schedule Governmental Funds - School Food Service Fund ��143 Exhibit 53: Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Budgetary Basis) And Changes in Fund Balances Governmental Funds - School Operating Fund ��144 Exhibit 54: Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Budgetary Basis) And Changes in Fund Balances Governmental Funds - School Grants Fund ��145

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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FINANCIAL SECTION (CONTINUED)

Exhibit 55: Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Budgetary Basis) And Changes in Fund Balances Governmental Funds - School Food Service Fund ��146 Exhibit 56: Statement of Fiduciary Net Position OPEB Fund �� 147 Exhibit 57: Statement of Changes in Fiduciary Net Position OPEB Fund ��148

STATISTICAL SECTION

Table 1 Net Position by Component �� 151 Table 2 Changes in Net Position �� 152 Table 3 Fund Balances – Governmental Funds �� 155 Table 4 Changes in Fund Balances – Governmental Funds �� 156 Table 5 Tax Revenues by Source – Governmental Funds �� 158 Table 6 Assessed Value and Estimated Actual Value of Taxable Property �� 159 Table 7 Direct Property Tax Rates �� 160 Table 8 Principal Property Tax Payers �� 161 Table 9 Property Tax Levies and Collections �� 162 Table 10 Property Value and Construction ��163 Table 11 Principal Commercial/Industrial Water and Sewer Consumers ��164 Table 12 Water and Sewer Rate Schedule �� 165 Table 13 Outstanding Debt by Type �� 166 Table 14 Legal Debt Margin �� 167 Table 15 Pledge-Revenue Coverage �� 168 Table 16 Demographic and Economic Statistics �� 169 Table 17 Principal Employers �� 170 Table 18 Full-Time Equivalent City Government Employees by Function/Program �� 171 Table 19 Operating Indicators by Function/Program �� 174 Table 20 Capital Asset Statistics by Function/Program �� 175

COMPLIANCE SECTION

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

INTRODUCTORY SECTION

Introductory Section

December 15, 2025 The Honorable Council City of Suffolk, Virginia To the Honorable Mayor, City Council, and Citizens of Suffolk:

We are proud to present the Annual Comprehensive Financial Report (ACFR) for the fiscal year July 1, 2024, through June 30, 2025. This report reflects the City of Suffolk’s ongoing commitment to transparency, accountability, and excellence in financial management. In accordance with the Code of the Commonwealth of Virginia and the City Charter, this report has been prepared by the Department of Finance in conformity with accounting principles generally accepted in the United States (GAAP) and audited in accordance with Government Auditing Standards by a firm of licensed certified public accountants. Suffolk’s management assumes full responsibility for the accuracy, completeness, and reliability of the information presented. We believe the data contained herein fairly represents the City’s financial position and results of operations, providing residents, investors, and stakeholders with a clear and comprehensive view of our financial health. The City has implemented strong internal controls to safeguard assets, maintain accurate financial records, and ensure accountability, offering reasonable assurance that the information in this report is reliable. During the past year, Suffolk has continued to demonstrate strong financial stewardship while fostering growth and opportunity across the community. Our proactive planning, strategic management of residential and commercial development, and targeted infrastructure investments have positioned Suffolk as one of the most attractive cities in the Hampton Roads region for both businesses and families. These efforts enable the City to deliver high-quality services efficiently, supporting a vibrant economy, a thriving workforce, and an excellent quality of life for residents. As required by City Charter Section 8.08 and Section 15.2-2511 of the Virginia Code, an independent audit of the City’s financial statements was conducted by Cherry Bekaert LLP. They review each of the City’s major funds and aggregate remaining funds. Their review confirmed that Suffolk’s financial statements are presented fairly, in all material respects, in accordance with GAAP, and they issued an unmodified opinion. The independent auditor’s report is presented as the first component of the financial section of this report. The audit also included a federally mandated Single Audit, which ensures compliance with all requirements governing federal awards. This process highlights Suffolk’s commitment to transparency, accountability, and responsible stewardship of public resources. A separate report detailing the auditors’ findings regarding federal grant compliance will be issued.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Introductory Section

This transmittal letter complements the Management’s Discussion and Analysis (MD&A), which provides an in-depth narrative overview of the City’s financial performance and trends. The MD&A is presented immediately following the independent auditor’s report in the financial section. Together, this report and the MD&A provide a clear, comprehensive, and inspiring picture of Suffolk’s strong financial foundation and ongoing progress as a dynamic, growing community.

Profile of the City The present City of Suffolk was formed January 1, 1974, from the consolidation of the City of Suffolk and the City of Nansemond (formerly Nansemond County). The City is Virginia’s largest city in land area and one of the top twenty largest cities in land area in the nation with over 400 square miles of land mass and 30 square miles of waterways. The diverse landscape includes a mix of rural, suburban and urban development areas. The City is situated in the western portion of Hampton Roads, Virginia’s coastal plain area, and is bounded by the James River to the north, the Cities of Chesapeake and Portsmouth to the east, the State of North Carolina to the south, and the Counties of Southampton and Isle of Wight to the west. The City of Suffolk is one of seven major cities that form the Norfolk-Virginia Beach-Newport News metropolitan area with 1.7 million people. This region is also known as the Hampton Roads area. The City’s government is organized under the Council-Manager form of government. The governing body, the City Council, is composed of seven members and a Mayor who develop policies for the administration of the City. The Mayor is elected at large and the Council members are elected by borough in a city-wide election every other year with terms of office being four years. The City Council appoints a City Manager to act as administrative head of the City. The City Manager serves at the pleasure of City Council and carries out the City Council’s policies and directs business procedures. The City Manager also appoints and removes the directors of all departments. The School Board is elected by borough. Under Virginia law, all operations of the School Board are completely independent of the City Council and City Administration. City Council is required to make an annual appropriation to the School Board based upon an approved budget, but has no authority to direct how such appropriation is expended. As a full-service city, Suffolk provides a broad range of municipal services authorized by statute or charter. Those services include education, public safety, highways and streets, parks and recreation, sanitation, health and social services, public improvements, planning and zoning, public utilities, storm water management and general administrative services. The funds and entities included in the City’s ACFR are those controlled by, or dependent on, the City. This determination is explained in Note 1A within the Notes to Financial Statements tab. Consequently, this report includes the public School System and the Economic Development Authority as component units and excludes related organizations such as the Suffolk Redevelopment and Housing Authority, the Western Tidewater Regional Jail Authority, and the Western Tidewater Water Authority. The City maintains budgetary controls, the objective of which is to ensure compliance with the legal provisions embodied in the annual appropriated budget approved by City Council. Budgetary control is maintained at the expenditure level of each department using an encumbrance accounting system. Open encumbrances are reported within the appropriate classification of fund balance at June 30, 2025. A description of the procedures utilized to establish budgetary data is presented in Note 1D within the Notes to Financial Statements tab.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Introductory Section

Economic Activity – Calendar Year 2024

The City of Suffolk experienced another strong year of economic growth in 2024, building on momentum from previous years. The City reported approximately $391.36 million in new capital investment and 517 new jobs across key sectors including logistics, healthcare, food and beverage, retail, and technology. These achievements reflect the City’s ongoing commitment to supporting business expansion and attracting new industries. Lowe’s Home Center advanced a significant expansion project in Suffolk during FY 2025, reinforcing the City’s position as a regional destination for retail and home-improvement services. Supported through the Local EDIP program, the project brings substantial capital investment and new employment opportunities. This expansion underscores Suffolk’s continued success in attracting and retaining national industry leaders. Westport Vano LLC’s investment reflects sustained confidence in Suffolk’s industrial and logistics sectors. The project introduces new capital investment and job creation, strengthening the City’s growing industrial corridor. EDIP support for this expansion further demonstrates the City’s commitment to facilitating high-quality business growth. Blue Point Investment Group initiated new commercial development within the City, contributing to Suffolk’s expanding and diversified economic base. This investment, supported by the Authority, broadens local business activity and enhances long-term revenue potential. The project highlights the strength of Suffolk’s development climate and its ability to attract impactful private-sector investment. The Elliott Apartments completed a transformative façade improvement that enhances the visual appeal and long-term stability of a key multi-family property. This revitalization effort supports neighborhood attractiveness, encourages adjacent private investment, and strengthens Suffolk’s urban corridor. The Authority’s involvement reflects ongoing support for community development and reinvestment. Redwood Smokeshack received both façade and small business improvement funding, enabling a substantial upgrade to its facilities and customer experience. These enhancements support the long-term viability of a valued local business while adding to Suffolk’s growing culinary and small-business environment. This project demonstrates the City’s dedication to supporting homegrown enterprises and strengthening local commerce. Darla’s Boutique benefited from small business improvement resources that provided facility upgrades and enhanced retail appeal. These improvements support business growth, increase downtown activity, and contribute to an expanding local retail sector. The investment underscores the City’s ongoing commitment to cultivating a vibrant, diverse, and resilient small-business community. Overall, these achievements highlight Suffolk’s continued economic momentum, marked by significant capital investments, job creation, and modernization of key industrial and service facilities. The City remains a prime destination for both domestic and international businesses seeking growth opportunities in Virginia.

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Introductory Section

NEW AND EXPANDING INDUSTRY Calendar Year 2024 Approximate Number of Capital Jobs Square Feet Investment Advanced Manufacturing 73 280,000 $ 193,557,000 Warehousing & Distribution 113 2,100,694 $ 147,033,400 Medical 54 7,600 $ 3,263,350 Retail 261 70,701 $ 22,704,806 Office & Administration 7 1,000 $ 3,597,000 Hospitality & Other 9 127,467 $ 21,204,000 517 2,587,462 $ 391,359,556 TOTAL Source: City of Suffolk, Virginia, Department of Economic Development.

In addition to the growth of new and expanding businesses, Suffolk has continued to experience sustained population growth. The City’s population increased to 102,572 residents in 2024, an 8.7% increase since 2020, making Suffolk the fastest-growing city among the seven major cities in Hampton Roads. By comparison, Chesapeake grew by 1.5%, Virginia Beach decreased by 1.4%, Newport News declined by 1.9%, Portsmouth fell by 2.7%, Hampton dropped by 0.3%, and Norfolk saw a modest increase of 0.4%. This positive trend is expected to continue, with projections from the Weldon Cooper Center at the University of Virginia estimating Suffolk’s population will reach 112,920 by 2030.

HAMPTON ROADS POPULATION GROWTH BY CITY

2020 2024 Percent Change City Census Estimate (2020-2024) Suffolk (red bar) 94,324 102,572 8.7% Chesapeake 249,422 253,261 1.5% Virginia Beach 459,470 452,965 -1.4% Newport News 186,247 182,621 -1.9% Portsmouth 97,915 95,240 -2.7% Hampton 137,148 136,793 -0.3% Norfolk 244,348 245,406 0.4%

Hampton Roads Population Growth by City 2020-2024 0

-4

-3

-2

-1

Percent Change Estimate Source: Weldon Cooper Center for Public Service, Population Estimates.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Introductory Section

Suffolk Population Growth and Projections 140,000

130,000

120,000

110,000

100,000

90,000

2020

2030

2040

2050

Source: Weldon Cooper Center for Public Service, Population Estimates

The City of Suffolk boasts a median household income of approximately $90,089 (2023 ACS 5-year estimate). This figure is competitive regionally and aligns with strong local economic performance. Suffolk’s central location in the Hampton Roads area makes it an attractive place for both businesses and families. The City’s leadership takes a proactive approach to future growth, managing residential and commercial expansion strategically while prioritizing infrastructure improvements. As a result, Suffolk delivers efficient and effective public services and fosters a high quality of life for its residents.

Long-Term Financial Planning City Council and City Management have established a vision for the future of the City along with target areas which serve as guiding principles to move the City forward and include Public Safety, Financial Stability, Growth Management and Comprehensive Planning, Civic Engagement and Responsive City Services, Expanded Economic Development, Public Education, Leisure, Health, and Wellness, and Transportation. In planning for the specific initiatives under these priorities, the City maintains a comprehensive ten-year Capital Improvements Program and Plan (CIP). The FY 2025–FY 2034 CIP outlines planned capital investment of approximately $2.0 billion over ten years. Within the initial five-year period (FY 2025–2029), expenditures across funds are planned at approximately $383.1 million. The CIP places focus on critical areas including school facilities, public safety, transportation, infrastructure, and quality-of-life upgrades. Of this amount, nearly one-third of the General Government fund’s CIP ($283.6 million) is directed to public schools, transportation, public safety, public buildings, and parks. Financial policies are vital to maintaining the City’s overall financial health and stability. The City’s financial policies are reviewed annually by City Management and the City’s independent financial advisor. The financial policies include key financial indicators which are incorporated into the decision-making process when developing the Capital Improvements Program and Plan and annual operating and capital budget. One of the most important indicators is the unassigned general fund balance which is used to assess the ability of the City to cope with unexpected financial challenges or emergencies. It is the ratio of the percentage of budgeted governmental funds expenditures (net of the general fund contribution to the schools, transfers to other governmental funds, and Capital Projects fund expenditures), plus the budgeted expenditures in the School Operating and Food Service Funds. The City has set the unassigned fund balance percentage at 20%. Any surplus amounts over 20% are put into a budget stabilization fund until it reaches 2.5% based

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Introductory Section

on the same ratio and the remaining go to a capital reserve fund. At June 30, 2025, the unassigned fund balance ratio met the 20% target level. The budget stabilization fund is at 2.5% and the capital reserve fund totals $78.8 million. Financial policies are also developed for the Utility Fund which provides for written documentation of sound business practices. Categories include financial independence, target percentage for unrestricted cash and long-term investments, debt service coverage ratios, plus policies for asset replacement and system extension. The Utility Fund is further governed by revenue bond Master Trust Indenture requirements.

Awards and Recognition Bond Ratings – Maintain rating of AAA In August 2025, the City’s bond ratings were reaffirmed by all three rating agencies: Moody’s (Aaa), Fitch Rating Agency (AAA), and Standard and Poor’s (AAA). These ratings reflect the City’s commitment to strong financial management. Annual Comprehensive Financial Report The City of Suffolk, Virginia, was recognized by the Government Finance Officers Association of the United States and Canada (GFOA) with a Certificate of Achievement for Excellence in Financial Reporting for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2024. This marks the 40th consecutive year that the City has received this prestigious national award, which honors governments that demonstrate the highest standards in financial reporting. To earn this recognition, a governmental unit must publish an ACFR that is both easily readable and efficiently organized, with content that conforms to program standards. Such reports are required to comply fully with generally accepted accounting principles (GAAP) in the United States as well as applicable legal requirements. Citizen Reporting The City of Suffolk was recognized with the Government Finance Officers Association (GFOA) Award for Outstanding Achievement in Popular Annual Financial Reporting for its Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2024. This marks the ninth consecutive year the City has received this distinction. The PAFR provides a clear and accessible overview of the City’s financial results, enhancing community awareness and understanding of the City’s financial operations. All information presented is derived from the audited financial statements included in the City’s 2024 Annual Comprehensive Financial Report. Annual Budget The City of Suffolk operates on a fiscal year beginning July 1 and ending June 30, in accordance with state law and the City Charter. The annual operating and capital budget must be adopted by a majority vote of City Council prior to the start of the fiscal year. Should the City Council not adopt a budget by July 1, the proposed budget submitted by the City Manager automatically takes effect. The budget is statutorily required to be balanced, with revenues equal to expenditures, and all expenditures of the City to be budgeted and appropriated. Appropriations are established by ordinance at the Fund level. All governmental and business-type funds are annually budgeted and appropriated with an additional budget and appropriation approval in the annual budget ordinance for commitments and encumbrances to be carried forward to the next fiscal year.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Introductory Section

During the fiscal year, additional appropriations may be authorized by City Council ordinance in response to grants, donations, proffers, other external funding sources, excess revenues, or available fund balance. The City Manager is authorized to transfer appropriations between line items within each budgeted Fund, while transfers across Funds or between capital projects require City Council approval by ordinance. Appropriations generally lapse at the close of business on June 30, except for certain unexpended balances that are authorized for carryforward in accordance with the budget appropriation ordinance and funds lawfully obligated or encumbered. The Government Finance Officers Association (GFOA) awarded the City of Suffolk a Distinguished Budget Presentation Award for its annual budget for the fiscal year beginning July 1, 2024. This award recognizes budget documents that meet the highest standards as a policy document, operations guide, financial plan, and communications tool. The 2024 award marks the seventeenth consecutive year that the City has received this recognition, which is valid for a one-year period. Suffolk’s Future is Bright The City of Suffolk continues to experience steady growth each year as businesses and residents take advantage of its unique opportunities and high quality of life. Supported by sound financial management, strategic planning, and a diverse mix of urban, suburban, and rural environments, Suffolk is well-positioned to remain a premier community within the Hampton Roads region. Acknowledgments We sincerely appreciate the dedication and tireless efforts of the Department of Finance staff in coordinating the preparation of the Annual Comprehensive Financial Report (ACFR). Their commitment and attention to detail have been essential in ensuring the City’s finances are managed with integrity and in full compliance with generally accepted accounting principles. We also extend our gratitude to the Mayor and City Council for their thoughtful fiscal oversight and for establishing policies that have contributed to the City’s strong and stable financial position.

Respectfully,

Interim City Manager

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Director of Finance

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Introductory Section

Government Finance Officers Association

Certificate of Achievement for Excellence in Financial Reporting Presented to

City of Suffolk Virginia For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2024

Executive Director/CEO

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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Introductory Section

Members of City Council Directory of Principal Officials As of June 30, 2025 Michael D. Duman Lue R. Ward Jr Shelley Butler Barlow Timothy J. Johnson John Rector LeRoy Bennett LeOtis L. Williams Ebony Wright

Members of City Council

David D. Miles Narendra Pleas Susan L. Draper Ronald H. Williams W. Randolph Carter, Jr

Constitutional Officers

Mayor Vice Mayor City Council Member City Council Member City Council Member City Council Member City Council Member City Council Member

Sheriff Commonwealth’s Attorney Commissioner of the Revenue Treasurer Clerk of the Circuit Court City Administration Albert S. Moor, II City Manager Kevin Hughes Deputy City Manager Azeez Felder Deputy City Manager William Hutchings City Attorney Holt Butt City Assessor Erika S. Dawley City Clerk Gerry Jones Capital Programs and Buildings Deputy Emergency Management Brian Spicer Coordinator Angela Tillery Health Clint Rudy Library Jennifer Moore Media and Community Relations Planning and Community Kevin Wyne Development Robert Lewis Public Works Charles Meek Finance Michael Barakey Fire and Rescue Jessica Stallings Human Resources James “Danny” Buie Police Mark Furlo Parks and Recreation Paul Retel Public Utilities Harry Cromer Social Services Charles Kiriakou Information Technology Suffolk Public Schools – School Board Karen L. Jenkins Chairman Heather S. Howell Vice Chairman Phyllis C. Byrum Board Member Tyron D. Riddick Board Member Dawn Marie Brittingham, Ed.D Board Member Dr. Judith Brooks-Buck Board Member Kimberly A. Slingluff Board Member Suffolk Public Schools – Administration Dr. John B. Gordon III School Superintendent Wendy Forsman Chief Financial Officer

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

FINANCIAL SECTION

Financial Section

Report of Independent Auditor To the City Council City of Suffolk, Virginia Suffolk, Virginia

Report on the Audit of the Financial Statements Opinions

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Suffolk, Virginia (the “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 as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, 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, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the Specifications for Audits of Counties, Cities, and Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia (the “Specifications”). Our responsibilities under those standards and Specifications 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

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.

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 generally accepted auditing standards, Government Auditing Standards, and the Specifications 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. cbh.com

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Specifications, 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 and the Required Supplementary Information, as listed in the table of contents, 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 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.

Other 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 accompanying Other Supplementary Information, as listed in the table of contents, and Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information 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. The 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 Other Supplementary Information and the Schedule of Expenditures of Federal Awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Other Information

Management is responsible for the other information included in the annual report. The other information comprises the Introductory Section and Statistical Section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 15, 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.

Virginia Beach, Virginia December 15, 2025

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Management’s Discussion and Analysis

Financial Section Financial Highlights

The Management of the City of Suffolk, Virginia (the “City”) presents this narrative discussion and analysis of the City’s financial performance as of and for the fiscal year ended June 30, 2025. To enhance your understanding of the City’s financial performance, please read this discussion and analysis in conjunction with the transmittal letter in the front of this report, the City’s basic financial statements, and supporting notes following this section.

Financial Highlights The government-wide financial statements report information about the City as a whole using the economic resources measurement focus and accrual basis of accounting. For the fiscal year ended June 30, 2025, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences. As a result of implementing this standard, the beginning net position for fiscal year 2025 was restated. This restatement led to a $10.9 million decrease in the beginning net position of the Primary Government. The City’s total net position (assets and deferred outflows of resources less liabilities and deferred inflows of resources) on a government-wide basis was $1,021.5 million at June 30, 2025. Of this balance, $785.7 million is attributed to governmental activities and $235.8 million to the business-type activities. For fiscal year 2025, taxes, other general revenues net of transfers of the City’s governmental activities amounted to $341.3 million and net program expenses $212.5 million, which resulted in an increase from 2025 in net position for the City’s governmental activities of $128.7 million. Revenues of the City’s business-type activities were $95.8 million, expenses were $73.0 million and net transfers to the General Fund were $1.5 million, which resulted in an increase of net position for the City’s business-type activities of $20.3 million. The City is rated AAA with Fitch, Standard and Poor’s and Moody’s.

Overview Of The Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The financial section of this report includes management’s discussion and analysis, the basic financial statements, and required supplementary information. The City’s basic financial statements comprise three components: 1) Government-wide financial statements, 2) Fund financial statements, and 3) Notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. The City’s financial statements present two kinds of statements, each with a different measurement focus and basis of accounting. The government-wide statements (economic resources measurement focus and accrual basis of accounting) provide both long and short term information about the City’s overall financial status. The fund financial statements (current financial resources measurement focus and modified accrual basis of accounting) focus on the individual functions of the city government, reporting the City’s operations in more detail than the government-wide statements. Both perspectives allow the user to address relevant questions, broaden the basis of comparison and enhance the City’s accountability.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Fund Financial Statements

Government-wide Financial Statements The government-wide financial statements are designed to provide the readers with a broad overview of the City’s finances in a manner similar to a private-sector business. These statements include all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources reported using the accrual basis of accounting. Government-wide financial reporting consists of two statements: The Statement of Net Position and the Statement of Activities. The Statement of Net Position presents information on all City assets and deferred outflows of resources, and liabilities and deferred inflows of resources, with the difference reported as net position. Net position is one way to measure the City’s financial health, or financial position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information identifying how net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, some items of revenues and expenses are reported in this statement that will result in cash flows in future fiscal periods. In the Statement of Net Position and the Statement of Activities, the City is divided into the following categories: Governmental Activities - Most of the City’s basic services are reported here including general government, public safety, public works, education, health and welfare, parks and recreation and economic and community development. Government activities are financed primarily through property taxes, other taxes and state and federal grants. Business-type Activities - The City’s water and sewer services are reported here as well as the City’s stormwater utility, and the refuse collection service. These services are supported by charges for services based on use. Component Units - The City includes two separate legal entities in its report - the Suffolk School Board and the Economic Development Authority of the City of Suffolk. While legally separate, the City is financially accountable and provides operating and capital funding to these component units.

Fund Financial Statements Fund financial statements provide more detailed information about the City’s most significant funds. Funds are groupings of related accounts that are 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 finance-related legal compliance. Traditional users of government financial statements will find the fund financial statement presentation more familiar. The focus is now on the City’s most significant funds. The fund financial statements are divided into three categories: governmental funds, proprietary funds and fiduciary 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 current sources and uses 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. Because the focus of governmental funds 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 City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Fund Financial Statements governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Since this presentation does not include the long-term focus of the government-wide statements, both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The fund financial statements using the current financial resources measurement focus will show bond proceeds and interfund transfers as other financing sources, in addition capital outlay and bond principal payments will be shown as expenditures. The reconciliation between the fund statements and the government-wide statements will eliminate these transactions and incorporate capital assets and long-term debt obligations into the governmental activities column in the government-wide statements. The City maintains several individual governmental funds. Information is presented separately in the governmental funds’ statements for the General, Capital Projects, Road Maintenance, Grants and Debt Service funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. Proprietary Funds - Services for which the City charges customers a fee are generally reported in proprietary funds. Proprietary funds statements, like the government-wide statements; provide both short- and long-term financial information. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government¬wide financial statements, and provide more detail and additional information, such as a cash flow statement. The City uses enterprise funds to account for its water and sewer operations, the activities of the stormwater utility fund, and the refuse collection services. Internal Service funds are an accounting mechanism used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its fleet management, information technology and insurance programs. Fiduciary Funds - The fiduciary funds consist of custodial funds that are used to account for resources held for the benefit of parties outside the government. Custodial funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s programs. The accounting used for custodial funds is similar to that of the proprietary funds. The OPEB trust fund is also reported as a fiduciary fund. Notes to the Financial Statements - Included as part of 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 financial statements can be found at the end of the Basic Financial Statements section of this report. Required Supplementary Information - In addition to the basic financial statements and notes, this section presents budgetary comparison schedules, a schedule of funding progress for defined benefit pension plan and an analysis of funding progress for other postemployment benefits. Other Supplementary Information - This section of the report presents combining and individual fund statements and schedules.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Statement of Net Position

Government-Wide Financial Analysis Statement of Net Position The City’s combined net position (which is the City’s “bottom line”) increased by $149.9 million in fiscal year 2025. Of the City’s total net position, approximately $88.8 million represents resources that are subject to external restrictions or enabling legislation. Net investment in capital assets (land, buildings, infrastructure, improvements, machinery and equipment, less accumulated depreciation and related outstanding debt used to acquire those assets) of $759.7 million comprises 74.37% of the net position. This portion of the net position is not available for spending because they are capital assets and do not represent a financial resource. Bond funds on hand for construction or purchase of capital assets are netted with the the liability and therefore are not a component of net position. These assets and liabilities are included in the calculation of Net investment in capital assets. The City has a solid financial position with 22% of net position, or $173 million, unrestricted. The unrestricted portion of net position is available to allow the City to provide services to citizens.

The following table reflects the condensed Statement of Net Position:

Net Position (In Millions) Governmental Activities 2025 2024 Assets Other assets Capital assets Total assets Deferred outflows of resources Total assets and deferred outflows of resources Liabilities Current liabilities Noncurrent liabilities Total liabilities Deferred inflows of resources Total liabilities and deferred inflows of resources Net position Net investments in capital assets Restricted Unrestricted Total net position Change in net position Net position - beginning, as restated Net position - ending

Business-type Activities 2025 2024

Total 2025

2024

$ 465.3 $ 452.1 $ 120.5 $ 113.9 $ 585.8 $ 566.0 766.1 664.1 465.3 461.8 1,231.4 1,125.9 1,231.4 1,116.2 585.8 575.7 1,817.2 1,691.9 40.8 35.7 23.5 24.2 64.3 59.9 1,272.2 1,151.9 609.3 599.9 1,881.5 1,751.8 88.3 89.5 8.8 27.1 97.1 116.6 361.9 365.7 360.9 354.0 722.8 719.7 450.2 455.1 369.7 381.1 819.9 836.2 36.3 27.9 3.7 3.4 40.0 31.3 486.5 483.0 373.4 384.5 859.9 867.5 614.5 427.3 145.2 164.0 759.7 591.3 83.7 38.2 5.1 4.5 88.8 42.7 87.5 203.2 85.5 47.0 173.0 250.2 785.7 668.7 235.9 215.5 1,021.6 884.2 128.7 114.7 21.3 20.7 150.0 135.4 657.0 554.0 214.6 194.8 871.6 748.8 $ 785.7 $ 668.7 $ 235.9 $ 215.5 $ 1,021.6 $ 884.2

Rounding errors may exist, see Financial Statements for detail.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Statement of Activities

Statement of Activities The following table summarizes the changes in net position for governmental and business-type activities: Change in Net Position

Change in Net Position (In Millions) Governmental Activities Business-type Activities Total 2025 2024 2025 2024 2025 2024 $ 57.1 $ 11.3 $ 84.6 $ 80.7 $ 141.7 $ 92.0

Revenues Program revenues Charges for services Operating grants and contributions 16.7 53.1 - - 16.7 53.1 Capital grants and contributions 35.1 35.1 4.1 8.1 39.2 43.2 General revenues Real estate and property taxes 218.5 207.2 - - 218.5 207.2 Other taxes 67.1 65.1 - - 67.1 65.1 Grants and contributions, not restricted 14.8 14.7 - - 14.8 14.7 Unrestricted Investment earnings 13.4 21.0 3.9 4.7 17.3 25.7 Miscellaneous 26.0 25.0 3.2 1.7 29.2 26.7 Total revenues 448.7 432.5 95.8 95.2 544.5 527.7 Expenses General government 22.9 36.7 - - 22.9 36.7 Judicial 13.0 12.2 - - 13.0 12.2 Public safety 101.3 87.3 - - 101.3 87.3 Public works 23.3 52.9 - - 23.3 52.9 Health and welfare 22.7 19.5 - - 22.7 19.5 Transportration 3.3 2.3 - - 3.3 2.3 Education 103.0 71.7 - - 103.0 71.7 Parks, recreation, cultural 11.5 16.0 - - 11.5 16.0 Community development 10.9 11.0 - - 10.9 11.0 Interest on long-term debt 9.6 8.9 - - 9.6 8.9 Utility - - 55.9 57.2 55.9 57.2 Refuse collection services - - 10.8 10.4 10.8 10.4 Stormwater utility - - 6.3 5.5 6.3 5.5 Total expenses 321.5 318.5 73.0 73.1 394.5 391.6 Excess (deficiency) of revenues over/(under) expenditures 127.2 114.0 22.8 22.1 150.0 136.1 Gain (Loss) on disposal of assets - (0.7) - - - (0.7) Transfers 1.5 1.4 (1.5) (1.4) - Change in net position 128.7 114.7 21.3 20.7 150.0 135.4 Net Position July 1 as previously presented 668.7 554.0 215.5 194.8 884.2 748.8 Restatements (Note 18) (11.7) - (0.9) - (12.6) Net Position July 1, as restated 657.0 554.0 214.6 194.8 871.6 748.8 Net position - ending

$ 785.7 $ 668.7 $ 235.9 $ 215.5 $ 1,021.6 $ 884.2

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Expense Highlights

Governmental Activities Revenue Highlights: Real estate and personal property taxes revenues, the City’s largest revenue source, totaled $220.1 million and $205.7 million in fiscal years 2025 and 2024, respectively. The following chart indicates the growth in this revenue source, shown on the Activities Statement under General Revenue as “Property taxes”, over the past ten years. The drivers of this increase in revenue include an increase in assessed value of real estate and personal property, as well as increases in the real estate tax rate. The City had increases in tax rates in both FY 2016 and FY 2019 to fund public education and public safety operating needs. The City also experienced post pandemic increases in values for real estate and personal property, which was commonly experienced by other localities regionally and nationally during the same time period. The increase in the City’s assessed values was further bolstered by the City’s significant increases in commercial and residential development over the last ten years. As a result of both economic growth and property development, in FY 2024, the City was able to reduce the real estate tax rate by $.02 from $1.09 to $1.07.

Suffolk Population Growth and Projections 220 200 180 160 140 120 100 80 60 40 20 0

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

Other Local Taxes are comprised of revenue from local sales tax, meals, lodging, and utilities increased from fiscal year 2024 to fiscal year 2025. The City experienced growth in sales, meals, business license, and lodging tax revenue, new businesses, and an increase in population.

Expense Highlights: The City is committed to ensuring the highest level of safety for its citizens and has expended $101.3 million towards public safety efforts; this represents 31.65% of the governmental expenses. Education continues to be one of the City’s highest priorities and commitments representing $103.0 million, this amount is an increase from fiscal year 2024 and represents 32.04% of governmental expenses. Public Safety and Education together make up 63.55% of total governmental expenses for the City.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Revenue Highlights

Business-type Activities The business-type activities consist of Public Utilities, Stormwater Utilities, and Refuse Collection services.

Revenue Highlights: Charges for services, including water and sewer fees, Stormwater utility fees and refuse collection fees represent 88.31% of the total revenues collected. These revenues increased slightly from fiscal year 2024 to 2025 due to increased water and sewer connections, equivalent residential units, additional households, and refuse host fee revenue.

Expense Highlights: Utility Fund expenses were $55.9 million of which 30.13% is depreciation and amortization expenses. There is a decrease in total expenditures. Stormwater expenses were $6.3 million for fiscal year 2025, which is an increase in expenditures as compared to fiscal year 2024. The refuse fund expenses were $10.8 million in fiscal year 2025, which is a slight increase from fiscal year 2024.

Financial Analysis Of The City’s Funds The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds: The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $363.7 million. Approximately 34.1% of this amount is available for spending at the government’s discretion (unassigned fund balance). Fund Balance is divided into five classifications: non-spendable, restricted, committed, assigned and unassigned. General Fund: The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the General Fund balance was $240.6 million of which $124.1 million represents unassigned fund balance. Fund Balance in the General Fund increased from fiscal year 2024. This increase is attributable to better than anticipated collections of local taxes such as sales tax and business license taxes as well as rising interest rates, which resulted in an increase of interest revenue, earned on the City’s cash balances. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total budgeted expenditures. The City has a financial policy goal that unassigned fund balance should be 20% of the following fiscal years governmental funds budget. The City also has a policy that any excess amounts over the 20% is dedicated to a budget stabilization fund, until that reaches 2.5% of the budgeted revenue and then to a capital reserve fund, both of these reserves are reported as committed fund balance. The restricted portion of fund balance, $2.0 million reflects restricted cash for unspent grant funds and developer deposits. General Fund Budget analysis: The general fund final amended budget for fiscal year 2025 revenue excluding transfers was $310.5 million. The total revenue collected in the general fund was $346.0 million, which resulted in a revenue surplus over the budget of $35.4 million. This surplus is primarily due to an increase in the assessed values of real and personal property over what was estimated during the budget development process. In addition, the other local taxes experienced increases due to increased economic development and population growth in the City. The other area of significant surplus over the budget was in the interest earnings, due to rising interest rates. On the expenditure side, the total actual expenditures on a budgetary basis were $266.9 million compared to the

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Analysis Of The City’s Funds

final amended budget excluding transfers of $280.9 million; this resulted in an expenditure savings of $14.0 million. The expenditure savings is primarily due to savings in salary line items. The City is actively using surplus funds for Capital Pay-Go in lieu of additional tax increases as some of the increases in revenue will be temporarily inflated; specifically, revenue from camera enforcement of speeding violations. Capital Projects Fund: The Capital Projects Fund accounts for all construction projects of general public improvements, excluding capital projects related to business-type activities, which are accounted for elsewhere. At the end of the current fiscal year, the fund balance was $87.2 million, of which $62.0 million is restricted. It consists of unspent bond proceeds and interest earnings, grant funding and cash proffers for subsequent years’ projects. The overall fund balance decreased in the current year, as there are several large projects utilizing bond funds assigned to these projects. Four of the City’s significant capital projects are the following in fiscal year 2025: ● Shoulders Hill Intersection Improvements ● New Central Library ● New Fire Station ● Replacement of John F. Kennedy Middle School Road Maintenance Fund: The Road Maintenance Fund has a fund balance of $13.1 million. The Road Maintenance Fund accumulates resources from the Virginia Department of Transportation for the maintenance of roadways in the City. The fund balance in the fund decreased by $5.7 million from the prior year. The decrease is a result of reallocating revenue collected from automated camera enforcement fines to the General Fund for public safety. Consolidated Grants Fund: The consolidated grants fund has a fund balance of $10.4 million. The fund accumulates resources from various local, state and federal agencies for specific purposes. The majority of the activity in the grants fund in fiscal year 2025 was for pandemic response related grants. Pandemic related funds are expected to be fully utilized by the 2027 Fiscal Year. The fund balance in the grant fund increased by $6.9 million from the prior year due to a decrease in unearned revenue. Funds previously received and recorded as unearned were recognized as earned in FY2025. Debt Service Fund: The Debt Service Fund has a fund balance of $537 thousand. The General Fund routinely transfers monies to this fund to meet debt service requirements. The fund balance in the Debt Service fund decreased slightly as compared to the prior year due to slight differences in transfers for debt payments and actual interest cost of new debt from estimated costs. Proprietary funds: The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Enterprise funds: The City’s enterprise funds account for its water and sewer operations, stormwater utility efforts, and refuse collection services. The net position of the enterprise funds at the end of the current fiscal year totaled $235.9 million. No significant changes occurred during the fiscal year. Internal service funds: The internal service funds are used to account for entity-wide fleet management, information technology and risk management programs. The total net position at the end of the current fiscal year was $45.2 million. Trust funds: In fiscal year 2025, the City fully funded its annual contribution to the OPEB fund as calculated by the actuaries and there is currently a balance of $60.0 million cash and cash equivalents in the OPEB Trust Fund. The City is expected to begin fully funding OPEB expenses out of the fund due to it being over 100% funded for post employment medical plan costs.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Capital Assets And Debt Administration

Capital Assets And Debt Administration Capital Assets: The City’s capital assets for its governmental and business-type activities as of June 30, 2025, totaled $1,231.4 million, net of accumulated depreciation. This investment in capital assets includes land, buildings, improvements other than buildings, infrastructure, machinery and equipment, intangibles, the intangible right to use assets, and construction in progress. The City continues to debt fund $35M in capital projects annually. The school system was the largest capital project funded in FY25. Additional information on the City’s capital assets can be found in Note #7.

Capital Assets (net of depreciation) (in Millions) Governmental Activities 2025 2024 Capital Assets (net of depreciation) Land Construction in progress Buildings Infrastructure Improvements other than buildings Machinery and equipment Right-to-use leased assets Right-to-use subscription assets Intangibles Total capital assets (net of depreciation)

Business-type Activities 2025 2024

Total 2025

2024

$26.0 346.5 80.3 199.0

$25.2 246.8 83.3 201.4

$4.7 36.6 67.9 2.6

$4.7 22.8 69.5 2.6

$30.7 383.1 148.2 201.6

$29.9 269.6 152.8 204.0

45.4 45.0 18.8

47.6 35.8 20.0

288.7 58.4 1.8

293.8 60.8 2.8

334.1 103.4 20.6

341.4 96.6 22.8

0.3 4.8

0.3 3.6

4.6

4.9

0.3 9.4

0.3 8.5

$766.1

$664.0

$465.3

$461.9

$1,231.4

$1,125.9

Capital Assets (Chart)

Buildings: 12.04% Construction in progress: 31.11% Infrastructure: 16.37% Land: 2.49% Intangibles: 0.76% Right-to-use leased assets: 1.67% Machinery and equipment: 8.40%

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Improvements other than buildings: 27.13%

Financial Section Requests For Information

Long-term debt: As previously stated, Schools continue to be the City’s largest capital expenditures, and as a result, a significant driver of long-term debt. In FY 2025, the City utilized a Literary Loan program through the Commonwealth of Virginia in the amount of $25 million. This program will allow for capital draws until fully expended. When fully expended, the City will repay the loan by issuing the authorized $25M in bonds. No draws were made in FY2025. The remainder of the $10 million in debt issued was allocated to multiple capital projects for public safety, parks and public works which includes road construction. Road construction is currently the City’s second largest driver of City debt followed by public safety equipment, parks and public buildings. At the end of the current fiscal year, the City had total outstanding debt of $667.7 million. Claims payable, compensated absences and pension and OPEB liabilities are not included in these figures. Long-term debt: At the end of the current fiscal year, the City had total outstanding debt of $667.9 million. Claims payable, compensated absences and pension and OPEB liabilities are not included in these figures. Governmental Activities 2025 2024 Outstanding Debt Bonds Payable Bond Premiums Lease Liabilities Subscription Liabilities Total outstanding debt

$281.4 16.1 17.9 0.2 $315.6

Business-type Activities 2025 2024

$295.3 17.3 19.0 0.3 $331.9

$337.1 13.2 1.8 $352.1

$348.1 13.7 2.8 $364.6

Total 2025 $618.5 29.3 19.7 0.2 $667.7

2024 $643.4 31.0 21.8 0.3 $696.5

The Commonwealth of Virginia limits the amount of general obligation debt outstanding to 10% of the locality’s assessed value of real property, which is $1.6 billion for 2025. The City Charter further limits this general obligation limit to 7% of the City’s assessed value of real property or $1.1 billion. Of the debt shown above, only $416.4 million is general obligation debt that is applicable to the legal debt limits. The City has met both of the legal debt limits. The City has a financial policy that further restricted the debt ratio of general government debt, not pledged by other revenue sources, to 4% or $629.2 million to reflect its conservative use of borrowed monies. The City has met this policy limit as well. Achieving these limits represents the City’s conservative debt borrowing policy. Additional information on the City’s long-term debt can be found in Note 88.

Economic Factors The City’s economic development initiatives created 517 new jobs and over $391 million dollars in new and expanding capital investment in the City during the calendar year 2024. For fiscal year 2025, the City’s tax rate was $1.07 per $100 and remains the third lowest tax rate in the region. Population in the City has increased 8.7% in the last four years. The City has achieved bond ratings from Moody’s Investor Service of Aaa, and from Fitch Rating Agency and Standard and Poor’s Ratings Services of “AAA”. These ratings reflect the City’s continued commitment to strong financial management.

