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Preliminary Official Statement (Moreno Valley 2026 Lease Revenue Bonds).pdf

Moreno Valley City Council
October 6, 2026

Document
Preliminary Official Statement (Moreno Valley 2026 Lease Revenue Bonds).pdf
Meeting
October 6, 2026
Body
Moreno Valley City Council
Original file
1.2 MB
Text extracted from the city's file for reading and search. Open the original on pub-morenovalley.escribemeetings.com. That file is the official record.

Stradling Yocca Carlson & Rauth
Draft of 9/15/26
4909-7645-4603v8/022432-0051
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

PRELIMINARY OFFICIAL STATEMENT DATED ________, 2026
NEW ISSUE—BOOK-ENTRY ONLY RATINGS:

S&P: “__” (INSURED SERIES 2026A BONDS)
S&P: “__” (UNDERLYING/UNINSURED SERIES 2026A BONDS)
(See “RATINGS” herein)
In the opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described in this Official Statement, interest (and original issue discount) on the Series 2026A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2026A Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” with respect to tax consequences relating to the Series 2026A Bonds, including with respect to the alternative minimum tax imposed on certain large corporations. $________*

MORENO VALLEY PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2026A
Dated: Date of Delivery Due: November 1, as shown on inside cover The Moreno Valley Public Financing Authority Lease Revenue Bonds, Series 2026A (the “Series 2026A Bonds”) are payable from base rental payments (the “Base Rental Payments”) to be made by the City of Moreno Valley (the “City”) for the right to use certain City-owned property (the “Property”) pursuant to a Lease Agreement, dated as of August 1, 2024 , as amended and supplemented by a First Amendment to Lease Agreement, dated as of November 1, 2026 ( collectively, the “Lease Agreement”), each by and between the City, as lessee, and the Moreno Valley Public Financing Authority (the “Authority”), as lessor. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS.” The Series 2026A Bonds are payable from the Base Rental Payments on a parity with payments made by the City with respect to the Moreno Valley Public Financing Authority Lease Revenue Refunding Bonds, Series 2024A (the “Series 2024A Bonds”) and any additional bonds issued under the Indenture (as defined below) in the future.

The Series 2026A Bonds are being issued to provide funds to (i) finance the costs of the acquisition, construction and installation of certain capital improvements of the City, as described herein, (ii) purchase a municipal bond insurance policy to guarantee payment of the principal of and interest on the Insured Series 2026A Bonds when due and (iii) pay the costs incurred in connection with the issuance of the Series 2026A Bonds. See “SOURCES AND USES OF FUNDS.”
The City has covenanted under the Lease Agreement to make all Base Rental Payments provided for therein, to include all such payments in its annual budgets, and to make all the necessary annual appropriations for such Base Rental Payments. The City’s obligation to make Base Rental Payments is subject to abatement during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defects in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property. See “RISK FACTORS—Abatement.”
The Series 2026A Bonds are being issued in fully registered book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Interest on the Series 2026A Bonds is payable semiannually on May 1 and November 1 of each year, commencing May 1, 2027. Purchasers will not receive certificates representing their interest in the Series 2026A Bonds. Individual purchases of the Series 2026A Bonds may be made in principal amounts of $5,000 or integral multiples thereof. Principal of and interest and premium, if any, on the Series 2026A Bonds will be paid by Wilmington Trust, National Association, as trustee (the “Trustee”) to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the Beneficial Owners of the Series 2026A Bonds. See “THE SERIES 2026A BONDS—Book-Entry Only System” herein.

The Series 2026A Bonds will be issued pursuant to an Indenture, dated as of August 1, 2024, as amended and supplemented by a First Supplemental Indenture, dated as of November 1, 2026 (collectively, the “Indenture”), each by and among the City, the Authority and the Trustee. The Series 2024A Bonds, the Series 2026A Bonds and any additional bonds issued pursuant to the Indenture (“Additional Bonds”) are collectively referred to herein as the “Bonds.” See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS.” The Series 2026A Bonds are subject to optional and extraordinary redemption prior to maturity. See “THE SERIES 2026A BONDS— Redemption.”
The scheduled payment of principal of and interest on the Series 2026A Bonds maturing on November 1 of the years 20__ through 20__, inclusive (the “Insured Series 2026A Bonds”), when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY INC. See “BOND INSURANCE—Bond Insurance Policy.” [AGM LOGO]
The Bonds are special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. The Authority has no power to tax.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

The Series 2026A Bonds will be offered when, as and if issued and received by the Underwriter, subject to the approval as to their validity by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Stradling Yocca Carlson & Rauth LLP, * Preliminary, subject to change.
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Newport Beach, California, is also acting as Disclosure Counsel to the City. Certain legal matters will be passed upon for the City and the Authority by the City Attorney of the City, for the Underwriter by Kutak Rock LLP, Irvine, California for the Trustee by its counsel and for the Insurer by its counsel. It is anticipated that the Series 2026A Bonds will be available in book-entry form through the facilities of DTC in New York, New York on or about _____ , 2026.
[Stifel Logo]
Dated: _____, 2026
4909-7645-4603v8/022432-0051
$_________*

MORENO VALLEY PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2026A

MATURITY SCHEDULE
BASE CUSIP†
: 61685P
Maturity Date
(November 1) Principal Amount Interest Rate Yield Price CUSIP† * Preliminary, subject to change. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright(c) 2026 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the Authority, the City nor the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers. 4909-7645-4603v8/022432-0051
No dealer, broker, salesperson or other person has been authorized by the City or the Authority to give any information or to make any representations in connection with the offer or sale of the Series 2026A Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Authority. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2026A Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Series 2026A Bonds.

Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

This Official Statement and the information contained herein are subject to completion or amendment without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or the Authority or any other parties described herein since the date hereof. The Series 2026A Bonds may not be sold nor may an offer to buy be accepted prior to the time this Official Statement is delivered in final form.

This Official Statement is being submitted in connection with the sale of the Series 2026A Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the City. All summaries of documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions.

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget,” “intend” or similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the captions “THE CITY,” “CITY FINANCIAL INFORMATION” and “RISK FACTORS.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH

FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER

FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE

MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. IN

EVALUATING SUCH STATEMENTS, POTENTIAL INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS

FACTORS WHICH COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

THE UNDERWRITER MAY OFFER AND SELL THE SERIES 2026A BONDS TO CERTAIN DEALERS AND

DEALER BANKS AND BANKS ACTING AS AGENT AND OTHERS AT PRICES LOWER THAN THE PUBLIC

OFFERING PRICES STATED ON THE INSIDE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

THE SERIES 2026A BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

Assured Guaranty Inc, (the “Insurer”) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, the Insurer has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Insurer supplied by the Insurer and presented under the caption “BOND INSURANCE” and Appendix G—“SPECIMEN MUNICIPAL BOND INSURANCE POLICY.” A wide variety of other information, including financial information, concerning the City is available from publications and website of City. Any such information that is inconsistent with the information set forth in this Official Statement should be disregarded.

No such information is a part of or incorporated into this Official Statement, except as expressly noted. 4909-7645-4603v8/022432-0051

CITY OF MORENO VALLEY

MAYOR AND MEMBERS OF THE CITY COUNCIL
Ulises Cabrera, Mayor
Erlan Gonzalez, Mayor Pro Tem, District 3
Elena Baca-Santa Cruz, Councilmember, District 1
Ed A. Delgado, Councilmember, District 2
Cheylynda Barnard, Councilmember, District 4

MORENO VALLEY PUBLIC FINANCING AUTHORITY
Ulises Cabrera, Chair
Erlan Gonzalez, Vice Chair
Ed A. Delgado, Boardmember
Elena Baca-Santa Cruz, Boardmember
Cheylynda Barnard, Boardmember
STAFF
Brian Mohan, City Manager/Authority Executive Director
Steve Quintanilla, City Attorney
Launa Jimenez, Assistant City Manager (Administration)
Felicia London, Chief Financial Officer/City Treasurer
M. Patricia Rodriguez, City Clerk/Authority Secretary

SPECIAL SERVICES
Bond Counsel and Disclosure Counsel
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
Municipal Advisor
Fieldman Rolapp & Associates, Inc.

Irvine, California
Trustee
Wilmington Trust, National Association
Costa Mesa, California

TABLE OF CONTENTS
Page
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INTRODUCTION .................................................................................................................................1 General ......................................................................................................................................1 Bondholders’ Risks ...................................................................................................................3 Other Information in this Official Statement.............................................................................3 THE SERIES 2026A BONDS...............................................................................................................3 General ......................................................................................................................................3 Registration, Transfers and Exchanges .....................................................................................4 Redemption................................................................................................................................4 Book-Entry Only System ..........................................................................................................6 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS...........................6 Pledge of Revenues...................................................................................................................6 Base Rental Payments...............................................................................................................6 Additional Rental Payments......................................................................................................7 Abatement..................................................................................................................................8 Substitution, Addition and Removal of Property ......................................................................8 Action on Default ......................................................................................................................9 No Reserve Fund.......................................................................................................................9 Additional Bonds.....................................................................................................................10 Insurance .................................................................................................................................10 BOND INSURANCE ..........................................................................................................................11 Bond Insurance Policy.............................................................................................................11 Assured Guaranty Municipal Corp..........................................................................................12 SOURCES AND USES OF FUNDS...................................................................................................14 DEBT SERVICE SCHEDULE............................................................................................................15 THE PROPERTY ................................................................................................................................15 General ....................................................................................................................................15 The Public Safety Campus......................................................................................................17 THE 2026 PROJECT...........................................................................................................................17 THE AUTHORITY .............................................................................................................................18 THE CITY ...........................................................................................................................................18 General ....................................................................................................................................18 Largest Employers...................................................................................................................18 Government and Administration .............................................................................................19 4909-7645-4603v8/022432-0051 ii
Risk Management....................................................................................................................20 CITY FINANCIAL INFORMATION.................................................................................................21 Accounting and Financial Reporting.......................................................................................21 General Economic Condition and Outlook of the City ...........................................................21 Budget Procedure, Current Budget and Historical Budget Information .................................22 Change in Fund Balance of the City General Fund.................................................................28 General Fund Balance Sheets of the City................................................................................29 Tax Revenues by Source .........................................................................................................30 Sales Taxes..............................................................................................................................30 Property Taxes.........................................................................................................................31 State of California Motor Vehicle In-Lieu Payments.............................................................. 33 Utility Taxes............................................................................................................................34 Other Taxes .............................................................................................................................34 Services ...................................................................................................................................35 Other Indebtedness..................................................................................................................35 Retirement Contributions........................................................................................................37 Other Post-Employment Benefits............................................................................................42 City Investment Policy ............................................................................................................43 RISK FACTORS .................................................................................................................................44 General Considerations – Security for the Series 2026A Bonds.............................................44 Abatement................................................................................................................................45 Natural Disasters .....................................................................................................................46 Climate Change .......................................................................................................................46 Hazardous Substances.............................................................................................................47 Cybersecurity...........................................................................................................................47 Substitution, Addition and Removal of Property; Additional Bonds......................................47 Limited Recourse on Default; No Acceleration of Base Rental..............................................48 Limitations on Remedies Available; Bankruptcy....................................................................49 Possible Insufficiency of Insurance Proceeds .........................................................................50 Loss of Tax Exemption ...........................................................................................................50 No Liability of Authority to the Owners.................................................................................50 Dependence on State for Certain Revenues ............................................................................50 Risks Associated with Bond Insurance ...................................................................................51 4909-7645-4603v8/022432-0051 iii

CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND
APPROPRIATIONS ...............................................................................................................52 Article XIIIA of the State Constitution ...................................................................................52 Legislation Implementing Article XIIIA.................................................................................52 Article XIIIB of the State Constitution ...................................................................................53 Articles XIIIC and XIIID of the State Constitution ................................................................53 Proposition 62..........................................................................................................................54 Proposition 1A.........................................................................................................................55 Proposition 22..........................................................................................................................55 Proposition 26..........................................................................................................................55 Possible Future Initiatives.......................................................................................................56 TAX MATTERS..................................................................................................................................56 CERTAIN LEGAL MATTERS...........................................................................................................58 ABSENCE OF LITIGATION .............................................................................................................58 UNDERWRITING ..............................................................................................................................58 RATINGS ............................................................................................................................................58 MUNICIPAL ADVISOR.....................................................................................................................59 CONTINUING DISCLOSURE...........................................................................................................59 FINANCIAL STATEMENTS OF THE CITY....................................................................................59 MISCELLANEOUS ............................................................................................................................60

APPENDIX A ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING THE CITY OF MORENO VALLEY.........................................................................................A-1 APPENDIX B SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS...........................................B-1

APPENDIX C ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025..........................................................................C-1 APPENDIX D PROPOSED FORM OF BOND COUNSEL OPINION....................................................D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE............................................ E-1 APPENDIX F BOOK-ENTRY ONLY SYSTEM .....................................................................................F-1 APPENDIX G SPECIMEN MUNICIPAL BOND INSURANCE POLICY .............................................G-1 4909-7645-4603v8/022432-0051 1

OFFICIAL STATEMENT
$_______*

MORENO VALLEY PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2026A

INTRODUCTION
General
This Official Statement (which includes the cover page, inside cover page and the appendices hereto) (the “Official Statement”), provides certain information concerning the sale and delivery of $__________* aggregate principal amount of Moreno Valley Public Financing Authority Lease Revenue Bonds, Series 2026A (the “Series 2026A Bonds”).

The net proceeds of the sale of the Series 2026A Bonds will be used to (i) finance the costs of the acquisition, construction and installation of certain capital improvements of the City (the “City”), as described under the caption “THE 2026 PROJECT”; (ii) purchase a municipal bond insurance policy to guarantee payment of the principal of and interest on the Insured Series 2026A Bonds (as defined herein) when due, as described under the caption “BOND INSURANCE”; and (iii) pay the costs incurred in connection with the issuance of the Series 2026A Bonds. See “SOURCES AND USES OF FUNDS” herein.

On August 6, 2024, the Moreno Valley Public Financing Authority (the “Authority”) issued its $21,960,000 Moreno Valley Public Financing Authority Lease Revenue Refunding Bonds, Series 2024A (the “Series 2024A Bonds”) pursuant to an Indenture, dated as of August 1, 2024 (the “Original Indenture”), by and among the Authority, the City and Wilmington Trust, National Association (the “Trustee”). The Series 2026A Bonds will be issued pursuant to the Original Indenture, as amended and supplemented by a First Supplemental Indenture, dated as of November 1, 2026 (the “First Supplemental Indenture” and, together with the Original Indenture, the “Indenture”) by and among the Authority, the City and the Trustee.

The Series 2026A Bonds are equally and ratably payable from base rental payments (the “Base Rental Payments”) to be made by the City for the right to use certain real property (the “Property”), as further described under the caption “THE PROPERTY,” pursuant to a Lease Agreement, dated as of August 1, 2024, as amended and supplemented by the First Amendment to Lease Agreement, dated as of November 1, 2026 (collectively, the “Lease Agreement”), between the City, as lessee, and the Moreno Valley Public Financing Authority, as lessor.

The Series 2026A Bonds will be issued pursuant to an Indenture, dated as of August 1, 2024, as amended and supplemented by a First Supplemental Indenture, dated as of November 1, 2026 (collectively, the “Indenture”), by and among the Authority, the City and Wilmington Trust, National Association, as trustee.

Pursuant to the Indenture, the Authority may issue additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Series 2026A Bonds (the Series 2024A Bonds, the Series 2026A Bonds and any such Additional Bonds being collectively referred to as the “Bonds”) subject to certain conditions.

Pursuant to a Ground Lease, dated as of August 1, 2024, as amended and supplemented by a First Amendment to Ground Lease, dated as of November 1, 2026 (collectively, the “Ground Lease”), by and between the City and the Authority, the City has leased the Property to the Authority. The Authority has subleased the Property to the City under the Lease Agreement. The Lease Agreement obligates the City to make Base Rental Payments to the Authority.
* Preliminary, subject to change.
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The Trustee and the Authority have entered into an Assignment Agreement, dated as of August 1, 2024, as amended and supplemented by a First Amendment to Assignment Agreement, (collectively, the “Assignment Agreement”) pursuant to which the Authority has assigned to the Trustee for the benefit of the Bond Owners substantially all of the Authority’s right, title and interest in and to the Ground Lease and the Lease Agreement, including its rights to receive the Base Rental Payments due under the Lease Agreement and to enforce any remedies in the event of a default under the Lease Agreement by the City.

The City has covenanted under the Lease Agreement to take such action as may be necessary to include all Rental Payments, which are comprised of Base Rental Payments and Additional Rental Payments (which, as defined under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS—Additional Rental Payments,” include taxes and assessments affecting the Property, administrative costs of the Authority relating to the Property, fees and expenses of the Trustee, and other amounts payable under the Lease Agreement), due under the Lease Agreement as a separate line item in its annual budgets and to make the necessary annual appropriations therefor, subject to abatement as described herein.

Base Rental Payments are subject to complete or partial abatement in the event and to the extent that there is substantial interference with the City’s right to use and occupy the Property or any portion thereof.

See “RISK FACTORS—Abatement.” Abatement of Base Rental Payments under the Lease Agreement, to the extent that payment is not made from alternative sources as set forth below, would result in all Bond Owners receiving less than the full amount of principal of and interest on the Bonds. To the extent that proceeds of insurance are available, Base Rental Payments (or a portion thereof) may be made from such proceeds of insurance during periods of abatement.

Payment of the principal of and interest on the Series 2026A Bonds maturing on November 1 of the years 20__ through 20__ inclusive (the “Insured Series 2026A Bonds”), when due will be insured by a municipal bond insurance policy (the “Insurance Policy”) to be issued by Assured Guaranty Inc. (“AG” or the “Insurer”) concurrently with the issuance of the Insured Series 2026A Bonds. See the caption “BOND INSURANCE.” A specimen of the Insurance Policy is set forth in Appendix G.

The Series 2026A Bonds are special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California (the “State”), or any political subdivision thereof, is pledged to the payment of the Series 2026A Bonds. The Authority has no power to tax.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City, the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation.

The City has agreed to provide, or cause to be provided, to the Municipal Securities Rulemaking Board for purposes of Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission (“SEC Rule 15c2-12(b)(5)”) certain annual financial information and operating data and, in a timely manner, notice of certain listed events. These covenants have been made in order to assist the Underwriter in complying with SEC Rule 15c2-12(b)(5). See “CONTINUING DISCLOSURE” herein for a description of the specific nature of the annual report and notices of listed events.

Wilmington Trust, National Association, Costa Mesa, California, will act as Trustee with respect to the Series 2026A Bonds. The Series 2026A Bonds will be issued subject to the approval as to their legality by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Certain legal matters will be passed upon for the City and the Authority by the City Attorney of the City and by Stradling Yocca Carlson 4909-7645-4603v8/022432-0051 3
& Rauth LLP, Newport Beach, California, Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by Kutak Rock LLP, Irvine, California. The City’s financial statements for the fiscal year ended June 30, 2025 included as Appendix C hereto have been audited by Rogers, Anderson, Malody & Scott, LLP (the “Auditor”). See APPENDIX C—“ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025” herein. The Auditor has not undertaken to update the audited financial statements of the City or its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement.

Bondholders’ Risks
Certain events could affect the ability of the City to make the Base Rental Payments when due. See “RISK FACTORS” for a discussion of certain factors that should be considered, in addition to other matters set forth herein, in evaluating an investment in the Series 2026A Bonds. See the caption “RISK FACTORS.” The presentation of information, including tables of receipt of revenues, is intended to show recent historical information and, except for a budget discussion for Fiscal Year 2026-27, is not intended to indicate future or continuing trends in the financial position or other affairs of the City. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future. See the captions “THE CITY” and “CITY FINANCIAL INFORMATION” and APPENDIX C—“ ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025” for financial and operating information related to the City.

Other Information in this Official Statement
The summaries or references to the Indenture, the Lease Agreement, the Ground Lease, the Assignment Agreement and other documents, agreements and statutes referred to herein, and the description of the Series 2026A Bonds included in this Official Statement, do not purport to be comprehensive or definitive, and such summaries, references and descriptions are qualified in their entireties by reference to each such document or statute. All capitalized terms used in this Official Statement (unless otherwise defined herein) which are defined in the Indenture or the Lease Agreement shall have the meanings set forth therein, some of which are summarized in APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS.” THE SERIES 2026A BONDS
General
The Series 2026A Bonds will be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The Series 2026A Bonds will be dated as of and bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) from the dated date thereof at the rates set forth on the inside cover page hereof. Interest on the Series 2026A Bonds will be paid semiannually on May 1 and November 1 (each, an “Interest Payment Date”) of each year, commencing May 1, 2027.

Interest on the Series 2026A Bonds will be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2026A Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth day of the month next preceding such Interest Payment Date, whether or not such day is a Business Day (the “Record Date”), in which event it will bear interest from such Interest Payment Date, (ii) a Series 2026A Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the dated date thereof, or (iii) interest on any Series 2026A Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest will be paid in lawful money of the United States on each Interest Payment Date to the Persons in whose names the ownership 4909-7645-4603v8/022432-0051 4
of the Series 2026A Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest will be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date or by wire transfer to Owners of more than $1,000,000 in principal amount of Series 2026A Bonds who have provided account information and wiring instructions satisfactory to the Trustee.

The principal of the Series 2026A Bonds will be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee. The Series 2026A Bonds will be subject to redemption as set forth herein.

Registration, Transfers and Exchanges
The Series 2026A Bonds will be issued as fully registered bonds, registered in the name of Cede & Co. as nominee of DTC, and will be available to actual purchasers of the Series 2026A Bonds (the “Beneficial Owners”) in the denominations set forth above, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants (as defined in Appendix F) as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Series 2026A Bonds. See “THE SERIES 2026A BONDS—Book-Entry Only System.”
Redemption
Extraordinary Redemption from Condemnation Award or Insurance Proceeds. The Series 2026A Bonds shall be subject to redemption, in whole or in part, on any date, in denominations of $5,000 or any integral multiple thereof, from and to the extent of: (i) Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund pursuant to the Indenture, and (ii) eminent domain proceeds received pursuant to the Lease Agreement, at a Redemption Price equal to the principal amount of the Series 2026A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Optional Redemption. The Series 2026A Bonds maturing on or after November 1, 20__, are subject to optional redemption, in whole or in part, on any date on or after November 1, 20__, in denominations of $5,000 or any integral multiple thereof, from and to the extent of prepaid Base Rental Payments paid pursuant to the Lease Agreement, at a Redemption Price equal to the principal amount of the Series 2026A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption (a) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Authority provided to the Trustee at least 30 but no more than 60 days prior to the date of such redemption, (b) with respect to any redemption from and to the extent of any insurance proceeds or condemnation award received with respect to all or a portion of the Property and the corresponding provision of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, as directed in a Written Request of the Authority provided to the Trustee at least 30 but no more than 60 days prior to the date of such redemption, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner which the Trustee in its sole discretion deems appropriate and fair. For purposes of such selection, all Bonds will be deemed to be comprised of separate $5,000 denominations and such separate denominations will be treated as separate Bonds which may be separately redeemed.
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Notice of Redemption. Notice of redemption shall be given by the Trustee, not less than 20 nor more than 60 days prior to the redemption date (i) as to Series 2026A Bonds not registered in the name of a Securities Depository or its nominee, to the respective Owners of the Series 2026A Bonds designated for redemption at their addresses appearing on the Registration Books, (ii) as to Series 2026A Bonds registered in the name of a Securities Depository or its nominee, to such Securities Depository for such Series 2026A Bonds, and (iii) the Information Services. Notice of redemption to the Owners pursuant to (i) above shall be given by mail at their addresses appearing on the Registration Books, or any other method agreed upon by such Owner and the Trustee. Notice of redemption to the Securities Depositories pursuant to (ii) above and the Information Services pursuant to (iii) above shall be given by electronically secure means, or any other method agreed upon by such entities and the Trustee.

