MENIFEE
M
FINANCE
ANNUAL COMPREHENSIVE
FINANCIAL REPORT (ACFR)
CITY HALL
FISCAL YEAR ENDED JUNE 30, 2024
CITY OF MENIFEE
CALIFORNIA
CITY OF MENIFEE, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2024
Prepared by:
Finance Department
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CITY OF MENIFEE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
TABLE OF CONTENTS
Page
Number
INTRODUCTORY SECTION (unaudited)
Letter of Transmittal .....i
Listing of Elected Officials .. viii
Organizational Chart .... ix
Executive Staff ......x
GOA Award of Financial Reporting Achievement ..... Xi
FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT ... .........1
MANAGEMENT'S DISCUSSION AND ANALYSIS ....4
BASIC FINANCIAL STATEMENTS
Government - Wide Financial Statements
Statement of Net Position .... .. 13
Statement of Activities 14
Fund Financial Statements
Balance Sheet - Governmental Funds ... 15
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position . 16
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 17
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities . 18
Statement of Fiduciary Net Position - Fiduciary Funds 19 Statement of Changes in Fiduciary Net Position - Fiduciary Funds • 20 Notes to Financial Statements .21
CITY OF MENIFEE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
TABLE OF CONTENTS
Page
Number
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule - General Fund .51
Budgetary Comparison Schedule - Development Impact Fees ..52 Budgetary Comparison Schedule - Grants Fund .53
TUMF Fees Funds - Special Revenue Fund .54
Schedule of the City's Proportionate Share of the Pension Plan's Net Pension Liability and Related Ratios as of the Measurement Date ........ 55 Schedule of the Pension Plan's Contributions 56
Schedule of Changes in the Total OPEB Liability and Related Ratios 57 Notes to the Required Supplementary Information 58
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Non-major Governmental Funds Descriptions 59
Combining Balance Sheet - Non-major Governmental Funds 62 66 Budgetary Comparison Schedules - Special Revenue Funds Gas Tax 70
SB 1 71
Measure A 72
Air Quality Management District 73
Landscape and Lighting Maintenance District 74
ning Maine Dishy anch 75
Community Facilities District - Hidden Hills 76
Community Facilities District - 2014-1 Town Center 77
Community Facilities District - 2014-2 Commerce Point 78 Community Facilities District - 2015-2 Citywide 79
Community Facilities District - 2017-1 Maintenance Services . 80 Public Education and Governmental Access 81
County Service Areas (CSA) 82
Maintenance CFD 83
Budgetary Comparison Schedule - Capital Projects Fund
Bonded CFDs.... 84
Capital Projects Fund 85
Budgetary Comparison Schedule - Debt Service Fund
Debt Service 86
CITY OF MENIFEE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
TABLE OF CONTENTS
Page
Number
STATISTICAL SECTION (unaudited)
Statistical Section Descriptions 87
Net Position 88
90 -und Balances of Governmental Funds .. 92
Changes in Fund Balances of Governmental Funds 94
Major Revenues by Source - Governmental Funds 96
Assessed Value and Estimated Actual Value of Taxable Property ... . 97 Assessed Value and Estimated Actual Value of Taxable Property by Use Category 98 Direct and Overlapping Property Tax Rates 99
Principal Property Taxpayers ... 100
Property Tax Levies and Collections ..... 101
Ratio of Outstanding Debt by Type ...... 102
Ratio of General Bonded Debt Outstanding 103
Direct and Overlapping Bonded Debt ... 104
Legal Debt Margin Information .......... 105
Demographic and Economic Statistics ... 106
Principal Employers .... 107
Full and Part-time City Employees by Program 108
Capital Asset Statistics by Function/Program 109
Operating Indicators by Function/Program 110
Miscellaneous Statistics .... 111
Taxable Sales by Category 112
Top 25 Sales Tax Producers ..... 113
Measure DD 1% Sales Tax - Revenues and Expenditures History 114
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INTRODUCTORY SECTION
MENIFEE 29844 Haun Rd. Menifee CA. 92586
M (951) 672-6777 | Fax (951) 679-3843
New. Better. Best. cityofmenifee.us
January 30, 2025
Honorable Mayor, Members of the City Council & Citizens of the City of Menifee, California
It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) for the City of Menifee (City) for the fiscal year ended June 30, 2024. The City annually issues a report on its financial position and activity, audited by an independent firm of certified public accountants. The City's Finance Department prepared this report in accordance with generally accepted accounting principles (GAAP), as set forth by the Governmental Accounting Standards Board (GASB) and other sources. This ACFR also conforms to GASB Statement No. 34 financial report standards, providing the reader a dual-perspective financial report. The report contains a citywide view of all governmental activities, as well as a focus on the financial position and operating results of the City's major funds.
Responsibility for the accuracy of the data, and the completeness and fairness of the presentations including disclosures, rests with the City. To provide a reasonable basis for making these presentations, management has established a comprehensive internal control framework that is designed both to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the presentation of the City's financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefits, internal controls have been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City. Also, all disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included.
Rogers, Anderson, Malody & Scott, LLP, Certified Public Accountants, have issued unmodified opinions on the City of Menifee's financial statements for the year ended June 30, 2024. The independent auditor's report is located at the front of the financial section of this report.
Generally accepted accounting principles requires that management provide a narrative introduction overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with the MD&A which can be found immediately following the report of the independent auditors.
Ricky Estrada Bob Karwin Vacant Dan Temple Dean Deines Armando G. Villa Mayor Mayor Pro Tem Councilmember Councilmember Councilmember City Manage:
District 1 District 2 District 3 District 4
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Profile of the City of Menifee
The City of Menifee is located approximately 80 miles southeast of Los Angeles in the southwestern portion of Riverside County. The City incorporated on October 1, 2008 as a general law City. As of 2024, the City has slightly more than 111,560 residents and covers an area of over 46 square miles. As a general law city, Menifee is governed by a five-member City Council operating under the Council/Manager form of government. Beginning with the November 2012 election, the Council consists of four Council Members elected by district who serve a four- year term on a staggering basis, and a Mayor elected at large who serves a four year term. The City Council is responsible for passing City ordinances, resolutions, adopting the annual budget, appointing commissions and committees, and setting policy. The City Council appoints the City Attorney and City Manager who in turn appoints the heads of the various departments and other city staff.
The City provides a wide range of services including planning, building, public works, engineering, parks and recreation, police and general administrative activities. Services are also provided to the City and its citizens by contract and by the direct services of other government agencies and organizations. These services include animal control through Animal Friends of the Valley for animal field services and participation as a member of the Joint Powers Authority (JPA) for animal sheltering services. Fire protection services are provided through contract with the County of Riverside while water and sewer services are provided by the Eastern Municipal Water District (EMWD). Library services and public health services are provided by the County of Riverside. Franchise agreements for electricity services are provided through Southern California Edison (SCE), natural gas through Sempra Utilities (SoCalGas), refuse collection alias taste har through a franchise agreement with Waste Management, public transit through the Riverside Transit Agency (RTA), and cable service through state franchise agreements with Mediacom, Charter and Frontier.
Although the City is distinctively residential in character, the City has the potential for a strong economic base and staff is working diligently to enhance this opportunity. Currently the major commercial bases are anchored by the Countryside Marketplace, Center Pointe, Newport Towne Square, Menifee Plaza, Cherry Hills Plaza, and other key focal points near the I-215, Newport Road and McCall Boulevard. The City has experienced significant growth over the past fiscal year, welcoming several new businesses, including Papa Smash Burgers, Savage Spin Studio, Lady R Bistro, and Los Amigos Restaurant. Looking ahead, the City anticipates further expansion with the introduction of key establishments such as Rancho Family Medical Center, Rady's Children's Medical Center, Scripps Exploring Academy, and the Velo Training Facility.
These developments are expected to enhance the local economy and provide residents with increased access to diverse services and amenities. The City also saw the addition of the Football Stadium and Kinesiology Building at MSJC and Family and Civic Courthouse completed during 2024. Other future development projects include amenities such as entertainment venues, restaurants and other retail, offices, and lodging. -i-
Local Economy
Mirroring the national, state and regional economies, the City of Menifee's local economy reflects the impacts of decelerating national historic inflation, continued international supply chain issues, and higher interest rates. Relative to the unemployment rate during the Covid-19 pandemic, the unemployment rate has significantly improved over the past few years. However, there was a slight increase from 4.2% to 5.0% in 2023, in line with a softening labor market experienced at the statewide level over the last year. The existing high-interest rate environment and more cautious lending from banks have impacted credit conditions that in turn have affected job growth in credit-sensitive sectors. During the FY2023-24 period the City and local region experienced a markedly slower pace of permitting activity compared to the prior year. Statewide and locally an overall decline in permit activity was experienced because of increased interest rates slowing the demand for housing and making construction loans more expensive. Locally, the number of building permits issued has experienced a notable decrease of 35.87% (from 6,261 to 4,015), while the number of planning applications increased modestly by 1.79% (from 336 to 342).
UNEMPLOYMENT RATE
BY CALENDAR YEAR (PER HDL)
10.20% 9.60%
8.90% 7.90%
7.10% 7.50%
5.20% 4.20% 4.00% 4.20% 5.00%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Comparable to national trends, retail sales activity during the FY2023-24 period was marked by overall slower growth. While net Bradley Burns Sales tax collections increased significantly from $12,287,692 in fiscal year 2022-23 to $16,976,710 in fiscal year 2023-24, $4,047,938, or construction for the project be reported and remitted to the City. Excluding the Nova Park associated sales tax remittances, the overall Bradley Burns sales tax change from 2022-23 to 2023-24 was an increase $641,080 or 5.22% from the prior year. Similarly, for Quality of Life (Measure DD) Sales Tax collections increased from $19,634,904 in fiscal year 2022-23 to $24,088,083 in fiscal year 2023-24, a 22.68% increase. However, $4,050,832 of the increase corresponds to one time sales tax revenue resultina from the construction of the Nova Park -iii-
Battery Storage project. Excluding the Nova Park Project remittances, the increase in Quality of Life revenue from FY2022-23 to FY2023-24 was $402,347 or 2.05%. This was the seventh full year of collection of this 1% additional sales tax that was passed by the voters in November 2016. While both Bradley Burns Sales Tax and Quality of Life Sales Tax collection reflected overall increases from the prior year, the increases were: 1) principally attributed to one time sales tax revenue associated with the Nova Park Battery Storage Project and 2) excluding the Nova Park revenues, modest and reflecting the overall national financial conditions signaling a potential economic slowdown in the upcoming year. As the City enters the new fiscal year, projected revenues in sales tax (Bradley Burns and Quality of Life) are forecast to be modest growth from the FY2022-23 amounts.
As part of the State of California's Fiscal Year 2011-12 Budget, the Governor signed Senate Bill 89 (SB 89), which shifted millions of Vehicle License Fee (VLF) revenues to fund state law enforcement grants. This legislation particularly impacted newly incorporated cities such as Menifee, which received a special allocation from VLF revenues. The impact due to SB 89 for the City of Menifee in Fiscal Year 2016-17 was estimated to be a loss of approximately $4.3 million, which the City addressed through budgetary measures. In the State of California budget for fiscal year 2017-18 SB 130 was introduced, signed and made into law. With SB 130 the City of Menifee's annual VLF revenues were restored. In fiscal year 2022-23 the City received $9,578,382, in fiscal year 2023-24 the City received $10,726, 737 an increase of 10.73%.
Budget Process
Beginning with Fiscal Year 2023-24, the City has transitioned from an annual budget cycle to a biennial budget process, developing and adopting two consecutive and discrete 12 month budgets in a consolidated process. In doing so, the City's main objectives were to streamline the budget development process as well as align this with long-term financial planning. With a biennial budget process the City is able to examine budgetary decisions with a longer-term view.
Additionally, incorporated as part its biennial budget process is the update of its 10-year financial forecast for its principal funds. As was included in the regular one year budget process, staff presents two mid-year reviews (Year 1 and Year 2) examining progress and adjustments of revenues and expenses for the current year underway, and one mid-cycle process, examining any significant budgetary adjustments needed for the second year.
The City's operating budget and five-year capital improvement plan is adopted in the biennial budget cycle by the City Council no later than the close of the prior fiscal year and serves as the foundation for planning and controlling the City's finances. The budget process begins early in winter and encompasses budget workshops with the public and City Council in order to promote transparency and to develop goals and objectives with the community's best interest at heart.
As the City of Menifee is still relatively new and growing, the primary goal for the City continues to be maintaining a good balance between augmenting City staff and services, and utilizing existing resources efficiently as well as minimizing costs as much as possible. -iv-
During the year, supplemental appropriations are made to the adopted budget and approved by City Council as necessary. The City Manager is authorized to approve operating transfers between departments within a fund without limits and may reduce expenditure appropriations within a fund as a method of fiscal control. The Chief Financial Officer may decrease revenue estimates to reflect changes in the economy within the fiscal year. Annually, staff prepares and presents mid-year budget adjustments to City Council for their approval. This process incorporates updating beginning fund balances per the annual audit report and adjusting the budget as dictated by changes in the City's goals and objectives or due to economic or legislative changes. All appropriations lapse at year-end, except those approved for carryover through encumbrances or by Council resolution.
Long-term Financial Planning
The City has adopted a fund balance policy in compliance with GASB Statement No. 54, which sets the goal of maintaining the General Fund unrestricted balance in an amount equal to thirty- five percent (35%) of general fund expenditures. 12.5% of these reserves are committed or set aside for use specifically in the case of the declaration of a state or federal emergency, or a local emergency as defined in Menifee Municipal Code 1.10.010. The City's Finance Committee, made up of two City Councilmembers and Finance staff, has made it a priority to work with staff to develop necessary and appropriate fiscal policies to guide the City's future operations. The Finance Committee and City staff will also be working together on the development of a long- term financial plan for the City. At the end of FY 2023-24, the agency reviewed its financial capacity to increase the fund balance policy threshold, and following Council approval, has formally increased its fund balance policy threshold from 35% to 40% effective July 1, 2024.
During the City's budget process, the City's engineering staff takes a five-year capital project budget to City Council for adoption. For FY2023-24 in the five year capital project budget there were a total of 32 projects identified with requested funding totaling $21,133,101, from various sources. These 32 projects consist of seven transportation projects, two traffic signal projects, five street improvement projects, four pavement management projects, one technology infrastructure, and four facility projects and nine parks, trails and recreation projects. As a fast- growing community, Menifee continues to prioritize funding resources and efforts into capital projects. During FY2023-24 a total of 20 capital improvement projects were completed including facilities, park, trails, and recreation, street improvements, traffic signals and transportation projects. Additionally, significant construction progress continued for the Holland Road Overpass Project, a $35 million infrastructure investment to support much needed traffic mitigation efforts.
Design and pre-construction efforts on the Bradley Road Bridge and the widening of Scott Road west to Bundy Canyon Road continued through FY2023-24. These projects are vital to alleviate traffic congestion and improve safety, and the City continues to aggressively seeking various methods of funding and is also looking into local, regional and state collaborations. On the recreation side, construction on the Central Park Amphitheater Project progressed throughout the year, continuing through the upcoming year. Similarly, construction approached completion at the end of the fiscal year for the City's newest fire station, Quail Valley Station #5, a new state- -V-
of-the-art facility that will provide a significant increase in the amount of personnel and equipment that can be utilized at the station.
User fees and development impact fees are collected under the updated fee schedules effective January 1, 2023 and July 1, 2023, respectively. The City conducted a comprehensive citywide user fee study and development impact fee (DIF) study update during FY2021-22 and formally updated a new fee schedule on October 5, 2022, with an effective date of January 1, 2023. The user fee study examined all existing fees for service and provide an updated fee schedule reflecting the costs to provide each service. The DIF study update was conducted to review the existing impact fees to ensure that these are compatible to today's construction costs and meet the future needs of the City. These fees are imposed on new construction and bring much needed financial relief to the City by expanding current and future roadways and constructing new public facilities. The implementation date of any new fees related to the 2022 DIF Study Update were presented for City Council consideration and adopted on November 16, 2022. The updated DIF fees schedule was effective July 1, 2023, with a five year phase-in for commercial/retail and office development.
In April 2015 the City adopted its first city-wide Community Facility District (CFD) for facility maintenance. This city-wide CFD provides maintenance services such as street lighting, street sweeping, landscape maintenance and storm drainage maintenance to those residential and commercial projects that annex into the maintenance CFD. This maintenance CFD will assess only new construction to help minimize the fiscal impact that expanding development imposes on the City. The formation of the new CFDs will allow the City to continue to provide quality services that our residents and community expect, and the level of services that make the City of Menifee one of the premier cities in Riverside County.
Lastly, beginning February 2023, the City has embarked on the implementation of a new and more robust financial system, enterprise resource system (ERP) to replace the system used through the present. The overarching goals of this system conversion are to streamline business processes, improve data accuracy, enhance operational efficiency, and gain a unified view of all Critical business functions across departments by centralizing data in a single system. In the implementation of the project, the City has established an executive steering committee, core team, and included other departments in the phased-in implementation of the new ERP. The City successfully went live with the financials component of the new ERP in July 2024, including closing of the FY2023-24 year. Efforts for the human resources and payroll components of the ERP project will continue through FY2024-25 year, with a target go live date in the spring of 2025.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) of the United States and Canada awarded the City its Certificate of Achievement for Excellence in Financial Reporting for the Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2023. Since incorporation, the City has been bestowed this prestigious award every year that has been -vii-
submitted. In order to be awarded the Certificate of Achievement, a government must publish an easily readable and efficiently organized ACFR. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year. The City believes the current ACFR continues to meet the high standards associated with the Certificate of Achievement Program and we are submitting it to GOA to determine its eligibility for another certificate.
The City's ACFR was prepared through the combined efforts of City staff. Special recognition is due to the Finance Department. With their support and coordination, the entire department assisted in closing the books for the year and ensuring timely and accurate reporting. Credit must also be given to the Mayor and City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City's finances.
Respectfully submitted,
Armando G. Villa Travis Hickey
City Manager Chief Financial Officer
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CITY OF MENIFEE
Elected Officials
Bill Zimmerman - Mayor
Dean Deines- Mayor Pro Tem
Bob Karwin - Councilmember
Ricky Estrada - Councilmember
Lesa A. Sobek - Councilmember
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CITY OF MENIFEE
ORGANIZATIONAL CHART
(BY DEPARTMENT)
Fiscal Year 2023/24
CITIZENS OF MENIFEE
CITY COUNCIL
COMMISSIONS &
CITY ATTORNEY CITY MANAGER
COMMITTEES
CITY EXECUTIVE
DEPUTY CITY OFFICE (CEO) ASSISTANT CITY
MANAGER MANAGER
COMMUNICATIONS
CITY CLERK ECONOMIC
DEVELOPMENT
INFORMATION
TECHNOLOGY
COMMUNITY
COMMUNITY
SERVICES DEVELOPMENT
FINANCE &
GENERAL
SERVICES
PUBLIC WORKS/
ENGINEERING
HUMAN
RESOURCES
FIRE
MENIFEE PD
|I HOMETOWN
-ix- • OF HEROES
City of Menifee Executive Staff
ARMANDO VILLA BRYAN JONES REBEKAH KRAMER MARK SCOVILLE
City Manager Assistant City Manager Deputy City Manager Fire Division Chief
TRAVIS HICKEY RON PUCCINELLI STEPHANIE ROSEEN CHERYL KITZEROW Chief Financial Öfficer Chief Information Officer City Clerk: Community Development Director
ANGELA RIVERA CHRIS KARRER NICK FIDLER JEFF MELCHING
Human Resources Police Chief Public Works Director City Attorney Director
City of Menifee ACFR Team
Travis Hickey, Chief Financial Officer (CFO) Lauri Lockwood, Financial Analyst Margarita Cornejo, Deputy Finance Director Melissa Cortes, Senior Accountant Ann-Marie Etienne, Finance Manager Dominic Tartaglia, Principal Accountant Colin O'Connell, Accountant
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Menifee
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Chuitophe P. Movill
Executive Director/CEO
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FINANCIAL SECTION
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R A
ROGERS. ANDERSON. MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
735 E. Carnegie Dr. Suite 100
Independent Auditor's Report
San Bernardino, CA 92408
909 889 0871 T
909 889 5361 F To the Honorable City Council
ramscpa.net City of Menifee, California
PARTNERS Report on the Audit of the Financial Statements Scott W. Manno, CPA, CGMA
Leona Shanbhag, CPA. MST. CGMA Opinions
Bradlerd A. Welebir. CPA. MBA. CGMA
Jenny W. Liu, CPA. MST We have audited the financial statements of the governmental activities, each Gardenya Duran. CPA, CGMA
major fund, and the aggregate remaining fund information of the City of Brianna Schultz, CPA. CGMA
Menifee (the City), as of and for the year ended June 30, 2024, and the related Brenda L Odle. CPA, MST (Partner Emeritusi
notes to the financial statements, which collectively comprise the City's basic Terry P. Shea, CPA Partner Emeritus)
financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the MANAGERS / STAFF governmental activities, each major fund, and the aggregate remaining fund Seong-Hyea Lee, CPA. MBA information of the entity, as of June 30, 2024, and the respective changes in Evelyn Morentin-Barcena. CPA financial position for the year then ended in accordance with accounting Veronica Hernandez, CPA principles generally accepted in the United States of America.