Requests For Information This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Questions concerning this report or requests for additional information should be directed to the City’s Department of Finance, 442 West Washington Street, Suffolk, Virginia, 23439. City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Basic Financial Statements

Financial Section

Exhibit 1

Statement of Net Position June 30, 2025 Primary Government Governmental Activities ASSETS Current assets: Cash and cash equivalents Receivables (net of uncollectible allowance) Property taxes Due from other governments Accounts receivable Other receivables Due from component units Inventories Land and improvements held for sale Prepaid items Lease receivables Total current assets Noncurrent assets: Cash and cash equivalents, restricted Lease receivable, non-current Capital assets Assets not being depreciated Assets being depreciated, net Net pension asset Net OPEB asset medical plan Net OPEB asset state plans Total noncurrent assets Total assets DEFERRED OUTFLOWS OF RESOURCES Pension plan OPEB medical plan OPEB state plans Deferred charge on refunding Total deferred outflows of resources LIABILITIES Current liabilities: Accounts payable and accrued liabilities Accrued payroll and related liabilities Due to primary government Deposits and amounts held for others Accrued interest payable Prepaid taxes Unearned revenues Total current liabilities Noncurrent liabilities: Due within one year Due in more than one year Net pension liability Net OPEB liability state plans Total noncurrent liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Leases Pension plan OPEB medical plan OPEB state plans Total deferred inflows of resources NET POSITION Net investments in capital assets Restricted Operating reserves General government Judicial Public safety Public works Parks and recreation Health and wellfare Economic development Pension OPEB Unrestricted Total net position

Business-type Activities

Total

Component Units Economic Development School Board Authority

$ 333,429,455 $

86,750,141 $ 420,179,596 $ 34,899,110 $

4,817,016

5,736,696 13,776,848 2,154,785 3,121,862 1,992,321 700,695 - - 5,454,004 366,366,666

5,736,696 13,776,848 11,121,673 13,276,458 3,121,862 1,992,321 460,860 1,161,555 - - - - 5,454,004 98,332,674 464,699,340

5,723,149 506,368 396,736 195,000 41,720,363

155,072 8,146,980 1,130,067 14,249,135

2,165,992 14,571,780

372,497,665 41,244,849 413,742,514 6,387,523 393,574,973 424,027,135 817,602,108 147,269,182 - - - 1,249,899 11,495,325 1,908,809 13,404,134 7,840,123 - - - 61,136 865,022,775 487,438,533 1,352,461,308 162,807,863 1,231,389,441 585,771,207 1,817,160,648 204,528,226

1,435,662 18,680,377 36,853,811 51,102,946

87,454,812 -

20,257,740 -

107,712,552 -

23,255,186 8,794,114 5,763,464 2,974,761 40,787,525

3,351,613 1,452,600 131,251 18,597,907 23,533,371

26,606,799 10,246,714 5,894,715 21,572,668 64,320,896

34,829,096 1,900,659 4,486,620 41,216,375

9,424 9,424

18,193,430 3,858,602 - 2,731,985 3,508,835 1,878,938 18,574,243 48,746,033

5,273,165 424,186 - 21,000 3,034,770 8,753,121

23,466,595 4,282,788 - 2,752,985 6,543,605 1,878,938 18,574,243 57,499,154

4,648,275 21,584,850 1,753,067 27,986,192

45,814 239,255 7,500 2,831 295,400

39,518,106 18,738,429 58,256,535 7,634,023 306,712,947 336,116,668 642,829,615 9,225,152 40,221,042 5,631,150 45,852,192 88,357,338 14,981,616 464,845 15,446,461 15,890,365 401,433,711 360,951,092 762,384,803 121,106,878 450,179,744 369,704,213 819,883,957 149,093,070

842,773 842,773 1,138,173

6,464,303 9,491,178 13,827,822 6,500,349 36,283,652

1,374,454 2,284,060 88,067 3,746,581

6,464,303 10,865,632 16,111,882 6,588,416 40,030,233

17,037,434 2,472,603 2,119,812 21,629,849

15,336,608 15,336,608

614,513,245 145,231,169 759,744,414 153,656,705

19,282,690

3,187,583 3,187,583 9,554,681 9,554,681 108,978 108,978 10,706,605 10,706,605 39,904,112 39,904,112 10,818,693 10,818,693 1,133,059 1,133,059 - - - 2,163,161 - - - 1,249,899 11,495,325 1,908,809 13,404,134 7,901,259 87,478,872 85,526,223 173,005,095 (87,786,181) 13,191,738 $ 785,713,570 $ 235,853,784 $ 1,021,567,354 $ 75,021,682 $ 34,637,589

The notes to the financial statement are an integral part of this statement.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 2

Statement of Activities Year Ended June 30, 2025

Functions/Programs Primary Government: Governmental activities: General government administration Judicial administration Public safety Public works Health and welfare Transportation Education Parks, recreation and cultural Community development Interest and fiscal charges on long-term debt Total governmental activities Business-type activities: Utility Stormwater utility Refuse Total business-type activities Total Primary Government Component Unit: School Board Economic Development Authority Total component units

Expenses

Charges for Services

Program Revenues Operating Grants and Contributions

Capital Grants and Contributions

Governmental Activities

Net (Expense) Revenue and Changes in Net Position Primary Government Component Units Economic Business-Type Development Activities Total School Board Authority

$ 22,861,398 $ 664,218 $ 11,010,427 $ 185,824 $ (11,000,929) $ - $ (11,000,929) 12,982,921 2,521,512 391,544 - (10,069,865) - (10,069,865) 101,282,309 11,144,444 3,834,510 2,277,238 (84,026,117) - (84,026,117) 23,285,450 39,739,288 35,224 32,265,377 48,754,439 - 48,754,439 22,735,514 - - - (22,735,514) - (22,735,514) 3,280,901 - - - (3,280,901) - (3,280,901) 103,016,685 - - - (103,016,685) - (103,016,685) 11,530,862 1,342,151 73,920 369,511 (9,745,280) - (9,745,280) 10,925,849 1,660,649 1,429,086 - (7,836,114) - (7,836,114) 9,574,395 - - - (9,574,395) - (9,574,395) 321,476,284 57,072,262 16,774,711 35,097,950 (212,531,361) - (212,531,361) - 55,931,287 65,003,261 - 4,148,197 - 13,220,171 13,220,171 6,342,684 9,191,333 - - - 2,848,649 2,848,649 10,842,082 10,438,671 - - - (403,411) (403,411) 73,116,053 84,633,265 - 4,148,197 - 15,665,409 15,665,409 - $ 394,592,337 $ 141,705,527 $ 16,774,711 $ 39,246,147 $ (212,531,361) $ 15,665,409 $ (196,865,952) $ - $ $ 228,895,572 $ 233,886 $ 150,431,277 $ - $ - $ - $ - $ (78,230,409) $ 2,879,776 1,716,127 1,365,000 - - - - - 201,351 $ 231,775,348 $ 1,950,013 $ 151,796,277 $ - $ - $ - $ - $ (78,230,409) $ 201,351

General revenues and transfers General revenues Property taxes Sales and use taxes Business license taxes Meals taxes Utility taxes Communication taxes Motor vehicle license taxes Tobacco taxes Lodging taxes Recordation taxes Other local taxes Grants and contributions not restricted to specific programs Miscellaneous Unrealized gain on land held for sale Unrestricted revenues from use of money and property Transfers Contribution from primary government Total general revenues and transfers Change in net position Net position at July 1 Restatements and corrections (Note 18) Net position at July 1, as restated Net position at June 30

218,510,268 - 218,510,268 - 18,964,571 - 18,964,571 - 13,385,196 - 13,385,196 - 17,091,726 - 17,091,726 - 5,338,259 - 5,338,259 - 2,267,692 - 2,267,692 - 2,903,879 - 2,903,879 - 1,397,435 - 1,397,435 - 2,429,980 - 2,429,980 - 2,159,572 - 2,159,572 - 1,140,679 - 1,140,679 - 14,760,139 - 14,760,139 3,954,530 25,971,588 3,232,517 29,204,105 - 277,529 - - - 133,480 804,500 13,399,544 3,903,819 17,303,363 - 286,647 1,550,451 (1,550,451) - - - - - 73,579,134 341,270,979 5,585,885 346,856,864 77,667,144 1,368,676 128,739,618 21,251,294 149,990,912 (563,265) 1,570,027 668,683,937 215,480,494 884,164,431 86,751,415 33,067,562 $ (11,709,985) $ (878,004) $ (12,587,989) $ (11,166,468) $ $ 656,973,952 $ 214,602,490 $ 871,576,442 $ 785,713,570 $ 235,853,784 $ 1,021,567,354 $ 75,021,682 $ 34,637,589

The notes to the financial statement are an integral part of this statement. City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 3

Balance Sheet Governmental Funds June 30, 2025 Major Funds Total Governmental General Fund Capital Projects Road Maintenance Consolidated Grants Debt Service Total Nonmajor Funds Funds Assets Cash and cash equivalents $ 231,469,504 $ 31,293,100 $ 14,290,442 $ 8,491,533 $ 537,377 $ 10,502,371 $ 296,584,327 Cash and investments – restricted 7,283,954 64,968,191 1,060,865 12,425,825 - 1,303,929 87,042,764 Receivables (net of allowance for uncollectibles): Property taxes 5,725,250 - - - - 11,446 5,736,696 Due from other governments 2,520,160 7,557,598 - 3,699,090 - - 13,776,848 Accounts receivable 2,005,074 - - - - - 2,005,074 Other receivables 1,786,221 - 43,387 1,155,031 - 137,223 3,121,862 Lease receivable 4,229,931 - - - - 355,195 4,585,126 Inventories 63,762 - - - - 98,866 162,628 Due from component units 1,992,322 - - - - - 1,992,322 Total assets Liabilities Accounts payable and accrued liabilities Accrued payroll and related liabilities Unearned grant receipts Unavailable revenues - taxes Prepaid taxes Proffers received Deposits

257,076,178 103,818,889 15,394,694 25,771,479 537,377 12,409,030 415,007,647 3,441,416 10,312,361 1,019,561 1,906,987 - 258,895 16,939,220 3,447,153 - 184,490 18,897 - 11,239 3,661,779 - - - 12,306,171 - - 12,306,171 1,759,191 - - - - 3,301 1,762,492 1,878,938 - - - - - 1,878,938 - 6,268,072 - - - - 6,268,072 1,652,268 - 1,060,865 - - 18,852 2,731,985

Total liabilities Deferred inflows of resources Leases Opioid settlements

12,178,966 16,580,433 2,264,916 14,232,055 - 292,287 45,548,657 4,279,343 - - - - 368,785 4,648,128 - - - 1,133,059 - - 1,133,059

Total deferred inflows of resources Fund balances Nonspendable Restricted Committed Assigned Unassigned

4,279,343 - - 1,133,059 - 368,785 5,781,187 63,762 - - - - 98,866 162,628 1,990,835 61,966,364 - 119,654 - 6,804,295 70,881,148 - - - - - 971,322 971,322 114,470,806 25,272,092 13,129,778 10,286,711 537,377 3,873,475 167,570,239 124,092,466 - - - - - 124,092,466

Total fund balances 240,617,869 87,238,456 13,129,778 10,406,365 537,377 11,747,958 363,677,803 Total liabilities, deferred inflows of resources, and fund balances $ 257,076,178 $ 103,818,889 $ 15,394,694 $ 25,771,479 $ 537,377 $ 12,409,030 $ 415,007,647

The notes to the financial statement are an integral part of this statement.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 3

Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2025 Amounts reported for governmental activities in the Statement of Net Position are different because: Total fund balance – governmental funds $ 363,677,803 Capital assets net of accumulated depreciation, used in governmental activities are not financial resources and, therefore, are not reported in the funds. 746,355,488 Unavailable revenues represent amounts that were not available to fund current expenditures and, therefore, are not reported in the funds. 1,762,492 Property taxes 1,133,059 Opioid settlements Interest on long-term debt is not accrued in the governmental funds, but rather is recognized as an expenditure when due. (3,469,460) Deferred charges on refunding are not current outflows of resources and not reported in the governmental funds 2,974,761 Differences between expected and actual experiences, assumptions changes and net differences between project and actual earnings and contributions subsequent to the measurement date for the postretirement benefits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of on the Statement of Net Position. 22,090,254 Deferred outflows - pension plan 8,381,891 Deferred outflows - OPEB medical plan 5,718,656 Deferred outflows - OPEB state plans (38,480,376) Net pension liability 10,960,606 Net OPEB asset - medical plan (14,832,791) Net OPEB liability - state plans (9,057,173) Deferred inflows - pension plan (13,179,643) Deferred inflows - OPEB medical plan (6,471,448) Deferred inflows - OPEB state plans (34,870,024) Total deferred outflows and inflows related to postemployment benefits Other long-term assets that are not available to pay for current period expenditures and, therefore, are either deferred or not reported in the funds. Unearned revenues not recorded in the funds as it did not arise from current financial resources relating to lease agreements. (1,040,213) Internal service funds are used by management to charge the costs of information technology, fleet management and risk management to individual funds. The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in governmental activities in the statement of net position. 45,152,589 Long-term liabilities that are not due and payable in the current period and, therefore, are not reported in the fund statements: General obligation bonds (279,555,000) Lease liabilities (17,102,623) Unamortized premiums and other credits on bonds (15,836,567) Arbitrage liability (5,745,558) Compensated absences (17,723,177) Total long-term liabilities (335,962,925) Net position of governmental activities

$ 785,713,570

The notes to the financial statement are an integral part of this statement. City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 4

Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds Year Ended June 30, 2025 Revenues Taxes: Real estate and personal property taxes Other local taxes Intergovernmental: Revenue from the Commonwealth Revenue from the federal government Permits, privilege fees and regulatory licenses Fines and forfeitures Revenue from use of money and property Charges for services Miscellaneous Total revenues Expenditures Current: General government administration Judicial administration Public safety Public works Transportation Health and welfare Education Parks, recreation and cultural Community development Nondepartmental Debt service: Principal Bond issuance costs Interest and other charges

General Fund

Major Governmental Funds Road Consolidated Capital Projects Maintenance Grants

Debt Service

Total Governmental Funds

$217,063,026 67,078,989

$3,078,933 -

$220,141,959 67,078,989

25,664,885

32,820,208

33,184,876

2,028,681

615,531

94,314,181

6,580,365

2,277,741

12,001,164

1,461,269

22,320,539

1,892,286 6,223,539

582,375 247,568

2,474,661 6,471,107

14,933,113 4,965,856 1,568,112

14,489,310

450,565 964,356 34,763

1,619,803 13,306 582,396

300,581 -

796,470 728,807 53,666

18,100,532 6,672,325 16,728,247

345,970,171

49,587,259

35,464,503

16,245,350

300,581

6,734,676

454,302,540

26,229,943 12,116,305 101,823,636 1,427,538 18,615,367 74,342,362 16,673,549 8,587,516 464,332

3,483,992 14,178,655 52,537,957 28,674,323 14,848,747 -

32,015,194 -

1,950 1,133,248 2,715,823 69,882 4,409,780 141,302 1,451,886 -

919,960 208,446 3,213,136 -

30,635,845 13,249,553 118,718,114 86,259,017 3,213,136 23,025,147 103,016,685 31,663,598 10,039,402 464,332

151,046 -

22,784,496 442,620 10,462,346

22,935,542 442,620 10,462,346

260,431,594

113,723,674

32,015,194

9,923,871

33,689,462

4,341,542

454,125,337

Total expenditures Excess (deficiency) of revenues over/ (under) expenditures Other financing sources (uses) Transfers from other funds Transfers to other funds Premiums on bonds issued General obligation bonds issued Lease obligations issued

85,538,577

(64,136,415)

3,449,309

6,321,479

(33,388,881)

2,393,134

177,203

10,205,687 (56,788,651) 397,064

25,686,971 196,859 10,040,000 -

(9,100,911) -

561,921 -

32,941,937 389,585 -

598,450 (1,914,892) -

69,994,966 (67,804,454) 586,444 10,040,000 397,064

Total other financing sources (uses) Net change in fund balances Fund balances at July 1 Restatements Fund balances at July 1, as restated Fund balances at June 30

(46,185,900) 39,352,677 202,863,503 (1,598,311) 201,265,192 $240,617,869

35,923,830 (28,212,585) 115,451,041 115,451,041 $87,238,456

(9,100,911) (5,651,602) 18,781,380 18,781,380 $13,129,778

561,921 6,883,400 3,567,863 (44,898) 3,522,965 $10,406,365

33,331,522 (57,359) 594,736 594,736 $537,377

(1,316,442) 1,076,692 10,671,266 10,671,266 $11,747,958

13,214,020 13,391,223 351,929,789 (1,643,209) 350,286,580 $363,677,803

The notes to the financial statement are an integral part of this statement.

Nonmajor Governmental Funds

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 4

Reconciliation of the Statement of Revenues, Expenditures, and Changes In Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2025 Amounts reported for governmental activities in the Statement of Activities are different because: Net change in fund balances--total governmental funds

$ 13,391,223

Governmental funds report capital outlay as expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expenses. Capital outlay expenditures 123,935,311 Depreciation expense Net of $3,878,396 depreciation expense recognized through Internal Service Funds (19,204,337) Miscellaneous transactions involving donations and disposals of capital assets (3,511,530) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds Unavailable revenues (498,632) Lease revenue paid in form of leasehold improvements (306,901) Arbitrage interest earned (4,831,558) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. Principal repayment and payments to escrow agent 23,332,606 Proceeds from issuance of new debt and long term obligations (11,023,508) Amortization of deferred loss on refunding (385,287) Amortization of bond premiums 2,005,727 13,929,538 Record the net flow of resources in the current year related to the Pension Plan 2,049,240 Record the net flow of resources in the current year related to the OPEB City trust fund 2,498,570 Record the net flow of resources in the current year related to the state OPEB plans (775,409) 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. Accrued interest payable 258,241 Change in compensated absences (1,386,195) The internal service funds are used by management to charge the costs of information technology, fleet management and insurance to the individual funds. The change in net position of the internal service funds are reported with governmental activities. 3,192,057 Change in net position of governmental activities $ 128,739,618

The notes to the financial statement are an integral part of this statement. City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 5

Statement of Net Position Proprietary Funds June 30, 2025 Business-type Activities - Enterprise Funds Major Funds

Assets Current assets Cash and cash equivalents Accounts receivable (net of allowance for uncollectibles) Lease receivables Inventories Total current assets Noncurrent assets Cash and cash equivalents, restricted Net OPEB asset medical plan Capital assets Assets not being depreciated Assets being depreciated, net Total noncurrent assets Total assets Deferred outflows of resources Pension plan Opeb medical plan Opeb state plans Deferred charge on refunding Total deferred outflows of resources Liabilities Current liabilities Accounts payable and accrued liabilities Accrued payroll and related liabilities Accrued interest payable Customer deposits Compensated absences Claims payable Subscriptions payable Leases payable, current portion Bonds payable, current portion Revenue bonds payable, current portion Direct borrowing, current portion Total current liabilities Noncurrent liabilities Arbitrage liability Claims payable Compensated absences Net pension liability Net OPEB liability state plans Subscriptions payable Leases payable, less current portion Direct borrowing, less current Revenue bonds payable, less current Bonds payable, less current portion Bonds premium Total noncurrent liabilities Total liabilities Deferred inflows of resources Leases Pension plan Opeb medical plan Opeb state plans Total deferred inflows of resources Net position Net investment in capital assets Restricted Capital projects Operating reserves OPEB Unrestricted Total net position

Utility Fund

Nonmajor Enterprise Funds

Total Enterprise Funds

$ 60,760,500 $ 25,989,641 $ 86,750,141 $ 36,845,128 10,025,504 1,096,169 11,121,673 149,711 - - - 868,878 460,860 - 460,860 538,067 71,246,864 27,085,810 98,332,674 38,401,784 6,409,544 13,848,196 20,257,740 412,048 1,109,503 799,306 1,908,809 534,719 33,440,561 7,804,288 41,244,849 1,341,147 419,801,867 4,225,268 424,027,135 18,376,003 460,761,475 26,677,058 487,438,533 20,663,917 532,008,339 53,762,868 585,771,207 59,065,701 1,947,694 1,403,919 3,351,613 1,164,932 844,078 608,522 1,452,600 412,223 76,414 54,837 131,251 44,808 18,597,907 - 18,597,907 21,466,093 2,067,278 23,533,371 1,621,963 3,197,620 2,075,545 5,273,165 1,254,210 240,851 183,335 424,186 196,824 2,888,112 146,658 3,034,770 39,375 21,000 - 21,000 605,615 364,302 969,917 307,130 - - - 2,941,927 - - - 112,836 914,109 - 914,109 559,436 9,005,000 15,000 9,020,000 1,130,000 6,070,000 - 6,070,000 825,000 492,000 1,317,000 23,767,307 3,276,840 27,044,147 6,541,738 379,469 350,493 729,962 16,763 - - - 3,518,591 601,654 379,690 981,344 273,947 3,382,546 2,248,604 5,631,150 1,740,666 279,606 185,239 464,845 148,825 - - - 112,614 890,547 - 890,547 264,662 - 13,594,000 13,594,000 178,715,000 - 178,715,000 128,135,000 290,000 128,425,000 760,000 12,630,898 597,320 13,228,218 270,222 325,014,720 17,645,346 342,660,066 7,106,290 348,782,027 20,922,186 369,704,213 13,648,028 - - - 775,962 807,212 567,242 1,374,454 434,005 1,327,224 956,836 2,284,060 648,179 51,475 36,592 88,067 28,901 2,185,911 1,560,670 3,746,581 1,887,047 134,341,737 10,889,432 145,231,169 16,919,429 - - - 211,972 3,187,583 - 3,187,583 1,109,503 799,306 1,908,809 534,719 63,867,671 21,658,552 85,526,223 27,486,469 $ 202,506,494 $ 33,347,290 $ 235,853,784 $ 45,152,589

The notes to the financial statement are an integral part of this statement.

Total Governmental Activities Internal Service Funds

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 6

Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds Year Ended June 30, 2025 Business-type Activities - Enterprise Funds Major Funds Utility Fund

Nonmajor Enterprise Funds

Total Enterprise Funds

Total Governmental Activities Internal Service Funds

Operating revenues Charges for services Lease Other Total operating revenues

$ 65,003,261 $ 19,630,004 $ 84,633,265 $ 52,114,580 48,940 - 48,940 54,412 173,123 3,010,456 3,183,579 1,201,032 65,225,324 22,640,460 87,865,784 53,370,024

Operating expenses Personnel services Contractual services Administration Supplies Repairs and maintenance Utilities Computers and equipment Vehicle and power equipment - fuel Vehicle and power equipment - supplies Self-insured claims Insurance Bulk-water purchases Depreciation and amortization Short term rentals Other charges Total operating expenses Operating income (loss)

8,792,883 6,182,198 14,975,081 5,400,584 619,421 6,109,222 6,728,643 9,217,148 4,376,314 3,423,629 7,799,943 1,278,800 1,468,614 297,460 1,766,074 75,459 1,498,983 35,891 1,534,874 1,068,067 1,711,129 71,770 1,782,899 436,463 - - - 757,024 - - - 1,816,568 - - - 3,904,782 - - - 20,164,772 - - - 2,666,615 9,375,802 - 9,375,802 16,850,193 163,040 17,013,233 3,878,396 119,049 89,296 208,345 83,902 720,272 114,992 835,264 347,816 45,532,660 16,487,498 62,020,158 51,096,396 19,692,664 6,152,962 25,845,626 2,273,628

Nonoperating revenues (expenses) Investment earnings Interest expense and other charges Infrastructure contributions Loss on disposal of capital assets Total nonoperating revenues (expenses) Income (loss) before transfers and capital contributions

2,577,351 1,326,468 3,903,819 1,615,818 (10,356,720) (697,268) (11,053,988) (47,277) (41,909) - (41,909) - - - (10,051) (7,821,278) 629,200 (7,192,078) 1,558,490

Capital contributions and transfers Capital grants and contributions Transfers to other funds Total capital contributions and transfers Changes in net position Total net position at July 1 Restatements Total net position at July 1, as restated Total net position at June 30

4,148,197 - 4,148,197 (847,721) (702,730) (1,550,451) (640,061) 3,300,476 (702,730) 2,597,746 (640,061) 15,171,862 6,079,432 21,251,294 3,192,057 187,867,949 27,612,545 215,480,494 42,189,118 (533,317) (344,687) (878,004) (228,586) 187,334,632 27,267,858 214,602,490 41,960,532 $ 202,506,494 $ 33,347,290 $ 235,853,784 $ 45,152,589

11,871,386 6,782,162 18,653,548 3,832,118

The notes to the financial statement are an integral part of this statement. City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Statement of Cash Flows Proprietary Funds Year Ended June 30, 2025

Exhibit 7

Business-type Activities - Enterprise Funds Total Governmental Major Funds Nonmajor Activities Enterprise Total Enterprise Internal Service Utility Fund Funds Funds Funds $ 63,191,098 $ 22,515,630 $ 85,706,728 $ 53,367,595 (21,985,795) (8,580,992) (30,566,787) (41,229,933) (9,161,221) (6,458,972) (15,620,193) (5,644,350) 32,044,082 7,475,666 39,519,748 6,493,312 (847,721) (702,730) (1,550,451) (640,061)

Cash flows from operating activities: Receipts from customers Payment to suppliers Payments to employees Net cash flows provided by (used in) operating activities Cash flows from noncapital financing activities: Transfers to other funds Net cash flows provided by (used in) noncapital financing activities (847,721) (702,730) (1,550,451) (640,061) Cash flows from capital and related financing activities: Acquisition and construction of capital assets (14,422,015) (6,027,770) (20,449,785) (4,631,639) Proceeds from sale of assets - - - (10,051) Proceeds from issuance of debt - 4,795,000 4,795,000 Principal paid on capital debt, net (16,788,755) (571,827) (17,360,582) (2,020,712) Proceeds from capital grants 4,106,288 - 4,106,288 Interest and other charges paid on capital debt (9,741,205) (82,580) (9,823,785) 200,445 Net cash flows provided by (used in) capital and related financing activities (36,845,687) (1,887,177) (38,732,864) (6,461,957) Cash flows from investing activities: Interest received 2,956,820 1,676,961 4,633,781 1,632,583 Net cash flows provided by (used in) investing activities 2,956,820 1,676,961 4,633,781 1,632,583 Net change in cash and cash equivalents (2,692,506) 6,562,720 3,870,214 1,023,877 69,862,550 33,275,117 103,137,667 36,233,299 Beginning, July 1 Ending, June 30 $ 67,170,044 $ 39,837,837 $ 107,007,881 $ 37,257,176 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 19,692,664 $ 6,152,962 $ 25,845,626 $ 2,273,628 Adjustments to reconcile operating income to cash provided by operating activities: Depreciation and amortization 16,850,193 163,040 17,013,233 3,878,396 Changes in assets and liabilities: (Increase) decrease in: Receivables (1,990,336) (124,830) (2,115,166) (755,490) Inventories (102,776) - (102,776) Increase (decrease) in: Accounts payable and accrued liabilities (1,993,436) 1,561,266 (432,170) 781,822 Accrued payroll and related liabilities (360,836) (276,772) (637,608) (243,767) Estimated claims payable - - - 558,723 Unearned revenue (51,391) - (51,391) Total adjustments 12,351,418 1,322,704 13,674,122 4,219,684 Net cash flows from operating activities $ 32,044,082 $ 7,475,666 $ 39,519,748 $ 6,493,312 Reconciliation of cash and investments: Cash and investments Unrestricted $ 60,760,500 $ 25,989,641 $ 86,750,141 $ 36,845,128 Restricted 6,409,544 13,848,196 20,257,740 412,048 Total cash and cash equivalents $ 67,170,044 $ 39,837,837 $ 107,007,881 $ 37,257,176

The notes to the financial statement are an integral part of this statement.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 8

Statement of Fiduciary Net Position Fiduciary Funds June 30, 2025 OPEB Trust Fund

Custodial Funds

Assets Cash and cash equivalents Total assets

$ 59,979,871 $ 160,678 59,979,871 160,678

Liabilities Accounts payable Amounts held for others Total liabilities

- 10,393 - 30,764 - 41,157

Net position Restricted for: Individual, organizations, and other governments Total net position

59,979,871 119,521 $ 59,979,871 $ 119,521

The notes to the financial statement are an integral part of this statement. City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Statement of Changes in Fiduciary Net Position Fiduciary Funds Year Ended June 30, 2025 OPEB Trust Fund

Custodial Funds

Additions Gain on investments Permits and fees Miscellaneous revenue Total additions

$ 4,874,525 $ 3 51,052 - 35,925 4,874,528 86,977

Deductions Administrative fees Special welfare agency payments Payments to other governments Total deductions Change in net position Net position at July 1 Net position at June 30

39,635 - 35,925 - 49,944 39,635 85,869 4,834,893 1,108 55,144,978 118,413 $ 59,979,871 $ 119,521

The notes to the financial statement are an integral part of this statement.

Exhibit 9

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Notes to the Basic Financial Statements

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies The financial statements of the City of Suffolk, Virginia (the “City”) have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States of America as applied to government units. The Governmental Accounting Standards Board (“GASB”) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The City’s more significant accounting policies are described below.

A. Reporting Entity The City was formed on January 1, 1974, by the merger of the former Cities of Suffolk and Nansemond. The City of Nansemond was previously formed by the merger of the County of Nansemond and the Towns of Whaleyville and Holland. The City is a political subdivision of the Commonwealth of Virginia operating under the councilmanager form of government. The elected Mayor and seven-member City Council, vested with the legislative powers, appoints the City Manager, who is the executive and administrative head of the City’s government. The City provides a full range of services to include the following: public safety (police and fire), education, community development (planning and zoning), water treatment and distribution, sewage collection, refuse collection, maintenance of highways, streets and infrastructure, stormwater management, transit, recreational activities, cultural events, social services, and library, among other services. The accompanying financial statements present the City and its component units, entities for which the City is financially accountable. Blended component units, although legally separate entities, are in substance part of the City’s operations and, as such, are included in the reporting entity. The City’s discretely presented component units are reported in separate columns in the City’s financial statements in order to emphasize that they are legally separate from the City. Included within the reporting entity are:

City of Suffolk Public Schools (the “School Board”) The City of Suffolk Public Schools (the “School Board”) is responsible for elementary and secondary education within the City. Management of the School Board is composed of seven members popularly elected to a four year term. The School Board is fiscally dependent upon the City because the City Council approves the annual budget of the School Board, levies the necessary taxes to finance operations and approves the borrowing of money and issuance of debt. The School Board does not issue separate financial statements, as such, they have been included in these statements.

Economic Development Authority of the City of Suffolk (the “EDA”) The Economic Development Authority of the City of Suffolk (the “EDA”) was established under the Industrial Development and Revenue Bond Act - Code of Virginia. A separate board appointed by the City Council governs the EDA. The EDA is authorized to acquire, own, lease, and dispose of properties, and to conduct related activities to promote industry and develop trade by inducing manufacturing, industrial, governmental, and commercial enterprises to locate or to remain in the City. The City makes significant contributions to the EDA relating to the property the EDA develops and markets. Separate audited financial statements may be obtained from the EDA by contacting the EDA’s Deputy Secretary/Treasurer, at P.O. Box 1858, Suffolk, Virginia 23439.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) Not included within the reporting entity are:

Jointly Governed Organization Western Tidewater Water Authority (the “Water Authority”) The Western Tidewater Water Authority (the “Water Authority”) was created March 18, 1998, by the City Council and the Board of Supervisors of the County of Isle of Wight, Virginia (the “County”) pursuant to the Virginia Water and Sewer Authorities Act, Chapter 51, Title 15.2, Code of Virginia. The members of the Water Authority Board representing both the City and the County have equal voting interests. The Water Authority was formed for the purpose of acquiring, financing, constructing, leasing, operating, and maintaining facilities for the production, impoundment, treatment, and transmission of potable and non-potable water. The City is not obligated to pay the principal or interest on notes or any other liabilities of the Authority and has no financial interest in the Authority. Separate audited financial statements can be obtained by contacting the City Finance Director at the City of Suffolk at 442 West Washington St., Suffolk, Virginia 23434.

Western Tidewater Regional Jail Authority (the “Jail Authority”) The Western Tidewater Regional Jail Authority (the “Jail Authority”) was created as a political subdivision of the Commonwealth of Virginia jointly through an agreement dated November 1, 1989, among the Cities of Suffolk and Franklin, and the County of Isle of Wight (the member jurisdictions) under the Jail Authority Act, Code of the Commonwealth of Virginia. The member jurisdictions are responsible for a percentage of the annual operating costs of the jail based on the jail population. The Jail Authority has the responsibility to finance the acquisition, construction, equipping, and maintenance of a regional jail facility to operate for the benefit of the member jurisdictions. Historically, notes issued by the Jail Authority are limited obligations payable solely from revenues received from the member jurisdictions. The City has not been obligated to pay the principal or interest on the notes or any other liability of the Jail Authority and has no financial interest in the Authority beyond its annual contribution. However, during 2014, the member jurisdictions pledged to pay its pro rata share of any debt service on the issuance of the Authority’s 2014 bonds. Separate financial statements can be obtained by contacting the Superintendent of Jail Authority at 2402 Godwin Blvd., Suffolk, Virginia 23434.

Southeastern Public Service Authority of Virginia (the “PSA”) The Southeastern Public Service Authority of Virginia (the “PSA”) is a special purpose government entity engaged in business-type activities with no component units and was created for solid waste disposal. The members of the PSA are the Cities of Chesapeake, Franklin, Norfolk, Portsmouth, Suffolk, and Virginia Beach and the Counties of Isle of Wight and Southampton. In fiscal year 2018, each member jurisdiction signed a new use and support agreement with the PSA and have agreed to deliver, or cause to be delivered, 100% of all municipal solid waste collected by the municipality, excluding certain classifications of waste such as recyclables, yard waste and storm debris. The City has also signed a host agreement that details the amount that the City will receive in host fees related to the waste delivered to the landfill located within the City limits from the PSA. Separate audited financial statements can be obtained by contacting the Chief Financial Officer at 723 Woodlake Drive, Chesapeake, VA 23320.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) Related Organization Suffolk Redevelopment and Housing Authority (the “SRHA”) The Suffolk Redevelopment and Housing Authority (the “SRHA”) administers public housing and redevelopment activities in the City. It applies, receives, and invests its own funds and formulates and approves its own budget. City Council is responsible for appointing members of the Board of SRHA, but the City’s accountability does not extend beyond making such appointments. SRHA does not have a significant operational or financial relationship with the City. Separate financial statements can be obtained by contacting the SRHA Executive Director at 530 E. Pinner Street, Suffolk, Virginia 23434.

B. Government-wide and Fund Financial Statements The government-wide financial statements consist of a Statement of Net Position and a Statement of Activities that report information on all of the non-fiduciary activities of the Primary Government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental activities, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the Primary Government is reported separately from certain legally separate component units for which the Primary Government is financially accountable. The Statement of Net Position offers information on the assets and deferred outflows of resources, and liabilities and deferred inflows of resources, with the difference between the two reported as net position. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly associated with program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental and enterprise funds are reported as separate columns in the financial statements. Governmental funds are reported using the financial resources measurement focus. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and the expenses are recorded when a liability is incurred, regardless of the timing related cash flows. Property taxes are recognized as revenue when the tax is levied.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Governmental Fund Types: 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 City considers revenues to be available if they are collected within 45 days of the end of the current 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 period. Accordingly, real and personal property taxes are recorded as revenues and receivables when billed, net of allowances for uncollectable amounts. Property taxes not collected within 45 days after year-end are reflected as deferred inflows City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) of resources - unavailable revenues taxes. Sales and utility taxes, which are collected by the Commonwealth or utilities and subsequently remitted to the City, are recognized as revenues and receivable upon collection, which is generally one or two months preceding receipt by the City. Licenses, permits, fines, and rents are recorded as revenues when received. Intergovernmental revenues, consisting primarily of Federal, state, and other grants for the purpose of funding specific expenditures, are recognized when the qualifying expenditures have been incurred and all other eligibility requirements have been met. Revenues from general-purpose grants are recognized in the period to which the grant applies. All other revenue items are considered to be measurable and available only when the City receives cash. Amounts reported as program revenues include charges to customers or applicants for goods, services, or privileges provided, operating grants and contributions, and capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes and contributions not restricted to specific programs and other revenues not meeting the definition of program revenues. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this rule include: (1) accumulated unpaid vacation leave, sick leave, and other employee amounts (e.g., other postemployment benefits), which are recognized when paid, and (2) principal and interest payments on general long-term debt, both of which are recognized when due. As a general rule, the effect of inter-fund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City’s proprietary funds and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. The City presents the following major governmental funds: General Fund - The General Fund is the primary operating fund of the City, which accounts for all financial resources not accounted for in another fund. Capital Projects Fund - The Capital Projects Fund is used to account for financial resources that are restricted, committed, or assigned to expenditures for capital outlays, except for those financed by proprietary funds or for assets held in trust for individuals, private organizations, or other governments. Road Maintenance Fund - accounts for revenue and expenditures related to maintaining roadways City wide. Revenues are derived from the state and from the sale of service to other funds. Consolidated Grants Fund - accounts for revenue and expenditures related to grants received from various federal and state granting agencies. Debt Service Fund - accounts for the accumulation of resources that are restricted, committed, or assigned to the expenditure for principal and interest on the general long-term debt of the City, with the exception of the debt in the proprietary funds, and compensated absences. The City presents the following non-major governmental funds: Special Revenue Funds - account for proceeds of specific revenue sources restricted or committed to expenditure for a specific purpose other than debt service or capital projects. These funds consist of the Suffolk Taxing District, Downtown Business Overlay District, Law Library, Route 17 Taxing District, Transit, Cemetery, and Aviation.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) Proprietary Fund Types: Proprietary funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. The proprietary funds utilize the accrual basis of accounting where the measurement focus is upon determination of net income. Proprietary funds consist of enterprise and internal service funds. Proprietary funds distinguish operating revenues and expense from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary funds’ principal ongoing operations. The principal operating revenues of the Utility Fund, Stormwater Utility Fund, Refuse Fund and the internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting the operating definition are reported as non-operating revenues and expenses. The City presents the following major enterprise fund: Utility Fund - accounts for the provision of water and sewer services. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operation, maintenance, billing, collections, capital financing and related debt service, and capital assets. The City presents the following non-major enterprise funds: Stormwater Utility Fund - accounts for the maintenance and improvements to the City’s stormwater infrastructure. All activities necessary to provide such services are funded by charges to citizens and are accounted for in this fund. The City’s mosquito control activities are also accounted for in this fund. Refuse Fund - accounts for the provision of refuse and waste management services. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operation, billing, and collections. Internal Service Funds account for the financing of goods or services provided by one department to other departments or agencies of the City on a cost-reimbursement basis. The Internal Service Funds are included in governmental activities for government-wide reporting purposes. The City has the following internal service funds: Information Technology Fund - accounts for technology infrastructure and allocated costs to the various departments or agencies using the service. Fleet Management Fund - accounts for, on a cost-reimbursement basis, the financing of vehicles and related maintenance, repairs and fuel costs and allocates those costs to the various departments or agencies using the equipment. Risk Management Fund - accounts for the funding and payment of auto, personal liability, general liability, health insurance, and workers’ compensation claims against the City exclusive of the School Board employees. Charges to other funds are based on estimated claims for the year.

Fiduciary Fund Types: The City and School Board each have the following fiduciary funds: OPEB Trust Fund - accounts for activities related to other postemployment benefits (OPEB). This fund accumulates resources for health insurance for retired employees.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) Custodial Funds - Custodial Funds accounts for assets held by the City as an agent for individuals, private organization, and other governments. Special Welfare Fund - accounts for receipt of welfare checks and foster children support checks from the state and payments made on behalf of individuals. Commonwealth of Virginia Fund - accounts for monies collected by the City on behalf of the Commonwealth of Virginia.

D. Stewardship, Compliance, and Accountability The provisions of the Code of Virginia shall control the preparation, consideration, adoption, and execution of the budget of the City. The City Charter requires the budget to be balanced with planned expenditures equal to revenue estimates. The City will prepare and annually update a long range (5 year) financial forecast model utilizing trend indicators and projections of annual operating revenues, expenditures, capital improvements, and related debt service and operating costs as well as fund balance levels. The City Manager, through the Budget and Finance division of the Finance Department, will exercise appropriate fiscal management as necessary to live within the limits of the adopted budget. Financial Policies The City’s Finance Committee (the “Committee”) is empowered by City Council to implement and establish various financial policies. The Committee meets on a quarterly basis to manage and review financial activities and to ensure compliance with established policies. Members of the Committee include those individuals stipulated by ordinance adopted by City Council. It is the City’s policy to fund current expenditures with current revenues and the City’s mission is to strive to maintain a diversified and stable revenue stream to protect from problematic fluctuations in any single revenue source and provide stability to ongoing services. The City’s unassigned fund balance in the General Fund will be maintained to provide the City with sufficient working capital and a margin of safety to address local and regional emergencies without borrowing.

E. Cash and Cash Equivalents Cash and Cash Equivalents include cash on hand, money market funds, certificates of deposit, and investments with maturities of three months or less.

F. Investments Investments are reported at fair value. Interest income on investments is allocated to the appropriate funds based upon the average monthly cash balance of each fund. Interest income is accrued as earned.

G. Receivables Receivables are shown net of an allowance for uncollectable amounts calculated by management using historical collection data, specific account analysis, and management’s judgment.

H. Inventories and Prepaid Items Inventories of materials and supplies and fuel are recorded at cost. The cost of inventory is recorded as an expenditure at the time individual inventory items are consumed (consumption method) on a first in, first out basis.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

Leases Receivable

The City is a lessor for non-cancellable lease. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements. At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is recognized as revenue over the life of the lease term.

J. Capital Assets Capital outlays are recorded as expenditures of the governmental funds and as assets in the proprietary funds and in the government-wide financial statements to the extent the City’s capitalization threshold is met. Buildings, improvements, machinery and equipment, intangible, and infrastructure capital outlays are recorded as capital assets and depreciated over their useful lives on a straight-line basis in both the proprietary fund’s and the government-wide statements. The City’s capitalization policy threshold is $5,000. All capital assets are valued at historical costs or estimated historical cost if actual cost was not available. Donated assets are valued at their estimated acquisition value on the date donated. The right to use assets are initially measured as an amount equal to the initial measurement of the related lease liability. The right to use assets are amortized on a straight line basis over the life of the related arrangement. The estimated useful lives of capital assets are as follows:

Buildings

40 years

Improvements other than buildings

15-75 years

Infrastructure

5-50 years

Machinery and equipment

3-50 years

Intangibles

5-10 years

Maintenance, repairs, and minor equipment less than $5,000 are expended/expensed when incurred. Costs that materially change capacities or extend useful lives are capitalized. Upon sale or retirement of land, buildings, or equipment, the cost and related accumulated depreciation, if applicable, are eliminated from the respective accounts and any resulting gain or loss is recorded.

K. Unearned Revenues Grants and entitlements received before the eligibility requirements are met have been recorded as unearned revenues. Unearned revenues in the government-wide statements also consists of lease payments credited for future years relating to certified capital improvements at the golf course.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) L. Deferred Outflows of Resources Deferred outflows of resources represent a consumption of net assets that applies to a future period and so will not be recognized as an expense or expenditure until then. The City’s deferred outflows of resources consist of the amount by which the principal and premium of a refunding bond exceed the net carrying amount of the refunded debt. The related deferred outflow is being recognized as an expense over the remaining life of the refunded debt. Deferred outflows of resources for pensions and OPEB related activities may result from changes in actuarial assumptions, differences between expected and actual experience, pension investment returns that exceed projected earnings, changes in proportionate share and contributions made subsequent to the measurement date. Changes in actuarial assumptions other than investment related are deferred and amortized over the remaining service life of all participants and investment experience amounts are deferred and amortized over a closed five-year period. Contributions made subsequent to the measurement date are expensed in the following year.

M. Deferred Inflows of Resources Deferred inflows of resources represent an acquisition of net assets that applies to a future period and so will not be recognized as revenue until then. Deferred inflows of resources, under the modified accrual basis of accounting, can consist of revenues which are received in advance, but are applicable to a future period, and will not be recognized until the period they become available. In governmental funds’ financial statements, receivables that will not be collected within the available period have also been reported as unavailable revenues. Deferred inflows for pensions and OPEB related activities may result from changes in actuarial assumptions, differences between the expected and actual experience, investment results and changes in proportionate share. Changes in actuarial assumptions not related to investment activity are deferred and amortized over the remaining service life of all participants and investment experience results are deferred and amortized over a closed five-year period. Unavailable revenues in the governmental funds consists of monies that are measurable but not available for use during the current period. Property taxes receivable at June 30 but not collected within 45 days after that date, are reported as unavailable revenues in the governmental funds’ financial statements. Unavailable revenues arise when assets are recognized before revenue recognition criteria can be satisfied and also when assets are recognized in connection with a transaction, but those assets are not yet available to finance expenditures of the current fiscal period. Deferred Inflows of resources recorded related to leases are recorded at the initiation of the lease in the amount equal to the initial recording of the lease receivable. The deferred inflow of resources are recognized on a straight¬line basis over the term of the lease.

N. Compensated Absences City and School Board employees are granted vacation and sick pay in varying amounts based on years of service. Employees may accumulate, subject to certain limitations, unused vacation and sick pay earned and, upon retirement, termination, or death, may be compensated for certain amounts at specific rates. The cost of accumulated vacation and sick pay expected to be paid from future expendable resources is accounted for as a liability in the government-wide statements and proprietary fund statements. For governmental fund types, the amount of accumulated unpaid vacation leave is recorded as a liability of the respective fund only if it has matured, for example, as a result of employee retirement or resignation. For proprietary funds, the cost of vacation and sick leave is accrued as a liability for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash. The City considers historical use of paid leave expected to be used within the next year to determine the current and non-current portions of the compensated absences liability.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) O. Long-Term Liabilities In the government-wide and proprietary funds’ financial statements, long-term debt and other long-term obligations are reported as liabilities in the appropriate Statement of Net Position. Bonds payable are reported net of the applicable bond premium or discount. Related bond issuance costs are expensed when incurred. In the governmental funds’ financial statements, bond premiums, discounts, and bond issuance costs, are expended when incurred. The face amount of debt issued is reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

P. Pension Plan For the purpose of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s retirement benefits and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the Virginia Retirement System (the “VRS”). 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.

Q. VRS Sponsored OPEB Programs Group Life Insurance (GLI) The VRS GLI Program is a multiple employer, cost-sharing plan. It provides coverage to state employees, teachers, and employees of participating political subdivisions. The GLI Program was established pursuant to §51.1-500 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. The GLI Program is a defined benefit plan that provides a basic group life insurance benefit for employees of participating employers. For purposes of measuring the net GLI Program OPEB liability, deferred outflows of resources and deferred inflows of resources related to the GLI Program OPEB, and GLI OPEB expense, information about the fiduciary net position of the VRS GLI program OPEB and the additions to/deductions from the VRS GLI OPEB’s net fiduciary position have been determined on the same basis as they were reported by VRS. In addition, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Line of Duty Act Program (LODA) The LODA is a multiple-employer, cost-sharing plan. The LODA Program was established pursuant to §9.1-400 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. The LODA Program provides death and health insurance benefits to eligible state employees and local government employees, including volunteers, who die or become disabled as a result of the performance of their duties as a public safety officer. In addition, health insurance benefits are provided to eligible survivors and family members. For purposes of measuring the net LODA Program OPEB liability, deferred outflows of resources and deferred inflows of resources related to the LODA Program OPEB, and LODA Program OPEB expense, information about the fiduciary net position of the VRS LODA Program OPEB Plan and the additions to/deductions from the VRS LODA Program OPEB Plan’s net fiduciary position have been determined on the same basis as they were reported by VRS. In addition, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Virginia Local Disability Program (VLDP) The VRS VLDP is a multiple-employer, cost-sharing plan. For purposes of measuring the VLDP OPEB liability, deferred outflows of resources and deferred inflows of resources related to the Teacher Employee VLDP OPEB,

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) and the Teacher Employee VLDP OPEB expense, information about the fiduciary net position of the VRS VLDP and the additions to/deductions from the VLDP net fiduciary position have been determined on the same basis as they were reported by VRS. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Teacher Employee Health Insurance Credit Program (THIC) The VRS HIC Program is a multiple-employer, cost-sharing plan. The THIC Program was established pursuant to §51.1-1400 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. The THIC Program is a defined benefit plan that provides a credit toward the cost of health insurance coverage for retired teachers. For purposes of measuring the net THIC Program OPEB liability, deferred outflows of resources and deferred inflows of resources related to the Teacher Employee HIC Program OPEB, and the THIC Program OPEB expense, information about the fiduciary net position of the VRS THIC Program; and the additions to/deductions from the VRS THIC Program’s net fiduciary position have been determined on the same basis as they were reported by VRS. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Non-Teacher Employee Health Insurance Credit Program (NTHIC) The VRS NTHIC Program is a multiple-employer, agent defined benefit plan that provides a credit toward the cost of health insurance coverage for retired school board non-teacher employees. The NTHIC Program was established pursuant to §51.1-1400 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. For purposes of measuring the net NTHIC Program OPEB liability, deferred outflows of resources and deferred inflows of resources related to the NTHIC Program OPEB, and the NTHIC Program OPEB expense, information about the fiduciary net position of the VRS NTHIC Program; and the additions to/deductions from the VRS Teacher Employee HIC Program’s net fiduciary position have been determined on the same basis as they were reported by VRS. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

R. Fund Balance Fund Balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources: Nonspendable fund balance - Includes amounts that cannot be spent because they are either not in spendable form or, for legal or contractual reasons, must be kept intact. This classification includes inventories, prepaid amounts, assets held for sale, long-term receivables. Restricted fund balance - Restricted funds are either externally imposed (such as debt covenants, grantor, contributors or other governments) or are imposed by law (constitutionally or enabling legislations). Committed fund balance - The City’s committed funds include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the highest level of decision making authority - City Council. Formal Council action includes the annual adoption of the City’s Budget Ordinance for the subsequent year, Council Ordinances appropriating funds and/or resources, and budget amendments to carry forward appropriations that were encumbered but unexpended at fiscal year-end. The same action of council is required to uncommit. Assigned fund balance - Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as committed, in accordance with the City’s financial policies. Intent can be stipulated by the governing body, or by designees with authority to assign such as the Finance Committee, or by the City Manager.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 1. Nature of operations and summary of significant accounting policies (Continued) Unassigned fund balance - this is the residual classification of the General Fund. Only the General Fund can report a positive “unassigned fund balance”. Other governmental funds may report a negative balance in this classification. General fund unassigned fund balance target - the ratio of General Fund unassigned fund balance as a percentage of budgeted governmental funds expenditures (net of the General Fund contribution to schools, transfer to other governmental funds, and capital projects fund expenditures) plus budgeted expenditures in the School operating and food service funds indicates the ability of the City to cope with unexpected financial problems or emergencies. The larger the general fund unassigned fund balance, the greater the City’s ability to cope with financial emergencies and fluctuations in revenue cycles. The City has a financial policy goal that unassigned fund balance should be 20% of the following fiscal years governmental funds budget, using the formula stated above. The City also has a policy that any excess amounts over the 20% will be dedicated to a budget stabilization fund, until that reaches 2% of the budgeted revenue and then to a capital reserve fund, both of these reserves are reported as committed fund balance. The budget stabilization fund is established by City Council and will be added to as necessary each year with excess fund balance to maintain 2% of the budgeted revenue; the stabilization fund can be spent with approval of council. As of June 30, 2025, the balance is $13,232,283. The City considers restricted fund balance to be spent when expenditures are incurred for purposes for which restricted and any other fund balance classification is available unless prohibited by legal documents or contracts. When expenditures are incurred for purposes for which committed, assigned, or unassigned amounts are available, the City considers committed fund balance to be spent first, followed by assigned fund balance, and lastly unassigned fund balance. The School Board currently does not have a policy regarding whether to first apply restricted or other resources when expenditures are incurred.

S. Net Position Net position in the government-wide and proprietary financial statements represents the difference between assets and deferred outflows of resources, and liabilities and deferred inflows of resources, and is classified as net investment in capital assets, restricted, or unrestricted. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets. Restricted net position is reported when there are assets and deferred outflows of resources, net of related liabilities and deferred inflows of resources, that have limitations imposed on their use either through enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, laws or regulations of other governments.