Such notice will state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Series 2026A Bond numbers and the maturity or maturities (except in the event of redemption of all of the Series 2026A Bonds of such maturity or maturities in whole) of the Series 2026A Bonds to be redeemed, and will require that such Series 2026A Bonds be then surrendered at the principal corporate trust office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Series 2026A Bonds will not accrue from and after the date fixed for redemption. Neither the failure to receive any notice so given, nor any defect in such notice, will affect the validity of the proceedings for the redemption of the Series 2026A Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.

With respect to any notice of optional redemption of the Bonds, such notice may state that such redemption is conditional upon the receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys sufficient to pay the principal of, premium if any, and interest on the Bonds to be redeemed and upon other conditions set forth therein and that, if such money has not been so received or such other conditions have not been satisfied, said notice is of no force and effect and the Trustee is not required to redeem such Bonds. If any condition stated in the redemption notice for an optional redemption have not been satisfied on or prior to the redemption date: (i) the redemption notice will be of no force and effect, (ii) the Authority will not be required to redeem such Bonds, (iii) the redemption will not be made, and (iv) the Trustee will within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.

Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority will execute and the Trustee will authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in authorized denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered.

Effect of Notice of Redemption. Notice having been given as aforesaid, and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption, having been set aside in the Redemption Fund, the Bonds will become due and payable on said date, and, upon presentation and surrender thereof at the principal corporate trust office of the Trustee, said Bonds will be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.

If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, will be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof has been given as aforesaid and not canceled, then, from and after said date, interest on said Bonds will cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds will be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon. All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of the Indenture will be canceled upon surrender thereof and destroyed.
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Book-Entry Only System
DTC will act as securities depository for the Series 2026A Bonds. The Series 2026A Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC’s partnership nominee). One fully-registered Series 2026A Bond will be issued for each maturity of the Series 2026A Bonds, each in the initial aggregate principal amount of such maturity, and will be deposited with DTC. See APPENDIX F— “BOOK-ENTRY ONLY SYSTEM.”
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS Pledge of Revenues
The Series 2026A Bonds are equally and ratably payable from and secured by Base Rental Payments and certain amounts on deposit in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund established under the Indenture on a parity with the 2024A Bonds. Base Rental Payments will be payable by the City from any and all legally available funds, however, the City expects that its General Fund will be the primary source of funds to make Base Rental Payments. See the captions “THE CITY,” “CITY FINANCIAL INFORMATION” and “RISK FACTORS” for a description of such available funds and the potential risks associated with the availability of such funds to make Base Rental Payments. The City covenants in the Lease Agreement to take such action as may be necessary to include all Base Rental Payments and Additional Rental Payments due under the Lease Agreement in its annual budgets and to make the necessary annual appropriations therefor.

The Authority, pursuant to the Assignment Agreement, has assigned to the Trustee for the benefit of the Bond Owners all of the Authority’s right, title and interest in and to the Ground Lease and the Lease Agreement, including, without limitation, its right to receive Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided that, the Authority will retain the rights to indemnification, to give approvals and consents under the Lease Agreement and the Ground Lease and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement. The City will pay Base Rental Payments directly to the Trustee, as assignee of the Authority. See “—Base Rental Payments” below. Pursuant to the Indenture, the Authority may issue Additional Bonds payable from the Base Rental Payments on a parity with the Series 2026A Bonds subject to certain conditions. See APPENDIX B— “SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE INDENTURE—ISSUANCE OF BONDS; APPLICATION OF PROCEEDS—Conditions for the Issuance of Additional Bonds” and “— Procedure for the Issuance of Additional Bonds.”
Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund are pledged by the Authority pursuant to the Indenture to secure the payment of the principal of and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act. Said pledge constitutes a first lien on such assets.

The Bonds are special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State, or any political subdivision thereof, is pledged to the payment of the Bonds. The Authority has no power to tax.

Base Rental Payments
Rental Payments (defined in the Lease Agreement, as collectively, the Base Rental Payments and the Additional Rental Payments) will be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof 4909-7645-4603v8/022432-0051 7
during each Rental Period for which such Rental Payments are to be paid. Each Base Rental Payment will be deposited with the Trustee no later than the 25th day of the month next preceding each Interest Payment Date (the “Base Rental Deposit Date”) on which such Base Rental Payment is due. All Base Rental Payments will be paid directly by the City to the Trustee, and if received by the Authority at any time will be transferred by the Authority to the Trustee within one Business Day after the receipt thereof. All Base Rental Payments received by the Trustee will be deposited by the Trustee in the Base Rental Payment Fund.

Pursuant to the Indenture, on the Business Day immediately preceding each Interest Payment Date and on the Business Day immediately preceding each Principal Payment Date, the Trustee will transfer amounts in the Base Rental Payment Fund as are necessary to the Interest Fund and the Principal Fund to provide for the payment of and the interest on and principal of the Series 2026A Bonds.

The Base Rental due under the Lease Agreement is calculated to be sufficient to pay the principal of and interest on the Series 2024A Bonds and the Series 2026A Bonds. The debt service schedules for the Series 2024A Bonds and Series 2026A Bonds are set forth below under the heading “DEBT SERVICE SCHEDULE.”
The obligation of the City to make the Base Rental Payments does not constitute a debt of the City, the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation.

Additional Rental Payments
For the right to use and occupy the Property, the Lease Agreement requires the City to pay, as “Additional Rental Payments” thereunder, in addition to the Base Rental Payments, such amounts as shall be required for the payment of the following:
(i) All taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein; (ii) All reasonable administrative costs of the Authority relating to the Property including, but without limiting the generality of the foregoing, salaries, wages, fees and expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or the Lease Agreement or to defend the Authority and its members, officers, agents and employees;
(iii) Insurance premiums for all insurance required pursuant to the Lease Agreement; (iv) Any amounts with respect to the Lease Agreement or the Bonds required to be rebated to the federal government in accordance with section 148(f) of the Internal Revenue Code of 1986; (v) Amounts due and owing to the Insurer as set forth in the Lease Agreement; and (vi) All other payments required to be paid by the City under the provisions of the Lease Agreement or the Indenture.

Amounts constituting Additional Rental Payments payable under the Lease Agreement will be paid by the City directly to the person or persons to whom such amounts are payable. The City will pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, 4909-7645-4603v8/022432-0051 8
within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof.

Abatement
Base Rental Payments and Additional Rental Payments are paid by the City in each Rental Period for and in consideration of the right to use and occupy the Property. Base Rental Payments and Additional Rental Payments may be abated in the event of damage, destruction, condemnation or title defect affecting the Property, each as described further below. The Trustee cannot terminate the Lease Agreement in the event of such substantial interference. Abatement of Base Rental Payments and Additional Rental Payments is not an event of default under the Lease Agreement and does not permit the Trustee to take any action or avail itself of any remedy against the City. See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—RENTAL PAYMENTS—Rental Abatement.” Except as otherwise specifically provided in the Lease Agreement, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments are subject to abatement proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Lease Agreement by virtue of any such interference, and the Lease Agreement will continue in full force and effect. The amount of such abatement will be agreed upon by the City and the Authority; provided, however, that the Rental Payments due for any Rental Period may not exceed the annual fair rental value of that portion of the Property available for use and occupancy by the City during such Rental Period. Any such abatement will continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending when such use and occupancy is restored. In the event of abatement, the term of the Lease Agreement will be extended until the date upon which (i) all Bonds shall be fully paid, or provision therefor made in accordance with the Indenture, or (ii) the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full.

Notwithstanding the foregoing, the term of the Lease Agreement will in no event be extended beyond November 1, 2056.

Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments due under the Lease Agreement in any of the funds and accounts established under the Indenture (including as a result of the availability of insurance proceeds), such Rental Payments will not be abated as provided above but, rather, will be payable by the City as a special obligation payable solely from said funds and accounts.

Substitution, Addition and Removal of Property
The Authority and the City may amend the Lease Agreement to substitute alternate property for any portion of the Property, to release a portion of the Property from the Lease Agreement or to add additional property to the encumbrance of the Lease Agreement upon compliance with all of the conditions set forth in the Lease Agreement and described below. After a substitution or release, the portion of the Property for which the substitution or release has been effected will be released from the leasehold encumbrance of the Lease Agreement.

The Lease Agreement provides that there will be no reduction in or abatement of the Base Rental Payments due from the City thereunder as a result of such substitution, release or addition. Any such substitution, release or addition is subject to the following specific conditions precedent to such substitution, release or addition:
(a) a Written Certificate of the City to the effect that the Property, as constituted after such substitution, release or addition: (i) has an annual fair rental value at least equal to the maximum Base Rental 4909-7645-4603v8/022432-0051 9
Payments payable by the City in any Rental Period, and (ii) has a useful life in excess of the final maturity of any Outstanding Bonds;
(b) with respect to any substituted or added property, the City obtains or causes to be obtained a CLTA or ALTA title insurance policy or policies with respect to the Property (as such term will be defined after such substitution or addition) that when taken together with other title insurance policies covering the Property, will be in an amount at least equal to the aggregate principal amount of any Outstanding Bonds, of the type and with the endorsements described in the Lease Agreement; and (c) the City, the Authority and the Trustee execute, and the City causes to be recorded with the County of Riverside Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted or added real property in the description of the Property contained in the Lease Agreement and in the Ground Lease.

See the captions “THE 2026 PROJECT” and “THE PROPERTY,” as well as APPENDIX B— “SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—NO CONSEQUENTIAL DAMAGES; USE OF THE PROPERTY; SUBSTITUTION OR RELEASE— Substitution or Release of, or Addition to, the Property.” Action on Default
Should the City default under the Lease Agreement, the Trustee, as assignee of the Authority under the Lease Agreement, may terminate the Lease Agreement and recover certain damages from the City, or may retain the Lease Agreement and hold the City liable for all Base Rental Payments thereunder on an annual basis, and will have the right to re-enter and re-let the Property. In the event such re-letting occurs, the City would be liable for any resulting deficiency in Base Rental Payments. See “RISK FACTORS—Limited Recourse on Default; No Acceleration of Base Rental.”
For purposes of certain actions of Bond Owners under the Indenture and the Lease Agreement, such as certain consents and amendments and the direction of remedies following default, Bond Owners do not act alone and may not control such matters to the extent such matters are not supported by the requisite number of the Owners of all Bonds.

In the event of a default under the Lease Agreement there is no right under any circumstances to accelerate the Base Rental Payments or otherwise declare any Base Rental Payments not then in default to be immediately due and payable. There is no right under the Indenture to accelerate debt service payments on the Bonds in the event of a default under the Indenture or the Lease Agreement.

For a description of the events of default and permitted remedies of the Trustee (as assignee of the Authority) contained in the Lease Agreement and the Indenture, see APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—DEFAULTS AND REMEDIES” and “—THE INDENTURE—DEFAULT AND LIMITATIONS OF LIABILITY.”
No Reserve Fund
The Authority and the City will not establish or maintain a debt service reserve fund for the Series 2026A Bonds.

The Indenture establishes a Reserve Fund and a Series 2024A Bonds Account in the Reserve Fund.

However, amounts within the Series 2024A Bonds Account of the Reserve Fund secure only the Series 2024A Bonds and are not available to pay debt service payments with respect to the Series 2026A Bonds or any Additional Bonds issued in the future.
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Additional Bonds
Pursuant to the Indenture, the Authority may issue Additional Bonds payable from the Base Rental Payments on a parity with the outstanding Bonds upon satisfaction of certain conditions, including, but not limited to, the following:
(a) The Authority shall be in compliance with all agreements, conditions, covenants and terms contained in the Indenture, in the Lease Agreement and in the Ground Lease required to be observed or performed by it;
(b) The City shall be in compliance with all agreements, conditions, covenants and terms contained in the Indenture, in the Lease Agreement and in the Ground Lease required to be observed or performed by it; and
(c) The Ground Lease and the Lease Agreement shall have been amended, to the extent necessary, (i) so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds, payable at such times and in such manner as may be necessary to provide for the payment of the principal of and interest on such Additional Bonds; provided, however, that no such amendment shall be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period shall be in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith (evidence of the satisfaction of such condition shall be made by a Written Certificate of the City); and (ii) to include provisions for the prepayment of Base Rental Payments attributable to such Additional Bonds.

Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set forth in the Indenture, no such issuance may occur if (1) an event of default (within the meaning of the Lease Agreement) (or any event which, once all notice or grace periods have passed, would constitute such event of default) exists unless such event of default shall be cured upon such execution or issuance or (2) the Reserve Fund is not fully funded at the Reserve Fund Requirement (including the Reserve Fund Requirement for the proposed issue, if any) upon the issuance of such Additional Bonds.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE INDENTURE—ISSUANCE OF BONDS; APPLICATION OF PROCEEDS—Conditions for the Issuance of Additional Bonds” and “—Procedure for the Issuance of Additional Bonds.” Insurance
General. The Lease Agreement requires that the City maintain certain insurance coverages on the Property for loss due to property damage, title defect, loss of use and other liability as described below. Under the Lease Agreement, the City may self-insure for the coverages required under the captions “Property Insurance,” “General Liability Insurance,” and “Workers’ Compensation Insurance.” The City selfinsures up to certain amounts and purchases additional coverage from commercial carriers as described under the caption “THE CITY—Risk Management.”
Property Insurance. The Lease Agreement requires the City to maintain or cause to be maintained fire, lightning and special extended coverage insurance (which includes coverage for vandalism and malicious mischief, but need not include coverage for earthquake damage) on all improvements constituting any part of the Property in an amount not less than 100% of the replacement cost of such improvements. Such property insurance required to be maintained pursuant to the Lease Agreement may be subject to a deductible in an amount not to exceed $500,000.
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General Liability Insurance. The Lease Agreement requires the City to maintain or cause to be maintained a standard commercial general liability insurance policy or policies in protection of the City, the Authority and their respective members, officers, agents and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the use or ownership of the Property. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in a single accident or event, and in a minimum amount of $500,000 for damage to property (subject to a deductible clause of not to exceed $100,000) resulting from a single accident or event. Such commercial general liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks.

Rental Interruption Insurance. The Lease Agreement requires the City to maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards covered by the casualty insurance described above under “— Property Insurance,” in an amount sufficient at all times to pay an amount not less than the product of two times the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period. The City is not permitted to self-insure its obligation to maintain rental interruption insurance.

Workers’ Compensation Insurance. The City is also required to maintain or cause to be maintained workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State to insure employers against liability for compensation under the California Labor Code, or any act enacted as an amendment or supplement thereto or in lieu thereof, such workers’ compensation insurance to cover all persons employed by the City in connection with the Property and to cover full liability for compensation under any such act.

Title Insurance. The City shall provide, at its own expense, one or more CLTA or ALTA title insurance policies for the Property, in the aggregate amount of not less than the initial aggregate principal amount of the Bonds. Said policy or policies shall insure (a) the fee interest of the City in the Property, (b) the Authority’s ground leasehold estate in the Property under the Ground Lease, and (c) the City’s leasehold estate under the Lease in the Property, subject only to Permitted Encumbrances. All Net Insurance Proceeds received under said policy or policies shall be deposited with the Trustee and applied as provided in the Indenture. So long as any of the Bonds remain Outstanding, each policy of title insurance obtained pursuant to the Indenture or the Lease Agreement or required thereby shall provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Bond Owners.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—INSURANCE.”

BOND INSURANCE
The information under this caption has been prepared by the Insurer for inclusion in this Official Statement. None of the Authority, the City or the Underwriter has reviewed this information, nor do the Authority, the City or the Underwriter make any representation with respect to the accuracy or completeness thereof. The following information is not a complete summary of the terms of the Policy (as such term is defined below) and reference is made to Appendix G for a specimen of the Policy.

Bond Insurance Policy
Concurrently with the issuance of the Bonds, Assured Guaranty Inc. (previously defined as “AG” or the “Insurer”) will issue its Municipal Bond Insurance Policy (previously defined as the “Insurance Policy”) for the Series 2026A Bonds maturing on November 1 of the years 20__ through 20__ inclusive (previously 4909-7645-4603v8/022432-0051 12
defined as the “Insured Series 2026A Bonds”), when due. The Insurance Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an appendix to this Official Statement.

The Insurance Policy is not covered by any insurance security or guaranty fund established under New York, Maryland, California, Connecticut or Florida insurance law.

Assured Guaranty Municipal Corp.

AG is a Maryland domiciled financial guaranty insurance company and an indirect subsidiary of Assured Guaranty Ltd. (“AGL” and together with its subsidiaries, “Assured Guaranty”), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol “AGO.” AGL, through its subsidiaries, provides credit enhancement products to the U.S. and non-U.S. public finance (including infrastructure) and structured finance markets, and participates in the asset management business through ownership interests in Sound Point Capital Management, LP and certain of its investment management affiliates, and in the annuity reinsurance business through Assured Life Reinsurance Ltd. Only AG is obligated to pay claims under the insurance policies AG has issued, and not AGL or any of its shareholders or other affiliates.

AG’s financial strength is rated “AA” (stable outlook) by S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC (“S&P”), “AA+” (stable outlook) by Kroll Bond Rating Agency, Inc. (“KBRA”) and “A1” (stable outlook) by Moody’s Investors Service, Inc. (“Moody’s”). Each rating of AG should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AG in its sole discretion. In addition, the rating agencies may at any time change AG’s long-term rating outlooks or place such ratings on a watch list for possible downgrade in the near term. Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by AG. AG only guarantees scheduled principal and scheduled interest payments payable by the issuer of bonds insured by AG on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant insurance policy), and does not guarantee the market price or liquidity of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn.

Current Financial Strength Ratings. On August 3, 2026, KBRA announced that it had affirmed AG’s insurance financial strength rating of “AA+” (stable outlook).

On July 27, 2026, Moody’s announced that it had affirmed AG’s insurance financial strength rating of “A1” (stable outlook).

On July 17, 2026, S&P announced that it had affirmed AG’s financial strength rating of “AA” (stable outlook).

AG can give no assurance as to any further ratings action that S&P, Moody’s and/or KBRA may take.

For more information regarding AG’s financial strength ratings and the risks relating thereto, see AGL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Capitalization of AG
At June 30, 2026:
• The policyholders’ surplus of AG was approximately $3,088 million. 4909-7645-4603v8/022432-0051 13
• The contingency reserve of AG was approximately $1,569 million. • The net unearned premium reserves and net deferred ceding commission income of AG and its subsidiaries (as described below) were approximately $2,411 million. Such amount includes (i) 100% of the net unearned premium reserve and net deferred ceding commission income of AG and (ii) the net unearned premium reserves and net deferred ceding commissions of AG’s wholly owned subsidiary Assured Guaranty UK Limited (“AGUK”), and its 99.9999% owned subsidiary Assured Guaranty (Europe) SA (“AGE”).

The policyholders’ surplus, contingency reserve, and net unearned premium reserves and net deferred ceding commission income of AG were determined in accordance with statutory accounting principles. The net unearned premium reserves and net deferred ceding commissions of AGUK and AGE were determined in accordance with accounting principles generally accepted in the United States of America.

Incorporation of Certain Documents by Reference
Portions of the following documents filed by AGL with the Securities and Exchange Commission (the “SEC”) that relate to AG are incorporated by reference into this Official Statement and shall be deemed to be a part hereof:
(i) the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (filed by AGL with the SEC on February 27, 2026);
(ii) the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (filed by AGL with the SEC on May 8, 2026); and
(iii) the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 (filed by AGL with the SEC on August 7, 2026).

All information relating to AG included in, or as exhibits to, documents filed by AGL with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, excluding Current Reports or portions thereof “furnished” under Item 2.02 or Item 7.01 of Form 8 K, after the filing of the last document referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC’s website at http://www.sec.gov, at AGL’s website at http://www.assuredguaranty.com, or will be provided upon request to Assured Guaranty Inc.: 1633 Broadway, New York, New York 10019, Attention: Communications Department (telephone (212) 974-0100). Except for the information referred to above, no information available on or through AGL’s website shall be deemed to be part of or incorporated in this Official Statement.

Any information regarding AG included herein under the caption “BOND INSURANCE – Assured Guaranty Inc.” or included in a document incorporated by reference herein (collectively, the “AG Information”) shall be modified or superseded to the extent that any subsequently included AG Information (either directly or through incorporation by reference) modifies or supersedes such previously included AG Information. Any AG Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded.

Miscellaneous Matters. AG makes no representation regarding the Series 2026A Bonds or the advisability of investing in the Series 2026A Bonds. In addition, AG has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AG supplied by AG and presented under the heading “BOND INSURANCE”.
4909-7645-4603v8/022432-0051 14

SOURCES AND USES OF FUNDS
The sources and uses of funds with respect to proceeds of the Series 2026A Bonds and other available amounts are shown below.

Sources
Principal Amount of Series 2026A Bonds $
[Plus/less] [Net] Original Issue [Premium/Discount]
Total Sources $
Uses
Project Fund $
Underwriter’s Discount
Costs of Issuance(1)
Total Uses $
(1) Includes legal, municipal advisory, rating agency, printing fees, the premiums for the Insurance Policy and other miscellaneous costs of issuance.
4909-7645-4603v8/022432-0051 15

DEBT SERVICE SCHEDULE
Following is the annual schedule of debt service due with respect to the Series 2026A Bonds:

Bond Year
Ending
November 1
Series 2024A
Bonds Debt
Service
Series 2026A Bonds
Aggregate Debt
Principal Interest Total Service
2027 $ 2,435,000
2028 2,431,500
2029 2,429,250
2030 2,433,000
2031 2,437,250
2032 2,431,750
2033 2,431,750
2034 2,436,750
2035 2,441,250
2036 --
2037 --
2038 --
2039 --
2040 --
2041 --
2042 --
2043 --
2044 --
2045 --
2046 --
2047 --
2048 --
2049 --
2050 --
2051 --
2052 --
2053 --
2054 --
2055 --
2056 --
Total $ 21,907,500
Source: The Underwriter.

THE PROPERTY
General
The Property initially leased under the Ground Lease and the Lease Agreement consists of various City assets described further below. The Authority and the City may amend the Lease Agreement to substitute alternate property for any portion of the Property, to release a portion of the Property from the Lease Agreement or to add additional property to the encumbrance of the Lease Agreement upon compliance with all of the conditions set forth in the Lease Agreement and described below. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS—Substitution, Addition and Removal of Property.”
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City Hall. City Hall is comprised of an approximately 57,600-square-foot building constructed in 1991, located on approximately 3.33 acres at 14177 Frederick Street in the City. City Hall includes all of the managerial departments of the City, the City Council chambers and the City Council Members’ offices.

The City Hall building is a two-story tilt-up construction office building for public access including offices for City Council and City staff, plus general administration for the following departments: City Manager, City Clerk, Community Development, Planning, Economic Development, Finance, City Attorney, Public Works, and Technical Services. The City Hall building underwent a seismic retrofit in 2012. The City estimates the value of City Hall is approximately $44.8 million.

Public Safety Building. The City’s existing Public Safety Building consists of an approximately 44,700 square foot building situated on approximately 10.2 acres located at 22850 Calle San Juan de Los Lagos. The Public Safety Building consists of a single story tilt-up construction building originally constructed in 1999 and expanded in 2007 which is the primary location for City police services and fire administration. The City estimates the value of the Public Safety Building is approximately $23.7 million.