Laura Arvizu, CPA
john Maldonado, CPA, MSA Basis for Opinions
Julia Rodriguez Fuentes. CPA, MSA
Demi Hite. CPA We conducted our audit in accordance with auditing standards generally Jeffrey McKennan CPA accepted in the United States of America (GAAS) and the standards Monica Wysocki, CPA applicable to financial audits contained in Government Auditing Standards Jacob Weatherbie, CPA, MSA issued by the Comptroller General of the United States (Government Auditing Bolim Han, CPA. MAcc
Standards). Our responsibilities under those standards are further described Anny Gonzalez, CPA in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of entity and to meet our other ethical responsibilities, in accordance with the relevant ethical
MEMBERS
American Institute of requirements relating to our audit. We believe that the audit evidence we have Certilied Public Accountants. obtained is sufficient and appropriate to provide a basis for our audit opinions.
PCPS The AICPA Alliance
[or CPA Firms Emphasis of a Matter
Govemmental Audit
As discussed in Note 1 to the financial statements, during the year ended Quality Center
June 30, 2024, the City adopted the provisions of Governmental Accounting California Society of Standards Board (GASB) Statement No. 100, Accounting Changes and Erroi Certified Public Accountants
Corrections. Our opinions are not modified with respect to this matter Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the Proud Member of
AlliottGlobalAlliance™
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STABILITY. ACCURACY. TRUST.
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 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 GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about City's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, pension and OPEB schedules, and budgetary comparison 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 GAAS, 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. -2-
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor fund financial statements 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 GAAS. In our opinion, the accompanying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information included in the Annual Report
Management is responsible for the other information included in the annual comprehensive financial report (ACFR). The other information comprises the introductory and statistical sections 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 January 30, 2025 on our consideration of entity'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 entity'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 entity's internal control over financial reporting and compliance.
Rogers, Anderson, Malody e leott, UP.
San Bernardino, California
January 30, 2025
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CITY OF MENIFEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Menifee, California, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2024.
We encourage readers to consider the information presented here in conjunction with additional information beyond what we have furnished in our letter of transmittal, which can be found in the introductory section of this report, and with the City's financial statements, which follow this discussion.
Financial Highlights
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows or resources at June 30, 2024, by $573.032 million (net position). Of this amount, $94.6 million is restricted for public works, future capital projects and debt service.
As of June 30, 2024, the City's governmental funds reported combined ending fund balances of $203.2 million.
• At June 30, 2024, the Unassigned Fund Balance for the General Fund was $74.6 million, an additional $11.3 million was Committed for use in the event of an emergency, $5.5 million for the McCall Blvd project improvement, as well as an additional $4.8 million for the construction of a future City Hall, $11.3 million was Assigned for economic uncertainty, and $2.1 million for various assignments of fund balance. Council action in 2021 set fund balance requirements at Committed of 12.5%, Assigned of 12.5% and Unassigned Fund Balance of 10% for a total required Fund Balance of 35% of budgeted expenditures. The ending General Fund balance for FY2023-24 compared to the ending Fund balance of $90.2 on June 30, 2023, an increase of $19.4 million, principally driven from one time sales tax revenues and operational savings. The fund balance amounts are reviewed each year as part of the budget process.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's Basic Financial Statements. The City's Basic Financial Statements consist of three components: 1) Government-wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the Basic Financial Statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference between them reported as net position. Over time increases in the 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 showing how the government's 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, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The government-wide financial statements present information about the functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities). The governmental activities of the City include general government, engineering and public works, public safety, community development and recreation services.
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The Government-wide Financial Statements can be found in the Table of Contents under the heading Basic Financial Statements.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The fund financial statements provide detailed information about the individual funds—not the City as a whole. Some funds are required to be established by State law. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money. The City of Menifee uses primarily governmental funds and one fiduciary fund for accounting and reporting purposes.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements.
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 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. Both the governmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains various individual governmental funds. Information is presented separately in the Governmental Funds Balance Sheet, and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances. The General Fund, the Development Impact Fees Fund, the Grants Fund, the TUMF Fees Fund, and the Bonded CFD Fund are considered to be major funds, and are presented in individual columns in the fund statements. Data from other non-major 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. The Governmental Fund Financial Statements can be found in the Table of Contents under the heading Basic Financial Statements.
Proprietary Funds
Proprietary funds are generally used to account for services for which the City charges customers (either outside customers, or internal units or departments of the City). Proprietary Funds provide the same type of information as shown in the Government-Wide Financial Statements: albeit in more detail. Proprietary Funds utilize the same method used by the private sector businesses: the accrual basis of accounting. The City currently does not maintain any separate proprietary funds.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government.
Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of Menifee's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City has one fiduciary fund - the Custodial Fund, which is used to hold deposits that the City holds on behalf of outside parties. The Fiduciary Funds Financial Statements can be found in the Table of Contents under the heading Basic Financial Statements. -5-
Notes to the Basic Financial Statements
The Notes to the Basic Financial Statements provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. The Notes to the Basic Financial Statements can be found in the Table of Contents under the heading Notes to Financial Statements.
Government-wide Financial Analysis
The government-wide financial statements provide long-term and short-term information about the City's overall financial condition. This analysis addresses the financial statements of the City as a whole.
For fiscal year ending June 30, 2024 the City of Menifee's total net position increased 17.2 percent from $488.8 million for fiscal year ending 2023, to $573.0 million for fiscal year ending 2024. The largest portion of the City's net position, $366.4 million or 63.9 percent, reflects its investment in capital assets (e.g. land, buildings, improvements other than buildings, equipment, infrastructure and construction in progress); less any related debt used to acquire those assets, which is still outstanding. The City uses these capital assets to provide services to citizens; consequently these assets are not available for future spending. Although the city's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Of the remaining total, $94.6 million is restricted to specifically stipulated spending agreements originated by law, contract or other agreements with external parties.
Summary of Net Position
June 30, 2024 and 2023
Governmental
Activities
2023 2024
Assets:
Current and other assets $ 204,286,090 $ 234,078,170
Restricted assets 10,771,121 15,499,177
Capital and intangible assets 343,726,602 391,954,095
Total assets 558,783,813 641,531,442
Deferred Outflows of Resources:
OPEB related 1,081,734 1,282,640
Pension related 6,841,187 10,176,204
Deferred charges on refunding 859,170 813,951
Total deferred outflows of resources 8,782,091 12,272,795 Liabilities:
Other liabilities 45,934,862 46,069,315
Long-term liabilities 31,975,979 33,907,137
Total liabilities 77,910,841 79,976,452
Deferred Inflows of Resources:
OPEB related 728,083 690,003
Pension related 156,006 105,619
Total deferred inflows of resources 884,089 795,622
Net Position:
Net investment in capital assets 317,756,598 366,417,603 Restricted 80,052,911 94,559,622
Unrestricted 90.961,465 112,054,938
Total net position $ 488,770,974 $ 573,032,163
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As shown above, the City's assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $573.0 million at June 30, 2024. Deferred outflows is defined as "a consumption of net assets by the government that is applicable to a future reporting period" and deferred inflows is defined as "an acquisition of net assets by the government that is applicable to a future reporting period". For further information on the deferred outflows and inflows, see Notes 7 and 8 in the Basic Financial Statements section of this report.
Overall, Citywide governmental fund revenues for the fiscal year ending June 30, 2024, totaled $186.6 million. This figure compares with the prior year total of $175.9 million, a (6.1%) increase. • Total program revenues of $96.6 million were 51.76 percent of total revenues • Total general revenues of $90.0 million were 48.24 percent of total revenues.
Total related current year expenses accumulated to $95.9 million, compared with prior year expenses of $120.0 million. Public Safety expenses accounted for 46.17% of total current expenses. Engineering and Public Works expenses, which accounts for 6.34% of the total expenses, were used primarily for street maintenance costs and design costs. The overall largest category, General Government, includes expenses related to the management and administration of the City, such as finances, management, and legal expense services, accounted for 28.55% of total expenses.
Summary of Changes in Net Position
For the Years Ended June 30, 2024 and 2023
Governmental
Activities
2023 2024
Revenues
Program revenues:
Charges for services $ 46,428,763 $ 44,218,494
Operating grants and contributions 12,278,329 12,041,584 Capital grants and contributions 48,472,712 40,366,619
General revenues:
Property taxes 30,117,514 33,849,512
Sales taxes 31,922,596 41,064,793
Other taxes 5,721,774 6,144,757
Motor vehicle in-lieu (unrestricted) 109,295 135,915
Use of money & property 550,807 8,327,212
Other revenues 319,330 535,387
Total revenues 175,921,120 186,684,273
Expenses
General government 33,033,004 27,374,493
Public safety 43,999,757 44,266,879
Community development 9,365,371 8,906,681
Recreation services 9,507,152 8,634,157
Engineering and public works 22,646,459 6,075,482
Interest expense 1,463,336 622,071
Total expenses 120,015,079 95,879,763
Change in Net Position 55,906,041 90,804,510
Net position, beginning of year, as previously reported 432,864,933 488,770,974 Restatement - correction of an error (6,543,321)
Net position, beginning of year, restated 432,864,933 482,227,653 Net position, end of year $ 488,770,974 $ 573,032,163
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Financial Analysis of the Government's Funds
As noted earlier, 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 may be 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.
Below, the Statement of Revenues, Expenditures, and Change in Fund Balances shows the governmental activities fund balances for the two fiscal years ending June 30, 2024 and 2023. Governmental funds are divided into two categories consisting of major and non-major funds. During the year ending June 30, 2024, five funds were classified as major governmental funds, consisting of the General Fund, the Development Impact rees Fund, the Grants Fund, the TUMF Fund, and the Bonded CFD Fund. All other funds were classified as non-major funds. A major fund is any individual fund that meets the criteria of the following combined two tests: 1) a fund is classified as a major fund if the corresponding total revenues, expenses or (expenditures), assets or liability for that fund are at least 10 percent of the total of the aggregate for all funds and; 2) at least 5 percent of the total aggregate for all funds combined. The General Fund is always classified as a major fund while all other funds must meet the qualifications to be a major fund.
Summary of Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Years Ended June 30, 2024 and 2023
=083253
Revenues over (under)
expenditures 9.427.979 2,684,894 3,359.414 (745,590) (951,222) 4.417.982 18,193.457 Total other financing
sources (uses) 3,857,079 (2.674,894) (100,000) 227,560 1.309.745 Net change in fund balances 13,285,058 2,684,894 684,520 (745,590) (1,051,222) 4,645,542 19,503,202 Fund balances, beginning 76,905,707 38,568,870 890,650 (412,708) 11,703,311 22.006.016 149,661,846 Fund balances, ending 90.190.765 41.253,764 3 1.575,170 S (1,158.298) S 10.652.089 26.651,558 § 169,165,048 Other Total
Development Grants TUMF Bonded CFD's Governmental Governmental Fiscal Year 2023-2024 General Impact Fees Fund Fund Fund Funds Funds Total revenues: 106.478,150 15,883.053 S 4,751,231 $ 11.208.327 25.292,460 22.698.394 186.311,615 Total expenditures: 90,659,586 12,417,702 2,880.646 10.988.369 20.497,137 16.991.501 154.434,941 Renues our uncon) 15,818,564 3.465,351 1,870,585 219.958 4.795.323 5,706,893 31.876,674 Total other financing
sources (uses) 3,573,984 219,088 — (1,150,000) (440,364) 2.202,708 Net change in fund balances 19,392,548 3,684,439 720,585 219,958 4,795,323 5,266,529 34,079,382 Fund balances, beginning 90,190,765 41,253,764 1,575.170 (1,158,298) 10.652,089 26.651,558 169.165.048 Fund balances, ending 109.583.313 44.938,203 S 2,295,755 (938.340) 15.447,412 S 31.918.087 203.244,430 -8-
As of fiscal year ending 2024, the City's total governmental funds reported a combined ending fund balance of $203.2 million, an increase of $34,079,382 from the prior fiscal year. The General Fund, which is the chief operating fund of the City, had a fund balance of $109,583,313 as of June 30, 2024. This is an increase of $19,392,548 over the prior year. This increase is also due primarily because of an increase in one time sales tax revenues in Sales Tax, including Quality of Life (Measure DD) sales tax, increased property tax revenues compared to the prior year, and one-time operational savings. Lastly, investment income rose $7.31 million, during fiscal year 2023-24, the City proactively expanded its investments efforts with investments made in a significantly higher interest rate environment.
As indicated in the previous table, the City's total governmental funds ending fund balances, is $203.2 million of which $73.6 million represents unassigned fund balance, which is available for spending at the government's discretion, less allocations as noted in Note 11. The remainder of fund balance, $129.6 million, is either non-spendable, restricted (to indicate that it be spent only for the specific purposes stipulated by constitution, enabling legislation or external providers); committed (can be used only for specific purposes determined by formal action of a government's legislative body); or assigned (intended to be used for specific purposes but does not meet the higher criteria of restricted or committed).
General Fund Financial Highlights
As of June 30, 2024, unassigned fund balance of the General Fund is $74.6 million, with an additional $11.3 million committed by Council action for emergencies, $5.5 million for the McCall Blvd. project improvement and $4.8 million for a future City Hall; $11.3 million is assigned for economic uncertainty, $569,680 for fire safety, $934,463 for general plan update, $223,872 for the Bradley Bridge Project, and $442,660 for eligible technology updates (Technology surcharge).
Overall, General Fund revenues for the fiscal year ending June 30, 2024 totaled $106.5 million, compared to $93.5 million for the previous year. General Fund revenues can be broken down into five major categories shown below. By far, sales tax is the City's single largest source of revenue. Sales tax revenues, including both Bradley Burns and the Quality of Life Funds have increased 28.64%, or $9.1 million over prior year.
However, most of the increase experienced, just over $8 million, was from one-time sales tax revenue proceeds generated from the construction of the Nova Park Battery Storage Project. As a condition of the respective development agreement for this project, construction costs associated with the project were required to be remitted to the City of Menifee. Excluding the one-time sales tax revenue associated with Nova Park, the sales tax revenues increase compared to the prior year were 3.27%, or just over $1 million.
Property tax revenue, including VLF in Lieu revenue, is the City's second largest source of revenue.
Property taxes have increased 6% from prior year, reflecting continued appreciation in assessed values and new development. Both property and sales tax, including Quality of Life sales tax and VLF in Lieu revenues combined represent 70% of the City's total General Fund revenues. Development related fees (building, planning, fire and engineering permits and fees) decreased by 0.84% from the prior year as FY2023-24 reflected an overall decrease and slowing down in development activity experienced over the year principally attributable to increased interest rates and construction costs.
GENERAL FUND REVENUES
OTHER CATEGORY, DEVELOPMENT
12% • RELATED FEES, 13%
FRANCHISE FEES, 5%
SALESTAX,399
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General Fund expenditures totaled $90.7 million for the fiscal year ending June 30, 2024, compared to $84.1 million for the previous year. This increase of $6.6 million was due to overall personnel cost increases operation ons of si,4 man ompared to YV of $3 million, and well as increases of $2.2 million in capital program project expenditures and increases in operational costs of $1.4 million compared to FY2022-23. By the end of FY2022-23 the City had an approved workforce of 330.40 FTEs, with an original approved workforce of 315.40, compared to an ending workforce of 332.50 FTEs for FY2023-24, with the addition of 2.10 FTEs during the year.
The overall personnel increase of $3 million compared to FY2022-23 amount is reflective of the overall increase of 10 FTEs between the two years, and filling of the positions in FY2023-24. Other larger operational increases includes $800,000 in insurance premiums and claims expenses, $495,000 in fire contract costs, and $390,000 in dispatch services. Similar to the prior year, the City has noted increases year over year within these main categories. Additionally, construction for several large capital projects, funded in part with General Fund, commenced and/or continued through FY2023-24.
General Fund Budgetary Highlights
Differences between the General Fund original budget expenditures and the final amended budget were $50.9 million. The differences between the General Fund original budget revenues and the final amended budget were approximately $6 million and are briefly summarized as follows:
Revenues:
In closing out FY2023-24, all five of the City's top five revenues had final year actuals higher than adjusted budget amounts. In total Property Tax, Development revenue (planning, engineering and building permit activity), VLF, and Franchise Fee revenue totaled $2.6 million higher than the adjusted budget. Sales Tax revenue actuals, including the seventh year of collections of the City's Quality of Life (Measure DD) 1% sales tax, were approximately $7.2 million more than the adjusted budget, principally drive by one-time sales tax revenues, including Quality of Life, associated with the construction of the Nova Park Battery Storage site. Regular sales tax and Quality of Life revenues, excluding the Nova Park associated sales tax revenues, were $828k less than adjusted budget, throughout the fiscal year, signaling slowing retail activity, reflecting overall national retail trends and economic conditions.
In total General Fund revenues, net of transfers and SBITA/Lease Acquisition, were $4.2 million higher than the adjusted budget primarily due to the combined impact of: one-time revenue sales tax and Quality of Life revenues receipts of $8 million from construction of the Nova Park Battery Storage Park Project), increased property taxes, VLF, and Franchise fee revenue. Development revenue was just under $1 million higher than the adjusted budget, however, it is noted the FY2024/25 adopted and adjusted budget were conservatively adopted anticipating lower numbers than previous years. Additionally, interest earning throughout the year performed strongly exceeding adjusted budget projections by $642,000. The City has made deliberate efforts to consolidate and maximize investment activity in adherence with its investment policy.
Expenditures:
Total General Fund expenditures were approximately $42.2 million less than the budgeted amounts, excluding interfund transfers, and were mostly due to one-time savings (unfilled authorized positions and operating and maintenance savings) and also due to deferred expenditures (professional services including multi-year environmental studies (CEQA) activity and multi-year capital projects) underway that will be completed in future years.
Personnel expenditures totaled $1.6 million less than the adjusted budget, which was attributable to unfilled authorized positions. The largest operational savings of FY2023-24 were represented from the Fire contract totaling $2.9 million, dispatch contract of $221,000, and approximately $3.9 million in operational savings including various professional services agreements.
The majority of the $42.2 of expenditure actuals to budget variance is represented by expenditures not yet incurred. Approximately $25.3 million of the total $42.2 million is represented by multi-year capital projects that will be completed in future years, with expenses to be realized as project activity commences. Similarly existing contracts and/or projects underway totaling $4.8 million will be carried forward into the new fiscal -10-
Anticipating spending for capital items that were budgeted but incomplete at year end will be rolled into the subsequent year's budget, along with any operating budget carryovers. Budget carryovers, except for encumbrances, will require council approval for addition to the next budget.
Capital Asset and Debt Administration
Capital Assets
The City's investment in capital assets for its governmental activities as of June 30, 2024, totals $391.9 million, net of accumulated depreciation. This investment in capital assets includes land, buildings, system improvements, machinery and equipment, park facilities, roads, highways, and bridges.
Summary of Changes in Capital Assets
June 30, 2024
Balance Balance
July 1, 2023 Additions Deletions June 30, 2024
Governmental activities:
Capital assets, not being depreciated:
Land $ 28,794,607 $ - $ : $ 28,794,607
Right-of-way 415,800 435,000 850,800
Construction in progress 50,327,367 37,670,055 (12,043,702) 75,953,720 Total capital assets, not being
depreciated 79,537,774 38, 105,055 (12,043,702) 105,599,127 Capital assets, being depreciated:
Building and improvements 31,812,983 1,416,729 33,229,712 Equipment and fumiture 4,837,959 860,949 5,698,908
Vehicles 8,411,023 729,060 9,140,083
Software and website design 772,239 772,239
Infrastructure 337,303,340 44,449,467 381,752,807
Righ-to-use 8,278,993 2,245,856 (318,917) 10,205,932
Total capital assets, being
depreciated 391,416,537 49,702,061 (318,917) 440,799,681 Less accumulated depreciation (133,771,030) (20,992,600) 318,917 (154,444,713) Total capital assets,
being depreciated, net 257,645,507 28,709,461 286,354,968 Governmental Activities
Capital Assets, net $ 337,183,281 $ 66,814,516 $ (12,043,702) $ 391,954,095 Total capital assets increased 16.24% from prior year. During the current fiscal year, the City accepted $33.8 million in infrastructure improvements from development projects and had an additional $10.6 million in construction in progress.
During FY2023-24 the City also acquired 13 new city vehicles totaling $0.7 million for Police, Fire, and Public Works departments.
Additional information on the City's capital assets can be found within Note 4 - Capital Assets and Note 5 - Long-term Liabilities in the notes to the basic financial statements section of this report.
Long-term Liabilities
At the end of the current fiscal year, the City had total unsecured debt outstanding of $28.9 million.
During Fiscal Year 2011-12, the City issued $20 million in Certificates of Participation through the California Communities Total Road Improvement Program (TRIP). The proceeds from this financing were used to fund various capital road improvements and are being repaid from a combination of future Gas Tax and Measure "A" revenues. This original TRIP debt was refinanced in 2020, resulting in anticipated savings exceeding $4 million for the balance of the debt. The current outstanding balance for this project is $14,960,000.
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In June of 2019 the City entered into a financing agreement with Banc of America through the support and regional efforts of the Western Riverside Council of Governments (WRCOG) with Southern California Edison (SCE) to work with the City in the purchase and retrofit of approximately 6,300 streetlights from SCE, known as the Streetlight Retrofit Project. The initial debt for the Streetlight Retrofit Project was $6,550,000 and with a financing period of fifteen years. In the fall of 2021, taking advantage of the lower interest rate market, the City refinanced the Streetlight Retrofit Project, resulting in anticipated savings of over $400k for the balance of the debt. The current outstanding balance for this project is $5,057,262.
Other debts include the City's liabilities arising from employee's accrued leave, or compensated absences of $2,627,278, lease liabilities of $6,001,205, represented by various vehicle, real property, equipment leases, and subscription liabilities of $331,975 further detailed within Note 5- Long-Term Liabilities.