T. Component Unit-School Board Capital Asset and Debt Presentation By law, the School Board does not have taxing authority and, therefore, it cannot incur debt through general obligation bonds to fund the acquisition, construction, or improvement of its capital assets. That responsibility lies with the City to issue the debt on behalf of the School Board. However, the Code of Virginia requires the School Board to hold title to the capital assets (buildings and equipment) due to their responsibility for maintaining the assets. During the construction of the School Board assets, they are reflected in the City’s construction in progress balance. In the Statement of Net Position, this scenario presents a dilemma for the City. Debt issued on behalf of the School Board is reported as a liability of the Primary Government, thereby reducing the net position of the City. The corresponding capital assets are reported as assets of the component unit - School Board (title holder), thereby increasing its net position.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 2. Deposits and Investments Deposits Deposits with banks are covered by the Federal Deposit Insurance Corporation (the “FDIC”) and collateralized in accordance with the Virginia Security for Public Deposits Act (the “Act”) Section 2.2-4400 et. seq. of the Code of Virginia. Under the Act, banks and savings institutions holding public deposits in excess of the amount insured by the FDIC must pledge collateral to the Commonwealth of Virginia Treasury Board. Financial institutions may choose between two collateralization methodologies and depending upon that choice, will pledge collateral that ranges in the amounts from 50% to 130% of excess deposits. Accordingly, all deposits are considered fully collateralized.

Investments The City’s investments are subject to credit risk, concentration of credit risk, and interest rate risk as described below. The City’s investments are not subject to custodial risk or foreign currency risk.

Credit Risk Credit risk is the risk that an issuer or other counterpart to an investment will not fulfill its obligations. Credit risk is measured by the assignment of a rating by a nationally recognized statistical rating organization. If a credit quality disclosure is required and the investment is unrated, the disclosure should indicate that fact. Statutes authorize the City to invest in obligations of the United States or agencies thereof, obligations of the Commonwealth of Virginia or political subdivisions thereof, obligations of the International Bank for Reconstruction and Development (the “World Bank”), the Asian Development Bank, the African Development Bank, “prime quality” commercial paper and certain corporate notes, bankers’ acceptances, repurchase agreements, the State Treasurer’s Local Government Investment Pool (the “LGIP”), and the State Non-Arbitrage Program (the “SNAP”). The City’s policy emphasizes the use of securities of high credit quality and marketability, and follows statute, but does not specify minimum credit ratings. The Virginia Pooled OPEB Trust Fund’s investments are not restricted to fixed-income securities but rather are commingled across sectors and include investments in fixed-income securities, equity securities, and real assets. Credit quality disclosure is not required for the Virginia Pooled OPEB Trust Fund.

Interest Rate Risk Interest rate risk is the risk that change in interest rates will adversely affect the fair value of an investment. The City Treasurer’s policy states that the investment portfolio shall be designed to attain a market rate of return, taking into account investment risk constraints and liquidity needs. The portfolio shall be structured so that securities mature concurrent with estimated cash needs and remain sufficiently liquid to meet anticipated operating requirements. Investment of current operating funds shall have maturities of no longer than 24 months. Interest rate risk does not apply to the SNAP pooled investments. Investments held in the Virginia Pooled OPEB Trust Fund are not restricted to fixed-income securities but rather are commingled across sectors and include investments in fixed-income securities, equity securities and real assets. Interest rate disclosures for the Virginia Pooled Trust fund is not required.

External Investment Pool The SNAP is an open-end management investment company registered with the Securities and Exchange Commission (the “SEC”). The fair value of the positions in the SNAP is the same as the net asset value of the pool shares.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 2. Deposits and Investments (Continued) Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. Investments in external investment pools are excluded from the concentration of credit risk disclosure requirements. 100% of the City’s investments at June 30 were with SNAP. These investments were not considered by management to represent a risk to the City.

Fair Value Disclosures Fair value disclosures related to the Virginia Pooled OPEB Trust Fund are as follows: Portfolio I: The fair value of portfolio I is determined using the NAV per share of the investments. Portfolio I is an external investment pool and is constructed to achieve an expected rate of return of approximately 7.5%. This objective is achieved by weighting the asset allocation more heavily towards equities and real assets, an allocation that tends to have greater market volatility than a portfolio weighted more heavily towards fixed income. The portfolio includes investments diversified across fixed-income, equities, and real assets. Participant redemptions may be made to pay authorized OPEB expenses. Participant withdrawals are redeemable quarterly and require a ninety-day written notice. Portfolio II: The fair value of Portfolio II is determined using the NAV per share of investments. Portfolio II is an external investment pool and is constructed to achieve an expected rate of return of approximately 6.0% and to experience less volatility by allocating a greater weight to fixed-income investments than equity investments. The portfolio includes investments diversified across fixed-income, equities, and real assets. Participant redemptions may be made to pay authorized OPEB expenses. Participant withdrawals are redeemable quarterly and require a ninety-day written notice. Restricted Cash

The City has restricted cash as follows: Note 2. Deposits and Investments (Continued)

Unspent debt proceeds Cemetery Escrow/bond interest/customer deposits Other external purposes Total

Governmental Activities

Primary Government

Statement of Net Position: Cash and cash equivalents Cash and cash equivalents, restricted Total

Primary Government

$ 59,112,166 $ 17,070,157 $ 76,182,323 971,323 - 971,323 14,612,891 - 14,612,891 12,758,432 3,187,583 15,946,015 $ 87,454,812 $ 20,257,740 $ 107,712,552

Cash and Cash Equivalents

Deposits and Investments: SNAP Deposits

Business-type Activities

Component Units Economic Development School Board Authority

$ 76,182,323 $ - $ 451,709,825 34,899,110 6,983,000 $ 527,892,148 $ 34,899,110 $ 6,983,000 420,179,596 34,899,110 4,817,016 107,712,552 - 2,165,992 $ 527,892,148 $ 34,899,110 $ 6,983,008

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 3. Receivables Note 3. Receivables

Receivables are as follows:

General Taxes Accounts Due from other governments Leases

Capital Projects

Governmental Activities Non-Major Road Consolidated Governmental Maintance Grants Fund Funds

Internal Service Funds

Total

$ 13,628,372 $ - $ - $ - $ 17,825 $ - $ 13,646,197 5,190,584 - 43,387 1,155,031 137,223 149,711 6,675,936 2,520,160 7,557,598 - 3,699,090 - - 13,776,848 4,229,931 - - - 355,195 868,878 5,454,004

Subtotal 25,569,047 7,557,598 43,387 4,854,121 510,243 1,018,589 39,552,985 Less Allowance (9,302,412) - - - (6,379) - (9,308,791) Receivables, net

$ 16,266,635 $ 7,557,598 $ 43,387 $ 4,854,121 $ 503,864 $ 1,018,589 $ 30,244,194

Business-type Activities Non-Major Enterprise Utilities Funds

Accounts

Total

Component Unit - School Board

$ 10,407,869 $ 1,723,539 $ 12,131,408 $ 506,368

Less Allowance (382,365) (627,370) (1,009,735) Receivables, net

$ 10,025,504 $ 1,096,169 $ 11,121,673 $ 506,368

Allowances for Uncollectible Accounts The City calculates its allowances for uncollectible receivables using historical collection data and specific account analysis. The receivables shown on the Statement of Net Position are presented net of the following allowances for doubtful accounts:

General Fund - Taxes receivable General Fund - EMS receivable Non-major Funds - Taxes receivable Utility Fund - Accounts receivable Non-major Proprietary Funds - Accounts receivable

Governmental Business-type Activities Activities $ 7,903,122 $ 1,399,290 6,379 - 382,365 - 627,370 $ 9,308,791 $ 1,009,735

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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Note 3. Receivables (Continued) Property Taxes – Property taxes are levied as of January 1 for personal property for the current calendar year and as of July 1 for real estate for the current year, based on the assessed value the related property as of the date. The City’s legal right to collect property taxes attaches each year when the rates are approved and the taxes are assessed. Real estate taxes are collectible twice a year, on December 5 and June 5. Personal property taxes are due on December 5. Amounts not collected within 45 days after the end of the fiscal year are reflected as unearned revenues in the General Fund. A lien is created when the real estate taxes are levied and, after three years, it becomes enforceable by judicial sale of the property.

City as a Lessor – Leases and Public Private Partnership Receivable: The City has recorded over seventy (70) leases where the City is a lessor, ranging in terms from 5-20 years. The revenues are received for leasing airport hangars, a Golf Course property, farmland, and communications antenna space. The discount rate for all leases is based on the average of the City’s Municipal Market Data (MMD) rate. The discount rates assigned to each lease is the average MMD rate from 7/1/2023 – 02/01/2024 and the number of years of the lease. The lease is measured at the present value of future minimum lease payments expected to be received during the lease term at a discount rate equal to the average MMD rate for the City. At June 30, 2025, the City recorded a receivable related to leases and a public private partnership in the amount of $5,454,004 with a corresponding deferred inflow of resources in the amount of $6,464,303. The City also received donated land improvements in conjunction with its Public Private Partnership. The City will recognize revenue related to the lease payments and land improvements over the remaining term of the lease agreement which is currently expected to end in 2035.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 4. Due from Other Government Due from other governments in the fund statements are as follows:

Primary Government: !

General Commonwealth of Virginia: State sales tax Communication sales tax Various other state aid and grants Federal Government: Various grants

Total due from other governments

Capital Projects

Consolidated Grants

$ 1,570,588 $ - $ - $ 1,570,588 188,868 - - 188,868 222,781 1,180,848 1,979,908 3,383,537 1,982,237 1,180,848 1,979,908 5,142,993 537,923 6,376,750 1,719,182 8,633,855 537,923 6,376,750 1,719,182 8,633,855 $ 2,520,160 $ 7,557,598 $ 3,699,090 $ 13,776,848

Component Unit - School Board: Total Commonwealth of Virginia: State technology Dual Enrollment Security Equipment Grant Sales tax Federal Government: School improvement grant Title I Title II Title III Title IV-A Title VI-B USDA reimbursement meals Various grants Local Total due from other governments

Total

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$ 27,200 1,002 218,328 1,931,641 2,178,171 171,780 1,101,774 179,792 10,093 41,581 473,486 1,114,481 421,319 3,514,306 30,672 $ 5,723,149

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 5. Interfund Transactions Transfers In

General fund Road Maintenance Non-major Governmental Funds Utility Fund Non-major enterprise funds Internal service funds Total

Nonmajor Capital Consolidated Governmental General Fund Projects Grants Debt Service Funds Transfers Out $ - $ 24,391,738 $ 561,921 $ 31,236,542 $ 598,450 $ 56,788,651 7,757,572 8,530 - 1,334,809 - 9,100,911 257,603 1,286,703 - 370,586 - 1,914,892 847,721 - - - - 847,721 702,730 - - - - 702,730 640,061 - - - - 640,061 $ 10,205,687 $ 25,686,971 $ 561,921 $ 32,941,937 $ 598,450 $ 69,994,966

Transfers are used to (1) move revenues from the funds that statute or budget requires to collect them to the funds 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 budgeting authorization.

Note 6. Transactions between Primary Government and Component Units Significant Transactions of the City and Component Unit - School Board Certain transactions between the City and School Board are explained here in detail to provide a more informed understanding of the operational relationship of the two entities and how such transactions are presented in the financial statements. 1.

The School Board can neither levy taxes nor incur debt under Virginia Law. Therefore, the City issues debt “on behalf” of the School Board. The debt obligation is recorded as a liability of the City. The proceeds from the debt issued “on behalf” of the School Board are recorded in the City’s General Fund. This fund then accounts for capital expenditures relating to major school construction projects.

2. Debt service payments for school related bonded debt are reported as part of the City in the Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Fund. 3. If all economic resources associated with school activities were reported with the School Board, its total expenditures would be as follows: Expenditures of School Board - Component Unit

$ 228,895,572

Repayment of School Board debt

11,653,944 $ 240,549,516

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 7. Capital Assets Note 7. Capital Assets

The following is a summary of governmental activities’ capital asset activity: Governmental Activities Beginning Balance Capital assets, non-depreciable: Land and improvements (1) Construction in progress (2) Total capital asset, non-depreciable Capital assets, depreciable: Buildings Infrastructure Improvements other than buildings Machinery and equipment Right-to-use leased assets Land Buildings Machinery and equipment Right-to-use subscription assets Intangibles Total capital asset, depreciable Less accumulated depreciation/amortization for: Buildings Infrastructure Improvements other than buildings Machinery and equipment Right-to-use leased assets Land Buildings Machinery and equipment Right-to-use subscription assets Intangibles Total accumulated depreciation/amortization Total capital assets, depreciable, net Governmental activities capital assets, net (1) (2)

Increases

Decreases

Ending Balance

$ 25,173,661 $ 807,252 $ - $ 25,980,913 246,840,797 112,870,951 13,194,996 346,516,752 272,014,458 113,678,203 13,194,996 372,497,665 134,310,281 56,351 - 134,366,632 451,816,380 5,553,986 - 457,370,366 71,402,769 160,429 - 71,563,198 130,786,571 15,939,282 2,864,637 143,861,216 1,602,300 224,189 1,378,111 18,381,462 397,064 - 18,778,526 7,850,812 - - 7,850,812 636,512 81,978 - 718,490 7,796,137 1,729,225 - 9,525,362 824,583,224 23,918,315 3,088,826 845,412,713 50,979,351 3,048,657 - 54,028,008 250,432,996 7,901,255 - 258,334,251 23,799,035 2,393,836 - 26,192,871 94,975,258 6,400,624 2,529,946 98,845,936 1,461,789 13,551 14,471 1,460,869 2,440,909 1,051,696 - 3,492,605 3,920,532 1,543,929 1,198,306 4,266,155 295,097 160,333 - 455,430 4,192,763 568,852 - 4,761,615 432,497,730 23,082,733 3,742,723 451,837,740 392,085,494 835,582 (653,897) 393,574,973 $ 664,099,952 $ 114,513,785 $ 12,541,099 $ 766,072,638

Increases in Land and land improvements includes donated land improvements. Decreases in Construction in progress includes assets the City no longer holds title to.

The following is a summary of depreciation expense charged to various functions: Governmental Activities: General government Judicial administration Public safety Public works Community development Parks, recreation, and cultural

$ 3,574,278 40,146 3,201,573 11,863,190 1,050,665 3,352,881 $ 23,082,733

Governmental activities includes depreciation of $2,677,816 for the Fleet Maintenance fund, $47,748 for the Risk Management fund, and $1,152,832 for Information Technology fund.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 7. Capital Assets (Continued) The following is a summary of Business-type Activities capital asset activity:

Capital assets, non-depreciable: Land and improvements Construction in progress Total capital asset, non-depreciable Capital Assets, Depreciable: Buildings Infrastructure Improvements other than buildings Machinery and equipment Right-to-use leased assets Machinery and equipment Intangibles Total capital asset, depreciable Less Accumulated Depreciation/Amortization for: Buildings Infrastructure Improvements other than buildings Machinery and equipment Right-to-use leased assets Machinery and equipment Intangibles Accumulated Depreciation/Amortization, Net Capital Assets, Depreciable, Net Buisness-Type Activities Capital Assets, Net

Business-type Activities Beginning Ending Balance Increases Decreases Balance $ 4,675,235 $ 17,902 $ - $ 4,693,137 22,763,946 17,050,065 3,262,299 36,551,712 27,439,181 17,067,967 3,262,299 41,244,849 109,451,123 1,254,647 400,000 110,305,770 2,653,062 - - 2,653,062 440,346,130 13,107,083 9,515,401 443,937,812 127,708,318 3,634,620 1,579,556 129,763,382 5,538,451 - 97,691 5,440,760 19,383,005 - - 19,383,005 705,080,089 17,996,350 11,592,648 711,483,791 39,948,311 2,414,417 - 42,362,728 4,160 35,046 - 39,206 146,558,782 8,700,551 - 155,259,333 66,894,104 4,631,870 142,726 71,383,248 2,759,568 942,646 97,690 3,604,524 14,518,914 288,703 - 14,807,617 270,683,839 17,013,233 240,416 287,456,656 434,396,250 983,117 11,352,232 424,027,135 $ 461,835,431 $ 18,051,084 $ 14,614,531 $ 465,271,984

The following is a summary of Component Unit – School Board capital asset activity: Component Unit - School Board

Note 7. Capital Assets (Continued)

Beginning Balance Capital Assets, Non-Depreciable: Land Total Capital Assets, Non-Depreciable Capital Assets, Depreciable: Buildings Improvements other than buildings Machinery and equipment Total Capital Assets, Depreciable Less Accumulated Depreciation for: Buildings Improvements other than buildings Machinery and equipment Total Accumulated Depreciation Totals Capital Assets, Depreciable Component Unit - School Board Capital Assets, Net

Increases

Decreases

Ending Balance

$ 6,387,523 $ - $ - $ 6,387,523 6,387,523 - 6,387,523 260,089,762 - 412,600 259,677,162 23,219,167 - 26,600 23,192,567 68,215,393 3,826,869 9,042,362 62,999,900 351,524,322 3,826,869 9,481,562 345,869,629 129,875,105 5,030,717 387,412 134,518,410 15,068,490 675,812 26,600 15,717,702 52,591,360 4,765,606 8,992,631 48,364,335 197,534,955 10,472,135 9,406,643 198,600,447 153,989,367 (6,645,266) 74,919 147,269,182 $ 160,376,890 $ (6,645,266) $ 74,919 $ 153,656,705

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 8. Long-Term Liabilities Note 8. Long-Term Liabilities

The following is a summary of changes in long-term liabilities: Beginning Ending Current Portion Balance Governmental Activities: Bonds and notes payable: General obligation bonds Direct borrowing Bond premiums Lease liabilities Subscription liabilities Compensated absences payable* Claims payable Arbitrage payable Net pension liability Net OPEB liability state plans Total governmental activities Business-Type Activities: Bonds and notes payable: General obligation bonds Revenue bonds Direct borrowing Bond premiums Lease liabilities Compensated absences payable* Arbitrage payable Net pension liability Net OPEB liability state plans Total business-type activities *

Additions

Reductions

Balance

of Balance

$ 292,349,497 $ 10,040,000 $ 23,449,497 $ 278,940,000 $ 24,140,000 2,920,000 - 415,000 2,505,000 415,000 17,255,850 586,444 1,735,505 16,106,789 1,730,059 312,525,347 10,626,444 25,600,002 297,551,789 26,285,059 18,983,045 397,064 1,453,388 17,926,721 1,990,414 260,882 35,432 225,450 112,836 16,886,767 1,417,487 - 18,304,254 8,187,870 5,901,794 558,724 - 6,460,518 2,941,927 914,000 4,848,321 - 5,762,321 40,080,709 34,219,023 34,078,690 40,221,042 14,161,430 12,948,966 12,128,780 14,981,616 97,188,627 54,389,585 47,696,290 103,881,922 13,233,047 $ 409,713,974 $ 65,016,029 $ 73,296,292 $ 401,433,711 $ 39,518,106 $ 146,285,503 $ - $ 8,840,503 137,445,000 $ 9,020,000 190,401,000 - 5,616,000 184,785,000 6,070,000 11,456,000 4,795,000 1,340,000 14,911,000 1,317,000 13,675,621 - 447,403 13,228,218 447,403 361,818,124 4,795,000 16,243,906 350,369,218 16,854,403 2,812,188 109,144 1,116,676 1,804,656 914,109 1,862,225 89,036 - 1,951,261 969,917 - 729,962 - 729,962 5,605,527 5,154,103 5,128,480 5,631,150 507,853 228,304 271,312 464,845 $ 372,605,917 $ 11,105,549 $ 22,760,374 $ 360,951,092 $ 18,738,429

Beginning balances adjusted for GASB 101 Compensated Absences implementation

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 8. Long-Term Liabilities (Continued) Details of long-term indebtedness are as follows: Note 8. Long-Term Liabilities (Continued)

Bonds Payable: Direct borrowing 2011 VPSA Local School Bond General Obligation 2015 Public Improvement and Refunding Bonds 2016 Public Improvement and Refunding Bonds 2016 Taxable Refunding Bonds 2017A Public Improvement and Refunding Bonds 2017B Taxable Refunding Bonds 2018 Public Improvement Bonds 2019 Public Improvement Bonds 2019B Taxable Refunding Bonds 2020A Public Improvement Bonds 2020AB Public Improvement and Refunding bonds 2021A Public Improvement Bonds 2021AB Public Improvement and Refunding Bonds 2022 Public Improvement Bonds 2023 Public Improvement Bonds 2024 Public Improvement Bonds 2024 Literary Loan Total general obligation bonds * Authorized debt pending issuance

Authorized and Issued

Governmental Business-type Activities Activities

Issue Date

Final Maturity

Interest Rate

12/15/11

06/30/31

4.97

7,500,000 2,505,000

07/08/15

02/01/35

2.00-5.00

41,170,000 4,415,000 -

07/14/16 07/14/16

02/01/36 02/01/35

1.50-5.00 1.10-4.00

51,085,000 31,060,000 25,745,000 13,615,000 -

07/27/17 07/27/17 08/14/18 09/26/19 09/26/19 09/15/20

02/01/42 02/01/32 02/01/38 02/01/40 02/01/33 02/01/41

3.125-5.00 2.25-3.36 2.95 - 5.00 2.50 - 5.00 1.87 - 2.76 1.125 - 5.00

69,775,000 20,320,000 31,290,000 20,245,000 - 18,265,000 18,530,000 14,225,000 21,705,000 16,620,000 305,000 52,335,000 21,355,000 15,870,000 25,635,000 20,765,000 -

09/15/20 10/05/21

02/01/42 02/01/42

0.18 - 2.41 1.625 - 5.00

115,800,000 28,770,000 70,820,000 27,305,000 25,210,000 -

10/05/21 08/24/22 10/17/23 9/18/24

02/01/35 02/01/43 06/30/44 02/01/45

0.10 - 2.00 4.00 - 5.00 4.38 - 5.00 4.31

18,970,000 16,805,000 895,000 27,735,000 26,785,000 28,955,000 28,955,000 10,040,000 10,040,000 25,000,000 * 281,445,000 137,445,000

Details of long-term indebtedness are as follows (continued): Issue Date Bonds Payable: Pledged Revenue Bonds: 2015B VRA Revenue and Refunding Bonds 2016C VRA Revenue and Refunding Bonds 2017C VRA Revenue Bonds 2019 VRA Refunding Bonds (a) 2020 VRA Revenue Bonds 2020 VRA Refunding Bonds 2021 VRA Refunding Bonds Pledged Stormwater Revenue Bonds: 2022 Stormwater Revenue Bonds 2023 Stormwater Revenue Bonds 2024 Stormwater Revenue Bonds Total pledged revenue bonds

Final Maturity

Interest Rate

Authorized and Issued

Business-Type Activities

31,455,000 74,660,000 12,330,000 825,000 12,705,000 38,980,000 14,655,000

11/18/15 11/16/16 11/01/17 08/08/19 07/22/20 10/27/20 11/17/21

10/01/45 10/21/43 10/01/42 10/01/25 10/01/46 10/01/45 10/01/37

3.12-5.12 2.12-5.12 3.012-5.125 1.88 2.125 - 5.125 0.374 - 2.954 1.485 - 2.818

81,125,000 92,795,000 14,355,000 4,854,000 14,020,000 41,585,000 15,190,000

08/23/22 11/15/23 11/19/24

11/01/41 04/01/44 04/01/42

3.39 4.429-5.125 5.125

4,955,000 4,571,000 4,865,000 4,720,000 4,795,000 4,795,000 $ 199,696,000

(a) Indicates the bond is a direct placement or borrowing

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 8. Long-Term Liabilities (Continued) The annual requirements to amortize long-term debt and related interest as follows: Governmental Activities General Bonds from direct Obligation Bonds borrowings or placements Principal Interest Principal Interest Year(s) Ending June 30, 2026 2027 2028 2029 2030 2031-2035 2036-2040 2041-2044

$ 24,140,000 $ 8,759,055 $ 415,000 $ 318,750 24,185,000 7,628,407 415,000 318,750 24,125,000 6,877,708 415,000 318,750 20,435,000 6,144,529 420,000 318,750 20,085,000 5,493,165 420,000 318,750 92,435,000 18,597,258 420,000 159,375 50,910,000 7,826,488 - 22,625,000 1,659,525 - $ 278,940,000 $ 62,986,135 $ 2,505,000 $ 1,753,125 Business-type Activities

Business-type Activities: Year(s) Ending June 30, 2026 2027 2028 2029 2030 2031-2035 2036-2040 2041-2045 2046-2050

General Obligations Bonds Principal Interest

Revenue Bonds Principal Interest

Revenue Bonds from Direct Placement Principal Interest

9,020,000 3,221,113 6,070,000 6,167,828 1,317,000 616,663 9,235,000 3,033,958 7,210,000 5,882,894 519,000 586,567 8,195,000 2,818,290 8,505,000 5,590,730 541,000 563,091 8,810,000 2,654,700 8,385,000 5,308,030 569,000 538,464 9,010,000 2,479,458 8,650,000 5,026,712 592,000 512,669 46,745,000 16,740,198 47,075,000 14,035,865 3,398,000 2,131,742 37,500,000 11,509,398 66,505,000 4,572,055 4,236,000 1,286,166 8,930,000 999,834 29,345,000 1,619,870 3,739,000 342,375 - - 3,040,000 58,797 - $ 137,445,000 $ 43,456,949 $ 184,785,000 $ 48,262,781 $ 14,911,000 $ 6,577,737

School Board Long-Term Liabilities: Following is a summary of changes in noncurrent liabilities of the School Board for the year ended June 30, 2025: Beginning Balance Component Unit - School Board Other postemployment benefits, net Net pension liability Compensated absences Total School Board activities

Additions

Reductions

Ending Balance

Due Within One Year

$ 16,768,684 $ - $ (878,319) $ 15,890,365 $ 93,792,839 - (5,435,501) 88,357,338 15,001,719 1,857,456 - 16,859,175 7,634,023 $ 125,563,242 $ 1,857,456 $ (6,313,820) $ 121,106,878 $ 7,634,023

Pledge-Revenue Bond Restrictions: The City’s Utility fund has outstanding obligations with VRA for which revenue has been pledged to secure the obligations. The net revenues of the Utility Fund have been pledged to meet the debt service requirement of these bonds. The bonds have been issued to finance the capital improvements and construction of the water

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 8. Long-Term Liabilities (Continued) and sewer systems. The total amount remaining debt service to be paid over the life of these VRA bonds is $248,353,914 through 2047. In accordance with the master trust indenture, the revenue covenant has been met for the pledged-revenue bonds. Net revenues are required to be no less than greater of (i) the sum of 1.5 times senior debt service and 1.0 times subordinate debt service for the fiscal year (ii) net revenues are not less than 1.0 times the funding requirements for transfers from the revenue fund to the bond fund, the parity debt service fund, the debt service reserve fund, the subordinate debt service fund, the repair and replacement reserve fund, and the rate stabilization fund. This coverage ratio for the current year is 2.95, which exceeds the requirement. Furthermore, there has been no occurrence of any condition or event which constitutes, or which, with notice or lapse of time, or both, would constitute an event of default within the terms of the master trust indenture. The City’s Stormwater fund has outstanding revenue bonds for which revenue has been pledged to secure the obligations. The net revenues of the Stormwater Fund have been pledged to meet the debt service requirement of these bonds. The bonds have been issued to finance the capital improvements of the Stormwater Utility system. The total amount remaining debt service to be paid over the life of these revenue bonds is $20,655,983 through 2046. In accordance with the master trust indenture, the revenue covenant has been met for the pledged-revenue bonds. Net revenues are required to be no less than greater of (i) the sum of 1.5 times senior debt service and 1.0 times subordinate debt service for the fiscal year (ii) net revenues are not less than 1.0 times the funding requirements for transfers from the revenue fund to the bond fund, the parity debt service fund, the debt service reserve fund, the subordinate debt service fund, the repair and replacement reserve fund, and the rate stabilization fund. This coverage ratio for the current year is 14.44, which exceeds the requirement. Furthermore, there has been no occurrence of any condition or event which constitutes, or which, with notice or lapse of time, or both, would constitute an event of default within the terms of the master trust indenture.

General Obligation Bonds and the Legal Debt Limit: General Fund revenues are used to pay all general long-term liabilities. The City retains the liability for the portion of general obligation bonds issued to fund capital projects of the School Board. The General Fund has a contingent liability for repayment of the general obligation bonds outstanding in the Utility Fund, from which repayment is anticipated, should the Utility Fund be unable to do so. General obligation bonds are direct obligations and pledge the full faith and credit of the City. The Commonwealth of Virginia imposes a legal limit of 10% of the assessed valuation of taxable real property on the amount of general obligation borrowing which may be outstanding by the City. The City has independently set a lower debt limit of 7% of the assessed valuation. As of June 30, 2025, the City’s aggregate general obligation indebtedness is approximately $1.29 billion less than the Commonwealth’s limit and $768.5 million less than the City’s independent limit.

Direct Borrowings or Placements: The City has outstanding bonds from direct borrowings and placement related to governmental activities and Business-type activities of $2,505,000 and $14,911,000 respectively. The full faith and credit of the City’s or the pledged revenue of the Utility or Stormwater fund secure all of the bonds from direct borrowings. A portion of the direct borrowing bonds in the amount of $2,505,000 are bonds issued with the Virginia Public School Authority (VPSA). These VPSA bonds contain 1) a provision that if a default exists the governor of the State of Virginia may intercept other state aid to the City to pay the bonds and 2) a clause that allows the lender to require redemption in whole or part if it is necessary to maintain the bonds as qualified tax credit bonds, the lender may, with 90 days

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 8. Long-Term Liabilities (Continued) written notice require redemption if there are amendments to the applicable tax section or there is a reduction or elimination of the refundable credit received by the lender. Commonwealth of Virginia Literary Fund—Authorized Literary Loan (Undrawn) 2024 Literary Loan ($25M Authorized) In February 2023, the City adopted a resolution approving an application to the Commonwealth of Virginia’s Literary Fund and providing initial authorization for the issuance of general obligation bonds by the City of Suffolk, Virginia, as evidence of a loan from the Literary Fund in an amount up to $25 million to finance the design, acquisition, construction, and equipping of a replacement facility for John F. Kennedy Middle School and to pay related costs. As of June 30, 2025, no funds had been drawn under this authorization; therefore, no liability is recorded in the financial statements. Final authorization and issuance of the bonds will require a public hearing and City Council approval through the adoption of a subsequent ordinance in accordance with the Virginia Public Finance Act. The City incurs and reports the related debt for school capital projects; the School Division is a component unit and does not issue debt.

Prior Year Defeasances: In prior years, the City defeased certain general obligation and other bonds by placing the proceeds of new bonds in an irrevocable trust to provide all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. At June 30, 2025, the balance of these defeased bonds was $47,220,000.

Lease Liability: The City has entered into various agreements to lease certain equipment, buildings, office space and land. The lease agreements have been recorded at the present value of the expected lease payments as of the date of each lease inception. The agreements have varying contractual dates. The discount rate is based on the average of the City’s Municipal Market Data (MMD) rate. The discount rate assigned to each lease is the average MMD rate at the time of lease signing and the number of years of the lease. The detail for the City’s lease agreements are contained below: Lease Classification Buildings Land Copiers Generators Public Safety Equipment Mailing Equipment Buildings Land

End Dates 6/30/2035 & 5/31/2044, 12/21/2028 6/30/2026 & 6/30/2025 2/28/2025, 4/30/2025, 6/30/2025 Various Through 2032 8/31/2026 & 6/30/2026 Various through 2026 6/30/2035 & 5/31/2044 6/30/2026

Number of Individual Leases 3 2 325 68 2 6 2 2

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 8. Long-Term Liabilities (Continued) Year Ending June 30, 2026 2027 2028 2029 2030 2030-2035 2036-2040 2041-2045

Principal 1,990,414 1,870,158 1,810,962 1,555,840 1,251,743 4,940,510 3,868,363 2,443,387 $ 19,731,377

Interest 315,379 279,951 250,243 227,156 208,480 814,948 458,087 92,312 $ 2,646,556

Total 2,305,793 2,150,109 2,061,205 1,782,996 1,460,223 5,755,458 4,326,450 2,535,699 $ 22,377,933

Subscription Liabilities: The City has entered into various agreements for subscription based information technology agreements (SBITA) that have been recorded at the present value of the expected subscription payments as of the date of inception. The agreements have varying contractual dates. The discount rate is based on the average of the City’s Municipal Market Data (MMD) rate. The discount rate assigned to each lease is the average MMD rate at the time of signing and the number of years of the agreement. The City has seven SBITA agreements, these agreements are for a variety of applications that serve the City. The details of these agreements are as follows: Agreement description/purpose Public Safety Lease Tracking Time and Attendance IT Servers Public Safety and Communication Public Safety Equipment Support Grant Tracking Year Ending June 30, 2026 2027 2028 2029

End Dates 6/14/2026 1/31/2028 3/31/2028 6/30/2026 6/30/2026 8/31/2026 10/13/2028 Principal Interest Total 112,836 3,202 116,038 71,421 1,537 72,958 39,904 246 40,150 1,288 7 1,295 $ 225,450 $ 4,992 $ 230,442

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan Plan Description: The City and School Board contribute to the VRS, a qualified defined benefit retirement plan to provide pension benefits for all permanent full-time general and public safety employees of the City and the Schools. The VRS is an agent-multiple employer defined benefit plan (City and School Board) and a cost-sharing multiple employer plan (School Board) administered by VRS.

Benefits Provided: All full-time, salaried permanent (professional) employees are automatically enrolled in VRS upon employment. Benefits vest after five years of service credit, and are eligible to retire with an unreduced or reduced benefit when they meet the age and service requirements of the plan. Members can earn one month of service credit for each month they are employed and contributions are deposited into the VRS. Members are eligible to purchase prior public service, active duty military service, certain periods of leave and previously refunded VRS service as credit in their plan. The VRS also provided Death and disability benefits. Title 51.1 of the Code of Virginia (1950), as amended assigns the authority to establish and amend benefit provisions to the General Assembly of Virginia. The System issues a publicly available Annual Comprehensive Financial Report (ACFR) that includes financial statements and required supplementary information for the plans administered by VRS. A copy of that report may be obtained from the VRS website at http://www.varetire.org/Pdf/publications/2023-Annual-Report.pdf or obtained by writing to the Chief Financial Officer at P.O. Box 2500, Richmond, VA 23218-2500. The System administers different benefit structures (called plans) for the City and School Board employees: Plan 1, Plan 2, and the Hybrid Retirement Plan (“Hybrid”) each of these have different provisions with a specific eligibility and benefit structure. See Table below for details.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) Benefit Terms, and Contribution Requirements Plan 1 Plan 2 Description (Employees Description (Employees Covered): Covered):

Hybrid Description (Employees Covered):

Plan 1 is a defined benefit plan. The benefit is based on a member’s age, creditable service and average final compensation at retirement using a formula. Employees are eligible for Plan 1 if their membership date is before July 1, 2010, and they were vested as of July 1, 2013.

Plan 2 is a defined benefit plan. The retirement benefit is based on a member’s age, creditable service and average final compensation at retirement using a formula. Employees are eligible for Plan 2 if their membership date is on or after July 1, 2010 or their membership dates is before July 1, 2010 and they were not vested as of January 1, 2013.

The Hybrid Plan combines the features of a defined benefit and a defined contribution plan. Members hired on or after January 1, 2014 are on this plan, as well as any eligible Plan 1 or Plan 2 members who opted into the plan during the special election period.

Non-hazardous duty members were allowed to make an irrevocable decision to opt into the Hybrid plan during a special elections window held January 1 through April 30, 2014.

Eligible members in Plan 2 were allowed to make an irrevocable decision to opt into the Hybrid plan during a special election window held January 1 through April 30, 2014.

- The defined benefit is based on the member’s age, creditable service and average final compensation. - The benefit from the defined contribution component of the plan depends on the member and employer contributions made to the plan and the investment performance of those contributions.

Note 9. Defined Benefit Pension Plan (Continued)

Retirement Eligibility: Retirement Eligibility: Retirement Eligibility: Normal: Normal: Normal: - Non-hazardous duty members are eligible - Non-hazardous duty members are eligible - Defined Benefit Component: members are for an unreduced benefit at age 65 with for an unreduced benefit at their normal eligible for an unreduced benefit at their at least 5 years of service credit or age 50 Social Security retirement age with at least normal Social Security retirement age with at with at least 30 years of service credit. 5 years of service credit, or when their least 5 years of service credit, or when their - Hazardous duty members are eligible for an combined age and service credit equals 90. combined age and service credit equals 90. unreduced benefit beginning at age 60 with at - Hazardous duty members’ eligibility is the - Defined Contribution Component: Members least 5 years of service credit, or age 50 with same as Plan 1. are eligible to receive distributions upon at least 25 years of service credit. leaving employment Early Retirement with reduced benefit: Early Retirement with reduced benefit: Early Retirement with reduced benefit: - Non-hazardous duty members may retire - Non-hazardous duty members may - Defined Benefit Component: Members early with a reduced benefit at age 55 with retire early with a reduced benefit at age are eligible for a reduced benefit at age 60 at least 5 years of service credit, or age 60 with at least 5 years of service credit. with at least 5 years of creditable service. 50 with at least 10 years of service credit. - Hazardous duty members’ eligibility is the - Defined Contribution Component: Members - Hazardous duty members may retire early same as Plan 1. are eligible to receive distributions upon with a reduced benefit at age 50 with at least leaving employment 5 years of service credit. Vesting: Vesting: Vesting: - Members become vested when they have at - Defined Benefit Component: Same as Plan 1. least 5 years of creditable service - Defined Contribution Component: After 2 years a member is 50% vested in employer contributions, after 3 years 75% vested in employer contributions and after 4 years 100% vested. - Members are 100% vested in contributions they make.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) Benefit Terms, and Contribution Requirements Plan 1 Plan 2 Types of Benefits: Types of Benefits: The VRS Basic Benefit is a lifetime monthly Same as Plan 1. benefit based on a retirement multiplier as a percentage of the member’s final compensation multiplied by the member’s total service credit at retirement. Members can elect the Basic Benefit, the Survivor Option, a Partial Lump- Sum Option Payment (PLOP) or the Advance Pension Option. If any option other than the basic benefit is selected a retirement reduction factor is applied.

Hybrid Types of Benefits: Defined Benefit Component: Same as Plan 1. Defined Contribution Component: The benefit is based on contributions made by the member and any matching contributions made by the City, plus net investment earnings on those contributions.

Elements of the Pension Formula: Elements of the Pension Formula: Elements of the Pension Formula: Average Final Compensation: Average Final Compensation: Average Final Compensation: - The average of the 36 consecutive months - The average of the 60 consecutive months - Same as Plan 2 for the Defined Benefit of highest compensation as a covered of highest compensation as a covered Component. employee. employee. Service Retirement Multiplier: - Non-hazardous duty members is 1.7% Sheriffs and regional jail superintendents is 1.85% - Hazardous duty members other than sheriffs and regional jail superintendents is 1.7% or 1.85% as elected by the employer. Creditable Service: - Earned for each month employed in a covered position Cost-of-Living Adjustments: - Matches the first 3% increase in the Consumer Price Index for all Urban consumers (CPI-U) and half of any additional increase (up to 4%) up to a maximum of 5% - Eligible July 1 of the 2nd calendar year of retirement. Contribution Requirements: Employees are required to contribute 5% of their compensation toward the plan, through a pre-tax salary deduction. Beginning July 1, 2012 for members in the plan, employers were required to begin making the employee pay the 5% member contribution. This could be phased in over a period of up to 5 years, the employer is required to provide a salary increase equal to the amount of the increase in the employee-paid member contribution. All employees will be paying the full 5% by July 1, 2016.

Service Retirement Multiplier: Service Retirement Multiplier: - For service earned, purchased or - Defined Benefit Component: 1.0% granted prior to 1/1/13, and hazardous - For members who opted into this plan, the duty members it is the same as Plan1. retirement multiplier for their previous plan - For service earned, purchased or granted will be used for service credited in those after 1/1/13 for non-hazardous duty members plans. it is 1.65% Creditable Service: Creditable Service: - Same as Plan 1 - Defined Benefit Component: Same as Plan 1 Cost-of-Living Adjustments: Cost-of-Living Adjustments: - Matches the first 2% increase in the - Defined Benefit Component: Same as Plan 2 CPI-U and half of any additional increase - Eligibility is the same as Plans 1 and 2. (up to 2%) for a maximum of 3%. Defined C ontribution Eligibility is the same as Plan 1. Component: Not applicable Contribution Requirements: Same as Plan 1.

Contribution Requirements: A member’s retirement benefit is funded through mandatory and voluntary contributions made by the member and the employer to both the defined benefit and the defined contribution components of the plan. Mandatory contributions are based on a percentage of the employee’s creditable compensation and are required from both the member and the employer. Additionally, members may choose to make voluntary contributions to the defined contribution component of the plan and the employer is required to match those voluntary contributions according to specified percentages.

The employer makes a separate actuarially determined contribution to VRS for all covered employees.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) Retirees or beneficiaries currently receiving benefits: Inactive Members: Vested inactive members Non-vested inactive members LTD Inactive members active elsewhere in VRS Total inactive members Active Employees: Total

School Board - Non City Teacher Plan 892 230 250 512 481 1,243 1,341 3,476

47 160 1 72 280 330 840

Contributions: Members and employers are required to contribute to the retirement plans as provided by Title 51.1 of the Code of Virginia (1950), as amended. The member contribution is 5% of compensation contributed by members or employers. The City and School Board are required to contribute the remaining amounts necessary to fund the pension plans using the entry age normal actuarial cost method adopted by the VRS Board of Trustees. The System’s actuary computed the amount of contributions to be provided by the City and School Board. The contribution rates for fiscal year 2025 were based on the actuary’s valuation as of June 30, 2022. In addition, the actuary computed a separate contribution requirement for the School Board for the teacher cost-sharing pool using the same valuation date. The City’s contractually required contribution rate for the year ended June 30, 2025 was 13.88% of covered employee compensation. This rate was based on actuarially determined rate from an actuarial valuation as of June 30, 2023. This rate, when combined with employee contributions, was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employer contributions to the pension plan for the years ended June 30, 2025 and June 30, 2024, respectively were $14,360,900 and $11,866,022. The School Board’s contractually required contribution rate for the Teacher Retirement Plan for the year ended June 30, 2025 was 14.21% of covered employee compensation. This rate was based on actuarially determined rate from an actuarial valuation as of June 30, 2023. The School Board’s (non-teacher plan) contractually required contribution rate for the year ended June 30, 2025 was 5.17% of covered employee compensation. This rate was based on actuarially determined rate from an actuarial valuation as of June 30, 2023. This rate, when combined with employee contributions, was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Based on the provisions of section 51.1-145 of the Code of Virginia, as amended, the contributions were funded at 100% of the actuarial rate for the year ended June 30, 2025. Contributions to the Teacher Retirement pension plan for the years ended June 30, 2025 and June 30, 2024, respectively were $14,916,263 and $15,909,644. Contributions to the Non-Teacher pension plan for the years ended June 30, 2025 and June 30, 2024, respectively were $569,717 and $379,260. In June 2023, the Commonwealth made a special contribution of approximately $147.5 million to the VRS Teacher Employee Plan. This special payment was authorized by Chapter 2 of the Acts of Assembly of 2022, Special Session I, as amended by Chapter 769, 2023 Acts of Assembly Reconvened Session, and is classified as a nonemployer contribution.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) Actuarial Assumptions The most recent actuarial valuation to determine the net pension liabilities for the City and School Board was prepared as of June 30, 2023. The total pension liability was determined based on that actuarial valuation using updated actuarial assumptions applied to all periods included in the measurement, and rolled forward to the measurement date of June 30, 2024. The total pension liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Actuarial Cost Method Investment Rate of Return, net of pension plan investment expense, including inflation * Inflation Projected Salary Increases Mortality Rates (% of deaths assumed to be service related)

General City and School Board (nonteacher) Employees Entry Age Normal

Public Safety Employees Entry Age Normal

School Board Teacher Retirement Plan Employees Entry Age Normal

6.75% 2.50% 3.5% - 5.35% 15%

6.75 2.50% 3.5% - 4.75% 45%

6.75 2.50% 3.5% - 5.95% N/A

General City and School Board (non-teacher) employees: Pre-Retirement: Pub-2010 Amount Weighted Safety Employee Rates projected generationally, 95% of rates for males; 105% of rates for female set forward 2 years. Post-Retirement: Pub-2010 Amount Weighted Safety Healthy Retiree Rates projected generationally; 110% of rates for males; 105% of rates for females set forward 3 years. Post-Disablement: Pub2010 Amount Weighted General Disabled Rates projected generationally; 95% of rates for males set back 3 years; 90% of rates for females set back 3 years. Beneficiaries and Survivors: Pub-2010 Amount Weighted Safety Contingent Annuitant Rates projected generationally; 110% of rates for males and females set forward 2 years. Mortality Improvement: Rates projected generationally with Modified MP-2020 Improvement Scale that is 75% of the MP-2020 rates. Public Safety Employees: Pre-Retirement: Pub-2010 Amount Weighted Safety Employee Rates projected generationally with a Modified MP-2020 Improvement Scale; 95% of rates for males; 105% of rates for females set forward 2 years. Post-Retirement: Pub-2010 Amount Weighted Safety Healthy Retiree Rates projected generationally with a Modified MP-2020 Improvement Scale; 110% of rates for males; 105% of rates for females set forward 3 years. Post - Disablement: Pub-2010 Amount Weighted General Disabled Rates projected generationally with a Modified MP-2020 Improvement Scale; 95% of rates for males set back 3 years; 90% of rates for females set back 3 years. Beneficiaries and Survivors: Pub-2010 Amount Weighted Safety Contingent Annuitant Rates projected generationally with a Modified MP-2020 Improvement Scale; 110% of rates for males and females set forward 2 years.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) Mortality Improvement: Rates projected generationally with Modified MP-2020 Improvement Scale that is 75% of the MP-2020 rates. School Board Teacher Retirement Plan employees: Pre-Retirement: Pub-2010 Amount Weighted Teacher Employee Rates projected generationally; 110% of rates for males. Post-Retirement: Pub-2010 Amount Weighted Teacher Healthy Retiree Rates projected generationally; males set forward 1 year; 105% of rates for females. Post - Disablement: Pub-2010 Amount Weighted Teachers Disabled Rates projected generationally; 110% of rates for males and females. Beneficiaries and Survivors: Pub-2010 Amount Weighted Teachers Contingent Annuitant Rates projected generationally. Mortality Improvement: Rates projected generationally with Modified MP-2020 Improvement Scale that is 75% of the standard rates. The actuarial assumptions used in the June 30, 2023 valuation were based on the results of an actuarial experience study for the period from July 1, 2016 through June 30, 2020. Except the change in the discount rate which was based on VRS Board action effective as of July 1, 2021. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

General City and School Board (non-teacher) Public Safety Employees Employees: - Update Mortality Rates to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020.

- Updated mortality rates to PUB2010 public sector mortality tables. Increased disability life expectancy. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020.