Emergency Operations Center. The City’s existing Emergency Operations Center consists of an approximately 8,492 square foot building situated on approximately 3.3 acres located at 22870 Calle San Juan de Los Lagos, adjacent to the existing Public Safety Building. The existing Emergency and Operation Center manages disaster preparedness and safety programs for the City and consists of a single story tilt-up construction building constructed in 2010. The City estimates the value of the Emergency Operation Center is approximately $4.6 million.

Conference and Recreation Center. The City’s Conference and Recreation Center consists of an approximately 42,400 square foot building situated on approximately 23.1 acres located at 14075 Frederick Street. The facility was constructed in 2005. The Conference and Recreation Center features the Grand Valley Ballroom, designed to host prominent events and conferences, as well as the Teen S.P.O.T. (Support, Programs, Opportunities, and Technology), which includes a full-size indoor basketball court, and provides educational support and social/recreational activities for local teens. The Conference and Recreation Center also provides spaces that accommodate classes, programs, and activities designed to serve individuals and families of all ages. The City estimates the value of the Conference and Recreation Center is approximately $35.1 million.

Corporate Yard. The City’s existing Corporate Yard situated on approximately 17.5 acres located at 15670 Perris Boulevard, and includes an approximately 63,142 square foot building. The City’s Corporate Yard maintains the City-wide collection and recycling program for both commercial and residential customers.

The City estimates the value of the Corporate Yard is approximately $24.0 million.

Animal Shelter. The City’s existing Animal Shelter is an approximately 16,288 square-foot building located on approximately 2.83 acres at 14041 Elsworth Street in the City which provides veterinarian, pet adoption and animal control services for the City. The City estimates the value of the Animal Shelter is approximately $6.8 million.

Fire Station Number 2. Fire Station Number 2 (Sunnymead) is an approximately 8,850 square-foot fire station originally constructed in 2001 and situated on approximately 1.72 acres located at 24935 Hemlock Avenue. The City estimates the value of Fire Station Number 2 is approximately $5.5 million.

Fire Station Number 6. Fire Station Number 6 (Towngate) is an approximately 9,490 square-foot fire station originally constructed in 1996 and situated on approximately 1.3 acres located at 22250 Eucalyptus Avenue. The City estimates the value of Fire Station Number 6 is approximately $4.7 million.

Fire Station Number 48. Fire Station Number 48 (Sunnymead Ranch) is an approximately 5,605 square-foot fire station originally constructed in 1984 and situated on approximately 0.9 acres located at 10511 Village Road. The City estimates the value of Fire Station Number 48 is approximately $2.9 million. 4909-7645-4603v8/022432-0051 17
Fire Station Number 58. Fire Station Number 58 (Moreno Beach) is an approximately 10,340 square-foot fire station originally constructed in 2008 and situated on approximately 3.59 acres located at 28040 Eucalyptus Avenue. The City estimates the value of Fire Station Number 58 is approximately $6.6 million.

Fire Station Number 65. Fire Station Number 65 (Kennedy Park) is an approximately 5,022 squarefoot fire station originally constructed in 1986 and situated on approximately 0.7 acres located at 15111 Indian Avenue. The City estimates the value of Fire Station Number 65 is approximately $3.3 million.

Fire Station Number 91. Fire Station Number 91 (College Park) is an approximately 8,848 squarefoot fire station originally constructed in 2003 and situated on approximately 3.1 acres located at 16110 Lasselle Street. The City estimates the value of Fire Station Number 91 is approximately $6.2 million.

Fire Station Number 99. Fire Station Number 99 (Morrison Park) is an approximately 10,348 squarefoot fire station originally constructed in 2012 and situated on approximately 1.4 acres located at 13400 Morrison Street. The City estimates the value of Fire Station Number 99 is approximately $5.8 million.

The Public Safety Campus
The Property also include the Public Safety Campus expected to be constructed with a portion of the proceeds of the Series 2026A Bonds. See caption “THE 2026 PROJECT—Public Safety Campus.” THE 2026 PROJECT
General. The 2026 Project consists of the development of a new public safety campus (the “Public Safety Campus”). The Public Safety Campus is expected to serve as a centralized public safety hub for the City, consisting of a new joint-use fire and police station, as well as related public infrastructure improvements. The proposed Public Safety Campus would be located on City-owned land located at the southwest corner of Redlands Boulevard and Brodiaea Avenue, which the City acquired in _____ 20__ and is currently vacant.

Components of the Public Safety Campus. The proposed fire station at the Public Safety Campus is expected to be a two-story, approximately 50,000 square-foot fire station, designed to serve as a regional facility for the Riverside County Fire Department. The fire station is expected to include six drive-through apparatus bays supporting Type 1 fire engines, squads, and tiller trucks. The fire station would also include fire administration, operational support, and firefighter living quarters.

The proposed police station at the Public Safety Campus is expected to be a two-story, approximately 90,0000 square-foot police station. The police station would incorporate controlled public and secure access, a secure perimeter and parking area, and multiple ingress and egress routes while supporting command staff, administration, patrol, specialized units like traffic and community service, special enforcement teams, investigations, property and evidence, and training.

Construction of the Public Safety Campus. The total cost of the Public Safety Campus (including furniture, fixtures and equipment) is expected to be approximately $_____ million, approximately $_____ million of which is expected to be financed with the proceeds of the Series 2026A Bonds and approximately $_____ million of which is expected from the City’s General Fund. The City Council has previously budgeted a total of $_____ million across fiscal years _____ and ______ to begin the design process of the Public Safety Campus. The design phase of the Public Safety Campus is currently underway, and the City currently expects to release a request for construction bids in _____ 20__, with construction currently expected to begin in _____ 20__. The City currently anticipates an approximately _____-month construction period for the Public Safety Campus.
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THE AUTHORITY
The Authority is a public body that is duly organized and existing under the Joint Exercise of Powers Agreement, dated as of October 28, 1997 (the “JPA Agreement”), by and between the City and the Community Redevelopment Agency of the City of Moreno Valley (the “Agency”), and under the Constitution and laws of the State. The Authority was formed for the purpose of assisting the City in the financing and refinancing of public capital improvements by exercising the powers referred to in the JPA Agreement, including the power to issue bonds to pay the costs of public improvements. Neither the City nor the Agency is responsible for repayment of the obligations of the other. The members of the Board of Directors of the Authority are the members of the City Council of the City. The Authority has no employees and all staff work is done by City staff or by consultants to the Authority. The Authority has acted as a conduit issuer for the City for a variety of financings.

THE CITY
General
The City is located in western Riverside County (the “County”), approximately 66 miles east of Los Angeles and 100 miles north of San Diego, California. The City had a population of approximately 208,289 as of January 1, 2023 and covers approximately 51.3 square miles. The City was incorporated on December 3, 1984 and is a general law city operating under a council/manager form of government. Further information concerning the City is set forth below and in APPENDIX A—“ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING THE CITY OF MORENO VALLEY”.

The City had approximately 569 full and part-time employees as of June 30, 2026. City employees (full-time) are represented by three labor associations: the Moreno Valley City Employees Association (the “MVCEA”), which represented approximately 190 employees as of June 30, 2026, the Moreno Valley Management Association (the “MVMA”), which represented approximately 119 employees as of June 30, 2026, and the Moreno Valley Confidential Management Employee Association (the “MVCMEA”) which represented approximately 23 employees as of June 30, 2026. Relations between the City and the MVCEA, MVMA and MVCMEA are governed by memoranda of understanding ( “MOU”) that expire on June 30, 2027. A total of approximately 237 management and confidential employees are exempt from collective bargaining. Salaries for exempt employees are set by the City Council. The City has never experienced a strike, slowdown or work stoppage.

The City provides or contracts for many municipal services for its residents, including libraries, parks, recreation, street and storm drain maintenance, and electric utility services. The City contracts with the Riverside County Sheriff’s Department for law enforcement services and with the County for fire protection services, which are provided by the California Department of Forestry and Fire Protection. Water and sewer service is provided by EMWD and Box Springs Mutual Water Company.

Largest Employers
The largest employer located in the City is the March Air Reserve Base, which currently employs approximately 7,000 persons, representing approximately 6.78% of the total City employment. March Air Reserve Base is the home to the Air Force Reserve Command’s 4th Air Force Headquarters and the 452nd Air Mobility Wing, the largest air mobility wing of the 4th Air Force. In addition to multiple units of the Air Force Reserve Command, the base supports the Air Mobility Command, Air Combat Command and Pacific Air Forces, and is home to units from the Army Reserve, Navy Reserve, Marine Corps Reserve and California Air National Guard.

Other large employers in the City include the Riverside County Regional Medical Center, which currently employs approximately 4,533 employees, Amazon.com, which currently employs approximately 4909-7645-4603v8/022432-0051 19
3,733 employees, and the Moreno Valley Unified School District, which currently employs approximately 3,579 employees. Based on its close proximity to the counties of Los Angeles, Orange and San Diego, the City serves as a regional logistics and major distribution hub for many large manufacturers and retail companies, including Skechers USA, Inc., Deckers, Walgreen Company, Ross Dress for Less, Inc. and Harbor Freight Tools. Several large companies await completion of or have recently completed construction of distribution sites and fulfillment centers within the City limits, including e-retailer Amazon (NASDAQ symbol: AMZN), Deckers Outdoor Corporation (NASDAQ symbol: DECK), which designs, manufactures and markets Teva, UGG Australia, and other footwear brands, and Aldi, Inc., a European discount grocery retailer chain that has over 8,000 stores worldwide (including over 1,000 stores in the United States).

The table below sets forth the largest employers within the City as of June 30, 2025, the latest date for which such information is available.

MORENO VALLEY
LARGEST EMPLOYERS – FISCAL YEAR 2025
Employer Number of Employees Type of Business
March Air Reserve Base 7,000 Military Reserve Base
Riverside County Regional Medical Center 4,533 County Hospital Amazon Fulfillment Center 3,733 Retail Distribution
Moreno Valley Unified School District 3,579 Public Schools Ross Distribution Center 1,803 Retail Distribution
Kaiser Permanente 1,643 Hospital/Medical Services
Harbor Freight Tools 1,075 Retail Distribution
Procter & Gamble 642 Retail Distribution
Val Verde Unified School District 640 Public Schools
City of Moreno Valley 556 Municipal Government
Source: City of Moreno Valley Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2025.

Government and Administration
The City operates under a council-manager form of government. Councilmembers are elected by district for four-year alternating terms and the Mayor is elected at large. The City Manager, appointed by the City Council, serves as the City’s chief administrative officer and is responsible for overseeing the daily operations of City departments and efficient management of all City business. Functions of the City Manager’s Office include coordination of the implementation of City Council policies and programs; providing overall direction to the departments that administer City programs and services; coordinating intergovernmental relations and legislative advocacy; and administration of the City’s communications, media relations and public information programs.

Other key personnel responsible for management of the City include the Assistant City Manager and the Chief Financial Officer. In addition, the City Attorney provides legal services to the City and the Authority.

Brian Mohan has served as the City Manager/Executive Director since January 2025. Mr. Mohan began working for the City in July 2017, initially serving as the Financial Resources Division Manager, and later serving as the Assistant City Manager/Chief Financial Officer/City Treasurer and the Assistant City Manager (Administration), and currently as the City Manager. Mr. Mohan’s 24-year career in local government has included senior management positions with the San Bernardino County Employees Retirement Association and the City of Rialto. Mr. Mohan has a Bachelor of Science degree in Business and Administration from California State University, San Bernardino. Other key personnel responsible for management of the City include the Assistant City Manager and the Chief Financial Officer/City Treasurer. In addition, the City Attorney provides legal services to the City and the Authority. 4909-7645-4603v8/022432-0051 20
Launa Jimenez serves as the Assistant City Manager (Administration). Ms. Jimenez began working for the City in February 2005, working her way up the ranks to her most recent position. Prior to becoming the Assistant City Manager, Ms. Jimenez served as the Chief Financial Officer and Financial Resources Division Manager and in various other roles related to capital improvement and transportation projects. Prior to joining the City, Ms. Jimenez worked for the City of Fontana. Ms. Jimenez has a Bachelor of Arts degree in Public Administration from California State University, San Bernardino.

Felicia London proudly serves as the Chief Financial Officer/City Treasurer for the City of Moreno Valley, providing strategic leadership over the City’s financial operations and directs the activities and programs of the Financial & Management Services Department. Ms. London oversees the Financial Operations, Purchasing & Sustainability, Grants, Payroll, Financial Resources and Special Districts divisions.

Ms. London also assists with investment and treasury services, financial analysis, and budgeting. Ms.

London’s career with the City of Moreno Valley began in 2010 as a Management Analyst assigned to the Police Department, where Ms. London supported the administration of the City’s police services contract.

Prior to joining the City of Moreno Valley, Felicia served as an accountant for the Rialto Police Department and held several positions with the County of Riverside Department of Mental Health. Ms. London attended California State University – San Bernardino, where she earned a Bachelor of Arts degree as well as a Master’s in Public Administration.

Steve Quintanilla, President and owner of the Law Offices of Quintanilla & Associates, served as contract Interim City Attorney and contract Interim General Legal Counsel for the City’s affiliated agencies in 2014-2015, and from March 2020 until being appointed City Attorney on a permanent basis in August 2023.

Mr. Quintanilla has been an attorney for more than 25 years in private practice specializing in municipal law.

He graduated with a juris doctorate from the University of California, Los Angeles School of Law.

Risk Management
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, injuries to employees and natural disasters. The City has established two self insurance funds to finance uninsured risks of loss up to a maximum of $300,000 for each workers’ compensation claim and $250,000 for each general liability claim. For workers’ compensation, the City participates in the CSAC Excess Insurance Authority, a joint powers authority, for claims in excess of coverage provided by its internal funds up to the statutory requirements. For general liability, the City participates in the Public Entity Risk Management Authority (“PERMA”), a joint powers authority, for claims in excess of coverage provided by its internal funds up to $50,000,000. Claims have not exceeded the City’s insurance coverage in any of the last three years.

The City purchases all-risk, replacement cost value property insurance coverage through PERMA up to a maximum amount of $100,000,000. All applicable property and improvements at the Property are insured under the City’s property insurance coverage. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS—Insurance.”
No assurance can be given as to the adequacy of the insurance maintained now or in the future by the City to fund necessary repairs or replacement of any portion of the Property, and the City does not have any obligation under the Lease Agreement to maintain earthquake coverage or other coverage in the current coverage amounts. Significant damage to any of the Property could cause Base Rental Payments to be abated.

See the captions “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS— Abatement” and “RISK FACTORS—Natural Disasters.”
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CITY FINANCIAL INFORMATION
Accounting and Financial Reporting
The City maintains its accounting records in accordance with Generally Accepted Accounting Principles and the standards established by the Governmental Accounting Standards Board (“GASB”). On a quarterly basis, a report is prepared for the City Council and City staff which reviews fiscal performance to date against the budget. Combined financial statements of the City and its component units are produced following the close of each Fiscal Year.

The City Council employs an independent certified public accountant who examines at least annually the financial statements of the City in accordance with generally accepted auditing standards, including tests of the accounting records and other auditing procedures as such accountant considers necessary. As soon as practicable, after the end of the Fiscal Year, a final audit and report is submitted by the independent accountant to the City Council.

The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

The City’s government-wide financial statements are reported using the economic resource measurement focus and the accrual basis of accounting, under which revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows.

The City’s governmental fund (including the General Fund) financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting, under which revenues are recognized as soon as they are both measurable and available (i.e. collectible within the current period or soon enough thereafter to pay liabilities of the current period), and expenditures are recorded when a liability is incurred.

The General Fund is the general operating fund of the City. It is used to account for all financial resources except those that are required to be accounted for in another fund. Base Rental Payments will be paid from any legally available funds of the City. Tables 1 through 4 below set forth certain historical and current Fiscal Year budget information for the General Fund. Information on the remaining governmental funds of the City as of June 30, 2025 is set forth in Appendix C.

General Economic Condition and Outlook of the City
Fiscal Policies. In 2017, the City adopted a comprehensive financial reserve policy (the “Reserve Policy”) to direct the City’s reserves for specific purposes. The Reserve Policy was further updated in 2023, and is anticipated to help maintain the City’s financial stability, protect against future economic downturns which bring unpredictable shortfalls in tax revenue and better prepare the City, its residents and its businesses for a catastrophic natural disaster.

The Reserve Policy categorizes the City’s reserves into a Cash Flow fund, a Rainy Day fund (also called the Economic Uncertainty Reserve) and an Emergency fund (also called the Operating Reserve). The Cash Flow fund’s minimum level is 17% of General Fund expenses, which allows the City to provide services before the receipt of the City’s first tranche of property tax payments (seven months after the start of the Fiscal Year).
4909-7645-4603v8/022432-0051 22
The Rainy Day fund’s minimum level is 15% of the City’s General Fund, which is intended to ensure that the City has the flexibility to continue to deliver quality services during economic downturns, which can reduce sales and property tax revenues which support the full range of services provided to residents.

The Emergency fund’s minimum level is 15% of the City’s General Fund, which is intended to ensure that the City can respond to a catastrophic earthquake, flood, fire or other disaster. The fund also provides a financial buffer in the event that the City is forced to wait for receipt of federal disaster relief funds.

The amounts that are currently held in the Cash Flow, Rainy Day and Emergency funds meet the target levels described above. The City did not apply any of its reserves to cover funding shortfalls during the COVID-19 pandemic.

Strategic Plan. In 2016, after soliciting significant public input via public meetings, online surveys and other community outreach efforts, the City adopted a strategic plan, known as “Momentum MoVal.” Momentum MoVal aligns the City’s resources and creative energy toward meeting six objectives identified by community stakeholders and approved by elected leaders. Momentum MoVal was intended to govern the first five years after adoption while allowing the City Council to adjust priorities as needed to address emerging issues. The strategic plan was reapproved in 2023.

Momentum MoVal identified the following City priorities:
• Economic Development, including attracting new businesses to the City, creating jobs, entering into strategic partnerships and developing the City’s workforce. • Public Safety, including reducing crime, preparing for emergencies and exploring costeffective solutions. • Library, including both traditional and virtual methods of delivering services to residents. • Infrastructure, including managing infrastructure and exploring cost-effective solutions to maintaining existing assets.
• Beautification, Community Engagement and Quality of Life, including caring for the environment and providing cultural and recreational opportunities. • Youth Programs, including expanding healthy lifestyle choices and learning opportunities.

Momentum MoVal also sets forth detailed means of achieving the above objectives, as well the timeline to undertake each task.

Based on the reapproval in 2023, the City continues to focus on the priorities established through Momentum MoVal and, during the most recent and future budgeting cycles, projects will be identified with these priorities in mind.

See the caption “—Budget Procedure, Current Budget and Historical Budget Information” for additional information relating to the City’s budget for Fiscal Years 2025-26 and 2026-27.

Budget Procedure, Current Budget and Historical Budget Information Budget Timeline. The City currently operates on a two-year operating budget cycle. The current budget was approved May 6, 2025 and governs the period beginning on July 1, 2025 for Fiscal Years 2025-26 and 2026-27. The budget includes all funding sources of the City, including the General Fund, Community 4909-7645-4603v8/022432-0051 23
Services District and the Successor Agency of the former Redevelopment Agency. The City’s budget process is described below.

At such time as the City Manager determines, each department head must furnish to the City Manager an estimate of revenues and expenditures for the applicable department for the ensuing two Fiscal Years, detailed in such a manner as may be prescribed by the City Manager. In preparing the proposed budget, the City Manager reviews the estimates, holds conferences regarding the estimates with the respective department heads and revises the estimates as the City Manager deems appropriate. The City Council has directed staff to develop a balanced budget.

Prior to June 30 of every second Fiscal Year, the City Manager submits to the City Council a proposed budget for the next two-year period commencing the following July 1. The budget includes proposed expenditures and the means of financing them. Prior to June 30 of the applicable Fiscal Year, public hearings are conducted to obtain public comments and the budget is legally enacted through the passage of a resolution.

The budget is subject to amendment throughout the two-year period to reflect actual financial performance.

From the effective date of the budget, the amounts stated as proposed expenditures become appropriated to the several departments, offices and agencies for the objects and purposes named. The City Manager is authorized to transfer budgeted amounts between line items within a department or activity, and between departments and programs within the same fund, provided that the total appropriation does not exceed the budgeted amount. All other transfers or amendments require City Council approval. The City Manager and affected department heads are mutually responsible for controlling expenditures within budgeted appropriations. All appropriations lapse at the end of the Fiscal Year to the extent that they have not been expended or lawfully encumbered. At a public meeting after the adoption of the budget the City Council may amend or supplement the budget by motion adopted by three affirmative votes of members of the City Council.

The City Manager proposes interim changes, if any, to the City Council quarterly throughout the two-year budget cycle.
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A summary of the actions taken during the budgetary process is set forth below:

CITY OF MORENO VALLEY

BUDGET PROCESS
Source: City.

The City conducts its annual financial audit between August and November each year, and such audit is typically accepted by the City Council by December of such year. In recognition of its financial reporting excellence, the Government Finance Officers Association of the United States and Canada has awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for over 25 consecutive years.

Current Budget. For Fiscal Year 2026-27, the adopted General Fund operating budget projects revenues of approximately $213.4 million (including transfers in) , which is approximately $9.2 million (or approximately 4.53%) above the budgeted Fiscal Year 2025-26 revenues. The adopted Fiscal Year 2026-27 General Fund operating budget projects expenditures of approximately $213.4 million (including transfers out), which is approximately $9.24 million (or approximately 4.53%) above budgeted Fiscal Year 2025-26 expenditures.

