1 City of Moreno Valley
Fiscal Year 2025/26
Mid-Year Operating Budget Review
TO: Mayor and City Council
FROM: Felicia London, Chief Financial Officer/City Treasurer DATE: February 17, 2026
INTRODUCTION
On May 6, 2025, the City Council adopted the Two-Year Operating Budget for Fiscal Years (FY) 2025/26 – 2026/27. 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 Mid-Year of FY 2025/26 (July 2025 – December 2025, 50% of the fiscal year).
Mid-Year Financial Summary FY 2025/26 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
Actions taken by the City Council after the May 6, 2025 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 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
12/31/25
(unaudited)
% of Amended
Budget
Fund/Component Unit
General Fund $ 178,370,713 $ 167,811,446 $ 79,467,002 47.4% Measure U 25,796,078 25,796,078 731,474 2.8% Community Services District (CSD) 29,269,773 29,578,052 13,098,158 44.3% Successor Agency 3,586,544 2,191,544 1,125,643 51.4% Housing Fund 266,750 1,176,750 191,741 16.3% Special Revenue Funds 48,094,713 96,473,043 38,959,184 40.4% Capital Projects Funds 13,831,000 87,402,420 14,036,133 16.1% Electric Utility Funds 87,933,297 120,523,402 30,072,583 25.0% Internal Service Funds 27,299,221 31,424,951 20,044,790 63.8% Debt Service Funds 3,549,303 3,549,303 1,932,939 54.5% Total 417,997,392 $ 565,926,989 $ 199,659,648 $ 35.3% Mid-Year Financial Summary FY 2025/26 3
GENERAL FUND OPERATING
Table 2. General Fund Operations
FY 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
12/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 36,000,000 $ 22,500,000 $ 8,294,805 36.9% Property Tax in-lieu 34,321,793 36,851,939 - 0.0% Utility Users Tax 20,000,000 20,000,000 9,986,736 49.9% Sales Tax 60,546,078 60,546,078 21,912,750 36.2% Other Taxes 22,000,000 22,000,000 6,049,876 27.5% Licenses & Permits 6,552,550 6,552,550 2,585,123 39.5% Intergovernmental 390,000 390,000 827,797 212.3% Charges for Services 15,699,054 15,699,054 8,070,964 51.4% Use of Money & Property 7,533,000 7,533,000 5,755,344 76.4% Fines & Forfeitures 544,500 544,500 127,741 23.5% Miscellaneous 168,000 168,000 444,695 264.7% Total Revenues $ 203,754,975 $ 192,785,121 $ 64,055,831 33.2% Expenditures:
Personnel Services $ 38,648,804 $ 39,261,109 20,022,646$ 51.0% Contractual Services 148,064,761 134,827,394 51,488,285 38.2% Material & Supplies 7,183,533 7,612,658 1,106,409 14.5% General Government - - - - Debt Service - - - - Micellaneous - - 20 - Fixed Charges 5,447,166 5,447,166 2,565,111 47.1% Fixed Assets 400,000 - - - Total Expenditures $ 199,744,264 $ 187,148,327 $ 75,182,471 40.2% Excess (Deficiency) of Revenues
Over (Under) Expenditures $ 4,010,711 $ 5,636,794 $ (11,126,640) Transfers:
Transfers In $ 418,816 $ 829,403 $ 325,959 39.3% Transfers Out 4,422,527 6,459,197 5,016,006 77.7% Net Transfers $ (4,003,711) $ (5,629,794) $ (4,690,047) Total Revenues & Transfers In $ 204,173,791 $ 193,614,524 $ 64,381,790 33.3% Total Expenditures & Transfers Out 204,166,791 193,607,524 80,198,477 41.4% Net Change of Fund Balance $ 7,000 $ 7,000 $ (15,816,687) Mid-Year Financial Summary FY 2025/26 4
Fund Operating Revenues
The General Fund is comprised of several reve nue 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
FY 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
12/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 36,000,000 $ 22,500,000 $ 8,294,805 36.9% Property Tax in-lieu 34,321,793 36,851,939 - 0.0% Utility Users Tax 20,000,000 20,000,000 9,986,736 49.9% Sales Tax 60,546,078 60,546,078 21,912,750 36.2% Other Taxes 22,000,000 22,000,000 6,049,876 27.5% Licenses & Permits 6,552,550 6,552,550 2,585,123 39.5% Intergovernmental 390,000 390,000 827,797 212.3% Charges for Services 15,699,054 15,699,054 8,070,964 51.4% Use of Money & Property 7,533,000 7,533,000 5,755,344 76.4% Fines & Forfeitures 544,500 544,500 127,741 23.5% Miscellaneous 168,000 168,000 444,695 264.7% Total Revenues $ 203,754,975 $ 192,785,121 $ 64,055,831 33.2% Mid-Year Financial Summary FY 2025/26 5
Property Taxes/Property Taxes In-Lieu
Property taxes were budgeted to increase by 11% from the FY 2024/25 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 M id-Year. The City has currently received 14% through the Mid-Year. Property taxes will contin ue to be monitored as property valuations may adjust throughout the year based on property sales and assessment appeals filed with the County.