- Adjusted retirement to better fit experience for Plan1; set separate rates based on experience for Plan2/Hybrid; changed final retirement age.

- Adjusted Retirement Rates to better fit experience and changed final retirement age from 65 to 70.

- Adjusted withdrawal rates to better fit experience at each year age and service through 9 years of service

- Decreased withdrawal rates and changed from rates based on age and service to rates based on service only to better fit experience and to be more consistent with Locals Largest 10 Hazardous Duty.

- No change in disability rates

- No change in Line of Duty Disability rates.

- No change in discount rate of 6.75%

School Board Teacher Retirement Plan Employees: ● Updated mortality rates to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP2020. ● Adjusted retirement rates to better fit experience for Plan 1; set separate rates based on experience for Plan2/ Hybrid; changed final retirement age from 75 to 80 for all. ● Adjusted withdrawal rates to better fit experience at each year age and service through 9 years of service. City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) ● No change in disability rates. ● No change in discount rate of 6.75%.

Net Pension Liability The net pension liability (NPL) for the teacher retirement plan is calculated separately for each system and represents that particular system’s total pension liability, less that system’s fiduciary net position. As of June 30, 20245, NPL amounts for the VRS Teacher Employee Retirement Plan is as follows (amounts expressed in thousands):

Total Pension Liability Plan Fiduciary Net Position Employer’s Net Pension Liability Plan Fiduciary Net Position as a Percentage of the Total Pension Liability

Teacher Employee Retirement Plan $ 57,574,610 47,467,405 $ 10,107,205

82.45%

Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension System investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class (Strategy) Public Equity Fixed Income Credit Strategies Real Assets Private Equity MAPS - Multi-Asset Public Strategies PIP - Private Investment Partnership Cash Total

Long-Term Asset Allocation 32.00% 16.00% 16.00% 15.00% 15.00% 3.00% 1.00% 2.00% 100.00% Inflation Expected arithmetic nominal return**

Arithmetic Long-Term Expected Rate of Return 6.70% 5.40% 8.10% 7.20% 8.70% 4.65% 8.00% 3.00%

Weighted Average Long-Term Expected Rate of Return* 2.14% 0.86% 1.30% 1.08% 1.31% 0.24% 0.08% 0.06% 7.07% 2.50% 9.57%

Discount Rate The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that System member contributions will be made per the VRS Statutes and the employer contributions will be made in accordance with the VRS funding policy at rates equal to the difference between actuarially determined contribution rates adopted by the VRS Board of Trustees and the member rate. Consistent with the phased-in funding provided by the General Assembly for state and teacher employer contributions; political subdivisions were also provided with an opportunity to use an alternate employer

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) contribution rate. For the year ended June 30, 2025, the alternate rate was the employer contribution rate used in FY2012 or 100% of the actuarially determined employer contribution rate from the June 30, 2023, actuarial valuations, whichever was greater. From July 1, 2024 on, participating employers are assumed to continue to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return was applied to all periods of projected benefit payments to determine the total pension liability.

Changes in the Net Pension Liability

Balances at June 30, 2023 Service Cost Interest Differences between expected and actual experience Contributions - employer Contributions - employee Net investment income Benefit payments including refunds of employee contributions Administrative expenses Other changes Net Change

City Pension Plan Total Pension Plan Fiduciary Net Net Pension Liability Position Liability $ 411,798,291 $ 366,112,055 $ 45,686,236 11,233,054 - 11,233,054 27,913,187 - 27,913,187 11,857,835 - 11,857,835 - 11,434,266 (11,434,266) - 4,149,434 (4,149,434) - 35,473,958 (35,473,958) (19,005,297) (19,005,297) - (226,885) 226,885 - 7,347 (7,347) 31,998,779 31,832,823 165,956

Balances at June 30, 2024

$ 443,797,070 $ 397,944,878 $ 45,852,192

School Board (non-teacher) Plan Total Pension Plan Fiduciary Net Net Pension Liability Position Asset $ 36,292,578 $ 36,399,185 $ (106,607) 852,018 - 852,018 2,438,342 - 2,438,342 (97,432) - (97,432) - 378,652 (378,652) - 481,665 (481,665) - 3,499,305 (3,499,305) (2,042,026) (2,042,026) - (24,087) 24,087 - 685 (685) 1,150,902 2,294,194 (1,143,292)

Balances at June 30, 2024

$ 37,443,480

$ 38,693,379

$ (1,249,899)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate In accordance with the requirements of GAAP, regarding the sensitivity of the net pension liability (rounded) to changes in the discount rate, the table below presents the net pension liability for the City and School Board calculated using the discount rate of 6.75%, as well as what it would be at a discount rate 1.00% lower and 1.00% higher.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) City’s net pension liability (Asset) $ School Board: Non-Teacher Plan Net Pension Liability (Asset) Teacher Plan Net Pension Liability $

1% Lower Discount Rate (5.75%) (6.75%) 104,752,399 $ 45,852,192 3,171,327 164,150,616 $

1% Higher (7.75%) $ (2,576,923)

(1,249,899) 88,357,338 $

(4,965,596) 26,285,056

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2025, the City recognized pension expenses of $11,438,614 and the School Board Non-teacher plan recognized pension expense of $474,775. At June 30, 2025, the School Board Teacher Retirement Plan reported a liability of $088,357,338 for its proportionate share of the Net Pension Liability. The Net Pension Liability was measured as of June 30, 2024 and the total pension liability used to calculate the Net Pension Liability was determined by an actuarial valuation performed as of June 30, 2023 and rolled forward to the measurement date of June 30, 2024. The School Board’s proportion of the Net Pension Liability was based on the School Board Teacher Retirement Plan’s actuarially determined employer contributions to the pension plan for the year ended June 30, 2024 relative to the total of the actuarially determined employer contributions for all participating employers. At June 30, 2024, the School Board Teacher Retirement Plan’s proportion was 0.94128% as compared to 0.92798% at June 30, 2023. For the year ended June 30, 2025, School Board’s Teacher Retirement plan recognized pension expense of $8,127,567. Since, for the School Board’s Teacher Retirement Plan there was a change in proportionate share between measurement dates, a portion of the pension expense was related to deferred amounts from changes in proportion and from differences between employer contributions and the proportionate share of employer contributions. At June 30, 2025, the City and School Board reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between employer contributions and proportionate share of contributions Contributions to the plan subsequent to the measurement date Total

City Pension Plan Deferred Deferred Outflows of Inflows of Resources Resources

School Board Non-teacher Plan Deferred Deferred Outflows of Inflows of Resources Resources

School Board Teacher Plan Deferred Deferred Outflows of Inflows of Resources Resources

$ 12,245,899 $ 740,669 $ 486,403 $ 58,459 $ 15,328,752 $ 1,819,339 - - - - 1,603,804 -

- 10,124,966 - 1,016,360 - 12,162,441

- - - - 1,924,157 1,980,835 14,360,900 - 569,717 - 14,916,263 $ 26,606,799 $ 10,865,632 $ 1,056,120 $ 1,074,819 $ 33,772,976 $ 15,962,615

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 9. Defined Benefit Pension Plan (Continued) $14,360,900, $569,717, and $14,916,263 reported as deferred outflows of resources related to pensions resulting from the City’s, School Board (non-teacher) plan and School Board’s Teacher Retirement plan (respectively) contributions subsequent to the measurement date will be recognized as a reduction of the respective Net Pension Liability in the year ended June 30, 2026. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: School Board School Board Teacher City Pension Plan Non-teacher Plan Plan $ (2,878,118) $ (446,102) $ (5,825,469) 7,333,186 272,342 7,372,509 (897,946) (198,048) 2,263,714 (2,176,858) (216,608) (916,656) - - $ 1,380,267 $ (588,416) $ 2,894,098

Years Ended June 30: 2026 2027 2028 2029 2030 Total

Pension Plan Fiduciary Net Position Detailed information about the VRS Teacher Retirement Plan’s Fiduciary Net Position is available in the separately issued VRS ACFR, which may be downloaded from the VRS website at http://www.varetire.org/Pdf/Publications/2023annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA 23218-2500.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 10. Other Postemployment Benefits Program – Medical Plan Plan Description OPEB Trust The City has established an irrevocable trust pursuant to Section 15.21544 of the Code of Virginia, as amended for the purpose of accumulating and investing assets to fund the City and School Board Medical Plan OPEB. In order to participate in the Virginia Pooled OPEB Trust Fund, the City has established a local Finance Board to become a Participating Employer in the Trust Fund. The Trust Fund provides administrative, custodial, and investment services to the Participating Employers in the Trust Fund. The OPEB Trust meets the criteria in GASB Statement No. 74 for fiduciary reporting. Plan assets are legally protected from the creditors of the City and School Board and may be used only to provide benefits to plan members and beneficiaries and to pay reasonable administrative costs of the plan. The Virginia Pooled OPEB Trust Fund is a separate legal entity. The City’s trust interest is reported as a fiduciary fund in the CIty’s ACFR. The financial statements of the OPEB Trust are prepared in accordance with GASB Statement No. 74, while the City’s employer-level disclosures are prepared in accordance with GASB Statement No. 75. The Trust Fund issues a separate report, which can be obtained by requesting a copy from the plan administrator, Virginia Municipal League (“VML”) at P.O. Box 12164, Richmond, Virginia 23241. OPEB Medical Plan The City and School Board provide postemployment medical coverage for retired employees through a single employer defined benefit plan. The plan is established under the authority of City Council and the School Board, which may also amend the plan as deemed appropriate. Participants in the City’s OPEB plans must have attained 15 years and five years of full-time consecutive service. Participants in the School Board’s OPEB plans must have attained 20 years of full-time service. Participants in the City’s and School Board’s OPEB plans must have been enrolled in the group health (City or School Schools) insurance plan for the 24 months prior to their retirement date to be eligible. Coverage ceases at age 65 for the school board employees. The amount the city contributes towards the retiree’s health insurance will be equal to 50 percent of the current city contribution for the lowest-tier employee-only coverage. For employees hired prior to July 1, 2017, the city shall make its contribution towards Medicare supplement coverage only for all city retirees who are age 65 or older. The city shall not include a city retiree’s spouse who is age 65 or older in any group health or Medicare supplement insurance program. For employees hired on or after July 1, 2017, the city will not make a contribution towards the retiree’s health insurance when the retiree becomes eligible for Medicare.

Plan Membership Number of Employees by Class: Inactive members and beneficiaries currently receiving benefits Active Employees: Total

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

City

163 1,325 1,488

School Board

61 2,033 2,094

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 10. Other Postemployment Benefits Program – Medical Plan (Continued) Contribution Requirements The City and School Board establish employer contribution rates for plan participants as part of the budgetary process each year and determines how the plan will be funded each year and whether it will partially fund or fully fund the plan. The City and School Board currently fund postemployments health care benefits on a pay-as-you-go basis and as contributions to their respective Trust Funds. The annual cost of OPEB is the Actuarially Determined Contribution (ADC). The City and School Board elected to pre-fund OPEB liabilities. The City contributes the ADC, an amount actuarially determined in accordance with GAAP. The ADC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over open amortization period not to exceed thirty years. The School Board made no contributions to the plan subsequent to its measurement date. For the fiscal year ended June 30, 2025, the City contributed $1,852,159 toward OPEB costs representing claims paid on behalf of retirees, net of premiums paid by retirees. The School Board contributed $558,621 toward OPEB costs representing claims paid on behalf of retirees.

Plan Investments The Board of Trustees has the responsibility for managing the investment process. In fulfilling this responsibility, the Board will establish and maintain investment policies and objectives. Within this framework, the Board will monitor and evaluate the investment managers, bank custodian, and other parties, to monitor whether operations conform to the guidelines and actual results meet objectives. If necessary, the Board is responsible for making changes to achieve this. The investment objective of the fund is to maximize total long-term rate of return with reasonable risk by seeking capital appreciation and, secondarily, principal protection. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized below: Asset Class Domestic Equity International Equity Emerging Markets Equity Long/Short Equity Private Equity Fixed Income Real Estate Total

Target Allocation 31.00% 13.00% 5.00% 6.00% 10.00% 20.00% 15.00%

100.00%

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 10. Other Postemployment Benefits Program – Medical Plan (Continued) There are no investments in any one organization that represent 5 percent or more of the OPEB Trust’s fiduciary net position. For the year ended June 30, 2025, and June 30, 2024 the annual money-weighted rate of return on investments, net of investment expense was 9.05% and 9.36% respectively. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Net OPEB Asset for the Plan The City’s Net OPEB Asset was measured as of its fiscal year end June 30, 2025, based on a valuation date of April 1, 2024. The School Board Net OPEB Asset was measured as of its fiscal year end of December 31, 2024 based on a valuation date of February 1, 2024. Because the fiduciary net position exceeds the total OPEB liability, the City reports a net OPEB Asset. The components of the Plans’ net OPEB Asset were as follows: Net OPEB Asset Total OPEB liability Plan fiduciary net position Net OPEB asset Fiduciary net position as a percent of total OPEB asset

City School Board $ 41,740,843 $ 14,951,438 55,144,978 22,791,561 $ (13,404,135) $ (7,840,123) 132.11% 152.44%

Actuarial Assumptions and Other Inputs Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The total OPEB asset for the City as part of the actuarial valuation was performed as of April 1, 2024 for the City and February 1, 2024 for the School Board. The following actuarial assumptions were used for purposes of measuring both the plan’s fiduciary net position (GASB 74) and the employer’s net OPEB asset (GASB 75). Note 10. Other Postemployment Benefits Program – Medical Plan (Continued)

Investment rate of return Actuarial Cost Method Inflation Rate Projected salary increases Real Wage Growth Rate Health care cost trend rate: Initial Ultimate (year of ultimate trend rate)

City 6.75% Entry Age Normal, level percentage of pay. 2.50% 3.5% - 5.35% 1.00%

School Board 6.75% Entry Age Normal, level percentage of pay. 2.50% 3.5% - 5.95% 1.00%

6.00% 3.94%

6.00% 4.00%

Mortality rates were based on amount–weighted Pub-2010 mortality tables with generationally project mortality improvements using Scale MP-2021. Generationally projected healthy and disabled mortality rates reflect differences for males and females, and for general and safety (i.e. enhanced hazardous duty) employment classifications.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 10. Other Postemployment Benefits Program – Medical Plan (Continued) Discount Rate The discount rate used to measure the total OPEB asset was 6.75%. The projection of cash flows used to determine the discount rate was performed in accordance with GAAP. The projection’s basis was an actuarial valuation performed as of April 1, 2024 for the City and February 1, 2024 for the School Board. The fiduciary net position projections are based upon the Plan’s financial status on the measurement date, the indicated set of methods and assumptions, and the requirements of GAAP. The long-term expected rate of return on plan investments is 6.75%. The long-term expected rate of return was applied to the periods of projected benefit payments and it is not anticipated that the plan’s assets will be exhausted. The expected municipal bond rate was not applied to determine the discount rate.

Sensitivity of the Total OPEB Asset to Changes in the Discount Rate The net OPEB asset is shown below as calculated at the current discount rate and current health care cost trend rate as indicated and also calculated using rates 1% lower and 1% higher. The City’s net OPEB asset for the plan was based on a valuation date of April 1, 2024 and rolled forward to a measurement date of June 30, 2025 for the City. The School Board had a valuation date of February 1, 2024 and with a measurement date of December 31, 2024. Net OPEB Asset analysis using discount rate: 1% Decrease Current Discount 1% Increase (5.75%) Rate (6.75%) (7.75%)

City’s Plan $ (8,328,648) $ (15,290,569) $ (20,951,608) School Board $ (6,836,257) $ (7,840,123) $ (8,780,016) Net OPEB Asset analysis using the health care cost trend rate: 1% Decrease Current Discount 1% Increase Ultimate Trend (2.94%) Rate (3.94%) (4.94%) City’s Plan $ (21,912,115) $ (15,290,569) $ (6,968,581) School Board $ (9,219,202) $ (7,840,123) $ (6,268,585)

Sensitivity of the Net OPEB Asset – for the Employer The net OPEB asset is shown below as calculated at the current discount rate and current health care cost trend rate as shown in the tables below and also as calculated using rates 1% lower and 1% higher. Net OPEB Asset analysis using discount rate: 1% Decrease Current Discount 1% Increase (5.75%) Rate (6.75%) (7.75%) (6,779,704) $ (13,404,135) $ (18,783,246) (6,836,257) $ (7,840,123) $ (8,780,016)

City’s Plan School Board

$ $

Ultimate Trend City’s Plan

Net OPEB Asset analysis using the health care cost trend rate: 1% Decrease Current Discount 1% Increase (3.00%) Rate (4.00%) (5.00%) $ (19,363,478) $ (13,404,135) $ (5,939,345)

Ultimate Trend School Board

1% Decrease Current Discount (3.00%) Rate (4.00%) (9,219,202) $ (7,840,123) $

1% Increase (5.00%) (6,268,585)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 10. Other Postemployment Benefits Program – Medical Plan (Continued) Changes in Net OPEB Asset

Balances at June 30, 2023 Service Cost Interest Differences between expected and actual experience Contributions - employer Net investment income Changes in Assumptions Benefit payments including refunds of employee contributions Net Change Balances at June 30, 2024

Balances at December 31, 2023 Service Cost Interest Differences between expected and actual experience Contributions - employer Net investment income Benefit payments including refunds of employee contributions Administrative expenses Net Change Balances at December 31, 2024

City Plan Plan Fiduciary Net Total OPEB Liability Position Net OPEB Asset $ 40,401,010 $ 50,407,682 $ (10,006,672) 920,508 - 920,508 2,688,336 - 2,688,336

(3,762,680) - - 2,888,856

- 1,395,187 4,737,296 -

(3,762,680) (1,395,187) (4,737,296) 2,888,856

(1,395,187) 1,339,833

(1,395,187) 4,737,296

(3,397,463)

$ 41,740,843 $ 55,144,978 $ (13,404,134) School Board Plan Plan Fiduciary Net Total OPEB Liability Position Net OPEB Asset $ 13,942,067 $ 22,438,642 $ (8,496,575) 824,971 - 824,971 916,432 - 916,432

(173,411) - -

- (1,071,087) 1,991,205

(173,411) 1,071,087 (1,991,205)

(558,621) - 1,009,371

(558,621) (8,578) 352,919

8,578 656,452

14,951,438 $

22,791,561 $

(7,840,123)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 10. Other Postemployment Benefits Program – Medical Plan (Continued) The City and School Board reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Differences between expected and actual experience Change in assumptions Net difference between projected and actual earnings on plan investments Contributions to the plan subsequent to measurement date Total

Deferred Outflows of Resources

City

School Board Deferred Deferred Outflows of Inflows of Resources Resources

Deferred Inflows of Resources

1,489,866 $ 6,679,622

15,792,931 $ 318,951

919,439 $ 502,743

2,472,603 -

225,067

478,477

1,852,159 10,246,714 $

- 16,111,882 $

- 1,900,659 $

2,472,603

Deferred outflows in the amount of $1,852,159 for the City, related to contributions subsequent to the measurement date will be recognized as a reduction of the OPEB asset in the year ended June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources will be recognized in OPEB expense in the future fiscal years and noted below: City School Board OPEB Plan OPEB Plan 2026 (1,735,311) (301,445) 2027 (532,731) 446,961 2028 (2,678,234) (477,384) 2029 (2,541,655) (211,175) 2030 (10,940) (28,901) Thereafter (218,456) $ (7,717,327) $ (571,944) Year Ended June 30:

Additional information on changes in net OPEB (Asset) Liability, related ratios, and employer contributions can be found in the required supplementary information following the notes to the financial statements.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS State Plans Plan Description Group Life Insurance Program: All full-time, salaried permanent employees of the City and School Board, including the teachers are automatically covered by the VRS GLI Program upon employment. This plan is administered by the VRS, along with pensions and other OPEB plans, for public employer groups in the Commonwealth of Virginia. In addition to the basic group life insurance benefit, members are also eligible to elect additional coverage for themselves as well as a spouse or dependent children through the optional group life insurance program. Since this is a separate and fully insured program, it is not included as part of the GLI.

Line of Duty Act Program: All paid employees and volunteers in hazardous duty positions in the City and hazardous duty employees who are covered under the VRS, the State Police Officer’s retirement system (SPORS), or the Virginia Law Officers Retirement System (VaLORS) are automatically covered by LODA. VRS is responsible for managing the assets of the program as required by statute. Participating employers made contributions to the program beginning in FY2012. The employer contributions are determined by the VRS actuary using anticipated program costs and the number of covered individuals associated with all participating employers.

Employee Virginia Local Disability Program: All full-time, salaried permanent (professional) employees of the School Board who are in the VRS Hybrid Retirement Plan benefit structure and whose employer has not elected to opt out of the VRS-sponsored program are automatically covered by the VLDP. This plan is administered by VRS, along with pension and other OPEB plans, for eligible public employer groups in the Commonwealth of Virginia. School divisions are required by Title 51.1 of the Code of Virginia, as amended, to provide short-term and long-term disability benefits for their hybrid employees either through a local plan or through the VLDP.

Teacher and Non-Teacher Employee Health Insurance Credit Programs: All full-time, salaried permanent (professional) employees of public school divisions are automatically covered by the VRS Teacher and NTHIC Programs. This plan is administered by the System, along with pension and other OPEB plans, for public employer groups in the Commonwealth of Virginia. Members earn one month of service credit toward the benefit for each month they are employed and for which their employer pays contributions to VRS. The health insurance credit is a tax-free reimbursement in an amount set by the General Assembly for each year of service credit against qualified health insurance premiums retirees pay for single coverage, excluding any portion covering the spouse or dependents. The credit cannot exceed the amount of the premiums and ends upon the retiree’s death. The specific information for each of the plans, including eligibility, coverage and benefits are set out in the table below:

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) Group Life Insurance Eligible Employees:

Line of Duty Act Eligible Employees:

GLI was established July 1, 1960, for state employees, teachers and employees of political subdivision that elect the program. Basic group life insurance coverage is automatic upon employment. Coverage ends for employee who leave their position before retirement eligibility or who take a refund of their contributions and interest.

Paid employees and volunteers in hazardous duty position in the City and hazardous duty employees who are covered under the VRS, the State Police Officer’s retirement system (SPORS), or the Virginia Law Officers Retirement System (VaLORS) are automatically covered by LODA.

Benefit Amounts: Natural Death Benefit: equal to the employees’ covered compensation rounded to the next highest thousand then doubled. Accidental Death Benefit: double the natural death benefit Other Benefit Provisions: other benefits provided under specific circumstances, including, accidental dismemberment, safety belt benefit, repatriation benefit, felonious assault andaccelerated death benefit option.

Benefit Amounts: Death: A one-time payment made to the beneficiary of a covered individual. Amounts vary as follows: $100,000 when a death occurs as a direct or proximate result of performing duty as of 1/1/06 or after, or $25,000 when the cause of death is attributed to one of the applicable presumptions and occurred earlier than 5 years after retirement. An additional $20,000 benefit is payable when certain members of the National Guard and U.S Military reserves are killed in action after 10/7/01

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued)

Health Insurance Credit Programs Eligible Employees:

Virginia Local Disability Program Eligible Employees:

THIC: Retired teacher employees who retire with at least 15 years of service credit. Enrolled automatically upon employment if they are full-time permanent professional salaried employees covered under VRS. NTHIC: Full-time permanent salaried employees who are covered under the VRS pension plan. Benefit Amounts: THIC: At retirement: Monthly benefit is $4.00 per year of servers per month with no cap on the benefit amount. Disability retirement: If retire on disability or go on long-term disability under VLDP the benefit is either: (a) $4.00 per month, multiplied by twice the amount of service credit, or (b) $4.00 per month, multiplied by the amount of service earned had the employee been active until age 60, whichever is lower.

Eligible employees are enrolled automatically upon employment. Teachers and other full-time permanent (professional) salaried employees of public school divisions covered under VRS

Benefit Amounts: Short-Term Disability: Beginning after a 7 calendar-day waiting period from the first day of disability. Employees are eligible for non-work related coverage after one year of continuous participation with their current employer. During the first 5 years of continuous participation employees are eligible for 60% of their predisability income. Once the eligibility period is satisfied employees are eligible for higher income replacement levels.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) Benefit Amounts: The benefit amounts are subject to a reduction factor. The amount reduced by 25% on January 1 following one calendar year of separation, and an additional 25% reduction on each January 1 until it reached 25% of its original value.

Benefit Amounts: Health Insurance: beginning July1, 2017 the health insurance benefits are managed through the Virginia department of human resource management and modeled after the state employee plans and provide consistent, premium-free continued health plan coverage for LODA-eligible disabled individuals, survivors and family members. Individuals must continue to meet eligibility requirements as defined by the Act.

Group Life Insurance Line of Duty Act Minimum benefit and COLA: Program Notes: For members with at least 30 years of creditable service there is a minimum benefit set and is increased annually based on the VRS Plan 2 cost of living adjustment.

Benefit Amounts: NTHIC: At retirement: Monthly benefit is $1.50 per year of service per month with a maximum benefit of $45.00 per month. Disability retirement: For employees who retire on disability or go on long¬term disability under the VLDP, the monthly benefit is $45.00 per month.

Benefit Amounts: Long-Term Disability: Begins after 125 workdays of short-term disability. Eligible if member is unable to work at all or less than 20 hours per week. Members will receive 60% of their pre¬disability income and will be offset by any worker’s compensation benefit.

Health Insurance Credit Programs

Virginia Local Disability Program

Program Notes: The monthly HIC benefit cannot exceed the individual premium amount. Employees who retire after being on long-term disability under VLDP must have at least 15 years of service credit to qualify for HIC as a retiree.

Program Notes: If the member is aged 60 or older will be eligible for the benefit provided they remain medically eligible.

Plan Membership – School Board Non-Teacher HIC Single Employer Plan School Board Membership (as of the valuation data) Number of Inactive members and beneficiaries currently receiving benefits 107 Active Employees 330 Total 437

Contribution Requirements Group Life Insurance Program: The contribution requirements for GLI are governed by §51.1-506 and §51.1-508 of the Code of Virginia, as amended, but may be impacted as a result of funding provided to state agencies and school divisions by the Virginia General

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) Assembly. The total rate for GLI was 1.34% of covered employee compensation. This was allocated into an employee and an employer component using a 60/40 split. The employee component was 0.80% (1.34% X 60%) and the employer component was 0.54% (1.34% X 40%). Employers may elect to pay all or part of the employee contribution; however, the employer must pay all of the employer contribution. Each employer’s contractually required employer contribution rate for the year ended June 30, 2025 was 0.54% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2021. The actuarially determined rate, when combined with employee contributions, was expected to finance the costs of benefits payable during the year, with an additional amount to finance any unfunded accrued liability. Contributions to GLI from the City were $448,459 and $456,844 for the years ended June 30, 2025 and June 30, 2024, respectively. Contributions to GLI for the School Board were $1,375,227 and $1,493,479 for the years ended June 30, 2025 and June 30, 2024 respectively.

Line of Duty Act Program: The contribution requirements for LODA are governed by §9.1-400.1 of the Code of Virginia, as amended, but may be impacted as a result of funding provided to state agencies by the Virginia General Assembly. Each employer’s contractually required employer contribution rate for LODA for the year ended June 30, 2025 was $1,015 per covered full-time-equivalent employee. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2021 and represents the pay-as-you-go funding rate and not the full actuarial cost of the benefits under the program. The actuarially determined pay-as-you-go rate was expected to finance the costs and related expenses of benefits payable during the year. Contributions to the LODA program from the City were $518,665 and $518,665448,823 for the years ended June 30, 2025 and June 30, 2024, respectively.

Virginia Local Disability Program: The contribution requirement for active Hybrid employees is governed by §51.1-1178(C) of the Code of Virginia, as amended, but may be impacted as a result of funding provided to school divisions by the Virginia General Assembly. Each school division’s contractually required employer contribution rate for the year ended June 30, 2025 was 0.47% of covered employee compensation for employees in the VLDP Teacher plan and 0.83% of covered employee compensation for the non-teacher employees covered in the VLDP. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2021. The actuarially determined rate was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions from the School Board to the VLDP were $256,510 and $240,602 for the years ended June 30, 2025 and June 30, 2024, respectively.

Teacher and Non-Teacher Employee Health Insurance Credit Programs: The contribution requirement for active employees is governed by §51.1-1401(E) of the Code of Virginia, as amended, but may be impacted as a result of funding provided to school divisions by the Virginia General Assembly. Each school division’s contractually required employer contribution rate for the year ended June 30, 2025 was 1.21% of covered employee compensation for employees in the THIC Program and 0.81% for employees in the NTHIC Program. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2021 for the THIC plan and June 30, 2021 for the NTHIC plan. The actuarially determined rate was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions from the school division to the VRS THIC Program were $1,268,262 and $1,208,608 for the years ended June 30, 2025 and June 30, 2024, respectively. Contributions from the school division to the VRS NTHIC program were $89,259 and $87,760 for the years ended June 30, 2025 and June 30, 2024, respectively.

GLI, THIC, NTHIC and VLDP: The long-term expected rate of return on the System’s investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of System’s investment expense and inflation) are developed for each major asset class. These ranges are combined to produce

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized below:

Asset Class (Strategy) Public Equity Fixed Income Credit Strategies Real Assets Private Equity MAPS - Multi-Asset Public Strategies PIP - Private Investment Partnership Cash Total

Long-Term Asset Allocation 34.00% 15.00% 14.00% 14.00% 16.00% 4.00% 2.00% 1.00% 100.00%

Arithmetic Long-Term Expected Rate of Return 6.14% 2.56% 5.60% 5.02% 9.17% 4.50% 7.18% 1.20%

Inflation Expected arithmetic nominal return**

Weighted Average Long-Term Expected Rate of Return* 2.09% 0.38% 0.78% 0.70% 1.47% 0.18% 0.14% 0.01% 5.75%

2.50% 8.25%

* The above allocation provides a one-year return of 8.25%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected return for the system, stochastic projections are employed to model future returns under various economic conditions. These results provide a range of returns over various time periods that ultimately provide a median return of 7.14%, including expected inflation of 2.50%. **On June 15, 2023, the VRS Board elected a long-term rate of return of 6.75%, which was roughly at the 45th percentile of expected long term results of the VRS fund asset allocation at that time, providing a median return of 7.14%, including expected inflation of 2.5%.

LODA: The long-term expected rate of return on LODA OPEB Program’s investments was set at 3.97% for this valuation. Since LODA is funded on a current-disbursement basis, it is not able to use the VRS Pooled Investments 6.75% assumption. Instead, the assumed annual rate of return of 3.97% was used since it approximates the risk-free rate of return. This Single Equivalent Interest Rate (SEIR) is the applicable municipal bond index rate based on the Bond Buyer General Obligation 20-year Municipal Bond Index as of the measurement date of June 30, 2024. The net OPEB liability (NOL) for the GLI, HIC, LODA and VLDP represents the programs’ total OPEB liability determined in accordance with GAAP, less the associated fiduciary net position. As of the measurement date of June 30, 2024, NOL amounts for the four programs are as follows (in thousands):

Total OPEB liability Plan fiduciary net position Net OPEB Liability Plan fiduciary net position as a percentage of the total OPEB liability

City and School - GLI $ 4,196,055 3,080,133 $ 1,115,922

City - LODA $ 398,395 4,841 $ 393,554

School - THIC $ 1,475,471 264,054 $ 1,211,417

School - VLDP $ 10,672 10,007 $ 665

73.41% 1.22% 17.90% 93.77%

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) The total OPEB liabilities are calculated by the System’s actuary and the plan’s fiduciary net position is reported in the System’s financial statements. The net OPEB liabilities are disclosed in accordance with the requirements of GAAP in the System’s notes to the financial statements and required supplementary information.

Actuarial Methods and Assumptions The total GLI, THIC, NTHIC LODA and VLDP, OPEB liabilities were based on actuarial valuations as of June 30, 2023, using the Entry Age Normal actuarial cost method and the following assumptions, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2024.

City LODA

School, THIC, NTHIC and VLDP

6.75%

3.86%*

6.75%

n/a n/a 2.50%

7.00%-4.75% 5.25%-4.75% 2.50%

n/a n/a 2.50%

3.5% - 5.35% 3.5% - 4.75% 3.5% - 5.95%

n/a n/a n/a

3.5% - 5.35% 3.5% - 4.75% 3.5% - 5.95%

City and School - GLI Investment rate of return Health Care cost trend rate: Under age 65 Age 65 and older Inflation Rate Projected salary increases: Locality - general Locality - hazardous duty Teachers

*LODA: Since LODA is funded on a current-disbursement basis, the assumed annual rate of return of 3.97% was used since it approximates the risk-free rate of return. Mortality Rates are as follows for all plans: Mortality Rates - Teachers: Pre-Retirement: Pub-2010 Amount Weighted Teachers Employee Rates projected generationally; 110% of rates for males. Post-Retirement: Pub-2010 Amount Weighted Teachers Healthy Retiree Rates projected generationally; males set forward 1 year; 105% of rates for females. Post-Disablement: Pub-2010 Amount Weighted Teachers Disabled Rates projected generationally; 110% of rates for males and females. Beneficiaries and Survivors: Pub-2010 Amount Weighted Teachers Contingent Annuitant Rates projected generationally. Mortality Improvement Scale: Rates projected generationally with Modified MP-2020 Improvement Scale that is 75% of the MP-2020 rates. Mortality rates - General Employees: Pre-Retirement: Pub-2010 Amount Weighted General Employee Rates projected generationally; males set forward 2 years; 105% of rates for females set forward 3 years.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) Post-Retirement: Pub-2010 Amount Weighted General Healthy Retiree Rates projected generationally; 95% of rates for males set forward 2 years; 95% of rates for females set forward 1 year. Post-Disablement: Pub-2010 Amount Weighted General Disabled Rates projected generationally; 110% of rates for males set forward 3 years; 110% of rates for females set forward 2 years. Beneficiaries and Survivors: Pub-2010 Amount Weighted General Contingent Annuitant Rates projected generationally. Mortality Improvement Scale: Rates projected generationally with Modified MP-2020 Improvement Scale that is 75% of the MP-2020 rates. Mortality rates - Hazardous Duty and Public Safety Employees: Pre-Retirement: Pub-2020 Amount Weighted Safety Employee Rates projected generationally; 95% of rates for males; 105% of rates for females set forward 2 years. Post-Retirement: Pub-2010 Amount Weighted Safety Healthy Retiree rates projected generationally; 110% of rate for males; 105% of rates for females set forward 3 years. Post-Disablement: Pub-2010 Amount weighted General Disables Rates projected generationally; 95% of rates for males set back 3 years; 90% of rates for females set back 3 years. Beneficiaries and Survivors: Pub-2010 Amount Weighted Safety Contingent Annuitant Rates projected generationally; 110% of rates for males and females set forward 2 years. Mortality Improvement Scale: Rates projected generationally with Modified MP-2020 Improvement Scale that is 75% of the MP-2020 rates. The actuarial assumptions used in the June 30, 2022 valuation were based on the results of an actuarial experience study for the period from July 1, 2016 through June 30, 2020. Except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2021. Changes to the actuarial assumptions as a result of the experience study are as follows:

Mortality Rates (Preretirement, postretirement healthy, and disabled)

Retirement Rates

General Employees Update to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP- 2020

Teachers Update to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP- 2020

Adjusted rates to better fit experience for Plan1; set separate rates based on experience for Plan 2/Hybrid; changed final retirement age from 75 to 80 for all.

Adjusted rates to better fit experience for Plan 1, set separate rates based on experience for Plan 2/Hybrid; changed final retirement age from 75 to 80 for all.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Hazardous Duty Employees Update to PUB2010 public sector mortality tables. Increase disability life expectancy. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP2020 Adjusted rates to better fit experience and changed final retirement age from 65 to 70.

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) Withdrawal Rates

Disability Rates Salary Scale Line of Duty Disability Discount Rate

General Employees Adjusted rates to better fit experience at each age and service decrement through 9 years of service No change No change No change No change

LODA: Mortality Rates (Pre-retirement, post-retirement healthy, and disabled)

Retirement Rates

Disability Rates Salary Scale Line of Duty Disability

Teachers Adjusted rates to better fit experience at each age and service decrement through 9 years of service No change No change n/a No change

Hazardous Duty Employees Decreased rates and changed from rates based on service only to better fit experience and to be more consistent with Locals top 10 Hazardous duty. No change No change No change No change

Public Safety Employees Update to PUB201 public sector mortality tables. Increased disability life expectancy. For future mortality improvements. Replace load with a modified Mortality Improvement scale MP-2020. Adjusted rates to better fit experience and changed final retirement age from 65 to 70. Decreased rates and changed from rates based on age and service to rates based on service only to better fit experience and to be more consistent with Locals Top 10 Hazardous Duty. No change No change No change

Discount Rate Group Life Insurance Program: The discount rate used to measure the total GLI OPEB liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that member contributions will be made per the VRS guidance and the employer contributions will be made in accordance with the VRS funding policy at rates equal to the difference between actuarially determined contribution rates adopted by the VRS Board of Trustees and the member rate. Through the fiscal year ending June 30, 2024, the rate contributed by the entity for the GLI OPEB will be subject to the portion of the VRS Board certified rates that are funded by the Virginia General Assembly which was 113% of the actuarially determined contribution rate. From July 1, 2023 on, employers are assumed to continue to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the GLI OPEB’s fiduciary net position was projected to be available to make all projected future benefit payments of eligible employees. Therefore the long-term expected rate of return was applied to all periods of projected benefit payments to determine the total GLI OPEB Liability.

Line of Duty Act Program: The discount rate used to measure the total LODA OPEB liability was 3.97%. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made per the VRS Statutes and that they will be made in accordance with the VRS funding policy and at rates equal to the actuarially determined contribution rates adopted by the VRS Board of Trustees. Through the fiscal year ending June 30, 2023, the rate contributed by

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) participating employers to the LODA OPEB Program will be subject to the portion of the VRS Board- certified rates that are funded by the Virginia General Assembly.

Virginia Local Disability Program: The discount rate used to measure the total School Board Employee VLDP OPEB was 6.75%. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made in accordance with the VRS funding policy at rates equal to the actuarially determined contribution rates adopted by the VRS Board of Trustees. Through the fiscal year ending June 30, 2023, the rate contributed by the school division for the VRS VLDP will be subject to the portion of the VRS-Board certified rates that are funded by the Virginia General Assembly. From July 1, 2023 on, all agencies are assumed to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the VLDP OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return was applied to all periods of projected benefit payments to determine the total VLDP OPEB liability.

Teacher and Non-Teacher Employee Health Insurance Credit Program: The discount rate used to measure the total Teacher and Non-Teacher Employee HIC OPEB was 6.75%. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made in accordance with the VRS funding policy and at rates equal to the actuarially determined contribution rates adopted by the VRS Board of Trustees and the member rate. Through the fiscal year ending June 30, 2023 the rate contributed by each school division for the VRS Teacher and Non-Teacher Employee Health Insurance Credit Program will be subject to the portion of the VRS Board-certified rates that are funded by the Virginia General Assembly. From July 1, 2023, on, all agencies are assumed to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the Teacher Employee HIC OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return was applied to all periods of projected benefit payments to determine the total Teacher and Non-Teacher Employee HIC OPEB liability. School Board Non-Teacher HIC Plan Fiduciary Total OPEB Net Net Pension Liability Position OPEB Liability Balances at June 30, 2024 $ 547,755 $ 174,784 $ 372,971 Service Cost 8,001 - 8,001 Interest 36,827 - 36,827 Differences between expected and actual experience (41,499) - (41,499) Contributions - employer - 87,570 (87,570) Net investment income - 20,514 (20,514) Benefit payments including refunds of employee contributions (20,344) (20,344) Administrative expenses - (318) 318 Net Change (17,015) 87,422 (104,437)

Balances at June 30, 2024

530,740 $

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

262,206 $

268,534

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) Sensitivity of the Net OPEB Liability The following present the employer’s proportionate share of the Net OPEB liabilities using the discount rate for each plan (the current rate shown below) as well as what the NOL would be using a discount rate that is one percentage point lower or one percentage point higher. Net OPEB Liability (asset) analysis using Discount rate: 1% Decrease Current Discount 1% Increase (5.75%) Rate (6.75%) (7.75%) City - GLI $ 5,798,157 $ 3,728,407 $ 2,671,106 School - GLI $ 7,531,652 $ 4,843,102 $ 3,177,722 School - THIC $ 12,258,104 $ 10,778,729 $ 9,524,824 School - NTHIC $ 327,704 $ 268,534 $ 218,242 School - VLDP $ 486 $ (61,136) $ (114,939) 1% Decrease Current Discount 1% Increase (2.97%) Rate (3.97%) (4.97%) City - LODA $ 12,990,373 $ 11,718,054 $ 10,624,001 Because the LODA Program contains a provisions for the payment of health insurance premiums, the liabilities are also impacted by the health care trend rates. The following presents the covered employer’s proportionate share of the net LODA OPEB liability using health care trend rate of 7.00% decreasing to 4.75%, as well as what the covered employer’s proportionate share of the net LODA OPEB liability would be if it were calculated using a health care trend rate that is one percentage point lower (6.00% decreasing to 3.75%) or one percentage point higher (8.00% decreasing to 5.75%) than the current rate: 1% Decrease Medical Trend 1% Increase (6.00% (7.00% (8.00% decreasing to decreasing to decreasing to 3.75%) 4.75%) 5.75%) City - LODA $ 9,982,225 $ 11,718,054 $ 13,847,939

OPEB Liabilities, Expenses, Deferred Outflows of Resources and Deferred Inflows of Resources At June 30, 2025, the City and School Board reported liabilities for the four various OPEB plans in the amount shown in the table on the next page for their proportionate share of the OPEB plans. The OPEB Liabilities were measured as of June 30, 2024 and the total OPEB liabilities used to calculate the Net OPEB Liabilities were determined by an actuarial valuation as of June 30, 2023, and rolled forward to the measurement date of June 30, 2024. The City and School Board’s GLI, THIC and VLDP OPEB liabilities were based on the covered employer’s actuarially determined employer contributions to the plans for the year ended June 30, 2024, relative to the total of the actuarially determined employer contributions for all participating employers. The City’s proportion of the Net LODA OPEB liability was based on the City’s actuarially determined pay-as-you-go employer contributions to the LODA OPEB plan for the year ended June 30, 2023 relative to the total of the actuarially determined pay-as-you go employer contributions for all participating employers. At June 30, 2024, the City and School Board’s respective proportions of the various programs as compared to the proportions for June 30, 2023 are shown in the table below.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) City - GLI Net OPEB Liability

City - LODA

School - GLI

School - THIC

School - VLDP School - NTHIC

$ 3,728,407 $ 11,718,054 $ 4,843,102 $ 10,778,729 $ (61,136) $ 268,534

TOTALS FOR CITY AND SCHOOL

$15,446,461

$15,829,229

6/30/24 Proportionate share of contributions

0.33411% 2.97749% 0.43400% 0.93270% 4.51917%

n/a

6/30/23 Proportionate share of contributions

0.33820% 2.64735% 0.43433% 0.92149% 4.35302%

n/a

For the year ended June 30, 2025, the City and School Board OPEB expense for the various plans as shown below. Since there was a change in proportionate share between measurement dates a portion of the VRS Teacher Employee VLDP and LODA Net OPEB expense was related to deferred amounts from changes in proportion. OPEB Plan: City - GLI City - LODA Total

OPEB Expense 56,840 1,566,776 1,623,616

School - GLI School - THIC School - VLDP Total

100,583 748,170 184,467 1,033,220

OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended June 30, 2025, the City and School Board recognized OPEB expense in the amount of ($1,200,051) and ($335,284) respectively. The aggregate amount of OPEB Expense for the City and School Board plans, including the local trust and Virginia Retirement System (VRS) plans are as follows: City OPEB School OPEB Expense Expense Local Trust (1,200,051) (335,284) VRS Plans: (note 11) GLI 56,840 100,583 LODA 1,566,776 HIC - 748,170 VLDP - 184,467 TOTAL: 423,565 697,936

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 11. Other Postemployment Benefits Program – VRS Plans (Continued) At June 30, 2025, the City and School Board reported deferred outflows of resources and deferred inflows of resources related to the OPEB plans from the following sources: City - GLI Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experince Net difference between projected and actual earnings on plan investments Changes in assumptions Changes in proportion Employer contribution subsequent to measurement date Total

School - NTHIC Deferred Deferred Outflows of Inflows of Resources Resources

$ 588,056 $ 91,072 $ 407,716 $ 2,862,367 $ - $ 193,416 - 314,266 - 38,736 - 3,178 21,252 184,772 2,160,111 2,360,072 23,482 39,929 88,634 1,710,527 648,497 - 448,459 - 518,665 - 89,259 $ 1,097,696 $ 678,744 $ 4,797,019 $ 5,909,672 $ 112,741 $ 196,594 School Board - GLI Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experince Net difference between projected and actual earnings on plan investments Changes in assumptions Changes in proportion Employer contribution subsequent to measurement date Total

City - LODA Deferred Deferred Outflows of Inflows of Resources Resources

School Board - THIC Deferred Deferred Outflows of Inflows of Resources Resources

School Board - VLDP Deferred Deferred Outflows of Inflows of Resources Resources

$ 763,868 $ 118,300 $ - $ 510,670 $ 106,265 $ 14,842 - 408,222 - 38,340 - 8,173 27,606 240,014 185,686 - 9,092 638 73,252 161,759 306,385 410,503 1,726 11,757 1,375,227 - 1,268,262 - 256,510 $ 2,239,953 $ 928,295 $ 1,760,333 $ 959,513 $ 373,593 $ 35,410

The amounts shown in the totals earlier reported as deferred outflows of resources related to the OPEB from the City and School Boards contributions subsequent to the measurement date will be recognized as a reduction of the Net OPEB Liability in the fiscal year ending June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the OPEB will be recognized in the OPEB expense in future reporting periods as follows: 2026 2027 2028 2029 2030 Thereafter

City - GLI City - LODA School - GLI School - THIC plan School - NTHIC plan School - VLDP (186,756) (107,473) (253,284) (113,763) (55,778) 4,348 59,373 (89,186) 67,678 (99,483) (59,594) 12,440 4,965 (154,671) (6,944) (128,060) (51,039) 8,173 42,404 (186,183) 54,350 (110,230) (6,701) 7,433 50,506 (346,557) 74,631 (14,184) - 9,864 - (747,247) - (1,722) - 39,415 $ (29,508) $ (1,631,317) $ (63,569) $ (467,442) $ (173,112) $ 81,673

Plan Fiduciary Net Positions Detailed information about the various programs’ Fiduciary Net Position is available in the separately issued VRS 2024 ACFR, which may be downloaded from the VRS website at http://www.varetire.org/Pdf/Publications/2023annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218- 2500.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 12. Commitments and Contingencies Federally Assisted Programs: The City participates in a number of federally assisted grant programs. Although the City has been audited in accordance with the provisions of the Uniform Guidance, these programs remain subject to financial and compliance audits by the grantors or their representatives. Such audits could lead to requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grant. Based on prior experience, City management believes such disallowances, if any, will not be significant.