Summary of Changes in Long-Term Liabilities
June 30, 2024
Balance Balance Long- Due Within
July 1, 2023 Increases Decreases June 30, 2024 Term One Year Transportation Revenues $ 15,640,000 $ $ (680,000) $ 14,960,000 $ 14,270,000 $ 690,000 COP, 2020
Distribution Facilities
Financing Agreement 5,485,266 (428,004) 5,057,262 4,616,365 440,897 Lease liabilities 5,175,405 2,122,283 (1,296,482) 6,001,206 4,703,114 1,298,092 Subscription liabilites 528.503 80.425 (276,953) 331,975 231,885 100,090 Compensated absences 2,178,377 649,859 (200,958) 2,627,278 2,101,822 525,456 Long-term liabilities total $ 29,007,551 $ 2,852,567 $ (2,882,397) $ 28.977.721 $ 25,923,186 $3,054,535 Additional information on the City's long-term liabilities can be found within Note 1 - Summary of Significant Accounting Policies, Note 5 - Long-Term Liabilities, Note 7 - Pension Plan, and Note 8 - Post Employment Benefits in the notes to the basic financial statements section of this report Economic Factors and Next Year's Budget
The city has experienced significant and steady increase in the City's sales tax base since fiscal year 2017- 18, with the adoption of the Quality of Life measure, and as consumers changed their spending habits during the pandemic. With this additional revenue source, the city has been able to prioritize services in the areas of public safety and infrastructure. However, over the past two years inflationary pressures continue to influence the City's financial landscape in the coming fiscal year, impacting both income and expenditures. Inflation is driving up costs in all City funds in areas such as personnel, supplies, purchased services, and capital investments. In addition to inflation, unemployment, which has increased slightly over the past year, is expected to lead to a reduction in sales tax and other City revenues as consumers cut back on discretionary spending.
As the City continues to mature and workforce expand, rising retirement costs will play significant impact on the City's long-term financial stability. The City has commenced some proactive efforts beginning with FY2024-25 to help mitigate significant fluctuations in year over year pension liability.
On June 21, 2023, the City Council adopted the City's Fiscal Year 2023-2025 Biennial Budget. Within the adoption, the fiscal year 2023-24 citywide budget totaled $135 million in funding for citywide operations, including $21.1 million for capital projects. On February 7, 2024, the City Council adopted an amended Fiscal Year 2023-24 budget totaling $241 million for citywide operations, including $140.5 million for capital projects. The adjusted budget reflected prior year carryovers, addition of the Aquatics Program, and some minor personnel adjustments.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Travis Hickey, Chief Financial Officer, City of Menifee, 29844 Haun Road, Menifee, CA 92586 or by telephone to (951) 672-6777. The entire ACFR is also available on the City's website: www.cityofmenifee.us. -12-
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Basic Financial Statements
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CITY OF MENIFEE
STATEMENT OF NET POSITION
JUNE 30, 2024
Governmental
Activities
Assets:
Cash and investments $ 215,602, 148
Receivables:
Accounts 17,079,892
Accrued interest 1,156,755
Prepaid items 234,200
Restricted assets:
Cash with fiscal agent 15,499,177
Other current assets 5,175
Capital assets, not being depreciated 105,599, 127
Capital assets, depreciated, net 286,354,968
Total Assets 641,531,442
Deferred Outflows of Resources:
OPEB related 1,282,640
Pension related 10,176,204
Deferred charge on refunding 813,951
Total Deferred Outflows of Resources 12,272,795
Liabilities:
Accounts payable 13,540,495
Accrued liabilities 2,620,794
Accrued interest 45,142
Deposits payable 27,124,537
Unearned revenue 2,670,644
Long-term liabilities, due within one year 3,054,535
Current portion of total OPEB liability 67,703
Due beyond one year:
Total OPEB liability 3,768,324
Net Pension liability 1,161,092
Long-term liabilities, due beyond one year 25,923,186
Total Liabilities 79,976,452
Deferred Inflows of Resources:
OPEB related 690,003
Pension related 105,619
Total Deferred Inflows of Resources 795,622
Net Position:
Net investment in capital assets 366,417,603
Restricted for:
Community development projects 18,986,084
Public works 74,958,469
Debt service 615,069
Unrestricted 112,054,938
Total Net Position $ 573,032,163
The accompanying notes are an integral part of these financial statements.
CITY OF MENIFEE
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Net
(Expenses)
Revenues and
Changes in
Program Revenues Net Position
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs
Governmental activities:
General government $ 27,374,493 $ 14,555,941 $ 2,555,282 $ $ (10,263,270) Public safety 44,266,879 15,767,680 374,723 (28,124,476) Community development 8,906,681 1,770,478 1,276,934 (5,859,269) Recreation services 8,634,157 1,057,150 (7,577,007)
Engineering and public works 6,075,482 11,067,245 7,834,645 40,366,619 53,193,027 Interest on long-term debt 622,071 (622,071)
Total governmental activities $ 95,879,763 $ 44,218,494 $ 12,041,584 $ 40,366,619 746,934 General Revenues:
Taxes:
Property tax, levied for general purpose 33,849,512
Sales tax - Shared State revenue 41,064,793
Transient occupancy tax 507,446
Franchise taxes 4,765,363
Other taxes 871,948
Unrestricted:
Vehicle license fees 135,915
Use of money and property 8,327,212
Other 535,387
Total General Revenues 90,057,576
Change in net position 90,804,510
Net Position
Beginning of year, as previously reported 488,770,974
Restatement - correction of an error (6,543,321)
Beginning of year, as restated 482,227,653
End of ye ar $ 573,032,163
The accompanying notes are an integral part of these financial statements. -14-
CITY OF MENIFEE
BALANCE SHEET - GOVERNMENTAL FUNDS
JUNE 30, 2024
Capital
Special Revenue Funds Projects Fund
Total Non-
TUMF Fees Bonded CFDs Major Total
Development (formerly non- (formerly non- Governmental Governmental General Impact Fees Grants major). major) Funds Funds
Assets
Cash and investments $ 131,990,053 $ 47,434,680 $ 5,107,514 $ $ - $ 31,069,901 $ 215,602,148 Receivables:
Accounts, grants and taxes 9,435,496 553,119 1,593,226 17,079,892 Accrued interest 771,921 216,502 33,812 62572 71,748 1,156,755 Prepaid items 44,888 39,835 149,477 234,200
Other current assets 5,175 : : 5,175
Due from other funds 6,085,621 6.085,621
Resticted assets:
Cash and investments with fiscal agents 15,384,740 114,437 15,499,177 Total Assets $ 148,333,154 $ 47,651,282 $ 5,734,280 $ 5,498,051 $ 15,447,412 $ 32,998,789 $ 255,662,968 Liabilities and Fund Balances
Liabilities:
Accounts payable $ 8,628,727 $ 2,713,079 $ 767,881 $ 350,770 $ 1,080,038 $ 13,540,495 Accrued liabilities 2,620,130 664 2,620,794
Deposits payable 27,124,537 27,124,537
2,670,644 2,670,644
6,085,621 6,085,621
Total Liabilities 38,373,394 2,713,079 3,438,525 6,436,391 1,080,702 52,042,091 Deferred Inflows of Resources:
Unavailable revenues 376,447 376.447
Total Deferred Inflows of Resources 376,447 376,447
Fund Balances:
Nonspendable:
Prepaid items 44,888 39,835 - 149,477 234,200
Restricted for:
Community development projects 18,986,084 18,986,084
Engineering and public works : 44.938.203 2,255,920 : 15,447,412 12,316,934 74,958,469 Debtsenice 465,592 465,592
Committed to:
Emergency contingency 11,257,355 11,257,355
City hall 4,750,000 : : 4,750,000
McCall Blud project improvement 5,540,317 5,540,317
Assigned to:
Economic uncertainty 11,257,355 11,257,355
Fire safety 569,680 : 569,680
General plan update 934,463 934,463
Technology 442,660 442,660
Bradley Bridge 223,872 223,872
Unassigned 74,562,723 (938.340) 73,624,383
Total Fund Balances 109,583,313 44,938,203 2,295,755 (938,340) 15,447,412 31,918,087 203,244,430 Total Liabilities, Deferred Inflows of
Resource and Fund Balances S 148,333,154 ≤ 47,651,282 $ 5,734,280 $ 5,498,051 $ 15,447,412 $ 32,998,789 $ 255,662,968 The accompanying notes are an integral part of these financial statements.
CITY OF MENIFEE
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2024
Fund balances of governmental funds $ 203,244,430
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets net of depreciation have not been included as financial resources in governmental fund activity. 391,954,095
Long-term liabilities and compensated absences that have not been included in the governmental fund activity:
Certificates of Participation $ (14,960,000)
Debt Agreement 2019 (5,057,262)
Net pension liability (1,161,092)
Total OPEB liability (3,836,027)
Subscriptions (331,975)
Lease liabilities (6,001,206)
Compensated absences (2,627,278) (33,974,840)
Accrued interest payable for the current portion of interest due on bonds has not been reported in the governmental funds. (45,142)
Deferred inflows and outflows of resources not due and payable, or owed and receivable, respectively, in the current period, are not reported in the funds:
Pension related deferred outflows of resources 10,176,204 OPEB related deferred outflows of resources 1,282,640
Deferred charge on refunding 813,951
Pension related deferred inflows of resources (105,619) OPEB related deferred inflows of resources (690,003)
Revenues reported as unavailable and unearned in the governmental funds are recognized in the statement of activities. 376,447
Net position of governmental activities $ 573,032,163
The accompanying notes are an integral part of these financial statements. - 16-
CITY OF MENIFEE
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Capital
Special Revenue Funds Projects Fund
Total Non-
TUMF Fees Bonded CFDs
Development (formerly non- (formerly non- Governmental Governmental General Impact Fees
Revenues:
Taxes $ 70,494,188 $ 52,499 $ 70,546,687
enses and perm 11,419,395 : 4.50221 : 11,419,395
ergovemmer 11,464,282 111.208.327 9,091,003 36,304,333
Charges for services 7.102,415 10,488,581 17,590,996
Ise of money and propert 5,070,556 2,662,016 210510 1,101,711 1,237,310 10,282,103 Fines and forfeitures 483,068 483,068
Developer participation 13.221,037 24,070 13,245,107
Miscellaneous 444,246 68,411 512,657
Contributions from property owners 24.122,338 1,804,931 25,927,269 Total Revenues 106,478,150 15,883,053 4,751,231 11,208,327 25,292,460 22,698,394 186,311,615 Expenditures:
Current:
General government 20,659,828 49,856 363,142 8.248,115 347,421 29,668,362 Public safety 44,868,882 175,804 368,260 152,517 45,565,463 : : -
ommunity developmen 78,771 9,202,687
2.20930 150,931 3,303,822 7,945,083
Parks and recreatio
Engineering and public works 5,455,679 663,506 3,618,508 9,737,693 Capital outlay 5,771,960 12,192,042 1,256,036 10.988,369 12.249,022 7,895,069 50,352,498 Debt service:
Principal retirement 276,953 1,108,004 1,384,957
Interest and fiscal charges 12,038 566,160 578,198
Total Expenditures 90,659,586 12,417,702 2,880,646 10,988,369 20,497,137 16,991,501 154,434,941 Exens tresenues over under)
15.818.564 3,465,351 1,870,585 219,958 4,795,323 5.706.893 31,876,674 Other Financing Sources (Uses):
Transfers in 1,371,276 219,088 2,871,435 4,461,799
ransfers ou (1,150,000) (3,311,799) (4,461,799)
subscription lease acquisitior 2.202.708 2,202,708
Total Other Financing Sources (Uses) 3,573,984 219,088 (1,150,000) (440,364) 2,202,708 Net Change in Fund Balances 19.392,548 3.684.439 720,585 219,958 4,795,323 5.266.529 34.079.382 ind Balances (Defic
ginning of year, as previously repor 90,190,765 41,253,764 36,145,349 169,165,048 Change from major to non-major (1,158,298) 10.652,089
Beginning of year, as restated 90.190.765 41.253.764 (1.158.298) 10.052,089 26651.5 169.165.048 End of year S 109,583.313 44,938,203 (938,340) $ 15,447,412 $ 31.918,087 $ 203,244,430 The accompanying notes are an integral part of these financial statements.
CITY OF MENIFEE
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Net change in fund balances - total governmental funds $ 34,079,382 Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives and reported as depreciation and amortization expense or allocated to the appropriate functional expense. The capital and intangible asset activity is reconciled as follows:
Cost of assets capitalized:
Capitalized expenditures 5,834,438
Additional costs capitalized 25,548,004
Contributed capital assets 44,380,972
Depreciation/amortization expense (20,992,600)
Governmental funds report proceeds from issuance of debt and lease/SBITA acquisitions as other financing sources or uses, and do not report the respective long term liabilities. For the Statement of Activities these amounts been reclassified to long term debt in the Statement of Net Position. This is the amount for the current year: (2,202,708)
Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long- term liabilities in the statement of net position.
Principal repayments $ 2,681,439
Amortization of deferred charges (45,219) 2,636,220
Accrued interest for long-term liabilities. This is the change in accrued interest for the current period. 1,346 Compensated absences 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. This is the change in compensated absences for the current period. (448,901) Revenues reported as unavailable and unearned revenue in the governmental funds are recognized in the statement of activities. These are included in the intergovernmental revenues under the modified accrual basis of accounting in the governmental fund activity when they are measurable and available. 372,658 Deferred inflows and outflows of resources not due and payable, or owed and receivable, respectively, in the current period, are not reported in the funds:
Pension related net adjustment 2,365,355
OPEB related net adjustment (769.656)
Change in net position of governmental activities $ 90.804,510 The accompanying notes are an integral part of these financial statements. -18-
CITY OF MENIFEE
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2024
Bonded CFD
Custodial Fund
Assets:
Cash and investments $ 1,534,484
Cash and investments with fiscal agents 5,029,994
Receivables:
Accounts 24,462
Accrued interest 20,490
Total Assets 6,609,430
Liabilities:
Total Liabilities -
Net Position:
Net position restricted for other purposes 6,609,430
Total Net Position $ 6,609,430
The accompanying notes are an integral part of these financial statements. -19-
CITY OF MENIFEE
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Bonded CFD
Custodial Fund
Additions:
Interest income $ 50,413
Contributions from property owners 5,673,749
Total Additions 5,724,162
Deductions:
Administrative expenses 187,688
Interest paid to bondholders 2,059, 158
Total Deductions 2,246,846
Change in Net Position 3,477,316
Net position
Beginning of year 3,132,114
End of year $ 6,609,430
The accompanying notes are an integral part of these financial statements.
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
I. SIGNIFICANT ACCOUNTING POLICIES
Note 1: Summary of Significant Accounting Policies
a. Description of the Reporting Entity
The City of Menifee, California (the City), was incorporated on October 1, 2008, under the laws of the State of California and enjoys all the rights and privileges applicable to a General Law City. The City is governed by an elected five-member board. As required by generally accepted accounting principles, these financial statements present the City (the primary government) and its component units. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the nature and significance of their relationship with a primary government are such that exclusion would cause the reporting entity's financial statements to be incomplete. Under this definition, it is determined that there are no component units for this reporting entity, and these financial statements present the financial reporting entity that consisted solely of the City as the primary government.
b. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Interfund services provided and used are not eliminated in the process of consolidation. Governmental activities are normally supported by taxes and intergovernmental revenues.
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 included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. The fiduciary funds are reported on the accrual basis of accounting. Major individual governmental funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. -21-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 1: Summary of Significant Accounting Policies (continued) C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued)
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. However, grant revenues are considered available within 6 months of the end of the current fiscal year. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
The City's fiduciary fund financial statements report a custodial fund. The custodial fund is reported using the economic resources measurement focus and the accrual basis of accounting.
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. All other revenue items are considered to be measurable and available only when cash is received by the government.
Governmental funds with assets and deferred outflows, liabilities and deferred inflows, revenues, or expenditures equal to at least 10% of their fund-type total, and at least 5% of the combined total of governmental funds and enterprise fund, as applicable, are required to be reported as a major fund. A governmental fund may also be presented as a major fund in the basic financial statements, event if it does not meet the size criteria just described, if the City's officials believe that the fund is particularly important to the financial statement users (because of public interest, reporting consistency, or otherwise). The General Fund is always reported as a major fund.
The City reports the following major governmental funds:
The General Fund is the City's primary operating fund. All general tax receipts and fee revenue not allocated by law, Council policy, or contractual agreement to other funds are accounted for in the General Fund. General Fund expenditures include operations traditionally associated with activities, which are not required to be accounted for or paid by another fund.
The Development Impact Fees (DIF) Fund - This fund is used to account for 9 separate DIF Funds. Fees are charged to new development to pay for future infrastructure costs such as roads, fire facilities, parks and libraries.
The Grants Fund - This fund accounts for all of the various miscellaneous grants, 1 order to properly segregate and track grant tunding. Grants are budgeted upo eing awarded by a third-party agency and approved by the City Council. Onl grants that are approved at the time of the adoption of this budget are listed in this budget document.
-22-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 1: Summary of Significant Accounting Policies (continued) C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued)
The TUMF Fees Fund - This fund tracks revenues and expenditures associated with the regional transportation mitigation fee program. These funds are generated from impact fees assessed by Western Riverside Council of Governments (WRCOG) on all new residential and commercial development. These funds are later divided among the three (3) zones comprising of the Northern, Central and Southern zones. The City of Menifee is located within the Central zone along witl he Cities of Perris, Moreno Valley and Riverside County. The City is eligible to receive TUMF funds on major road and bridge projects located within the City.
These projects must first be approved by WRCOG and the Central zone Technical Advisory Committee (TAC). The City uses these funds to supplement capital projects relating to road and bridge improvements and they are treated as grant funding.
The Bonded CFDs Fund - This fund is used to account for 6 separate Bonded CFD unds (capital projects). Proceeds received by the issuance of bonds under the Mello-Roos Community Facilities Act of 1982, are accounted for under the respective Bonded CFD fund and used to pay for the specific eligible public facilities/improvements financed by the CFD.
Additionally, the City reports the following fund types:
The custodial fund is used to account for third party contributions received by the City for which the City's responsibility is essentially custodial. The Bonded CFD fund is used to account for contributions from property owners for payment on outstanding debt that the City is not directly liable for. d. Assets, Liabilities and Net Position or Equity
Cash and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. For financial statement presentation purposes, cash and cash equivalents are shown as both restricted and unrestricted cash and investments in the governmental funds.
Investments are reported at fair value. The City's policy is generally to hold investments until maturity or until market values equal or exceed cost. The State Treasurer's Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of an allowance for uncollectable.
-23-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 1: Summary of Significant Accounting Policies (continued) d. Assets, Liabilities and Net Position or Equity (continued) Capital Assets
Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 ($50,000 for infrastructure) and an estimated useful life in excess of two or more years. Assets are generally capitalized as a whole unit or system and not by the individual units that comprise the system. For example, a phone system is capitalized as one entire system and not on the individual components such as the phones, phone Such assets are recorded at historical cost or estimated historical cost if purchased or acquisited. Donated capital assets are recorded at acquisition value at the date of Capital assets, which include property, plant, equipment, infrastructure assets (e.g., roads, bridges, sidewalks and similar items) and intangible assets, are reported in the governmental activities column in the government-wide financial statements. In accordance with generally accepted accounting principles, the City has reported all general infrastructure assets.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, plant, equipment, infrastructure and intangible assets of the primary government, as well as its component units, are depreciated/amortized using the straight-line method over the following estimated useful lives:
Assets Years $ Threshold
Equipment and furniture 2-10 $ 5,000
Vehicles 2-10 5,000
Software 2-10 5,000
Infrastructure 20-50 50,000
Intangible Assets
Intangible Right to Use assets are related to equipment or real property that the City has obtained the right to utilize for a specified period of time through the use of a lease or subscription agreement. The lift of the right to use asset is for the same period as the lease/subscription and amortized on a straight-line basis over that period.
Compensated Absences
Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Normally, an employee cannot accrue more than his regular annual entitlement. Payment for vacation not taken is payable at the end of the cumulative time.
Sick leave is payable when an employee is unable to work because of illness. Upon termination an employee will not be paid for any unused sick leave, with the exception for the City Manager pursuant to employment contract.
-24-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 1: Summary of Significant Accounting Policies (continued) d. Assets, Liabilities and Net Position or Equity (continued) All unpaid vacation and sick leave, if applicable, is recorded as a liability in the overnment-wide financial statements. Compensated absence liabilities are expected t e liquidated by the General Fund in future periods
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category.
Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from taxes and intergovernmental revenues. These amounts are unavailable and recognized as an inflow of resources in the period that the amounts become available.
Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted - net position to have been depleted before unrestricted - net position is applied.
Fund Balance
In the fund financial statements, government funds report the following fund balance classification:
Nonspendable include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws or regulations of other governments or (b) by law through constitutional provisions or enabling legislation.
Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest authority, the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution.
-25-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 1: Summary of Significant Accounting Policies (continued) Assets, Liabilities and Net Position or Equity (continued) Assigned include amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. The City Manager is authorized to assign amounts to a specific purpose, which was established by the governing body in Resolution No. 2011-226 approved on June 21, 2011.
Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes in the General Fund, and deficit fund balances in any other funds.
An Emergency Contingency commitment of fund balance has been established through Resolution 21-1076. This reserve is set at a minimum of 12.5% of General Fund operating expenditures The specified uses include the declaration of a state or federal emergency or a local emergency as defined in Section 1.10.010 of the Menifee Municipal Code. City Council may, by majority vote of the members, change the amount of this commitment and/or the specific uses through adoption of resolution.
An individual governmental fund could include nonspendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. Restricted amounts are to be considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available and committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used.
The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds it is not appropriate. However, if expenditures incurred for a specific purpose exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.
Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
-26-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 1: Summary of Significant Accounting Policies (continued) Assets, Liabilities and Net Position or Equity (continued) Property Taxes
Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means then due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of Riverside collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January proceeding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively.
Unsecured personal property taxes become due on the first of March each year and are delinquent on August 31.