Mid-Year Financial Summary FY 2025/26 6
Sales Taxes
Sales taxes were budgeted to increase by 60% as compared to the FY 2024/25 Amended Budget due to implementing Measure U. On November 5, 2024, residents of Moreno Valley passed Measure U - Moreno Valley Essential Services Reauthorization Measure. Priorities for this funding source is to maintain critical Moreno Valley services, including 911 response times, robbery/burglary prevention, neighborhood police patrols/fire service levels; address homelessness; repair streets/potholes; keep public areas safe/clean; help retain businesses; and for general government use. Sales tax receipt trends will need to be continually monitored throughout the year for possible future budget adjustments.
Historical averages were at 36% budgeted sales tax revenue through Mid-Year of actual receipts. The City has currently received 36% through Mid-Year.
Note: For FY 2017/18, the reversal of revenues accrued to the prior fiscal year in accordance with the Government Accounting Standards Board (GASB) did not occur until the second quarter.
Mid-Year Financial Summary FY 2025/26 7
Utility Users Tax Utility
Utility Users Tax were budgeted to increase by 11% as compared to FY 2024/25 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 50% of the budgeted utility users tax revenue through the Mid-Year. The City has currently received 50% through the Mid-Year.
Mid-Year Financial Summary FY 2025/26 8
Other Taxes
Other taxes are primarily composed of Bus iness Gross Receipts, Transient Occupancy Tax, Documentary Transfer Tax, and Franchise Fees. Collectively, other taxes were budgeted to increase 10% Transient Occupancy and Franchise Fees from the FY 2024/25 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 27% through the Mid-Year.
Mid-Year Financial Summary FY 2025/26 9
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 16% as compared to the FY 2024/25 Amended Budget.
Based on historical averages of actual receipts, the City is expected to receive 50% of the budgeted Licenses & Permits revenue through the Mid-Year. The City has received 39% 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 2025/26 10
Charges for Services
Charges for services are primarily compos ed of Plan Check Fees, Inspection Fees, Administrative Charges to other funds, and Pa rking Control Fines. Collectively, Charges for Services were conservatively budgeted to increase by 8 % as compared to the FY 2024/25 Amended Budget.
Based on historical averages of actual receipts, the City is expected to receive 54% of the budgeted Charges for Services revenue through Mid-Year. The City has currently received 51% through the Mid-Year.
Use of Money and Property
Investment income modestly improved during t he period as interest rate conditions continued to evolve. The City’s investment portfolio achieved a Yield to Maturity (YTM) of 3.877% as of December 2025, while funds invested in the State Local Agency Investment Fund (LAIF) earned a YTM of 4.025%. At its December 2025 meeting, the Federal Open Market Committee (FOMC) lowered the federal funds target range to 3.50%–3.75% following its third 25-basis-point rate cut of the year, contributing to a modest steepening of the yield curve. Staff will continue to monitor market conditions to maximize investment income while maintaining a prudent risk profile.
*Federal Reserve Board - Federal Reserve issues Federal Open Market Committee (FOMC) statement (12/10/2025)
Chart 6. General Fund Mid-Year Revenue Trend – Charges for Services Mid-Year Financial Summary FY 2025/26 11
General Fund Expenditures
Expenditures are being spent in-line with prior y ear 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 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
12/31/25
(unaudited)
% of Amended
Budget
Department
City Council $ 1,154,214 $ 1,161,642 $ 493,290 42.5% City Clerk 1,415,128 1,415,128 426,315 30.1% City Manager 14,679,197 15,244,842 7,039,862 46.2% City Attorney 2,083,694 2,083,694 735,280 35.3% Community Development 17,810,499 17,882,499 7,762,119 43.4% Economic Development 3,491,219 3,318,047 983,985 29.7% Financial & Management Services 9,784,806 10,147,821 3,825,016 37.7% Human Resources 4,160,174 4,160,174 1,319,321 31.7% Public Works 19,335,879 19,222,051 6,429,696 33.4% Non-Departmental 2,044,289 4,080,959 6,338,757 155.3% Non-Public Safety Subtotal $ 75,959,099 $ 78,716,857 $ 35,353,641 44.9% Public Safety
Police $ 86,874,769 $ 77,607,744 $ 28,965,367 37.3% Fire 41,332,923 37,282,923 15,879,469 42.6% Public Safety Subtotal $ 128,207,692 $ 114,890,667 $ 44,844,836 39.0% Total $ 204,166,791 $ 193,607,524 $ 80,198,477 Mid-Year Financial Summary FY 2025/26 12