Construction Commitments: The City has authorized expenditures for capital additions and construction of various governmental, stormwater, grant (ARPA), and utility capital projects. At June 30, 2025, projects expected to be completed at various dates through 2025 had a total unexpended balance of $81,474,744 (governmental), $2,244,974 (stormwater), $1,796,725 (grant – ARPA) and $10,988,007 (utility).

Encumbrances: The City has the following encumbrances as of June 30, 2025: Road Capital Special Revenue Non-Major Internal General Maintenance Projects Governmental Utility Enterprise Service Fund Fund Fund Funds Fund Fund Funds $ 6,422,423 $ 3,885,150 $ 81,474,774 $ 710,304 $ 11,547,817 $ 3,632,613 $ 2,175,112

Litigation: There are various lawsuits pending against the City, one of which have a potential range of loss up to $1,000,000. There are no significant lawsuits pending against the School Board. These and other claims outstanding against the City and School board, in the opinion of management after consulting with legal counsel, will not materially affect the City or School Board’s financial position.

Note 13. Risk Management The City and School Board are exposed to various risks of loss related to the following: torts; theft of damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City and School Board participate with other localities in a public entity risk pool, the Virginia Municipal League, for their coverage of property damage. The City and School Board pay an annual premium to the pools for its general insurance coverage. The agreement for the formation of the pools provides that the pools will be self-sustaining through member premiums. The City and School Board continue to carry commercial insurance for all other risks of loss. There have been no significant reductions in insurance coverage from the prior year. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three years.

Self-Insurance – City: The City is self-insured for a portion of its health insurance risks up to $125,000 per occurrence. An external insurance policy provides coverage over the specified amount up to $1,000,000 per individual for life. Claims payable reported in the Risk Management Fund at June 30, 2025 consists of all current self-insured claims payable, including an estimate of incurred but not reportable claims amounting to $6,460,518, the current portion of which is $2,941,927. Claims payable for health insurance are based on current enrollment and benefits and historical experience.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 13. Risk Management (Continued) Claims payable for workers’ compensation and property and liability are based on insurance coverage and specific claims, which have presented. Following is a summary of changes in claims payable for the fiscal years ended June 30, 2025 and 2024: Beginning Claims and Claim Ending Balance Reserves Payments Balance Workers’ Compensation 2025 $ 3,499,265 $ 1,835,953 $ 1,366,627 $ 3,968,591 2024 $ 2,968,179 $ 1,365,799 $ 834,713 $ 3,499,265 Property and Liability 2025 $ 882,229 $ 1,218,213 $ 837,266 $ 1,263,177 2024 $ 318,472 $ 1,310,943 $ 747,186 $ 882,229 Health Insurance 2025 $ 1,520,300 $ 19,227,186 $ 19,518,736 $ 1,228,750 2024 $ 948,454 $ 15,373,996 $ 14,802,150 $ 1,520,300

Self-Insurance – School Board: The School Board is self-insured for workers’ compensation benefits. Charges are made to the School Operating, Grants, and Food Service Funds as approved by City Council in the annual operating budgets. Any excess charges are reflected as nonspendable balance for workers’ compensation claims in the School Operating Fund. At June 30, 2025, $225,000 of fund balance was allocated for purposes of funding future claims. Claims are paid by a third-party administrator acting on behalf of the School Board under terms of a contractual agreement. Administrative fees are included within the provisions of that agreement. The plan pays all claims up to $600,000 for each covered accident. Any claims exceeding $600,000 for each covered accident are paid by specific stop-loss insurance provided by a third-party insurance company. As of June 30, 2025, the workers’ compensation benefit obligation consisted of $713,195 in reported unpaid claims and estimated incurred but not reported claims.

Workers’ Compensation Self-Insurance Coverage – School Board Changes in the balance of claims liabilities during the years ended June 30, 2025 and 2024, are as follows: Beginning Balance Workers’ Compensation 2025 2024

Claims and Reserves

Claim Payments

Ending Balance

$ 650,960 $ 775,430 $ 713,195 $ 713,195 $ 627,978 $ 795,165 $ 772,183 $ 650,960

Health Insurance Self-Insurance Coverage – School Board Claims are paid by a third-party administrator acting on behalf of the School Board under terms of a contractual agreement. The plan pays all claims up to $125,000 for each participant. Any claims exceeding $125,000 for each participant are paid by specific stop-loss insurance provided by a third-party insurance company. As of June 30, 2025, School Operating Fund prepaids of $95,000 were held for purposes of funding the School Board’s future claims liabilities. As a result, $285,122 of the School Operating Fund balance is allocated for payment of future claims liabilities.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 14. Subsequent Events On September 11, 2025, the City issued $33,950,000 of authorized Tax-Exempt General Obligation, with maturity dates of February 1, 2046. These bonds were issued to finance capital projects approved in the FY2026 Capital Improvements Plan.

Note 15. Fund Balances Fund Balance is classified as nonspendable, restricted, committed, assigned and/or unassigned based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the government funds. The constraints placed on the general fund balance and other governmental funds balance are presented below:

Nonspendable: Inventories Total Nonspendable Restricted for: Public Safety Judicial Administration Capital Outlay: Roadway Projects Schools Public Facilities Recreation facilities Public Safety Various Grants Tax District Services Total Restricted Committed to: Total Committed Assigned to: General Government Administration Public Works Capital Projects Debt Service Various Grants Total Assigned Unassigned Total Fund Balance

General Fund

Capital Projects

Road Maintenance

Consolidated Grants

Debt Service

Nonmajor Governmental Funds

$ 63,762 $ - $ - $ - $ - $ 98,866 63,762 - - - - 98,866 $ 1,625,324 - - - - 365,511 - - - - 336,913 - 28,627,163 - - - - 15,624,218 - - - - 1,898,376 - - - - 8,090,865 - - - - 7,725,742 - - - - - - 119,654 - - - - - - 6,467,382 1,990,835 61,966,364 - 119,654 - 6,804,295 - - - - - $ - - - - - 4,844,797 - - 13,129,778 - - 114,470,806 25,272,092 - - - - - - - 537,377 - - - 10,286,711 - 114,470,806 25,272,092 13,129,778 10,286,711 537,377 4,844,797 124,092,466 - - - - $ 240,617,869 $ 87,238,456 $ 13,129,778 $ 10,406,365 $ 537,377 $ 11,747,958

The City Council has adopted a financial policy goal that unassigned fund balance should be 20% of the following fiscal years governmental funds budget. The adopted policy also established a budget stabilization fund the policy states that any excess amounts over the 20% will be dedicated to the budget stabilization fund, until that reaches 2.5% of the budgeted revenue and then to a capital reserve fund, both of these reserves are reported as committed fund balance. The amounts in the budget stabilization fund can only be drawn with the approval of City Council in an emergency situation, that would result in increased expenditures over budgeted amount or significant shortfalls in revenue.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial FinancialSection Section

NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 16. Tax Abatement Agreements As of June 30, 2025, the City provides tax abatement through two programs -- the land use program and the rehabilitated structures program. The Land use program provides for a reduction in the assessed value for land preservation with property devoted to agricultural, horticultural, forest or open space under Code of Virginia sections 58.1-3229 thru 3230, 58.1-3235 and 58.1-3237 as well as City Ordinance 82-71-77. The property owner must make a 6 year commitment, and must revalidate the use every 6 years. The valuation of the property is determined by the State Land Evaluation Advisory Committee; this process gives the property a reduction in value based on the agricultural use. This reduction in value is used to calculate the real estate tax reduction. If the property owner fails to comply with the requirements of the use, or has a change in use, the property is subject to roll back taxes. This program is considered of significant value to our community by increasing greenspace and preserving the natural resources in our environment. The rehabilitated structures program provides a partial exemption from real estate taxes for qualifying rehabilitated real estate under Code of Virginia sections 58.1-3220 thru 3221 and City Ordinance 82-481- 482. This program provides a significant value to our community by preserving historical structures and decreasing blight. For qualifying properties, the initial increase in the real estate assessment caused by rehabilitation will be excused for 10 years. Upon receipt of an application the Assessor will determine the base value prior to commencement of the rehabilitation. The credit will remain with the property for the term of the exemption. There are separate requirements for residential and commercial properties to qualify for the program. - Residential buildings should be at least 25 years old. The improvements need to increase the assessed value by no less than 40 percent. The total square footage of the building shall not be increased by more than 15 percent. - Commercial/Industrial buildings should be at least 25 years old. The improvements need to increase the assessed value by no less than 60 percent. - For both Residential and commercial/industrial properties, improvements to vacant land and total replacement of structures are not eligible. In order to be eligible all appropriate building permits must have been acquired and an application for exemption must be filed with the City Assessor. Tax Abatement Program Land Use program Rehabilitated Structures

$ $

Amount of Taxes Abated City Wide Downtown Business Real Estate Overlay District 6,091,196 $ 51,807 $ 278,803

Note 17. Future Accounting Standards The GASB has issued the following statements, which are not yet effective. GASB Statement No. 103, Financial Reporting Model Improvements, the primary objective of which is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This statement is effective for the fiscal year ending June 30, 2026. GASB Statement No. 104, Disclosures of Certain Capital Assets, the primary objective of which is to provide users of government financial statements with essential information about certain types of capital assets. This statement is effective for the fiscal year ending June 15, 2026. Management has not yet evaluated the effects, if any, of adopting these standards.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Financial Section NOTES TO THE BASIC FINANCIAL STATEMENTS

Note 18. Restatements of Net Position and Fund Balance Error Corrections

Correction of Due from Component Units During review of accounts receivable, it was discovered that the amount recorded as Due from Schools was incorrect for the fiscal year ended June 30, 2024. There was a $1.6 million decrease in Due from Component Units for this correction. The effect of the error correction on fund balance is outlined in the table below. Correction of Accounts Receivable During review of the Grants Fund activity, it was discovered that the amount recorded as Accounts Receivable was incorrect for the fiscal year ended June 30, 2024. There was a $44,898 decrease in Accounts Receivable for this correction. The effect of the error correction on fund balance is outlined in the table below. Change in accounting principle Adoption of GASB Statement No. 101, Compensated Absences The adoption of GASB Statement No. 101 resulted in the restatement of the City’s Statement of Net Position for fiscal year ended June 30, 2024. There was a $12.6 million increase in the City’s compensated absences liability due to the adoption of this pronouncement. The effect of the change in net position for the primary government is outlined in the tables below for the City and Schools. Reporting Units Affected by Adjustments to and Restatements of Beginning Balances

6/30/2024, as previously reported Error corrections Due from Component Unit-Schools Accounts Receivable Change in accounting principle (GASB 101) 6/30/2024, as adjusted or restated

Governmental Fund Balances Government-Wide Net Position General Consolidated Governmental Business-Type Fund Grants Activities Activities $ 202,863,503 $ 3,567,863 $ 668,683,937 $ 215,480,494 (1,598,311) - (1,598,311) - (44,898) (44,898) - - (10,066,776) (878,004) $ 201,265,192 $ 3,522,965 $ 656,973,952 $ 214,602,490

Net Position 6/30/2024, as previously reported Restatement - change in accounting principle (GASB 101) 6/30/2024, as restated

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Schools $ 86,751,415 (11,166,468) $ 75,584,947

Financial Section

This page intentionall y left blank.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Required Supplementary Information

Financial Section

Exhibit 10

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis General Fund Year Ended June 30, 2025

Revenues General property taxes Real estate Personal property Public service corporations Machinery and tools Payments in Lieu of Taxes Penalties Total general property taxes Other Local Taxes Sales and use Utility tax Communication taxes Business and occupational licenses Motor vehicle license Bank stock Recordation Tobacco Lodging Meals Admission Total other local taxes Revenue from the Commonwealth Noncategorical aid Tax on deeds Total noncategorical aid Categorical aid Commonwealth’s Attorney Commissioner of the Revenue Treasurer Sheriff Circuit Court Clerk Registrar Total categorical aid Other categorical aid Public assistance and welfare administration Parks, recreation and cultural Police Fire and rescue Other Total other categorical aid Total revenue from the commonwealth Revenue from the federal government Categorical aid Public assistance and welfare administration Public Safety

Original Budget

Final Budget

Actual Amounts

Variance with Final Budget

$165,126,233 36,000,000 5,000,000 3,000 1,800,000 207,929,233

$165,186,004 42,134,751 5,643,028 1,592,974 2,506,269 217,063,026

$59,771 6,134,751 643,028 1,592,974 (3,000) 706,269 9,133,793

17,500,000 4,800,000 2,000,000 11,500,000 2,700,000 768,872 1,800,000 1,600,000 1,800,000 15,000,000 200,000 59,668,872

18,964,572 5,338,259 2,267,692 13,385,196 2,903,878 793,612 2,159,572 1,397,435 2,429,980 17,091,726 347,067 67,078,989

1,464,572 538,259 267,692 1,885,196 203,878 24,740 359,572 (202,565) 629,980 2,091,726 147,067 7,410,117

14,492,364 14,492,364

14,760,139 14,760,139

267,775 267,775

1,225,673 253,810 306,662 1,209,916 705,220 106,071 3,807,352

1,225,673 253,810 306,662 1,209,916 708,720 106,071 3,810,852

1,447,989 290,701 290,070 1,272,506 845,641 109,996 4,256,903

222,316 36,891 (16,592) 62,590 136,921 3,925 446,051

4,992,765 242,374 400,000 518,125 6,153,264 24,452,980

4,992,765 242,374 400,000 518,125 6,153,264 24,456,480

4,930,258 266,635 875,753 575,198 (1) 6,647,843 25,664,885

(62,507) 24,261 475,753 57,073 (1) 494,579 1,208,405

5,810,319 -

6,437,939 121,263

627,620 121,263

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 10

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis General Fund Year Ended June 30, 2025 (continued) Parks, recreation and cultural Total categorical aid Total revenue from the federal government Permits, fees, and licenses Animal license Permits and other licenses Total permits, fees, and licenses Fines and forfeitures Revenue from use of money and property Revenue from use of money Revenue from use of property Total revenue from use of money and property Charges for services Court costs Commonwealth’s Attorney fee Police and traffic control Charges for fire and rescue service Charges for other protection Charges for parks and recreation Charges for library Charges for tourism Charges for planning and community development Charges for other services Total charges for services Miscellaneous revenues Recovered Costs Miscellaneous Total miscellaneous revenues Total revenues Expenditures General government administration Legislative City Council Total legislative General and financial administration City Manager Budget and strategic planning City Attorney Human Resources Commissioner of the Revenue City Assessor City Treasurer Finance Purchasing Capital program management Media and community relations

Original Budget 20,000 5,830,319 5,830,319

Final Budget Actual Amounts 20,000 21,163 5,830,319 6,580,365 5,830,319 6,580,365

Variance with Final Budget 1,163 750,046 750,046

25,000 1,434,800 1,459,800 675,000

18,134 1,874,152 1,892,286 6,223,539

(6,866) 439,352 432,486 5,548,539

4,000,000 384,132 4,384,132

14,774,122 158,991 14,933,113

10,774,122 (225,141) 10,548,981

203,787 8,000 35,000 3,197,932 50,000 600,000 15,000 28,000 50 332,500 4,470,269

175,805 8,509 14,604 3,354,862 41,778 1,030,386 12,892 11,075 315,945 4,965,856

(27,982) 509 (20,396) 156,930 (8,222) 430,386 (2,108) (16,925) (50) (16,555) 495,587

1,140,568 526,000 1,666,568 310,537,173

1,140,568 534,143 1,674,711 310,548,816

909,603 658,509 1,568,112 345,970,171

(230,965) 124,366 (106,599) 35,421,355

797,595 797,595

790,287 790,287

7,308 7,308

1,654,126 467,366 1,564,287 2,147,774 1,569,389 2,814,606 2,216,470 2,439,929 510,768 6,148,581 1,452,303

1,654,126 467,366 1,564,287 2,147,774 1,569,389 2,814,606 2,222,470 2,521,199 518,257 6,156,981 1,611,430

1,507,700 315,337 1,519,455 1,968,799 1,522,381 2,693,438 2,222,366 2,462,362 494,776 5,860,587 1,598,445

146,426 152,029 44,832 178,975 47,008 121,168 104 58,837 23,481 296,394 12,985

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 10

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis General Fund Year Ended June 30, 2025 (continued) Local and regional organizations Total general and financial administration Board of Elections Registrar Total board of elections Total general government administration Judicial administration Courts Circuit Court District Court Magistrate Juvenile and Domestic Relations Court Juvenile and Domestic Relations Court Service Unit Circuit Court Clerk Sheriff Commonwealth’s Attorney Total courts Total judicial administration Public safety Police Communications Property seizure program - Federal Police E-ticketing Confiscation program - State DARE Community Safety Fire Western Tidewater Regional Jail Animal shelter and management Emergency services Total public safety Public works Administration Total public works Health and welfare Western Tidewater Health Department Western Tidewater CSB Social Services Comprehensive Services Act Total health and welfare Education Contributions to component unit school board Total education Parks, recreation and cultural Parks and recreation Parks and recreation maintenance

Original Budget 2,091,656 25,077,255

Final Budget Actual Amounts 2,336,438 2,331,749 25,584,323 24,497,395

Variance with Final Budget 4,689 1,086,928

1,313,828 1,313,828 27,188,678

1,313,828 1,313,828 27,695,746

1,249,142 1,249,142 26,536,824

64,686 64,686 1,158,922

361,641 107,246 15,075 19,039 1,454,160 2,158,035 4,465,336 4,158,790 12,739,322 12,739,322

361,641 107,246 15,075 19,039 1,454,160 2,256,001 4,492,336 4,460,437 13,165,935 13,165,935

360,041 65,531 13,084 12,819 1,109,269 2,172,920 4,491,549 3,891,092 12,116,305 12,116,305

1,600 41,715 1,991 6,220 344,891 83,081 787 569,345 1,049,630 1,049,630

37,182,806 3,463,798 48,962,725 4,280,078 1,401,328 22,627 95,313,362

37,424,479 3,467,609 217,241 235,309 195,070 2,850 9,548,213 52,242,773 4,349,538 1,501,933 22,627 109,207,642

37,090,409 3,271,215 13,050 5,577,422 51,820,822 4,349,538 1,434,566 19,148 103,576,170

334,070 196,394 217,241 222,259 195,070 2,850 3,970,791 421,951 67,367 3,479 5,631,472

1,504,380 1,504,380

1,667,771 1,667,771

1,501,921 1,501,921

165,850 165,850

1,300,000 654,686 14,290,669 2,867,511 19,112,866

1,300,000 654,686 14,306,900 3,641,541 19,903,127

1,300,000 654,686 13,072,376 3,628,229 18,655,291

1,234,524 13,312 1,247,836

76,071,903 76,071,903

76,095,429 76,095,429

74,342,362 74,342,362

1,753,067 1,753,067

4,002,342 4,250,879

4,055,785 4,294,600

3,963,403 3,980,142

92,382 314,458

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 10

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis General Fund Year Ended June 30, 2025 (continued) Parks and recreation - recreation Public libraries Total parks, recreation and cultural Community development Planning and community development Economic development Tourism Cooperative extension service Total community development Nondepartmental Salary, fringe benefits and insurance Other Miscellaneous Total nondepartmental Total expenditures

Original Budget 4,599,179 4,690,293 17,542,693

Final Budget Actual Amounts 4,598,679 4,466,038 4,727,817 4,631,078 17,676,881 17,040,661

7,340,866 2,918,228 986,223 87,779 11,333,096

9,113,273 4,614,778 986,223 87,779 14,802,053

8,280,917 3,278,320 977,572 83,342 12,620,151

832,356 1,336,458 8,651 4,437 2,181,902

1,478,773 1,300,000 2,778,773 263,585,073

446,773 233,423 680,196 280,894,780

45,634 418,698 464,332 266,854,017

401,139 (185,275) 215,864 14,040,763

Excess (deficiency) of revenues over (under) expenditures

46,952,100

29,654,036

79,116,154

49,462,118

Other financing sources (uses) Transfers in Transfers out Lease obligations Fund balance Total other financing sources (uses)

3,115,171 (57,378,258) 7,310,987 (46,952,100)

11,477,994 (57,539,228) 16,407,198 (29,654,036)

10,205,687 (56,788,651) 397,064 (46,185,900)

(1,272,307) 750,577 397,064 (16,407,198) (16,531,864)

$32,930,254

Net change in fund balances Reconciliation to Governmental Fund Statement: Total net change in fund balance Encumbrances Total net change in fund balance per statement of revenues, expenditures and changes in fund balance

Variance with Final Budget 132,641 96,739 636,220

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$32,930,254 6,422,423 $39,352,677

Financial Section

Exhibit 11

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Capital Projects Year Ended June 30, 2025 Original Budget

Final Budget

Actual Amounts

Variance with Final Budget

Revenues Revenue from the Commonwealth Revenue from the federal government Miscellaneous revenues Grants anticipated Fund balance Total revenues

$7,077,159 967,056 8,044,215

$11,948,037 604,880 13,354,899 14,804,859 224,482,353 265,195,028

$32,820,208 2,277,741 13,246,098 1,243,212 49,587,259

$20,872,171 1,672,861 (108,801) (14,804,859) (223,239,141) (215,607,769)

Expenditures General government administration Public safety Public works Education Parks, recreation and cultural Transportation Nondepartmental Total expenditures

2,855,000 4,185,000 21,648,738 28,575,000 3,928,089 800,000 4,778,929 66,770,756

7,748,155 27,873,848 160,915,163 59,678,385 34,447,210 1,792,108 24,634,109 317,088,978

4,639,153 21,686,587 89,695,560 52,594,664 26,145,681 436,803 195,198,448

3,109,002 6,187,261 71,219,603 7,083,721 8,301,529 1,355,305 24,634,109 121,890,530

Excess (deficiency) of revenues over (under) expenditures

(58,726,541)

(51,893,950)

(145,611,189)

(93,717,239)

Other financing sources (uses) Transfers in General obligation bonds Premium on bonds Total other financing sources (uses)

23,489,682 35,236,859 58,726,541

16,657,092 35,236,859 51,893,951

25,686,971 10,040,000 196,859 35,923,830

9,029,879 (25,196,859) 196,859 (15,970,121)

$(109,687,359)

$(109,687,360)

$(109,687,359) 81,474,774 $(28,212,585)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 12

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Road Maintenance Fund Year Ended June 30, 2025 Original Budget

Final Budget

Variance with Final Budget

Revenues Revenue from the Commonwealth Permits, fees, and licenses Fines and forfeitures Revenue from use of money and property Charges for services Miscellaneous revenues Fund balance Total revenues

$32,258,475 420,000 250,000 20,000 1,265,605 22,500 2,495,914 36,732,494

$33,184,881 420,000 250,000 20,000 1,265,605 31,030 12,877,405 48,048,921

$33,184,876 582,375 247,568 450,565 964,356 34,763 35,464,503

$(5) 162,375 (2,432) 430,565 (301,249) 3,733 (12,877,405) (12,584,418)

Expenditures Public works Total expenditures

34,730,629 34,730,629

37,675,704 37,675,704

35,900,344 35,900,344

1,775,360 1,775,360

Excess (deficiency) of revenues over (under) expenditures

2,001,865

10,373,217

(435,841)

(10,809,058)

Other financing sources (uses) Transfers out Total other financing sources (uses)

(2,001,865) (2,001,865)

(10,373,217) (10,373,217)

(9,100,911) (9,100,911)

1,272,306 1,272,306

$(9,536,752)

Actual Amounts

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$(9,536,752) 3,885,150 $(5,651,602)

Financial Section

Exhibit 13

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Consolidated Grants Year Ended June 30, 2025 Original Budget Revenues Revenue from the Commonwealth Revenue from the federal government Revenue from use of money and property Charges for services Miscellaneous revenues Fund balance Total revenues

Final Budget

Actual Amounts

Variance with Final Budget

$3,838,280 25,722,673 30,000 304,833 389,948 30,285,734

$2,028,681 12,001,164 1,619,803 13,306 582,396 16,245,350

$(1,809,599) (13,721,509) 1,619,803 (16,694) 277,563 (389,948) (14,040,384)

Expenditures General government administration Judicial administration Public safety Public works Health and welfare Parks, recreation and cultural Community development Nondepartmental Total expenditures

800,000 800,000

7,950 1,844,095 6,092,918 612,208 19,448,659 233,016 2,608,809 238,079 31,085,734

7,950 1,177,334 2,845,945 90,335 15,275,460 141,302 1,537,783 21,076,109

666,761 3,246,973 521,873 4,173,199 91,714 1,071,026 238,079 10,009,625

Excess (deficiency) of revenues over (under) expenditures

(800,000)

(4,830,759)

(4,030,759)

Other financing sources (uses) Transfers in Total other financing sources (uses)

800,000 800,000

561,921 561,921

(238,079) (238,079)

$(4,268,838)

$(4,268,838) 11,152,238 $6,883,400

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 14

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Debt Service Fund Year Ended June 30, 2025 Original Budget Revenues Revenue from use of money and property Total revenues

Final Budget

Variance with Final Budget

$(4,530,977) (4,530,977)

Expenditures Debt Service Total expenditures

34,228,465 34,228,465

33,575,107 33,575,107

653,358 653,358

Excess (deficiency) of revenues over (under) expenditures

(34,228,465)

(38,106,084)

(3,877,619)

Other financing sources (uses) Transfers in Premium on bonds Total other financing sources (uses)

34,228,465 34,228,465

32,941,937 275,229 33,217,166

(1,286,528) 275,229 (1,011,299)

$(4,888,918)

Actual Amounts

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$(4,888,918) $(4,888,918)

Financial Section

Exhibit 15

Required Supplementary Information Schedule of Changes in the City’s Net Pension Liability and Related Ratios Last Ten Fiscal Years 2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

Total Pension Liability: Service cost

$ 11,233,054 $ 10,017,571 $ 8,374,519 $ 8,280,040 $ 8,132,336 $ 7,567,281 $ 7,533,051 $ 7,259,255 $ 7,104,813 $ 7,018,182

Interest

27,913,187 25,927,892 25,051,249 22,671,297 21,574,861 20,613,324 19,140,479 18,400,909 17,359,071 16,812,748

Changes in assumptions

- - - 14,289,977 - 9,986,163 - (690,942) - -

Differences between expected and actual experience

11,857,835 9,941,153 (5,678,453) (2,470,637) 1,274,360 651,344 6,884,588 (2,868,934) 1,303,368 (5,841,034)

Benefit payments including refunds of employee contributions

(19,005,297) (16,375,344) (16,430,793) (15,342,506) (14,133,599) (13,199,609) (11,835,331) (11,234,683) (10,533,021) (9,837,539)

Net Change in Total Pension Liability

31,998,779 29,511,272 11,316,522 27,428,171 16,847,958 25,618,503 21,722,787 10,865,605 15,234,231 8,152,357

Total pension liability - beginning

411,798,291 382,287,019 370,970,497 343,542,326 326,694,368 301,075,865 279,353,078 268,487,473 253,253,242 245,100,885

Total pension liability - ending

$ 443,797,070 $ 411,798,291 $ 382,287,019 $ 370,970,497 $ 343,542,326 $ 326,694,368 $ 301,075,865 $ 279,353,078 $ 268,487,473 $ 253,253,242

Plan Fiduciary Net Position:

Contributions - employer

11,434,266 10,653,472 8,744,931 8,393,781 7,256,065 7,031,636 7,172,294 6,958,618 7,519,618 7,327,510

Contributions - employee

4,149,434 3,888,274 3,524,800 3,350,831 3,361,141 3,260,682 3,241,083 3,248,534 2,962,118 2,851,871

Net investment income

35,473,958 22,426,052 (361,724) 76,007,281 5,284,646 17,460,442 18,158,127 26,854,025 3,824,803 9,496,953

Benefit payments including refunds of employee contributions

(19,005,297) (16,375,344) (16,430,793) (15,342,506) (14,133,599) (13,199,609) (11,835,331) (11,234,683) (10,533,021) (9,837,539)

Administrative expenses

(226,885) (219,410) (217,054) (187,378) (178,495) (171,506) (154,614) (152,890) (132,646) (127,715)

Other changes

7,347 7,770 8,124 7,191 (6,273) (11,042) (16,278) (24,013) (1,608) (2,019)

Net Change in Plan Fiduciary Net Position

31,832,823 20,380,814 (4,731,716) 72,229,200 1,583,485 14,370,603 16,565,281 25,649,591 3,639,264 9,709,061

Plan fiduciary net position – beginning

366,112,055 345,731,241 350,462,957 278,233,757 276,650,272 262,279,669 245,714,388 220,064,797 216,425,533 206,716,469

Plan fiduciary net position – ending

397,944,878 366,112,055 345,731,241 350,462,957 278,233,757 276,650,272 262,279,669 245,714,388 220,064,797 216,425,530

Total net pension liability – beginning

$ 45,686,236 $ 36,555,778 $ 20,507,540 $ 65,308,569 $ 50,044,096 $ 38,796,196 $ 33,638,690 $ 48,422,676 $ 36,827,709 $ 38,384,416

Total net pension liability – ending

$ 45,852,192 $ 45,686,236 $ 36,555,778 $ 20,507,540 $ 65,308,569 $ 50,044,096 $ 38,796,196 $ 33,638,690 $ 48,422,676 $ 36,827,712

Plan fiduciary net position as a percentage of total pension liability

89.67% 88.91% 90.44% 94.47% 80.99% 84.68% 87.11% 87.96% 81.96% 85.46%

Covered payroll

$ 85,577,066 $ 79,565,797 $ 72,395,220 $ 69,212,248 $ 69,343,981 $ 67,256,705 $ 67,302,874 $ 64,085,203 $ 59,144,296 $ 63,639,606

Net pension liability as a percentage of covered payroll 53.58% 57.42% 50.49% 29.63% 94.18% 74.41% 57.64% 52.49% 81.87% 57.87% Per GAAP, Net Pension Liability is reported using the measurement date, which is one year prior to the reporting date.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 16

Required Supplementary Information Schedule of Changes in the School Board’s (Non-Teacher) Net Pension Liability (Asset) and Related Ratios Last Ten Fiscal Years 2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

Total Pension Liability: Service cost

- 846,978 636,507 669,620 687,145 642,823 648,762 668,468 733,174 713,970

Interest

- 2,222,287 2,162,362 2,025,076 1,921,663 1,849,648 1,742,804 1,706,059 1,650,099 1,537,449

Changes in assumptions

- - - 899,673 - 801,043 - (209,695) - -

Differences between expected and actual experience

- 2,107,743 (354,739) (796,573) 148,865 (42,381) 270,296 (515,637) (570,559) 304,251

Benefit payments including refunds of employee contributions

- (1,920,451) (1,613,180) (1,187,694) (1,263,572) (1,147,613) (1,123,413) (1,125,127) (901,450) (991,325)

Net Change in Total Pension Liability

- 3,256,557 830,950 1,610,102 1,494,101 2,103,520 1,538,449 524,068 911,264 1,564,345

Total pension liability - beginning

36,292,578 33,036,021 32,205,071 30,594,969 29,100,868 26,997,348 25,458,899 24,934,831 24,023,567 22,459,222

Total pension liability - ending

36,292,578 36,292,578 33,036,021 32,205,071 30,594,969 29,100,868 26,997,348 25,458,899 24,934,831 24,023,567

Plan Fiduciary Net Position:

Contributions - employer

- 356,879 446,099 381,546 351,095 356,625 395,475 393,829 663,115 477,042

Contributions - employee

- 444,504 409,545 353,744 339,946 341,637 324,119 324,226 314,507 312,739

Net investment income

- 2,250,734 (38,447) 7,850,056 548,651 1,823,319 1,910,589 2,848,179 405,924 1,014,884

Benefit payments including refunds of employee contributions

- (1,920,451) (1,613,180) (1,187,694) (1,263,572) (1,147,613) (1,123,413) (1,125,127) (901,450) (991,325)

Administrative expenses

- (22,782) (22,513) (19,450) (18,730) (18,028) (16,379) (16,505) (14,198) (13,901)

Other changes

- 901 829 741 (679) (1,148) (1,688) (2,534) (171) (215)

Net Change in Plan Fiduciary Net Position

- 1,109,785 (817,667) 7,378,943 (43,289) 1,354,792 1,488,703 2,422,068 467,727 799,224

Plan fiduciary net position – beginning

36,399,185 35,289,400 36,107,067 28,728,124 28,771,413 27,416,621 25,927,918 23,505,850 23,038,123 22,238,899

Plan fiduciary net position – ending

36,399,185 36,399,185 35,289,400 36,107,067 28,728,124 28,771,413 27,416,621 25,927,918 23,505,850 23,038,123

Total net pension liability (asset) – beginning

(106,607) (2,253,379) (3,901,996) 1,866,845 329,455 (419,273) (469,019) 1,428,981 985,444 220,323

Total net pension liability (asset) – ending (106,607) (106,607) (2,253,379) (3,901,996) 1,866,845 329,455 (419,273) (469,019) 1,428,981 985,444 Plan fiduciary net position as a percentage of total pension liability

100.29%

Covered payroll

$ 10,811,181 $ 9,859,115 $ 8,968,585 $ 7,502,569 $ 7,228,784 $ 7,179,989 $ 6,718,706 $ 6,556,134 $ 7,303,711 $ 6,271,733

100.29%

106.82%

112.12%

93.90% 98.87% 101.55%

101.84%

94.27% 95.90%

Net pension liability (asset) as a percentage of covered payroll (0.99%) (1.08%) (25.13%) (52.01%) 25.83% 4.59% (6.24%) (7.15%) 19.57% 15.71%

Per GAAP, Net Pension Liability is reported using the measurement date, which is one year prior to the reporting date.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 17

Required Supplementary Information Schedule of Proportionate Share of Net Pension Liability School Board Teacher Retirement Plan Last Ten Fiscal Years 2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

Employer’s proportion of the net pension liability 0.94128% 0.92798% 0.91479% 0.95117% 0.94792% 0.98036% 0.95078% 0.95248% 0.94584% 0.91814% Employer’s proportionate share of the net pension liability $ 88,357,338

$ 93,792,839

$ 87,093,484

$ 73,840,253

$ 137,947,254

$ 129,020,948

$ 111,812,000

$ 117,136,000

$ 132,551,000

$ 115,560,000

Employer’s covered payroll

$ 91,882,191

$ 84,666,483

$ 83,522,903

$ 82,806,334

$ 81,801,705

$ 76,657,195

$ 73,624,141

$ 71,032,824

$ 68,193,037

$ 99,927,633

Employer’s proportionate share of the net pension liability as a percentage of its covered payroll 88.42% 102.08% 102.87% 88.41% 166.59% 157.72% 145.86% 159.10% 186.61% 169.46% Plan fiduciary net position as a percentage of the total pension liability 84.14% 84.14% 95.51% 88.61% 91.63% 91.63% 94.18% 91.47% 98.09% 102.64%

Note: The amounts presented have a measurement date of the previous fiscal year.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

100

Financial Section

Exhibit 18

Required Supplementary Information Schedule of Contributions Last Ten Fiscal Years

Contractually Required Contribution City Pension Plan: 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

101

Contribution in Relation to Contractually Required Contribution

Contribution Deficiency (Excess)

Employer’s Covered Payroll

Contributions as a % of Covered Payroll

7,662,022 8,035,838 (373,816) 59,144,296 7,068,598 7,030,967 37,631 64,085,203 423,507 7,309,368 (6,885,861) 67,302,574 7,243,547 7,200,075 43,472 67,256,705 7,468,347 7,462,406 5,941 69,343,981 8,630,767 8,610,229 20,538 69,212,248 8,992,126 8,992,126 - 72,395,220 11,027,523 11,027,523 - 79,565,797 11,866,022 11,860,022 6,000 85,577,066 14,360,900 14,360,900 - 95,157,733

13.59% 10.97% 10.86% 10.71% 10.76% 12.44% 12.42% 13.86% 13.86% 15.09%

School Board (non-teacher) Pension Plan: 2016 701,325 701,325 - 7,303,711 2017 586,121 586,121 - 6,556,134 2018 395,660 395,660 - 6,718,706 2019 356,136 356,136 - 7,179,989 2020 350,347 350,347 - 7,228,784 2021 420,144 420,144 - 7,502,569 2022 444,256 444,256 - 8,968,585 2023 356,654 356,654 - 9,859,115 2024 379,260 379,260 - 10,811,181 2025 569,717 569,717 - 11,031,193

9.60% 8.94% 5.89% 4.96% 4.85% 5.60% 4.95% 3.62% 3.51% 5.16%

School Board Teacher Retirement Plan: 2016 11,533,874 11,533,874 - 71,032,824 2017 11,760,656 11,760,656 - 73,624,141 2018 12,290,506 12,290,506 - 76,657,195 2019 12,543,319 12,543,319 - 81,801,705 2020 12,616,285 12,616,285 - 82,806,334 2021 13,881,507 13,881,507 - 83,522,903 2022 13,650,009 13,650,009 - 84,666,483 2023 14,811,454 14,811,454 - 91,882,191 2024 15,909,644 15,909,644 - 99,927,633 2025 14,916,263 14,916,263 - 104,821,406

16.24% 15.97% 16.03% 15.33% 15.24% 16.62% 16.12% 16.12% 15.92% 14.23%

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Notes to the Required Supplementary Information June 30, 2025 Notes to the Required Supplementary Information related to Pensions Changes in Benefit terms There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

Changes of assumptions The actuarial assumptions used in the June 30, 2022, valuation were based on the results of an actuarial experience study for the period from July 1, 2016, through June 30, 2020, except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2021. Change to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

General City and School Board (nonteacher) Employees:

Public Safety Employees:

Updated mortality rates to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020.

- Updated mortality rates to PUB2010 public sector mortality tales. Increased disability life expectancy. For future mortality improvements, replace load wit a modified Mortality Improvement Scale MP-2020.

- Lowered retirement rates to better fit experience for Plan1; set separate rates based on experience for Plan2/Hybrid; changed final retirement age.

- Adjusted retirement rates to better fit experience and changed final retirement age from 65 to 70.

- Adjusted withdrawal rates to better fit experience at each year age and service through 9 years of service.

- Decreased withdrawal rates and changed from rates based on age and service to rates based on service only to better fit experience and to be more consistent with Locals Largest 10 Hazardous Duty.

- No change to disability rates.

- No change to line of duty disability rates.

- No change to discount rate of 6.75%

School Board Teacher Retirement Plan Employees: - Update mortality rates to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020. - Adjusted Retirement rates to better fit experience for Plan 1; set separate rates based on experience for Plan 2/ Hybrid; changed final retirement age from 75 to 80 for all. - Adjusted withdrawal rates to better fit experience at each year age and service through 9 years of service. - No change in disability rates. - No change in discount rate of 6.75%

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

102

Financial Section

Exhibit 19

Required Supplementary Information Schedule of Changes in the City’s Net OPEB Liability (Asset) And Related Ratios – Plan Reporting City OPEB Medical Plan Last Nine Fiscal Years 2025 2024 2023 2022 2021 2020 2019 2018 2017 Total OPEB Liability: Service cost $ 1,169,985 $ 920,508 $ 885,615 $ 1,250,647 $ 972,561 $ 936,260 $ 835,242 $ 646,056 $ 886,026 Interest 2,859,980 2,688,336 2,529,533 3,143,180 3,568,007 3,435,345 2,976,786 2,369,007 2,225,368 Difference between expected and actual experience 770,654 (3,762,680) 688,028 (21,471,616) (109,112) (479,096) 576,876 5,564,681 - Changes in assumptions - 2,888,856 - 5,714,895 - (863,241) 3,129,118 289,822 - Benefit payments, including refunds of employee contributions (1,852,159) (1,395,187) (1,665,443) (1,073,690) (1,242,451) (1,349,107) (1,655,212) (1,454,455) (1,060,396) Net Change in Total OPEB Liability 2,948,460 1,339,833 2,437,733 (12,436,584) 3,189,005 1,680,161 5,862,810 7,415,111 2,050,998 Total OPEB liability – beginning 41,740,843 40,401,010 37,963,277 50,399,861 47,210,856 45,530,695 39,667,885 32,252,774 30,201,776 Total OPEB liability – ending $ 44,689,303 $ 41,740,843 $ 40,401,010 $ 37,963,277 $ 50,399,861 $ 47,210,856 $ 45,530,695 $ 39,667,885 $ 32,252,774 Plan Fiduciary Net Position: Contributions - employer 1,852,159 1,395,187 2,394,963 1,803,211 1,742,451 1,349,107 1,655,212 2,488,905 3,340,696 Net investment income 4,834,894 4,737,296 3,506,213 (4,707,020) 11,551,219 1,131,826 1,629,195 3,045,950 3,390,546 Benefit payments, including refunds of employee contributions (1,852,159) (1,395,187) (1,665,443) (1,073,690) (1,242,451) (1,349,107) (1,655,212) (1,454,455) (1,060,396) Administrative fees - - - - (36,394) (33,677) (32,333) (31,912) - Net Change in Plan Fiduciary Net Position 4,834,894 4,737,296 4,235,733 (3,977,499) 12,014,825 1,098,149 1,596,862 4,048,488 5,670,846 Plan fiduciary net position – beginning 55,144,979 50,407,683 46,171,950 50,149,449 38,134,624 37,036,475 35,439,613 31,391,125 25,720,279 Plan fiduciary net position – ending 59,979,873 55,144,979 50,407,683 46,171,950 50,149,449 38,134,624 37,036,475 35,439,613 31,391,125 Total net OPEB liability (asset) – beginning $ (13,404,136) $ (10,006,673) $ (8,208,673) $ 250,412 $ 9,076,232 $ 8,494,220 $ 4,228,272 $ 861,649 $ 4,481,497 Total net OPEB liability (asset) – ending $ (15,290,570) $ (13,404,136) $ (10,006,673) $ (8,208,673) $ 250,412 $ 9,076,232 $ 8,494,220 $ 4,228,272 $ 861,649 Plan fiduciary net position as a percentage of total OPEB liability 134.22% 132.11% 124.77% 121.62% 99.50% 80.78% 81.34% 89.34% 97.33% Covered payroll $ 95,157,733 $ 85,577,066 $ 78,923,637 $ 75,470,202 $ 69,886,884 $ 69,886,884 $ 61,416,353 $ 67,302,874 $ 58,111,943 Net OPEB liability (asset) as a percentage of covered payroll (16.07%) (15.66%) (12.68%) (10.88%) 0.36% 12.99% 13.83% 6.28% 1.48% Schedules are intended to show information for 10 years. Since 2017 is the first year of this presentation, no other data is available. Additional years will be included as they become available. Per GAAP, Net OPEB Liability is reported using the measurement date, which is one year prior to the reporting date.

103

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 20

Required Supplementary Information Schedule of Changes in the School Boards’s Net OPEB Asset And Related Ratios – Plan Reporting School Board OPEB Medical Plan Last Eight Fiscal Years Total OPEB Liability: Service cost Interest Change in benefit terms Differences between expected and actual experience Change in assumption Benefit payments including refunds of employee contributions Net Change in Total OPEB Liability Total OPEB liability - beginning Total OPEB liability - ending

2024

2023

2022

2021

2020

2019

2018

2017

824,971 381,263 366,810 532,956 474,424 458,381 456,968 518,107 916,432 759,038 727,741 869,162 1,124,926 1,024,964 1,034,554 1,168,697 - - - - - - - (391,210) (173,411) 1,137,344 (154,315) (1,920,563) (4,196,230) 695,593 (651,244) (2,060,226) - 707,264 - 79,997 26,928 - 34,634 1,303,406 (558,621) (622,884) (435,346) (304,691) (267,861) (1,435,329) (588,348) (1,323,985) 1,009,371 2,362,025 504,890 (743,139) (2,837,813) 743,609 286,564 (785,211) 13,942,067 11,580,042 11,075,152 11,818,291 14,656,104 13,912,495 13,625,931 14,411,142 14,951,438 13,942,067 11,580,042 11,075,152 11,818,291 14,656,104 13,912,495 13,625,931

Plan Fiduciary Net Position: Contributions - employer Net investment income Benefit payments including refunds of employee contributions Administrative expenses Net Change in Plan Fiduciary Net Position Plan fiduciary net position – beginning Plan fiduciary net position – ending

(1,071,087) 622,884 435,346 304,691 267,861 1,435,329 588,348 1,323,985 1,991,205 2,244,818 (2,858,127) 3,020,825 2,533,238 2,823,320 (699,998) 2,073,264

Total net OPEB asset – beginning Total net OPEB asset – ending

(8,496,575) (8,622,164) (12,003,130) (8,257,897) (2,902,564) (838,019) (1,839,308) 1,004,621 (7,840,123) (8,496,575) (8,622,164) (12,003,130) (8,257,897) (2,902,564) (838,019) (1,839,308)

Plan fiduciary net position as a percentage of total OPEB liability

152.44% 160.94% 174.46% 208.38% 169.87% 119.80% 106.02% 113.50%

Covered payroll

$ 111,084,098 $ 102,506,109 $ 94,222,692 $ 90,628,803 $ 84,334,164 $ 81,801,705 $ 80,618,413 $ 79,940,967

(558,621) (622,884) (435,346) (304,691) (267,861) (1,435,329) (588,348) (1,323,985) (8,578) (8,382) (17,949) (18,731) (15,718) (15,166) (14,727) (14,546) 352,919 2,236,436 (2,876,076) 3,002,094 2,517,520 2,808,154 (714,725) 2,058,718 22,438,642 20,202,206 23,078,282 20,076,188 17,558,668 14,750,514 15,465,239 13,406,521 22,791,561 22,438,642 20,202,206 23,078,282 20,076,188 17,558,668 14,750,514 15,465,239

Net OPEB asset as a percentage of covered payroll (7.06%) (8.29%) (9.15%) (13.24%) (9.79%) (3.55%) (1.04%) (2.30%) Schedules are intended to show information for 10 years. Since 2017 is the first year of this presentation, no other data is available. Additional years will be included as they become available. Per GAAP, Net OPEB Liability is reported using the measurement date, which is one year prior to the reporting date.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

104

Financial Section

Exhibit 21

Required Supplementary Information Schedule of Contributions – OPEB Plan OPEB Medical Plan Last Ten Fiscal Years

Contractually Required Contribution

Contribution in Relation to Contractually Required Contribution

Contribution Deficiency (Excess)

Employer’s Covered Payroll

Contributions as a % of Covered Payroll

City Plan: 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 School Board: 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

105

$ 3,182,500 $ 3,501,603 $ (319,103) $ 58,111,943 1,083,859 3,340,696 (2,256,837) 58,111,943 734,245 2,488,906 (1,754,661) 67,302,874 1,330,615 1,655,212 (324,597) 61,416,353 1,330,615 1,349,107 (18,492) 69,886,884 1,702,081 1,742,451 (40,370) 69,886,884 1,702,081 1,803,210 (101,129) 75,470,202 - 2,394,963 (2,394,963) 78,923,637 - 2,748,278 (2,748,278) 85,577,086 - 2,750,058 (2,750,058) 95,157,733 $ 112,200 $ 1,578,887 $ (1,466,687) $ 55,537,800 613,629 1,822,143 (1,208,514) 79,940,967 613,629 1,063,180 (449,551) 80,618,413 588,348 1,053,194 (464,846) 81,801,705 1,435,329 621,810 813,519 84,334,164 - 267,861 (267,861) 90,628,803 - 304,691 (304,691) 94,222,692 - 435,346 (435,346) 102,506,109 - 622,884 (622,884) 111,084,098 - - - 116,616,167

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

6.03% 5.75% 3.70% 2.70% 1.93% 2.49% 2.39% 3.03% 3.21% 2.89%

2.84% 2.28% 1.32% 1.29% 0.74% 0.30% 0.32% 0.42% 0.56% 0.00%

Financial Section

Exhibit 22

Required Supplementary Information Schedule of Annual Money Weighted Rate Of Return on OPEB Plan Investments OPEB Medical Plan Last Nine Fiscal Years

2017 2018 2019 2020 2021 2022 2023 2024 2025

City OPEB Trust 13.04% 9.52% 4.67% 4.88% 30.05% (9.28%) 9.76% 9.36% 9.05%

School Board OPEB Trust 15.52% 9.52% 4.67% 4.88% 30.05% (9.28%) 9.76% 9.36% 9.05%

Schedule is intended to show information for 10 years. Since 2017 is the first year of this presentation, no other data is available. Additional years will be included as they become available.

