1 City of Moreno Valley
Fiscal Year 2025/26
Third Quarter Operating Budget Review
TO: Mayor and City Council
FROM: Felicia London, Chief Financial Officer/City Treasurer DATE: June 2, 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 Third Quarter of FY 2025/26 (July 2025 – March 2026, 75% of the fiscal year).
Third Quarter 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 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 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 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 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
03/31/25
(unaudited)
% of Amended
Budget
Fund/Component Unit
General Fund $ 178,370,713 $ 167,979,703 $ 116,572,368 69.4% Measure U 25,796,078 25,907,764 1,600,172 6.2% Community Services District (CSD) 29,269,773 30,905,764 19,539,317 63.2% Successor Agency 3,586,544 2,232,880 1,876,018 84.0% Housing Fund 266,750 1,176,750 385,358 32.7% Special Revenue Funds 48,094,713 96,985,091 51,237,890 52.8% Capital Projects Funds 13,831,000 87,822,420 24,948,430 28.4% Electric Utility Funds 87,933,297 123,023,402 44,663,689 36.3% Internal Service Funds 27,299,221 31,844,951 21,101,724 66.3% Debt Service Funds 3,549,303 3,549,303 1,936,049 54.5% Total 417,997,392 $ 571,428,028 $ 283,861,013 $ 49.7% Third Quarter 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
03/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 36,000,000 $ 22,500,000 $ 15,483,277 68.8% Property Tax in-lieu 34,321,793 36,576,939 15,684,729 42.9% Utility Users Tax 20,000,000 20,000,000 14,055,188 70.3% Sales Tax 60,546,078 60,657,764 38,702,276 63.8% Other Taxes 22,000,000 22,000,000 11,613,043 52.8% Licenses & Permits 6,552,550 6,552,550 4,233,054 64.6% Intergovernmental 390,000 558,257 841,321 150.7% Charges for Services 15,699,054 15,974,054 11,726,559 73.4% Use of Money & Property 7,533,000 7,533,000 9,582,430 127.2% Fines & Forfeitures 544,500 544,500 208,957 38.4% Miscellaneous 168,000 168,000 4,569,152 2719.7% Total Revenues $ 203,754,975 $ 193,065,064 $ 126,699,986 65.6% Expenditures:
Personnel Services $ 38,648,804 $ 39,372,795 29,713,453$ 75.5% Contractual Services 148,064,761 134,859,358 76,650,567 56.8% Material & Supplies 7,183,533 7,748,951 2,320,040 29.9% General Government - - - - Debt Service - - - - Micellaneous - - 20 - Fixed Charges 5,447,166 5,447,166 3,860,796 70.9% Fixed Assets 400,000 - - - Total Expenditures $ 199,744,264 $ 187,428,270 $ 112,544,877 60.0% Excess (Deficiency) of Revenues
Over (Under) Expenditures $ 4,010,711 $ 5,636,794 $ 14,155,109 Transfers:
Transfers In $ 418,816 $ 829,403 $ 346,204 41.7% Transfers Out 4,422,527 6,459,197 5,627,662 87.1% Net Transfers $ (4,003,711) $ (5,629,794) $ (5,281,459) Total Revenues & Transfers In $ 204,173,791 $ 193,894,467 $ 127,046,190 65.5% Total Expenditures & Transfers Out 204,166,791 193,887,467 118,172,539 60.9% Net Change of Fund Balance $ 7,000 $ 7,000 $ 8,873,650 Third Quarter 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
03/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 36,000,000 $ 22,500,000 $ 15,483,277 68.8% Property Tax in-lieu 34,321,793 36,576,939 15,684,729 42.9% Utility Users Tax 20,000,000 20,000,000 14,055,188 70.3% Sales Tax 60,546,078 60,657,764 38,702,276 63.8% Other Taxes 22,000,000 22,000,000 11,613,043 52.8% Licenses & Permits 6,552,550 6,552,550 4,233,054 64.6% Intergovernmental 390,000 558,257 841,321 150.7% Charges for Services 15,699,054 15,974,054 11,726,559 73.4% Use of Money & Property 7,533,000 7,533,000 9,582,430 127.2% Fines & Forfeitures 544,500 544,500 208,957 38.4% Miscellaneous 168,000 168,000 4,569,152 2719.7% Total Revenues $ 203,754,975 $ 193,065,064 $ 126,699,986 65.6% Third Quarter Financial Summary FY 2025/26 5
Property Taxes/Property Taxes In-Lieu
Property taxes were budgeted to increase by 13% 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 55% of the budgeted property tax revenue through the Third Quarter. The City has currently received 53% through the Third Quarter. Property taxes will continue to be monitored as property valuations may adjust throughout the year based on property sales and assessment appeals filed with the County.