Table 5. CSD Operations
FY 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
12/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 6,694,252 $ 6,694,252 $ 2,500,519 37.4% Other Taxes 7,427,900 8,021,976 87,618 1.1% Intergovernmental - - 36,410 0.0% Charges for Services 4,167,834 4,199,984 767,136 18.3% Use of Money & Property 1,292,001 1,292,001 625,008 48.4% Fines & Forfeitures 3,500 3,500 2,091 59.7% Miscellaneous 16,180 16,180 7,033 43.5% Transfers In 2,068,733 2,070,516 1,050,103 50.7% Total Revenues $ 21,670,400 $ 22,298,409 $ 5,075,918 22.8% Expenditures:
Library Services Fund (5010) $ 4,530,031 $ 4,530,031 $ 1,861,834 41.1% Zone A Parks Fund (5011) 13,296,555 13,296,555 7,073,312 53.2% LMD 2014-01 Residential Street Lighting Fund (5012) 1,588,549 1,588,549 681,965 42.9% Zone C Arterial Street Lighting Fund (5110) 912,213 912,213 409,938 44.9% Zone D Standard Landscaping Fund (5111) 1,715,790 1,715,790 491,521 28.6% Zone E Extensive Landscaping Fund (5013) 699,906 701,211 149,775 21.4% Zone M Median Fund (5112) 476,335 476,335 112,976 23.7% CFD No. 1 (5113) 1,965,636 2,272,610 1,068,439 47.0% Zone S Financial & Management Svcs (5114) 76,786 76,786 23,591 30.7% Total Expenditures $ 25,261,801 $ 25,570,080 $ 11,873,349 46.4% Net Change or
Adopted Use of Fund Balance (3,591,401) $ (3,271,671) $ (6,797,431)$ Mid-Year Financial Summary FY 2025/26 13
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 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
12/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 2,979,205 $ 2,979,205 $ 1,297,738 44% Other Taxes 5,282,900 5,293,488 81,499 1.5% Charges for Services 1,350,234 1,350,234 659,297 48.8% Use of Money & Property 1,283,001 1,283,001 525,628 41.0% Miscellaneous 4,650 4,650 3,013 64.8% Total Revenues $ 10,899,990 $ 10,910,578 $ 2,567,175 23.5% Expenditures:
35010 Parks & Comm Svcs - Admin $ 1,216,179 $ 1,216,179 $ 510,664 42.0% 35210 Park Maintenance - General 5,450,540 5,450,540 2,746,043 50.4% 35211 Contract Park Maintenance 490,295 490,295 297,804 60.7% 35213 Golf Course Program 559,845 559,845 322,780 57.7% 35214 Parks Projects 265,097 265,097 137,768 52.0% 35310 Senior Program 851,210 851,210 468,965 55.1% 35311 Community Services - - 216 0.0% 35312 Community Events 1,171,411 1,171,411 786,105 67.1% 35313 Conf & Rec Cntr 597,448 597,448 297,408 49.8% 35314 Conf & Rec Cntr - Banquet 273,240 273,240 151,250 55.4% 35315 Recreation Programs 1,514,069 1,514,069 762,603 50.4% 35318 Sports Programs 786,548 786,548 403,459 51.3% 35319 Towngate Community Center 37,083 37,083 11,384 30.7% 35320 Amphitheater 7,940.00 7,940 481 6.1% 35321 March Annex 5,650.00 5,650 7,095 125.6% 35324 Aquatics Programs 70,000.00 70,000 40,981 58.5% 95011 Non-Dept Zone A Parks - - 128,306 0.0% Total Expenditures $ 13,296,555 $ 13,296,555 $ 7,073,312 53.2% Net Change or
Adopted Use of Fund Balance (2,396,565) $ (2,385,977) $ (4,506,137)$ Mid-Year Financial Summary FY 2025/26 14
Electric Utility
The Moreno Valley Utility (MVU) manages the operation, maintenance, and business planning of the City’s electric utility. MVU’s basic purpos e 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 9,661 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 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
12/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Charges for Services $ 57,409,981 $ 57,409,981 37,368,175 65.1% Use of Money & Property 1,607,000 1,607,000 2,113,730 131.5% Miscellaneous 100,000 100,000 248,555 248.6% Total Revenues $ 59,116,981 $ 59,116,981 $ 39,730,459 67.2% Expenditures:
45510 Electric Utility - General $ 53,411,908 $ 53,122,209 $ 19,982,345 37.6% 45511 Public Purpose Program 3,346,196 3,416,196 814,582 23.8% 45512 SCE Served Street Lights 750,000 750,000 382,584 51.0% 80005 CIP - Electric Utility 24,818,501 57,628,305 6,293,430 10.9% 96010 Non-Dept Electric - - 23,404 0.0% 96030 Non-Dept 2005 Lease Revenue Bonds 3,857,477 3,857,477 1,535,910 39.8% 96030 Non-Dept 2005 Lease Revenue Bonds 200,000 200,000 95,000 47.5% 96036 Non-Dept 2024 Refund 2014 LRB 104,815 104,815 186,108 177.6% 96041 Non-Dept 2021 LRB Refinance 609,785 609,785 205,393 33.7% 96051 Non-Dept 2021 Streetlight Refin. 185,410 185,410 340,404 183.6% 96060 Non-Dept 2019 Taxable LRB 649,205 649,205 213,423 32.9% Total Expenditures $ 87,933,297 $ 120,523,402 $ 30,072,583 25.0% Net Change or
Adopted Use of Fund Balance $ (28,816,316) $ (61,406,421) $ 9,657,876 Mid-Year Financial Summary FY 2025/26 15
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.