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Financial Section

Notes to the Required Supplementary Information June 30, 2025 Notes to the Required Supplementary Information related to Other Postemployment Benefit Medical Plan Changes in Benefit Terms: There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

Changes to assumptions or other inputs The actuarial assumptions used in the June 30, 2023, valuation were based on the results of an actuarial experience study for the period from July 1, 2016, through June 30, 2020. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows: G e n e r a l

E m p l o y e e s

Mortality Rates (Pre -retirement, Update to PUB2010 public sector mortality tables. For future post-retirement healthy, and disabled) mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020 Retirement Rates

Adjusted rates to better fit experience and changed final retirement age from 65 to 70

Withdrawal Rates

Adjusted rates to better fit experience at each age and service decrement through 9 years of service

Hazardous Duty Employees

Mortality Rates (Pre -retirement, Update to PUB2010 public sector mortality tables. Increased post-retirement healthy, and disabled) disability life expectancy. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP2020

107

Retirement Rates

Adjusted rates to better fit experience and changed final retirement age from 65 to 70

Withdrawal Rates

Decreased rates and changed from rates based on age and service to rates based on service only to better fit experience and to be more consistent with Locals Top 10 Hazardous Duty

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 23

Required Supplementary Information Schedule of Proportionate Share of Net OPEB Liability Line of Duty Act Program (LODA) for the City Last Eight Fiscal Years Employer’s proportion of the net LODA OPEB liability Employer’s proportionate share of the net LODA OPEB liability Employer’s covered payroll Employer’s proportionate share of the net LODA OPEB liability as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total LODA OPEB liability

2024

2023

2022

2021

2020

2019

2018

2017

2.97749% 2.64735% 2.62447% 2.78220% 2.75114% 2.62930% 2.86170% 2.76316% $ 11,718,054 $ 36,100,948

$ 10,613,205 $ 35,391,248

$ 9,932,449 $ 31,137,183

$ 12,269,269 $ 27,241,531

$ 11,522,199 $ 29,370,754

$ 9,433,565 $ 28,324,247

$ 8,972,000 $ 24,288,204

$ 7,261,000 $ 23,102,737

32.46% 29.99% 31.90% 45.04% 39.23% 33.31% 36.94% 31.43% 1.22% 1.31% 1.87% 1.68% 1.02% 0.79% 0.60% 1.30%

Note: The amounts presented have a measurement date of the previous fiscal year. Schedule is intended to show information for 10 years. Since 2017 is the first year of this presentation, no other data is available. Additional years will be included as they become available.

Exhibit 24

Schedule of Proportionate Share of Net OPEB Liability Group Life Insurance Program (GLI) for the City Last Eight Fiscal Years Employer’s proportion of the net GLI OPEB liability Employer’s proportionate share of the net GLI OPEB liability Employer’s covered payroll Employer’s proportionate share of the net GLI OPEB liability as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total GLI OPEB liability

2024

2023

2022

2021

2020

2019

2018

2017

0.33411% 0.33820% 0.33359% 0.33366% 0.33753% 0.34159% 0.34952% 0.34781% $ 3,728,407 $ 85,787,744

$ 4,056,078 $ 79,663,713

$ 4,016,745 $ 72,564,393

$ 3,918,355 $ 69,484,722

$ 5,632,832 $ 69,692,322

$ 5,558,578 $ 66,963,814

$ 5,308,000 $ 66,461,255

$ 5,234,000 $ 64,154,851

4.35% 5.09% 5.54% 5.64% 8.08% 8.30% 7.99% 8.16% 73.41% 69.30% 67.21% 67.45% 52.64% 52.00% 51.22% 48.86%

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Financial Section

Exhibit 25

Required Supplementary Information Schedule of Proportionate Share of Net OPEB Liability Group Life Insurance Program (GLI) for the School Board Last Eight Fiscal Years Employer’s proportion of the net GLI OPEB liability Employer’s proportionate share of the net GLI OPEB liability Employer’s covered payroll Employer’s proportionate share of the net GLI OPEB liability as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total GLI OPEB liability

2024

2023

2022

2021

2020

2019

2018

2017

0.43400% 0.43433% 0.43367% 0.44273% 0.43943% 0.45715% 0.44079% 0.40934% $ 4,843,102 $ 100,500,589

$ 5,208,978 $ 102,306,872

$ 5,221,805 $ 94,334,223

$ 5,154,577 $ 91,407,110

$ 7,333,367 $ 90,437,143

$ 7,439,047 $ 89,616,947

$ 6,695,000 $ 83,814,437

$ 6,704,000 $ 82,175,449

4.82% 5.09% 5.54% 5.64% 8.11% 8.30% 7.99% 8.16% 69.30% 69.30% 67.21% 67.45% 52.64% 52.00% 51.22% 48.86%

Exhibit 26

Schedule of Proportionate Share of Net OPEB Liability Health Insurance Credit Plans (THIC) for the School Board – Teachers Last Eight Fiscal Years Employer’s proportion of the net HIC OPEB liability Employer’s proportionate share of the net HIC OPEB liability Employer’s covered payroll Employer’s proportionate share of the net HIC OPEB liability as a percentage of its covered payroll Plan fiduciary net position as a percentage of the total HIC OPEB liability

2024

2023

2022

2021

2020

2019

2018

2017

0.93270% 0.92149% 0.90842% 0.94441% 0.94455% 0.97557% 0.94832% 0.95031% $ 10,778,729 $ 99,927,633

$ 11,163,090 $ 91,882,191

$ 11,346,588 $ 84,666,483

$ 12,122,156 $ 83,522,903

$ 12,321,811 $ 82,806,334

$ 12,771,160 $ 81,827,304

$ 12,040,000 $ 76,694,389

$ 12,056,000 $ 74,998,650

10.79% 12.15% 13.40% 14.51% 14.88% 15.61% 15.70% 16.07% 17.90% 17.90% 15.08% 13.15% 9.95% 8.97% 8.08% 7.04%

109

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 27

Required Supplementary Information Schedule of Proportionate Share of Net OPEB Liability Virginia Local Disability Program (VLDP) – School Board Teachers Last Eight Fiscal Years 2024

2023

2022

2021

2020

2019

2018

2017

Employer’s proportion of the net VLDP OPEB liability

4.51917% 4.35302% 4.18720% 4.07483% 4.10950% 4.50925% 4.37837% 4.31966%

Employer’s proportionate share of the net VLDP OPEB liability

$ (61,136)

$ 10,907

$ (8,608)

$ (30,600)

$ 34,104

$ 34,661

$ 34,000

$ 25,000

Employer’s covered payroll

$ 33,257,196

$ 38,102,735

$ 30,691,112

$ 25,736,865

$ 23,040,664

$ 20,626,222

$ 15,699,589

$ 11,799,069

Employer’s proportionate share of the net VLDP OPEB liability as a percentage of its covered payroll

-0.18% 0.03% -0.03% -0.12% 0.15% 0.17% 0.22% 0.21%

Plan fiduciary net position as a percentage of the total VLDP OPEB liability

93.78% 93.78% 101.57% 114.46% 78.28% 74.12% 46.18% 31.96%

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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Financial Section

Exhibit 28

Required Supplementary Information Schedule of Contributions – OPEB City VRS Plans Last Ten Fiscal Years

Contractually Required Contribution

Contribution in Relation to Contractually Required Contribution

Contribution Deficiency (Excess)

Employer’s Covered Payroll

Contributions as a % of Covered Payroll

City Group Life Insurance Program (GLI) 2016 283,950 283,950 - 59,156,221 0.48% 2017 333,605 333,605 - 64,154,851 0.52% 2018 345,599 345,599 - 66,461,255 0.52% 2019 348,212 348,212 - 66,963,814 0.52% 2020 432,439 432,439 - 69,692,322 0.62% 2021 375,217 375,217 - 69,484,722 0.54% 2022 385,940 385,940 - 72,564,393 0.53% 2023 423,066 423,066 - 79,663,713 0.53% 2024 456,844 456,844 - 79,663,713 0.57% 2025 458,459 448,459 10,000 95,416,904 0.47% City Line of Duty Act Program (LODA) 2016 270,316 270,316 - 21,832,593 1.24% 2017 298,011 298,011 - 23,102,737 1.29% 2018 304,819 304,819 - 24,288,204 1.26% 2019 352,885 352,885 - 28,324,247 1.25% 2020 373,881 373,881 - 29,370,754 1.27% 2021 383,044 383,044 - 27,241,531 1.41% 2022 358,834 358,834 - 31,137,183 1.15% 2023 351,318 351,318 - 35,391,248 0.99% 2024 448,822 448,822 - 36,100,948 1.41% 2025 518,665 518,665 - 40,659,967 1.28%

111

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 29

Required Supplementary Information Schedule of Contributions – OPEB School Board VRS Plans Last Ten Fiscal Years

Contractually Required Contribution

Contribution in Relation to Contractually Required Contribution

Contribution Deficiency (Excess)

Employer’s Covered Payroll

Contributions as a % of Covered Payroll

School Board Group Life Insurance Program (GLI) 2016 $ 386,299 $ 386,299 $ - 80,479,145 0.48% 2017 427,312 427,312 - 82,175,449 0.52% 2018 435,835 435,835 - 83,814,437 0.52% 2019 466,008 466,008 - 89,616,947 0.52% 2020 470,273 470,273 - 90,437,143 0.52% 2021 493,598 493,598 - 91,407,110 0.54% 2022 509,405 509,405 - 94,334,223 0.54% 2023 552,457 552,457 - 102,306,872 0.54% 2024 542,703 542,703 - 100,500,589 0.54% 2025 1,357,227 1,357,227 - 105,359,235 1.29% School Board Health Insurance Credit Program (THIC) - Teachers 2016 $ 779,951 $ 779,951 $ - 73,580,311 1.06% 2017 932,485 932,485 - 74,998,650 1.24% 2018 943,341 943,341 - 76,694,389 1.23% 2019 981,928 981,928 - 81,827,304 1.20% 2020 993,676 993,676 - 82,806,334 1.20% 2021 1,010,627 1,010,627 - 83,522,903 1.21% 2022 1,024,485 1,024,485 - 84,666,483 1.21% 2023 1,111,707 1,111,707 - 91,882,191 1.21% 2025 1,208,608 1,208,608 - 99,927,633 1.21% 2025 1,268,262 1,268,262 - 104,821,406 1.21% School Board Virginia Local Disability Program (VLDP) 2016 $ 23,681 $ 23,681 $ - 7,814,391 0.30% 2017 38,690 38,690 - 11,799,069 0.33% 2018 52,058 52,058 - 15,699,589 0.33% 2019 88,363 88,363 - 20,626,222 0.43% 2020 101,154 101,154 - 23,040,664 0.44% 2021 129,938 129,938 - 25,736,865 0.50% 2022 158,126 158,126 - 30,691,112 0.52% 2023 197,414 197,414 - 38,102,735 0.52% 2025 156,309 156,309 - 33,257,196 0.47% 2025 256,510 256,510 - 46,203,644 0.56%

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Financial Section

Changes of assumptions The actuarial assumptions used in the June 30, 2023, valuation were based on the results of an actuarial experience study for the period from July 1, 2016, through June 30, 2020, except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2021. Change to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

School Board NonTeacher GLI plan Employees:

Public Safety Employee LODA plans:

Updated mortality rates to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020.

Updated mortality rates to PUB2010 public sector mortality tales. Increased disability life expectancy. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020.

Adjusted retirement rates to better fit experience Adjusted retirement rates to better fit experience and for Plan 1; set separate rates based on experience changed final retirement age from 65 to 70. for Plan 2/Hybrid; changed final retirement age from 75 to 80 for all. Adjusted withdrawal rates to better fit experience at Decreased withdrawal rates and changed from rates each year age and service through 9 years of service. based on age and service to rates based on service only to better fit experience and to be more consistent with Locals Top 10 Hazardous Duty.

School Board Teacher GLI, HIC and VLDP: - Updated mortality rates to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020 - Adjusted retirement rates to better fit experience for Plan 1; set separate rates based on experience for Plan 2/ Hybrid; changed final retirement ages from 75 to 80 for all. - Adjusted rates to better fit experience at each age and service decrement through 9 years of service. - No change in disability rates - No change in Discount rate

113

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 30

Required Supplementary Information Schedule of Changes in the City’s Net OPEB Liability And Related Ratios – Plan Reporting School Board Non-Teacher HIC Single Employer Plan Last Five Fiscal Years 2025 Total OPEB Liability: Service cost Interest Changes of benefit terms Differences between expected and actual experience Changes in assumptions Benefit payments including refunds of employee contributions Net Change in Total OPEB Liability Total OPEB liability - beginning Total OPEB liability - ending

2024

2022

2021

2020

$ 8,001 $ 8,393 $ 9,501 $ 10,909 $ - 36,827 52,976 46,945 42,022 - - - - - 622,573 (41,499) (280,480) (839) - - - - 51,707 17,815 - (20,344) (19,129) (14,603) (35) - (17,015) (238,240) 92,711 70,711 622,573 547,755 785,995 693,284 622,573 - 530,740 547,755 785,995 693,284 622,573

Plan Fiduciary Net Position: Contributions - employer Net investment income Benefit payments including refunds of employee contributions Administrative expenses Other Changes Net Change in Plan Fiduciary Net Position Plan fiduciary net position – beginning Plan fiduciary net position – ending

87,570 79,857 62,759 52,520 - 20,514 9,017 (1,673) 6,756 -

Total net OPEB liability – beginning Total net OPEB liability – ending

372,971 680,704 634,275 622,573 - $ 268,534 $ 372,971 $ 680,704 $ 634,275 $ 622,573

Plan fiduciary net position as a percentage of total OPEB liability

49.40% 31.91% 13.40% 8.51% 0.00%

Covered payroll

$ 9,859,115 $ 9,859,115 $ 8,968,585 $ 7,502,569 $ 7,502,569

Net OPEB liability as a percentage of covered payroll

2.72% 3.78% 7.59% 8.45% 8.30%

(20,344) (19,129) (14,603) (35) - (318) (254) (201) (232) - - 2 - - - 87,422 69,493 46,282 59,009 - 174,784 105,291 59,009 - - 262,206 174,784 105,291 59,009 -

Schedules are intended to show information for 10 years. Since 2020 is the first year of this presentation, no other data is available. Additional years will be included as they become available. Per GAAP, Net OPEB Liability is reported using the measurement date, which is one year prior to the reporting date.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

114

Financial Section

Exhibit 31

Required Supplementary Information Schedule of Contributions – School Board Non-Teacher Health Insurance Credit OPEB Plan Last Four Fiscal Years Actuarially Determined Contribution 2021 2022 2023 2024 2025

Contribution in Relation to Required Contribution

Contribution Deficiency (Excess)

Employer’s Covered Payroll

Contributions as a % of Covered Payroll

52,518 52,518 - 7,502,569 0.70% $ 62,748 $ 62,748 - $ 8,968,585 0.70% 79,857 79,857 - 9,859,115 0.81% 87,760 87,760 - 10,811,181 0.81% 89,259 89,259 - 11,031,193 0.81%

Schedules are intended to show information for 10 years. Since 2021 is the first year of this presentation, no other data is available. Additional years will be included as they become available.

115

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Notes to the Required Supplementary Information June 30, 2025 Notes to the Required Supplementary Information related to Other Postemployment Benefit Plans - School Board Non-Teacher Health Insurance Credit Single Employer State VRS Plan. Changes in Benefit Terms: There have been no actuarially material changes to the benefit provisions since the prior actuarial valuation.

Changes to assumptions or other inputs The actuarial assumptions used in the June 30, 2022, valuation were based on the results of an actuarial experience study for the period from July 1, 2016, through June 30, 2020, except for the change in the discount rate, which was based on VRS Board action effective as of July 1, 2021. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

Mor tality Rates (pre -retirement, postretirement, healthy and disabled):

Update to PUB2010 public sector mortality tables. For future mortality improvements, replace load with a modified Mortality Improvement Scale MP-2020

Retirement Rates:

Adjusted rates to better fit experience for Plan 1; set separate rates based on experience for Plan 2/ Hybrid; changed final retirement age from 75 to 80 for all.

Withdrawal Rates:

Adjusted rates to better fit experience at each age and service decrement through 9 year of service.

Disability rates:

No change.

Salary Scale:

No change.

Line of Duty Disability:

No change.

Discount Rate:

No change.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

116

Other Supplementary Information

Financial Section

Other Supplementary Information: Non-Major Governmental Funds Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Suffolk Taxing District Fund – accounts for revenues and expenditures related to services provided in the Suffolk Taxing District. Most revenues are derived from a specific percentage of the annual real estate tax assessments in the Suffolk Taxing District. These additional assessments ceased as of July 1, 2007. Downtown Business Overlay District Fund – accounts for revenues and expenditures related to services provided in the Downtown Business Overlay District. Most revenues are derived from a specific percentage of the annual real estate tax assessments in the Downtown Business Overlay District. Law Library Fund – accounts for the maintenance of a law library. Revenue is derived from court fees. Route 17 Taxing District Fund – accounts for revenues and expenditures related to services provided in the Route 17 Taxing District. Most revenues are derived from a specific percentage of the annual real estate tax assessments in the route 17 Taxing District. Cemetery Fund – accounts for monies received from the sale of burial sites, lots, and mausoleum sites, the revenue from which is to be applied to the perpetual care of the City’s cemeteries. Aviation Fund – accounts for revenues generated through use of airport facilities and governmental grant programs to be used solely for expansion, maintenance, and use of city municipal airport. Transit Fund – accounts for revenues and expenditures associated with the City’s bus services. The revenue comes from a combination of state grants and fares collected from the passengers.

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118

Financial Section

Exhibit 32

Combining Balance Sheet Nonmajor Governmental Funds – Special Revenue Funds June 30, 2025 Downtown Business Overlay District

Law Library

Route 17 Taxing District

Cemetery

Transit

Aviation

Total Nonmajor Governmental Funds

Assets Cash and cash equivalents Cash and investments – restricted Receivables (net of allowance for uncollectibles): Property taxes Other receivables Lease receivable Inventories Total assets

$ 408,635 $ - $ 6,060,374 $ - $ 3,253,238 $ 780,124 $ 10,502,371 - 332,607 - 971,322 - - 1,303,929

Liabilities Accounts payable and accrued liabilities Accrued payroll and related liabilities Unavailable revenues - taxes Deposits Total liabilities

Deferred inflows of resources Leases Total deferred inflows of resources

- - - - - 368,785 368,785 - - - - - 368,785 368,785

Fund balances Nonspendable Restricted Committed Assigned Total fund balances Total liabilities, deferred inflows of resources, and fund balances

- - - - - 98,866 98,866 399,432 336,913 6,067,950 - - - 6,804,295 - - - 971,322 - - 971,322 - - - - 3,098,149 775,326 3,873,475 399,432 336,913 6,067,950 971,322 3,098,149 874,192 11,747,958

119

907 - 10,539 - - - 11,446 - 4,306 - - - 132,917 137,223 - - - - - 355,195 355,195 - - - - - 98,866 98,866 409,542 336,913 6,070,913 971,322 3,253,238 1,367,102 12,409,030

9,772 - - - 152,636 96,487 258,895 - - - - 2,453 8,786 11,239 338 - 2,963 - - - 3,301 - - - - - 18,852 18,852 10,110 - 2,963 - 155,089 124,125 292,287

$ 409,542 $ 336,913 $ 6,070,913 $ 971,322 $ 3,253,238 $ 1,367,102 $ 12,409,030

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Exhibit 33

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Nonmajor Governmental Funds – Special Revenue Funds Year Ended June 30, 2025 Downtown Business Overlay District

Revenues Taxes: Real estate and personal property taxes Intergovernmental: Revenue from the Commonwealth Revenue from the federal government Revenue from use of money and property Charges for services Miscellaneous Total revenues

Law Library

Route 17 Taxing District

Cemetery

Transit

Aviation

Total Nonmajor Governmental Funds

$ 242,805 $ - $ 2,836,128 $ - $ - $ - $ 3,078,933 - - - - 610,936 4,595 615,531 - - - - 1,461,269 - 1,461,269 17,931 13,744 265,938 87,949 134,616 276,292 796,470 - 43,569 - - 62,798 622,440 728,807 - - - 29,868 23,798 - 53,666 260,736 57,313 3,102,066 117,817 2,293,417 903,327 6,734,676

Expenditures Current: General government administration - - - - - 919,960 919,960 Public works 208,446 - - - - - 208,446 Transportation - - - - 3,213,136 - 3,213,136 Total expenditures 208,446 - - - 3,213,136 919,960 4,341,542 Excess (deficiency) of revenues over/ (under) expenditures 52,290 57,313 3,102,066 117,817 (919,719) (16,633) 2,393,134 Other financing sources (uses) Transfers from other funds Transfers to other funds Total other financing sources (uses) Net change in fund balances Fund balances at July 1 Fund balances at June 30

- - - - 418,604 179,846 598,450 - - (1,570,586) (77,703) (156,684) (109,919) (1,914,892) - - (1,570,586) (77,703) 261,920 69,927 (1,316,442) 52,290 57,313 1,531,480 40,114 (657,799) 53,294 1,076,692 347,142 279,600 4,536,470 931,208 3,755,948 820,898 10,671,266 $ 399,432 $ 336,913 $ 6,067,950 $ 971,322 $ 3,098,149 $ 874,192 $ 11,747,958

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

120

Financial Section Exhibit 34

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Downtown Business Overlay District Year Ended June 30, 2025 Original Budget

Final Budget

Actual Amounts

Variance with Final Budget

Revenues General property taxes Revenue from use of money and property Total revenues

$228,443 228,443

$242,805 17,931 260,736

$14,362 17,931 32,293

Expenditures Public works Total expenditures

228,443 228,443

208,446 208,446

19,997 19,997

Excess (deficiency) of revenues over (under) expenditures

52,290

Net change in fund balances

$52,290

Reconciliation to Governmental Fund Statement: Total net change in fund balance Encumbrances Total net change in fund balance per statement of revenues, expenditures and changes in fund balance

121

$52,290 $52,290

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Exhibit 35

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Law Library Year Ended June 30, 2025 Original Budget

Final Budget

Actual Amounts

Variance with Final Budget

Revenues Revenue from use of money and property Charges for services Total revenues

$13,744 43,569 57,313

Excess (deficiency) of revenues over (under) expenditures

57,313

Net change in fund balances

$57,313

Reconciliation to Governmental Fund Statement: Total net change in fund balance Encumbrances Total net change in fund balance per statement of revenues, expenditures and changes in fund balance

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$57,313 $57,313

122

Financial Section Exhibit 36

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Route 17 Taxing District Year Ended June 30, 2025 Original Budget

Final Budget

Variance with Final Budget

Actual Amounts

Revenues General property taxes Revenue from use of money and property Fund balance Total revenues

$2,675,020 2,675,020

$2,675,020 500,000 3,175,020

$2,836,128 265,938 3,102,066

$161,108 265,938 (500,000) (72,954)

Expenditures Community development Total expenditures

1,604,434 1,604,434

Excess (deficiency) of revenues over (under) expenditures

1,070,586

1,570,586

3,102,066

1,531,480

Other financing sources (uses) Transfers out Total other financing sources (uses)

(1,070,586) (1,070,586)

(1,570,586) (1,570,586)

$1,531,480

123

$1,531,480 $1,531,480

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Exhibit 37

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Cemetery Year Ended June 30, 2025 Original Budget

Final Budget

Actual Amounts

Variance with Final Budget

Revenues Revenue from use of money and property Miscellaneous revenues Fund balance Total revenues

$78,237 78,237

$87,949 29,868 117,817

$87,949 29,868 (78,237) 39,580

Excess (deficiency) of revenues over (under) expenditures

78,237

117,817

39,580

Other financing sources (uses) Transfers out Total other financing sources (uses)

(77,703) (77,703)

Net change in fund balances

$534

$40,114

$39,580

Reconciliation to Governmental Fund Statement: Total net change in fund balance Encumbrances Total net change in fund balance per statement of revenues, expenditures and changes in fund balance

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$40,114 $40,114

124

Financial Section Exhibit 38

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Transit Year Ended June 30, 2025 Original Budget

Final Budget

Actual Amounts

Variance with Final Budget

Revenues Revenue from the Commonwealth Revenue from the federal government Revenue from use of money and property Charges for services Miscellaneous revenues Fund balance Total revenues

$664,032 1,585,194 62,000 10,000 450,000 2,771,226

$2,230,406 4,915,473 62,000 10,000 627,452 7,845,331

$610,936 1,461,269 134,616 62,798 23,798 2,293,417

$(1,619,470) (3,454,204) 134,616 798 13,798 (627,452) (5,551,914)

Expenditures Transportation Total expenditures

2,973,146 2,973,146

8,047,251 8,047,251

3,923,440 3,923,440

4,123,811 4,123,811

Excess (deficiency) of revenues over (under) expenditures

(201,920)

(1,630,023)

(1,428,103)

Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses)

418,604 (216,684) 201,920

418,604 (156,684) 261,920

60,000 60,000

$(1,368,103)

125

$(1,368,103) 710,304 $(657,799)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section Exhibit 39

Schedule of Revenues, Expenditures, and Changes In Fund Balances – Budget and Actual – Budgetary Basis Aviation Year Ended June 30, 2025 Original Budget

Final Budget

Actual Amounts

Variance with Final Budget

Revenues Revenue from the Commonwealth Revenue from use of money and property Charges for services Total revenues

$261,804 695,000 956,804

$17,457 261,804 695,000 974,261

$4,595 276,292 622,440 903,327

$(12,862) 14,488 (72,560) (70,934)

Expenditures Transportation Nondepartmental Total expenditures

1,005,731 30,000 1,035,731

1,024,107 20,081 1,044,188

919,960 919,960

104,147 20,081 124,228

Excess (deficiency) of revenues over (under) expenditures

(78,927)

(69,927)

(16,633)

53,294

Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses)

179,846 (100,919) 78,927

179,846 (109,919) 69,927

$53,294

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$53,294 $53,294

126

Financial Section

Other Supplementary Information: Non-Major Proprietary Funds Enterprise Funds are used to account for: Stormwater Utility Fund – accounts for the maintenance and improvements to the City’s stormwater infrastructure. All activities necessary to provide such services are funded by charges to citizens and are accounted for in this fund. Refuse Fund – accounts for the provision of refuse and waste management services. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operation, billing, and collections.

127

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2025

Assets Current assets Cash and cash equivalents Accounts receivable (net of allowance for uncollectibles) Total current assets Noncurrent assets Cash and cash equivalents, restricted Net OPEB asset medical plan Capital assets Assets not being depreciated Assets being depreciated, net Total noncurrent assets Total assets Deferred outflows of resources Pension plan Opeb medical plan Opeb state plans Total deferred outflows of resources Liabilities Current liabilities Accounts payable and accrued liabilities Accrued payroll and related liabilities Accrued interest payable Compensated absences Bonds payable, current portion Direct borrowing, current portion Total current liabilities Noncurrent liabilities Arbitrage liability Compensated absences Net pension liability Net OPEB liability state plans Direct borrowing, less current Bonds payable, less current portion Bonds premium Total noncurrent liabilities Total liabilities Deferred inflows of resources Pension plan Opeb medical plan Opeb state plans Total deferred inflows of resources Net position Net investment in capital assets Restricted OPEB Unrestricted Total net position

Exhibit 40

Stormwater Total Nonmajor Utility Refuse Enterprise Funds $ 18,651,052 $ 7,338,589 $ 25,989,641 121,736 974,433 1,096,169 18,772,788 8,313,022 27,085,810 13,848,196 - 13,848,196 454,645 344,661 799,306 7,804,288 - 7,804,288 2,971,248 1,254,020 4,225,268 25,078,377 1,598,681 26,677,058 43,851,165 9,911,703 53,762,868 890,682 513,237 1,403,919 346,792 261,730 608,522 34,886 19,951 54,837 1,272,360 794,918 2,067,278 1,760,231 315,314 2,075,545 94,311 89,024 183,335 146,658 - 146,658 232,097 132,205 364,302 15,000 - 15,000 492,000 - 492,000 2,740,297 536,543 3,276,840 350,493 - 350,493 246,874 132,816 379,690 1,418,138 830,466 2,248,604 116,194 69,045 185,239 13,594,000 - 13,594,000 290,000 - 290,000 597,320 - 597,320 16,613,019 1,032,327 17,645,346 19,353,316 1,568,870 20,922,186 361,919 205,323 567,242 545,294 411,542 956,836 23,472 13,120 36,592 930,685 629,985 1,560,670 9,635,412 1,254,020 10,889,432 454,645 344,661 799,306 14,749,467 6,909,085 21,658,552 $ 24,839,524 $ 8,507,766 $ 33,347,290

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

128

Financial Section

Stormwater Utility

129

Exhibit 41

Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Enterprise Funds Year Ended June 30, 2025 Refuse

Total Nonmajor Enterprise Funds

Operating revenues Charges for services Other Total operating revenues

$ 9,191,333 $ 10,438,671 $ 19,630,004 736,021 2,274,435 3,010,456 9,927,354 12,713,106 22,640,460

Operating expenses Personnel services Contractual services Administration Supplies Repairs and maintenance Utilities Depreciation and amortization Short term rentals Other charges Total operating expenses Operating income (loss)

3,791,209 2,390,989 6,182,198 453,245 5,655,977 6,109,222 1,049,549 2,374,080 3,423,629 89,556 207,904 297,460 8,482 27,409 35,891 39,296 32,474 71,770 65,736 97,304 163,040 89,296 - 89,296 59,047 55,945 114,992 5,645,416 10,842,082 16,487,498 4,281,938 1,871,024 6,152,962

Nonoperating revenues (expenses) Investment earnings Interest expense and other charges Total nonoperating revenues (expenses) Income (loss) before transfers and capital contributions

1,047,041 279,427 1,326,468 (697,268) - (697,268) 349,773 279,427 629,200 4,631,711 2,150,451 6,782,162

Capital contributions and transfers Transfers to other funds Total capital contributions and transfers Changes in net position Total net position at July 1 Restatements Total net position at July 1, as restated Total net position at June 30

(433,730) (269,000) (702,730) (433,730) (269,000) (702,730) 4,197,981 1,881,451 6,079,432 20,867,824 6,744,721 27,612,545 (226,281) (118,406) (344,687) 20,641,543 6,626,315 27,267,858 $ 24,839,524 $ 8,507,766 $ 33,347,290

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Combining Statement of Cash Flows Nonmajor Enterprise Funds Year Ended June 30, 2025

Cash flows from operating activities: Receipts from customers Payment to suppliers Payments to employees Total cash flows from operating activities: Cash flows from noncapital financing activities: Transfers to other funds Total cash flows from noncapital financing activities: Cash flows from capital and related financing activities: Acquisition and construction of capital assets Proceeds from issuance of debt Principal paid on capital debt, net Interest and other charges paid on capital debt Total cash flows from capital and related financing activities: Cash flows from investing activities: Interest received Total cash flows from investing activities: Net change in cash and cash equivalents Beginning, July 1 Ending, June 30 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income to cash provided by operating activities: Depreciation and amortization Changes in assets and liabilities: (Increase) decrease in: Receivables Increase (decrease) in: Accounts payable and accrued liabilities Accrued payroll and related liabilities Total adjustments to reconcile operating income to cash provided by operating activities: Total reconciliation of operating income to net cash provided by operating activities: Reconciliation of cash and investments: Cash and investments Unrestricted Restricted Total cash and investments

Exhibit 42

Total Nonmajor Stormwater Enterprise Utility Refuse Funds $ 10,005,500 $ 12,510,130 $ 22,515,630 (236,132) (8,344,860) (8,580,992) (3,946,238) (2,512,734) (6,458,972) 5,823,130 1,652,536 7,475,666 (433,730) (269,000) (702,730) (433,730) (269,000) (702,730) (4,677,498) (1,350,272) (6,027,770) 4,795,000 - 4,795,000 (570,767) (1,060) (571,827) (82,580) - (82,580) (535,845) (1,351,332) (1,887,177) 1,397,534 279,427 1,676,961 1,397,534 279,427 1,676,961 6,251,089 311,631 6,562,720 26,248,159 7,026,958 33,275,117 $ 32,499,248 $ 7,338,589 $ 39,837,837 $ 4,281,938 $ 1,871,024 $ 6,152,962 65,736 97,304 163,040 78,147 (202,977) (124,830) 1,552,338 8,928 1,561,266 (155,029) (121,743) (276,772) 1,541,192 (218,488) 1,322,704 $ 5,823,130 $ 1,652,536 $ 7,475,666 $ 18,651,052 $ 7,338,589 $ 25,989,641 13,848,196 - 13,848,196 $ 32,499,248 $ 7,338,589 $ 39,837,837

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

130

Financial Section

Other Supplementary Information: Internal Service Funds Internal Service Funds are used to account for: Information Technology Fund – account for technology infrastructure and allocates costs to the various departments or agencies using the service. Fleet Management Fund – accounts for, on a cost-reimbursement basis, the financing of vehicles and the related maintenance, repairs, and fuel costs and allocates those costs to the various departments or agencies using the equipment. Risk Management Fund – accounts for the funding and payment of auto, personal liability, general liability, health insurance, and workers’ compensation claims against the City exclusive of the School Board employees. Charges to other funds are based on estimated claims for the year.

131

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Combining Statement of Net Position Internal Service Funds June 30, 2025

Assets Current assets Cash and cash equivalents Accounts receivable (net of allowance for uncollectibles) Lease receivables Inventories Total current assets Noncurrent assets Cash and cash equivalents, restricted Net OPEB asset medical plan Capital assets Assets not being depreciated Assets being depreciated, net Total noncurrent assets Total assets Deferred outflows of resources Pension plan Opeb medical plan Opeb state plans Total deferred outflows of resources Liabilities Current liabilities Accounts payable and accrued liabilities Accrued payroll and related liabilities Accrued interest payable Compensated absences Claims payable Subscriptions payable Leases payable, current portion Bonds payable, current portion Total current liabilities Noncurrent liabilities Arbitrage liability Claims payable Compensated absences Net pension liability Net OPEB liability state plans Subscriptions payable Leases payable, less current portion Bonds payable, less current portion Bonds premium Total noncurrent liabilities Total liabilities Deferred inflows of resources Leases Pension plan Opeb medical plan Opeb state plans Total deferred inflows of resources Net position Net investment in capital assets Restricted Capital projects OPEB Unrestricted Total net position

Exhibit 43

Information Fleet Risk Total Internal Technology Management Management Service Funds $ 674,386 $ 18,993,450 $ 17,177,292 $ 36,845,128 27,000 122,711 - 149,711 868,878 - - 868,878 - 538,067 - 538,067 1,570,264 19,654,228 17,177,292 38,401,784 412,048 - - 412,048 271,667 187,532 75,520 534,719 1,043,147 298,000 - 1,341,147 4,740,228 12,911,652 724,123 18,376,003 6,467,090 13,397,184 799,643 20,663,917 8,037,354 33,051,412 17,976,935 59,065,701 628,640 364,325 171,967 1,164,932 209,383 143,951 58,889 412,223 24,012 14,015 6,781 44,808 862,035 522,291 237,637 1,621,963 539,578 248,694 465,938 1,254,210 70,585 22,278 103,961 196,824 39,375 - - 39,375 149,463 116,739 40,928 307,130 - - 2,941,927 2,941,927 112,836 - - 112,836 501,197 58,239 - 559,436 1,130,000 - - 1,130,000 2,543,034 445,950 3,552,754 6,541,738 16,763 - - 16,763 - - 3,518,591 3,518,591 116,261 98,027 59,659 273,947 854,956 613,547 272,163 1,740,666 72,662 52,859 23,304 148,825 112,614 - - 112,614 230,951 33,711 - 264,662 760,000 - - 760,000 270,222 - - 270,222 2,434,429 798,144 3,873,717 7,106,290 4,977,463 1,244,094 7,426,471 13,648,028 775,962 - - 775,962 228,323 135,192 70,490 434,005 329,234 226,348 92,597 648,179 15,389 8,970 4,542 28,901 1,348,908 370,510 167,629 1,887,047 3,077,603 13,117,703 724,123 16,919,429 211,972 - - 211,972 271,667 187,532 75,520 534,719 (988,224) 18,653,864 9,820,829 27,486,469 $ 2,573,018 $ 31,959,099 $ 10,620,472 $ 45,152,589

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

132

Financial Section

Information Technology

133

Exhibit 44

Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds Year Ended June 30, 2025 Fleet Management

Risk Management

Total Internal Service Funds

Operating revenues Charges for services Lease Other Total operating revenues

$ 17,022,421 $ 12,555,797 $ 22,536,362 $ 52,114,580 54,412 - - 54,412 3,228 444,520 753,284 1,201,032 17,080,061 13,000,317 23,289,646 53,370,024

Operating expenses Personnel services Contractual services Administration Supplies Repairs and maintenance Utilities Computers and equipment Vehicle and power equipment - fuel Vehicle and power equipment - supplies Self-insured claims Insurance Depreciation and amortization Short term rentals Other charges Total operating expenses Operating income (loss)

2,879,822 1,657,070 863,692 5,400,584 9,051,989 3,795 161,364 9,217,148 346,466 859,182 73,152 1,278,800 9,312 63,366 2,781 75,459 1,007,033 61,034 - 1,068,067 395,760 33,398 7,305 436,463 757,024 - - 757,024 - 1,816,568 - 1,816,568 - 3,904,782 - 3,904,782 - - 20,164,772 20,164,772 - - 2,666,615 2,666,615 1,152,832 2,677,816 47,748 3,878,396 61,972 - 21,930 83,902 60,732 38,215 248,869 347,816 15,722,942 11,115,226 24,258,228 51,096,396 1,357,119 1,885,091 (968,582) 2,273,628

Nonoperating revenues (expenses) Investment earnings Interest expense and other charges Loss on disposal of capital assets Total nonoperating revenues (expenses) Income (loss) before transfers and capital contributions

39,800 834,326 741,692 1,615,818 (46,901) (376) - (47,277) - (10,051) - (10,051) (7,101) 823,899 741,692 1,558,490 1,350,018 2,708,990 (226,890) 3,832,118

(304,382) (236,661) (99,018) (640,061) (304,382) (236,661) (99,018) (640,061) 1,045,636 2,472,329 (325,908) 3,192,057 1,615,711 29,565,459 11,007,948 42,189,118 (88,329) (78,689) (61,568) (228,586) 1,527,382 29,486,770 10,946,380 41,960,532 $ 2,573,018 $ 31,959,099 $ 10,620,472 $ 45,152,589

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Combining Statement of Cash Flows Internal Service Funds Year Ended June 30, 2025

Exhibit 45

Information Fleet Risk Total Internal Technology Management Management Service Funds $ 17,017,513 $ 13,058,795 $ 23,291,287 $ 53,367,595 (11,988,861) (6,857,884) (22,383,188) (41,229,933) (3,024,244) (1,745,104) (875,002) (5,644,350) 2,004,408 4,455,807 33,097 6,493,312 (304,382) (236,661) (99,018) (640,061)

Cash flows from operating activities: Receipts from customers Payment to suppliers Payments to employees Net cash flows provided by (used in) operating activities Cash flows from noncapital financing activities: Transfers to other funds Net cash flows provided by (used in) noncapital financing activities (304,382) (236,661) (99,018) (640,061) Cash flows from capital and related financing activities: Acquisition and construction of capital assets (1,218,230) (3,285,695) (127,714) (4,631,639) Proceeds from sale of assets - (10,051) - (10,051) Principal paid on capital debt, net (1,976,462) (44,250) - (2,020,712) Interest and other charges paid on capital debt 200,821 (376) - 200,445 Net cash flows provided by (used in) capital and related financing activities (2,993,871) (3,340,372) (127,714) (6,461,957) Cash flows from investing activities: Interest received 56,562 834,328 741,693 1,632,583 Net cash flows provided by (used in) investing activities 56,562 834,328 741,693 1,632,583 Net change in cash and cash equivalents (1,237,283) 1,713,102 548,058 1,023,877 2,323,717 17,280,348 16,629,234 36,233,299 Beginning, July 1 Ending, June 30 $ 1,086,434 $ 18,993,450 $ 17,177,292 $ 37,257,176 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 1,357,119 $ 1,885,091 $ (968,582) $ 2,273,628 Adjustments to reconcile operating income to cash provided by operating activities: Depreciation and amortization 1,152,832 2,677,816 47,748 3,878,396 Changes in assets and liabilities: (Increase) decrease in: Receivables (815,610) 58,479 1,641 (755,490) Increase (decrease) in: Accounts payable and accrued liabilities 454,490 (77,545) 404,877 781,822 Accrued payroll and related liabilities (144,423) (88,034) (11,310) (243,767) Estimated claims payable - - 558,723 558,723 Total adjustments 647,289 2,570,716 1,001,679 4,219,684 Net cash flows from operating activities $ 2,004,408 $ 4,455,807 $ 33,097 $ 6,493,312 Reconciliation of cash and investments: Cash and investments Unrestricted $ 674,386 $ 18,993,450 $ 17,177,292 $ 36,845,128 Restricted 412,048 - - 412,048 Total cash and cash equivalents $ 1,086,434 $ 18,993,450 $ 17,177,292 $ 37,257,176

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

134

Financial Section

Other Supplementary Information: Custodial Funds Custodial Funds are used to account for assets held by the City as an agent for private organizations or other governments. Funds in this category include: Special Welfare Fund – accounts for receipt of welfare checks and foster children support checks from the state and payments made on behalf of individuals. Commonwealth of Virginia Fund – accounts for monies collected by the City on behalf of the Commonwealth of Virginia.