Set forth in Table 1A are recent General Fund budgets and results of the City, excluding transfers in and out, for Fiscal Years 2024-25 and 2025-26. During each Fiscal Year, the budget is amended and revised as necessary by the City Council on a quarterly basis. Set forth in Table 1B are the adopted General Fund budgets for Fiscal Years 2025-26 and 2026-27, as well as the adjusted budgets for Fiscal Year 2025-26. [Any budget adjustments for Fiscal Year 2026-27 are expected to occur in _______.] 4909-7645-4603v8/022432-0051 25
For Fiscal Year 2025-26, the General Fund was anticipated to have a balanced budget, resulting in a minimal change in fund balance. Actual unaudited results of the total fund balance increased by approximately $28.6 million. Revenues were approximately $7.2 million more than what was anticipated in the final budget, primarily, as of June 30, 2026, due to an increase in sales taxes of approximately $6.6 million and the use of money and property of approximately $2.7 million. The increases were largely driven by Measure U sales tax revenue exceeding budget projections and by improvements in investment portfolio holdings. Overall, General Fund actual unaudited expenditures were approximately $22.4 million lower than anticipated in the final budget, primarily due to an approximately $13.1 million decrease in public safety. The reduction in public safety was primarily due to the timing of filling additional public safety positions and the acquisition of planned public safety vehicles and equipment.
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TABLE 1A

CITY OF MORENO VALLEY

GENERAL FUND BUDGETS AND RESULTS
Fiscal Year
2024-25
Final Budget
Fiscal Year
2024-25
Audited Results
Fiscal Year
2025-26
Final Budget
Fiscal Year
2025-26
Unaudited Results
Revenues
Property Taxes(1) $ 53,552,015 $ 55,135,927 $ 58,293,224 $ 58,423,433 Sales Taxes(2) 37,750,000 41,156,071 60,657,764 67,268,160 Utility Users Taxes 18,000,000 21,582,335 20,000,000 21,655,949 Other Taxes(3) 20,000,000 19,108,171 22,000,000 19,255,907 Licenses & Permits 5,639,454 5,220,954 6,287,550 4,312,588 Intergovernmental 794,264 1,073,183 558,257 1,047,493
Charges for Services 15,002,973 15,117,785 16,454,054 15,341,728 Use of Money & Property 4,725,100 16,746,186 7,533,000 10,229,683 Fines & Forfeitures 499,500 348,733 544,500 337,071
Miscellaneous 364,619 1,840,907 10,077,017 11,709,349
Total Revenues $ 156,327,925 $ 177,330,252 $ 202,405,366 $ 209,581,361 Expenditures
Current
General Government
City Council $ 1,052,419 $ 1,033,665 $ 1,161,642 $ 953,173 City Manager 3,458,593 4,896,069 15,731,214 12,359,270
City Clerk 1,346,055 1,318,153 1,415,128 968,107
City Attorney 1,094,769 1,711,469 2,083,694 2,127,523
Human resources 2,348,331 2,510,557 4,229,943 3,117,355 Financial and management services 15,967,365 13,680,871 10,264,541 7,426,456 Non-departmental (3,065,950) 5,002,854 (2,378,238) 2,458,806 Public Safety
Police 64,723,898 57,362,427 77,249,091 68,420,611
Fire 30,242,275 28,273,064 35,872,923 31,600,101
Community and Economic
Development 18,721,310 18,387,241 29,556,695 27,210,850 Community and cultural 1,000 - - -
Public Works 13,901,282 12,065,851 16,045,729 13,044,148 Total Current $ 149,791,347 $ 146,242,221 $ 191,232,362 $ 169,686,400 Debt Service
Principal retirement - 961,354 - 1,081,299
Interest - 60,452 - 87,238
Total debt service - 1,021,806 - 1,168,537
Capital outlay 5,798,846 3,213,258 5,167,010 3,139,265
Total expenditures $ 155,590,193 $ 150,477,285 $ 196,399,372 $ 173,994,202 Excess (Deficiency) of Revenues Over
(Under) Expenditures $ 737,732 $ 26,852,967 $ 6,005,994 $ 35,587,159 Other Financing Sources
Transfers In(1) $ 5,880,514 $ 2,585,080 $ 830,939 $ 11,396,576 Transfers Out(1) (6,683,010) (19,650,721) (12,220,622) (19,925,984) Lease Acquisition - - - 87,046
SBITA Acquisition - 446,070 - 1,494,487
Total Other Financing Sources $ (802,496) $ (16,619,571) $ (11,389,683) $ (6,947,875) Net Change in Fund Balance $ (64,764) $ 10,233,396 $ (5,383,689) $ 28,639,284 Beginning Fund Balance $ 104,185,956 $ 104,185,956 $ 114,419,352 $ 114,419,352 Ending Fund Balance $ 114,419,352 $ 114,419,352 $ 109,035,663 $ 143,058,636 (1) Includes property taxes in-lieu of VLF. See the captions “—Property Taxes” and “—State of California Motor Vehicle In-Lieu Payments.” (2) Includes Measure U sales tax collections, which took effect on April 1, 2025. See the captions “—Sales Taxes” and “—Measure U.” (3) Includes franchise fees, business license fees, cannabis business taxes and transient occupancy tax revenues. See the captions “—Tax Revenues by Source” and “—Other Taxes.”
Sources: Audited financial statements of the City for Fiscal Year 2024-25. City for Fiscal Year 2025-26. 4909-7645-4603v8/022432-0051 27
TABLE 1B

CITY OF MORENO VALLEY
FISCAL YEARS 2025-26 AND 2026-27 BIENNIAL BUDGET
Fiscal Year
2025-26
Adopted Budget
Fiscal Year
2025-26
Amended Budget
Fiscal Year
2026-27
Adopted Budget
Total Revenues & Transfers In $ 204,173,791 $ 202,722,092 $ 213,416,086 Property Taxes(1) 36,000,000 22,500,000 36,750,000
Property Taxes in lieu(1) 34,321,793 35,793,224 37,753,973 Utility Taxes 20,000,000 20,000,000 22,000,000
Sales Taxes(2) 60,546,078 60,657,764 60,588,067
Other Taxes(3) 22,000,000 22,000,000 24,200,000
Licenses & Permits 6,552,550 6,287,550 6,553,150
Intergovernmental 390,000 558,257 390,000
Charges for Services 15,699,054 16,174,054 16,312,377
Use of Money & Property 7,533,000 7,533,000 7,536,450
Fines & Forfeitures 544,500 544,500 544,500
Miscellaneous 168,000 9,842,804 168,000
Transfers In 418,816 830,939 -
Total Revenues & Transfers In $ 204,173,791 $ 202,722,092 $ 213,416,086 Total Expenditures & Transfers Out $ (204,166,791) $(207,915,092) $(213,409,086) Personnel Services (38,648,804) (39,494,595) (36,842,438) Contractual Services (148,064,761) (143,493,758) (160,772,849) Materials & Supplies (7,183,533) (7,708,951) (5,338,074) Debt Service - 0 -
Fixed Charges (5,447,166) (4,997,166) (5,434,166)
Fixed Assets (400,000) 0 (600,000)
Transfers Out 4,422,527 12,220,622 4,421,559
Total Expenditures & Transfers Out $ (204,166,791) $(207,915,092) $ (213,409,086) Net Change or Adopted Use of Fund Balance $ 7,000 $ (5,193,000) $ 7,000 (1) See the captions “—Property Taxes” and “—State of California Motor Vehicle In-Lieu Payments.” (2) Includes Measure U sales tax collections, which took effect on April 1, 2025. See the captions “—Sales Taxes” and “—Measure U.” (3) Includes franchise fees, business license fees, cannabis business taxes and transient occupancy tax revenues. See the captions “—Tax Revenues by Source” and “—Other Taxes.”
Sources: Adopted budgets of the City for Fiscal Years 2025-26 and 2026-27; City for mid-year budget updates to the biennial budget for Fiscal Year 2025-26.
4909-7645-4603v8/022432-0051 28
Change in Fund Balance of the City General Fund
Set forth in Table 2 are the City’s General Fund statements of revenues, expenditures, and changes in fund balance for the last five Fiscal Years.

TABLE 2

CITY OF MORENO VALLEY

GENERAL FUND STATEMENT OF

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
Fiscal Year Ended June 30
2022 2023 2024 2025 2026(7)
Revenues
Taxes
Property Taxes $ 19,290,854 $ 21,268,854 $ 23,928,256 $ 25,592,633 $ 27,053,975 Property Taxes in lieu(1) 23,835,902 25,938,708 28,131,102 29,543,294 31,369,458 Utility Taxes 17,708,256 19,501,114 19,496,246 21,582,335 21,655,949 Sales Taxes(2) 40,570,137 36,161,809 37,811,351 41,156,071 67,268,160 Other Taxes(3) 19,818,127 20,930,742 19,882,841 19,108,171 19,255,907 Licenses & Permits 4,182,232 4,254,783 4,873,213 5,220,954 4,312,588 Intergovernmental 663,988 607,686 1,905,873 1,073,183 1,047,493 Charges for Services 15,788,929 15,931,642 14,981,941 15,117,785 15,341,728 Use of Money & Property (6,674,183) 4,910,748 15,319,519 16,746,186 10,229,683 Fines & Forfeitures 660,409 678,067 509,048 348,733 337,071 Miscellaneous(4) 784,081 10,383,637 2,625,615 1,840,907 11,709,349 Total Revenues $ 136,628,447 $ 160,567,790 $ 169,465,005 $ 177,330,252 $ 209,581,361 Expenditures
Current
General Government $ 18,744,301 $ 20,026,089 $ 25,349,851 $ 30,153,638 $ 29,410,690 Public Safety(5) 42,125,860 49,946,422 80,572,015 85,635,491 100,020,712 Community and Economic
Development
11,960,478 13,435,228 17,308,641 18,387,241 27,210,850
Public Works 8,452,014 10,116,764 11,138,670 12,065,851 13,044,148 Principal Retirement 222,149 882,176 1,024,447 961,354 1,081,299 Interest and Fiscal Charges 7,527 60,997 143,741 60,452 87,238 Capital Outlay 1,769,346 3,030,793 3,791,677 3,213,258 3,139,265 Total Expenditures $ 83,281,675 $ 97,498,469 $ 139,329,042 $ 150,477,285 $ 173,994,202 Excess (Deficiency) of Revenues Over
(Under) Expenditures $ 53,346,772 $ 63,069,321 $ 30,135,963 $ 26,852,967 $ 35,587,159 Other Financing Sources (Uses)
Transfers In $ 65,129 $ 758,451 $ 67,491 $ 2,585,080 $ 11,396,576 Transfers Out(6) (44,104,079) (64,222,671) (25,581,757) (19,650,721) (19,925,984) Lease Acquisition 1,370,973 -- -- -- 87,046
SBITA Acquisition -- 1,775,199 - 446,070 1,494,487
Total Other Financing Sources (Uses) $ (42,667,977) $ (61,689,021) $ (24,594,456) $ (16,619,571) $ (6,947,875) Net Change in Fund Balances $ 10,678,795 $ 1,380,300 $ 5,541,507 $ 10,233,396 $ 28,639,284 Fund Balances, Beginning of Year $ 86,585,354 $ 97,264,149 $ 98,644,449 $ 104,185,956 $ 114,419,352 Fund Balances, End of Year $ 97,264,149 $ 98,644,449 $ 104,185,956 $ 114,419,352 $ 143,058,636 (1) See the caption “—State of California Motor Vehicle In-Lieu Payments.” The City’s audited financial statements present property taxes in-lieu of VLF together with general property taxes.
(2) Increases beginning in Fiscal Year 2024-25 due to Measure U sales tax collections, which took effect on April 1, 2025. See the captions “—Sales Taxes” and “—Measure U.”
(3) Includes franchise fees, business license fees, cannabis business taxes and transient occupancy tax revenues. See the caption “—Other Taxes.” The cannabis business tax was approved by the voters in November 2018 and the first full year of collections was Fiscal Year 2020-21. See the captions “—Tax Revenues by Source” and “—Other Taxes.”
(4) Increase in Fiscal Year 2022-23 due to a one-time donation. Increase in Fiscal Year 2025-26 due to the usage and closing of a Section 115 PARS account.
(5) In each of Fiscal Year 2021-22 and 2022-23, public safety expenditures were less than prior years due to the City using approximately $24.2 million and $24.3 million, respectively, of funds from the City’s American Rescue Plan Act Fund to fund public safety services related to the pandemic response.
(6) Transfers out in Fiscal Years 2021-22 and 2022-23 include transfers out of approximately $24.4 million in each year to fund capital projects using funds made available due to the City’s receipt of approximately $48.8 million in funding received under the American Rescue Plan Act across such years. Transfers out in Fiscal Years 2021-22 and 2022-23 also include transfers out to Internal Service Funds to increase reserves for technology, facilities, fleet and unfunded liabilities.
(7) Fiscal Year 2025-26 information is unaudited.

Sources: Audited financial statements of the City for Fiscal Years 2021-22 through 2024-25; City for Fiscal Year 2025-26. 4909-7645-4603v8/022432-0051 29
General Fund Balance Sheets of the City
Set forth in Table 3 are the City’s General Fund balance sheets for the last five Fiscal Years.

TABLE 3

CITY OF MORENO VALLEY

GENERAL FUND BALANCE SHEETS
Fiscal Year Ended June 30,
2022 2023 2024 2025 2026(10)
Assets
Pooled Cash and Investments $ 58,024,866 $ 51,139,078 $ 107,843,580 $ 115,003,534 $ 140,610,055 Receivables
Accounts 4,251,200 7,072,296 3,176,238 3,347,612 5,797,624 Notes to Successor Agency 10,227,341 9,464,341 8,701,341 7,938,341 7,175,341 Leases(1) 1,694,567 1,629,255 1,559,636 1,506,527 1,423,965 Interest 820,927 1,827,367 1,758,757 2,445,251 2,703,408 Other -- -- -- -- --
Prepaid Costs 451,612 743,112 928,879 981,299 997,528
Due from Other Governments 7,276,902 6,793,509 6,389,206 14,605,286 13,125,905 Due from Other Funds(2) 51,782,657 63,304,067 15,413,496 10,857,996 9,741,936 Advances to Other Funds 5,400,000 5,500,000 6,000,000 5,750,000 5,750,000 Restricted: Cash and investments -- -- -- 5,635,925 --
Land Held for Resale/Redevelopment 2,856,471 2,856,471 2,856,471 2,856,471 2,856,471 Total Assets $ 142,786,543 $ 150,329,496 $ 154,627,604 $ 170,928,242 $ 190,182,233 Liabilities, Deferred Inflows of
Resources and Fund Balances
Liabilities
Accounts Payable $ 23,568,023 $ 22,798,736 $ 19,881,449 $ 19,206,829 $ 16,996,638 Accrued Liabilities 915,232 1,313,703 3,570,898 6,037,166 1,323,339 Deposits Payable(3) 8,746,423 9,385,188 9,666,079 11,737,010 10,902,848 Unearned Revenues 744,901 1,025,176 653,569 662,293 2,660,468 Due to Other Governments(4) 8,205 6,010,337 6,327,322 6,694,016 7,636,267 Total Liabilities $ 33,982,784 $ 40,533,140 $ 40,099,317 $ 44,337,314 $ 39,519,560 Deferred Inflows of Resources
Unavailable Revenues $ 9,884,828 $ 9,601,917 $ 8,897,133 $ 10,806,711 $ 6,345,818 Leases(1) 1,654,782 1,549,990 1,445,198 1,364,865 1,258,219 Total Deferred Inflows of Resources $ 11,539,610 $ 11,151,907 $ 10,342,331 $ 12,171,576 $ 7,604,037 Fund Balances
Nonspendable
Prepaid Costs $ 451,612 $ 743,112 $ 928,879 $ 981,299 $ 997,528 Land Held for Resale 2,856,471 2,856,471 2,856,471 2,856,471 2,856,471 Notes to Successor Agency 2,759,823 2,555,187 2,350,551 1,950,663 1,941,279 Advances to Other Funds 5,400,000 5,500,000 6,000,000 5,750,000 5,750,000 Committed to
Revolving Line of Credit(5) 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 Maintenance of Pedestrian Bridge 240,363 255,936 273,426 291,519 310,227 Operating Reserve(6) 16,129,747 22,446,030 22,876,351 24,256,014 26,333,782 Assigned to
Economic Uncertainty Reserve(7) 13,441,456 22,446,030 22,876,351 24,256,014 26,333,782 Continuing Appropriations 2,256,992 2,454,543 2,002,670 842,118 -- Grants and Federal/State Awards(8) -- 13,115,981 17,966,393 12,539,362 10,048,750 GASB 31(9) -- -- -- -- --
Measure U -- -- -- 7,251,527 32,370,590
Unassigned 51,127,685 23,671,159 23,454,864 30,844,365 33,516,227 Total Fund Balances $ 97,264,149 $ 98,644,449 $ 104,185,956 $ 114,419,352 $ 143,058,636 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 142,786,543 $ 150,329,496 $ 154,627,604 $ 170,928,242 $ 190,182,233 (1) Beginning in Fiscal Year 2021-22, the City implemented GASB Statement No. 87—Leases, which generally requires recognition of certain leased assets and liabilities for leases that were previously classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. (Footnotes continue on the following page.)
4909-7645-4603v8/022432-0051 30
(Footnotes continued from previous page.)
(2) Increases beginning in Fiscal Year 2020-21 due to restructuring the financial reporting. (3) Represents deposits held by the City for various development projects and shown beginning in Fiscal Year 2020-21 due to a change in reporting.
(4) Represents Public Safety expenditures accrued and sales tax payable. Increases in Fiscal Years 2021 and 2023 due to public safety services related to the pandemic response, which was funded by the American Rescue Plan Act. (5) Reflects moneys made available from the General Fund to the Moreno Valley Electric Utility (“MVU”) for liquidity purposes. No portion of the available amount has been drawn upon for over a decade. MVU has robust reserves and the City does not currently expect MVU to draw upon these moneys for the foreseeable future.
(6) Also referred to in the Reserve Policy as the Emergency fund. See the caption “—General Economic Condition and Outlook of the City— Fiscal Policies.”
(7) Also referred to in the Reserve Policy as the Rainy Day fund. See the caption “—General Economic Condition and Outlook of the City— Fiscal Policies.”
(8) Amounts shown for Fiscal Year 2022-23 represent grants awarded but not yet completed. (9) Represents temporary fluctuations in the fair value of investments pursuant to GASB Statement No. 31. Not shown in Fiscal Years 2020-21 through 2022-23 due to changes in reporting structure.
(10) Fiscal Year 2025-26 information is unaudited.

Sources: Audited financial statements of the City for Fiscal Years 2020-21 through 2024-25; City for Fiscal Year 2025-26.

Tax Revenues by Source
The City derives its General Fund tax revenues from a variety of sources including ad valorem property taxes, sales and use taxes, franchise taxes, a real property transfer tax and transient occupancy taxes.

The City’s total General Fund tax revenues by source for the five most recent fiscal years are set forth below.

TABLE 4

CITY OF MORENO VALLEY

GENERAL FUND TAX REVENUES BY SOURCE
Fiscal Year Ended June 30
Revenue Category 2021-22 2022-23 2023-24 2024-25 2025-26(1) Property Tax $ 19,290,569 $ 21,268,854 $ 23,928,256 $ 25,592,633 $ 27,053,975 Property Tax In-Lieu of VLF 23,835,902 25,938,708 28,131,102 29,543,294 31,369,458 Utility Users Tax 17,708,256 19,501,114 19,496,246 21,582,335 21,655,949 Sales and Use Tax(2) 40,570,137 36,161,809 37,811,351 33,904,544 34,598,808 Measure U Sales Tax(3) -- -- -- 7,251,527 32,669,352
Transient Occupancy Tax 4,731,985 4,787,129 4,281,245 4,074,962 4,089,275 Franchise Tax 7,706,517 9,045,784 9,018,642 9,251,321 9,197,042 Business License Gross Receipts Tax 2,668,645 2,959,202 3,018,980 2,944,235 2,925,498 Documentary Transfer Tax 1,314,039 954,975 633,336 643,894 588,857 Cannabis Business Tax(4) 3,396,941 3,183,652 2,930,638 2,193,759 2,455,235 Total Tax Revenues $121,222,991 $123,801,227 $ 129,249,796 $ 136,982,504 $ 166,603,449 (1) Based on unaudited results for Fiscal Year 2025-26. (2) Increase beginning in Fiscal Year 2021-22 due to changes in the corporate structure of Amazon, which operates a fulfillment center within the City, which led to increased collections of sales taxes received by the City. See the caption “—Sales Taxes.” (3) The Measure U Sales Tax was approved by the voters in November 2024 and took effect on April 1, 2025. See the caption “—Measure U Sales Tax.”
(4) The cannabis business tax was approved by the voters in November 2018. See the caption “—Other Taxes.” Source: City.

Sales Taxes
General. Sales tax receipts of $41,156,071 (which includes Measure U Sales Tax receipts, as described below) provided the largest tax revenue source for the City in Fiscal Year 2024-25, contributing approximately 30.4% of General Fund tax revenues and approximately 23.2% of total General Fund revenues during Fiscal Year 2024-25. Sales tax receipts of $67,268,160 (including Measure U) provided the largest tax revenue source for the City in Fiscal Year 2025-26, contributing approximately 40.1% of General Fund tax revenues and approximately 32.1% of total General Fund revenues during Fiscal Year 2025-26 based on unaudited results. Automobile sales at the Moreno Valley Auto Mall and business activity at fulfillment centers and logistics warehouses throughout the City contribute significantly to such receipts. 4909-7645-4603v8/022432-0051 31
A sales tax is imposed on retail sales or consumption of personal property and collected and distributed by the California Department of Tax and Fee Administration (the “CDTFA”). The basic sales tax rate is established by the State Legislature, and local overrides may be approved by voters.

Additional information relating to sales tax receipts by the City is set forth in APPENDIX A— “ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING THE CITY OF MORENO VALLEY”.

Measure U Sales Tax. On November 5, 2024 voters in the City approved Measure U which increased the sales tax rate in the City form 7.75% to 8.75%, with no sunset provisions. Measure U took effect on April 1, 2025. Unaudited Measure U sales tax revenues for Fiscal Year 2025-26 were $32,669,352 and are budgeted to be $32,000,000 for Fiscal Year 2026-27. For Fiscal Year 2025-26, Measure U contributed approximately 19.6% of the General Fund tax revenues and approximately 16.1% of total revenue.

Property Taxes
Property tax receipts of $25,592,633 (excluding motor vehicle license fee in-lieu payments, which are discussed under the caption “—State of California Motor Vehicle In-Lieu Payments”), contributed approximately 18.7% of General Fund tax revenues and approximately 14.4% of total General Fund revenues during Fiscal Year 2024-25. Property tax receipts of $27,053,975 (excluding motor vehicle license fee in-lieu payments, which are discussed under the caption “—State of California Motor Vehicle In-Lieu Payments”) contributed approximately 16.2% of General Fund tax revenues and approximately 12.9% of total General Fund revenues during Fiscal Year 2025-26 based on unaudited results.

Property in the State which is subject to ad valorem taxes is classified as “secured” or “unsecured.” The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax that is levied on unsecured property may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens arising pursuant to State law on the secured property, regardless of the time of the creation of other liens.

The exclusive means of compelling the payment of delinquent taxes with respect to secured property is the sale of the property securing the taxes for the amount of taxes that are delinquent. The taxing authority has three methods of collecting unsecured personal property taxes: (1) filing a civil action against the taxpayer; (2) obtaining a judgment lien on certain property of the taxpayer from the county clerk or county recorder; and (3) seizing and selling personal property, improvements or possessory interests belonging or taxable to the assessee.

A 10% penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, beginning on the July 1 following a delinquency, interest begins accruing at the rate of 1.5% per month on the amount delinquent. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A 10% penalty also applies to the delinquent taxes or property on the unsecured roll, and further, an additional penalty of 1.5% per month accrues with respect to such taxes beginning on the varying dates related to the tax billing date.

State law also provides for the supplemental assignment and taxation of property as of the occurrence of a change in ownership or completion of new construction. Collection of taxes based on supplemental assessments occurs throughout the year. Taxes due are prorated according to the amount of time remaining in the tax year.

For a number of years, the State Legislature shifted property taxes from cities, counties and special districts to the Educational Revenue Augmentation Fund (“ERAF”). In Fiscal Years 1993 and 1994, in response to serious budgetary shortfalls, the State Legislature and administration permanently redirected over $3 billion of property taxes from cities, counties, and special districts to schools and community college 4909-7645-4603v8/022432-0051 32
districts pursuant to ERAF shifts. The Fiscal Year 2004-05 State Budget included an additional $1.3 billion shift of property taxes from certain local agencies, including the City, in Fiscal Years 2004-05 and 2005-06.

On July 27, 2009, the Governor signed a revised Fiscal Year 2010 State budget that included an ERAF shift of approximately 8% of 1% ad valorem property tax revenues from certain local agencies, including the City.

On November 2, 2010, State voters approved Proposition 22, which: (i) prohibits the State of California from shifting or delaying the distribution of funds from special districts to schools and community colleges; (ii) eliminates the authority to shift property taxes temporarily during a severe financial hardship of the State; and (iii) restricts the State’s authority to use fuel tax revenues to pay debt service on transportation bonds, to borrow or change the distribution of fuel tax revenues or to use vehicle license fee revenues to reimburse local governments for state-mandated costs.

