1 City of Moreno Valley
Fiscal Year 2024/25
Mid-Year Operating Budget Review
TO: Mayor and City Council
FROM: Launa Jimenez, Assistant City Manager (Administration)/Chief Financial Officer/City Treasurer
DATE: March 4, 2025
INTRODUCTION
On May 2, 2023, the City Council adopted the Two-Year Operating Budget for Fiscal Years (FY) 2023/24 – 2024/25. During the two-year budget period, the City Council will be kept informed of the City’s financial condition through the process of First Quarter , Mid-Year, and Third Quarter Reviews. This ongoing process ensures a forum to look at expenditure and revenue deviations from the estimates made in the budget document. Additionally, any significant changes in projected revenue or unanticipated expenditure that may occur will be shared with the City Council.
This report provides a review of the unaudited financial results for the Mid-Year of FY 2024/25 (July 2024 – December 2024, 50% of the fiscal year).
Mid-Year Financial Summary FY 2024/25 2
CITYWIDE OPERATING EXPENDITURE SUMMARY
The following table contains a summary of the adopted budget, amended budget and expenditures through the Mid-Year. The totals represent each major fund type and component unit of the City.
Table 1. Citywide Operating Expenditures
Actuals as of
Actions taken by the City Council after the May 2, 2023 adoption of the two-year budget and included in the Amended Budget are:
• Throughout the fiscal year, there are also budget amendments to reflect the acceptance of grants and adjustments to contractual services and material/supplies. The individual amendments are reviewed as part of separate City Council agenda items. • Much of this Mid -Year update will focus on the General Fund, as it supports all basic services provided to City residents. Highlights for other key component funds will be discussed at a summary level as well.
FY 2024/25
Adopted Budget
FY 2024/25
Amended Budget
Actuals as of
12/31/24
(unaudited)
% of Amended
Budget
Fund/Component Unit
General Fund $ 155,185,813 $ 160,472,863 $ 78,557,178 49.0% Community Services District (CSD) 26,129,510 30,488,675 15,173,320 49.8% Successor Agency 2,400,666 2,250,666 1,201,576 53.4% Housing Fund - 250,000 58,487 23.4% Special Revenue Funds 39,586,038 73,102,859 29,622,845 40.5% Capital Projects Funds 17,348,000 90,344,889 13,625,060 15.1% Electric Utility Funds 46,770,191 85,150,305 24,801,217 29.1% Internal Service Funds 15,349,694 32,180,003 11,010,920 34.2% Debt Service Funds 4,010,854 3,673,267 209,597 5.7% Total 306,780,766$ 477,913,527$ 174,260,200$ 36.5% Mid-Year Financial Summary FY 2024/25 3
GENERAL FUND OPERATING
Table 2. General Fund Operations
FY 2024/25
Adopted Budget
FY 2024/25
Amended Budget
Actuals as of
12/31/24
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 22,136,000 $ 22,136,000 $ 8,596,050 38.8% Property Tax in-lieu 28,100,000 30,177,972 - 0.0% Utility Users Tax 18,000,000 18,000,000 11,059,116 61.4% Sales Tax 37,750,000 37,750,000 10,432,163 27.6% Other Taxes 20,000,000 20,000,000 5,295,070 26.5% Licenses & Permits 5,639,454 5,639,454 3,674,104 65.1% Intergovernmental 615,803 759,526 636,082 83.7% Charges for Services 14,529,973 14,562,973 8,211,682 56.4% Use of Money & Property 4,725,100 4,725,100 6,941,038 146.9% Fines & Forfeitures 532,500 499,500 107,563 21.5% Miscellaneous 221,500 346,500 102,476 29.6% Total Revenues $ 152,250,330 $ 154,597,025 $ 55,055,344 35.6% Expenditures:
Personnel Services $ 30,985,300 $ 31,386,794 18,640,029$ 59. 4% Contractual Services 108,073,742 110,155,111 51,581,024 46. 8% Material & Supplies 4,414,612 6,510,651 1,789,899 27. 5% Fixed Charges - - 5,072 0. 0% Fixed Charges 6,151,248 6,151,248 3,005,826 48. 9% Fixed Assets - 862,666 - 0. 0% Total Expenditures $ 149,624,902 $ 155,066,470 $ 75,021,850 48.4% Excess (Deficiency) of Revenues