Functional Classifications
Expenditures of the governmental funds are classified by function. Functional classifications are defined as follows:
• General Government includes legislative activities, City Clerk, City Attorney, City Manager as well as management or supportive services across more than one functional area.
• Public Safety includes those activities which involve police protection, fire protection and animal control services.
• Community Development includes those activities which involve planning, building and safety and code enforcement.
• Parks and Recreation includes activities which provide recreation, cultural and educational services.
• Engineering and Public Works includes all maintenance, engineering and capital improvements which relate to streets and other public facilities. e. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
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CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 1: Summary of Significant Accounting Policies (continued) f. Pension Plans
For purposes 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 Plan and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. The General Fund has been used to liquidate the liability in prior years.
Generally accepted accounting principles requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date (VD) June 30, 2022
Measurement Date (MD) June 30, 2023
Measurement Period (MP) July 1, 2022 to June 30, 2023
g. Other Postemployment Benefits (OPEB)
For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are reported at fair value. The General Fund has been used to liquidate the liability in prior years.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date (VD) June 30, 2023
Measurement Date (MD) June 30, 2023
Measurement Period (MP) July 1, 2022 to June 30, 2023
h. Implementation of New Pronouncement
Governmental Accounting Standards Board has issued Statement No. 100, Accounting Changes and Error Corrections. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The requirements of this Statement are effective for fiscal years beginning after December 15, 2023.
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CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
II. STEWARDSHIP
Note 2: Stewardship, Compliance and Accountability
a. Budgetary Data
General Budget Policies
The City Council approves each year's budget prior to the beginning of the new the lay anger mat ase retire may not are are on al
the function level. At fiscal year-end, all operating budget appropriations lapse.
Encumbrances
Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue and similar governmental funds. Encumbrances represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year-end are completed. They do not constitute expenditures or estimated liabilities.
Budget Basis of Accounting
Budgets for all governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP).
b. Deficit Fund Balances
The following funds present a fund balance deficit as of the year ended June 30, 2024:
Fund Fund Balance Deficit
TUMF Fees $ (938,340)
Note 3: Cash and Investments
As of June 30, 2024, cash and investments were reported in the accompanying financial statements as follows:
Governmental activities
Cash and investments $ 215,602,148
Cash with fiscal agent 15,499,177
Fiduciary funds
Cash and investment 1,534,484
Cash with fiscal agent 5,029,994
Total Cash and Investments $ 237,665,803
-29-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 3: Cash and Investments (continued)
Cash and investments held by the City consist of the following:
Cash on hand $ 12,300
Deposits with financial institutions 20,121,693
Investments 217,531,810
Total Cash and Investments $ 237,665,803
The City maintains a cash and investment pool that is available for use for all funds. Each fund type's position in the pool is reported on the combined balance sheet as cash and investments.
The City has adopted an investment policy which authorizes it to invest in various investments.
Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on average daily cash balances.
Deposits with financial institutions
The California Government Code requires California banks and savings and loan associations to secure a City's deposits by pledging government securities with a value of 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state-chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency.
Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency.
Investments Authorized by Debt Agreements
The above investments do not address investment of debt proceeds held by a bond trustee.
Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy.
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CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 3: Cash and Investments (continued)
Investments Authorized by the California Government Code and the Entity's Investment Policy The table below identifies the investment types that are authorized by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.
*Maximum
*Maximum Investment
Investment Types *Maximum Percentage of In One
Authorized by City's Investment Policy Maturity Portfolio Issuer U.S. Treasury securities 5 years None None
Federal Agency Securities 5 years 20% None
Municipal securities 5 years 30% 5%
Negotiable certificates of deposit 5 years 30% 5%
Commercial Paper 270 days 25% 5%
Bankers acceptance 180 days 40% 5%
Local Agency Investment Fund N/A None $75 million
Federally insured time deposits (CDs) 5 years 20% None
Non-negotiable certificates of deposit 5 years 20% None Certificate of deposit placement service 5 years 30% None Collateralized bank deposits N/A N/A N/A
Repurchase agreements 1 year None None
Local government investment pools N/A None None
Corporate medium term notes 5 years 30% 5%
Asset/mortgage backed securities 5 years 20% 5%
Supranationals 5 years 30% 10%
Mutual funds N/A 10% None
Money market mutual funds N/A 20% 20%
*Based on state law requirements or investment policy requirements, whichever is more restrictive Investments in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's Office audits the fund annually. The fair value of the position in the investment pool is the same as the value of the pool shares.
Fair Value
Generally Accepted Accounting Principles (GAAP), establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement.
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CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 3: Cash and Investments (continued)
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy does not limit investments in Federal Agency Securities and Treasury Obligations to ratings issued by nationally recognized statistical rating organizations. The City's investment policy does restrict investments in Corporate Medium-Term Notes (MTN's) to those rated A or better by a nationally recognized statistical rating organization. Presented below are the City's investments and the actual rating as of fiscal year end for each investment type Rating at year end
Minimum Aaa (or
Investment Type Amount legal rating AA AA- similar) Not rated State investment pool (LAIF) $ 11.208.871 N/A $ 11,208.871 Money market tunds 870,132 N/A 870,132
U,S, Treasury obligations 57,973,948 N/A 57.973,948
Federal agency securities 35,494,016 N/A 35,494,016
U.S. corporate medium term notes 30,090,573 N/A 12,213.717 4,604,633 3,827.738 107,636 244,542 Supranational 1,767,022 N/A 1,767,022
Asset-backed securities 1,141,083 N/A 1,141,083
California asset management program (CAMP) 77,125,117 N/A 77,125, 117 Held by bond trustee and escrow agent:
Cash with fiscal agents 1.861,048 N/A 1,861,048
$217,531,810 $ 12,213,717 $4,604,633 $3.827,738 $107,636 $9.092,307 $ 174.615,860 $ 13,069,919 Custodial Credit Risk
The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City's investment in LAIF is unrated.
The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions t secure City deposits by pledaing first trust deed mortgage notes havina a value of 150% of thi secured public deposits.
As of June 30, 2024, the City held deposits with financial institutions in excess of Federal Depository Insurance Corporation (FDIC) limits. These funds were held in collateralized accounts as required by the California Government Code as stated above. -32-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 3: Cash and Investments (continued)
Concentration of Credit Risk
certain types of investments and with any one issuer for certain types of investments. Generally accepted accounting principles requires a separate disclosure if any single issuer comprises of more than 5%. Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk.
As of June 30, 2024, the City had the following investments and remaining maturities:
Investments Maturities
1 year 1 year 3 years Fair
or less to 3 years to 5 years Value
State investment pool (LAIF) $ 11,208,871 $ 11,208,871
Money market funds 870,132 2 270,120 870,132
U.S. Treasury obligations 11,539,420 21, 164,402 57,973,948 Federal agency securities 4,736,643 24,296,394 6,460,979 35,494,016 U.S. corporate medium term notes 524,574 4,996,606 24,569,393 30,030,573
CMO
Supranational 140,750 1,767,022
1. 6,202
Asset-backed securities 278,278 1,141,083
California asset management program (CAMP) 77.125,117 77,125,117 Held by bond trustee and escrow agent:
Cash with fiscal agents 1,861,048 1,861,048
Total investments $ 107,865,805 $ 54,982,154 $ 54,683,851 $ 217,531,810 Fair Value Measurements
Generally accepted accounting principles, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of quoted prices (unadjusted) for identical assets and liabilities in active markets that a government can access at the measurement date, Level 2 inputs that are observable for an asset or liability, either directly or indirectly, and Level 3 inputs have the lowest priority and consist of unobservable inputs for an asset or liability.
The valuation technique used for level 2 investments include "inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly".
Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; interest rates and yield curves observable at commonly quoted intervals; implied volatilities; credit spreads, and market-corroborated inputs.
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CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 3: Cash and Investments (continued)
Fair Value Measurements (continued)
The following table presents the balances of the assets measured at fair value on a recurring basis as of June 30, 2024:
Investments by Fair Value Hierarchy Total Level 1 Level 2 Level 3 U.S. Treasury obligations $ 57,973,948 $ 57,973,948 $
Federal agency securities 35,494,016 35,494,016
U.S. corporate medium term notes 30,090,573 - 30,090,573 Supranational 1,767,022 1,767,022
Asset-backed securities 1,141,083 1,141,083 -
Total Investments by Fair Value Hierarchy 126,466,642 - S126.166.642 $ Investments outside the Fair Value Hierarchy
State investment pool (LAIF) 11,208,87
California asset management program (CAMP) 77,125,117
Money market funds 870,132
Held by bond trustee and escrow agent:
Cash with fiscal agents 1,861,048
Total Investments $217,531,810
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-34-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 4: Capital Assets
Capital asset activity for the year ended June 30, 2024, was as follows:
Beginning Deletions/ Ending
Balance Additions Adjustments Balance
Governmental activities:
Capital assets, not being depreciated:
Land $ 28,794,607 $ - $ : $ 28,794,607
Constern progress 415,800 435,000 850,800
50,327,367 37,670,055 (12,043,702) 75,953,720
Total capital assets, not being
depreciated 79,537,774 38,105,055 (12,043,702) 105,599,127 Capital assets, being depreciated/amortized:
Building and improvements 31,812,983 1,416,729 33,229,712 Equipment and furniture 4,837,959 860,949 5,698,908
Vehicles 8,411,023 729,060 9,140,083
Software and website design 772,239 772,239
Infrastructure 337,303,340 44,449,467 381,752,807
Right-to-use
Land 175,347 (175,347)
Buildings 6,545,089 1.397,134 8,442,223
Vehicles and equipment 644,153 268,297 912,450
Subscriptions 914,404 80,425 (143,570) 851,259
Total capital assets, being
depreciated/amortized 391,416,537 49,702,061 (318,917) 440,799,681 Less accumulated depreciation/amortization:
Building and improvements (7,735,610) (1,507,607) (9,243,217) Equipment and furniture (2,476,617) (652,388) (3,129,005) Vehicles (3,829,840) (1,237,904) (5,067,744)
Software and website design (551,280) (38,818) (590,098) Infrastructure (116,233,809) (15,792,326) (132,026,135) Right-to-use
Land (116,898) (58,449) 175,347
Buildings (2,246,924) (1,310,456) (3,567,380)
Vehicles and equipment (281,700) (99,386) (381,086)
Subscriptions (298,352) (295,266) 143,570 (450.048)
Total accumulated
depreciation/amortization (133,771,030) (20,992,600) 318,917 (154,444,713) Total capital assets, being
depreciated/amortized, net 257,645,507 28,709,461 286,354,968 Governmental activities capital assets,
net $337,183,281 $ 66,814,516 S (12,043,702) $391,954,095 Depreciation/amortization expense was charged to the following functions in the statement of activities:
Governmental Activities:
General government $ 527,310
Public safety 3,073,183
Community development 2,646
Parks and recreation 1,917,523
Engineering and public works 15,471,938
Total Depreciation/Amortization Expense - Governmental Activities $ 20,992,600 -35-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 5: Long-Term Liabilities
The following is a schedule of changes in long-term liabilities for the fiscal year ended June 30, 2024:
Beginning Ending Due Within
Balance Additions Deductions Balance One Year
Long-term liabilities
Certificates of Participation,
Series 2020 (TRIP) $ 15,640,000 $ - $ (680,000) $ 14,960,000 $ 690,000 Direct Borrow ings:
Distribution Facilities
Financing Agreement 5,485,266 - (428,004) 5,057,262 440,897 Lease labilties 5,175,405 2,122,283 (1,296,482) 6,001,206 1,298,092 Subscription liabilities 528,503 80,425 (276,953) 331,975 100,090 Other long-term liability:
Compensated absences 2,178,377 649,859 (200,958) 2,627,278 525,456 Total long-term debt $ 29,007,551 $ 2,852,567 S(2,882,397) $ 28,977,721 $3,054,535 Transportation Revenue Certificates of Participation Bonds, Series 2020 The 2020 Certificates of Participation Bonds were issued to refund the 2012B Certificate of Participation Bonds for $16,990,000. The bonds mature annually through 2042, in amounts ranging from $1,835,000 to $2,305,000. Interest rates vary from 0.435% to a maximum of
3.238% and are payable semiannually on December 1 and June 1. This transaction resulted in an economic gain of $1.8 million and a net savings in debt service costs of $4.3 million.
Assets irrevocably pledged as collateral for the bonded debt are all of the revenues and all money in the Pledged Tax Fund (the "Gas Tax Account" and the "Measure A Receipts Account") and in the funds or accounts so specified and provided for in the 2020 Installment Sale Agreement.
In the event of default the Trustee may, by notice in writing to the City, declare the entire principal amount of the unpaid 2020 Installment Sale Payments and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.
The annual debt service requirements on these bonds are as follows:
Certificates of Participation, Series 2020 TRIP
Year Ending
June 30 Principal Interest Total
2025 690,000 $ 390,487 $ 1,080,487
2026 700,000 383,166 1,083,166
2027 710,000 373,352 1,083,352
2028 720,000 361,978 1,081,978
2029 730,000 348,141 1,078,141
2030-2034 3,900,000 1,493,734 5,393,734
2035-2039 4,470,000 931,357 5,401,357
2040-2044 3,040,000 198,813 3.238,813
Totals $ 14,960,000 $ 4,481,028 $ 19,441,028
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CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 5: Long-Term Liabilities (continued)
Distribution Facilities Financing Agreement - Direct borrowing:
On July 6, 2018, the City entered into a financing agreement to purchase Certain Southern Calitornia Edison Company Street Light Facilities. I he agreement calls tor the conveyance and sale of 6,310 LS-1 electric streetlights facilities. The term of the agreement is 15 years, expiring on 2034. Interest rate is set at 4.30% and debt payments are payable semiannually on December 1 and June 1.
The agreement was refinanced on September 10, 2021 for $6,335,581 with an interest rate of
2.99% with payments due in December and June of every year. The refinancing did not extend the life of the agreement and will therefore continue to expire in 2034. The refinancing resulted in economic gain of approximately $400,738 over the term of the agreement with an annual average cash flow savings of approximately $30,826.
In the event of default, the lessor may, by notice in writing to the City, declare the entire principal amount of the unpaid Agreement and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.
The annual debt service requirements on this borrowing is as follows:
Distribution Facilities Financing Agreement
Year Ending
June 30 Principal Interest Total
2025 $ 440,897 $ 147,941 $ 588,838
2026 454,178 134,660 588,838
2027 467,860 106,885 574,745
2028 481,953 120,978 602,931
2029 496,471 92,366 588,837
2030-2034 2,715,903 228,284 2,944,187
Totals $ 5,057,262 $ 831,114 $ 5,888,376
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-37-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 5: Long-Term Liabilities (continued)
Lease Liabilities
The City has entered into a leases (as the lessee) for various vehicles and equipment. The lease terms range from 33 to 60 months. Monthly fixed payments range from $390 to $1,195 with interest rates ranging from 0.411% to 0.736%. The leases have guaranteed residual values ranging from $3,265 to $10,372.
The City has entered into a leases (as the lessee) for various buildings. The lease terms range from 33 to 86 months. Monthly fixed payments range from $1,352 to $47,760 with interest rates ranging from 0.308% to 2.287%.
Future payments on the total lease liabilities are as follows.
Leases
Year Ending
June 30 Principal Interest Total
2025 $ 1,298,092 $ 48,674 1,346,766
2026 1,358,613 36,743 1,395,356
2027 1,432,577 23,817 1,456,394
2028 1,406,212 10,722 1,416,934
2029 505,712 1,039 506,751
-
Totals $ 6,001,206 $ 120,995 $ 6,122,201
See note 4 for the net book value of right-to-use assets acquired through leases.
Subscription Liabilities
The City has entered into a subscriptions for the use of various software packages. The terms range from 18 to 58 months. Annual fixed payments range from $7,020 to $136,207 with interest rates ranging from 2.0237% to 2.3657%.
Future payments on the total lease liabilities are as follows.
Subscriptions
Year Ending
June 30 Principal Interest Total
2025 $ 100,090 $ 6,930 $ 107,020
2026 95,431 10,034 105,465
2027 136,454 4,344 140,798
-
Totals S 331,975 21,308 353,283
See note 4 for the net book value of right-to-use assets acquired through leases.
Compensated Absences
The City's liability for vested and unpaid compensated absences (accrued vacation and sick pay) in the governmental activities has been accrued and amounts to $2,627,278 as of June 30, 2024. These liabilities have been described in Note 1.
-38-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 6: Interfund Receivable, Payable and Transfers
Due to/from other funds balances as of June 30, 2024 were as follows:
Funds Total
Due From Other Funds:
Due to General Fund
TUMF Fund $ 6,085,621
Total $ 6,085,621
These represent borrowings from other governmental funds to cover temporary cash deficit.
Transfers in and out for the year ended June 30, 2024 were as follows:
Transfers in Transfers out Amount
General Fund Grants Fund (a) $ 150,000
Nonmajor Governmental Funds (b) 1,221,276
Development Impact Fees Nonmajor Governmental Funds (b) 219,088 Nonmajor Governmental Funds Grants Fund (c) 1,000,000
Nonmajor Governmental Funds (d) 1.871,435
Total transfers $ 4,461,799
(a) To fund police salaries and benefits.
(b) To repay the fund for the Lazy Creek CIP Project and for Fleet Services. (c) To fund the ARPA Fire Station CIP Project
(d) To fund the debt service payments and Citywide CFD transfers.
Note 7: Pension Plan
General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public Employees' Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also referred to as "risk pools"), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under generally accepted accounting principles. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City participates in three rate plans (two miscellaneous and one safety). Benefit provisions under the Plan are established by State statute and City resolution. CaPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CaPERS' website, at www.calpers.ca.gov. -39-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 7: Pension Plan (continued)
General Information about the Pension Plan (continued)
Benefits provided
CaPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits.
All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees' Retirement Law.
The Plan operates under the provisions of the California Public Employees' Retirement Law (PERL), the California Public Employees' Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CaPERS Board of Administration. The Plan's authority to establish and amend the benefit terms are set by the PERL and PEPRA and may be amended by the California state legislature and in some cases require approval The Plans' provisions and benefits in effect as of June 30, 2024 are summarized as follows:
Miscellaneous Safety
Prior to On or after On or after
Hire date January 1, 2013 January 1, 2013 January 1, 2013 Benefit formula 2.7% @55 2% @62 2.7% @57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 67 52 - 67 50 - 57
Monthly benefits, as a % of eligible compensations 2.0% to 2.7% 1.0% to 2.5% 2.0% to 2.7% Required employee contribution rates 8.00% 7.25% 13.75% Required employer contribution rates 16.87% 8.00% 14.50% Contributions
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CaPERS' annual actuarial valuation process.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2024 were $5,881,952. The actual employer payments of $3,383,586 made to CaPERS by the City during the measurement period ended June 30, 2023 differed from the City's proportionate share of the employer's contributions of $1,054,888 by $2,328,698, which is being amortized over the expected average remaining service lifetime in the Public Agency Cost-Sharing Multiple Employer Plan. -40-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 7: Pension Plan (continued)
Net Pension Liability (Asset)
The City's net pension liability (asset) for the Plan is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability (asset) of the Plan is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability (asset) is as follows.
Actuarial Methods and Assumptions Used to Determine Total Pension Liability The collective total pension liability for the June 30, 2023 measurement period was determined by an actuarial valuation as of June 30, 2022, with update procedures used to roll forward the total pension liability to June 30, 2023. The collective total pension liability was based on the following assumptions:
Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry Age Actuarial Cost Method
Asset Valuation Method Fair value of assets
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.30%
Salary Increase Varies by Entry Age and Service
Mortality Rate Table (1) Derived using CaPERS' membership data for all funds
Post Retirement Benefit Increase The lesser of contract COLA up to 2.30% until purchasing power protection allowance floor on
purchasing power applies, 2.30% thereafter
(1) The mortality table used was developed based on CalPERS' specific data. The probabilities of mortality are based on the 2021 CaPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CaPERS website.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CaPERS took into account both short- term and long-term market return expectations. Using historical returns of all of the funds' asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.
-41-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 7: Pension Plan (continued)
Net Pension Liability (Asset) (continued)
The expected real rates of return by asset class are as follows:
Assumed
Asset
Asset Class Allocation Real Return 1,2
Global equity - cap-weighted 30.0% 4.54%
Global equity - non-cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed securities 5.0% 0.50%
Investment grade corporates 10.0% 1.56%
High yield 5.0% 2.27%
Emerging market debt 5.0% 2.48%
Private debt 5.0% 3.57%
Real assets 15.0% 3.21%
Leverage (5.00%) (0.59%)
Total 100.0%
' An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.
Change of Assumptions
There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to
5.90%. In determining the long-term expected rate of return, CaPERS took into account long- erm market return expectations as well as the expected pension fund cash flows. In additio emographic assumptions and the price inflation assumption were changed in accordance wi the 2021 CaPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.
Discount Rate
The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from emplovers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
-42-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 7: Pension Plan (continued)
Net Pension Liability (Asset) (continued)
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.
Pension Plan Fiduciary Net Position
Information about the pension plan's assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CaPERS' audited financial statements, which are publicly available reports that can be obtained at CaPERS' website, at www.calpers.ca.gov. The plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting.
Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value.
Proportionate Share of Net Pension Liability
The following table shows the City's proportionate share of the Plan's net pension liability (asset) over the measurement period.
Increase (Decrease)
Plan Total Plan Fiduciary Plan Net Pension
Pension Liability Net Position Liability (Asset)
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2022 (VD) $ 19,749,641 19,608,598 $ 141,043 Balance at: 6/30/2023 (MD) 26,716,025 25,554,933 1,161,092 Net changes during 2022-23 $ 6,966,384 $ 5,946,335 $ 1,020,049 Valuation Date (VD), Measurement Date (MD).