Despite the passage of Proposition 22, there can be no assurance that 1% ad valorem property tax revenues which the City currently expects to receive will not be temporarily shifted from the City or reduced pursuant to State legislation enacted in the future. See the caption “STATE OF CALIFORNIA BUDGET INFORMATION.” If the property tax formula is permanently changed in the future, it could have a material adverse effect on the receipt of its share of 1% property tax revenues by the City.

Set forth in Table 5 are the secured and unsecured assessed valuations for property in the City for the five most recent Fiscal Years.

TABLE 5

CITY OF MORENO VALLEY

ASSESSED VALUATION HISTORY
(in thousands of dollars)
Fiscal
Year Secured Value
Unsecured
Value
Total Assessed
Value
Less
Exemptions
Taxable Assessed
Value(2)
2021 $17,993,472 $ 744,144 $18,737,617 $(525,363) $18,212,254 2022 18,891,344 732,701 19,624,064 (416,160) 19,207,904 2023 20,519,93 795,193 21,315,143 (433,258) 20,881,885
2024 22,081,305 1,037,323 23,118,647 (446,203) 22,672,444 2025 23,271,313 1,105,029 24,376,342 (545,345) 23,830,997 2026 24,800,752 1,091,668 25,892,420 (610,611) 25,281,809 2027
(1) The Direct Tax Rate is the ratio of the assessed valuations within the City to the amount of all property taxes collected in the County. (2) Totals and percentages may not sum due to rounding.

Sources: County Assessor’s Office; County Auditor-Controller’s Office.

Set forth in Table 6 are property tax collections (including amounts that do not constitute General Fund moneys) and delinquencies in the City as of June 30 for the last five Fiscal Years. The County has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (known as the Teeter Plan), as provided for in Section 4701 et seq. of the Revenue and Taxation Code of the State, and therefore the County Auditor-Controller distributes 100% of property tax revenues allocated to each city in the County without regard to delinquencies in the payment of property taxes. As a result of City’s participation in the Teeter Plan, the City receives no adjustments for redemption payments on delinquent collections. The City does receive supplemental taxes. There can be no assurance that the County Auditor-Controller will not change its policies with respect to delinquencies in property tax payments in the future.
4909-7645-4603v8/022432-0051 33
TABLE 6

CITY OF MORENO VALLEY

PROPERTY TAX LEVIES AND COLLECTIONS
Fiscal Year
Total
Tax Levy
Collections
within the
Fiscal Year
of Levy(1)
Percent of Levy
Collected within
the Fiscal Year
of Levy
Collections in
Subsequent
Years
Total
Collections to
Date
Percent of Levy
Collected to
Date
2022 $ 35,239,398 $ 34,720,200 98.53% $ 519,198 % 35,239,398 100.00% 2023 37,433,664 37,433,664 100.00 -- 37,433,664 100.00
2024 40,021,738 40,021,738 100.00 -- 40,021,738 100.00
2025 42,238,316 42,147,170 99.78 91,146 42,238,316 100.00 2026 44,896,124 44,741,138 99.65 154,986 44,896,124 100.00 (1) The amounts shown in this column reflect all property tax collections of the City, including non-General Fund monies. See Table 2 under the caption “—Change in Fund Balance of the City General Fund” for historic General Fund property tax revenues alone.

Sources: County Assessor’s Office; County Auditor-Controller’s Office.

Information with respect to the ten largest property taxpayers in the City as shown on the Fiscal Year 2025-26 tax roll is set forth in Table 7.

TABLE 7

CITY OF MORENO VALLEY

TEN LARGEST PROPERTY TAXPAYERS
Taxpayer
2027 Taxable
Assessed Valuation
% of Total
Assessed
Valuation(1)
Duke Realty LP $ 611,755,200 2.42%
Prologis 446,689,491 1.77
HF Logistics SKX T1 LLC 331,283,904 1.31
First Industrial LP 284,686,959 1.13
TGA Centerpointe LLC 283,453,375 1.12
Skechers USA Inc. 232,558,010 0.92
Ross Dress For Less Inc. 164,242,487 0.65
Walgreen Company 163,702,251 0.65
Amazon.com Services LLC 147,178,368 0.58
FR Cal Moreno Valley LLC 139,924,456 0.55
TOTAL $ 2,805,474,501 11.10%
(1) Fiscal Year 2025-26 total taxable assessed value: approximately $25,281,808,537.

Source: County Assessor’s Office.

State of California Motor Vehicle In-Lieu Payments
The State imposes a Vehicle License Fee (the “VLF”), which is the portion of the fees paid in lieu of personal property taxes on a vehicle. The VLF is based on vehicle value and declines as the vehicle ages.

Prior to the adoption of the Fiscal Year 2004-05 State Budget, the VLF was 2% of the value of a vehicle.

Through legislation in prior Fiscal Years, the State enacted VLF reductions under which the State was required to “backfill” local governments for their revenue losses resulting from the lowered fee. The Fiscal Year 2004-05 State Budget permanently reduced the VLF from 2% to 0.65% of the value of a vehicle and deleted the requirement for backfill payments, providing instead that the amount of the backfill requirement will be met by an increase in the property tax allocation to cities and counties. See the caption “STATE OF CALIFORNIA BUDGET INFORMATION.”
4909-7645-4603v8/022432-0051 34
VLF receipts totaled $29,543,294 in Fiscal Year 2024-25. Such revenues provided the second largest tax revenue source for the City in Fiscal Year 2024-25, contributing approximately 21.57% of General Fund tax revenues and approximately 16.7% of total General Fund revenues. VLF receipts totaled $31,369,458 in Fiscal Year 2025-26 based on unaudited actual results providing the third largest tax revenue source for the City, contributing approximately 18.8% of General Fund tax revenues and approximately 15.0% of total General Fund revenues.

TABLE 8

CITY OF MORENO VALLEY

STATE OF CALIFORNIA MOTOR VEHICLE IN-LIEU PAYMENTS
Fiscal Year Ended June 30,
Source 2021 2022 2023 2024 2026(1)
Motor Vehicle In-Lieu Payments $23,835,902 $25,938,708 $28,131,102 $29,543,294 $31,369,458 (1) Fiscal Year 2025-26 information is unaudited.

Source: City.

Utility Taxes
Utility tax receipts of $21,582,335 contributed approximately 15.76% of General Fund tax revenues and approximately 12.2% of total General Fund revenues during Fiscal Year 2024-25. Utility tax receipts of $21,655,949 contributed approximately 13.0% of General Fund tax revenues and approximately 10.3% of total General Fund revenues during Fiscal Year 2025-26 based on unaudited actual results. The utility tax is imposed upon utility users in the City, including users of electricity, gas, telephone, mobile telephone and water services, at the rate of 5.75%. Exemptions are available for low-income residents. Proceeds of the utility tax are used to fund police, fire, library, school crossing guards, animal control, community enhancement, and street maintenance programs and other activities funded by the General Fund.

The City notes that the utility tax does not have a sunset provision and has been a stable revenue source which has enabled the City to manage its finances during economic downturns that negatively affected other tax revenue sources, including the 2008-09 financial crisis and the pandemic-induced recession in 2020.

Other Taxes
Other tax receipts of $19,108,171 collected by the City in Fiscal Year 2024-25, including but not limited to transient occupancy taxes, business license taxes, franchise fees, property transfer taxes and Measure M tax revenues (described above), provided approximately 13.95% of General Fund tax revenues and 10.8% of total General Fund revenues during Fiscal Year 2024-25. Other tax receipts of $19,255,907 collected by the City in Fiscal Year 2025-26, including but not limited to transient occupancy taxes, business license taxes, franchise fees, property transfer taxes and Measure M tax revenues (described above), provided approximately

11.6% of General Fund tax revenues and 9.2% of total General Fund revenues during Fiscal Year 2025-26, based on unaudited results.

On November 6, 2018, City voters approved Measure M, a tax on commercial cannabis activity at the rate of 8% of the sales price (excluding excise taxes) of cannabis products. The City has made 39 cannabis business permits available, of which 17 are currently in use. Fiscal Year 2020-21 was the first full year in which the Measure M tax was collected. See the caption “—Tax Revenues by Source” for the City’s historical Measure M tax revenues.
4909-7645-4603v8/022432-0051 35
Services
Fees of $15,117,785 collected for services provided by the City in Fiscal Year 2024-25, based on unaudited actual results, including but not limited to fees for plan checks and other planning services, issuance of building permits, police services, and public works projects, provided approximately 8.52% of General Fund revenues during Fiscal Year 2024-25. Fees of $15,341,728 collected for services provided by the City in Fiscal Year 2025-26, including but not limited to fees for plan checks and other planning services, issuance of building permits, police services, and public works projects, provided approximately 7.32% of General Fund revenues during Fiscal Year 2025-26 based on unaudited results. Such amounts reflect the sum of the “Licenses & Permits,” “Charges for Services” and “Fines & Forfeitures” line items shown in Tables 1 and 2 above.

Other Indebtedness
General Fund-Supported Debt.

Series 2024 Bonds. In July 2024, the Authority issued its Lease Revenue Refunding Bonds, Series 2024A in an aggregate principal amount of $21,960,000 (the “2024A Bonds”) to refund its outstanding Lease Revenue Bonds, Series 2024A of June 30, 2026. The 2024A Bonds were outstanding in the aggregate principal amount of $18,785,000. The 2024A Bonds are payable from rental payments made by the City to the Authority under a Lease Agreement.

The City has covenanted in the Lease Agreement with respect to the 2024A Bonds to budget and appropriate moneys annually for the lease payments payable thereunder from legally available funds in the same manner as for the Series 2026 Bonds.

Other Long-Term Debt. As of June 30, 2026, the City had $14,965,000 aggregate principal amount of obligations under an Installment Sale Agreement, dated as of October 1, 2020 (the “2020 ISA”), by and between the City and the California Statewide Communities Development Authority. The 2020 ISA is payable from proceeds of retail transactions and use tax (Measure A) imposed by the Riverside County Transportation Commission.

In June 2026, the Authority issued its Electric System Revenue Bonds, Series 2026A (the “2026A Electric Bonds”) in the aggregate principal amount of $135,955,000 to refund the Authority’s outstanding Lease Revenue Bonds, Series 21019 (Taxable) and the Lease Revenue Bonds, Series 2021 (Taxable) and to finance certain electric system improvements on behalf of the Moreno Valley Utility. The 2026A Electric Bonds are secured by installment payments made by the City to the Authority which are secured by a pledge and lien on net revenues of the City’s electric system and are not secured by the General Fund.

Short-Term Debt. The City currently has no short-term debt outstanding. As discussed in the footnotes to the table under the caption “—General Fund Balance Sheets,” the City has made available (as a potential interfund transfer) up to $2.6 million from the General Fund to MVU for liquidity purposes. No portion of the available amount has been drawn upon for over a decade. MVU has robust reserves and the City does not currently expect MVU to draw upon these moneys for the foreseeable future.

Estimated Direct and Overlapping Bonded Debt. The estimated direct and overlapping bonded debt of the City as of May 1, 2025, is set forth in Table 9. The information in Table 9 has been derived from data assembled and reported to the City by California Municipal Statistics, Inc. None of the City, the Authority or the Underwriter has independently verified the information in Table 9 and the City, the Authority and the Underwriter do not guarantee its accuracy.
4909-7645-4603v8/022432-0051 36
TABLE 9

CITY OF MORENO VALLEY

ESTIMATED DIRECT AND OVERLAPPING BONDED DEBT
2025-26 Assessed Valuation: $25,280,959,678
OVERLAPPING TAX AND ASSESSMENT DEBT: %Applicable Debt 8/1/26 Metropolitan Water District 0.594% $ 95,307
Eastern Municipal Water District, I.D. No. U-22 98.709 992,025 Riverside City Community College District 14.671 64,246,510 Mount San Jacinto Community College District 0.017 38,797 Moreno Valley Unified School District 80.032 328,819,475 San Jacinto Unified School District 0.494 577,758
Val Verde Unified School District 27.197 95,398,864
Moreno Valley Unified School District Community Facilities District No. 2002-1 100.000 6,903,749 Moreno Valley Unified School District Community Facilities District No. 2003-1 & 2 100.000 11,103,053 Moreno Valley Unified School District Community Facilities District No. 2004-1 100.000 1,695,000 Moreno Valley Unified School District Community Facilities District No. 2004-2 100.000 4,749,779 Moreno Valley Unified School District Community Facilities District No. 2004-3 100.000 2,460,000 Moreno Valley Unified School District Community Facilities District No. 2004-4 100.000 3,325,000 Moreno Valley Unified School District Community Facilities District No. 2004-5 100.000 2,900,000 Moreno Valley Unified School District Community Facilities District No. 2004-6 100.000 25,897,186 Moreno Valley Unified School District Community Facilities District No. 2005-1 100.000 5,875,000 Moreno Valley Unified School District Community Facilities District No. 2005-2, 3, 4, & 5 100.000 19,325,000 Moreno Valley Unified School District Community Facilities District No. 2007-1 100.000 4,370,000 Moreno Valley Unified School District Community Facilities District No. 2015-2 100.000 6,025,000 Moreno Valley Unified School District Community Facilities District No. 2015-3 100.000 3,845,000 Moreno Valley Unified School District Community Facilities District No. 2016-1 100.000 4,955,000 Moreno Valley Unified School District Community Facilities District No. 2017-1 100.000 3,475,000 Moreno Valley Unified School District Community Facilities District No. 2018-1 100.000 9,750,000 Moreno Valley Unified School District Community Facilities District No. 2019-1 100.000 5,265,000 Moreno Valley Unified School District Community Facilities District No. 2019-2 100.000 4,895,000 Moreno Valley Unified School District Community Facilities District No. 2020-1 100.000 3,905,000 Moreno Valley Unified School District Community Facilities District No. 2022-1 100.000 12,585,000 Moreno Valley Unified School District Community Facilities District No. 2023-1 100.000 8,415,000 Val Verde Unified School District Community Facilities District No. 98-1 100.000 5,050,000 Val Verde Unified School District Community Facilities District No. 2003-2 100.000 1,845,000 Val Verde Unified School District Community Facilities District No. 2014-1 100.000 6,430,000 Val Verde Unified School District Community Facilities District No. 2018-1 100.000 12,190,000 Val Verde Unified School District Community Facilities District No. 2021-1 100.000 2,770,000 Eastern Municipal Water District Community Facilities Districts 100.000 13,416,000 City of Moreno Valley Community Facilities District No. 5 100.000 3,985,000 City of Moreno Valley Community Facilities District No. 7, I.A. No. 1 100.000 2,630,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 690,203,503 DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Riverside County General Fund Obligations 5.610% $ 61,622,888 Riverside County Pension Obligation Bonds 5.610 30,938,870 Riverside City Community College District Certificates of Participation 14.671 3,446,951 Moreno Valley Unified School District Certificates of Participation 80.032 1,048,419 San Jacinto Unified School District Certificates of Participation 0.494 170,183 Val Verde Unified School District Certificates of Participation 27.197 7,373,107 City of Moreno Valley General Fund Obligations 100.000 62,952,008 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 167,552,426 OVERLAPPING TAX INCREMENT DEBT (Successor Agencies): 21.870-100.% $ 39,722,580 COMBINED TOTAL DEBT $ 897,478,509(2)
Ratios to 2025-26 Assessed Valuation:

Total Overlapping Tax and Assessment Debt ...........................................................................2.73% Total Direct Debt ($62,952,008)............................................................................................ 0.25% Combined Total Debt................................................................................................................3.55% Ratios to Redevelopment Successor Agencies Incremental Valuation ($5,891,430,659):

Total Overlapping Tax Increment Debt.....................................................................................0.67% (1) Excludes issue to be sold.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. 4909-7645-4603v8/022432-0051 37
Retirement Contributions
Accounting and financial reporting by state and local government employers for defined benefit pension plans is governed by GASB Statement No. 68 (“GASB 68”). GASB 68 includes the following components: (i) unfunded pension liabilities are included on the employer’s balance sheet; (ii) pension expense incorporates rapid recognition of actuarial experience and investment returns and is not based on the employer’s actual contribution amounts; (iii) lower actuarial discount rates are required to be used for underfunded plans in certain cases for purposes of the financial statements; (iv) closed amortization periods for unfunded liabilities are required to be used for certain purposes of the financial statements; and (v) the difference between expected and actual investment returns will be recognized over a closed five-year smoothing period. GASB 68 affects the City’s accounting and reporting requirements, but it does not change the City’s pension plan funding obligations.

The City participates in a Miscellaneous plan to fund pension benefits for employees. The City’s pension plan is administered by CalPERS. CalPERS administers an agent multiple-employer public employee defined benefit pension plan for all of the City’s full-time and certain part-time employees. CalPERS provides retirement, disability and death benefits to plan members and beneficiaries and acts as a common investment and administrative agent for participating public entities within the State, including the City. CalPERS plan benefit provisions and all other requirements are established by State statute and the City Council.

City employees are subject to different benefit levels based on their hire date. Current benefit provisions for City employees are set forth below as of June 30, 2025.

CITY OF MORENO VALLEY
CALPERS PENSION PLANS – SUMMARY OF BENEFIT PROVISIONS
Employees Hired
Before December 23,
2011
Employees Hired
between December 23,
2011 and December 31,
2012
Employees Hired after
December 31, 2012 (Not
Previously CalPERS
members)
Benefit Formula 2.7% @ age 55 2.0% @ age 55 2.0% @ age 62 Benefit Vesting 5 years of service 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life Monthly for life Minimum Retirement Age 50-55 50-55 52-62
Monthly Benefits as % of
Eligible Compensation

2.0% - 2.7% 1.426% - 2.418% 1.0% - 2.5%
Employee Normal Cost 8.00%(1) 7.00%(1) 7.75%(1)
Employer Normal Cost Rate 19.85% 19.85% 19.85%
(1) These employees are required to make the full employee contribution.

Source: City.

Contributions to the City’s pension plan consist of contributions from plan participants (i.e., employees) and contributions by the City.

City employees who were hired on and after January 1, 2013 and who were not previously CalPERS members receive benefits based on a 2.0% at age 62 formula. Such employees are required to make the full amount of required employee contributions themselves under the California Public Employees’ Pension Reform Act of 2013 (“AB 340”), which was signed by the State Governor on September 12, 2012. AB 340 established a new pension tier for such employees. Benefits for such participants are calculated on the highest average annual compensation over a consecutive 36-month period. Employees are required to pay at least 50% 4909-7645-4603v8/022432-0051 38
of the total normal cost rate. AB 340 also capped pensionable income as noted below. Amounts are set annually, subject to Consumer Price Index increases, and retroactive benefit increases are prohibited, as are contribution holidays and purchases of additional non-qualified service credit.

CITY OF MORENO VALLEY
PENSIONABLE INCOME CAPS FOR CALENDAR YEAR 2026
(AB 340 AND NON-AB 340 EMPLOYEES)
Employees Hired Before
January 1, 2013
(Non-AB 340 Employees)
Employees Hired On or After
January 1, 2013
(AB 340 Employees)
Maximum Pensionable Income $360,000 $191,679
Maximum Pensionable Income if
also Participating in Social Security N/A $159,733
Source: City.

Additional employee contributions, limits on pensionable compensation, and higher retirement ages for new members as a result of the passage of AB 340 are expected to reduce the City’s unfunded pension lability and potentially reduce City contribution levels in the long term.

The City is also required to contribute the actuarially determined remaining amounts necessary to fund benefits for its members. Employer contribution rates for all public employers are determined on an annual basis by the CalPERS actuary and are effective on the July 1 following notice of a change in the rate. Total plan contributions are determined through the CalPERS annual actuarial valuation process. The total minimum required employer contribution is the sum of: (i) the plan’s employer normal cost rate, which funds pension benefits for current employees for the upcoming Fiscal Year (expressed as a percentage of payroll); plus (ii) the employer unfunded accrued liability contribution amount, which funds pension benefits that were previously earned by current and former employees (billed monthly).

For the Fiscal Year ending June 30, 2025, required employer normal cost rates as a percentage of payroll were 12.11% for employees hired before December 23, 2011, employees hired between December 23, 2011 and December 31, 2012 and employees hired after December 31, 2012. For the Fiscal Year ending June 30, 2026, required employer normal cost rates as a percentage of payroll are 11.55% for employees hired before December 23, 2011, employees hired between December 23, 2011 and December 31, 2012 and employees hired after December 31, 2012. For the Fiscal Year ending June 30, 2027, required employer normal cost rates as a percentage of payroll will be 11.26% for employees hired before December 23, 2011, employees hired between December 23, 2011 and December 31, 2012 and employees hired after December 31, 2012.

For the Fiscal Year ending June 30, 2025, the total required employer payment of the unfunded accrued liability for the City’s Miscellaneous plan was $7,988,536. For the Fiscal Year ending June 30, 2026, the total required employer payment of the unfunded accrued liability for the City’s Miscellaneous plan is $8,659,463. For the Fiscal Year ending June 30, 2027, the total required employer payment of the unfunded accrued liability for the City’s Miscellaneous plan will be $8,851,947.

Beginning in Fiscal Year 2017-18, CalPERS began collecting employer contributions toward a pension plan’s unfunded liability as dollar amounts instead of the prior method of a percentage of payroll.

According to CalPERS, this change was intended to address potential funding issues that could arise from a declining payroll or a reduction in the number of active members in the plan. Funding the unfunded liability as a percentage of payroll could lead to underfunding of pension plans. Due to stakeholder feedback regarding internal needs for total contributions expressed as an estimated percentage of payroll, the CalPERS reports 4909-7645-4603v8/022432-0051 39
include such results in the contribution projection for informational purposes only. Contributions toward a pension plan’s unfunded liability will continue to be collected as set dollar amounts.

Beginning in Fiscal Year 2017-18, CalPERS began collecting employer contributions toward a pension plan’s unfunded liability as dollar amounts instead of the prior method of a percentage of payroll.

According to CalPERS, this change was intended to address potential funding issues that could arise from a declining payroll or a reduction in the number of active members in the plan. Funding the unfunded liability as a percentage of payroll could lead to underfunding of pension plans. Due to stakeholder feedback regarding internal needs for total contributions expressed as an estimated percentage of payroll, the CalPERS reports include such results in the contribution projection for informational purposes only. Contributions toward a pension plan’s unfunded liability will continue to be collected as set dollar amounts.

The City’s required contributions to CalPERS fluctuate each year and, as noted, include a normal cost component and a component equal to an amortized amount of the unfunded liability. Many assumptions are used to estimate the ultimate liability of pensions and the contributions that will be required to meet those obligations. The CalPERS Board of Administration has adjusted and may in the future further adjust certain assumptions used in the CalPERS actuarial valuations, which adjustments may increase the City’s required contributions to CalPERS in future years. Accordingly, the City cannot provide any assurances that the City’s required contributions to CalPERS in future years will not significantly increase (or otherwise vary) from any past or current projected levels of contributions. CalPERS earnings reports for Fiscal Years 2013 through 2024 report investment gains (and losses) of approximately 13.2%, 18.4%, 2.4%, 0.6%, 11.2%, 8.6%, 6.7%,

4.7%, 21.3%, (6.1%), 5.8% and 9.3%, respectively. CalPERS preliminary earnings report for Fiscal Year 2024-25 reported investment gains of approximately 11.6%. Future earnings performance may increase or decrease future contribution rates for plan participants, including the City.