Over (Under) Expenditures $ 2,625,428 $ (469,445) $ (19,966,506) Transfers:
Transfers In $ 2,940,159 $ 5,880,514 $ 50,000 0.9% Transfers Out 5,560,911 5,406,393 3,535,328 65.4% Net Transfers $ (2,620,752) $ 474,121 $ (3,485,328) Total Revenues & Transfers In $ 155,190,489 $ 160,477,539 $ 55,105,344 34.3% Total Expenditures & Transfers Out 155,185,813 160,472,863 78,557,178 49.0% Net Change of Fund Balance $ 4,676 $ 4,676 $ (23,451,834) Mid-Year Financial Summary FY 2024/25 4
Fund Operating Revenues
The General Fund is comprised of several revenue types. However, the main sources include property tax, sales tax, and utility user’s tax. Each of these is affected by different economic activity cycles and pressures. Miscellaneous revenue consists of claims, donations, business license report fees, business fees for events, etc.
Table 3. General Fund Operating Revenues
Property Taxes/Property Taxes In-Lieu
Property taxes were budgeted to increase by 6.8% from the FY 2023/24 Amended Budget. The annual schedule of property tax payments from the County of Riverside will provide payments to the City based on the following estimated schedule:
Secured Property Tax Payment Dates
Settlement 1 January
Settlement 2 May
Settlement 3 August
Teeter Settlement October
Based on historical averages of actual receipts, the City is estimated to receive less than 14% of the budgeted property tax revenue through the Mid-Year. The City has currently received 16 % through the Mid-Year. Property taxes will continue to be monitored as property valuations may adjust through the year based on property sales and assessment appeals filed with the County.
FY 2024/25
Adopted Budget
FY 2024/25
Amended Budget
Actuals as of
12/31/24
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 22,136,000 $ 22,136,000 $ 8,596,050 38.8% Property Tax in-lieu 28,100,000 30,177,972 - 0.0% Utility Users Tax 18,000,000 18,000,000 11,059,116 61.4% Sales Tax 37,750,000 37,750,000 10,432,163 27.6% Other Taxes 20,000,000 20,000,000 5,295,070 26.5% Licenses & Permits 5,639,454 5,639,454 3,674,104 65.1% Intergovernmental 615,803 759,526 636,082 83.7% Charges for Services 14,529,973 14,562,973 8,211,682 56.4% Use of Money & Property 4,725,100 4,725,100 6,941,038 146.9% Fines & Forfeitures 532,500 499,500 107,563 21.5% Miscellaneous 221,500 346,500 102,476 29.6% Total Revenues $ 152,250,330 $ 154,597,025 $ 55,055,344 35.6% Mid-Year Financial Summary FY 2024/25 5
Sales Taxes
Sales taxes were budgeted to increase by less than 1% as compared to the FY 2023/24 Amended Budget. Sales tax receipt trends will need to be continually monitored throughout the year for possible future budget adjustments.
Historical averages were at 37% budgeted sales tax revenue through Mid -Year of actual receipts. The City has currently received 28% through Mid-Year.
Mid-Year Financial Summary FY 2024/25 6
Utility Users Tax Utility
Utility Users Tax was budgeted to increase by 3% as compared to FY 2023/24 Amended Budget.
This projection is primarily due to competitive forces within the communications markets.
Based on historical averages of actual receipts, the City is estimated to receive 48% of the budgeted utility users tax revenue through the Mid-Year. The City has currently received 61% through the Mid-Year.
Other Taxes
Other taxes are primarily composed of Business Gross Receipts, Transient Occupancy Tax, Documentary Transfer Tax, and Franchise Fees. Collectively, other taxes were budgeted to increase 1.5% from the FY 2023/24 Amended Budget.
