1 City of Moreno Valley
Fiscal Year 2024/25
Third Quarter Operating Budget Review
TO:
FROM:
DATE:
Mayor and City Council
Dena Heald, Chief Financial Officer/City Treasurer
June 17, 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 apprised 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 Third Quarter of FY 2024/25 (July 2024 – March 2025, 75% of the fiscal year).
Third Quarter 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 Third Quarter. The totals represent each major fund type and component unit of the City.
Table 1. Citywide Operating Expenditures
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 Third Quarter 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 3/31/25 (unaudited) % of Amended BudgetFund/Component Unit General Fund $ 155,185,813 $ 161,144,480 $ 112,482,820 69.8%Community Services District (CSD) 26,129,510 30,546,623 22,098,724 72.3%Successor Agency 2,400,666 2,250,666 1,982,901 88.1%Housing Fund - 250,000 128,378 51.4%Special Revenue Funds 39,586,038 77,485,482 36,862,615 47.6%Capital Projects Funds 17,348,000 91,174,022 26,040,302 28.6%Electric Utility Funds 46,770,191 85,400,364 34,551,725 40.5%Internal Service Funds 15,349,694 32,797,136 13,741,214 41.9%Debt Service Funds 4,010,854 3,651,284 2,220,994 60.8%Total 306,780,766$ 484,700,057$ 250,109,672$ 51.6% Third Quarter Financial Summary FY 2024/25 3
GENERAL FUND OPERATING
Table 2. General Fund Operations
FY 2024/25 A dopted Budget FY 2024/25 Amended Budget Actuals as of 03/31/25 (unaudited) % of A mended BudgetRevenues:Taxes:Property Tax $ 22,136,000 $ 22,136,000 $ 15,266,546 69.0%Property Tax in-lieu 28,100,000 30,201,630 14,771,647 48.9%Utility Users Tax 18,000,000 18,000,000 15,529,479 86.3%Sales Tax 37,750,000 37,750,000 19,787,324 52.4%Other Taxes 20,000,000 20,000,000 11,758,574 58.8%Licenses & Permits 5,639,454 5,639,454 5,256,171 93.2%Intergovernmental 615,803 759,526 793,191 104.4%Charges for Services 14,529,973 14,562,973 11,839,231 81.3%Use of Money & Property 4,725,100 4,725,100 8,807,807 186.4%Fines & Forfeitures 532,500 499,500 218,404 43.7%Miscellaneous 221,500 346,500 158,731 45.8%Total Revenues $ 152,250,330 $ 154,620,683 $ 104,187,105 67.4%Expenditures:Personnel Services $ 30,985,300 $ 31,386,794 27,062,233$ 86.2%Contractual Services 108,073,742 110,129,11174,121,773 67.3%Material & Supplies4,414,612 6,510,6512,365,778 36.3%General Government - - - -Debt Service - - - -Miscllaneous - - 5,072 -Fixed Charges6,151,248 6,151,2484,550,346 74.0%Fixed Assets - 862,666 - 0.0%Total Expenditures $ 149,624,902 $ 155,040,470 $ 108,105,203 69.7%Excess (Deficiency) of RevenuesOver (Under) Expenditures $ 2,625,428 $ (419,787) $ (3,918,098)Transfers:Transfers In $ 2,940,159 $ 5,880,514 $ 68,782 1.2%Transfers Out5,560,911 6,104,010 4,377,617 71.7%Net Transfers $ (2,620,752) $ (223,496) $ (4,308,835)Total Revenues & Transfers In $ 155,190,489 $ 160,501,197 $ 104,255,887 65.0%Total Expenditures & Transfers Out155,185,813 161,144,480 112,482,820 69.8%Net Change of Fund Balance $ 4,676 $ (643,283) $ (8,226,932) Third Quarter 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 55% of the budgeted property tax revenue through the Third Quarter. The City has currently received 57% through the Third Quarter. 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 A dopted Budget FY 2024/25 Amended Budget Actuals as of 03/31/25 (unaudited) % of A mended BudgetRevenues:Taxes:Property Tax $ 22,136,000 $ 22,136,000 $ 15,266,546 69.0%Property Tax in-lieu 28,100,000 30,201,630 14,771,647 48.9%Utility Users Tax 18,000,000 18,000,000 15,529,479 86.3%Sales Tax 37,750,000 37,750,000 19,787,324 52.4%Other Taxes 20,000,000 20,000,000 11,758,574 58.8%Licenses & Permits 5,639,454 5,639,454 5,256,171 93.2%Intergovernmental 615,803 759,526 793,191 104.4%Charges for Services 14,529,973 14,562,973 11,839,231 81.3%Use of Money & Property 4,725,100 4,725,100 8,807,807 186.4%Fines & Forfeitures 532,500 499,500 218,404 43.7%Miscellaneous 221,500 346,500 158,731 45.8%Total Revenues $ 152,250,330 $ 154,620,683 $ 104,187,105 67.4% Third Quarter 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 66% of budgeted sales tax revenue through the Third Quarter of actual receipts. The City has received 52% through the Third Quarter.