The City's proportion of the net pension liability was determined by CaPERS using the output rom the Actuarial Valuation System and the fiduciary net position, as provided in the CalPER ublic Agency Cost-Sharing Allocation Methodology Report, which is a publicly available repor hat can be obtained at CaPERS' website, at www.calpers.ca.gov. The Local Government's roportionate share of the net pension liability for the Plan as of the June 30. 2022 and 2023 measurement dates was as follows:
Proportion - June 30, 2022 0.00122%
Proportion - June 30, 2023 0.00931%
Change - Increase (Decrease) 0.00809%
-43-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 7: Pension Plan (continued)
Proportionate Share of Net Pension Liability (continued) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the Local Government's proportionate share of the net pension liability (asset) of the Plan as of the measurement date, calculated using the discount rate of 6.9%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9%) or 1 percentage-point higher (7.9%) than the current rate:
Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
Miscellaneous Plan's
Net Pension Liability
(Asset) 3,742,339 $ 769,230 $ (1,677,894)
Safety Plan's Net
Pension Liability
(Asset) 1,041,147 391,862 (138,975)
Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Difference between projected 5 year straight-line amortization and actual earnings
All other amounts Straight-line amortization over the average expected remaining services lives of all members that are
provided with benefits (active, inactive and retired) as of the beginning of the measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C).
The EARSL for PERF C for the measurement period ending June 30, 2023 is 3.8 years, which was obtained by dividing the total service years of 600,538 (the sum of remaining service lifetimes of the active employees) by 160,073 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to O. Total future service is based on the members' probability of decrementing due to an event other than receiving a cash refund.
-44-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 7: Pension Plan (continued)
Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2022), the City's net pension liability/(asset) was $141,043. For the measurement period ending June 30, 2023 (the measurement date), the City incurred a pension expense) of $3,516,598.
As of June 30, 2024, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Outflows of Deferred Inflows
Resources of Resources
Changes of Assumptions $ 69,311 $
Differences between expected and actual experience 68,066 8,559 Differences between Projected and Actual Investment Earnings 178,172 - Differences between Employer's Contributions
and Proportionate Share of Contributions 2,910,725
Change in Employer's Proportion 1,067,978 97,060
Pension Contributions Made Subsequent to
Measurement Date 5,881,952
Total $ 10,176,204 $ 105,619
The amounts above are net of outflows and inflows recognized in the 2022-23 measurement period expense. Contributions subsequent to the measurement date of $5,881,952 reported with deferred outflows of resources will be recognized as a reduction of the net pension liability (asset) in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as Deferred
Fiscal Year Ended Outflows/(Inflows) of
June 30: Resources, Net
2025 $ 2,050,255
2026 1,381,618
2027 751,690
2028 5,070
2029
Thereafter :
Payable to the Pension Plan
As of June 30, 2024, the City reported a payable of $766,628 for the outstanding amount of contributions to the pension plan required for the year then ended. -45-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 8: Other Post-Employment Benefits
Plan Description
The City has established a single-employer Retiree Healthcare Plan (HC Plan). This coverage is available for employees who satisfy the requirements for retirement under the California Public Employees Retirement System (PERS), which is age 50 or older with at least five years of State or public agency service. The healthcare coverage provided by PERS meets the definition of an Other Post Employment Benefit (OPEB) as described in GASB Statement No.
75. Medical plan benefits are provided through PERS, as permitted by the Public Employees' Medical and Hospital and Care Act (PEMHCA). A separate financial report is not prepared for the HC Plan.
Employees Covered
As of the June 30, 2023 measurement date, the following current and former employees were covered by the benefit terms under the HC Plan:
Active employees 280
Inactive employees or beneficiaries currently receiving benefits 4 Total 284
Contributions
The HC Plan and its contribution requirements are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the City and the bargaining units. For the fiscal year ended June 30, 2024, the City's cash contributions were $9,385 in payments for benefits.
Total OPEB Liability
The City's total OPEB liability was measured as of June 30, 2023 and was calculated based on the following actuarial methods and assumptions from the valuation dated June 30, 2023:
Actuarial Assumptions:
Discount Rate 3.65%
Inflation 2.50%
Salary Increases 2.75% per year
Investment Rate of Return 3.65%
Mortality Rate 2021 CaPERS Mortality for Miscellaneous
and Schools Employees, and Safety
Employees, respectively
Pre-Retirement Tumover 4.0% per year
Healthcare Trend Rate
Discount Rate
The discount rate used to measure the total OPE liability was 3.65% percent.
Change of Assumptions
The discount rate changed from 3.54% to 3.65% for the measurement date June 30, 2023. -46-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 8: Other Post-Employment Benefits (continued)
Changes in Total OPEB Liability
The changes in the total OPEB liability for the HC Plan are as follows:
Total OPEB
Liability
Balance at June 30, 2023
(Measurement Date June 30, 2022) $ 2,827,385
Changes recognized for the measurement period:
Service Cost 670,308
Interest 111,120
Changes of assumptions 28,355
Experience (gains)/losses 249,879
Contributions - employer
Net investment income :
Benected yinus Actual Benefit Payment (51,020)
Net Changes 1,008,642
Balance at June 30, 2024
(Measurement Date June 30, 2023) $ 3.836.027
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:
1% Decrease Current Discount 1% Increase
(2.65%) Rate (3.65%) (4.65%)
Total OPEB Liability $ 4,509,483 $ 3,836,027 $ 3,291,727 Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability of the Authority if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher thar the current rate, for measurement period ended June 30, 2023:
Current Healthcare
1% Decrease Cost Trend Rates 1% Increase
Total OPEB Liability $ 3,073,817 $ 3,836,027 $ 4,856,757 OPEB Plan Fiduciary Net Position
The City is not prefunding with an OPEB trust. Plan Fiduciary Net Position was $0 at June 30, 2024. The City does not have assets accumulated in a trust that meets the criteria of GASB 75 to pay related benefits.
-47-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 8: Other Post-Employment Benefits (continued)
Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The City determined that it was not reasonable to rerun prior valuations under GASB 75. Therefore, the transition approach was used as provided in GASB 75, Paragraph 244. This means that there are no deferred inflows/outflows in the first year of implementation of GASB 75 with the exception of employer contributions after the measurement date.
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2024, the City recognized OPEB expense of $820,435. The City reported deferred outflows and inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
OPEB contributions subsequent to
measurement date $ 9,385 $
Changes of assumptions 700,693 688,999
Differences between expected
and actual experience 572,562 1,004
Total $ 1,282,640 $ 690,003
The $9,385 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2023 measurement date will be recognized as a reduction of the total OPEB liability during the fiscal year ending June 30, 2024. Other amounts reported as deferred outflows and deferred inflows of resources related to OPEB will be recognized in future OPEB expense as follows:
Deferred
Fiscal Year Ended Outflows (Inflows) of
June 30: Resources
2025 $ 39,007
2026 39,007
2027 39,007
2028 39,007
2029 39,007
Thereafter: 388,217
-48-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 9: Risk Management
The City of Menifee ("City") is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the Member Entity obtains insurance coverage.
Beginning July 1, 2021, The City is a member of the California Intergovernmental Risk Authority (CIRA) (Authority), a joint powers authority, which provides joint protection programs for public entities covering automobile, general liability, errors and omission losses, workers' compensation, and property claims. Under the General Liability program, the «Type» has a «Liability_Retention» retention limit similar to a deductible, with the Authority being responsible for losses above that amount up to $1 million. The Authority has additional coverage of $39 million in excess of its $1 million retention limit through affiliated risk management authorities.
The Authority also provides $600 million aggregate property coverage to its members with such coverage provided by purchased insurance.
Liabilities of the member entity are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims.
Estimated recoveries, for example, from salvage or subrogation, are another component of the claims liability estimate.
The Authority covers workers' compensation claims up to its self-insurance limit of $500,000.
The Local Agency Workers Compensation Excess Pool provides excess coverage to statutory limits. Financial statements of CIRA may be obtained from its administrative office located at 2330 E. Bidwell Street, Suite 150, Folsom, CA 95630; www.cira-jpa.org or by calling (916) 927- 7727.
Note 10: Tax Abatements
The City periodically enters into tax abatement agreements with local businesses for the purpose of attracting or retaining businesses within their its jurisdiction. The abatements may be granted to any business located within or promising to relocate to the City.
The City has agreed to abate 50% of taxes collected for a period of ten years with a not-to- exceed amount of $1,000,000. For the fiscal year ended June 30, 2024, the City abated certain taxes totaling $173,052 under this program. The developer has covenanted to operating the business within the City continuously over the period of the agreement.
Note 11: Commitments and Contingencies
Litigation
The City is involved as a defendant in various legal proceedings. While it is not feasible to predict or determine the outcome in these cases, it is the opinion of the City that the outcome will have no material adverse effect on the financial position of the City. -49-
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Note 11: Commitments and Contingencies (continued)
Grants
The City has received State and Federal funds for specific purposes that are subject to audit oy the grantor agencies. Although such audits could generate expenditure disallowances unde he terms of the grants, it is believed that any required reimbursements will not be material.
Construction Commitments
No material construction commitments existed as of June 30, 2024.
Additional Allocations of Fund Balance
The City has various other allocations for the General Fund unassigned fund balance, which is further detailed below to show the total funds available as of June 30, 2024 Purpose Amount
Public Facilities $ 3,700,000
Internal Service Operations 6,626,171
Encumbered Items 31,081,450
CIRA (SIR & Insurance Premium) 500,000
Fleet Replacement 1,000,000
Cash flow - 10% minimum 9,458,093
Unallocated 22,197,009
Total Unassigned Fund Balance $ 74,562,723
Note 12: Prior Period Restatements
As a result of the implementation of GASB 100, as described in Note 1, the City is required to restate its June 30, 2023 governmental funds' fund balance and net position. The TUMF Fund and the Bonded CFD funds were previously reported as non-major funds, and qualified as major for the year ending June 30, 2024. This qualifies as a change to or within the financial reporting entity, under the guidance of GASB 100. There was a correction to the roads infrastructure from the initial recording causing an overall decrease to the infrastructure balance and related depreciation. This qualifies as a correction of an error under the quidance of GASE Total Non-Major
Governmental
TUMF Fees Bonded CFDs Funds
Fund balance, as previously reported 5 36,145,349
Change from major to non-major (1,158,298) 10,652,089 (9,493,791) Fund balance, as restated (1,158, 298) 10,652,089 5 26.651.558 Govermental
Activities
Beginning net position, as previously reported $ 488,770,974 Correction of an error (6,543,321)
Beginning net position, as restated $ 482,227,653
-50-
REQUIRED SUPPLEMENTARY INFORMATION
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 90,190,765 $ 90,190,765 $ 90,190,765 $ - Resources (Inflows):
61,548,914 61,548,914 70,494,188 8,945,274
Licenses and permits 10,120,376 10,120,376 11,419,395 1,299,019 Intergovernmental 11,177,311 11,177,311 11,464,282 286,971 Charges for services 6,481,912 9,154,658 7,102,415 (2,052,243) Use of money and property 625,000 952,500 5,070,556 4,118,056 Fines and forfeitures 878,000 898,563 483,068 (415,495) Miscellaneous 444,246 378,246
9,323,777 10,133,149 1,371,276 (8,761,873)
SBITA/Lease acquisition 2,202,708
Amounts Available for Appropriation 190,412,055 200,242,899 3,797,955 Charges for Appropriation (Outflows):
General government 24,353,151 20,659,828 3,693,323
Public safety 44,868,882 5,482,790
Community development 13,142,752 9,123,916 4,018,836
Parks and recreation 4,316,478 5,051,624 4,490,330 561,294 Engineering and public works 5,818,065 10,988,716 5,455,679 5,533,037 Debt service:
heres and recal harges : 276,953 276,953 :
12,038 12,038
Capital outlay 8,288,092 28,705,143 5,771,960 22,933,183 Transfers out 8,048,710 8,648,710 8,648,710
Total Charges to Appropriations 106,101,104 141,530,759 90,659,586 50,871,173 Budgetary Fund Balance, June 30 $ 84,310,951 $ 54,914,185 $ 109,583,313 $ 54,669,128 -51-
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEES - SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 41,253,764 $ 41,253,764 $41,253,764 $ - Use of money and property 2,662,016 2,370,451
Developer participatior 7,943,186 13,221,037 5,277,851
219,088 219,088
Amounts Available for Appropriation 48,623,387 49,707,603 57,355,905 7,648,302 Charges for Appropriation (Outflows):
Capital outlay 36,808,447 12,192,042
Total Charges to Appropriations 37,053,619 12,417,702 24,635,917 Budgetary Fund Balance, June 30 $ 39,809,680 $ 12,653,984 $44,938,203 $ 32,284,219 -52-
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GRANT FUNDS - SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 1,575,170 $ 1,575,170 $ 1,575,170 $ - 1,209,216 12,569,220 4,540,721 (8,028,499)
30,000 210,510 180,510
2,784,386 14,174,390 6.326,401 (7,847,989)
Charges for Appropriation (Outflows):
1,175,682 363,142 812,540
1,017,763 368,260 649,503
78,771 26,528
715,402 150,931 564,471
Engineering and public works 687,898 663,506 24,392
Capital outlay 531,369 7,627,619 1,256,036 6,371,583
Transfers out 150,000 1,150,000 1,150,000
Total Charges to Appropriations 1,209,215 12,479,663 4,030,646 8,449,017 Budgetary Fund Balance, June 30 $ 1,575,171 1,694,727 $ 2,295,755 601,028 -53-
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
TUMF FEES FUND - SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Amounts Final Budget
Budgetary Fund Balance (Deficit), July 1 $ (1,158,298) S (1,158,298) S (1,158,298) Resources (Inflows):
Intergovernmental 19,763,845 11,208,321 (8,555,518)
Amounts Available for Appropriation (1,158,298) 18,605,547 10,050,029 (8,555,518) Charges for Appropriation (Outflows)
19,763,845 10,988,369 8.775,476
Total Charges to Appropriations 19,763,845 10,988,369 8,775,476 Budgetary Fund Balance (Deficit), June 30 $ (1,158,298) $ (1,158,298) $ (938,340) $ 219,958 -54-
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF THE PENSION PLAN'S NET PENSION
LIABILITY AND RELATED RATIOS AS OF THE MEASUREMENT DATE
LAST TEN YEARS
Employer's
Proportionate
Share of the Pension's
Employer's Collective Net Plans Fiduciary
Employer's Proportionate Pension Liability Net Position as Proportion of Share of the as a Percentage a Percentage of the Collective Collective Net of the the Total
Measurement Net Pension Pension Employer's Employer's Pension Date Liability' Liability Covered Payroll Covered Payroll Liability 6/30/2014 0.00921% $ 288,345 $ 2,658,666 10.85% 83.02%
6/30/2015 0.00368% 252,740 3,376,969 7.48% 89.51%
6/30/2016 0.00420% 363,319 4,222,698 8.60% 89.67%
6/30/2017 0.00556% 551,431 4,350,553 12.67% 88.92%
6/30/2018 0.00519% 499,769 5,130,794 9.74% 91.91%
6/30/2019 0.00023% 23,598 6,773,265 0.35% 99.71%
6/30/2020 0.00236% 256,708 10,202,569 2.52% 97.57%
6/30/2021 -0.03945% (2,133,291) 17,087,839 -12.48% 115.27% 6/30/2022 0.00122% 141,043 20,641,512 0.68% 99.29%
6/30/2023 0.00931% 1,161,092 25,329,014 4.58% 95.65%
1 Proportion of the collective net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk pools excluding the 1959 Survivors Risk Pool. -55-
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE PENSION PLAN'S CONTRIBUTIONS
LAST TEN YEARS
Contributions in
Relation to the Contributions
Actuarially Actuarially Contribution as a
Determined Determined Deficiency Employer's Percentage of Fiscal Year Contributions Contributions (Excess) Covered Payroll Covered Payroll 6/30/2015 $ 525,168 $ (525,168) $ $ 3,376,969 15.55%
6/30/2016 447,484 (447,484) 4,222,698 10.60%
6/30/2017 461,164 (461,164) : 4,350,553 10.60%
6/30/2018 524,088 (524,088) 5,130,794 10.21%
6/30/2019 727,566 (1,360,520) (632,954) 6,773,265 20.09% 6/30/2020 1,089,277 (1,089,277) 10,202,569 10.68%
6/30/2021 1,631,504 (2,053,455) (421,951) 17,087,839 12.02% 6/30/2022 2,881,799 (2,881,799) 20,641,512 13.96%
6/30/2023 3,383,586 (3,383,586) 25,329,014 13.36%
6/30/2024 3,709,952 (5,881,952) (2,172,000) 26,066,270 22.57% Notes to Schedule:
Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. Additionally, the figures above do not include any liability impact that may have resulted from Golden Handshakes that occurred after the June 30, 2021 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.
Changes in Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CaPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CaPERS Experience Study and Review of Actuarial Assumptions. There were no assumption changes for 2021. For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp- down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CaPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. -56-
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS LAST TEN YEARS*
Measurement Period 2023 2022 2021 2020 2019
Total OPEB Liability
Service Cost 670,308 $ 857,974 606,096 449,840 71,218
Interest on the Total OPEB Liability 111,120 67,079 44,239 38,328 10,868 Actual and expected experience difference 245,953 32,710 364,149 91,138 Change in belies 28,355 (754,285) 313,441 (1,232) 453,877 Expected Minus Actual Benefit Payments 3,926 1,591 407
(51,020) (41,422) (16,144) (12,360) (775)
Net change in Total OPEB Liability 1,008,642 130,937 980,749 838,725 626,326 Total OPEB Liability, beginning 2,827,385 2,696,448 1,715,699 876,974 250,648 Total OPEB Liability, ending 3.836.027 2,827,385 2,696,448 1,715,699 876,974
0.00% 0.00% 0.00% 0.00% 0.00%
Covered employee payroll $ 20,641,512 $ 20,641,512 17,087,839 $ 10,202,569 6,773,265 Net OPEB liability as a percentage
of covered employee payroll 18.58% 13.70% 15.78% 16.82% 12.95% Measurement Period 2018
Total OPEB Liability
Service Cost $ 74,816
Interest on the Total OPEB Liability 8,305
Actual and expected experience difference
Changes in assumptions (13,488)
Changes in benefit terms
Expected Minus Actual Benefit Payments
Benefit payments
Net change in Total OPEB Liability
Total OPEB Liability, beginning 181,271
Total OPEB Liability, ending 250,648
Plan fiduciary net position as
a percentage of the total OPE liability 0.00%
Covered employee payroll 5,130,794
et OPEB liability as a percenta
covered employee payr 4.89%
Notes to schedule:
The City does not have assets accumulated in a trust that meets the criteria of GASB 75 to pay related benefits Benefits are not based on a measure of pay, therefore covered employee payroll is used.
Changes Since the Prior Valuation:
The discount rate of 3.65% was used in the valuation. The interest rate used in the prior valuation was 2.54%. * Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available.
Fiscal year 2017-18 was the first year of implementation. -57-
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
Notes to the Required Supplementary Information:
Budget Basis of Accounting
Budgets for all governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP), with the exception of the Veteran's Memorial Fund which does not have an adopted budget.
-58-
SUPPLEMENTAL SCHEDULES
THIS PAGE INTENTIONALLY LEFT BLANK
NON-MAJOR GOVERNMENTAL FUNDS DESCRIPTIONS
SPECIAL REVENUE FUNDS
Gas Tax
Used to account for revenue and expenditures of money apportioned under Street and Highways Code, Sections 2103, 2105, 2106, 2107 and 2107.5 of the State of California. These funds are earmarked for maintenance, rehabilitation or improvement of public streets. Section 2107.5 funds can be used for engineering and gas tax audit costs. In addition, beginning in FY 2010/11, the new excise tax on fuel, which took the place of Traffic Congestion Relief/Proposition 42 funds, is recorded in the Gas Tax Fund.
SB1
Used to account for revenue and expenditures of the Road Maintenance and Rehabilitation Account to address deferred maintenance on the State Highway System and the local streets and road system. A percentage of this new RMRA funding will be apportioned by formula to eligible cities and counties pursuant to Streets and Highways Code section 2032(h) for basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads system.
Measure A
Represents funds apportioned by the Riverside County Transportation Commission (RCT) and received by the City as a result of the voter-approved initiative that increased sales tax by 1/2 percent in Riverside County to fund transportation projects. Measure "A" funds were originally approved by voters in 1988, and an extension was approved in 2002 which will fund projects through 2039.
Air Quality Management District
This fund was established to account for the City's share of vehicle registration fees collected under Assembly Bill 2766 passed during the 1990 State Legislative session. This fee was levied to fund programs to reduce air pollution from mobile sources such as cars, trucks and buses. Allocations to agencies are made through an apportionment basis and also through a competitive process. The South Coast Air Quality Management District distributes these funds to the City.
Landscape and Lighting Maintenance
Upon incorporation, the City acquired the responsibility of a portion of one LLMD which included both street lighting and traffic signals. In January 2015, the City requested from the County of Riverside to become solely responsible for all LLMDs located exclusively within the City jurisdiction. This resulted in the City acquiring 24 individual LLMD zones. These LLMDs had originally been established by Riverside County prior to the City's incorporation, and maintained responsibility for the maintenance of these zones until January 2015.
CFD Audie Murphy Ranch
In January 2012 the Audie Murphy Ranch Community Facility District (CFD) was formed. This CFD encompasses approximately 1,059.3 gross acres and upon full build out will contain approximately 2,129 residential dwelling units. Each July 1, commencing on July 1, 2013, the maximum special tax for developed property shall be increased based on the percentage change in the Consumer Price Index, with a maximum annual increase of six percent (6%) and a minimum annual increase of two percent (2%) per fiscal year.