Based on historical averages of actual receipts, the City is expected to receive 32% of the budgeted Other Taxes revenue through Mid-Year. The City has currently received 26% through the Mid-Year.
Mid-Year Financial Summary FY 2024/25 7
Licenses & Permits
Licenses & Permits are primarily composed of Business Permits, to include Cannabis Business Permits, as well as Animal Licenses, Building, Electrical, Mechanical, Plumbing and other permits.
Collectively, Licenses & Permits were conservatively budgeted to remain the same as compared to the FY 2023/24 Amended Budget.
Based on historical averages of actual receipts, the City is expected to receive 49% of the budgeted Licenses & Permits revenue through the Mid-Year. The City has currently received 65% through the Mid-Year. The collection rate is related primarily to building and business license permit activities.
Chart 5. General Fund Mid-Year Revenue Trend - Licenses & Permits Mid-Year Financial Summary FY 2024/25 8
Charges for Services
Charges for Services are primarily composed of Plan Check Fees, Inspection Fees, Administrative Charges to other funds, and Parking Control Fines. Collectively, Charges for Services were conservatively budgeted to decrease by 1 % as compared to the FY 2023/24 Amended Budget.
Based on historical averages of actual receipts, the City is expected to receive 53% of the budgeted Charges for Services revenue through Mid-Year. The City has currently received 56% through the Mid-Year.
Use of Money and Property
Investment income continues to remain low due to extremely low rates of return for fixed income investments but have increased over the last year due to actions taken by the Federal Open Market Committee (FOMC). The investments achieved a Yield to Maturity (YTM) for December 2024 of 4.639%. In addition, the City maintained funds in the State Local Agency Investment Fund Pool (LAIF) with a YTM of 4.434%. LAIF is realizing considerable investment gains based on the increases to the Federal Funds target rate increase. FOMC is expected to keep current rates through 2024 with no reductions until 2025. The FOMC target rate is currently 4.25% to 4.50%.* Staff will continue to monitor closely to ensure we maximize our investment income going forward.
*Federal Reserve Board - Federal Reserve issues FOMC statement Chart 6. General Fund Mid-Year Revenue Trend – Charges for Services Mid-Year Financial Summary FY 2024/25 9
General Fund Expenditures
Expenditures are being spent in -line with prior year expenditures. Each Department’s activities will be monitored throughout the year as they may be impacted by different operational activities and project timelines.
Table 4. General Fund Expenditures
OTHER KEY FUNDS
The following summaries describe other major funds in the City.
Moreno Valley Community Services District
The Moreno Valley Community Services District (CSD) was formed by the voters in 1984 to collect fees and certain taxes to provide an array of services including parks, recreation and community services, streetlights, landscaping and ongoing maintenance. The CSD provides these services through separate “zones” that define the services that are provided.
For certain zones, the primary revenue source used to provide services to properties is parcel fees or taxes levied on properties via their annual tax bill. Proposition 218, passed by California voters in November 1996, and has posed a serious challenge to managing the future operation of the CSD zones. Prop. 218 requires any revenue increase to be addressed through a voting process by affected property owners. For the period following the initial implementation of Prop. 218, the CSD was successful in receiving approval for some new or increased revenues. There were also revenue increases due to the growth of developed parcels within the zones.