The announcement on July 12, 2021 that CalPERS achieved investment returns of 21.3% in Fiscal Year 2021 caused the CalPERS Board of Administration to lower CalPERS’ discount rate from 7.00% to

6.80% in fall 2021 in accordance with a risk mitigation policy that was adopted in 2015, which calls for the discount rate to be lowered if returns exceed the then-current discount rate by two or more percentage points.

Lowering the discount rate means that employers that contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities. Active members hired after January 1, 2013 who were not previously CalPERS members will also see their contribution rates rise under AB 340.

The tables below are derived from the Actuarial Valuation as of June 30, 2024 for the Miscellaneous Plan of the City of Moreno Valley (the “2024 Report”) and show the required and projected employer contributions (before cost sharing) for the next six fiscal years, as well as the historical funded status of the City’s Miscellaneous pension plan. Projected results reflect the adopted changes to the discount rate described in the 2024 Report. Such projections also assume that all actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur during the projection period.

The projected normal cost percentages in the projections below does not reflect that the normal cost will decline over time as new employees are hired into AB 340 or other lower cost benefit tiers.

The following projections assumed the investment return for Fiscal Year 2024-25 would be 6.8%.

However, CalPERS announced preliminary investment returns of 11.6% for Fiscal Year 2024-25. As a result, the actual contribution requirements for the Fiscal Years 2026-27 and the following years shown below can be expected to differ from such projections.
4909-7645-4603v8/022432-0051 40
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2024-25 and Beyond) Fiscal Year 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 Normal Cost % 11.26% 11.0% 10.7% 10.5% 10.3% 10.0%
UAL Payment $8,851,947 $9,179,000 $9,967,000 $10,084,000 $10,177,000 $9,389,000 Total as a % of Payroll* 38.44% 38.4% 39.7% 39.0% 38.2% 35.1% Projected Payroll $32,566,993 $33,478,869 $34,416,277 $35,379,933 $36,370,570 $37,388,947 * Illustrative only and based on the projected payroll shown.

Source: CalPERS’ 2024 Report.

The tables below are derived from the 2024 Report and show the funded status of the City’s Miscellaneous pension plan as of the valuation dates shown.

Valuation
Date
Accrued
Liability
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
6/30/2020 238,198,412 155,038,558 83,159,854 65.1 24,020,218 6/30/2021 251,638,371 189,639,861 61,998,510 75.4 21,136,753 6/30/2022 264,504,100 174,120,660 90,383,440 65.8 23,129,051 6/30/2023 275,339,043 183,627,232 91,711,811 66.7 24,653,083 6/30/2024 292,730,406 200,075,113 92,655,293 68.3 29,977,700 Source: CalPERS’ 2024 Report.

Portions of the above disclosures are primarily derived from information that has been produced by CalPERS, its independent accountants and its actuaries. The City has not independently verified such information and neither makes any representations nor expresses any opinion as to the accuracy of the information that has been provided by CalPERS.

The comprehensive annual financial reports of CalPERS are available on CalPERS’ Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information that concerns benefits and other matters. The textual reference to such Internet website is provided for convenience only. None of the information on such Internet website is incorporated by reference herein. The City cannot guarantee the accuracy of such information. Actuarial assessments are “forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future.

The City’s Miscellaneous plan had a total net pension liability of approximately $75,631,464 for Fiscal Year 2025-26 (as of the measurement date of June 30, 2025). The net pension liability is the difference between the total pension liability and the fair market value of pension assets. The City’s total pension assets include funds that are held by CalPERS, and its net pension asset or liability is based on such amounts.

For the Fiscal Year ending June 30, 2026, the City incurred Miscellaneous plan pension expenses of $10,670,270.
4909-7645-4603v8/022432-0051 41
A summary of principal assumptions and methods used to determine the total pension liability for Fiscal Year 2025-26 is shown below.

CITY OF MORENO VALLEY

ACTUARIAL ASSUMPTIONS FOR CALPERS PENSION PLAN
Actuarial Cost Method Entry Age Normal in accordance with the requirements of GASB 68 Asset Valuation Method Market Value of Assets
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.80%
Salary Increases Varies by entry age and service, depending on age, service and type of employment
Investment Rate of Return 6.80% net of pension plan investment and administrative expenses; includes projected inflation
Mortality Rate Table(1) Derived using CalPERS’ membership data for all funds (1) The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 valuation were based on the results of a 2017 CalPERS actuarial experience study for the period 1997 to 2015.

Source: City of Moreno Valley.

Changes in the net pension liability for the City’s pension plans in the most recent Fiscal Year for which information is available were as follows:

CITY OF MORENO VALLEY

CHANGES IN CALPERS PENSION PLANS NET PENSION LIABILITY
Increase / (Decrease)
Total
Pension Liability
Plan Fiduciary
Net Position
Net Pension
Liability / (Asset)
Balance at June 30, 2024 (Measurement Date) $ 281,331,139 $ 200,168,470 $ 81,162,669 Balance at June 30, 2025 (Measurement Date) 300,032,952 224,401,488 75,631,464 Net Changes for period from July 1, 2023 through
June 30, 2024 $ 18,701,813 $ 24,233,018 $ (5,531,205)
Source: City of Moreno Valley.

The table below presents the net pension liability of the City’s pension plans, calculated using the discount rate applicable to Fiscal Year 2025-26 (6.90%), as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.90%) or 1 percentage point higher (7.90%) than the Fiscal Year 2025-26 rate:

CITY OF MORENO VALLEY

SENSITIVITY OF THE CALPERS PENSION PLANS NET PENSION LIABILITY

TO CHANGES IN THE DISCOUNT RATE
Discount Rate – 1%
(5.90%)
Applicable Discount
Rate (6.90%)
Discount Rate + 1%
(7.90%)
Plan’s Net Pension Liability/(Asset) $114,876,493 $75,631,464 $43,149,991 Source: City.
4909-7645-4603v8/022432-0051 42
For additional information relating to the City’s plan, see Note 8 to the City’s audited financial statements set forth in Appendix A.

Other Post-Employment Benefits
The City provides post-employment health care benefits to qualified retired employees. Employees are eligible for such benefits if they were hired prior to September 30, 2011 and retire directly from the City at or after age 50 with at least five years of CalPERS membership. Employees hired after September 30, 2011 are not eligible for such benefits; the City no longer offers such benefits to employees hired after September 30, 2011. The City administers a single-employer defined benefit post-employment healthcare plan (the “OPEB Plan”). Benefits vary by hire date and employment status (Management or Non-Management), and continue to surviving spouses. A menu of benefit provisions, as well as other requirements, are established by state statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance.

At June 30, 2024 (the census date), the following employees were covered by the benefit terms:

Category Count
Active employees 364
Inactive employees or beneficiaries currently receiving benefit payments 189 Inactive employees entitled to but not yet receiving benefit payment 76 Source: City of Moreno Valley.

The City funds benefits under the OPEB Plan based on an Actuarially Determined Contribution (the “ADC”). For the year ended June 30, 2026, the City’s ADC contribution rate was 3.67% of covered employee payroll. Employees do not contribute to the plan, but instead pay the difference between the benefit that they receive and the monthly premium for that benefit.

GASB has issued two pronouncements, known as GASB 74 and GASB 75, related to funding and accounting for the OPEB Plan. Under these pronouncements, OPEB Plan benefits are intended to be accounted for in a manner that is similar to the accounting treatment of pensions under GASB 68. See the caption “—Retirement Contributions.” Under GASB 74 and 75, unfunded OPEB Plan benefits will be recognized on the City’s financial statements and the City is required to use the Entry Age actuarial cost method when calculating OPEB Plan liabilities. In addition, a 20-year municipal bond rate is used to discount unfunded OPEB Plan payments and the long-term rate of return on plan investments is used to discount benefits that are projected to be paid by plan assets.

The City retained Precision Actuarial Inc. (the “Actuarial Consultant”) to calculate the City’s postemployment benefits funding status. In a report for the Fiscal Year ended June 30, 2026 (the “Report”), the Actuarial Consultant concluded that, as of June 30, 2026, the City’s unfunded actuarial accrued liability (asset) for postemployment benefits was $(3,123,653). The Actuarial Consultant also concluded that the City’s ADC is $793,133.

The City is not required to fund the amortization of the unfunded actuarial liability. Prior to June 2009, the City’s policy was to pay for OPEB Plan costs as they are incurred. In June 2009, the City Council approved the establishment of an irrevocable trust to fund OPEB Plan benefits (the “OPEB Trust”) with the California Employers’ Retiree Benefit Trust, an agent multiple-employer plan that is administered by CalPERS, and approved and authorized an agreement with CalPERS to administer the OPEB Trust on its behalf. As of June 30, 2026, the City held $22,210,220 in the OPEB Trust. Based on the most recent actuarial valuation, the actuarial unfunded liability of the OPEB Plan was estimated to be approximately $(3,123,653) using a methodology that is compliant with GASB 75.
4909-7645-4603v8/022432-0051 43
Changes in the total liability for the City’s OPEB Plan for Fiscal Year 2025-26 were as follows.

CITY OF MORENO VALLEY

CHANGES IN OPEB PLAN LIABILITY
Increase / (Decrease)
Total
OPEB Plan Liability
Plan Fiduciary
Net Position
Net OPEB Plan
Liability / (Asset)
Balance at June 30, 2025 $ 18,626,674 $ 19,479,974 $ (853,300) Net Changes for period from July 1,
2025 through June 30, 2026 459,893 2,730,246 (2,270,353) Balance at June 30, 2026 $ 19,086,567 $ 22,210,220 $ (3,123,653) Source: City of Moreno Valley.

The following table presents the net liability(asset) of the OPEB Plan, calculated using the discount rate applicable to Fiscal Year 2025-26 (6.40%), as well as what the net pension liability(asset) would be if it were calculated using a discount rate that is 1 percentage point lower (5.40%) or 1 percentage point higher (7.40%) than the current rate:

CITY OF MORENO VALLEY

SENSITIVITY OF THE OPEB PLAN TOTAL LIABILITY

TO CHANGES IN THE DISCOUNT RATE
Discount Rate – 1%
(5.40%)
Current Discount
Rate (6.40%)
Discount Rate + 1%
(7.40%)
Plan’s Total Liability/(Asset) $(1,175,457) $(3,123,653) $(4,790,773) Source: City.

Future changes in funding policies and assumptions, including those related to assumed rates of investment return and healthcare cost inflation, could trigger increases in the City’s annual required OPEB Plan contributions, and such increases could be material to the finances of the City. No assurance can be provided that such expenses will not increase significantly in the future. The City does not expect that any increased funding of OPEB Plan benefits will have a material adverse effect on the ability of the City to pay the Series 2026 Bonds.

For additional information relating to the City’s OPEB Plan, see Note 9 to the City’s audited financial statements set forth in Appendix C.

City Investment Policy
The City invests its funds in accordance with the City’s investment policy (the “Investment Policy”), which was most recently reviewed and revised by the City Council on May 19, 2026. In accordance with Section 53600 et seq. of the California Government Code, idle cash management and investment transactions are the responsibility of the City Treasurer. The City’s Investment Policy sets forth the policies and procedures applicable to the investment of City funds and designates eligible investments. The Investment Policy sets forth a stated objective, among others, of insuring the safety of invested funds by limiting credit and market risks. Eligible investments are generally limited to the Local Agency Investment Fund which is operated by the California State Treasurer, the County investment pool for local agencies, local agency bonds, U.S. Treasury Bills, Notes and Bonds, obligations issued by United States Government agencies, FDIC-insured or negotiable certificates of deposit, repurchase agreements, banker’s acceptances and 4909-7645-4603v8/022432-0051 44
commercial paper rated A1/P1, as applicable, or better, and money market funds rated in the highest category by Moody’s or S&P or administered by a domestic bank with long-term debt rated in one of the top two categories of Moody’s and S&P. Funds are invested in the following order of priority:
• Safety of Principal;
• Liquidity; and
• Return on Investment.

The City’s cash flow requirements are evaluated on an ongoing basis, with short-term needs accommodated through the City’s pooled investment funds with the Local Agency Investment Fund (“LAIF”) and California CLASS. LAIF is a pool of public funds managed by the State Treasurer of California, providing 24- hour liquidity while yielding a rate of return approximately equivalent to a one-year treasury bill.

Additionally, California CLASS is a Joint Powers Authority investment pool that provides public agencies the opportunity to invest funds on a cooperative basis in rated pools that are managed in accordance with state law with the primary objectives of offering Participants safety, daily and next-day liquidity, and optimized returns.

The City Treasurer is required to provide a quarterly report to the City Manager and the City Council showing the type of investment, date of maturity, amount invested, current market value, rate of interest, and other such information as may be required by the City Council.

A summary of the City’s investments as of June 30, 2026 is set forth in the below table.

CITY OF MORENO VALLEY

SUMMARY OF INVESTMENTS
Investment Type Cost Value Market Value Par Value
Bank Accounts $ 5,374,752 $ 5,374,752 $ 5,374,752
Local Agency Investment Fund 73,848,222 73,765,734 73,848,222 California CLASS 144,398,260 144,389,397 144,398,260
Investments 261,768,437 262,090,754 265,610,442
Subtotal $485,389,671 $485,620,637 $489,231,676
Total Funds with Fiscal Agents $139,598,578
Total Investment Portfolio $625,219,215
(1) Totals may not add due to rounding.

Source: City.

For additional information relating to the City’s investments, see Note 3 to the City’s audited financial statements set forth in Appendix C.

RISK FACTORS
The following factors, along with the other information in this Official Statement, should be considered by potential investors in evaluating the purchase of the Series 2026A Bonds. However, they do not purport to be an exhaustive listing of risks and other considerations which may be relevant to an investment in the Series 2026A Bonds. In addition, the order in which the following factors are presented is not intended to reflect the relative importance of any such risks.

General Considerations – Security for the Series 2026A Bonds The Series 2026A Bonds are special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged under the Indenture. Neither the faith and credit nor the taxing power 4909-7645-4603v8/022432-0051 45
of the Authority, the City or the State, or any political subdivision thereof, is pledged to the payment of the Series 2026A Bonds. The Authority has no taxing power.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation.

Although the Lease Agreement does not create a pledge, lien or encumbrance upon the funds of the City, the City is obligated under the Lease Agreement to pay the Base Rental Payments and Additional Rental Payments from any source of legally available funds and the City has covenanted in the Lease Agreement that it will take such action as may be necessary to include all Base Rental Payments and Additional Rental Payments due under the Lease Agreement in its annual budgets and to make necessary annual appropriations for all such Rental Payments, subject to abatement. The City is currently liable and may become liable on other obligations payable from general revenues. See the caption “CITY FINANCIAL INFORMATION— Other Indebtedness.”
The City has the capacity to enter into other obligations which may constitute additional charges against its revenues. To the extent that additional obligations are incurred by the City, the funds available to make Base Rental Payments may be decreased. In the event the City’s revenue sources are less than its total obligations, the City could choose to fund other activities before making Base Rental Payments and other payments due under the Lease Agreement. The same result could occur if, because of California Constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues. However, the City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB of the State Constitution. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS—Article XIIIB of the State Constitution.” Abatement
In the event of substantial interference with the City’s right to use and occupy any portion of the Property by reason of damage to, or destruction or condemnation of the Property, or any defects in title to the Property, Base Rental Payments will be subject to abatement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS—Abatement.” In the event that all or a portion of the Property, if damaged or destroyed by an insured casualty, could not be replaced during the period of time in which proceeds of the City’s rental interruption insurance will be available in lieu of Base Rental Payments, plus the period for which funds are available from the funds and accounts established under the Indenture, or in the event that casualty insurance proceeds are insufficient to provide for complete repair or replacement of such portion of the Property or redemption of the Series 2026A Bonds, there could be insufficient funds to make payments to Owners in full.

It is not always possible to predict the circumstances under which abatement of rental may occur. In addition, there is no statute, case or other law specifying how such an abatement of rental should be measured.

For example, it is not clear whether fair rental value is established as of commencement of the lease or at the time of the abatement. If the latter, it may be that the value of the Property is substantially higher or lower than its value at the time of issuance of the Series 2026A Bonds. Abatement, therefore, could have an uncertain and material adverse effect on the security for and payment of the Series 2026A Bonds.

If damage, destruction, title defect or eminent domain proceedings with respect to the Property results in abatement of the Base Rental Payments related to such Property and if such abated Base Rental Payments, if any, together with moneys from rental interruption or use and occupancy insurance (in the event of any insured loss due to damage or destruction), and eminent domain proceeds, if any, are insufficient to make all payments of principal and interest with respect to the Series 2026A Bonds during the period that the Property is being replaced, repaired or reconstructed, then all or a portion of such payments of principal and interest may not be 4909-7645-4603v8/022432-0051 46
made. Under the Lease Agreement and the Indenture, no remedy is available to the Series 2026A Bond Owners for nonpayment under such circumstances.

Natural Disasters
The occurrence of any natural disaster in the City, including, without limitation, fire, wildfire, windstorm, drought, earthquake, landslide, mudslide, subsidence or flood, could have an adverse material impact on the economy within the City, its General Fund and the revenues available for the payment of the Base Rental Payments. The City does not maintain earthquake insurance for the Property.

Earthquakes are considered a threat to the City due to the highly active seismic region and the proximity of fault zones, which could influence the entire southern coastal portion of the State. There are also likely to be unmapped faults in or near the City. Seismically induced ground shaking has affected the City in the past and is expected to affect the City in the future. However, no major earthquake has caused substantial damage to the City to date.

An earthquake along one of the faults in the vicinity of the City, either known or unknown, could cause a number of casualties and extensive property damage. The effects of such a quake could be aggravated by aftershocks and secondary effects such as fires, landslides, dam failure, liquefaction, floods and other threats to public health, safety and welfare. The potential direct and indirect consequences of a major earthquake could easily exceed the resources of the City and would require a high level of self-help, coordination and cooperation.

In recent years, wildfires have caused extensive damage throughout the State. In some instances, entire neighborhoods have been destroyed. Several of the fires that occurred in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events. Some commentators believe that climate change will lead to even more frequent and more damaging wildfires in the future. Additionally, wildfires increase the risk of mudslides in areas like those in the City that are surrounded by hillsides because, when wildfires scorch land, they destroy all vegetation on mountains and hillsides. As a result, when heavy rain falls in the winter, there is nothing to stop the rain from penetrating directly into the soil. In addition, waxy compounds in plants and soil that are released during fires create a natural barrier in the soil that prevents rain water from seeping deep into the ground. The result is erosion, mudslides and excess water running off the hillsides often causing flash flooding. In general, property damage due to wildfire or mudslides could result in a significant decrease in property tax and other revenues received by the City.

The occurrence of natural disasters in the City could result in substantial damage to the City which, in turn, could substantially reduce General Fund revenues and affect the ability of the City to make the Base Rental Payments. Reduced ability to make the Base Rental Payments could affect the payment of the principal of and interest on the Series 2026A Bonds. The City maintains liability insurance and property casualty insurance (for losses other than from seismic events) for the Property. See the caption “THE CITY—Risk Management.” However, there can be no assurance that specific losses will be covered by insurance or, if covered, that claims will be paid in full by the applicable insurers.

Climate Change
The State has historically been susceptible to wildfires and hydrologic variability. As greenhouse gas emissions continue to accumulate in the atmosphere as a result of economic activity, climate change is expected to intensify, increasing the frequency, severity and timing of extreme weather events such as coastal storm surges, drought, wildfires, floods and heat waves, and raising sea levels. The future fiscal impact of climate change on the City is difficult to predict, but it could be significant and it could have a material adverse effect on the General Fund by requiring greater expenditures to counteract the effects of climate change or by changing the operations and activities of City residents and business establishments. On April 24, 2026, the 4909-7645-4603v8/022432-0051 47
City adopted a Climate Action Plan (the “CAP”) as part of the City’s comprehensive General Plan update, which is intended to guide the City’s planning and development through 2040.

Hazardous Substances
An additional environmental condition that may result in the reduction in the assessed value of property, and therefore property tax revenue available to make Base Rental Payments, would be the discovery of a hazardous substance that would limit the beneficial use of taxable property within the City. In general, the owners and operators of a property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but State laws with regard to hazardous substances are also stringent and similar in effect. Under many of these laws, the owner or operator may be required to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the property within the City be affected by a hazardous substance, could be to reduce the marketability and value of such property by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.

The City has not independently verified, but is not aware of, the presence of any hazardous substances on the Property. Hazardous substance liabilities may arise in the future with respect to any of the property in the City resulting from the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may arise from the method of handling such substance.

These possibilities could significantly affect the value of a parcel and could result in substantial delays in completing planned development on parcels that are currently undeveloped.

Cybersecurity
Municipal agencies, like other business entities, face significant risks relating to the use and application of computer software and hardware. Recently, there have been significant cybersecurity incidents affecting municipal agencies, including a freeze affecting computer systems of the City of Atlanta, an attack on the City of Baltimore’s 911 system, an attack on the Colorado Department of Transportation’s computers and an attack that resulted in the temporary closure of the Port of Los Angeles’ largest terminal.

The City employs a multi-layer cyber protection scheme that includes weekly vulnerability scans by the Cybersecurity Infrastructure and Security Agency (part of the United States Department of Homeland Security), next-generation firewalls, anti-virus software, anti-spam/malware software, intrusion detection/prevention, domain name system filtering services by the Multi-State Information Sharing and Analysis Center, duplicate systems in a disaster recovery site and multiple copies of all information that is backed up. The City implements recommended strategies suggested by security vendors and makes internal system changes as needed. To date, the City has not experienced a significant attack on its computer operating systems. However, there is no assurance that a future attack or attempted attack would not result in disruption of City operations. The City expects that any such disruptions would be temporary in nature. The City also carries cyber insurance. See the caption “THE CITY—Risk Management.” Substitution, Addition and Removal of Property; Additional Bonds The Authority and the City may amend the Lease Agreement to substitute alternate real property for any portion of or add additional real property to the Property or to release a portion of the Property from the Lease Agreement, upon compliance with all of the conditions set forth in the Lease Agreement. After a substitution or release, the portion of the Property for which the substitution or release has been effected will 4909-7645-4603v8/022432-0051 48
be released from the leasehold encumbrance of the Lease Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS―Substitution, Addition and Removal of Property.” Moreover, the Authority may issue Additional Bonds secured by Base Rental Payments which are increased from current levels.

Although the Lease Agreement requires, among other things, that the Property, as constituted after such substitution or release, have an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period, it does not require that such Property have an annual fair rental value equal to the annual fair rental value of the Property at the time of substitution or release. Thus, a portion of the Property could be replaced with less valuable real property, or could be released altogether.

Such a replacement or release could have an adverse impact on the security for the Series 2026A Bonds, particularly if an event requiring abatement of Base Rental Payments were to occur subsequent to such substitution or release. See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS— THE LEASE AGREEMENT—NO CONSEQUENTIAL DAMAGES; USE OF THE PROPERTY; SUBSTITUTION OR RELEASE—Substitution or Release of, or Addition to, the Property.” The Indenture requires, among other things, that upon the issuance of Additional Bonds, the Ground Lease and the Lease Agreement will be amended, to the extent necessary, so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds; provided, however, that no such amendment will be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period is in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith.

Limited Recourse on Default; No Acceleration of Base Rental Failure by the City to make Base Rental Payments or other payments required to be made under the Lease Agreement, or failure to observe and perform any other terms, covenants or conditions contained in the Lease Agreement or in the Indenture for a period of 30 days or such additional time as is reasonable required to correct any such default after notice by the Authority to the City, constitute events of default under the Lease Agreement and permit the Trustee or the Authority to pursue any and all remedies available. In the event of a default, notwithstanding anything in the Lease Agreement or in the Indenture to the contrary, there is no right under any circumstances to accelerate the Base Rental Payments or otherwise declare any Base Rental Payments not then in default to be immediately due and payable, nor do the Authority or the Trustee have any right to re-enter or re-let the Property except as described in the Lease Agreement.