The assessed fees will be used towards street lighting, landscaping, street sweeping, water quality basin improvements, parks, trails and recreation improvements. -59-
CFD Hidden Hills
In June 2012 the Hidden Hills Community Facility District (CFD) was formed. This CFD boundary includes approximately 157 gross acres and upon full build out will contain 511 single family homes. Services provided by the CFD include landscape maintenance, park and trails maintenance, as well as incidental costs such as capital replacement and administrative costs. The maximum special tax for developed property shall be increased based on the percentage change in the Consumer Price Index, with a maximum annual increase of six percent (6%) and a minimum annual increase of two percent (2%) per fiscal year.
CFD 2014-1 Town Center
In August 2014 the Menifee Town Center Community Facility District (CFD) was formed. This CFD encompasses approximately 149 gross acres of mix use development consisting of retail, commercial and residential housing units Beginning July 1, 2015 and each year thereafter, the maximum special tax for developed property shall be increased based on the percentage change in the Consumer Price Index with a maximum annual increase of six percent (6%) and a minimum annual increase of two percent (2%) per fiscal year. The assessed fees will be used towards street lighting, landscaping, street sweeping, water quality basin improvements, parks, trails and recreation improvements.
CFD 2014-2 Commerce Point
In August 2014 the Commerce Point Community Facility District (CFD) was formed. This CFD boundary includes approximately 46 taxable acres of commercial real estate. Services provided by the CFD include landscape maintenance, street lighting, water quality improvements, graffiti removal, street sweeping, and park and trails maintenance. On July 1 of each year, and commencing July 1, 2016, the maximum special tax for developed properly shall be the greater of the increased based on the percentage change in the Consumer Price Index or two percent (2%) per fiscal year.
Veteran's Memorial
In August 2009, the City Council instructed staff to set up the fund to receive donations along with the Riverside County's donation of $25,000 and the City's match of $25,000 to construct a Veteran's Memorial.
Construction began in 2010 and the Memorial was completed in 2011. Citizens can purchase personalized bricks that are added to the Memorial.
2015-2 Citywide CFD
In April 2015 the City-Wide Community Facility District (CFD) was formed under Resolution No. 15-430.
CFD No. 2015-2 (Maintenance Services) currently consists of one Tax Zone consisting of one residential tract that will include 359 residential units. Services provided by the CFD include landscape maintenance, street lighting, water quality improvements, graffiti removal, public street sweeping, and park and trails maintenance. On July 1 of each year, and commencing July 1, 2016, the maximum special tax for developed property shall be the greater of the increased based on the percentage change in the Consumer Price Index or two percent (2%) per fiscal year.
2017-1 Maintenance Services CFD
In December 2017 the Community Facilities District (CFD) 2017-1 was formed. This CFD boundary includes approximately 104 acres of vacant commercial and residential property within the City (TR 36299-1 and PM 9504). The improvements proposed to be maintained include items such as landscaping, lighting, storm drains, water quality improvements, graffiti, streets, streetlights, traffic signals, street sweeping, and trail maintenance. On July 1 of each year, and commencing July 1, 2019, the maximum special tax for developed property shall be the greater of the increased based on the percentage change in the Consumer Price Index or two percent (2%), whichever is greater, per fiscal year. -60-
Public Education and Government Access
This fund will be used to acquire equipment for and broadcasting on a future City cable channel. Used to account for revenue and expenditures of money pursuant to section 611 of the Communications Act. Local Franchising authorities (The City) may require cable operations to remit funds and set aside channels for public, educational, or governmental use.
County Service Areas (CSA)
Upon incorporation, the City assumed responsibility for seven (7) County Service Area Districts within the City limits. These districts were established by the County of Riverside to provide a mechanism through special assessments to fund services such as street lighting, street sweeping, park maintenance, road maintenance, and law enforcement services to property owners within each district. Each CSA fund provides a unique set of services to the residents within that individual district.
Maintenance CFD
On September 18, 2019, the City Council adopted Resolution No. 19-830 declaring its intent to annex territory to CFD No. 2017-1 and commence the annexation proceedings for the territory to be annexed, also known as Annexation No. 1. Subsequently, the city has continued to annex additional zones into the Maintenance CFD. Services provided by the CFD include landscape maintenance, street lighting, water quality improvements, graffiti removal, public street sweeping, and park and trails maintenance. On July 1 of each year, and commencing July 1, 2019, the maximum special tax for developed property shall be the greater of the increased based on the percentage change in the Consumer Price Index or two percent (2%) sente per the coresponding al and Method of Aparionmen ANA, of the ro
CAPITAL PROJECTS FUND
Capital Projects Fund
This fund is used to account for the project completion of street and highways capital improvements financed through various sources including, but not limited to, developer contributions and grants.
DEBT SERVICE FUND
Debt Service
Debt Service Funds are used to track revenues and expenditures related to repayment of principal and interest costs associated with borrowing money for long-term obligations. In May 2012 the City issued Certificates of Participation in the amount of $20.0 million under the Total Road Improvement Program (TRIP) financing. These proceeds were used for the construction of the Newport Road/l-215 interchange and will be paid back over a 30 year period. In 2020, the TRIP financing was refinanced in 2020 in a • Bane or Amera 0 purchase and retoni Cetam Southern Calamit Street Light Facilities. In 2021, the City refinanced the Streetlight Retrofit Project in 2020 in a favorable low interest environment, resulting in anticipated interest savings exceeding $400k of the balance of the debt service schedule. Currently, the City has only the TRIP debt and Streetlight Retrofit Project outstanding debt accounted for in this fund.
-61-
CITY OF MENIFEE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
Special Revenue Funds
Air Quality Landscape and
Management Lighting
Gas Tax SB1 Measure A District Maintenance
Assets
Cash and investments 1,219,016 $ 2,281,893 $ 3,892,815 $ 310,232 $ 3,732,512 Receivables:
Accounts, grants and taxes 393,278 494,868 558,188 29,309 Accrued interest 1,140.00 4,252.00 10,920.00 :
Prepaid items :
Restricted assets:
Cash and investments with fiscal agents
Total Assets 1.613,434 2,781,013 4,461.923 310,232 3,761,821 Liabilities and Fund Balances
Liabilities:
Accounts payable 210,677 $ 61,727 $ 285,669 $ $ 53,331
Accrued liabilities 85
Total Liabilities 210,677 61.727 285,669 53,416
Fund Balances:
Nonspendable:
Prepaid items
Restricted for:
Community development projects
Engineering and public works 1.402,757 2,719,286 4,176.254 310,232 3,708,405 Debt service
Total Fund Balances 1,402,757 2,719,286 4,176,254 310,232 3.708.405 Total Liabilities and Fund Balances 1.613.434 2,781,013 4,461,923 310,232 3.761,821 -62-
CITY OF MENIFEE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS (continued)
JUNE 30, 2024
Special Revenue Funds
CFD Audie Murphy CFD 2014-1 Town CFD 2014-2
Ranch CFD Hidden Hills Center Commerce Point
$ 4,244,222 $ 876,173 $ 197,061 $ 74,577
16,487 1,216
20,268 : :
4,280,977 877,389 197,859 74,577
$ 185,911 $ 9,224 $ 155 $ 391
185,911 9,224 155 391
-
4,095,066 868,165 197,704 74,186
4,095,066 868,165 197,704 74,186
4,280,977 877,389 $ 197,859 74,577
-63-
CITY OF MENIFEE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS (continued)
JUNE 30, 2024
Special Revenue Funds
CFD 2017-1 Public, Education
2015-2 civicto Maintenance and Governmental County Service Services Access Areas
Assets
Cash and investments $ 4,293 $ 4,131,174 $ 705,273 $ 665,394 1,907,337 Receivables:
Accounts, grants and taxes 6,466 592 28,278 40,238
Accrued interest : : : 3,934 6,305
Prepaid items
Restricted assets:
Cash and investments with fiscal agents -
Total Assets 4,293 4,137,640 705,865 697,606 1,953,880
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 97,123 $ 30,392 $ $ 72,630
Accrued liabilities : 579
Total Liabilities 97,702 30,392 72,630
Fund Balances:
Nonspendable:
Prepaid items
Restricted for:
Community development projects 4,293 4,039,938 675,473 697.606 1,881,250 Engineering and public works
Debt service
Total Fund Balances 4,293 4,039,938 675,473 697,606 1,881,250 Total Liabilities and Fund Balances 4,293 4,137,640 705,865 697,606 1,953,880 -64-
CITY OF MENIFEE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS (concluded)
JUNE 30, 2024
Special Revenue Capital Projects
Funds Fund Debt Service Fund
Tota
Non-Majo
Governmental
Maintenance CFD Capital Projects Debt Service Funds
$ 1,429,284 $ 5,047,490 $ 351,155 31,069,901
6,382 17,893 1,593,226
: 24,162 19477 71,748
149,477
114,437 114,437
$ 1,435,666 5,089,545 615,069 32,998,789
$ 13,325 $ 59,483 $ $ 1,080,038
664
13,325 59,483 1.080,702
149,477 149,477
1,422,341 5,030,062 18.986.084
12,316,934
465,592 465.592
1,422,341 5,030,062 615,069 31,918,087
1,435,666 $ 5,089,545 615,069 32,998,789
-65-
CITY OF MENIFEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Special Revenue Funds
Landscape and
Air Quality Lighting
Gas Tax SB1 Measure A Management District Maintenance
Revenues
Taxes $
hergovernmental. 3,009.264 2.839,543 3,131.206 110,990 :
107,175 887,132
Ise of money and proper 36,549 68,046 75,749 5,828 165,180 Condopt patrom propertyowners
Total Revenues 3.045,813 2,907,589 3,314,130 116,818 1,052,312 Expenditures
Current:
General government 38,415
Public safety : : : 619,312
Parks and recreation
Engineering and public works 2,348,290 2.121.525 226,640 44,996 82,953 Capital outlay 70,339 2,176,316
Debt service:
Principal retirement : : :
Interest and fiscal charges
Total Expenditures 2,418,629 2,121,525 2,402,956 44,996 741,210 Excess (Deficiency) of Revenues Over
(Under) Expenditures 627,184 786,064 911,174 71,822 311,102 Other Financing Sources (Uses)
Transfers in :
Transfers out (476.482) (1.077.022) : (10.197)
Total Other Financing Sources (Uses) (476,482) (1,077,022) (10,197) Net Change in Fund Balances 150,702 786.064 (165,848) 71.822 300.905 nd Balances (Defic
eginning of year, as previously report 1,252,055 1,933.222 4,342,102 238,410 3,407,500 Change from major to non-majo
Beginning of year, as restated 1.252,055 1.933.222 4.32,102 238.410 3,407,500 End of year 1,402,757 2.719,286 $ 4,176,254 $ 310,232 3.708,405 -66-
CITY OF MENIFEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS (continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Special Revenue Funds
CFD Audie Murphy CFD 2014-1 Town TUMF Fees CFD 2014-2
Ranch CFD Hidden Hills Center _(formerly non-major) Commerce Point $ $ :
,331,03 287225 17,119 21208
59,14 5,239
2,490,178 324,278 22,358 30,256
13,625
1.263.562 161,545
143,388 832 155 4,869
496,342
: : : :
1,916,917 162,377 3,024 11,094
573,261 161,901 19,334 19,162
(32.237) : : : (412)
(32,237) (412)
541.024 161.901 19.334 18,750
3,554,042 706,264 178,370 (1,158,298) 55,436
706,264 178.370 1,158,298 55436
3.554,042
4,095,066 $ 868,165 $ 197,704 $ 74,186
-67-
CITY OF MENIFEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS (continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Special Revenue Funds
CFD 2017-1 Public, Education
Maintenance and Governmental County Service
Veteran's Memorial 2015-2 Citywide CFD Services Access Areas Revenues
Taxes : $ 52,499
1,638,913 458,29
(468) 106,092 03,0-
onloptons from properyowne
Total Revenues (468) 1,745,005 278,589 135,888 3.613,811 Expenditures
Current:
General government 15,693
Public safety 821.764 : 152,517
Parks and recreation 650,212
Engineering and public works 337,033 92,752 377,896
Capital outlay 49,943 198,933
Debt service:
Principal retirement : : : :
Interest and fiscal charges
Total Expenditures 858,817 169,289 49,943 1,395,251
under Expendity of Revenues Ovor
(468) 886,188 109,300 85,945 2.218.560
Other Financing Sources (Uses)
Transfers in 115,575 :
Transfers out : (10,300) (2,472) (1.587.102)
Total Other Financing Sources (Uses) 105,275 (2,472) (1,587,102) Net Change in Fund Balances (468) 991,463 106.828 85,945 631,458 Fund Balances (Deficit
Beginning of year, as previously reported 4,761 3,048,475 568,645 611,661 1,249,792 Change from majorto non-major 4.761
Beginning of year, as restated 33048.475 568645 611,661 1.249,702 End of year 4,293 4,039,938 $ 675,473 $ 697,606 1,881,250 -68-
CITY OF MENIFEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS (concluded)
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Special Revenue
Funds Capital Projects Fund Debt Service Fund
Total
Bonded CFD Non-Major
Maintenance CFD (formerly non-major) Capital Projects Debt Service Governmental Funds : $ 52,499
: 9,091,003
995,049 385,753 10,488,581
27,526 338,409 1,237,310
24,070 24,070
1,804.931 1.804.931
1,022,575 2,553,163 46,099 22.698.394
184,418 95,270 347,421
: 152,517
3,303.822
: 3,618,508
2,736,675 7,895,069
: 1,108,004 1,108,004
566,160 566,160
189,364 2,736,675 1,769,434 16,991,501
833,211 (183,512) (1,723,335) 5,706,893
: 1,000,000 1,755,860 2,871,435
(115,575) (3.311.799)
(115,575) 1,000,000 1,755,860 (440,364)
717,636 816,488 32.525 5.266.529
704,705 10,652,089 4,213,574 582,544 36,145,349
(10.652,089) (9,493,791)
704,705 4.213,574 582,51đ
26,651,558
1,422,341 $ $ 5,030.062 615,069 $ 31,918,087
-69-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
GAS TAX
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 1,252,055 $ 1,252,055 $ 1,252,055 $ - Resources (Inflows):
Intergovernmental 3,039,482 3,009,264 (30,218)
Use of money and property 26,949
Amounts Available for Appropriation 4,301,137 4,297,868 (3,269) Charges for Appropriation (Outflows)
Engineering and public works 2,498,660 2,820,974 2,348,290 472,684 Capital outlay 193,190 253,503 183,164
Transfers out 476,482 476,482 476,482
Total Charges to Appropriations 3,168,332 3,550,959 655,848 Budgetary Fund Balance, June 30 $ 1,125,205 $ 750,178 $ 1,402,757 652,579 -70-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
SB1
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Orindeed A mounts Actual Variance with
Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 1,933,222 $ 1,933,222 $ 1,933,222 $ - Resources (Inflows):
Intergovernmental 2,620,845 2,620,845 2,839,543 218,698 Use of money and property
4,587,067 4,840,811 235,04
Amounts Available for Appropriation
Charges for Appropriation (Outflows):
Capital outlay 4.501,201 2.21.525 - 2379876-
Total Charges to Appropriations 441,404 —
Budgetary Fund Balance, June 30 $ 2,127,663 $ 85,866 $ 2,719,286 $ 2,633,420 -71-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
MEASURE A
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 4,342,102 $ 4,342,102 $ 4,342,102 $ - Resources (Inflows):
Intergovernmental 3,018,000 3,018,000 3,131,206 113,206 Charges for services - - 107,175 107,175
Use of money and property 10,000 28,000 75,749 47,749
Amounts Available for Appropriation 7,370,102 7,388,102 7,656,232 268,130 Charges for Appropriation (Outflows):
Engineering and public works 748,612 226,640 521,972
2,536,883 5,037,796 2,176,316 2,861,480
1,077,022 1,077,022 1,077,022
Total Charges to Appropriations 3,613,905 6,863,430 3,479,978 3,383,452 Budgetary Fund Balance, June 30 $ 3,756,197 524,672 $ 4,176,254 $ 3,651,582 -72-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
AIR QUALITY MANAGEMENT DISTRICT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 238,410 $ 238,410 $ 238,410 $ - Resources (Inflows):
Intergovernmental 119,775 119,775 110,990 (8,785)
Use of money and property 225 250 5,828 5,578
Amounts Available for Appropriation 358,410 358,435 355,228 (3,2071 harges for Appropriation (Outflows):
Capital outlay 45,000 165,049 44,996 120,053
Total Charges to Appropriations 45,000 165,049 44,996 120,053 Budgetary Fund Balance, June 30 $ 313,410 $ 193,386 $ 310,232 $ 116,846 -73-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $3,407,500 $3,407,500 $ 3,407,500 $ - Resources (Inflows):
Charges for services 879,822 879,822 887,132 7,310
Use of money and property 19,175 165,180 146,005
Amounts Available for Appropriation 4,287,322 4,306,497 4,459,812 153,315 Charges for Appropriation (Outflows):
General government 38,575 38,579 38,415 164
Parks and recreation 713,078 759,610 619,842 139,768
Engineering and public works 186,992 211,590 82,953 128,637 Transfer out 10,197 10,197 10,197
Total Charges to Appropriations 948,842 1,019,976 751,407 268,569 Budgetary Fund Balance, June 30 $3,338,481 $ 3,286,521 $ 3,708,405 $ 421,884 -74-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT - AUDIE MURPHY RANCH
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Actual Variance with
origindeted Amounts Amounts Final Budget
$ 3,554,042 $ 3,554,042 $ 3,554,042 -
2,331,355 2,331,355 2,331,033
159,145 116,645
5,903,897 5,927,897 6,044,220
charral forepropriation (Outlows)
Enginning and public work- 1,551,067 1,551,066 1,263,562 287,504 342,494
1,192,752
Total Charges to Appropriations 2,636,752 3,254,993 1,949,154 1,305,839 Budgetary Fund Balance, June 30 $ 3,267,145 $ 2,672,904 $ 4,095,066 $ 1,422,162 -75-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT - HIDDEN HILLS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 706,264 $ 706,264 $ 706,264 $ - Resources (Inflows):
Charges for services 287,163 287,163 287,035 (128)
Use of money and property 5,700 37,243 31,543
Amounts Available for Appropriation 993,427 999,127 1,030,542 31,415 Charges for Appropriation (Outflows):
257,526 258,226 161,545 96,681
Engineering and public works 20,956 20,256 832 19,424
Total Charges to Appropriations 278,482 278,482 162,377 116,105 Budgetary Fund Balance, June 30 $ 714,945 $ 720,645 $ 868,165 $ 147,520 -76-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
CFD 2014-1 TOWN CENTER
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 178,370 178,370 $ 178,370 $ - Resources (Inflows):
Charges for services 17,119 17,119 17,119
Use of money and property 1,700 200.20 3539
Amounts Available for Appropriation 195,489 197,189 3,539 Charges for Appropriation (Outflows):
Parks and recreation 14,147 14,547 2,869 11,678
Engineering and public works 2,550 2,150 155
Total Charges to Appropriations 16,697 16,697 3,024
Budgetary Fund Balance, June 30 $ 178,792 180,492 $197,704 $ 17,212 -77-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT - 2014-2 COMMERCE POINT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 55,436 $ 55,436 $ 55,436 $ - 29,048 29,048 29,048
210 1,208
Amounts Available for Appropriation 84,484 84,694 85,692 998 Charges for Appropriation (Outflows):
8,149 8,150 6,225 1,925
Engineering and public works 8,285 8,284 4,869 3,415
412 412 412
Total Charges to Appropriations 16,846 16,846 11,506 5,340 Budgetary Fund Balance, June 30 67,638 $ 67,848 $ 74,186 $ 6,338 -78-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT - 2015-2 CITYWIDE
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Actual Variance with
Amounts Final Budget
$ 3,048,475 $ 3,048,475 $ 3,048,475 $
1,639,813 1,649,318 1,638,913 (10,405)
106,092 89,657
(173,310)
Amounts Available for Appropriation 5,003,113 4,909,055 (94,058) Charges for Appropriation (Outflows):
Parks and recreation 852,747 521,784 330,963
Engineering and public works 337,033 487,195
Capital outlay 34,000
10,300 173,310
Total Charges to Appropriations 1,894,585 869,117 1,025,468 Budgetary Fund Balance, June 30 $ 3,163,554 $ 3,108,528 $ 4,039,938 $ 931,410 -79-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT - 2017-1 MAINTENANCE SERVICES FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 568,645 $ 568,645 $ 568,645 $ - Resources (Inflows):
Charges for services 238,453 231,713 (6,740)
Use of money and property 2,600 46,876 44,276
Amounts Available for Appropriation 807,098 809,698 847,234 37,536 Charges for Appropriation (Outflows):
Parks and recreation 98,021 76,537 21,484
Engineering and public works 133,729 132,127 92,752 39,375 2,472 2,472 2,472
Total Charges to Appropriations 232,620 171,761 60,859
Budgetary Fund Balance, June 30 $ 574,476 $ 577,078 $ 675,473 $ 98,395 -80-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
PUBLIC, EDUCATION AND GOVERNMENTAL ACCESS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 611,661 $ 611,661 $ 611,661 $ - Resources (Inflows):
Charges for services 135,000 135,000 120,315 (14,685)
Use of money and property 5,000 12,000 15,573 3,573
Amounts Available for Appropriation 751,661 758,661 747,549 (11,112) Charges for Appropriation (Outflows):
Capital outlay 49,000 63,000 49,943 13,057
Total Charges to Appropriations 49,000 63,000 49,943 13,057 Budgetary Fund Balance, June 30 § 702,661 $ 695,661 $ 697,606 1,945 -81-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COUNTY SERVICE AREAS (CSA)
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 1,249,792 $ 1,249,792 $ 1,249,792 $ - Resources (Inflows):
52,499 52,499
Charges for services 1.898,731 3.494,111 3,458,296 (35,815) Use of money and property 10,000 13,350 103,016 89,666
Amounts Available for Appropriation 4,757,253 4,863,603 106,350 Charges for Appropriation (Outflows):
General government 15,693 8,987
Public safety 168,181 168,180 152,517 15,663
Parks and recreation 720,964 733,528 650,212 83,316
Engineering and public works 440,403 649,397 377,896 271,501 Capital outlay - 250,000 198,933 51,067
Transfers out 558,643 1,587,102 1,587,102
Total Charges to Appropriations 1,912,871 3,412,887 2,982,353 430,534 Budgetary Fund Balance, June 30 $ 1,245,652 $ 1,344,366 $ 1,881,250 536,884 -82-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
MAINTENANCE CFD
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
$ 704,705 $ 704,705 $ 704,705 $ -
962,963 997,969 995,049 (2,920)
2,980 27,526 24,546
1,667,668 1,705,654 1,727,280 21,626
563,469 571,658 184,418 387,240
22,516 22,192 - 22,192
68,155 66,755 1,246 65,509
3,700 (3,700)
115,575 115,575 115,575
769,715 776,180 304,939 471.241
Budgetary Fund Balance, June 30 897,953 $ 929,474 $ 1,422,341 $ 492,867 -83-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
BONDED CFD - MAJOR FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
$ 10,652,089 $ 10,652,089 $ 10,652,089
Resources (Inflows):
Use of money and property 1,101,711
Miscellaneous
Contributions from property owners 25,513,234
Amounts Available for Appropriation 10,652,089 37,246,542 35,944,549 (1,301,993) Charges for Appropriation (Outflows):
14,913,119 8,248,115 6,665,004
: 15,330,000 12,249,022 3,080,978
1,390,897 1,390,897
- 31,634,016 20,497,137 11,136,879
Budgetary Fund Balance, June 30 $ 10,652,089 $ 5,612,526 $ 15,447,412 $ 9,834,886 -84-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 4,213,574 $ 4,213,574 4,213,574 $ - Resources (Inflows):
Charges for services - 385,753 385,753
Use of money and property . 40,000 338,409 298,409
Developer participation 264,685 24,070 (240,615)
Contributions from property owners 1,804,931 1,804,931
: 1,000,000
1,000,000
Amounts Available for Appropriation 4,213,574 4,518,259 7,766,737 3,248,478 Charges for Appropriation (Outflows):
Capital outlay 5,694,698 2,736,675 2,958,023
Total Charges to Appropriations 5,694,698 2,736,675 2,958,023 Budgetary Fund Balance, June 30 $ 4,213,574 $ (1,176,439) $ 5,030,062 $ 6,206,501 -85-
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
DEBT SERVICE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 $ 582,544 $ 582,544 $ 582,544 $ - Use of money and property 6,200 46,099 39,899
1,755,860 1,755,860
Amounts Available for Appropriation 2,344,604 2,384,503 39,899 Charges for Appropriation (Outflows):
90,000 95,270 (5,270)
Principal retirement 840,834 1,108,004 1,108,004
Interest and fiscal charges 557,856 566,160 (8,304)
Total Charges to Appropriations 1,755,860 1,755,860 1,769,434 (13,574) Budgetary Fund Balance, June 30 $ 582,544 $ 588,744 $ 615,069 $ 26,325 -86-
STATISTICAL SECTION DESCRIPTIONS
This section of the City of Menifee's Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.