135

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Combining Statement of Fiduciary Net Position Custodial Funds June 30, 2025 Special Welfare Fund

Commonwealth of Virginia Fund

Exhibit 46

Total

Assets Cash and cash equivalents Total assets

$ 73,564 $ 87,114 $ 160,678 73,564 87,114 160,678

Liabilities Accounts payable Amounts held for others Total liabilities

1,601 8,792 10,393 30,764 - 30,764 32,365 8,792 41,157

Net position Restricted for: Individual, organizations, and other governments Total net position

41,199 78,322 119,521 $ 41,199 $ 78,322 $ 119,521

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

136

Financial Section

Combining Statement of Changes in Fiduciary Net Position Custodial Funds Year Ended June 30, 2025 Special Welfare Fund

137

Commonwealth of Virginia Fund

Exhibit 47

Total

Additions Permits and fees Miscellaneous revenue Total additions

$ 51,040 $ 12 $ 51,052 - 35,925 35,925 51,040 35,937 86,977

Deductions Special welfare agency payments Payments to other governments Total deductions Change in net position Net position at July 1 Net position at June 30

- 35,925 35,925 49,944 - 49,944 49,944 35,925 85,869 1,096 12 1,108 40,103 78,310 118,413 $ 41,199 $ 78,322 $ 119,521

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Other Supplementary Information: Discretely Presented Component Unit – City of Suffolk School Board School Operating Fund – accounts for revenues and expenditures relating to the operation of the City of Suffolk Public Schools. Revenues are derived from the City’s General Fund and from state and Federal funds. School Food Service Fund – accounts for revenues and expenditures relating to the operation of school cafeterias. Revenues are derived from state and Federal funds and cafeteria sales. School Grants Fund – accounts for revenues and expenditures relating to grants received by the school system from Federal and state governments. OPEB Trust Fund – accounts for the other postemployment benefits (OPEB). This fund accumulates resources for health insurance for retired employees. Combined School Activity Funds – accounts for the various activity funds of each of the schools. Revenues are derived from school fundraisers, athletic and state event receipts, and School Board allocations.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

138

Financial Section

Exhibit 48

Combining Balance Sheet Discretely Presented Component Unit School Board June 30, 2025

ASSETS Cash and cash equivalents Receivables, net Due from other funds Due from other governments Inventories Prepaid items Total assets LIABILITIES Accounts payable Accrued payroll and related liabilities Due to the Primary Government Due to other funds Total liabilities FUND BALANCES Nonspendable: Inventories and prepaids Premiums held for workers’ compensation claims Premiums held for health insurance claims Special revenue Food service Encumbrances Total fund balances Total liabilities and fund balance

School School Grant School Food School Student Total School Operating Fund Funds Service Fund Activity Funds Board $ 32,959,202 $ - $ 54,860 $ 1,885,048 $ 34,899,110 448,122 58,246 - - 506,368 - 1,677,100 - - 1,677,100 2,223,714 2,384,954 1,114,481 - 5,723,149 288,119 - 108,617 - 396,736 195,000 - - - 195,000 $ 36,114,157 $ 4,120,300 $ 1,277,958 $ 1,885,048 $ 43,397,463 $ 4,566,224 $ 52,004 $ 30,047 $ - $ 4,648,275 20,597,277 700,891 286,682 - 21,584,850 1,753,067 - - - 1,753,067 1,677,100 - - - 1,677,100 28,593,668 752,895 316,729 - 29,663,292 483,119 - 108,617 - 591,736 225,000 - - - 225,000 380,122 - - - 380,122 - 3,367,405 - 1,885,048 5,252,453 - - 852,612 - 852,612 6,432,248 - - - 6,432,248 7,520,489 3,367,405 961,229 1,885,048 13,734,171 $ 36,114,157 $ 4,120,300 $ 1,277,958 $ 1,885,048 $ 43,397,463

Reconciliation to the Statement of Net Position (Exhibit 1) Total fund balance - governmental funds Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. School Board Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Compensated absences Net pension and OPEB liability (asset) and pension and OPEB deferred inflows and outflows are not due and payable in the current period and, therefore, not reported in the governmental funds: Net pension asset - Schools Net pension liability - Schools Deferred outflows - pension Deferred inflows - pension Net OPEB asset - School Trust OPEB Deferred outflows - School Trust OPEB Deferred inflows - School Trust Net OPEB asset - State Plans Net OPEB liability - State Plans OPEB Deferred Outflows - State Plans OPEB Deferred Inflows - State Plans Net position of governmental activities

139

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$ 13,734,171

153,656,705

(16,859,175)

1,249,899 (88,357,338) 34,829,096 (17,037,434) 7,840,123 1,900,659 (2,472,603) 61,136 (15,890,365) 4,486,620 (2,119,812) $ 75,021,682

Financial Section

Exhibit 49

Combining Statement of Revenues, Expenditures, And Changes in Fund Balances Discretely Presented Component Unit School Board June 30, 2025 School Operating Fund

School Grant Funds

School Food Service Fund

REVENUES Revenue from use of money and property Charges for services Miscellaneous Intergovernmental: City contribution Revenue from the Commonwealth Revenue from the Federal Government Total revenues

School Student Total School Activity Funds Board $ 115,528 $ 2,148 $ 15,804 $ - $ 133,480 - - 233,886 - 233,886 447,608 226,580 16,921 3,263,421 3,954,530 73,579,134 - - - 73,579,134 128,557,669 1,357,400 286,494 - 130,201,563 960,521 10,962,991 8,306,202 - 20,229,714 203,660,460 12,549,119 8,859,307 3,263,421 228,332,307

EXPENDITURES Current: Education Total expenditures

199,763,178 14,726,520 10,023,373 2,982,445 227,495,516 199,763,178 14,726,520 10,023,373 2,982,445 227,495,516

Excess (deficiency) of revenues over (under) expenditures

3,897,282 (2,177,401) (1,164,066) 280,976 836,791

Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses), net

- 314,533 - - 314,533 (314,533) - - - (314,533) (314,533) 314,533 - - -

Net changes in fund balances

3,582,749 (1,862,868) (1,164,066) 280,976 836,791

Fund balances at July 1 Fund balances at June 30

3,937,740 5,230,273 2,125,295 1,604,072 12,897,380 $ 7,520,489 $ 3,367,405 $ 961,229 $ 1,885,048 $ 13,734,171 Reconciliation to the Statement of Activities (Exhibit 2) Net change in fund balance - governmental funds $ 836,791 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Depreciation expense for the School Board (10,472,135) Capitalized expenditures 3,826,869 Loss on disposal of capital assets (74,919) Record the net flow of resources in the current year related to the Pension Plan 6,849,231 Record the net flow of resources in the current year related to the OPEB School trust (735,803) Record the net flow of resources in the current year related to the OPEB State plans 1,064,157 Compensated absences and other postemployment benefits are not due and payable at June 30, and, therefore, are not reported in the fund statements. This amount represents the current year change in those items for the School Board - compensated absences (1,857,456) Change in net position of governmental activities (Exhibit 2) $ (563,265)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

140

Financial Section

Exhibit 50

Budgetary Reconciliation Schedule Discretely Presented Component Unit School Board Year Ended June 30, 2025

Revenues

School Operating Fund Total Exhibit 53 Budget Based Items Total Exhibit 49 $ 203,660,460 $ - $ 203,660,460

Total revenues

203,660,460 320,344

203,660,460

Expenditures Total other financing uses

199,763,178 314,533 -

199,763,178 314,533

Total expenditures

200,077,711 -

200,077,711

$ 3,582,749 $ 320,344

$ 3,582,749

Net changes in fund balances

CY encumbrance PY encumbrance

141

$ 6,432,248 (6,752,592) $ (320,344)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 51

Budgetary Reconciliation Schedule Governmental Funds – Discretely Presented Component Unit School Board Year Ended June 30, 2025

Revenues Total other financing sources

Total Exhibit 54 $ 12,549,119 314,533

School Grants Fund Budget Based Items Total Exhibit 49 $ - $ - 314,533

Total revenues

12,863,652

- 314,533

Expenditures

14,726,520

- -

Total expenditures

14,726,520

- -

Net changes in fund balances

$ (1,862,868) $ - $ 314,533

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

142

Financial Section

Exhibit 52

Budgetary Reconciliation Schedule Discretely Presented Component Unit School Board Year Ended June 30, 2025

Revenues

School Food Service Fund Total Exhibit 55 Budget Based Items Total Exhibit 49 $ 8,859,307 $ - $ -

Total revenues

8,859,307

- -

Expenditures

10,023,373

- -

Total expenditures

10,023,373

- -

Net changes in fund balances

143

$ (1,164,066) $ - $ -

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 53

Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Budgetary Basis) Discretely Presented Component Unit School Board Year Ended June 30, 2025 School Operating Fund Budgeted Amount Original Final Actual REVENUES Revenue from use of money and property Miscellaneous Intergovernmental: Contribution from the City of Suffolk Revenue from the Commonwealth Revenue from the Federal Government Total revenues

Variance with Final Budget

$ 35,000 $ 35,000 $ 115,528 $ 80,528 541,880 541,880 447,608 (94,272) 75,332,201 75,332,201 73,579,134 (1,753,067) 127,026,293 128,554,955 128,557,669 2,714 1,092,000 1,092,000 960,521 (131,479) 204,027,374 205,556,036 203,660,460 (1,895,576)

EXPENDITURES Current: Education

204,027,374 208,547,825 199,763,178 (8,784,647)

Total expenditures

204,027,374 208,547,825 199,763,178 (8,784,647)

Excess (deficiency) of revenues over (under) expenditures

- (2,991,789) 3,897,282 (10,680,223)

OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources (uses), net

- - (314,533) 314,533 - - (314,533) 314,533

Net change in fund balances

$ - $ (2,991,789) $ 3,582,749 $ (10,365,690)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

144

Financial Section

Exhibit 54

Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Budgetary Basis) Discretely Presented Component Unit School Board Year Ended June 30, 2025 School Grants Fund Budgeted Amount Original Final Actual REVENUES Revenue from use of money and property Miscellaneous Intergovernmental: Revenue from the Commonwealth Revenue from the Federal Government

$ - $ - $ 2,148 $ 2,148 1,150,000 6,441,084 226,580 (6,214,504) 10,115,000 14,505,236 1,357,400 (13,147,836) 22,955,000 13,273,680 10,962,991 (2,310,689)

Total revenues

34,220,000 34,220,000 12,549,119 (21,670,881)

EXPENDITURES Current: Grant expenditures

34,220,000 34,220,000 14,726,520 19,493,480

Total expenditures

145

Variance with Final Budget

34,220,000 34,220,000 14,726,520 19,493,480

Excess (deficiency) of revenues over (under) expenditures

- - (2,177,401) (2,177,401)

OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources (uses), net

- - 314,533 314,533 - - 314,533 314,533

Net change in fund balances

$ - $ - $ (1,862,868) $ (1,862,868)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Financial Section

Exhibit 55

Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Budgetary Basis) Discretely Presented Component Unit School Board Year Ended June 30, 2025 School Food Service Fund Budgeted Amount Original Final Actual REVENUES Revenue from use of money and property Charges for services Miscellaneous Intergovernmental: Revenue from the Commonwealth Revenue from the Federal Government Total revenues

Variance with Final Budget

$ 53,000 $ 53,000 $ 15,804 $ (37,196) 120,000 120,000 233,886 113,886 2,087,454 2,087,454 16,921 (2,070,533) 216,000 216,000 286,494 70,494 7,865,100 7,865,100 8,306,202 441,102 10,341,554 10,341,554 8,859,307 (1,482,247)

EXPENDITURES Current: Food Services

10,341,554 10,626,416 10,023,373 603,043

Total expenditures

10,341,554 10,626,416 10,023,373 603,043

Excess (deficiency) of revenues over (under) expenditures

- (284,862) (1,164,066) (879,204)

Net change in fund balances

$ - $ (284,862) $ (1,164,066) $ (879,204)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

146

Financial Section

Exhibit 56

Statement of Fiduciary Net Position Discretely Presented Component Unit – School Board June 30, 2025

ASSETS Cash and cash equivalents Total assets Net Position Held in trust for OPEB benefits Net position

147

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

OPEB Trust Fund $

23,806,499

23,806,499 $

23,806,499

Financial Section

Exhibit 57

Statement of Changes in Fiduciary Net Position Discretely Presented Component Unit – School Board Year Ended June 30, 2025

Additions: Gain on investments Total additions Deductions: Administrative fees

School Board $ 305,060

305,060

16,452

Total deductions

16,452

Change in net position

288,608

Net position - beginning of year

23,517,891

Net position - end of year

23,806,499

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

148

STATISTICAL SECTION

Statistical Section

This section of the City’s Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note to financial statements, and required supplementary information says about the City’s overall financial health. Contents: Financial Trends

Revenue Capacity

Debt Capacity

Table 1-4

These tables contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time.

These tables contain information to help the reader assess the factors affecting the City’s ability to generate its property and sales taxes, as well as revenues from its water and sewer operations.

These tables present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

5-12

13-15

Demographic and Economic Information These tables offer demographic and economic indicators to help the reader understand the environment in which the City’s financial activities take place and to help make comparison over time and with other governments.

16-17

Operating Information These schedules contain information about the City’s operations and resources to help the reader understand how the City’s financial information relates to the services the City provides and the activities it performs.

18-20

Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

150

Statistical Section

Table 1

Net Position by Component Last Ten Fiscal Years 2016 Governmental Activities: Net investment in capital assets Restricted: Capital projects Debt Service Other Purposes Unrestricted Total Governmental Activities Net Position Business-type Activities: Net investment in capital assets Restricted: Other Purposes Unrestricted Total Business-type Activities Net Position Primary Government: Net investment in capital assets Restricted: Capital Projects Debt Service Other Purposes Unrestricted Total Primary Government Net Position

2017

2018

2019

2020

2021

2022

2023

2024

2025

$ 323,431,229 $ 318,746,466 $ 335,967,276 $ 301,764,919 $ 312,862,208 $ 318,301,547 $ 325,875,876 $ 344,406,401 $ 427,273,581 $ 614,513,245 1,626,277 1,934,672 618,062 - - - - - - 392,424 393,352 397,267 - - - - - - 2,514,171 6,554,243 1,071,735 1,638,228 9,549,799 12,168,525 28,450,136 32,369,348 38,211,500 83,721,453 41,928,355 61,188,152 66,603,036 76,528,512 83,422,805 86,760,259 118,098,831 177,245,458 203,198,856 87,478,872 $ 369,892,456 $ 388,816,885 $ 404,657,376 $ 379,931,659 $ 405,834,812 $ 417,230,331 $ 472,424,843 $ 554,021,207 $ 668,683,937 $ 785,713,570

$ 116,807,623 $ 108,816,928 $ 108,549,474 $ 104,233,265 $ 107,008,077 $ 111,034,005 $ 128,990,591 $ 137,366,371 $ 163,995,859 $ 145,231,169 2,299,048 2,911,089 2,501,238 2,527,027 2,583,899 2,559,990 2,651,628 2,832,420 4,477,274 5,096,392 28,611,789 38,601,383 43,538,079 46,309,138 45,555,329 54,713,620 51,720,022 54,658,352 47,007,361 85,526,223 $ 147,718,460 $ 150,329,400 $ 154,588,791 $ 153,069,430 $ 155,147,305 $ 168,307,615 $ 183,362,241 $ 194,857,143 $ 215,480,494 $ 235,853,784

$ 440,238,852 $ 427,563,394 $ 444,516,750 $ 405,998,184 $ 419,870,285 $ 429,335,552 $ 454,866,467 $ 481,772,772 $ 591,269,440 $ 759,744,414 1,626,277 1,934,672 618,062 - - - - - - 392,424 393,352 397,267 - - - - - - 4,813,219 9,465,332 3,572,973 4,165,255 12,133,698 14,728,515 31,101,764 35,201,768 42,688,774 88,817,845 70,540,144 99,789,535 110,141,115 122,837,650 128,978,134 141,473,879 169,818,853 231,903,810 250,206,217 173,005,095 $ 517,610,916 $ 539,146,285 $ 559,246,167 $ 533,001,089 $ 560,982,117 $ 585,537,946 $ 655,787,084 $ 748,878,350 $ 884,164,431 $ 1,021,567,354 (1) (1)

(1)

Years not restated related to the implementation of GASB pronouncements in following Fiscal Year.

151

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 2

Changes in Net Position Last Ten Fiscal Years 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Expenses Governmental Activities: General Government $ 22,013,103 $ 23,932,608 $ 17,264,292 $ 18,671,840 $ 24,148,299 $ 39,918,523 $ 27,864,340 $ 29,364,108 $ 36,737,918 $ 22,861,398 Judicial 8,153,863 8,867,642 8,806,323 9,323,342 10,446,204 10,860,585 10,536,210 11,073,827 12,179,031 12,982,921 Public Safety 49,908,535 58,213,081 63,472,949 63,195,836 66,848,213 69,025,111 72,861,636 78,899,315 87,344,733 101,282,309 Public Works 38,037,370 40,501,580 37,224,174 39,080,373 42,200,323 44,417,911 61,008,906 49,098,480 52,940,289 23,285,450 Health and Welfare 11,901,139 13,162,760 13,044,274 13,260,821 15,192,043 15,114,251 14,673,123 19,749,753 19,449,700 22,735,514 Transportation 960,983 1,005,429 997,267 1,300,636 1,511,098 1,426,778 1,631,135 1,750,556 2,287,672 3,280,901 Education 53,440,550 54,983,835 57,818,350 60,358,348 58,464,243 65,531,837 65,382,786 66,512,206 71,669,409 103,016,685 Parks, Recreation and Cultural 10,318,851 12,111,876 11,737,262 12,621,117 12,333,012 12,100,733 12,265,195 14,057,260 15,993,004 11,530,862 Community Development 8,621,160 10,563,461 7,323,375 6,472,008 8,481,703 8,205,329 9,261,924 9,336,334 11,045,776 10,925,849 Interest on Long-Term Debt 9,419,498 8,849,091 9,765,103 9,663,773 9,095,957 8,047,611 8,570,572 8,858,680 8,875,859 9,574,395 Total Governmental Activities Expenses 212,775,052 232,191,363 227,453,369 233,948,094 248,721,095 274,648,669 284,055,827 288,700,519 318,523,391 321,476,284 Business-type Activities: Utilities 51,423,536 49,295,373 52,035,621 55,186,848 56,508,083 56,442,957 53,977,360 56,493,225 57,237,253 55,931,287 Refuse collection 5,718,442 5,320,570 6,713,015 8,458,504 9,194,200 5,044,152 9,419,082 10,072,140 10,442,002 10,842,082 Stormwater management 4,450,559 4,749,518 4,912,097 4,830,797 4,989,456 9,566,700 5,087,932 5,091,000 5,445,210 6,342,684 Total Business-type Activities Expenses 61,592,537 59,365,461 63,660,733 68,476,149 70,691,739 71,053,809 68,484,374 71,656,365 73,124,465 73,116,053 Total Primary Government Expenses $ 274,367,589 $ 291,556,824 $ 291,114,102 $ 302,424,243 $ 319,412,834 $ 345,702,478 $ 352,540,201 $ 360,356,884 $ 391,647,856 $ 394,592,337 Program Revenues Governmental activities: Charges for Services: General Government Administration $ 4,887,432 $ 4,659,243 $ 4,880,782 $ 5,035,626 $ 4,478,205 $ 4,100,866 $ 4,527,721 $ 4,480,553 $ 5,886,906 $ 664,218 Judicial Administration 304,129 272,141 313,092 274,208 288,709 323,618 352,911 254,891 183,762 2,521,512 Public Safety 1,885,914 1,948,166 1,836,661 2,199,385 2,272,912 2,337,613 2,716,979 3,268,111 3,070,113 11,144,444 Public Works 899,794 990,045 988,507 1,288,947 1,243,877 1,318,980 1,877,344 1,555,254 1,321,746 39,739,288 Transportation 67,759 76,099 71,652 87,229 68,430 5 64,817 65,326 60,045 Parks, Recreation and Cultural 1,108,862 1,056,185 1,020,013 1,009,068 727,136 284,721 759,552 921,014 782,731 1,342,151 Community Development 70 107 16,447 24,742 40,069 - - - - 1,660,649 Total Charges for Services 9,153,960 9,001,986 9,127,154 9,919,205 9,119,338 8,365,803 10,299,324 10,545,149 11,305,303 57,072,262 Operating Grants and Contributions: General Government Administration 1,503,473 1,477,767 450,386 456,759 2,355,721 12,928,654 9,474,000 635,285 915,473 11,010,427 Judicial Administration 2,047,647 2,170,053 3,410,191 3,318,391 2,209,983 2,424,511 2,437,198 3,843,402 4,072,324 391,544 Public Safety 1,057,389 1,347,604 1,145,864 1,271,752 1,218,376 1,416,529 4,803,818 2,404,123 2,212,308 3,834,510 Public Works 22,758,708 23,496,157 23,395,546 24,220,184 24,434,363 25,076,636 28,013,220 29,637,125 32,475,180 35,224 Health and Welfare 7,598,958 8,088,860 7,452,411 9,237,862 8,984,117 9,379,042 9,481,473 11,780,622 10,560,612 Transportation 141,002 188,364 186,942 984,425 1,571,026 1,501,150 2,146,421 2,273,206 1,466,234 Education - - - - 3,724 - - - - Parks, Recreation and Cultural 287,351 295,998 275,996 377,344 310,848 292,180 287,343 246,906 449,720 73,920 Community Development 1,032,855 2,725,076 1,209,289 1,116,646 719,004 984,074 878,525 950,140 994,996 1,429,086 Total Operating Grants and Contributions 36,427,383 39,789,879 37,526,625 40,983,363 41,807,162 54,002,776 57,521,998 51,770,809 53,146,847 16,774,711

Continued

Capital Grants and Contributions: General Government 3,077,758 2,548,273 4,248,322 1,407,912 376,848 543,372 433,763 2,586,696 313,312 185,824 Public Safety - - - - - - - - - 2,277,238

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

152

Statistical Section

Table 2

Changes in Net Position Last Ten Fiscal Years Public Works Health and Welfare Transportation Parks, Recreation and Cultural Community Development Total Capital Grants and Contributions Total Governmental Activities Program Revenues

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5,006,683 6,800,136 10,824,821 6,101,699 8,725,657 2,469,464 24,728,332 29,303,248 32,451,543 32,265,377 - - - - - - - 4,433,808 2,303,415 49,422 50,259 59,508 40,683 62,052 324 65,360 2,419 12,721 1,028,457 1,660 414,599 23,647 - 774,910 - - - 369,511 - - 93,400 - - - - - - 9,162,320 9,400,328 15,640,650 7,573,941 9,164,557 3,788,070 25,227,455 36,326,171 35,080,991 35,097,950 $ 54,743,663 $ 58,192,193 $ 62,294,429 $ 58,476,509 $ 60,091,057 $ 66,156,649 $ 93,048,777 $ 98,642,129 $ 99,533,141 $ 108,944,923 (1) 46,876,297 47,818,262 48,999,436 51,703,463 51,378,596 61,760,354 58,898,742 57,440,756 60,907,210 65,003,261 11,877,376 12,288,034 13,765,024 13,972,060 15,157,707 17,077,913 19,036,742 18,953,331 19,763,994 19,630,004 58,753,673 60,106,296 62,764,460 65,675,523 66,536,303 78,838,267 77,935,484 76,394,087 80,671,204 84,633,265

Business-type Activities: Charges for Services: Utility Non-major Total Charges for Services Operating Grants and Contributions: Utility - 88,315 - - - - - - - Total Operating Grants and Contributions - 88,315 - - - - - - - Capital Grants and Contributions: Utility 3,682,628 1,870,646 5,483,390 579,166 4,990,101 5,457,474 5,269,223 2,652,117 8,065,954 4,148,197 Total Capital Grants and Contributions 3,682,628 1,870,646 5,483,390 579,166 4,990,101 5,457,474 5,269,223 2,652,117 8,065,954 4,148,197 Total Business-type Activities Program Revenues $ 62,436,301 $ 62,065,257 $ 68,247,850 $ 66,254,689 $ 71,526,404 $ 84,295,741 $ 83,204,707 $ 79,046,204 $ 88,737,158 $ 88,781,462 Total Primary Government Program Revenues $ 117,179,964 $ 120,257,450 $ 130,542,279 $ 124,731,198 $ 131,617,461 $ 150,452,390 $ 176,253,484 $ 177,688,333 $ 188,270,299 $ 197,726,385 Net (Expense)/Revenue Governmental Activities $ (158,031,389) $ (173,999,170) $ (165,158,940) $ (175,471,585) $ (188,630,038) $ (208,492,020) $ (191,007,050) $ (190,058,390) $ (218,990,250) $ (212,531,361) Business-type Activities 843,764 2,699,796 4,587,117 (2,221,460) 834,665 13,241,932 14,720,333 7,389,839 15,612,693 15,665,409 Total Primary Government Net Expense $ (157,187,625) $ (171,299,374) $ (160,571,823) $ (177,693,045) $ (187,795,373) $ (195,250,088) $ (176,286,717) $ (182,668,551) $ (203,377,557) $ (196,865,952)

Continued

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 2

Changes in Net Position Last Ten Fiscal Years 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 General Revenues and Other Changes in Net Position Governmental Activities: Taxes 160,158,953 166,579,230 173,015,098 182,439,367 187,808,386 199,820,382 222,616,258 237,483,468 272,247,296 285,589,257 Grants and Contributions Not Restricted to Specific Programs 13,545,057 13,589,564 13,726,367 14,011,120 14,094,789 14,530,452 14,422,449 14,515,047 14,691,756 14,760,139 Revenue from use of money and property 1,374,395 1,837,341 2,892,413 5,524,760 4,067,125 1,702,489 1,735,694 11,270,149 21,032,372 13,399,544 Gain (Loss) on disposal of capital assets (1,904,854) - - - - (2,905,626) (484,909) (758,836) (741,297) Capital assets donated to Component Unit (185,632) - - (57,874,651) - - - - - Transfers/Miscellaneous 9,092,746 10,917,464 7,742,293 6,645,272 8,562,891 6,739,842 6,801,975 9,144,926 26,422,852 27,522,039 Total Governmental Activities 182,080,665 192,923,599 197,376,171 150,745,868 214,533,191 219,887,539 245,091,467 271,654,754 333,652,979 341,270,979 Business-type Activities: Investment Earnings 983,001 935,690 970,727 2,020,795 1,128,542 210,580 150,244 2,938,084 4,728,789 3,903,819 Transfers/Miscellaneous (2,687,252) (1,024,546) 121,844 (1,318,696) 114,668 (292,202) (218,278) 1,166,979 281,869 1,682,066 Total Business-type Activities (1,704,251) (88,856) 1,092,571 702,099 1,243,210 (81,622) (68,034) 4,105,063 5,010,658 5,585,885 Total Primary Government $ 180,376,414 $ 192,834,743 $ 198,468,742 $ 151,447,967 $ 215,776,401 $ 219,805,917 $ 245,023,433 $ 275,759,817 $ 338,663,637 $ 346,856,864 Change in Net Position Governmental Activities $ 24,049,276 $ 18,924,429 $ 32,217,231 $ (24,725,717) $ 25,903,153 $ 11,395,519 $ 54,084,417 $ 81,596,364 $ 114,662,729 $ 128,739,618 Business-type Activities (860,487) 2,610,940 5,679,688 (1,519,361) 2,077,875 13,160,310 14,652,299 11,494,902 20,623,351 21,251,294 Total Primary Government $ 23,188,789 $ 21,535,369 $ 37,896,919 $ (26,245,078) $ 27,981,028 $ 24,555,829 $ 68,736,716 $ 93,091,266 $ 135,286,080 $ 149,990,912 (1)

Concluded

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

154

Statistical Section

Table 3

Fund Balances of Governmental Funds Last Ten Fiscal Years 2016 General Fund: Nonspendable Restricted Committed Assigned Unassigned Total General Fund

2017

2018

2019

2020

2021

2022

2023

2024

2025

$ 24,905 $ 47,669 $ 37,908 $ 64,993 $ 73,373 $ 95,434 $ 100,474 $ 132,357 $ 123,814$ 63,762 1,162,069 1,528,879 1,552,547 1,614,632 1,455,994 1,401,576 1,324,839 1,373,625 1,428,394 1,990,835 4,472,517 5,920,555 6,633,215 4,237,613 9,022,280 25,260,455 38,290,681 66,624,120 88,697,747 425,008 2,609,232 426,564 748,518 526,269 1,500,527 1,862,146 2,871,082 5,927,503 114,470,806 56,491,224 58,392,937 65,326,008 73,858,094 86,344,490 81,006,638 93,931,500 98,014,544 106,686,045 124,092,466 $ 62,575,723 $ 68,499,272 $ 73,976,242 $ 80,523,850 $ 97,422,406 $ 109,264,630 $ 135,509,640 $ 169,015,728 $ 202,863,503$ 240,617,869

All Other Governmental Funds: Nonspendable $ 30,776 $ 45,654 $ 45,654 $ 45,654 $ 45,654 $ 45,654 $ 164,694 $ 90,766 $ 98,866$ 98,866 Restricted 67,568,640 63,765,980 56,841,100 56,027,201 65,409,783 67,810,242 85,261,656 99,942,644 100,391,673 68,890,313 Committed reported in: Capital Projects Funds 5,914,066 7,319,905 10,890,140 9,448,361 6,777,753 10,232,234 9,966,324 18,443,404 38,619,419 Nonmajor Governmental Funds 2,516,047 3,498,144 2,599,519 3,240,732 4,436,654 5,974,413 7,642,579 9,105,077 9,361,592 Other Governmental Funds 2,148,460 99,368 95,453 492,720 492,720 492,720 492,720 643,011 594,736 Unassigned (10,945) (10,818) (10,819) (10,819) (10,819) (10,819) (10,819) (10,819) - Total All Other Government Funds $ 78,167,044 $ 74,718,233 $ 70,461,047 $ 69,243,849 $ 77,151,745 $ 84,544,444 $ 103,517,154 $ 128,214,083 $ 149,066,286$ 68,989,179 Component Unit (School Board) Nonspendable Committed Assigned Unassigned Total Component Unit

(1)

$ 1,134,919 $ 1,125,204 $ 1,118,041 $ 1,222,261 $ 1,206,139 $ 1,179,061 $ 1,201,469 $ 1,515,015 $ 1,276,400$ 1,196,858 417,309 433,862 420,990 490,778 721,628 - - - - 7,125,361 7,682,280 9,170,789 10,150,397 9,978,500 10,977,207 11,863,486 9,802,013 11,620,980 12,537,313 154,815 - - - - - - - - $ 8,832,404 $ 9,241,346 $ 10,709,820 $ 11,863,436 $ 11,906,267 $ 12,156,268 $ 13,064,955 $ 11,317,028 $ 12,897,380$ 13,734,171

FY2015 includes a restatement of fund balance between the General Fund and the other special revenue funds of $763,185

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 4

Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years Revenues General Property Taxes Other Local Taxes Licenses, Permits and Fees Fines and Forfeitures Use of Money and Property Intergovernmental Charges for Services Miscellaneous Total Revenues

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

118,076,619 42,544,952

123,457,208 43,202,375

127,047,858 45,768,255

135,696,638 46,261,507

141,959,059 48,737,290

146,642,458 53,092,031

158,483,622 61,403,956

178,439,927 61,187,205

205,667,941 65,055,986

220,141,959 67,078,989

1,589,474 1,042,219

1,678,881 983,988

1,825,728 1,142,491

1,723,958 1,179,110

2,141,327 1,012,104

2,484,061 1,068,804

2,811,187 1,013,613

2,381,976 847,986

2,524,133 14,395,999

2,474,661 6,471,107

1,289,414 58,698,660 5,018,523 2,482,439 230,742,300

1,775,226 62,362,464 4,827,273 1,983,706 240,271,121

2,708,976 66,206,954 4,770,834 3,794,081 253,265,177

3,965,689 62,089,557 5,508,401 2,076,460 258,501,320

3,516,133 64,516,765 5,104,191 3,331,856 270,318,725

1,610,402 71,603,311 4,743,554 1,269,900 282,514,521

1,648,532 96,690,342 6,501,353 1,252,595 329,805,200

10,267,409 101,135,805 6,791,496 3,535,587 364,587,391

18,948,928 102,773,013 6,036,159 8,242,466 423,644,625

18,100,532 116,634,720 6,672,325 16,728,247 454,302,540

16,302,909 8,896,483 57,115,046 25,102,596 13,256,252 1,079,339 54,900,377

17,074,074 9,051,250 60,265,740 23,998,099 13,319,870 1,090,607 56,467,515

17,062,724 9,624,709 62,900,211 22,333,618 13,634,568 1,592,193 60,353,258

18,200,342 10,133,068 63,883,434 24,421,117 14,670,632 1,898,154 58,106,679

28,646,499 10,430,783 64,154,020 24,658,890 14,580,535 1,420,397 65,526,746

27,772,839 10,917,499 72,428,273 25,772,021 14,961,450 2,045,390 65,377,695

22,829,636 11,454,656 79,030,097 33,671,378 20,102,737 1,753,973 66,507,115

25,390,710 12,650,884 88,045,779 41,063,689 20,100,705 2,352,281 73,644,025

30,635,845 13,249,553 118,718,114 86,259,017 23,025,147 3,213,136 103,016,685

10,576,486 9,844,679 323,725 46,189,812

11,147,634 6,686,201 226,481 56,107,239

12,281,589 5,846,241 675,842 37,532,944

11,331,545 7,305,136 594,989 30,648,655

10,854,151 6,752,880 759,119 33,190,478

11,558,710 8,302,351 673,338 48,026,860

13,569,804 8,481,148 1,356,352 49,043,204

15,547,330 10,266,245 46,701 80,470,626

31,663,598 10,039,402 464,332 -

720,840 9,388,267 16,781,132 270,477,943

323,069 10,319,538 15,767,400 281,844,717

245,499 10,535,818 17,815,620 272,434,834

582,569 9,579,925 18,118,620 269,474,865

409,738 9,519,802 18,774,488 289,678,526

506,360 8,801,914 19,074,488 316,219,188

470,758 9,013,974 20,809,488 338,094,320

684,572 9,191,957 21,938,678 401,394,182

442,620 10,462,346 22,935,542 454,125,337

(7,164,005) 13,586,012

26,493,071

22,250,443 177,203 (Continued)

Expenditures General Government Administration 15,511,299 Judicial Administration 8,467,689 Public Safety 50,488,261 Public Works 23,038,899 Health and Welfare 12,219,597 Transportation 1,033,663 Education 53,435,459 Parks, Recreation and Cultural 9,835,503 Community Development 7,948,520 Non-Departmental 466,002 Capital Outlay (3) 28,950,011 Debt Service: Other 446,658 Interest 10,346,003 Principal 17,015,462 Total Expenditures 239,203,026 Excess (Deficiency) of Revenues Over (Under) Expenditures (8,460,726)

(30,206,822) (28,579,540) (13,933,514) 843,860

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156

Statistical Section

Table 4

Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years 2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Other Financing Sources (Uses) Proceeds of Refunding Bonds 20,176,111 47,215,000 3,395,000 575,000 31,345,000 36,855,000 17,990,000 - - Proceeds of Bonds Issued 20,360,000 26,380,000 26,665,000 17,370,000 18,965,000 22,000,000 27,090,000 27,735,000 30,000,000 10,040,000 Premiums on Debt 3,955,535 7,912,562 2,313,366 1,182,718 2,323,802 2,163,968 2,928,122 2,646,705 379,629 586,444 Transfers In 37,593,204 36,594,695 37,425,621 39,252,347 37,704,027 40,940,955 39,721,127 47,554,804 69,553,292 69,994,966 Payment to Refunded Bonds Escrow Agent (22,362,261) (51,298,280) (3,734,892) (600,000) (31,033,899) (36,743,990) (17,754,699) - - Transfers Out (33,903,324) (34,122,417) (36,264,770) (38,516,141) (35,341,338) (38,817,005) (38,342,842) (46,226,563) (67,483,386) (67,804,454) Total Other Financing Sources, net 25,819,265 32,681,560 29,799,325 19,263,924 23,962,592 26,398,928 31,631,708 31,709,946 32,449,535 12,816,956 Net Change in Fund Balance 17,358,539 2,474,738 1,219,785 5,330,410 24,806,452 19,234,923 45,217,720 58,203,017 54,699,978 12,994,159 Capital outlay(1) 31,474,338 48,309,227 58,064,359 39,808,562 32,231,862 34,373,563 52,498,272 52,222,998 86,704,065 86,704,065 Debt Service as a percentage of non-capital expenditures(1) 13.17% 11.78% 11.66% 12.19% 11.68% 11.08% 10.57% 10.43% 9.89% 9.09% Add’l School Operating & Food Service Expenditures(2) 88,999,257 88,031,891 90,729,115 96,781,541 99,580,517 102,129,429 108,480,077 124,478,636 222,957,953 222,957,953 Debt Service as a percentage of non-capital plus school expenditures(2) 9.22% 8.44% 8.29% 8.61% 8.22% 7.92% 7.49% 7.27% 5.79% 5.66% (1)

Calculated as the Principal plus Interest shown above divided by the Total Expenditures less Capital Outlay as shown in the Exhibit 4 reconciliation schedule, as defined by GFOA. This ratio may have changed from previous years’ presentations.

(2)

Additional School expenditures are found in the Component Unit section of the ACFR (School Operating and School Food Service Fund expenditures less Contribution revenue from the City). The related ratio is part of bond continuing disclosure requirements.

(Concluded)

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 5

Tax Revenues by Source, Governmental Funds Last Ten Fiscal Years 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 General Property Tax $ 117,651,210 $ 123,411,724 $ 127,047,858 $ 135,696,638 $ 141,959,059 $ 146,689,685 $ 161,212,302 $ 176,258,134 $ 205,667,941 $ 220,141,959 Other Local Taxes: Sales and Use 9,904,693 10,399,254 10,977,388 10,421,185 12,626,601 15,618,307 16,370,461 18,035,988 18,356,678 18,964,571 Utility Tax 4,478,378 4,447,778 4,839,131 4,799,814 4,755,918 4,864,689 5,024,008 5,034,466 5,076,743 5,338,259 Communication Taxes 3,115,672 3,311,375 3,212,841 3,001,565 2,890,793 2,627,477 2,499,745 2,434,071 2,306,793 2,267,692 Business and Occupational License 7,680,254 6,891,756 7,552,220 8,095,262 8,412,262 9,212,742 10,964,624 11,819,247 13,259,460 13,385,196 Motor Vehicle License 2,449,544 2,436,079 2,354,440 2,472,521 2,624,213 2,682,701 2,709,174 2,837,185 2,881,656 2,903,879 Bank Stock 564,037 629,727 675,738 691,626 582,250 706,211 747,889 768,872 795,464 793,612 Recordation 1,466,044 1,477,475 1,866,957 1,697,180 2,513,189 2,448,497 3,279,397 1,851,695 1,738,684 2,159,572 Tobacco 2,050,259 2,069,356 1,971,283 1,955,756 1,920,427 2,028,076 1,831,481 1,849,863 1,452,903 1,397,435 Lodging 1,484,031 1,706,709 1,787,927 1,762,778 1,470,419 1,657,435 2,206,627 2,067,131 2,362,048 2,429,980 Meals 8,996,483 9,432,240 10,111,438 10,996,828 10,749,762 11,278,549 15,592,762 14,299,363 16,582,151 17,091,726 Admission 318,348 365,757 418,892 366,992 191,456 6,013 177,788 227,453 243,406 347,067 Total $ 160,158,953 $ 166,579,230 $ 172,816,113 $ 181,958,145 $ 190,696,349 $ 199,820,382 $ 222,616,258 $ 237,483,468 $ 270,723,927 $ 287,220,948

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158

Statistical Section Table 6

Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years

Fiscal Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Real Property Assessed Value Estimated Citizens Public Actual Property(1) Service(2) Total Value $ 9,012,246,300 $ 30,898,516 $ 9,043,144,816 $ 9,423,596,600 $ 9,234,719,500 37,249,670 9,271,969,170 9,591,955,500 9,536,521,300 44,371,412 9,580,892,712 9,874,324,100 9,758,914,800 43,055,984 9,801,970,784 10,211,179,800 10,041,879,300 43,414,519 10,085,293,819 10,513,127,400 10,550,088,600 46,398,554 10,596,487,154 11,024,342,300 11,389,979,300 44,111,509 11,434,090,809 11,865,794,500 13,257,772,600 45,049,752 13,302,822,352 13,735,927,200 15,730,764,300 46,697,648 15,777,461,948 16,175,311,900 16,939,349,400 51,799,861 16,991,149,261 17,373,994,800

City Wide Rate

Personal Property Assessed Value Citizens Public Property(3)(4) Service Total 1.07 $ 941,845,500 $ 329,961,909 $ 1,271,807,409 $ 1.07 985,809,155 346,169,603 1,331,978,758 1.07 1,002,785,230 360,467,216 1,363,252,446 1.11 1,074,774,050 370,951,482 1,445,725,532 1.11 1,178,762,000 370,348,948 1,549,110,948 1.11 1,237,467,530 388,395,491 1,625,863,021 1.11 1,390,991,290 390,958,029 1,781,949,319 1.09 1,566,913,590 404,249,850 1,971,163,440 1.09 1,619,230,360 442,554,115 2,061,784,475 1.07 1,753,533,530 526,857,438 2,280,390,968

Total Tax Rate

Assessed Value 4.25 $ 10,314,952,225 4.25 10,603,947,928 4.25 10,944,145,158 4.25 11,247,696,316 4.25 11,634,404,767 4.25 12,222,350,175 4.25 13,216,040,128 4.25 15,273,985,792 4.25 17,839,246,423 4.25 19,271,540,229

Real property is assessed at 100% of estimated actual value except land use property which approximates 30%. Source: City Assessor’s Office Determined by the State Corporation Commission of Virginia. (3) Vehicles are assessed at 100% of clean loan value: recreation vehicles are assessed at 100% of lowest NADA value; and machinery and tools are assessed at 20% of original cost for the first five years and 10% thereafter. Source: City Commissioner of the Revenue’s Office. (4) In Fiscal Year 2023, a 75% assessment ratio was applied to the value of personal property due to increased market values of cars and trucks. A 90% assessment ratio was applied in Fiscal Year 2024. (1) (2)

(5)

In FY 2024, a $.02 real estate tax relief credit was applied to provide tax relief to property owners due to a significant increase in real estate assessments.

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 7

Direct Property Tax Rates (per Hundred)(1) Last Ten Fiscal Years Real Poperty(2)

Fiscal Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Route 17 Taxing District

City Wide $

1.07 $ 1.07 1.07 1.11 1.11 1.11 1.11 1.09 1.09 1.07

0.24 $ 0.24 0.24 0.24 0.24 0.24 0.24 0.24 0.24 0.24

Downtown Business Overlay Personal District Property(3) 0.11 $ 4.25 $ 0.11 4.25 0.11 4.25 0.11 4.25 0.11 4.25 0.11 4.25 0.11 4.25 0.11 4.25 0.11 4.25 0.11 4.25

Machinery Minimum and Total Direct Tools(4) Rate(5) 3.15 $ 5.28 3.15 5.28 3.15 5.28 3.15 5.28 3.15 5.28 3.15 5.28 3.15 5.28 3.15 5.28 3.15 5.28 3.15 5.28

The City is not a component of any overlapping governments; therefore, it does not share any overlapping tax rates nor debt. Real property is assessed at 100% of estimated actual value, except land use property which approximates 30%. (3) Vehicles are assessed at 100% of clean loan value per JD Power. In FY 23, a 75% assessment ratio was applied to cars and trucks less than two tons. In FY 2024, a 90% assessment ratio was applied to cars and trucks less than two tons. (1) (2)

(4) (5)

Assessed at 20% of original cost during the first five years of life; 10% thereafter. The district tax rates include the City-wide rate. Additionally, districts overlap some properties, resulting in those properties being taxed at the City rate plus the additional rate for each applicable district. Therefore, only the City-wide rate is used with the personal property rate to calculate the Minimum Total Direct Rate.

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Statistical Section

Table 8

Principal Property Tax Payers Current Year and Nine Years Ago Real Property 2025

Taxpayer

Retail Merchandise Warehouses

Monroe Lot 8 Owner LLC

Warehouses

Target Corporation

Distribution Warehouse

Suffolk Benton LLC Coastal Logistics Owner LLC Q Owner SCVA001 LLC 2152 LLC

Apartment Complex

BEC Investors, LLC

Apartment Complex

EGP 116 Suffolk, LLC

Joint Military Training Facility

116 Lakeview Parkway, LLC

Retirement Community

Centerpoint Properties Trust

Real Property Management

QVC of Suffolk Inc. / CVN Distribution

Distribution Warehouse

TowneBank

Financial Institution

The Pergola Group

Apartment Complex

Lake Prince Center, Inc.

Retirement Community

Walmart

Retail Merchandise

Boyd Suffolk GSA, LLC

Joint Military Training Facility

SGP 115 Lake View

Joint Military Training Facility

Percentage

of Total City

Taxable

Assessed

Value

Value(1)

Value

Type of Business

Amazon.com Services Inc SE VA Suffolk Property Owner LLC

2016 Percentage

Value(1)

$ 354,940,700 2.10% 188,920,900 1.12%

Mega Warehouse

153,416,500 0.91% 102,180,300 0.60% 58,876,200 0.65% 99,243,400 0.59%

Mega Warehouse

93,000,000 0.55%

Mega Warehouse

90,755,600 0.54% 63,326,700 0.37%

71,223,800 0.42% 53,232,400 0.31%

55,578,000 0.62% 51,601,200 0.57% 43,744,200 0.49% 40,876,400 0.45% 39,380,000 0.44% 33,599,000 0.37% 31,433,800 0.35% 31,320,200 0.35% 27,614,500 0.31% $ 1,270,240,300 7.50% $ 414,023,500 4.59%

(1)

Total Assessed Value (does not include public service corporations)

$ 16,939,349,400 $ 9,012,246,300

Source: City of Suffolk Assessor’s Office Personal Property 2025

Taxpayer

Type of Business

2016 Percentage

Percentage

of Total City

Taxable

Assessed

Value

Value(2)

Value

Value(2)

Amazon.com Services Inc Ekaterra Tea Manufacturing USA, LLC

Retail Merchandise Beverage Company

$ 49,838,310 2.84% 16,351,070 0.93%

Target Corporation

Distribution Warehouse

Spectrum Southeast LLC/Charter Communications

Cable Products

Solenis LLC/BASF Corporation/CIBA

Chemical Plant

9,529,480 0.54% 8,869,510 0.51%

Hormel Foods Corporation

Technology Company

Lockheed Martin Corporation

Technology Company

QVC of Suffolk, LLC

Distribution Warehouse

Birdsong Corporation

Food Processing

Massimo Zanetti Beverage USA

Beverage Company

Unilever/Lipton, Inc.

Beverage Company

5,956,350 0.34% 5,467,150 0.31% 5,959,760 0.63% 25,082,050 2.66%

Planters/ Kraft Foods

Food Processing

10,908,730 1.16%

JM Smuckers Company

Beverage Company

5,871,995 0.62%

Sysco Food Services of Hampton Roads

Food Service Distribution

4,974,590 0.53%

BASF Corporation

Chemical Plant

4,042,060 0.43%

Charter Communications

Cable Products

3,072,270 0.33%

12,755,540 0.73% 3,917,015 0.42%

7,473,410 0.43% 7,369,570 0.42% 6,323,605 0.67% 5,962,730 0.34% 7,521,535 0.80%

$ 129,573,120 7.39% $ 77,673,610 8.25% $ 1,753,533,530 $ 941,845,500 Source: City of Suffolk, Commissioner of Revenue’s Office

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Property Tax Levies and Collections Last Ten Fiscal Years Tax Collections Delinquent

Fiscal Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Note A:

(1) (2)

Total Tax Levy (1)

Current Tax Collections

Percent of Levy Collected

Delinquent Tax Collections

Total

As Percent of Outstanding Delinquent Total Tax Taxes Collections(2)

Total Collections as a Percent of the Levy

Outstanding Delinquent Taxes At End of Fiscal Year(2)

131,208,221 128,655,899 98.05% 1,880,684 44.26% 130,536,583 99.49% 4,249,557 134,647,214 132,124,360 98.13% 1,856,687 43.57% 133,981,047 99.51% 4,261,779 137,308,853 134,243,292 97.77% 1,639,344 32.58% 135,882,636 98.96% 5,032,040 146,769,909 143,637,167 97.87% 2,796,009 60.97% 146,433,176 99.77% 4,585,660 150,738,427 147,518,704 97.86% 1,920,465 41.63% 149,439,169 99.14% 4,612,663 157,939,087 154,394,883 97.76% 3,010,123 59.28% 157,405,006 99.66% 5,077,608 170,525,879 166,849,227 97.84% 3,563,113 60.15% 170,412,340 99.93% 5,923,453 193,627,936 189,435,697 97.83% 2,767,297 42.15% 192,202,994 99.26% 6,565,975 217,994,469 213,162,816 97.78% 2,419,958 30.94% 215,582,774 98.89% 7,822,355 232,658,793 227,802,565 97.91% 3,247,090 38.56% 231,049,655 99.31% 8,420,337 Delinquent real property taxes not collected within three years, a lien is recorded on the property of the collection thereof. Collecitons in subsequent years represent delinquent accounts collected during the course of that fiscal year for all prior fiscal years.

Beginning in the year ended June 30, 2000, the tax levy includes the Commonwealth’s reimbursement. Adjusted for collections through August 15.