The enforcement of any remedies provided in the Lease Agreement and the Indenture could prove both expensive and time consuming. If the City defaults on its obligation to make Base Rental Payments with respect to the Property, the Trustee, as assignee of the Authority, may retain the Lease Agreement and hold the City liable for all Base Rental Payments thereunder on an annual basis and enforce any other terms or provisions of the Lease Agreement to be kept or performed by the City.

Alternatively, the Authority or the Trustee may terminate the Lease Agreement, retake possession of the Property and proceed against the City to recover damages pursuant to the Lease Agreement. Due to the specialized nature of the Property or any property substituted therefor pursuant to the Lease Agreement and the restrictions on its use, no assurance can be given that the Trustee will be able to re-let the Property so as to provide rental income sufficient to make all payments of principal of, interest and premium, if any, on the Series 2026A Bonds when due, and the Trustee is not empowered to sell the Property for the benefit of the Owners of the Series 2026A Bonds. Any suit for money damages would be subject to limitations on legal remedies against cities in California, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS” and APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—DEFAULTS AND REMEDIES.”
4909-7645-4603v8/022432-0051 49
Limitations on Remedies Available; Bankruptcy
The enforceability of the rights and remedies of the Owners and the obligations of the City may become subject to the following: the federal bankruptcy code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equitable principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of servicing a significant and legitimate public purpose.

Under Chapter 9 of the United States Bankruptcy Code (Title 11, United States Code) (the “Bankruptcy Code”), which governs bankruptcy proceedings of public entities such as the City, no involuntary bankruptcy petition may be filed against a public entity. However, upon satisfaction of certain prerequisite conditions, a voluntary bankruptcy petition may be filed by the City. The filing of a bankruptcy petition results in a stay against enforcement of remedies under agreements to which the bankrupt entity is a party. A bankruptcy filing by the City could thus limit remedies under the Lease Agreement. A bankruptcy debtor may choose to assume or reject executory contracts and leases, such as the Lease Agreement. In the event of rejection of a lease by debtor lessee, the leased property is returned to the lessor and the lessor has a claim for a limited amount of the resulting damages.

Under the Indenture, the Trustee holds a security interest in the Base Rental Payments for the benefit of the Owners of the Bonds, but such security interest arises only when the Base Rental Payments are actually received by the Trustee following payment by the City. The Property is not subject to a security interest, mortgage or any other lien in favor of the Trustee for the benefit of Owners. In the event of a bankruptcy filed by the City and the subsequent rejection of the Lease Agreement by the City, the Authority would recover possession of the Property and the Trustee, as assignee of the Authority, would have a claim for damages against the City. The Trustee’s claim would constitute a secured claim only to the extent of Revenues in the possession of the Trustee; the balance of such claim would be unsecured.

Bankruptcy proceedings would subject the Owners of the Series 2026A Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently entail risks of delay, limitation, or modification of their rights with respect to the Series 2026A Bonds. In a bankruptcy case, the amount recovered by Owners of the Series 2026A Bonds could be affected by whether the Lease Agreement is determined to be a “true lease” or a loan or other financing arrangement (a “financing lease”), and the Owners’ recovery could be reduced in either case. If the Lease Agreement is determined by the bankruptcy court to constitute a “true lease” (rather than a financing lease), the City could choose not to perform under the Lease Agreement by rejecting it and the claim of the Owners could be substantially limited pursuant to Section 365 of the Bankruptcy Code to a fraction of the scheduled amount of Base Rental Payments, and that reduced claim amount could be impaired as an unsecured claim under a plan of adjustment. If a bankruptcy court were to treat the Lease Agreement as a financing lease then, under a plan of adjustment, the priority, payment terms, collateral, payment dates, payment sources, covenants and other terms or provisions of the Lease Agreement and the Series 2026A Bonds may be altered. Such a plan could be confirmed even over the objections of the Trustee and the Owners, and without their consent. For example, the amount of the Base Rental Payments from the City might be substantially reduced because of the power of the bankruptcy court under the Bankruptcy Code to adjust secured claims to the value of their collateral, which, as described above, could be limited to the Base Rental Payments held by the Trustee. In addition there can be a substantial disparity in treatment based on the nature of the Property. Whether the Lease Agreement is characterized by the bankruptcy court as a true lease or a financing lease, either scenario could result in the Owners not receiving the full amount of the principal and interest due on the Series 2026A Bonds.

The opinions of counsel, including Bond Counsel, delivered in connection with the issuance of the Series 2026A Bonds will be so qualified. Bankruptcy proceedings, or the exercising of powers by the federal 4909-7645-4603v8/022432-0051 50
or state government, if initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights.

Possible Insufficiency of Insurance Proceeds
The Lease Agreement obligates the City to keep in force various forms of insurance, subject to deductibles, for repair or replacement of the Property in the event of damage, destruction or title defects, subject to certain exceptions. The Authority and the City make no representation as to the ability of any insurer to fulfill its obligations under any insurance policy obtained pursuant to the Lease Agreement, and no assurance can be given as to the adequacy of any such insurance to fund necessary repair or replacement or to pay principal of and interest on the Series 2026A Bonds when due. In addition, certain risks, such as earthquakes and floods, are not required to be insured under the Lease Agreement, and therefore, are not carried by the City. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS—Insurance.”
Loss of Tax Exemption
As discussed under the heading “TAX MATTERS,” the interest on the Series 2026A Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Series 2026A Bonds, as a result of acts or omissions of the Authority or the City in violation of their covenants in the Indenture and the Lease Agreement. Should such an event of taxability occur, the Series 2026A Bonds would not be subject to a special redemption and would remain Outstanding until maturity or until redeemed under the redemption provisions contained in the Indenture.

No Liability of Authority to the Owners
Except as expressly provided in the Indenture, the Authority will not have any obligation or liability to the Owners of the Series 2026A Bonds with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the City of other agreements and covenants required to be performed by it contained in the Lease Agreement or the Indenture, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained in the Indenture.

Dependence on State for Certain Revenues
On June 29, 2026, the Governor signed the State budget for Fiscal Year 2026-27 (the “2026-27 State Budget”). The following is drawn from the Department of Finance (“DOF”) and Legislative Analyst’s Office (“LAO”) summaries of the 2026-27 State Budget.

The 2026-27 State Budget is projected to provide for balanced State budgets in both fiscal years 2026- 27 and 2027-28, while reducing projected structural deficits in fiscal years 2028-29 and 2029-30. To assist in providing for a positive ending balance in the State reserve in fiscal year 2027-28 and manage State resources, the 2026-27 State Budget includes a transfer in fiscal year 2026-27 of $6.4 billion into the Projected Surplus Temporary Holding Account (the “Surplus Holding Account”). Created in 2004 by Assembly Bill 179, the Surplus Holding Account allows the State to set aside a portion of anticipated surplus funds and allocate them in a subsequent fiscal year. State leaders have broad authority to determine whether or how to use the Surplus Holding Account. The only requirement is that revenues that go into the account cannot remain there for longer than one year. If State revenues materialize as projected, the revenues in the account may be spent for any purpose or transferred back to the State general fund for future use.

For fiscal year 2025-26, the 2026-27 State Budget projects total general fund revenues and transfers of $245.8 billion and authorizes expenditures of $245.3 billion. The State is projected to end fiscal year 2025-26 with total reserves of approximately $49.9 billion, including $11.5 billion in the Budget Stabilization Account 4909-7645-4603v8/022432-0051 51
(the “BSA”), $9.2 million in the Public School System Stabilization Account (“PSSSA”) and $29.2 billion in traditional general fund reserves. For fiscal year 2026-27, the 2026-27 State Budget projects total general fund revenues and transfers of $226.8 billion and authorizes expenditures of $251.5 billion. The State is projected to end fiscal year 2026-27 with total reserves of approximately $28.8 billion, including $15.1 billion in the BSA, $9.2 billion in the PSSSA and $4.5 billion in the traditional general fund reserve. The Safety Net Reserve is projected to have zero balances in both fiscal years.

While the City is not substantially reliant on the State’s finances, a number of the City’s revenues are collected and dispersed by the State (such as sales tax and motor-vehicle license fees) or allocated in accordance with State law (most importantly, property taxes). Therefore, State budget decisions can have an impact on City finances. In the event of a material economic downturn in the State, there can be no assurance that any resulting revenue shortfalls to the State will not reduce revenues to local governments (including the City) or shift financial responsibility for programs to local governments as part of the State’s efforts to address any such related State financial difficulties.

See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS—Proposition 1A” and “—Proposition 22” below.

Risks Associated with Bond Insurance
In the event that the Authority defaults in the payment of principal of or interest on the Insured Series 2026A Bonds as a result of the failure of the City to pay the Base Rental Payments when due, the Owners of the Insured Series 2026A Bonds will have a claim under the Insurance Policy for such payments. See the caption “BOND INSURANCE.” In the event that the Insurer becomes obligated to make payments with respect to the Insured Series 2026A Bonds, no assurance can be given that such event will not adversely affect the market for the Insured Series 2026A Bonds. In the event that the Insurer is unable to make payment of principal of and interest on the Insured Series 2026A Bonds when due under the Policy, the Insured Series 2026A Bonds will be payable solely from Base Rental Payments and amounts held in certain funds and accounts established under the Indenture, as described under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS.”
The Insurer is expected to insure a majority of the Series 2026A Bonds and will therefore have the ability to direct the actions of the Trustee, give consents and waivers and take other actions without regard to the views of the owners of the Series 2026A Bonds. As a result, Owners of the Series 2026A Bonds may be limited in the rights and remedies they are able to exercise in the event of a default by the Authority under the Indenture. The Insurer may have different business and other interests than the Owners of the Series 2026A Bonds.

The long-term rating on the Insured Series 2026A Bonds is dependent in part on the financial strength of the Insurer and its claims-paying ability. The Insurer’s financial strength and claims-paying ability are predicated upon a number of factors which could change over time. If the long-term ratings of the Insurer are lowered, such event could adversely affect the market for the Insured Series 2026A Bonds. See the caption “RATINGS.”
None of the City, the Authority or the Underwriter have made an independent investigation of the claims-paying ability of the Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Insurer is being made by the City, the Authority or the Underwriter in this Official Statement. Therefore, when making an investment decision with respect to the Insured Series 2026A Bonds, potential investors should carefully consider the ability of the City to pay Base Rental Payments, which secure the Insured Series 2026A Bonds, assuming that the Insurance Policy is not available for that purpose, and the claims-paying ability of the Insurer through final maturity of the Insured Series 2026A Bonds. 4909-7645-4603v8/022432-0051 52
So long as the Insurance Policy remains in effect and the Insurer is not in default of its obligations thereunder, the Insurer has certain notice, consent and other rights under the Indenture and will have the right to control all remedies for default under the Indenture. The Insurer is not required to obtain the consent of the Owners with respect to the exercise of remedies.

CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS Principal of and interest on the Series 2026A Bonds are payable from Base Rental Payments made from the City’s General Fund. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS.” Articles XIIIA, XIIIB, XIIIC and XIIID of the State Constitution, Propositions 62, 111, 218, 1A and 22, and certain other provisions of law discussed below are included in this Official Statement to describe the potential effect of these Constitutional and statutory measures on the ability of the City to levy taxes and spend tax proceeds for operating and other purposes.

Article XIIIA of the State Constitution
On June 6, 1978, State voters approved Proposition 13, which added Article XIIIA to the State Constitution. Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to 1% of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service: (i) on indebtedness approved by the voters prior to December 1, 1978; (ii) on bonded indebtedness approved by a two-thirds vote on or after December 1, 1978, for the acquisition or improvement of real property; or (iii) bonded indebtedness incurred by a school district, community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters voting on the proposition. Article XIIIA defines full cash value to mean “the county assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” This full cash value may be increased at a rate not to exceed 2% per year to account for inflation.

Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by damage, destruction or other factors, including a general economic downturn, to provide that there would be no increase in the “full cash value” base in the event of reconstruction of property damaged or destroyed in a disaster, and in other minor or technical ways.

Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA.

Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter-approved indebtedness). The 1% property tax is automatically levied by counties and distributed according to a formula among taxing agencies.

Increases in assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the “taxing area” based upon their respective “situs.” Any such allocation made to a local agency continues as part of its allocation in future years.

All taxable property is shown at full cash value on the tax rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100 percent of taxable value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.
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Article XIIIB of the State Constitution
In addition to the limits that Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and most local governments are subject to an annual “appropriations limit” imposed by Article XIIIB which effectively limits the amount of such revenues that such entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues and the investment proceeds thereof, State subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized as of October 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990 levels. The appropriations limit may also be exceeded in case of emergency; however, the appropriations limit for the next three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government.

The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Proposition 111 requires that each local government’s actual appropriations be tested against its limit every two years.

If the aggregate “proceeds of taxes” for the preceding two-year period exceeds the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years.

The City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB.

Articles XIIIC and XIIID of the State Constitution
On November 5, 1996, State voters approved Proposition 218, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the State Constitution and contains a number of interrelated provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments and property-related fees and charges. The interpretation and application of Proposition 218 will ultimately be determined by the courts with respect to a number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination.

Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City (such as Measure U) require a majority vote, and taxes for specific purposes, even if deposited in the City’s General Fund, require a two-thirds vote. The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.

Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain property-related fees, charges, and assessments for municipal services and programs, such as hearings and stricter and more individualized benefit requirements and findings. These provisions include, among other things: (i) a prohibition against assessments which exceed the reasonable cost of the proportional 4909-7645-4603v8/022432-0051 54
special benefit conferred on a parcel; (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred; (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party; and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. If the City is unable to continue to collect revenues of this nature, the services and programs funded with these revenues would have to be curtailed and/or the City’s General Fund might have to be used to support them. The City is unable to predict whether or not in the future it will be able to continue all existing services and programs funded by fees, charges and assessments in light of Proposition 218 or, if these services and programs are continued, which amounts (if any) would be used from the City’s General Fund to continue to support such activities.

Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. This extension of the initiative power is not limited to taxes imposed on or after November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or reduction in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional principles relating to the impairments of contracts. Legislation implementing Proposition 218 provides that the initiative power provided for in Proposition 218 “shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after (the effective date of Proposition 218) assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights” protected by the United States Constitution. However, no assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund.

Although a portion of the City’s General Fund revenues are derived from taxes purported to be governed by Proposition 218, all of such taxes were imposed in accordance with the requirements of Proposition 218. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges which support the City’s General Fund.

Proposition 62
Proposition 62 was adopted by the voters at the November 4, 1986, general election and: (a) requires that any new or higher taxes for general governmental purposes imposed by local governmental entities such as the City be approved by a two-thirds vote of the governmental entity’s legislative body and by a majority vote of the voters of the governmental entity voting in an election on the tax; (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two-thirds vote of the voters of the governmental entity voting in an election on the tax; (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was imposed; (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA; (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities; and (f) requires that any tax imposed by a local governmental entity on or after July 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of the adoption of the initiative or be terminated by November 15, 1988.

On September 28, 1995, the California Supreme Court, in the case of Santa Clara County Local Transportation Authority v. Guardino, upheld the constitutionality of Proposition 62. In this case, the court held that a countywide sales tax of one-half of one percent was a special tax that, under Section 53722 of the Government Code, required a two-thirds voter approval. Because the tax received an affirmative vote of only

54.1%, this special tax was found to be invalid. The decision did not address the question of whether or not it should be applied retroactively.
4909-7645-4603v8/022432-0051 55
Following the California Supreme Court’s decision upholding Proposition 62, several actions were filed challenging taxes imposed by public agencies since the adoption of Proposition 62, which was passed in November 1986. On June 4, 2001, the California Supreme Court released its decision in one of these cases, Howard Jarvis Taxpayers Association v. City of La Habra, et al. In this case, the court held that a public agency’s continued imposition and collection of a tax is an ongoing violation, upon which the statute of limitations period begins anew with each collection. The court also held that, unless another statute or constitutional rule provided differently, the statute of limitations for challenges to taxes subject to Proposition 62 is three years. Accordingly, a challenge to a tax subject to Proposition 62 may only be made for those taxes received within three years of the date the action is brought.

The City has not experienced any substantive adverse financial impact as a result of the passage of Proposition 62.

Proposition 1A
Proposition 1A was approved by the voters at the November 2, 2004 election. Proposition 1A amended the State Constitution to, among other things, reduce the Legislature’s authority over local government revenue sources by placing restrictions on the State’s access to local governments’ property, sales, and vehicle license fee revenues as of November 3, 2004. Beginning with Fiscal Year 2008-09, the State may borrow up to eight percent of local property tax revenues, but only if the Governor proclaims such action is necessary due to a severe State fiscal hardship, and two–thirds of both houses of the Legislature approves the borrowing. The amount borrowed is required to be paid back within three years. The State also will not be able to borrow from local property tax revenues for more than two fiscal years within a period of 10 fiscal years. In addition, the State cannot reduce the local sales tax rate or restrict the authority of local governments to impose or change the distribution of the statewide local sales tax.

Many of the provisions of Proposition 1A have been superseded by Proposition 22 enacted in November 2010 and described below.

Proposition 22
On November 2, 2010, the voters of the State approved Proposition 22, known as “The Local Taxpayer, Public Safety, and Transportation Protection Act” (“Proposition 22”). Proposition 22, among other things, broadens the restrictions established by Proposition 1A. While Proposition 1A permits the State to appropriate or borrow local property tax revenues on a temporary basis during times of severe financial hardship, Proposition 22 amends Article XIII of the State Constitution to prohibit the State from appropriating or borrowing local property tax revenues under any circumstances. The State can no longer borrow local property tax revenues on a temporary basis even during times of severe financial hardship. Proposition 22 also prohibits the State from appropriating or borrowing proceeds derived from any tax levied by a local government solely for the local government’s purposes. Furthermore, Proposition 22 restricts the State’s ability to redirect redevelopment agency property tax revenues to school districts and other local governments and limits uses of certain other funds although this provision no longer has any meaningful impact given the statewide dissolution of redevelopment agencies. Proposition 22 is intended to stabilize local government revenue sources by restricting the State government’s control over local revenues. The City cannot predict whether Proposition 22 will have a beneficial effect on the City’s financial condition.

Proposition 26
On November 2, 2010, State voters also approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” except the following: (a) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; 4909-7645-4603v8/022432-0051 56
(b) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (c) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (d) a charge imposed for entrance to or use of local government property, or the purchase, rental or lease of local government property; (e) a fine, penalty or other monetary charge imposed by the judicial branch of government or a local government as a result of a violation of law; (f) a charge imposed as a condition of property development; and (g) assessments and property-related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity. The City does not believe that Proposition 26 will adversely affect its General Fund revenues.

Possible Future Initiatives
Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 218, 111, 62, 1A, 22 and 26 were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or the City’s ability to expend revenues. The nature and impact of these measures cannot be anticipated by the City.

TAX MATTERS
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Series 2026A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. However, it should be noted that, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the Series 2026A Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2026A Bonds is exempt from State of California personal income tax.

Bond Counsel’s opinion as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Series 2026A Bonds is based upon certain representations of fact and certifications made by the Authority and others and is subject to the condition that the Authority comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2026A Bonds to assure that interest (and original issue discount) on the Series 2026A Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Series 2026A Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2026A Bonds. The Authority has covenanted to comply with all such requirements.

In the opinion of Bond Counsel, the difference between the issue price of a Series 2026A Bond (the first price at which a substantial amount of the Series 2026A Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity of such Series 2026A Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Beneficial Owner before receipt of cash attributable to such excludable income. The amount of 4909-7645-4603v8/022432-0051 57
original issue discount deemed received by a Beneficial Owner will increase the Beneficial Owner’s basis in the applicable Series 2026A Bond. The amount of original issue discount that accrues to the Beneficial Owner of a Series 2026A Bond is excluded from the gross income of such Beneficial Owner for federal income tax purposes, is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals, and is exempt from State of California personal income tax.

The amount by which a Series 2026A Bond Owner’s original basis for determining loss on sale or exchange in the applicable Series 2026A Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable bond premium, which must be amortized under Section 171 of the Code; such amortizable bond premium reduces the Series 2026A Bond Owner’s basis in the applicable Series 2026A Bond (and the amount of tax-exempt interest received with respect to the Series 2026A Bonds), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of bond premium may result in a Series 2026A Bond Owner realizing a taxable gain when a Series 2026A Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Series 2026A Bond to the Owner. Purchasers of the Series 2026A Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.

The IRS has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Series 2026A Bonds will be selected for audit by the IRS. It is also possible that the market value of the Series 2026A Bonds might be affected as a result of such an audit of the Series 2026A Bonds (or by an audit of similar municipal obligations). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the Series 2026A Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the Series 2026A Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2026A BONDS THERE MIGHT BE

FEDERAL, STATE OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY

CHANGES TO OR INTERPRETATIONS OF FEDERAL, STATE OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE OR LOCAL TAX TREATMENT OF THE SERIES 2026A BONDS, INCLUDING THE IMPOSITION OF ADDITIONAL FEDERAL INCOME OR STATE TAXES ON OWNERS OF TAXEXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE SERIES 2026A BONDS. THESE

CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE SERIES 2026A BONDS. NO ASSURANCE CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2026A BONDS STATUTORY CHANGES WILL NOT BE INTRODUCED OR ENACTED OR

JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE SERIES 2026A BONDS, ALL

POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING POSSIBLE

STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE SERIES 2026A BONDS.

Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax Certificate relating to the Series 2026A Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income of interest (and original issue discount) for federal income tax purposes with respect to any Series 2026A Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth LLP.

Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the Series 2026A Bonds is excluded from gross income for federal income tax purposes provided that the 4909-7645-4603v8/022432-0051 58
Authority continues to comply with certain requirements of the Code, the ownership of the Series 2026A Bonds and the accrual or receipt of interest (and original issue discount) on the Series 2026A Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of Series 2026A Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Series 2026A Bonds.

Should interest (and original issue discount) on the Series 2026A Bonds become includable in gross income for federal income tax purposes, the Series 2026A Bonds are not subject to early redemption and will remain outstanding until maturity or until redeemed in accordance with the Indenture.

A complete copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix D.

CERTAIN LEGAL MATTERS
The validity of the Series 2026A Bonds and certain other legal matters are subject to the approving opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel. Stradling Yocca Carlson & Rauth LLP, is also acting as Disclosure Counsel for the City. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix D hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Bond Counsel and Disclosure Counsel will receive compensation from the City contingent upon the sale and delivery of the Series 2026A Bonds. From time to time, Bond Counsel represents the Underwriter on matters unrelated to the Series 2026A Bonds. Certain legal matters will be passed upon for the Underwriter by Kutak Rock LLP, for the Trustee by its counsel and for the Insurer by its counsel. Counsel to the Underwriter will receive compensation contingent upon the issuance of the Series 2026A Bonds.

ABSENCE OF LITIGATION
To the best knowledge of the City and the Authority, there is no action, suit or proceeding pending or threatened either restraining or enjoining the execution or delivery of the Series 2026A Bonds, the Lease Agreement, the Ground Lease or the Indenture, or in any way contesting or affecting the validity of the foregoing or any proceedings of the Authority or the City taken with respect to any of the foregoing.

UNDERWRITING
The Series 2026A Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”). The Underwriter will purchase the Series 2026A Bonds from the Authority at an aggregate purchase price of $______ (representing the principal amount of the Series 2026A Bonds, [plus/less] a [net] original issue [premium/discount] of $______ and less an Underwriter’s discount of $______). The purchase agreement relating to the Series 2026A Bonds provides that the Underwriter will purchase all of the Series 2026A Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions.