Financial Trends Schedules - These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. As a newly incorporated City, information relative to the exact City boundaries prior to incorporation is not readily available in most cases.
Therefore, trend information will be developed over time and reported annually.
Net Position
Changes in Net Position
Fund Balances of Governmental Funds
Changes in Fund Balances of Governmental Funds
Major Revenues by Source - Governmental Funds
Revenue Capacity Schedules - These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property taxes.
Assessed Value and Estimated Actual Value of Taxable Property Direct and Overlapping Property Tax Rates
Principal Property Tax Payers
Property Tax Levies and Collections
Debt Capacity Schedules - These schedules 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.
Ratio of Outstanding Debt by Type
Ratio of General Bonded Debt Outstanding
Direct and Overlapping Bonded Debt
Legal Debt Margin
Demographic and Economic Information - These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.
Demographic and Economic Statistics
Principal Employers
Full-time and Part-time City Employees by Program
Operating Information - These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information related to the services the City provides and the activities it performs.
Capital Asset Statistics by Function/Program
Operating Indicators by Function/Program
Miscellaneous Statistics
Taxable Sales by Category
Top 25 Sales Tax Producers
Measure DD 1% Sales Tax - Revenues and Expenditures History Sources: Unless otherwise noted, the information in these schedules is derived from various internal and other governmental and non-governmental sources where reliability of the data could be ascertained. -87-
CITY OF MENIFEE
NET POSITION
As of June 30, 2015 2016 2017 2018
GOVERNMENTAL ACTIVITIES
Net Investment in Capital Assets $ 25,425,778 $ 51,416,214 $ 69,469,330 $ 110,924,809 Restricted for:
Community Development Projects 1,182,477 4,448,198 4,660,916 5,363,977 Public Safety (360,254) 12,472
Public Works 23,094,019 23,908,504 201471,018 32,360,079 Capital Projects 20,022,031 9,619,732 4,772,166
Debt service 1,354,467 1,359,694 1,358,034 1.371,931
Unrestricted 12,103,855 10,903,072 14,504,934 26,052,076 -
Total Governmental Activities
Net Position $ 82,822,373 $ 101,655,414 $ 115,236,398 $ 176,085,344
PRIMARY GOVERNMENT
Net Investment in Capital Assets $ 25,425,778 $ 51,416,214 $ 69,469,330 $ 110,924,809 Restricted for:
Community Development Projects 1,182,477 4,448,198 4,660,916 5,363,977 Public Safety (360,254) 12,472
Public Works 23,094,019 23,908,504 20,471,018 32,360,079 Capital Projects 20,022,031 9,619,732 4,772,166
Debt service 1,354,467 1,359,694 1,358,034 11371,931
Unrestricted 12,103,855 10,903,072 14,504,934 26,052,076 -
Total Primary Government
Net Position $ 82,822,373 $ 101,655,414 $ 115,236,398 $ 176,085,344 Source: City Finance Department
-88-
2019 2020 2021 2022 2023 2024
$156,771,192 $ 215,774,004 $ 259,935,987 $ 276,956,837 $ 317,756,598 $ 366,417,603 6,373,715 4,569,409 5,239,814 11,312,169 14,895,725 18,986,084 191,737
44,929,363 40,108,013 49,139,697 61,290,160 64,574,642 74,958,469 - - -
7,884,527 1,572,272 556,027 563,291 582,544 615,069
30,064,613 36,384,684 51,217,507 82,742,476 90,961,465 112,054,938 $246,215,147 $ 298,408,382 $ 366,089,032 $ 432,864,933 $ 488,770,974 $ 573,032,163 $156,771,192 $215,774,004 $ 259,935,987 $ 276,956,837 $ 317,756,598 $ 366,417,603 6,373,715 4,569,409 5,239,814 11,312,169 14,895,725 18,986,084 191,737
44,929,363 40,108,013 49,139,697 61,290,160 64,574,642 74,958,469 - -
7,884,527 1,572,272 556,027 563,291 582,544 615,069
30,064,613 36,384,684 51.217,507 82,742,476 90,961,465 112,054,938 $246,215,147 $ 298,408,382 $ 366,089,032 $ 432,864,933 $488,770,974 $ 573,032,163 -89-
CITY OF MENIFEE
CHANGES IN NET POSITION
For the Year Ended June 30, 2015 2016 2017 2018
EXPENSES
Governmental Activities:
General Government $ 4,160,012 $ 4,236,457 $ 5,158,876 $ 6,265,963 19,413,871 20,927,524 18,129,742 25,497,233
Community Development 3,091,768 3,255,560 3,403,182 4,925,868 1,903,871 1,145,208 1,664,348 3,034,270
Engineering and Public Works 7,292,714 10,361,131 8,281,676 6,082,233 Interest on Long-term Debt 918,204 902,716 891,605 917,342 Total Governmental Activities Expenses = 36,780,440 40,828,596 37,529,429 46,722,909
PROGRAM REVENUES
Governmental Activities:
Charges for Services 12,407,481 12,764,259 19,257,460 27,218,239 Operating Contributions and Grants 3,777,617 3,041,014 3,578,315 4,722,133 Capital Contributions and Grants 9,151,362 16,930,639 3,107,374 33,885,278 Total Governmental Activities Program Revenues 25,336,460 32,735,912 25,943,149 65,825,650 Total Net Revenues (Expenses) 5(11,443980) $ (8,092,684) $ (11,586,280) $ 19,102,741
GENERAL REVENUES AND OTHER
CHANGES IN NET POSITION
Governmental Activities:
Taxes:
Property Tax $ 14,634,225 $ 14,577,983 $ 12,369,587 $ 18,876,904 Transient Occupancy Tax 190,972 217,122 225,956 232,117 Sales Taxes 5,924,347 7,137,168 8,661,218 18,005,117
Franchise Tax 3,586,271 3,084,175 2,973,633 3,076,719
Other Taxes 409,003 460,751 582,937 615,333
Motor Vehicle in-lieu tax, unrestricted 34,308 34,451 39,873 47,721 Use of Money and Property 151,450 253,336 221,371 613,165 Other 84,370 94,005 92,689 166,682
Loss on Disposal of Asset
Total Governmental Activities = 25,014,946 25,858,991 25,167,264 41,633,758 Special item 1,066,734
Restatement 168,345 .
Change in Net Position S 13.570,966 S 17.766,307 $ 13,580,984 $ 60,736,499 Source: City Finance Department
-90-
2019 2020 2021 2022 2023 2024
$ 8,177,727 $ 9,907,689 $ 14,183,374 $ 12,323,993 $ 33,033,004 $ 27,374,493 27,595,237 29,559,843 27,853,563 31,656,830 43,999,757 44,266,879 5,253,832 8,906,681
4,082,858 5,432,196 3,546,483 1,083,554 8,634,157
16,979,928 18,331,483 16,251,977 3,257,056 22,646,459 6,075,482 1,108,218 622,071
63,046,659 69,593,261 67,813,363 55,999,064 120,015,079 95,879,763 33,823,689 24,835,036 30,631,445 35,013,739 46,428,763 44,218,494 5,141,336 5,530,426 8,057,443 10,832,899 12,278,329 12,041,584 46,785,288 38,642,004 34,739,876 17,727,525 48,472,712 40,366,619 85,750,313 69,007,466 73,428,764 63,574,163 107,179,804 96,626,697 $ 22,703,654 $ (585,795) $ 5,615,401 7,575,099 5(12,835,275) $ 746,934 $ 20,771,353 $ 22,361,021 $ 24,076,949 $ 26,024,300 $ 30,117,514 $ 33,849,512 238,464 189,032 506,967 529,006 430,098 507,446
20,384,878 21,102,457 27,476,156 31,684,459 31,922,596 41,064,793 3,141,174 6,289,806 3,653, 129 4,055,791 4,433,059 4,765,363 623,801 801,896 1,126,860 1,523,574 858,617 871,948
44,113 73,963 73,963 115,162 109,295 135,915
2,011,031 1,805,179 48,592 (4,886,350) 550,807 8,327,212 211,335 155,676 665,758 185,488 319,330 535,387
(30,628)
47,426,149 52,779,030 57,628,374 59,200,802 68,741,316 90,057,576 -
- - (6,543,321)
$ 70,129,803 $ 52,193,235 $ 63,243,775 $ 66,775,901 $ 55,906,041 $ 84,261,189 -91-
CITY OF MENIFEE
FUND BALANCES OF GOVERNMENTAL FUNDS
As of June 30, 2015 2016 2017 2018
GENERAL FUND:
Nonspendable $ 2,173,477 1,880,909 $ 64,540 $ 28,073
Committed 6,546,700 6,546,700 3,543,729 3,543,729
Assigned 40,836 226,500 461,890 4,396,969
Unassigned (486,600) 1,268,621 8,547,350 16,886,664
Total General Fund = 8,274,413 9,922,730 12,617,509 24,855,435
ALL OTHER GOVERNEMENTAL FUNDS
Nonspendable
Restricted for Community Development Projects 1.184,687 4,180,264 4.60.916 5,363,977 Restricted for Public Safety 194,826 267,934 234,782 12,472 Restricted for Engineering/Public Works 25,022,383 23,908,504 19,781,187 32,360,079 Restricted for Capital Projects 20,022,031 9,619,732 5,461,997 - Restricted for Debt Service 1,354,467 1,359,694 1,358,034 1,371,931 Unassigned (154)
Total All Other Governmental Funds = 47,778,394 39,336,128 31,496,916 39, 108,305 TOTAL GOVERNMENTAL FUNDS $ 56,052,807 $ 49,258,858 $ 44,114,425 $ 63,963,740 The City of Menifee was incorporated during fiscal year 2008-2009. No information prior to that date is available.
1 Fund balance classification reflects GASB 54 implementation beginning Fiscal Year 2011. 2 Establish $15,000 self-insurance, retention reserve.
3 Certificates of Participations issued for capital construction. 4 Establish emergency reserve of 20% of General Fund expenditures and $250,000 towards construction of new City Hall.
5 Transferred proceeds from Certificates of Participation to debt service fund. 6 Transferred proceeds from Certificates of Participation to capital project fund.
Source: City Finance Department
-92-
2019 2020 2021 2022 2023 2024
$ 65,751 $ 13,473 $ $ - $ $ 44,888
3,543,729 5,688,958 7,642,510 13,365,638 15,155,133 21,547,672 13,437,218 8,701,430 9,349,272 12,362,984 18,539,728 13,428,030 18,089,574 27,202,215 39,321,579 51,177,085 56,272,032 74,562,723 35,136,272 41,606,076 56,313,361 76,905,707 89,966,893
174,389 166,085 237,451 189,312
6,373,715 4,569,409 5,839,667 12,368,526 14,895,725 18,986,084 191,737
44,929,363 40,165,976 48,539,844 60,237,030 64,798,514 74,98.469 7,884,527 1,572,272 381,638 397,206 424,763 465,592
(57,963) (446,980) _ (412,708) (1,158,298) (938,340)
59,379,342 46,249,694 54,488,558 72,756, 139 79,198,155 93,661,117 $ 94,515,614 $ 87,855,770 $110,801,919 $ 149,661,846 $169,165,048 $ 203,244,430 -93-
CITY OF MENIFEE
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
For the Year Ended June 30, 2015 2016 2017 2018
REVENUES
Taxes $ 24,744,819 $ 25,477,199 $ 24,813,331 $ 34,743,397 Licenses and permits 5,463,643 6,832,170 8,061,714 10,867,727 Intergovernmental 9,151,033 6,369,501 5,748,048 12,580,822 Charges for services 658,972 1,630,272 6,219,925 6,677,180 Use of money and property 151,449 254,526 221,382 613,165 Fines and forfeitures 502,613 553,986 655,544 718,890
Developer participation 6,079,281 4,518,711 5,295,110 9,078,142 Miscellaneous 54,509 77,778 95,359 128,323
Contributions from property owners
Total Revenues = 46,806,319 45,714,143 51,110,413 75,407,646
EXPENDITURES
Current:
General government 4,087,029 4,253,708 5,391,081 6,151,518 19,336,968 20,836,489 21,350,629 25,062, 622
Community development 2,838,474 3, 154,443 3,643,590 4,872,304 Parks and recreation 2,075,562 1,182,854 2,461,119 2,833,753 Engineering and public works 11,457,614 20,576,193 5,947,990 9,438,808 Capital outlay 997,142 1,200,818 16,157,949 5,898,238
Debt service:
Principal retirement 360,000 370,000 380,000 390,000
Interest and fiscal charges 944,388 933,587 922,488 911,088 Bond issuance costs
Total Expenditures = 42,097,177 52,508,092 56,254,846 55,558,331 Excess (Deficiency) of Revenues
Over (Under) Expenditures 4,709,142 (6,793,949) (5,144,433) 19,849,315
OTHER FINANCING SOURCES (USES)
Transfers in 1,566,639 1,645,900 1,442,815 1,475,606
Transfers out (1,566,639) (1,645,900) (1,442,815)
Other debts issued
Payment to refunded bond escrow agent
Lease/subscription acquisition
Total Financing Sources (Uses
Net Change in Fund Balances 4,709,142 (6,793,949) (5,144,433) 19,849,315 Fund Balances, beginning of year 51,343,665 56,052,807 49,258,858 44,114,425 Restatements
Fund Balances, end of year $ 56.052,807 $ 49,258,858 $ 44,114,425 $ 63,963,740
DEBT SERVICE AS A PERCENTAGE OF
NON CAPITAL EXPENDITURES 3.17% 2.54% 3.25% 2.62%
Source: City Finance Department
-94-
2019 2020 2021 2022 2023 2024
$ 38,523,243 $ 44,111,372 $ 58,634,584 $ 70,546,687
10,765,702 10,011,450 10,914,819 13,343,572 10,929,850 11,419,395 13,820,929 16,762, 108 19,146,908 23,165,414 36,304,333 8,428,907 8,177,911 10,803,623 17,590,996
2,011,031 1,805,179 (4,886,358) 1,232,839 10,282,103
942,403 598,244 438,833 483,068
14,077,226 5,559,177 10,262,446 13,877,821 13,245,107
162,935 117,986 278,328 512,657
14,110,185 10,805,326 25,927,269
88,732,376 87,143,427 142,989,461 186,311,615
8,169,511 9,981,475 13,962,912 18,688,827 31,107,678 29,668,362 27,389,574 33,869,480 29,174,294 34,950,472 42,281,642 45,565,463 5,693,505 5,196,946 5,377,780 6,811,947 8,740,384 9,202,687 3,592,890 3,977,479 4,943,713 5,752,300 7,309,632 7,945,083 13,436, 193 20,997,861 7,041,057 5,528,660 6,546,643 9,737,693 5,143,341 18,164,545 13,332,826 17,605,427 25,957,044 50,352,498 410,000 475,088 2,585,843 7,250,613 1,432,841 1,384,957 895,488 1,140,397 540,059 1,202,754 1,420,140 578,198
306,935 40,000
64,730,502 93,803,271 77,265,419 97,831,000 124,796,004 154,434,941 24,001,874 (6,659,844) 22,320,219 25,564,404 18, 193,457 31,876,674 2,444,198 11,477,822 5,509,717 6,051,725 5,074,330 4,461,799 (2,444, 198) (11,477,822) (5,509,717) (6,051,725) (5,074,330) (4,461,799) 17,885,000 6,355,581
8.550.00 (17,372,007) 13097159
6,939,942 2,202,708
6,550,000 512,993 13,295,523 1,309,745 2,202,708
30,551,874 (6,659,844) 22,833,212 38,859,927 19,503,202 34,079,382 63,963,740 94,515,614 87,855,770 110,801,919 149,661,846 169,165,048 112,937
594.515.614 87.855.770 3110.801.919 5149.661.846 3165,165.048 3 203.244,430
2.19% 2.14% 4.89% 10.54% 2.89% 1.89%
-95-
CITY OF MENIFEE
MAJOR REVENUES BY SOURCE - GOVERNMENTAL FUNDS
Fiscal Property Sales Motor Vehicle Franchise
Year Tax Tax In Lieu Tax Tax Total
2015 $ 14,634,225 $ 5,924,347 $ 34,308 3,586,271 $ 24,179,151 2016 14,577,983 7,137,168 34,451 3,084,175 24,833,777
2017 12,369,587 8,661,218 39,873 2,973,633 24,044,311
2018 18,876,904 18,005,117 47,721 3,076,719 40,006,461
2019 20,771,353 20,384,878 44,113 3,141,174 44,341,518
2020 22,361,021 21,102,457 73,963 6,289,086 49,826,527
2021 24,076,949 27,476,156 73,963 3,653,129 55,280,197
2022 26,024,300 31,684,459 115,162 4,055,791 61,879,712 2023 30,118,595 31,922,596 109,295 4,433,059 66,583,545 2024 33,849,512 41,064,793 135,915 4,765,363 79,815,584 Source: City Finance Department
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CITY OF MENIFEE
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Total Taxable
Fiscal Assessed Percent
Year Secured Unsecured SBE Nonunitary Exemptions Value Change 2015 $6,987,584,499 $ 92,460,808 $ 346,628,271 S (19,962,118) $7,406,711,460 3.59% 2016 7,686,424,297 95,234,280 295,028,271 (131,240,361) 7,945,446,487 10.65% 2017 8,204,501,816 94,227,737 253,828,271 (144,682,408) 8,407,875,416 7.27% 2018 8,712,740,063 99,807,071 105,828,271 (21,427,691) 8,896,947,714 5.82% 2019 9,492,168,800 113,916,759 118,100,000 (21,889,314) 9,702,296,245 5.82% 2020 10,257,311,309 119,918,747 13,800,000 (1,199,425) 10,389,830,631 9.05% 2021 11,130,368,586 140,615,466 11,270,984,052 7.09%
2022 12,129,504,862 174,182,957 12,303,687,819 9.05%
2023 13,872,320,886 165,575,367 : 14,037,896,253 14.10% 2024 15,324,067,513 212,134,718 15,536,202,231 10.67%
In 1978, California voters passed Proposition 13 which set the property tax rate at 1.00% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.