FY 2024/25
Adopted Budget
FY 2024/25
Amended Budget
Actuals as of
12/31/24
(unaudited)
% of Amended
Budget
Department
City Council $ 1,164,811 $ 1,078,419 $ 540,749 50.1% City Clerk 769,143 1,346,055 350,485 26.0% City Manager 2,591,807 2,992,343 2,227,004 74.4% City Attorney 1,094,769 1,094,769 955,008 87.2% Community Development 15,484,210 16,129,210 7,217,931 44.8% Economic Development 2,589,931 2,589,931 1,239,052 47.8% Financial & Management Services 15,877,282 16,000,749 6,778,010 42.4% Human Resources 1,886,331 2,288,331 1,232,247 53.8% Public Works 16,114,873 19,524,058 6,600,243 33.8% Non-Departmental 2,494,961 2,340,443 6,341,602 271.0% Non-Public Safety Subtotal $ 60,068,118 $ 65,384,308 $ 33,482,332 51.2% Public Safety
Police $ 64,732,911 $ 64,826,280 $ 23,833,062 36.8% Fire 30,384,784 30,262,275 21,241,785 70.2% Public Safety Subtotal $ 95,117,695 $ 95,088,555 $ 45,074,846 47.4% Total $ 155,185,813 $ 160,472,863 $ 78,557,178 Mid-Year Financial Summary FY 2024/25 10
Table 5. CSD Operations
FY 2024/25
Adopted Budget
FY 2024/25
Amended Budget
Actuals as of
12/31/24
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 6,045,278 $ 6,045,278 $ 2,341,551 38.7% Other Taxes 7,328,090 7,738,149 69,347 0.9% Intergovernmental - - 48,109 0.0% Charges for Services 6,351,095 6,535,941 813,640 12.4% Use of Money & Property 1,164,220 1,164,220 608,444 52.3% Fines & Forfeitures 24,897 24,897 2,328 9.4% Miscellaneous 14,500 1,200 1,712 142.7% Transfers In 1,480,120 1,515,881 810,157 53.4% Total Revenues $ 22,408,200 $ 23,025,566 $ 4,695,288 20.4% Expenditures:
Library Services Fund (5010) $ 3,283,990 $ 3,283,990 $ 1,695,606 51.6% Zone A Parks Fund (5011) 12,778,268 15,200,375 8,315,766 54.7% LMD 2014-01 Residential Street Lighting Fund (5012) 1,498,648 1,498,648 667,423 44.5% Zone C Arterial Street Lighting Fund (5110) 831,808 831,808 404,578 48.6% Zone D Standard Landscaping Fund (5111) 1,739,192 1,739,192 566,947 32.6% Zone E Extensive Landscaping Fund (5013) 395,267 400,490 122,267 30.5% 5014 LMD 2014-02 (5014) 3,191,825 3,191,825 1,344,860 42.1% 5016 CFD 2021-01 Parks Fac Maint (5016) 145,900 525,500 91,929 17.5% Zone M Median Fund (5112) 406,213 406,213 125,290 30.8% CFD No. 1 (5113) 1,776,816 3,329,051 1,815,840 54.5% Zone S Financial & Management Svcs (5114) 81,583 81,583 22,814 28.0% Total Expenditures $ 26,129,510 $ 30,488,675 $ 15,173,320 49.8% Net Change or
Adopted Use of Fund Balance (3,721,310)$ (7,463,109)$ (10,478,032)$ Mid-Year Financial Summary FY 2024/25 11
Community Services District Zone A – Parks & Community Services The largest Zone within the CSD is Zone A. It accounts for the administration and maintenance of the Parks & Community Services facilities and programs. Funding sources for these services come from a combination of property taxes, fees for service, and smaller amounts from other City funds.