Third Quarter 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 74% of the budgeted utility users tax revenue through the Third Quarter. The City has currently received 86% through the Third Quarter.
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 70% of the budgeted Other Taxes revenue through Third Quarter. The City has currently received 59% through the Third Quarter.
Third Quarter 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 increase by less than 1% as compared to the FY 2023/24 Amended Budget.
Based on historical averages of actual receipts, the City is expected to receive 80% of the budgeted Licenses & Permits revenue through the Third Quarter. The City has currently received 93% throughout the Third Quarter. The collection rate is related primarily to building and business license permit activities.
Chart 5. General Fund Third Quarter Revenue Trend - Licenses & Permits Third Quarter 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 80% of the budgeted Charges for Services revenue through the Third Quarter. The City has currently received 81% through the Third Quarter.
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 March 2025 of 4.395%. In addition, the City maintained funds in the State Local Agency Investment Fund Pool (LAIF) with a YTM of 4.313%. 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 Third Quarter Revenue Trend – Charges for Third Quarter 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 03/31/25 (unaudited) % of A mended BudgetDepartmentCity Council $ 1,164,811 $ 1,052,419 $ 839,465 79.8%City Clerk769,143 1,346,055 517,486 38.4%City Manager 2,591,807 2,992,343 3,159,037 105.6%City Attorney1,094,769 1,094,769 1,484,690 135.6%Community Development15,484,210 16,129,210 11,211,859 69.5%Economic Development2,589,931 2,589,931 1,718,505 66.4%Financial & Management Services 15,877,282 16,000,749 10,216,293 63.8%Human Resources1,886,331 2,288,331 1,738,768 76.0%Public Works16,114,873 19,524,058 9,385,268 48.1%Non-Departmental2,494,961 3,038,060 7,759,754 255.4%Non-Public Safety Subtotal $ 60,068,118 $ 66,055,925 $ 48,031,124 72.7%Public SafetyPolice $ 64,732,911 $ 64,826,280 $ 35,908,380 55.4%Fire30,384,784 30,262,275 28,543,316 94.3%Public Safety Subtotal $ 95,117,695 $ 95,088,555 $ 64,451,696 67.8%Total $ 155,185,813 $ 161,144,480 $ 112,482,820 Third Quarter Financial Summary FY 2024/25 10
Table 5. CSD Operations
FY 2024/25 Adopted Budget FY 2024/25 Amended Budget Actuals as of 03/31/25 (unaudited) % of Amended BudgetRevenues:Taxes:Property Tax $ 6,045,278 $ 6,045,278 $ 4,652,607 77.0%Other Taxes 7,328,090 7,738,149 4,300,715 55.6%Intergovernmental - - 49,931 0.0%Charges for Services6,351,095 6,535,941 3,881,345 59.4%Use of Money & Property1,164,220 1,164,220 1,070,939 92.0%Fines & Forfeitures24,897 24,897 3,388 13.6%Miscellaneous14,500 1,200 12,813 1067.8%Transfers In1,480,120 1,515,881 1,088,280 71.8%Total Revenues $ 22,408,200 $ 23,025,566 $ 15,060,018 65.4%Expenditures:Library Services Fund (5010) $ 3,283,990 $ 3,283,990 $ 2,542,958 77.4%Zone A Parks Fund (5011)12,778,268 15,143,823 11,502,350 76.0%LMD 2014-01 Residential Street Lighting Fund (5012)1,498,6481,498,648 1,074,722 71.7%Zone C Arterial Street Lighting Fund (5110)831,808 831,808 636,024 76.5%Zone D Standard Landscaping Fund (5111)1,739,192 1,739,192 874,975 50.3%Zone E Extensive Landscaping Fund (5013)395,267 