Third Quarter 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 66% budgeted sales tax revenue through Third Quarter of actual receipts. The City has currently received 64% through Third Quarter.
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.
Third Quarter 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 76% of the budgeted utility users tax revenue through the Third Quarter. The City has currently received 70% through the Third Quarter.
Third Quarter 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 69% of the budgeted Other Taxes revenue through Third Quarter. The City has currently received 53% through the Third Quarter.
Third Quarter 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 80% of the budgeted Licenses & Permits revenue through the Third Quarter. The City has received 65% through 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 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 10% as compared to the FY 2024/25 Amended Budget.
Based on historical averages of actual receipts, the City is expected to receive 81% of the budgeted Charges for Services revenue through Third Quarter. The City has currently received 73% through the Third Quarter.
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 3.696% as of March 2026, while funds invested in the State Local Agency Investment Fund (LAIF) earned a YTM of
3.826%. At its March 2026 meeting, the Federal Open Market Committee decided to maintain the target range for the federal funds rate to 3.50%–3.75%, citing solid economic activity, somewhat elevated inflation, and heightened uncertainty, including geopolitical risks. Staff will continue to monitor market conditions to maximize investment income while maintaining a prudent risk profile.
*Federal Reserve Board - Federal Reserve issues FOMC statement March 18, 2026
Chart 6. General Fund Third Quarter Revenue Trend – Charges for Services Third Quarter 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
03/31/25
(unaudited)
% of Amended
Budget
Department
City Council $ 1,154,214 $ 1,161,642 $ 752,243 64.8% City Clerk 1,415,128 1,415,128 685,160 48.4% City Manager 14,679,197 15,244,842 9,762,913 64.0% City Attorney 2,083,694 2,083,694 1,204,921 57.8% Community Development 17,810,499 17,994,185 11,632,382 64.6% Economic Development 3,491,219 3,318,047 1,594,934 48.1% Financial & Management Services 9,784,806 10,199,852 5,534,407 54.3% Human Resources 4,160,174 4,108,143 2,088,721 50.8% Public Works 19,335,879 19,222,051 10,413,687 54.2% Non-Departmental 2,044,289 4,080,959 7,541,926 184.8% Non-Public Safety Subtotal $ 75,959,099 $ 78,828,543 $ 51,211,294 65.0% Public Safety
Police $ 86,874,769 $ 77,776,001 $ 43,315,162 55.7% Fire 41,332,923 37,282,923 23,646,083 63.4% Public Safety Subtotal $ 128,207,692 $ 115,058,924 $ 66,961,245 58.2% Total $ 204,166,791 $ 193,887,467 $ 118,172,539 Third Quarter Financial Summary FY 2025/26 12
Table 5. CSD Operations
FY 2025/26
Adopted Budget
FY 2025/26
Amended Budget
Actuals as of
03/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 6,694,252 $ 6,694,252 $ 4,977,187 74.4% Other Taxes 7,741,645 8,582,766 4,541,394 52.9% Intergovernmental - - 41,536 0.0% Charges for Services 6,954,834 6,986,984 3,974,446 56.9% Use of Money & Property 1,292,001 1,292,001 959,138 74.2% Fines & Forfeitures 3,500 3,500 3,234 92.4% Miscellaneous 16,180 16,180 16,944 104.7% Transfers In 2,301,203 2,302,986 1,643,730 71.4% Total Revenues $ 25,003,615 $ 25,878,669 $ 16,157,609 62.4% Expenditures:
Library Services Fund (5010) $ 4,530,031 $ 4,530,031 $ 2,791,983 61.6% Zone A Parks Fund (5011) 13,296,555 14,599,267 10,380,417 71.1% LMD 2014-01 Residential Street Lighting Fund (5012) 1,588,549 1,588,549 1,091,744 68.7% Zone C Arterial Street Lighting Fund (5110) 912,213 912,213 657,981 72.1% Zone D Standard Landscaping Fund (5111) 1,715,790 1,715,790 741,292 43.2% Zone E Extensive Landscaping Fund (5013) 699,906 726,211 320,027 44.1% 5014 LMD 2014-02 3,437,472 3,437,472 1,807,214 52.6% 5016 CFD 2021-01 Parks Fac Maint 570,500 570,500 121,427 21.3% Zone M Median Fund (5112) 476,335 476,335 188,388 39.5% CFD No. 1 (5113) 1,965,636 2,272,610 1,402,479 61.7% Zone S Financial & Management Svcs (5114) 76,786 76,786 36,365 47.4% Total Expenditures $ 29,269,773 $ 30,905,764 $ 19,539,317 63.2% Net Change or
Adopted Use of Fund Balance (4,266,158) $ (5,027,095) $ (3,381,708)$ Third Quarter 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
03/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Property Tax $ 2,979,205 $ 2,979,205 $ 2,577,096 87% Other Taxes 5,282,900 5,293,488 2,857,804 54.0% Charges for Services 1,350,234 1,350,234 946,965 70.1% Use of Money & Property 1,283,001 1,283,001 712,576 55.5% Miscellaneous 4,650 4,650 11,521 247.8% Total Revenues $ 10,899,990 $ 10,910,578 $ 7,105,962 65.1% Expenditures:
35010 Parks & Comm Svcs - Admin $ 1,216,179 $ 1,278,879 $ 813,522 63.6% 35210 Park Maintenance - General 5,450,540 5,792,440 3,979,864 68.7% 35211 Contract Park Maintenance 490,295 797,795 468,847 58.8% 35213 Golf Course Program 559,845 587,945 476,171 81.0% 35214 Parks Projects 265,097 266,672 210,131 78.8% 35310 Senior Program 851,210 897,530 689,323 76.8% 35311 Community Services - - 496 0.0% 35312 Community Events 1,171,411 1,443,411 1,071,867 74.3% 35313 Conf & Rec Cntr 597,448 608,948 430,690 70.7% 35314 Conf & Rec Cntr - Banquet 273,240 310,440 231,749 74.7% 35315 Recreation Programs 1,514,069 1,564,069 1,180,125 75.5% 35318 Sports Programs 786,548 851,948 604,467 71.0% 35319 Towngate Community Center 37,083 60,100 16,821 28.0% 35320 Amphitheater 7,940.00 8,440 2,136 25.3% 35321 March Annex 5,650.00 5,650 8,944 158.3% 35324 Aquatics Programs 70,000.00 125,000 40,981 32.8% 80007 CIP - Parks - - 2,465 0.0% 95011 Non-Dept Zone A Parks - - 151,819 0.0% Total Expenditures $ 13,296,555 $ 14,599,267 $ 10,380,417 71.1% Net Change or
Adopted Use of Fund Balance (2,396,565) $ (3,688,689) $ (3,274,455)$ Third Quarter 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 9,713 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
03/31/25
(unaudited)
% of Amended
Budget
Revenues:
Taxes:
Charges for Services $ 57,409,981 $ 57,409,981 48,439,452 84.4% Use of Money & Property 1,607,000 1,607,000 2,938,512 182.9% Miscellaneous 100,000 600,000 1,176,391 196.1% Total Revenues $ 59,116,981 $ 59,616,981 $ 52,554,354 88.2% Expenditures:
45510 Electric Utility - General $ 53,411,908 $ 51,122,209 $ 29,327,379 57.4% 45511 Public Purpose Program 3,346,196 3,416,196 1,360,439 39.8% 45512 SCE Served Street Lights 750,000 750,000 645,723 86.1% 80005 CIP - Electric Utility 24,818,501 62,128,305 9,927,427 16.0% 96010 Non-Dept Electric - - 102,549 0.0% 96030 Non-Dept 2005 Lease Revenue Bonds 3,857,477 3,857,477 2,175,725 56.4% 96030 Non-Dept 2005 Lease Revenue Bonds 200,000 200,000 177,750 88.9% 96036 Non-Dept 2024 Refund 2014 LRB 104,815 104,815 186,198 177.6% 96041 Non-Dept 2021 LRB Refinance 609,785 609,785 205,643 33.7% 96051 Non-Dept 2021 Streetlight Refin. 185,410 185,410 340,404 183.6% 96060 Non-Dept 2019 Taxable LRB 649,205 649,205 214,451 33.0% Total Expenditures $ 87,933,297 $ 123,023,402 $ 44,663,689 36.3% Net Change or
Adopted Use of Fund Balance $ (28,816,316) $ (63,406,421) $ 7,890,665 Third Quarter 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.