Table 6. CSD Zone A Operations
FY 2024/25
Adopted Budget
FY 2024/25
Amended Budget
Actuals as of
12/31/24
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 2,979,205 $ 2,979,205 $ 1,217,772 40.9% Other Taxes 5,024,390 5,282,900 63,691 1.2% Charges for Services 1,139,842 1,153,142 712,088 61.8% Use of Money & Property 1,131,074 1,131,074 538,702 47.6% Miscellaneous 14,500 1,200 (3,484) -290.3% Total Revenues $ 10,289,011 $ 10,547,521 $ 2,528,769 24.0% Expenditures:
35010 Parks & Comm Svcs - Admin $ 1,075,031 $ 1,075,031 $ 501,291 46.6% 35210 Park Maintenance - General 5,254,257 5,604,257 2,639,404 47.1% 35211 Contract Park Maintenance 517,617 664,617 267,983 40.3% 35213 Golf Course Program 699,017 699,017 281,954 40.3% 35214 Parks Projects 297,834 297,834 121,290 40.7% 35310 Senior Program 777,867 777,867 412,747 53.1% 35311 Community Services 17,434 - - 0.0% 35312 Community Events 831,499 831,499 572,283 68.8% 35313 Conf & Rec Cntr 616,992 634,426 326,802 51.5% 35314 Conf & Rec Cntr - Banquet 271,278 271,278 170,311 62.8% 35315 Recreation Programs 1,538,063 1,538,063 737,640 48.0% 35318 Sports Programs 779,517 779,517 377,025 48.4% 35319 Towngate Community Center 59,262 59,262 32,793 55.3% 35320 Amphitheater 29,100.00 29,100 - 0.0% 35321 March Annex 13,500.00 13,500 2,591 19.2% 35324 Aquatics Programs - 70,000 27,298 39.0% 80003 CIP - Buildings - 70,930 - 0.0% 95011 Non-Dept Zone A Parks - 1,784,177 1,844,355 103.4% Total Expenditures $ 12,778,268 $ 15,200,375 $ 8,315,766 54.7% Net Change or
Adopted Use of Fund Balance (2,489,257)$ (4,652,854)$ (5,786,997)$ Mid-Year Financial Summary FY 2024/25 12
Electric Utility
The Moreno Valley Utility (MVU) manages the operation, maintenance, and business planning of the City’s electric utility. MVU’s basic purpose is to purchase and distribute electricity to customers in newly developed areas of the City. The City began serving new customers in February 2004, and now serves 8, 937 customers. As it reaches fiscal and operational maturity, MVU will continue to be a key component of the City’s economic development strategy. The City Council has established special tiered rates for electric utility customers based upon factors such as the number of jobs created.
The main revenue source for this fund is derived from charges for services. The customer base includes residential, commercial, and industrial customers. The growth in the customer base will continue to provide for the ability to create rate stabilization and replacement reserve funding.
Table 7. MVU Operations
*MVU’s revenues and expenses will fluctuate annually based on energy demand.
FY 2024/25
Adopted Budget
FY 2024/25
Amended Budget
Actuals as of
12/31/24
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Charges for Services $ 49,374,318 $ 53,874,318 $ 38,617,037 71.7% Use of Money & Property 338,500 2,338,500 1,379,020 59.0% Miscellaneous 160,000 160,000 237,184 148.2% Total Revenues $ 49,872,818 $ 56,372,818 $ 40,233,242 71.4% Expenditures:
45510 Electric Utility - General $ 33,863,657 $ 40,665,765 $ 17,170,540 42.2% 45511 Public Purpose Program 2,111,781 2,511,781 1,237,473 49.3% 45512 SCE Served Street Lights 861,312 861,312 457,113 53.1% 80005 CIP - Electric Utility 4,680,000 35,858,006 3,653,153 10.2% 96010 Non-Dept Electric - - 27,431 0.0% 96030 Non-Dept 2005 Lease Revenue Bonds 3,688,898 3,688,898 1,508,345 40.9% 96012 Non-Dept Electric-Public Purpose - - 5,055 0.0% 96032 Non-Dept 2014 Refunding 2005 LRB 107,784 107,784 (18,546) -17.2% 96041 Non-Dept 2021 LRB Refinance 618,516 618,516 209,872 33.9% 96051 Non-Dept 2021 Streetlight Refin. 201,618 201,618 338,864 168.1% 96060 Non-Dept 2019 Taxable LRB 636,625 636,625 211,917 33.3% Total Expenditures $ 46,770,191 $ 85,150,305 $ 24,801,217 29.1% Net Change or
Adopted Use of Fund Balance $ 3,102,627 $ (28,777,487) $ 15,432,025 Mid-Year Financial Summary FY 2024/25 13
SUMMARY
The City of Moreno Valley has experienced certain levels of growth and continued to maintain a structurally balanced Budget without the use of reserves.
The economic climate is ever changing and for these reasons the City must remain optimistically cautious and only increase revenues when they are received. Staff will continue to monitor and request quarterly revenue adjustments based on this approach. These revenue adjustments will be offset by replenishing our expenditure levels accordingly.