400,490 297,819 74.4%5014 LMD 2014-023,191,825 3,316,825 2,021,518 60.9%5016 CFD 2021-01 Parks Fac Maint 145,900 525,500 292,227 55.6%Zone M Median Fund (5112)406,213 406,213 175,549 43.2%CFD No. 1 (5113)1,776,816 3,318,551 2,632,525 79.3%Zone S Financial & Management Svcs (5114) 81,583 81,583 48,057 58.9%Total Expenditures $ 26,129,510 $ 30,546,623 $ 22,098,724 72.3%Net Change orAdopted Use of Fund Balance (3,721,310)$ (7,521,057)$ (7,038,706)$ Third Quarter 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 A dopted Budget FY 2024/25 Amended Budget Actuals as of 03/31/25 (unaudited) % of A mended BudgetRevenues:Taxes:Property Tax $ 2,979,205 $ 2,979,205 $ 2,417,325 81.1%Other Taxes 5,024,390 5,282,900 2,842,313 53.8%Charges for Services 1,139,842 1,153,142 1,010,298 87.6%Use of Money & Property 1,131,074 1,131,074 703,001 62.2%Miscellaneous 14,500 1,200 6,175 514.6%Total Revenues $ 10,289,011 $ 10,547,521 $ 6,979,112 66.2%Expenditures:35010 Parks & Comm Svcs - Admin $ 1,075,031 $ 1,075,031 $ 784,315 73.0%35210 Park Maintenance - General5,254,257 5,606,057 3,888,951 69.4%35211 Contract Park Maintenance517,617 664,617 422,655 63.6%35213 Golf Course Program699,017 699,017 415,823 59.5%35214 Parks Projects297,834 302,834 184,402 60.9%35310 Senior Program777,867 777,867 614,058 78.9%35311 Community Services17,434 - - 0.0%35312 Community Events831,499 839,077 852,433 101.6%35313 Conf & Rec Cntr616,992 634,426 467,042 73.6%35314 Conf & Rec Cntr - Banquet271,278 271,278 283,442 104.5%35315 Recreation Programs1,538,063 1,538,063 1,068,598 69.5%35318 Sports Programs779,517 779,517 592,792 76.0%35319 Towngate Community Center59,262 59,262 40,896 69.0%35320 Amphitheater 29,100.00 29,100 10,600 36.4%35321 March Annex 13,500.00 13,500 2,824 20.9%35324 Aquatics Programs - 70,000 27,298 39.0%95011 Non-Dept Zone A Parks - 1,784,177 1,846,222 103.5%Total Expenditures $ 12,778,268 $ 15,143,823 $ 11,502,350 76.0%Net Change orA dopted Use of Fund Balance (2,489,257)$ (4,596,302)$ (4,523,238)$ Third Quarter 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 9,070 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 source of revenue 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 A mended Budget Actuals as of 03/31/25 (unaudited) % of Amended BudgetRevenues:Taxes:Charges for Services $ 49,374,318 $ 53,874,318 51,398,351 95.4%Use of Money & Property338,500 2,338,500 2,799,713 119.7%Miscellaneous160,000 160,000 295,342 184.6%Total Revenues $ 49,872,818 $ 56,372,818 $ 54,493,405 96.7%Expenditures:45510 Electric Utility - General $ 33,863,657 $ 40,665,765 $ 25,784,793 63.4%45511 Public Purpose Program2,111,781 2,511,781 1,653,293 65.8%45512 SCE Served Street Lights861,312 861,312 662,646 76.9%80005 CIP - Electric Utility 4,680,000 36,108,065 4,161,712 11.5%96010 Non-Dept Electric - - 32,071 0.0%96030 Non-Dept 2005 Lease Revenue Bonds3,688,8983,688,898 1,508,345 40.9%96032 Non-Dept 2014 Refunding 2005 LRB107,784 107,784 (18,493) -17.2%96041 Non-Dept 2021 LRB Refinance 618,516 618,516 210,272 34.0%96051 Non-Dept 2021 Streetlight Refin. 201,618 201,618 339,064 168.2%96060 Non-Dept 2019 Taxable LRB 636,625 636,625 212,967 33.5%Total Expenditures $ 46,770,191 $ 85,400,364 $ 34,551,725 40.5%Net Change orA dopted Use of Fund Balance $ 3,102,627 $ (29,027,546) $ 19,941,680 Third Quarter 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.