Source: City Treasurer

Property Tax Levies and Collections 250,000,000 200,000,000 150,000,000

100,000,000 50,000,000

2016

2017

2018

2019

Total Tax Levy

2020

2021

2022

2023

2024

2025

Current Tax Collections

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

162

Statistical Section

Table 10

Property Value and Construction Last Ten Fiscal Years

Fiscal Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 (1) (2)

Commercial Construction(1) Number of Permits Value 152 158 295 256 192 166 246 782 290 215

58,345,994 160,651,157 739,050,509 58,233,219 318,398,197 79,712,825 170,488,979 1,092,802,776 789,441,286 390,455,286

Residential Construction(1) Number of Permits Value 691 914 894 866 1,067 1,644 1,760 5,829 1,293 1,435

79,256,973 95,043,903 106,647,685 108,747,841 119,255,504 359,505,429 345,748,542 181,266,282 177,311,393 188,915,691

Real Property Value(2) Residential

Commercial

Agricultural

Nontaxable

Total

6,739,083,100 6,868,962,400 7,067,095,400 7,337,983,600 7,537,092,200 7,912,235,000 8,528,616,800 9,738,276,800 11,290,604,800 11,973,306,100

2,023,675,300 2,065,945,200 2,158,117,900 2,203,841,700 2,239,871,900 2,387,318,000 2,651,573,500 3,297,165,000 4,186,411,600 4,689,966,600

660,838,200 657,047,900 667,451,000 669,354,500 736,163,300 724,789,300 685,604,200 700,485,400 698,295,500 710,722,100

1,026,465,000 1,077,730,700 1,106,232,700 1,107,389,400 1,117,665,100 1,103,723,400 1,107,563,400 1,129,089,900 1,214,487,400 1,294,009,100

10,450,061,600 10,669,686,200 10,998,897,000 11,318,569,200 11,630,792,500 12,128,065,700 12,973,357,900 14,865,017,100 17,389,799,300 18,668,003,900

Department of Planning and Community Development City Assessor’s Office, estimated actual value (only residential, commercial, and Agricultural are reflected in Table 6)

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 11

Principal Commercial/Industrial Water and Sewer Consumers Year Ended June 30, 2025

Water Consumers Western Tidewater Water Authority Western Tidewater Regional Jail Sentara/Obici Hospital Suffolk Public Schools Wanchese Fish Company Planters/Kraft Foods/Hormel Harbour Breeze Apartments Suffolk Operations LLC Solenis LLC Ekaterra Tea Manufacturing

(1)

Annual Consumption (Hundred Cubic Feet)

% of Total Annual Consumption(1)

351,260 32,083 31,014 28,892 24,674 19,357 18,247 14,147 12,111 12,052 543,837

12.26% 1.12% 1.08% 1.01% 0.86% 0.68% 0.64% 0.49% 0.42% 0.42% 18.98%

Type of Business

Regional Water Supply Jail-Regional Facility Hospital Education Seafood Processing Food Processing Real Property Management Assisted Living Chemical Plant Beverage Company

Total annual consumption (all water customers)

Sewer Consumers

Type of Business

Western Tidewater Regional Jail Sentara/Obici Hospital Suffolk Public Schools Ekaterra Tea Manufacturing Wanchese Fish Company City of Suffolk Harbour Breeze Apartments Suffolk Operations, LLC SPSA Amazon.Com

Jail-Regional Facility Hospital Education Beverage Company Seafood Processing Water Production Real Property Management Assisted Living Waste Solutions Distribution Facility

2,865,123

Annual Consumption (Hundred Cubic Feet)

32,083 31,014 28,892 28,562 24,674 21,264 18,247 14,147 13,826 11,814

% of Total Annual Consumption(2)

1.38% 1.34% 1.25% 1.23% 1.06% 0.92% 0.79% 0.61% 0.60% 0.51%

224,523 9.69% (2)

Total annual consumption (all sewer customers)

2,317,798

Source: Department of Public Utilities

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

164

Statistical Section

Table 12

Water and Sewer Rate Schedule Last Ten Fiscal Years 2016

WATER Water Rate per 100 cubic feet Meter Service Charge (per month) 5/8 inch meter Water Connection Charge (installed by city) 5/8 inch meter Water Connection Charge (installed by developer) Water Availability Charge (residential) Single Family Water Availability Charge (commercial) 5/8 inch meter 3/4 inch meter 1 inch meter 1½ inch meter 2 inch meter 3 inch meter 4 inch meter WTWA Wholesale Water Rate Water Rate (CCF) Fixed Capacity Charge (Per Month)

2017

2018

2019

2020

2021

2022

2023

2024

2025

$ 8.86 $ 9.03 $ 9.20 $ 9.71 $ 9.71 $ 9.71 $ 10.31 $ 10.43 $ 10.63 $ 10.63 7.00 8.40 8.40 10.00 11.25 11.25 12.75 13.25 15.25 15.25 1,100 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 50 50 50 50 50 50 50 50 50 50 5,520 5,520 5,520 5,520 5,520 5,520 5,520 5,520 5,520 5,520 5,520 5,520 13,520 26,950 43,120 80,850 134,750

5,520 5,520 13,520 26,950 43,120 80,850 134,750

5,520 5,520 13,250 26,950 43,120 80,850 134,750

5,520 5,520 13,520 26,950 43,120 80,850 134,750

4.67 4.56 4.55 4.76 4.84 4.84 4.84 5.09 5.00 5.00 204,959 222,995 202,454 197,983 199,026 200,470 176,896 172,836 176,248 176,248

SEWER Sewer Collection (per 100 cubic feet) Sewer Connection Charge (installed by city) 4 inch lateral size 6 inch lateral size Sewer Connection Charge (installed by developer) Sewer Availability Charge (residential) Single Family Sewer Availability Charge (commercial) 5/8 inch meter 3/4 inch meter 1 inch meter 1½ inch meter 2 inch meter 3 inch meter 4 inch meter

6.74 6.97 7.21 7.27 7.27 7.27 7.27 7.27 7.56 7.56

1,450 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 2,650 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 50 50 50 50 50 50 50 50 50 50 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 14,800 29,500 47,100 88,100 146,800

6,000 6,000 14,800 29,500 47,100 88,100 146,800

Source: Department of Public Utilities

165

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

6,000 6,000 14,800 29,500 47,100 88,100 146,800

Statistical Section

Table 13

Ratio of Outstanding Debt by Type Last Ten Fiscal Years

Fiscal Year **

General Obligation Bonds General Gov’t (2)

General Obligation Bonds Business-type activities

Total General Bonded Debt

Percentage of Estimated Actual Taxable Value of Property (3)

Literary Bonds

Per Capita (4)

Lease and subscription Liabilities (6)

Section 108 Loan Payable

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

259,928,278 276,109,544 286,010,859 284,948,761 287,124,014 293,516,607 301,243,843 307,238,239 312,525,347 297,551,789

253,567,653 194,329,673 191,436,465 182,347,200 177,851,721 174,674,835 163,989,241 157,785,846 146,285,503 137,445,000

513,495,931 470,439,217 477,447,324 467,295,961 464,975,735 468,191,442 465,233,084 465,024,085 458,810,850 434,996,789

5.45% 4.90% 4.84% 4.58% 4.42% 4.25% 3.87% 3.39% 2.84% 2.50%

5,679 5,129 5,205 5,050 5,015 4,930 4,783 4,689 4,557 4,241

9,183,208 6,163,199 3,537,987 2,057,108 1,487,534 1,283,236 21,644,960 21,633,330 19,243,927 18,152,171

2,108,000 1,915,000 1,722,000 -

Fiscal Year **

Lease and Lease Liabilities (6)

Senior Revenue Bonds

Presentation only Subordinate: GO Bonds (5)

Total Governmental Activities

Total Business-type Activities

Grand Total

Percentage of Personal Income (4)

Total Per Capita (4)

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

1,166,659 987,740 785,452 562,671 454,908 411,085 4,133,310 3,620,860 2,812,188 1,804,656

117,709,923 199,345,172 213,022,740 210,667,350 207,712,784 223,268,539 219,099,622 214,908,222 215,532,621 212,924,218

24,505,000 23,840,000 700,000 -

271,219,486 284,187,743 291,270,846 287,005,869 288,611,548 294,799,843 322,888,803 328,871,569 331,769,274 315,703,960

372,444,235 394,662,585 405,244,657 393,577,221 386,019,413 398,354,459 387,222,173 376,314,928 364,630,312 352,173,874

643,663,721 678,850,327 696,515,503 680,583,090 674,630,961 693,154,302 710,110,976 705,186,497 696,399,586 667,877,834

14.88% 15.11% 14.75% 13.75% 13.63% 14.68% 14.24% 14.25% 11.63% 0.00%

7,118 7,401 7,527 7,341 7,190 7,299 7,330 7,110 6,916 6,511

Details regarding the City’s outstanding debt can be found in the notes to the financial statements. GO Bonds include Utility GO Bonds (with or without an additional revenue pledge). They exclude the unamortized premiums and deferred amounts for advance refunding. This change required restating previous years’ balances. (3) See Table 6 for estimated actual taxable value of property data. (4) See Table 16 for personal income and population data. The most recent personal income data available from the Bureau of Economic Analysis is 2011 and is used to analyze years 2011 through 2013. (5) The subordinate GO bonds are “double-barreled”, they have a revenue pledge, but are backed by the City’s general obligation. They are presented under Business-type activities, but are actually included in the General Bonded Debt total. (6) GASB 87 was implemented for leases in FY2022 (1)

(2)

Previous years restated to include Utility GO bond debt in General bonded debt. Previous years restated to include the related premiums, discounts and adjustments.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

166

Statistical Section

Table 14

Legal Debt Margin Last Ten Fiscal Years

Legal Debt Margin Calculation

City’s Financial Policy Goal

City’s Legal Debt Limit

Commonwealth’s Legal Debt Limit(1)

Assessed value (as of July 1) - taxable real property, including public service corporations(2)

$ 16,939,349,400

Adopted and Legal debt limits: 4% of assessed value (authorized limit adopted by City Council 2010)

$ 677,573,976

7% of assessed value (authorized limit imposed by City Charter)

$ 1,185,754,458

10% of assessed value (authorized by the Commonwealth for all cities)

$ 1,693,934,940

Deduct amount of debt applicable to debt limit: Gross general bonded debt (includes bonds and notes payable)

315,243,984

474,620,000

$ 362,329,992

$ 711,134,458

$ 1,219,314,940

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Debt Limit

633,020,137

649,037,842

670,662,490

686,137,955

705,970,567

741,754,101

800,386,357

931,197,565

1,101,153,501

1,185,754,458

Total Net Debt Applicable to Limit *

456,621,633

413,420,487

442,666,000

434,875,002

436,105,000

446,880,000

441,510,000

444,065,002

474,620,000

Legal Debt Margin

176,398,504

235,617,355

227,996,490

251,262,953

269,865,567

294,874,101

358,876,357

487,132,563

626,533,501

711,134,458

(4)

City’s Legal Debt Margin

Total Net Debt Applicable to Limit as percentage of Debt Limit 72.1%

63.7% 66.0% 63.4% 61.8% 60.2% 55.2% 47.7% 43.1% 40.0%

Commonwealth’s Legal Debt Margin Debt Limit

904,314,482

927,196,917

958,089,271

980,197,078

1,008,529,382

1,059,648,715

1,143,409,081

1,330,282,235

1,573,076,430

1,693,934,940

Total Net Debt Applicable to Limit *

456,621,633

413,420,487

442,666,000

434,875,002

436,105,000

446,880,000

441,510,000

444,065,002

474,620,000

Legal Debt Margin

447,692,849

513,776,430

515,423,271

545,322,076

572,424,382

612,768,715

701,899,081

886,217,233

1,098,456,430

1,219,314,940

Total Net Debt Applicable to Limit as percentage of Debt Limit 50.5%

44.6% 46.2% 44.4% 43.2% 42.2% 38.6% 33.4% 30.2% 28.0%

Virginia state statute limits bond issuing authority of Virginia cities to 10% of the assessed real estate value. The above calculation includes all debt secured by the full faith and credit of the City (including Utility GO Bonds--with or without an additional revenue pledge, see table 13). Prior fiscal years have been restated in order to accommodate this determination. The calculation excludes the unamortized premiums and deferred amounts for advance refunding, installment purchase contracts, accrued sick and annual leave, landfill liability, and net pension and OPEB obligations. (2) See Table 6 for assessed value of real property data. (3) There are no overlapping or underlying tax jurisdictions. (4) The debt applicable to the City’s financial policy limit is only the General Obligation bonds and leases that are payable with general government funds, Stormwater and Refuse funds (excluding Utility fund debt) and the General Obligation debt of the City’s Economic Development Authority issued to fund the Health and Human Services Buildin (1)

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City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 15

Pledge-Revenue Coverage Last Ten Fiscal Years

Fiscal Year

Gross Revenues(1)

Direct Operating Expenses(2)

UTILITY REVENUE BONDS (WATER AND SEWER) 2016 48,200,503 23,090,668 2017 49,516,030 21,945,068 2018 50,195,913 21,952,124 2019 54,500,177 25,205,851 2020 53,256,705 25,665,502 2021 62,511,014 25,746,183 2022 59,243,844 23,752,023 2023 59,942,670 27,162,864 2024 64,379,599 29,956,441 2025 67,802,675 28,682,467

Fiscal Year

Gross Revenues(1)

Direct Operating Expenses(2)

Net Revenue Available For Debt Service

Principal

25,109,835 27,570,962 28,243,789 29,294,326 27,591,203 36,764,831 35,491,821 32,779,806 34,423,158 39,120,208

1,135,000 1,240,000 1,820,000 2,230,000 2,001,000 4,597,000 5,725,000 6,145,000 6,370,000 6,370,000

Net Revenue Available For Debt Service

Principal

Debt Service Requirements(3) Interest

5,158,290 6,226,515 8,398,014 9,061,412 8,043,368 7,853,326 7,282,489 6,930,484 6,697,029 6,697,029

Total

Coverage (4)

6,293,290 7,466,515 10,218,014 11,291,412 10,044,368 12,450,326 13,007,489 13,075,484 13,067,029 13,067,029

3.99 3.69 2.76 2.59 2.75 2.95 2.73 2.51 2.63 2.99

Debt Service Requirements(3) Interest

Total

Coverage (4)

UTILITY REVENUE BONDS (STORMWATER) 2025 10,974,395 5,579,680 5,394,715 204,000 287,517 491,517 10.98

Gross revenues include operating revenues, miscellaneous revenues, transfers in, interest income and BAB interest subsidy. Operating expenses are exclusive of depreciation, amortization, interest expense, debt issuance costs and loss on disposal of capital assets. (3) Includes principal and interest of revenue debt that falls under the debt covenant requirements of the master indenture and other agreements. (Capitalized interest paid by bond proceeds is excluded from the interest) There were significant changes in debt service requirements from previous years because they now exclude GO-bonded debt. (4) The debt service coverage ratio is calculated as Net Revenue Available for Debt Service divided by Total Debt Service Requirements (For the Utility (Water and Sewer) fund the coverage must be over 1.15; since 2009, Suffolk’s financial policy has recommended a target of 1.30, including all non-parity debt which has not been included in this analysis) (1)

(2)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

168

Statistical Section

Table 16

Demographic and Economic Statistics Last Ten Fiscal Years Fiscal Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Population(1) 90,426 91,722 92,533 92,714 93,825 94,960 96,130 99,179 100,690 102,572

Personal Income(2) In Thousands $ 4,326,809 4,491,916 4,723,202 4,949,924 5,217,894 5,705,145 5,988,090 not available not available not available

Per Capita Income(2)* $ 48,467 49,779 51,798 53,740 55,561 59,309 60,770 not available not available not available

Schools: Average Daily Membership(3) 13,837 13,760 13,630 13,543 13,308 13,357 12,934 13,330 13,450 13,450

City of Suffolk 4.30% 4.10% 3.10% 3.20% 8.80% 5.00% 4.40% 3.10% 3.10% 3.00%

Unemployment Rate(4) State of United Virginia States 4.00% 5.10% 3.60% 4.10% 2.90% 3.60% 2.90% 3.70% 8.50% 11.20% 4.50% 5.90% 3.90% 5.30% 2.90% 3.60% 2.70% 4.30% 2.90% 4.00%

Weldon Cooper Center for Public Service Bureau of Economic Analysis based on calendar year (3) City of Suffolk Public Schools (4) Virginia Employment Commission - Area Unemployment Statistics, based on calendar year. 2021 rate as of June 2021 (1)

(2)

Comparative Unemployment Rates FY 2016 - FY 2025 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%

2016

2017

2018

City of Suffolk

169

2019

2020

2021

State of Virginia

2022

2023

2024

2025

United States

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 17

Principal Employers Current Year and Nine Years Ago 2025

Employer

Type of Business

Navy Information Dominance Forces Commands (Cyber Force) Sentara Health Systems Target CVN Distribution / QVC, Inc Towne Bank J-7 Joint Staff Wal-Mart Stores Hormel/Planters/Kraft Foods Massimo Zanetti Beverage USA Sysco Food Services of Hampton Roads

ModSim & Technology Medical Warehousing & Distribution Warehousing & Distribution Banking ModSim & Techololgy Retail Food Processing Beverage Company Food Service Distribution

Total Employment by Industry in City of Suffolk for fiscal year

Employees

Percentage of Total City Employment

2,250 1,503 1,300 700 600 550 336 380 315 275

6.13% 4.09% 3.54% 1.91% 1.63% 1.50% 0.91% 1.03% 0.86% 0.75%

8,209

22.35%

36,726 2016

Employer

Type of Business

Navy Information Dominance Forces Commands (Cyber Force) Sentara Health Systems J-7 Joint Staff CVN Distribution / QVC, Inc SYSCO Food Services of Hampton Roads Wal-Mart Stores Planters/Kraft Foods Unilever/Lipton Inc. Towne Bank Lakeview Medical Center

ModSim & Technology Medical ModSim & Technology Warehousing & Distribution Food Service Distribution Retail Food Processing Beverage Company Banking Medical

Total Employment by Industry in City of Suffolk for fiscal year

Employees

Percentage of Total City Employment

1,500 1,061 1,200 620 350 450 350 300 369 270

5.18% 3.67% 4.15% 2.14% 1.21% 1.56% 1.21% 1.04% 1.28% 0.93%

6,470

22.36%

28,935

The Suffolk Public Schools (2,300 employees) and the City of Suffolk (1,479 employees) have not been included to give a clearer reflection of community activity. Source: Economic Development Department and Virginia Employment Commission

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

170

Statistical Section

Table 18

Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years(2) Function/Program General Fund: General Government: City Council City Manager Budget and Strategic Planning City Attorney Human Resources Commissioner of the Revenue City Assessor Treasurer Finance - Administration and Accounting Finance - Purchasing Registrar Total Judicial: Circuit Court Circuit Court - Clerk’s Office Sheriff Commonwealth’s Attorney Total Public Safety: Police Administration and Officers Emergency Communications Animal Shelter and Management Fire Fire and Rescue Community Development(5) Total Public Works: Public Works Administration Capital Programs and Facilities Total

171

2016

2017

2018

2019

2020

2021

2022

2023

20244

2025

2 2 2 2 2 2 3 3 3 3 7 7 7 7 7 7 8 8 8 9 3 3 3 3 3 3 3 3 3 3 9 9 9 9 9 9 9 10 10 10 7 7 7 7 7 7 10 13 14 14 12 12 12 12 12 12 13 13 13 14 17 18 17 17 19 19 21 21 22 22 16 16 16 16 17 17 17 17 17 17 17 15 16 15 15 15 16 16 16 17 4 4 4 4 4 4 4 4 4 5 2 3 3 3 3 3 3 4 4 4 96 96 96 95 98 98 107 112 114 118 2 2 2 2 2 2 2 2 3 3 14 14 14 14 15 15 15 16 16 16 25 25 25 25 25 25 27 28 30 31 24 24 24 25 26 26 26 26 26 27 65 65 65 66 68 68 70 72 75 77

213 213 215 216 227 227 229 233 237 244 27 27 28 27 29 29 29 29 30 36 10 10 10 10 10 10 10 11 11 13 252 252 255 274 274 279 297 316 318 326 26 26 26 - - - - - - 528 528 534 527 540 545 565 589 596 619

2 2 2 2 3 3 3 3 3 3 24 24 24 24 25 25 25 27 28 28 26 26 26 26 28 28 28 30 31 31

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Statistical Section

Table 18

Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years(2) Function/Program

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

General Fund: Health and Welfare: Social Services

103 103 103 102 102 102 102 104 107 108

Comprehensive Services Act

2 2 2 2 2 2 2 2 2 3

Total

105 105 105 104 104 104 104 106 109 111

Parks, Recreation and Cultural: Parks and Recreation Administration

4 4 4 13 13 13 13 14 12 12

Office on Youth (4)

2 1 1 - - - - - - -

Support Services (4)

6 7 7 - - - - - - -

Parks, Gateway and Facility Maintenance

19 19 18 22 22 22 22 26 29 29

Grounds Maintenance (3) (4)

4 4 4 - - - - - - -

Recreation

21 21 22 22 22 22 29 29 32 33

Library

31 32 32 32 32 32 33 33 33 33

Total

87 88 88 89 89 89 97 102 106 107

Community Development: Planning

14 15 15 41 44 44 46 51 54 57

Economic Development

5 5 5 5 6 6 6 6 6 7

Tourism

3 3 3 3 3 3 3 3 3 4

Media and Community Relations

6 6 6 6 6 6 6 6 8 9

Total Total General Fund

28 29 29 55 59 59 61 66 71 77 935 937 943 962 986 991 1,032 1,077 1,102 1,140

Special Revenue Fund: Transit

- - 1 1 1 1 1 1 1 1

Road Maintenance Road Maintenance

100 101 102 102 102 102 105 107 108 108

Traffic Engineering

24 25 25 25 25 25 26 30 30 30

Aviation Facilities Total Special Revenue Fund

3 3 3 3 3 2 2 2 2 2 127 129 131 131 131 130 134 140 141 141 (Continued)

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

172

Statistical Section

Table 18

Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years(2) Function/Program

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Enterprise Fund: Public Utilities Administration

9 9 8 8 8 8 7 7 7 8

Customer Service

20 22 23 23 23 23 23 23 23 23

Line Maintenance

28 28 28 29 29 29 30 30 29 30

Maintenance

25 25 25 25 26 26 26 26 26 27

Water Production

28 28 28 28 28 28 28 28 28 28

Engineering

15 14 14 14 14 14 14 14 15 13

Stormwater Utility Stormwater Utility

38 41 40 40 41 41 41 43 45 45

Mosquito Control

7 7 7 7 7 7 7 7 7 8

Refuse Total Enterprise Fund

40 40 42 42 40 40 40 40 40 40 210 214 215 216 216 216 216 218 220 222

Internal Service Funds: Fleet Management

21 21 21 21 21 21 21 21 21 22

Information Technology

25 26 26 26 27 28 29 28 30 32

Risk Management

6 6 6 6 6 6 8 8 8 9

Total Risk Management Total

52 53 53 53 54 55 58 57 59 63 1,324 1,333 1,342 1,362 1,387 1,392 1,440 1,492 1,522 1,566

Change in methodology of calculating full time employees in this department. Data provided by the Budget Office (3) In 2015 The grounds maintenance function was moved out of Public Works and placed in Parks and Recreation. (4) In 2019 The divisions within Parks and Recreation were consolidated into 3 divisions. (5) In 2019 Community Development was combined with the Planning department. (1)

(2)

173

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

(Concluded)

Statistical Section

Table 19

Operating Indicators by Function/Program Last Ten Fiscal Years Function/Program

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

General Government: Building permits issued

843 1,072 1,189 1,122 1,259 1,810 2,006 6,611 1,583

1,650

Value of permits issued (millions)

$ 138 $ 256 $ 846 $ 167 $ 438 $ 439 $ 516 $ 1,274 $ 967

$ 579

Number of registered voters

58,141 60,652 62,458 62,334 64,780 67,706 69,886 71,493 75,080

77,284

Taxable retail sales (millions) Taxable retail sales per capita

$ 873 $ 896 $ 957 $ 976 $ 1,033 $ 1,155 $ 1,246 $ 1,319 **Not Available $ 9,654 $ 9,763 $ 10,341 $ 10,404 $ 10,879 $ 12,013 $ 12,565 $ 13,102 **Not Available

Library volumes in collection (thousands)

827 291 178 168 133 133 143 139 166

185

Circulation (thousands)

339 322 304 304 223 216 346 332 374

450

Number of Service days (not including ADA service)

257 257 252 305 308 306 305 307 307

305

Number of Routes (not including ADA service)

6 6 6 7 7 6 6 3 6

Vehicle Trips (not including ADA service)

13,856 13,825 13,589 18,602 18,791 18,663 19,979 20,181 22,455 (1) 22,727(1) 101,616 113,084 110,569 128,845 111,114 106,739 73,369 72,551 75,436 (2) 87,510(2)

Not Available Not Available

Parks, Recreation and Cultural:

Transit

Passenger Trips (not including ADA service)

1,271 1,450 1,025 1,565 1,919 1,605 1,738 2,228 2,275 (1) 1,799(1) 1,537 1,917 1,247 1,565 1,919 1,919 1,897 2,526 2,391 (2) 2,121(2)

Vehicle Trips (ADA Service) Passenger Trips (ADA Serivce) Enterprise Fund: Public Utilities Customers - Water

24,868 25,237 25,576 25,936 25,952 27,037 27,550 28,037 28,486

28,956

Customers - Sewer

21,770 22,160 22,506 22,851 23,272 23,865 24,350 24,853 25,305

25,757

Average daily production (mgd)

7 7 7 7 7 7 7 7 8

Treatment Capacity daily (mgd)

17 17 17 17 17 17 17 18 18

31,470 31,752 32,126 32,866 33,179 33,652 34,188 34,957 36,189

36,191

Customers

28,311 28,618 28,895 29,409 29,720 30,040 30,493 31,067 32,080

32,080

Recycled (tons)

5,878 5,821 5,511 5,842 6,075 6,085 5,472 5,503 **Not Available

5,443

Stormwater Billed customers Refuse collection

Sources: Various City Departments **

Data is not availabe as this is shown on a calendar year basis

(1)

A vehicle trip is defined as a bus completing the route one time.

(2)

A Passenger trip is defined as a passenger boarding a bus at one point and disembarking at another. A passenger taking a trip with a transfer in the middle would count as two passenger trips.

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

174

Statistical Section

Table 20

Capital Asset Statistics by Function/Program Last Ten Fiscal Years Function/Program

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Public Safety: Police Stations Fire and Rescue Stations

5 5 5 5 5 5 5 5 5 5 10 10 10 10 10 10 9 9 9 9

Public Works: State maintained road miles City maintained road miles Streetlights Bridges and Culverts Traffic Signals

18 18 18 18 18 18 18 18 18 18 1,596 1,621 1,632 1,650 1,660 1,660 1,669 1,671 1,681 1,683 8,657 8,913 8,988 9,136 9,217 9,288 9,571 9,890 9,790 10,789 149 151 151 151 152 151 151 151 151 151 98 99 99 100 100 101 102 102 105 105

Education: Elementary Schools Middle Schools High Schools Alternative Schools Number of Teachers, Principals, and Assistants Average Daily Membership Capacity of Schools

12 11 11 11 11 11 11 11 11 11 4 4 4 4 4 4 4 4 4 5 3 3 3 3 3 3 3 3 3 3 1 1 1 1 1 1 1 1 1 1 1,383 1,380 1,380 1,464 1,410 1,422 1,444 1,456 1,495 1,505 13,837 13,760 13,630 13,543 13,308 13,357 12,934 13,330 13,450 13,902 14,590 14,205 14,205 16,005 16,005 16,005 16,005 16,005 16,918 16,738

Enterprise Fund: Public Utilities Miles of Water Main 475 482 486 487 490 497 501 503 508 514 Miles of Sanitary Sewers 352 355 361 363 367 375 378 380 385 390 Pump Stations 146 147 150 150 152 154 154 154 156 157 Storage Tanks 10 10 10 10 11 11 11 11 11 11 Stormwater Utility Miles of Storm Sewers 333 396 407 412 420 428 433 435 444 455 Parks, Recreation and Cultural: Parks and Recreation Number of major parks and recreation facilties Acreage of major parks and recreation facilties Library Number of libraries Number of branch libraries Number of bookmobiles Transit (1) Buses Bus Stops with Shelters

50 50 52 52 52 54 56 57 58 58 2,042 2,092 2,118 2,118 2,118 2,111 2,216 1,928 1,930 1,930 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 1 1 1 1 1 1 1 1 1 1 8 9 9 10 14 14 12 12 10 12 8 8 10 11 11 10 16 16 16 17

Sources: Various City Departments (1) In Fiscal year 2015 The City added a route serving the northern end of the City and one that connects the north and south routes, as well as to HRT in Chesapeake.

175

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Statistical Section

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176

COMPLIANCE SECTION

Compliance Section

Report of Independent Auditor 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 To the City Council City of Suffolk, Virginia Suffolk, Virginia We have audited, in accordance with the auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, and the Specifications for Audits of Counties, Cities, and Towns issued by the Auditor of Public Accounts of the Commonwealth of Virginia (the “Specifications”), the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Suffolk, Virginia (the “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 December 15, 2025.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (“internal control”) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control described in the accompanying schedule of findings and questioned costs as item 2025-001 that we consider to be a material weakness.

Report on 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 and four instances of noncompliance that is required to be reported under the Specifications, which is described in the accompanying schedule of findings and questioned costs as items 2025-002 through 2025-005.

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City’s Response to Findings

Government Auditing Standards require the auditor to perform limited procedures on the City’s response to findings identified in our audit and described in the accompanying schedule of findings and questioned costs. The City’s responses were not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

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 City’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 City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

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Compliance Section

Report of Independent Auditor on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by the Uniform Guidance To the City Council City of Suffolk, Virginia Suffolk, Virginia

Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program

We have audited the City of Suffolk, Virginia’s (the “City”) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2025. The City’s major federal programs are identified in the Summary of Auditor’s Results section of the accompanying Schedule of Findings and Questioned Costs. In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025.

Basis for Opinion on Each Major Federal Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to City’s federal programs.

Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about City’s compliance with the requirements of each major federal program as a whole. cbh.com City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

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Compliance Section

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we: 

Exercise professional judgment and maintain professional skepticism throughout the audit.



Identify and assess the risks of material noncompliance, 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 City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.



Obtain an understanding of City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit, we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

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Compliance Section CITY OF SUFFOLK, VIRGINIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Period Ending June 30, 2025

Federal Grantor/Pass-Through Grantor/Grant Program U.S. Department of Agriculture Passed through the VA Department of Agriculture and VA Department of Education Child & Adult Food Program Child Nutrition Cluster School Breakfast Program (SBP) National School Lunch Program (NSPL) USDA Commodities Summer Food Service Program for Children (SFSP) Total Child Nutrition Cluster Passed through the VA Department of Social Services SNAP Cluster State Administrative Matching Grants for Supplemental Nutrition Assistance Total SNAP Cluster Total U.S. Department of Agriculture U.S. Department of Defense Direct Recipient JROTC Instruction Total U.S. Department of Defense U.S. Department of Housing and Urban Development Direct Recipient CDBG - Entitlement Grants Cluster Community Development Block Grants/Entitlement Grants Total CDBG - Entitlement Grants Cluster Saratoga Place Apartments Project Western Tidewater Clinic Home Investment Partnerships Program City of Franklin Isle of Wight County Southampton County CHDO Total U.S. Department of Housing and Urban Development

Assistance Listing Number (ALN)

Passed Through To Sub-Recipients

Cluster Total

ALN Total

Federal Expenditures

10.558

35,571

10.553 10.555 10.555 10.559

2,787,641 6,469,750 256,927

2,787,641 5,606,876 862,874 256,927

1,949,254

Federal Department Totals

$9,514,318

10.561 $1,949,254

12.000

$11,499,143

121,350

121,350 $121,350

14.218

418,641 300,000 22,000

14.239

$418,641

418,641

803,245

11,233 211,683 36,700 87,600

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$1,221,886

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Compliance Section CITY OF SUFFOLK, VIRGINIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Period Ending June 30, 2025 Federal Grantor/Pass-Through Grantor/Grant Program U.S. Department of Justice Direct Recipient Bullet Proof Vest Partnership Program Edward Byrne Memorial Justice Assistance Grant Program

Assistance Listing Number (ALN)

Passed Through To Sub-Recipients

Cluster Total

ALN Total

Federal Expenditures

16.607 16.738

30,485 118,900

30,485 48,712

Passed Through VA Department of Criminal Justice Services Violence Against Women Formula Grants COPs Grant Edward Byrne Memorial Justice Assistance Grant Program

16.588 16.710 16.738

334,579 2,248,941

334,579 2,248,941 70,188

Passed Through National Recreation and Park Association, Inc. Mentoring for Youth Affected by Opioid & Other Drug Misuse Program

16.726

22,836

$22,836

Total U.S. Department of Justice

$2,755,741

U.S. Department of Transportation Direct Recipient Airport Improvement Program Formula Grants for Rural Areas Federal Transit Cluster Federal Transit Cluster - Urbanized Area Formula Grants Program Federal Transit Cluster - Grants for Buses & Bus Facilities Program Total Federal Transist Cluster Passed Through VA Department of Transportation Bridge Rd. to Lincoln St. UPC #2252 Citywide Signal System Upgrade UPC #111086 #2244 Citywide Signal Timings UPC 108983 #2230 CMAQ Bridge Road Traffic Signal Upgrades UPC #102991 #2199 CMAQ Nansemond Pkwy/Wilroy Road Overpass UPC #110634 #2198 CMAQ Suffolk Transportation Op. Center UPC #108982 #2231 Diverging Diamond #120648 #2254 Downtown Railroad Warning System UPC 111083 #2246 Downtown Signal System UPC 111088 #2243 Freeman Mill Over Spivey Swamp UPC 113699 #2245 Godwin Blvd Improvements #119334 #2255

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Federal Department Totals

20.106 20.509

121,492

121,492 1,016

20.507 20.526

1,483,689 162,076

$1,645,765 20.205 20.205 20.205 20.205

250,949 76,443 70,572 486,094

20.205 20.205 20.205 20.205 20.205 20.205 20.205

1,776,170 36,497 574,984 313 84,685 1,242,755 898,456

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Compliance Section CITY OF SUFFOLK, VIRGINIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Period Ending June 30, 2025

Federal Grantor/Pass-Through Grantor/Grant Program Great Mill Hwy to Stuart Dr.UPC 121122 #2250 MP 34.77 to MP 35.77 UPC 121112 #2251 Pittman Rd over Mill Swamp UPC 113700 #2221 RSTP Suffolk Bypass ITS UPC #102994 Project #2200 RSTP Suffolk Bypass/Godwin Blvd/Wilroy Rd/Pruden Blvd UPC #111036 #2240 Rte. 17 Bridge Road Widening UPC #120649 #2256 Rte 189 to US 58 UPC 121132 #2253 Rte.58/Holland Rd Corridor Improvements UPC #100937 #3015 Seaboard Coastline Trail Phase I #115525 #3115 Seaboard Coastline Trail IIIA #119230 #3116 Seaboard Coastline Trail IIIB #121109 #3113 Shoulders Hill Road Reconstruction UPC #69050 #2173 Suffolk Gates over Adams Swamp UPC 121633 #2260 Whaleyville Blvd to Little Fork UPC 121127 #2248 Whaleyville Blvd to Mineral Spr. UPC #2249 Passed Through the Hampton Roads Transportation Planning Organization Metropolitan Transportation Planning Program Passed Through the VA Department of Rail and Public Transportation Transit Operations Facility #2233

Assistance Listing Number (ALN) 20.205 20.205 20.205 20.205

Passed Through To Sub-Recipients

Cluster Total

ALN Total

Federal Federal Department Expenditures Totals 234,011 268,224 1,065,280 411,119

20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205 20.205

21,163,537

887,160 613,754 194,230 336,003 130,666 202,569 17,084 10,705,908 129,218 245,260 225,133

20.505

9,000

20.509

192,571

191,555

Total U.S. Department of Transportation U.S. Department of Treasury Direct Recipient ARPA

$23,132,365

21.027

Passed Through VA Department of Criminal Justice Services Law Enforcement Equipment Grant School Safety and Security Total U.S. Department of Treasury

21.027 21.027

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

$4,395,867

4,855,624

$393,006 66,750 $4,855,623

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Compliance Section CITY OF SUFFOLK, VIRGINIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Period Ending June 30, 2025 Assistance Listing Number (ALN)

Federal Grantor/Pass-Through Grantor/Grant Program U.S. Department of Education Direct Recipient Impact Aid Award #S041B-2015-5303

Passed Through To Sub-Recipients

Cluster Total

84.041

ALN Total 397,874

Federal Expenditures 397,874

Passed Through Commonwealth of Virginia School Improvement 1003A Career and Technical-Basic Grants to States #V048A150046 School Based Mental Health Grant Title III Grant Title II-A #S367A150044 Comprehensive Literacy Title IV-A Grant Cares Act III Cares III Before and After Care

84.010 84.048 84.184 84.365 84.367 84.371 84.424 84.425 84.425

2,215,830

209,718 312,164 34,073 14,732 542,905 43,810 457,491 2,205,668 10,162

Title I, Part A Cluster Title I Grants to Local Educational Agencies #S010A150046

84.010

3,687,596

3,477,878

Special Education Cluster (IDEA) Special Education - Grants to States #H027A150107 Special Education - Preschool Grants #H173A150112

84.027 84.173

3,881,587 45,249

Special Education Cluster Total

312,164 34,073 14,732 542,905 43,810 457,491

$3,926,836

Total U.S. Department of Education U.S. Department of Health and Human Services Direct Recipient Medical Assistance Program #1003996083 Passed Through VA Department of Social Services Medicaid Cluster Medical Assistance Program Medicaid Cluster Total Guardianship Assistance Title IV -E Prevention Program Promoting Safe and Stable Families Temporary Assistance for Needy Families

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Federal Department Totals

$11,633,311

93.778

441,297

93.778 93.090 93.472 93.556 93.558

$2,134,581

2,134,581

1,693,284

11,404 33,926 19,131 857,387

City of Suffolk | Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2025

Compliance Section CITY OF SUFFOLK, VIRGINIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Period Ending June 30, 2025

Federal Grantor/Pass-Through Grantor/Grant Program Refugee & Entrant Assistance Low-Income Home Energy Assistance ILP Education & Training Child Welfare Services Foster Care - Title IV-E Adoption Assistance Social Service Block Grant Foster Care Independent Living Children’s Health Insurance Program CCDF Cluster Child Care Mandatory & Matching Funds for Child Care Dev Fund CCDF Cluster Total

Assistance Listing Number (ALN) 93.566 93.568 93.599 93.645 93.658 93.659 93.667 93.674 93.767

Passed Through To Sub-Recipients

Cluster Total

93.596

Federal ALN Federal Department Total Expenditures Totals 1,377 1,377 166,895 166,895 120 120 3,306 3,306 729,227 729,227 343,038 343,038 861,342 861,342 10,034 10,034 21,593 21,593

177,463

$177,463

Total U.S. Department of Health and Human Services U.S. Department of Homeland Security Direct Recipient Port Security Grant Program SAFER Program

$5,370,824

97.056 97.083

91,906 1,606,708

Total U.S. Department of Homeland Security

Grand Total

$1,698,614

$62,288,857

Note 1: Basis of Accounting This schedule was prepared on the modified accrual basis of accounting. Note 2: Nonmonetary Assistance: Nonmonetary assistance is reported in the Schedule of Federal Awards at the fair market value of the food commodities. At June 30, 2025, the School Board had USDA food commodities totaling $862,874 in inventory. Note 3: Reporting Entity: The Schedule of Expenditures of Federal Awards reports the expenditures for the City of Suffolk, Virginia and it’s component unit the School Board. Note 4: De minimis cost rate: The City did not elect to use the 15% de minimis cost rate.

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CITY OF SUFFOLK, VIRGINIA Schedule of Findings and Questioned Costs Year Ended June 30, 2025

Summary of Auditor’s Results 1.

The type of report issued on the basic financial statements: Unmodified

Significant deficiencies in internal control over financial reporting: None reported

Material weaknesses in internal control over financial reporting: Yes

Noncompliance, which is material to the financial statements: No

Significant deficiencies in internal control over major programs: None reported

Material weaknesses in internal control over major programs: No

The type of report issued on compliance for major programs: Unmodified

Any audit findings which are required to be reported under Uniform Grant Guidance: No

The programs tested as major programs were: AL Number 10.553/10.555/10.559 16.710 20.205 93.778

Name of Federal Program or Cluster Child Nutrition Cluster Public Safety Partnership and Community Polling Grants Highway Planning and Construction Medicaid Cluster

10. Dollar threshold used to distinguish between type A and type B programs: $1,868,666 11. City of Suffolk, Virginia (the “City”) qualified as a low-risk auditee under Uniform Grant Guidance: Yes B.

Findings Relating to Financial Statements Reported in Accordance with Government Auditing Standards Finding: 2025-001 Department: Finance Type of Finding: Material Weakness Criteria: The City of Suffolk, Virginia financial activities should be recorded in accordance with accounting principles generally accepted in the United States of America. Condition: During fiscal year 2025, management discovered that the amount reported for due from the School Board, a discretely-presented component unit, did not agree to the amount reported by the School Board as due to the City. Cause: During review of the Annual Comprehensive Financial Report the amount due from the School Board was not reviewed to ensure the balances agreed. Effect: The due from the School Board at June 30, 2024 was overstated by $1,598,311 in the General Fund and Governmental Activities, which resulted in a restatement of beginning net position/fund balance. Auditor’s Recommendation: We recommend the City reconcile the due to/due from discretely presented component units during their review of the Annual Comprehensive Financial Report to ensure the balances agree. Management’s Response: Management agrees with this finding. Management restated beginning net position in the amount of ($1,598,311) in the FY25 financial statements, as a correction of an error. Management will review the due to/due from component unit amounts to ensure they net to zero.

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Compliance Section

CITY OF SUFFOLK, VIRGINIA Schedule of Findings and Questioned Costs Year Ended June 30, 2025

Findings and Questioned Costs Relating to Federal Awards None reported

Findings and Questioned Costs Relating to Compliance with Commonwealth of Virginia Laws, Regulations, Contracts, and Grants Finding: 2025-002 (Repeat Finding – 2024-001) Department: Suffolk Department of Social Services (“DSS”) Compliance Requirement: Section 3-15 of the Specifications for Audits of Counties, Cities, and Towns (the “Specifications”), issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Type of Finding: Non-material Noncompliance Criteria: Section 63.2 of the Code of Virginia requires the Local Department of Social Services (“DSS”) to remove access privileges for terminated users from all systems they were authorized to use within three (3) working days of employment termination. Condition: While performing our audit procedures to ensure compliance with Section 3-15 of the Specifications, we identified one (1) employee in our sample of three (3) that did not have their access removed within three (3) working days. Cause: The DSS is responsible for communicating all employee terminations to the Information Technology (“IT”) Department to ensure all system access is promptly removed. They did not properly communicate employee terminations within the required timeframe to remove system access compliantly. Effect: The City is not in compliance with Section 63.2 of the Code of Virginia and is potentially at risk of terminated employees having access to DSS systems. Additionally, noncompliance may result in action by the Commonwealth of Virginia. Auditor’s Recommendation: We recommend the City ensure the IT Department is notified of an employee's termination immediately upon the termination to ensure access is removed in accordance with the prescribed requirements. Management’s Response: Management agrees with this finding. DSS, the Finance Department, Information Technology Department and Human Resources Management Department experienced turnover this fiscal year. However, each department will review and strengthen the notification process to the IT Department of an employee's termination immediately upon the employee's termination to ensure access is removed in accordance with the prescribed requirements.

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Compliance Section

CITY OF SUFFOLK, VIRGINIA Schedule of Findings and Questioned Costs Year Ended June 30, 2025

Finding: 2025-003 Department: Suffolk Department of Social Services (“DSS”) Compliance Requirement: Section 3-15 of the Specifications for Audits of Counties, Cities, and Towns (the “Specifications”), issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Type of Finding: Non-material Noncompliance Criteria: Section 63.2 of the Code of Virginia requires the Local Department of Social Services (“DSS”) to appoint and train two Local Security Officers (LSOs) to act as the single focal point for access controls. Condition: While performing our audit procedures to ensure compliance with Section 3-15 of the Specifications, we identified that DSS did not have at least one alternate LSO. Cause: The DSS is responsible for appointing and training two LSOs to act as the single focal point for access control. They did not properly appoint at least one alternate LSO. Effect: The City is not in compliance with Section 63.2 of the Code of Virginia and is potentially at risk of for no focal point for access control. Additionally, noncompliance may result in action by the Commonwealth of Virginia. Auditor’s Recommendation: We recommend the City ensure that DSS appoints an alternate LSO immediately to ensure there will always be a single focal point for access controls in the event the primary LSO is not available. Management’s Response: Management agrees with this finding. DSS, the Finance Department, Information Technology Department and Human Resources Management Department experienced turnover this fiscal year. However, DSS will appoint at least one alternate LSO and provide training to ensure there is a single focal point for access controls in the event the primary LSO is not available.

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Compliance Section

CITY OF SUFFOLK, VIRGINIA Schedule of Findings and Questioned Costs Year Ended June 30, 2025

Finding: 2025-004 Department: Suffolk Department of Social Services (“DSS”) Compliance Requirement: Section 3-15 of the Specifications for Audits of Counties, Cities, and Towns (the “Specifications”), issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Type of Finding: Non-material Noncompliance Criteria: Section 63.2 of the Code of Virginia requires the Local Department of Social Services Officer to annually review all employees’ access to each application with the employee’s supervisor to ensure the access is properly aligned with the job responsibilities. Condition: While performing our audit procedures to ensure compliance with Section 3-15 of the Specifications, we identified nine (9) employees in our sample of eleven (11) that did not have an annual review of access performed. Cause: The DSS is responsible for annually reviewing all employee’s access to each application to ensure that the access is properly aligned with the job responsibilities. The DSS LSO did not properly review employee’s access within the required timeframe. Effect: The City is not in compliance with Section 63.2 of the Code of Virginia and is potentially at risk of employees having access to applications that do not align with their job responsibilities. Auditor’s Recommendation: We recommend the City ensure that the DSS performs annual reviews over employee’s access to each application with the employee’s supervisor to ensure the access is properly aligned with the job responsibilities. Management’s Response: Management agrees with this finding. DSS failed to perform annual review of access. However, DSS will ensure that the LSO performs an annual review of access for all employees to ensure their access to applications aligns with their job responsibilities.

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Compliance Section

CITY OF SUFFOLK, VIRGINIA Schedule of Findings and Questioned Costs Year Ended June 30, 2025

Finding: 2025-005 Department: Suffolk Department of Social Services (“DSS”) Compliance Requirement: Section 3-15 of the Specifications for Audits of Counties, Cities, and Towns (the “Specifications”), issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Type of Finding: Non-material Noncompliance Criteria: Section 63.2 of the Code of Virginia requires that the Local Department of Social Services maintains documentation of employees and volunteers have acknowledged reading and understanding the VDSS Acceptable Use Policy. Condition: While performing our audit procedures to ensure compliance with Section 3-15 of the Specifications, we identified five (5) employees in our sample of eleven (11) that did not have a renewed wet signature for the Acceptable Use Policy. Cause: The DSS is responsible for ensuring that all employee’s VDSS Acceptable Use Policy be renewed and signed with a wet signature every five years. There were employees who did not properly renew their Acceptable Use Policy within the required timeframe. Effect: The City is not in compliance with Section 63.2 of the Code of Virginia and is potentially at risk of employees not being in compliance with the VDSS Acceptable Use Policy. Auditor’s Recommendation: We recommend the City DSS ensures employees renew their Acceptable Use Policy every five years with a wet signature. Management’s Response: Management agrees with this finding. DSS failed to ensure employees renewed their VDSS Acceptable Use Policy within the timeframe. However, DSS will ensure renewal of the VDSS Acceptable Use Policy will be renewed every five years.

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Compliance Section

CITY OF SUFFOLK, VIRGINIA Schedule of Findings and Questioned Costs Year Ended June 30, 2025

Status of Prior Year Findings: Finding 2024-001 – Non-material Noncompliance Relating to Compliance with Commonwealth of Virginia Laws, Regulations, Contracts, and Grants Status: Finding repeated in the current year. See Finding 2025-002

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