Source: HdL Companies, Riverside County Assessor
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CITY OF MENIFEE
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
BY USE CATEGORY
Total Taxable Total
Fiscal Residential Commercial Industrial Assessed Percent Direct Year Property Property Property Dry Farm Other Exemptions Value Change Rate 2015 5,837,398,400 $ 419,946.710 $ 78,550,017 $ 20,875,554 $ 1,069,902,897 $ (19,962,118) $7,406,711,460 10.65% 0,14230 2016 6,349,493,758 444.912.094 79,232,788 21.615,968 1,070,534,347 (20,342,468) 7,945.446,487 727% 0.14069 2017 6,823,268,713 465,564,229 80,678,726 21,511,185 1,038,617,091 (21,764,528) 8,407,875,416 5.82% 0,13943 2018 7,368,551,565 522,390,630 86.731.580 20,505,027 920,196,603 (21,427,691) 8,896,947,714 5.82% 0.13809 2019 8,050,646,652 592,624,119 97,305,521 20,895,440 962,713,827 (21,889,314) 9,702,296,245 9.05% 0.13739 2020 8,789,370,483 634,623,902 96,855,473 84,679,342 785.500,856 (1,199,425) 10,389,830,631 7.09% 0.13697 2021 9,605,927,556 718,201,265 92,954,481 61,632,016 792,268.734 11,270,984,052 8.48% 0.14302 2022 10,521,453,404 768,722,082 96,436,403 69,173,323 847,902,607 12,303,687,819 9.16% 0.14144 71,921,568 :
2023 12,057,202,958 923,154,976 133,416,320 852,200,431 14,037,896,253 14.10% 0.13998 2024 13,384,289,668 990,033,611 151,418,983 88,860,932 921,599,037 15,536,202,231 10.67% 0,13890 n 1978, Califoria voters passed Proposition 13 which set the property tax rate at 1.00% based upon the assessed value of the property being taxed. Each year, the assessed value of property may beincreased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only rata sosed at to represents one on lala cure At alt, it respeciese actual ases ale paper a side a so ala Source: HdL Companies, Riverside County Assessor
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CITY OF MENIFEE
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Agency 1000010000020000 2023 2024
Basic Lew* 1.00000 1.00000
Eastern Municipal Water Imp District
Menifee School Debt Senice
E2E22225522
Total Direct & Overlapping Tax Rates 1.25728 1.14596 1.14711 1.18425 1.18216 1.21191 1.21350 1.21848 1.20480 1.19656 City of Menifee Share of 1% per Prop 13 0.12740 0.12740 0.12740 0.12904 0.12903 0.12903 0.12643 0.12643 0.12643 0.12643 Total Direct Rate** 0.06617 0.14552 0.14227 0.14069 0.13943 0.13809 0.14302 0.14144 0.13998 0.13890 This schedule shows information for all city tax rate areas. *In 1978, California voters passed Proposition 13 which set the property tax rate at 1.00% fixed amount. This 1.00% is shared by all taxing **Total Direct Rate is the weighted average of all individual direct rates applied by the government entity.
Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city Source:HdL Companies
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CITY OF MENIFEE
PRINCIPAL PROPERTY TAX PAYERS
2024 2015
Percent Percent
of Total City of Total City
Total Taxable Total Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Rank Value Value Rank
MG Artesa Apartments LLC $ 159,119,999 1.02% 1
Newport Property LLC 110,492,520 0.71% 2
Malcolm Jerome and Maxine Winer 95,173,703 0.61% 3
Antelope Ridge Apartments LLC 50,229,489 0.32% 4 $ 42,145,595 0.57% 5 Cantabria Development LP 48,777,964 0.31% 5
Pulte Home Company 37,340,335 0.24% 6
Forterra Pipe and Precast LLC 36,348,368 0.23%
PHH Real Estate 34,615,186 0.22% 8 31,670,681 0.43% 6
Minor Ranch 32, 135,655 0.21%
Scott Road Partners 31,827,113 0.20% 10
Inland Empire Energy Center, LLC 346,600,000 4.68% 1
Donahue Schriber Realty Group 50,255,472 0.68% 2
Carrington Place Limited 45,322,291 0.61% 3
Stark Menifee Land 43,679,952 0.59% 5
Strata Cantabria LLC 31,177,716 0.42% 6
Target Corporation 23.074,208 0.31% 8
HCP HB2 Carrington Cherry Hills 21, 162,993 0.29% 9
Wal Mart Stores Inc 19,545,486 0.26% 10
Totals 636,060,332 4.09% 654,634,394 8.84%
All Other 14,900,141,899 95.91% 6,752,077,066 91.16%
City Total $ 15,536,202,231 100.00% $ 7,406,711,460 100.00% Source: HDL Companies
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CITY OF MENIFEE
PROPERTY TAX LEVIES AND COLLECTIONS
Collected within the
Total Tax Fiscal Year of Levy
Fiscal Levy for Percentage of Amount Collected in Total Tax Percentage Year Fiscal Year Amount Levy Subsequent Year Collections of Levy 2015 $ 10,165,063 $ 10,091,501 99.28% $ 73,562 $ 10, 165,064 100% 2016 10,903, 160 10,707, 116 98.20% 196,044 10,903, 161 100% 2017 11,592,282 11,391,985 98.27% 200,297 11,592,283 100% 2018 12,027,685 11,935,913 99.24% 91,772 12,027,686 100% 2019 13,268,770 13,077,732 98.56% 191,038 13,268,771 100% 2020 14,397,065 14,170,014 98.42% 227,051 14,397,066 100% 2021 16,382,479 16,347,132 99.78% 35,348 16,382,481 100% 2022 17,649,773 17,263,608 97.81% 386,165 17,649,774 100% 2023 20,540,213 20,423,009 99.43% 117,205 20,540,215 100% 2024 22,834,638 22,655,541 99.22% 179,097 22,834,639 100% With the passage of Resolution 10-138 in June 2010, the City of Menifee agreed to participate in the Riverside County Teeter Program. Under the Teeter Plan, the City is paid in full each year for the actual amount of property taxes levied, regardless of the amount of delinquencies.
Source: County of Riverside
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CITY OF MENIFEE
RATIO OF OUTSTANDING DEBT BY TYPE
Corticates Distribution Total Percentage of
Fiscal Facilities County Other Governmental Personal Per Year Participation Financing Repayment (1) liabilites Activities Income Capita (2) 2015 $ 20,206,344 1,057,619 $ $ 21,263,963 1.14%
2016 19,815,936 : 1,057,619 20,873,555 1.10%
2017 19,415,528 19,415,528 1.00%
2018 19,005,120 19,005, 120 0.09%
2019 18,144,304 6,550,000 24,694,304 1.09%
2020 17,688,896 6,499,912 ..... 24,188,808 0.99%
2021 16,040,392 6,120,786 22,161,178 0.84%
2022 16,315,000 5,900,754 5,922,140 28,137,894 0.84%
2023 15,640,000 5,485,266 5,703,908 26,829,174 0.80%
2024 14,960,000 5,057,262 6,333,181 26,350,443 0.71%
(1) County Repayment is not bonded debt
(2) See the schedule of demographic and economic statistics for population data.
Source: City Finance Department
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CITY OF MENIFEE
RATIO OF GENERAL BONDED DEBT OUTSTANDING
Total Less Percent
General Debt Net of Debt to Debt
Fiscal Assessed Obligation Service Bonded Assessed per
Year Population Value Bonds Fund (1) Debt Value (2) Capita 2015 85,385 $ 7,406,711,460 $ $ $- 0.00%
2016 : : 0.00%
88,524 7,945,446,487 -
2017 90,660 8,407,875,416 - 0.00%
2018 91,902 8,896,947,714 - 0.00%
2019 93,452 9,702,296,245 - 0.00%
2020 97,093 10,389,830,631 0.00%
2021 99,686 11,270,984,052 ' - 0.00%
2022 106,627 12,303,687,819 - 0.00%
2023 110,034 14,037,896,253 0.00%
2024 111,560 15,536,202,231 0.00%
(1) Amounts available for repayment of general obligation bonds. (2) Assessed value has been used because the actual value of taxable property is not readily available in the State of California.
Source: City Finance Department
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CITY OF MENIFEE
DIRECT AND OVERLAPPING BONDED DEBT
JUNE 30, 2024
Percent City's
Total Applicable Share of
Debt to City Debt
Direct Debt
City of Menifee-County Loan Repayment $ 14,960.000 0.0% $ 14,960.000 City of Menifee-Certificates of Participation 100.0%
City of Menifee-Distribution Facilities Financing Agreement 5,057,262 100.0% 5,057,262 6,001,206 100.0% 6,001,206
subscription Liabilities 331,975 100.0% 331,975
•otal Direct Debt 25,620,671 100.0% 26,350,443
Direct and Overlapping Tax and Assessment Debt
Metropolitan Water District $ 18,210,000 0.384% 69,926
Riverside County Flood Control & Water Conservation District Zo 2,755,000 19.393% 534,277 Eastem Municipal Water District Improvement District 11,040,000 79.029-100. 9,223,868 Mount San Jacinto Community College District 242,210,000 10.793 28,939,251 Perris Union High School District 292,042,191 57.517 170,546,799 Menifee Union School District 152,811,292 75.293 114,726,134 Perris Union High School District Community Facilites District Nc 30,100,000 61.140 18,403,140 Menifee Union School District Community Facilities Districts 187,130,000 37.715-100. 183,866,698 Romoland School District Communit Facilities Districts 203,770,000 54.833-100. 191, 199, 145 Eastem Municipal Water District Community Facilities Districts 83,997,000 64.257-100. 81,403,845 City of Menifee Community Facilities District Nos. 2016-2 and 20 53,460,000 100 53,460,000 Riverside County Community Facilities Districts 25,800,000 29.197-95.871 19,864,182 Eastem Municipal Water District 1915 Act Bonds 1,600,000 64.200 1,028,112 Total Direct and Overalapping Tax and Assessment Debt $ 873,265,377 Overlapping General Fund Debt:
Riverside County General Fund Obligations $ 1,169,217,035 3.916% $ 45,786,539 Riverside County Pension Obligations 670,785,000 3.916 26,267,941 Perris Union High School District Certificates of Participation 40,124,346 58.398 23,431,816 Menifee Union School District Certificates of Participation 32,715,875 75.077 24,562,097 City of Menifee Distribution Facilities Financing Agreement 5,057,262 100.000 5,057,262 Total Gross Overlapping General Fund Debt 5 125,105,655 Less: Riverside County Supported Obligations
Total Net Overlapping General Fund Debt 5 125,105,655
Overlapping Tax Increment Debt $ 216,419,785 2.176-10.959% $ 12,954,751 (Riverside County Successor Agency)
Total Direct Debt $ 26,350,443
Total Gross Overlapping Debt $1,011,325,783
Total Net Overlapping Debt $1,011,325,783
Total Direct and Overlapping Debt $1,036,946,454
Gross Combined Total Debt 1 $1,036,946,454
Vet Combined Total Debt $1,036,946,454
Ratios to 2022-23 Assessed Valuation:
Total Direct Debt 0.03%
Total Direct and Overlapping Tax and Assessment Debt 5.62% Gross Combined Total Debt 6.51%
Net Combined Total Debt 6.51%
The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value.
Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total assessed value.
C) tax lase tak anonsenue anticipation notes, enterprise revenue, morgage revenue and nonbonded -104-
CITY OF MENIFEE
LEGAL DEBT MARGIN INFORMATION
2019 2020 2021 2022 2023 2024
Assessed valuation $ 9,702,296,245 $ 10,389,830,631 $11,270,984,052 $ 12,303,687,819 $ 14,037,896,253 $ 15,536,202,231 Debit Limit Percentage 15% 15%
Debt limit 1,455,344,437 1,558,474,595 1,690,647,608 1,845,553,173 2,105,684,438 2,330,430,335 Toda Ner ol gion Ben to the limit
Legal debt margin S1,455,344,437 $ 1.558.474.595 $ 1.690.647.608S 1.845.553.173 S 2.105.684.438_S 2.330.430,335
0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Section 43605 of the Govemment Code of the State of Califomia limits the amount of indebtedness for public improvements to 15% of the assessed valuation of all real and personal property of the City.
The City of Menifee has no general obligation indebtedness.
Only last five years shown.
Source: City Finance Department, HdL Companies
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CITY OF MENIFEE
DEMOGRAPHIC AND ECONOMIC STATISTICS
Personal Per Capita Median Occupied Persons
Fiscal Income Parole Housing Household Median Unemployment Year Population (In 1000)
2015 85,385 $ 1,868,959 $ 280,000 29,383 2.91 37.9 9.60% 2016 88,524 1,891,622 30,226 2.93 38.7
2017 90,660 1,936,648 31,253 3.94 37.4
2018 91,902 22,667 31,253 2.94 37.4
2019 93,452 31,222 2.99 37.9
2020 97,093 33,348 2.91 37.9
2021 99,686 34,256 2.91 37.7
2022 106,627 2,871,857 36,308 2.94 38.0
2023 110,034 3,340,202 37,979 2.89 37.3
2024 111,560 38,989 2.86 37.3
Source: Riverside County Center for Demographic Research, California Department of Finance E-5 -106-
CITY OF MENIFEE
PRINCIPAL EMPLOYERS
2024
Number of Percentage of
Employer Employees Employment Rank
Mt San Jacinto College District 1,604 28.11% 1
Menifee Union School District 1,505 26.38% 2
Romoland Elementary School District 793 13.90% 3
Menifee Global Medical Center 362 6.34% 4
Stater Brothers 348 6.10% 5
City of Menifee 345 6.05% 6
United Parcel Service (UPS) 232 4.07% 7
Southern California Edison 189 3.31% 8
Texas Roadhouse 188 3.29% 9
Olive Garden 140 2.45% 10
Total Employment Listed 5,706 100.00%
Source: Menifee Valley Chamber of Commerce, City of Menifee Business License Division Information for the nine years prior is not currently available. -107-
CITY OF MENIFEE
FULL AND PART-TIME CITY EMPLOYEES BY PROGRAM
Equivalent Equivalent Equivalent
FUNCTION
City Manager 2 4 4 5 5 8 10 10
Administrative Senices 4,5 5 6 0 0 0
City Clerk 3 5 6 6
Emergency Senices
Finance 6 6 10 12.5 13.5 13.5 17 21 21
Human Resources 4 8.5 6.5 6.5 8 9
Information Technology 2 5 8 8 13 15
Economic Development 2 5 3.5 3.5 4 5 5
Community Development 4 4 5 11 13.5 13 13 15 15.5
Code Enforcement 4 7 7 5 6 8 8
Fire 2 2 2 2 1
Engineering/ Pub Works 10 12 16 24 32 33 33 44.5 46.5 50 Building/Safety 7 8 9 12 14 12 12 15 15 15
Community Senices 3 13 18.58 21.55 31.68 23.39 23.39 44.2 48.4 55 Police 0 0 77 78 118 120 122
Total 46.50 59.00 71.58 102.55 214.18 206.89 208.89 302.70 320.40 332.50 Part-Time Employees are expressed as Full-Time Equivalents.
Source: City Finance Department
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CITY OF MENIFEE
CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM
As of June 30, 2015 2017 2018 2019 2020 2021 2022 2023 2024
FUNCTION
Public Works
Streets (Miles) 317.9 317.9 317.9 317.9 327.1 341.0 347.2 355.9 386.3 Traffic Signals
Community Services
Parks 11 12 14 15 21 22
Park Acreage 53.7 58.7 79.1 79.0 85.1 100.1 118.2
Source: City Public Works Department, Community Services -109-
CITY OF MENIFEE
OPERATING INDICATORS BY
FUNCTION/PROGRAM
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
ABO HI 30.
Police Services
Physical Arrests
Parking Citations 836
Traffic Citations 22322 22 2 2 2 7,244
Calls for Service
Fire Senices
Medical/Public service Calls 7,220 9,741 10,081 9,342 10,071 9,172 10,232 10,612 11,031 11,059 Fire calls 183
All other calls 5 5 2 2 2 2 2 2 5 2,431
Total
Pubic Works
Potholes/Skinpatch (square feet) 63,348 16,358 20,052 104,000 426 Curb Refurbishment/Painting (linear feet 3,540 7,276 39,246 1,200 100 Right of Way Clearing (linear feet) 14,020,200 13,853,520 20,006 988,916 381,828 1,600 2,348 Traffic Signs repaired/replaced 461 1,176 572 638 472
Building & Safety
Building Permits Issued 4,365 5,179 6,232 6,778 5,959 6,261 4,015 Building Inspections Completed 15,417 21,522 25.180 32,225 Community Development
Planning Applications Completed 189 275 327 259 208 348 393 402 336 342 Source: City Finance Division, City Community Development Department, City Building Department, City Police Services Department, City Public Works Department -110-
CITY OF MENIFEE
MISCELLANEOUS STATISTICS
JUNE 30, 2024
Geographic Location: The City of Menifee is located approximately 80 miles south east of Los Angeles in the southwestern portion of Riverside County Population: 111,560
Area in square miles: 46
Form of Government: Council-Manager
Date of Incorporation: October 1, 2008
Number of Full Time Employees: 332.50
Public Safety:
Police Department Menifee City Police Department as of 6/30/2024, 122 FTE Riverside County/Cal Fire Department contract, 70 FTE, 4 Fire Fire Department Stations
Library: 2 branches, Riverside County Library System
25 Parks owned by Valley Wide Recreation and Park District Recreation: 23 Parks owned by the City
Schools:
Elementary 15
Middle Schools 6
High Schools
Community Colleges 1
Source: City Finance Department
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CITY OF MENIFEE
TAXABLE SALES BY CATEGORY
LAST TEN CALENDAR YEARS (IN THOUSANDS OF DOLLARS)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Apparel Stores 54,560
General Merchandise 96,989
Food Stores 55,199
Eating and Drinking Places 219,715
Building Materials 131,018
Auto Dealers and Suppliers 74,146
Service Stations 165,105
Other Retail Stores 173,766
All other Outlets 359,805
Total $ 517.210 $ 587.399 § 634,299 S 688,762 $ 750,711 S 783.357 $ 760.729 _S1.149.592, S1.258.568 $1.330.303 Source: State of California Board of Equalization and the HaL Companies Note: Due to confidentiality issues, the names of the ten largest revenue payers are not available. -112-
CITY OF MENIFEE
TOP 25 SALES TAX PRODUCERS
FOR FISCAL YEAR ENDED JUNE 30, 2024 AND JUNE 30, 2014
2024 2014
Business Business
Business Name Category Business Name Category
Arco AM PM Americamax Contractors
Arco AM PM Arco AM PM Service Stations
Arco AM PM Best Buy Electronics/Appliance Stores
Arco AM PM BJ's Restaurant Brewhouse Casual Dining
Best Buy Chevron Service Stations
Calpine Operating Services Chevon/Circle K Service Stations Camping World RV Sales Circle K Service Stations
Chevron/Circle K Kohl's
Circle K Living Spaces Furniture
Grove Lumber Lowes
Home Goods Menifee Car Wash Service Stations
Imperial Sprinkler Supply Menifee Mart Service Stations Kohls Ralph's Grocery Stores
Living Spaces Furniture Richardson's Auto & RV Sales Trailers/RVs Lowes Rite Aid Drug Stores
M A Mortenson Company Ross Dress for Less Family Apparel Menifee Lakes Plaza Chevron Service Stations Shell Service Stations Ross Dress for Less Family Apparel Stater Bros. Markets Grocery Stores RV Supercenter Trailers/RVs Target Discount Dept Stores Shell Service Stations Texas Roadhouse Casual Dining
Stater Brothers Grocery Stores TJ Maxx Family Apparel
Target Discount Dept. Stores United Oil Service Stations Texas Roadhouse Casual Dining Valero Service Stations
TJ Maxx Family Apparel Verizon Wireless Electronics/Appliance Stores United Rentals North America Repair Shop/Equip. Rentals Walgreens Drug Stores Percentage of Fiscal Year Total
Paid by Top 25 Accounts 54.26% 61.89%
Source: HdL Reports
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CITY OF MENIFEE
MEASURE DD 1% SALES TAX REVENUES AND EXPENDITURES HISTORY JUNE 30, 2022
Fiscal Year 2017 2018 2019 2020 2021
Revenues
1% Transaction Tax 1,369,814 9,961,049 11,416,810 12,617,232 16,724,722 Interest Income 24,668 96,362 141,559 4,951
Total Revenue: 1,369,814 9.985.717 11.513.172 12,758,791 16.729.673 Expenditures
Code Enforcement 188,042 234,261 263,112
County Sheriff Services 2,404,849 1,869,310 3,573,072
County Fire Services 1,969,424 1,768,811 3,893,526 3,353,950 Capital Equipment 593,105 1,305,108
Capital Projects-Roads 2,852,248 3,791,111 1,646,995 942,402 Menifee Police 273,779 4.855,886 4.906.55
Total Expenditures: 7.226.521 7.891,053 14,796,845 10,771,127 Cumulative Balance: 1,369,814 4,129,010 $ 7.751,129 5,713,075 $ 11.671,621 2022 2023 2024
Revenues
1% Transaction Tax $ 19,607,014 $ 19,634,904 $ 24,088,083 Interest Income (110,856) 236,870 499,582
Total Revenue: 19,496,159 19,871,774 24.587,665
Expenditures
Code Enforcement 319,706 357,907 387,426
County Sheriff Services
County Fire Services 5,171,600 10,928,976 12,140,268
Capital Equipment 42,319 460,204 252,619
Capital Projects-Roads 2,765,313 748,442 2,787,065
Menifee Police 5,746,016 6.966,283 7.120,472
Total Expenditures: 14,044,955 19.461.812 22.687,850
Cumulative Balance: $ 17.122,825 17.532.786 $ 19.432,601 The City's citizens voted and approved the 1% sales tax in November 2016 with the implementation date of January 2017.
No information prior to that year is available.
Source: City Finance Department
-114-