The initial offering prices that are stated on the inside front cover page of this Official Statement may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Series 2026A Bonds to certain dealers (including dealers depositing Series 2026A Bonds into investment trusts), dealer banks, banks acting as agent and others at prices lower than said public offering prices.

RATINGS
S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”) has assigned a rating of “__” to the Insured Series 2026A Bonds based upon the delivery of the Insurance Policy by the Insurer at the time of issuance of the Insured Series 2026A Bonds. S&P has assigned the Series 2026A Bonds 4909-7645-4603v8/022432-0051 59
the rating of “__” without regard to the delivery of the Policy. Such ratings reflect only the views of S&P and any desired explanation of the significance of such ratings should be obtained from S&P. Generally, a rating agency bases its ratings on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such ratings will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the market price of the Series 2026A Bonds. None of the Authority, the City or the Underwriter has undertaken any responsibility either to bring to the attention of the owners of the Series 2026A Bonds a proposed change in or withdrawal of the ratings or to oppose any such proposed revision or withdrawal.

MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc., Irvine, California (the “Municipal Advisor”), served as municipal advisor to the Authority and the City with respect to the sale of the Series 2026A Bonds. The Municipal Advisor will receive compensation contingent upon the sale and delivery of the Series 2026A Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

The Municipal Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

CONTINUING DISCLOSURE
The City has covenanted for the benefit of the Owners of the Series 2026A Bonds to provide annually certain financial information and operating data relating to the Series 2026A Bonds and the City (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events. For a complete listing of items of information which will be provided in each Annual Report and further description of the City’s undertaking with respect to the Annual Report and certain enumerated events, see APPENDIX E—“FORM OF CONTINUING DISCLOSURE CERTIFICATE.” The Annual Report is to be provided by the City not later than nine months following the end of the City’s fiscal year (which presently ends on June 30), commencing with the report for the fiscal year ending June 30, 2026 and due March 31, 2027. The Annual Report will be filed by the City with the Municipal Securities Rulemaking Board. These covenants have been made in order to assist the Underwriter in complying with SEC Rule 15c2-12(b)(5).

Within the last five years, the City has not failed to comply with continuing disclosure obligations related to any of the Authority’s or the City’s outstanding obligations pursuant to SEC Rule 15c2-12(b)(5).

In order to promote compliance by the City and its related entities, including the Authority and the Former Agency, with their respective continuing disclosure undertakings, the City has retained Willdan Financial Services (“Willdan”) to serve as dissemination agent and assist such entities in complying with their continuing disclosure obligations. Willdan will also perform these duties for the land-secured financings involving the City’s community facilities districts. Additionally the City has taken the steps to amend its existing debt policy, which has been approved by the City Council, to ensure compliance with Rule 15c2-12.

FINANCIAL STATEMENTS OF THE CITY
Included herein as Appendix C is the Annual Comprehensive Financial Report of the City for the Fiscal Year ended June 30, 2025, together with the report thereon dated December 5, 2025 of Rogers, Anderson, Malody & Scott, LLP (the “Auditor”). The Auditor has not undertaken to update the audited financial statements of the City or its report or to take any action intended or likely to elicit information 4909-7645-4603v8/022432-0051 60
concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by the Auditor with respect to any event subsequent to its report dated December 5, 2026.

MISCELLANEOUS
References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive and reference is made to such documents and reports for full and complete statements of the contents thereof.

Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority or the City and the purchasers or Owners of any of the Series 2026A Bonds.

The execution and delivery of this Official Statement have been duly authorized by the Authority and the City.

MORENO VALLEY PUBLIC FINANCING

AUTHORITY
By:

Executive Director

CITY OF MORENO VALLEY
By:

City Manager
4909-7645-4603v8/022432-0051 A-1

APPENDIX A

GENERAL INFORMATION REGARDING THE CITY OF MORENO VALLEY AND THE REGION The following information is presented as general background data. The Series 2026A Bonds are payable solely from the Base Rental Payments under the Lease Agreement as described in the Official Statement. The taxing power of the City, the State or any political subdivision thereof is not pledged to the payment of the Base Rental Payments or the Series 2026A Bonds.

Location
The City of Moreno Valley (the “City”) is centrally located in Southern California, 66 miles east of Los Angeles and 100 miles north of San Diego. The City encompasses approximately 51 square miles of land area in western Riverside County. Geographically, the City is bordered by three low-lying mountain ranges, March Air Reserve Force Base and Lake Perris State Park. The City is situated at the junction of two major highways, California State Highway 60 (the Moreno Valley Freeway) and Interstate 215.

Population
The City is the second largest city in Riverside County with an estimated population of 211,365 as of January 1, 2026. The table below sets forth the total population of the City, the County of Riverside (the “County”) and the State of California (the “State”).

CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE AND STATE OF CALIFORNIA Population
Calendar Year
2022 2023 2024 2025 2026
Moreno Valley 207,549 206,903 207,146 210,740 211,365
Riverside County 2,427,832 2,428,580 2,442,378 2,497,829 2,506,824 California 39,114,785 39,061,058 39,128,162 39,646,907 39,592,978 Source: State of California, Department of Finance, E-1 Population Estimates for Cities, Counties and the State with Annual Percent Change — January 1, 2025 and 2026. Sacramento, California, May 2026. 4909-7645-4603v8/022432-0051 A-2
Employment
The following table summarizes the labor force, employment and unemployment figures for the years 2021 through 2025 for the City, the County, the State and the nation as a whole.

CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE,

STATE OF CALIFORNIA AND UNITED STATES
Average Annual Civilian Labor Force, Employment and Unemployment Year and Area Labor Force Employment(1) Unemployment(2) Unemployment
Rate (%)(3)
2021
City of Moreno Valley 98,600 90,400 8,300 8.4%
Riverside County 1,123,000 1,039,900 83,200 7.4
California 19,019,800 17,619,300 1,394,500 7.3
United States(4) 161,204,000 152,581,000 8,623,000 5.3
2022
City of Moreno Valley 99,100 94,700 4,400 4.5%
Riverside County 1,144,000 1,095,300 48,700 4.3
California 19,267,400 18,441,400 826,100 4.3
United States(4) 164,287,000 158,291,000 5,996,000 3.6
2023
City of Moreno Valley 100,700 95,700 5,000 5.0%
Riverside County 1,168,100 1,112,600 55,500 4.8
California 19,514,600 18,593,600 921,000 4.7
United States(4) 167,116,000 161,037,000 6,080,000 3.6
2024
City of Moreno Valley 101,800 96,200 5,600 5.5%
Riverside County 1,187,800 1,124,700 63,100 5.3
California 19,962,800 18,650,700 1,042,200 5.3
United States(4) 168,106,000 161,346,000 6,761,000 4.0
2025
City of Moreno Valley 103,509 97,518 6,000 5.8%
Riverside County 1,207,200 1,140,100 67,000 5.6
California 19,823,800 18,738,500 1,085,300 5.5
United States(4) 170,807,000 163,493,000 7,314,000 4.3
(1) Includes persons involved in labor-management trade disputes. (2) Includes all persons without jobs who are actively seeking work. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.
(4) Not strictly comparable with data for prior years.

Source: California Employment Development Department, March 2025––– Benchmark and U.S. Department of Labor, Bureau of Labor Statistics.
4909-7645-4603v8/022432-0051 A-3
The following tables show the largest employers located in the City and the County as of Fiscal Year 2025.

CITY OF MORENO VALLEY
Largest Employers – Fiscal Year 2025
Employer Number of Employees Type of Business
March Air Reserve Base 7,000 Military
Riverside County Regional Medical Center 4,533 Medical
Amazon 3,733 Fulfillment
Moreno Valley Unified School District 3,579 Public Agency Ross Distribution Center 1,803 Distribution
Kaiser Permanente Community Hospital 1,643 Medical
Harbor Freight Tools 1,075 Distribution
Proctor & Gamble 642 Distribution
Val Verde Unified School District 640 Distribution
City of Moreno Valley 556 Municipal Government
Source: City of Moreno Valley Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2025.

COUNTY OF RIVERSIDE
Largest Employers – Fiscal Year 2025
Employer Number of Employees
Riverside County Admin Ctr 25,345
Amazon Fulfillment Ctr 14,317
State of California 8,398
Walmart 7,523
Riverside Unified School District 6,562
Moreno Valley Unified School District 6,306
Kaiser Permanente Riverside Medical Center 5,817
Stater Brothers Market 5,145
University of California, Riverside 5,137
Eisenhower Medical Center 4,971
Source: County of Riverside Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2025. 4909-7645-4603v8/022432-0051 A-4
Industry
Residents of the City find employment throughout the Riverside-San Bernardino-Ontario Labor Market Area. This labor market area, as defined for reporting purposes by the California Employment Development Department, has boundaries coterminous with those of Riverside and San Bernardino Counties.

The following table represents the Annual Average Labor Force and Industry Employment for the County for the period from 2021 through 2025.

RIVERSIDE-SAN BERNARDINO-ONTARIO MSA
Industry Employment and Labor Force (Annual Average)
2021 2022 2023 2024 2025
Civilian Labor Force 2,114,300 2,145,600 2,183,100 2,214,800 2,251,500 Civilian Employment 1,957,100 2,054,800 2,080,600 2,099,000 2,128,200 Civilian Unemployment 157,200 90,800 102,500 115,800 123,300 Civilian Unemployment Rate 7.4% 4.2% 4.7% 5.2% 5.5%
Total Farm 13,700 13,800 13,200 13,400 13,100
Total Nonfarm 1,575,100 1,660,200 1,680,000 1,699,600 1,717,300 Total Private 1,333,100 1,410,200 1,420,700 1,437,400 1,452,200 Goods Producing 207,700 216,300 215,300 213,600 206,800 Mining and Logging 111,500 116,300 116,800 117,500 111,700 Construction 110,100 114,700 115,400 115,900 110,000
Manufacturing 96,100 100,000 98,500 96,100 95,200
Service Providing 1,367,400 1,443,900 1,464,700 1,486,000 1,510,500 Trade, Transportation and Utilities 443,200 464,900 457,900 455,700 453,800 Wholesale Trade 67,400 69,500 68,900 68,400 67,300
Retail Trade 177,000 181,000 183,000 182,300 181,400
Transportation, Warehousing and Utilities 198,800 214,400 206,000 205,000 205,200 Information 12,500 13,000 13,300 12,800 12,100
Financial Activities 45,200 46,000 44,900 44,100 43,400 Professional and Business Services 166,600 173,900 164,400 161,300 157,400 Educational and Health Services 254,300 267,900 287,800 312,500 341,000 Leisure and Hospitality 160,200 180,900 187,600 186,400 186,700 Other Services 43,600 47,400 49,400 51,000 51,000
Government 242,000 250,000 259,300 262,200 265,100
Total, All Industries 1,588,800 1,674,000 1,693,200 1,713,000 1,730,400 Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households and persons involved in labor-management trade disputes. Employment reported by place of work. Items may not add to total due to independent rounding. The “Total, All Industries” data is not directly comparable to the employment data found in this Appendix A.

Source: State of California, Employment Development Department, March 2025 Benchmark. 4909-7645-4603v8/022432-0051 A-5
Commercial Activity
Trade outlet and retail sales activity for the last five Fiscal Years for which information is available are summarized below.

CITY OF MORENO VALLEY `
Taxable Transactions and Sales Permits (Dollars in Thousands) Calendar Year
Total Retail
Stores Taxable
Transactions
Total Retail
Stores Permits
Total Taxable
Transactions
Total Issued
Permits
2021 2,767,780 10,419 3,047,751 15,484
2022 2,865,012 10,603 3,207,163 15,861
2023 2,671,416 10,581 3,049,977 15,831
2024 2,646,150 10,797 2,999,861 16,290
2025 2,534,281 10,656 2,773,417 16,347
Source: California Department Tax and Fee Administration.

CITY OF MORENO VALLEY
Retail Sales (Dollars in Thousands)
Type of Business 2021 2022 2023 2024 2025
Auto Dealers $ 498,785 $ 524,464 $ 472,130 $ 405,635 $ 433,347 Home Furnishing 71,012 63,887 52,752 46,624 50,413
Building Materials 198,362 189,717 187,257 204,042 194,919 Apparel Stores 151,393 138,558 132,858 165,459 277,795
Food Stores 160,495 174,518 161,924 161,619 159,845
Eating/Drinking Places 336,448 364,886 401,875 336,447 432,040 Service Stations 241,649 278,061 245,093 241,649 206,194 General Merchandise Stores 357,362 376,288 349,186 357,361 344,263 Other Retail Stores 752,274 754,628 668,341 660,979 433,347 Retail Stores Totals $ 2,767,780 $ 2,865,012 $ 2,671,412 $ 2,646,150 $ 2,534,281 All Other Outlets 279,971 342,150 304,998 353,712 374,332 Total All Outlets $ 3,047,751 $ 3,207,162 $ 3,049,771 $ 2,999,861 $ 2,773,417 Source: California Department Tax and Fee Administration.

The table below presents taxable sales for the County for the last five Fiscal Years for which information is available.

COUNTY OF RIVERSIDE TAXABLE SALES
Taxable Sales
(Dollars in Thousands)
Year Permits Taxable Transactions
2021 261,850 55,535,196
2022 264,439 62,117,153
2023 265,660 61,331,274
2024 270,392 60,826,953
2025 280,169 61,139,698
Source: California Department Tax and Fee Administration. 4909-7645-4603v8/022432-0051 A-6
Personal Income
The following tables show the personal income and per capita personal income for the City, County, State of California and United States for the last five Fiscal Years for which information is available.

CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE,

STATE OF CALIFORNIA, AND UNITED STATES
Personal Income
Year
City of
Moreno Valley
County of
Riverside California United States
2020 $4,500,668 115,415,017 2,770,488,779 19,613,059,000 2021 4,490,722 126,651,219 3,019,215,724 21,484,168,000 2022 5,301,976 127,575,613 3,021,645,501 22,144,814,000 2023 5,969,563 133,563,233 3,182,779,295 23,577,208,000 2024 5,564,149 145,697,421 3,400,237,317 24,897,613,000 Note: Dollars in Thousands.

Source: U.S. Department of Commerce, Bureau of Economic Analysis and City of Moreno Valley Fiscal Year Ending June 30, 2025 ACFR.

CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE,

STATE OF CALIFORNIA, AND UNITED STATES
Per Capita Personal Income
Year
City of
Moreno Valley
County of
Riverside California United States
2018 $18,796 $40,619 $60,984 $53,311
2019 19,615 43,122 64,219 55,567
2020 21,551 47,600 70,100 59,151
2021 21,443 51,584 77,134 64,692
2022 25,319 51,449 77,196 66,298
2023 28,660 53,350 81,196 70,002
2024 26,861 56,404 86,232 73,204
2025 28,855 --(2) --(2) --(2)
(1) Per capita personal income is the total personal income divided by the total mid-year population estimates of the U.S.

Bureau of the Census. All dollar estimates are in current dollars (not adjusted for inflation). (2) 2025 figures not yet available for County of Riverside, State of California and the United States.

Source: U.S. Department of Commerce, Bureau of Economic Analysis and City of Moreno Valley Fiscal Year Ending June 30, 2025 ACFR.

Agriculture
Agriculture is a significant source of income in the County. In 2024, principal agricultural products were milk, nursery stock, table grapes, hay, lemons, bell peppers, eggs, grapefruit, dates and avocados.

Four areas in the County account for the major portion of agricultural activity: the Riverside/Corona and San Jacinto/Temecula Valley Districts in the western portion of the County, the Coachella Valley in the central portion and the Palo Verde Valley near the County’s eastern border. The County, and all of Southern California, has from time to time, including in recent years, experienced a severe drought. The County cannot predict the impact that a prolonged drought would have on agricultural production in the County. 4909-7645-4603v8/022432-0051 A-7
Utilities
The City receives water service from the Eastern Municipal Water District and Box Springs Mutual Water Company. The City is also serviced by Frontier (formerly Verizon) and Southern California Gas Company. Electrical service for most of the City’s developed areas is provided by Southern California Edison.

The City has established Moreno Valley Electric Utility to provide electric service for the remainder of the south and east ends of the City.

Transportation
The City is centrally located within the Inland Empire. Highways passing through the City include California State Highway 60 and Interstate 215. California State Highway 60 connects in Riverside to California State Highway 91, which connects to Orange County and Long Beach. California State Highway 60 and Interstate 215 provide access to Interstate 10 within 15 miles of the City. Rail service in the City includes the Burlington Northern Santa Fe branch line. The main line service in Riverside has stop locations at the Union Pacific, Southern Pacific and Burlington Northern Santa Fe stations. Metrolink commuter rail service is available in Perris and in Riverside to Los Angeles and Orange County.

Ontario International Airport (owned and operated by Ontario International Airport Authority), located near the City, is served by Alaska Airlines, American Airlines, Avianca, China Airlines Delta Air Lines, Frontier Airlines, JetBlue, Southwest Airlines, STARLUX Airlines, United Airlines, Volaris. Various airlines provide freight services at Ontario International Airport. Riverside Municipal Airport has general aviation facilities with 5,400 feet and 1,600 feet runways.

Education
The City is served by two public school districts: Moreno Valley Unified School District, with an approximate enrollment of 30,413 students, and Val Verde Unified School District, with an approximate enrollment of 18,717 students. Moreno Valley Unified School District has 23 elementary schools, six middle schools, four comprehensive high schools, one charter school, one adult school, one continuation school, a community day school, one pre-school and one academic center. Val Verde Unified School District serves the communities of Perris, Mead Valley and Moreno Valley. Val Verde Unified District has one pre-school, 13 elementary schools, four middle schools, three high schools and one continuation high school.

The City is also home to Moreno Valley Community College. Moreno Valley College is a significant local educational and workforce-development institution, providing affordable pathways to four-year universities as well as direct entry into high-demand careers, particularly in health care, public safety, and other technical fields. Its growing enrollment and partnerships also make it an important contributor to Moreno Valley's workforce and economic-development pipeline.

Recreation and Culture
Lake Perris State Park offers boating, swimming, water-skiing, fishing and camping within its 8,300 acres. Box Springs Mountain Park provides trails for hiking and horseback riding. The City’s centralized location allows residents to visit nearby mountain resorts, Palm Springs and the beach cities with relative ease.

The City’s park system consists of 37 parks with over 552 acres of maintenance. The City offers a variety of recreational activities for adults and youth. The City’s library system consists of a main library and two satellite branches. A third satellite site is currently being built and is expected to finish in early 2027. 4909-7645-4603v8/022432-0051 B-1

APPENDIX B

SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS
The following is a brief summary of the provisions of the Indenture, the Ground Lease, the Lease Agreement and the Assignment Agreement. This summary is not intended to be definitive, and Owners of the Series 2026A Bonds should refer to the documents for the complete text thereof.

Copies of the documents summarized herein are available from the City. 4909-7645-4603v8/022432-0051 C-1

APPENDIX C

ANNUAL COMPREHENSIVE FINANCIAL REPORT
OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025
4909-7645-4603v8/022432-0051 D-1

APPENDIX D

PROPOSED FORM OF BOND COUNSEL OPINION
[Date of Delivery]
Moreno Valley Public Financing Authority
Moreno Valley, California
Re: $____ Moreno Valley Public Financing Authority Lease Revenue Bonds, Series 2026A Ladies and Gentlemen:

We have acted as bond counsel to the Moreno Valley Public Financing Authority (the “Authority”) in connection with the issuance by the Authority of $_____ Moreno Valley Public Financing Authority Lease Revenue Bonds, Series 2026A (the “Bonds”), pursuant to the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), and pursuant to an Indenture, dated as of August 1, 2024 (the “Indenture”), by and among the Authority, the City of Moreno Valley (the “City”) and Wilmington Trust, National Association, as Trustee. The Bonds will be principally secured by lease payments to be made by the City pursuant to a Lease Agreement, dated as of November 1, 2026 (the “Lease”), by and between the Authority and the City. We have examined the law and such certified proceedings and other documents, agreements, opinions and matters as we deem necessary to render this opinion. This opinion is based on current statutory and constitutional law and published court decisions as of the date hereof. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Indenture.

As to questions of fact material to our opinion, we have relied upon representations of the Authority contained in the Indenture and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation.

We have assumed the genuineness of all documents and signatures presented to us, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions referred to in the preceding paragraphs of this opinion. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture, the Lease and the Ground Lease. We call attention to the fact that the rights and obligations under the Bonds, the Indenture, the Lease, the Ground Lease, the Assignment Agreement and the Tax Certificate may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, by the application of equitable principles and the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against cities and public agencies in the State of California.

Based upon the foregoing we are of the opinion, under existing law, as follows:

1. The Authority is a joint exercise of powers authority duly organized and validly existing under the laws of the State of California with the full power to enter into the Indenture and the Lease, to perform the agreements on its part contained therein and to issue the Bonds.

2. The Indenture and the Lease have each been duly authorized, executed and delivered by the Authority and the Indenture and the Lease constitute the valid and binding obligations of the Authority 4909-7645-4603v8/022432-0051 D-2
enforceable against the Authority in accordance with their respective terms. The Indenture creates a valid pledge of the Base Rental Payments and other moneys pledged under the Indenture, subject to the provisions of the Indenture.

3. The Indenture and the Lease have each been duly authorized, executed and delivered by the City and the Indenture and the Lease constitute the valid and binding obligations of the City enforceable against the City in accordance with their respective terms.

4. The Bonds have been duly and validly authorized by the Authority and are legal, valid and binding limited obligations of the Authority, enforceable in accordance with their terms and the terms of the Indenture. The Bonds are limited obligations of the Authority payable solely from the Base Rental Payments and other moneys pledged under the Indenture as provided in the Indenture, but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. The Authority has no taxing power.

5. Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; individuals; however, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations.

6. Interest (and original issue discount) on the Bonds is exempt from personal income taxes imposed in the State of California.

7. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond Owner will increase the Bond Owner’s basis in the applicable Bond. Original issue discount that accrues to the Bond Owner is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals (as described in paragraph 5 above) and is exempt from State of California personal income tax.

8. The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner.

The opinions expressed in paragraphs (5) and (7) above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds are subject to the condition that the Authority and the City comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Authority and the City have covenanted to 4909-7645-4603v8/022432-0051 D-3
comply with all such requirements. Except as set forth in paragraphs (5), (6), (7) and (8) above, we express no opinion as to any tax consequences related to the Bonds.

Certain requirements and procedures contained or referred to in the Indenture, the Lease and Tax Certificate may be changed, and certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in the Indenture, the Lease and Tax Certificate, upon the advice or with the approving opinion of counsel nationally recognized in the area of tax-exempt obligations. We express no opinion as to the effect on the exclusion of interest on the Bonds from gross income for federal income tax purposes on and after the date on which any such change occurs or action is taken upon the advice or approval of counsel other than Stradling Yocca Carlson & Rauth LLP.

Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

The opinions expressed herein are based upon an analysis of existing statutes, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. We call attention to the fact that the foregoing opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or do occur (or do not occur). Our engagement with respect to the Bonds terminates upon their issuance, and we disclaim any obligation to update the matters set forth herein.

We express no opinion herein with respect to any indemnification, contribution, choice of law, choice of forum, penalty or waiver provisions contained in the Bonds, the Indenture, the Lease, the Ground Lease or the Assignment Agreement; nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Lease or the Ground Lease, or the accuracy or sufficiency of the description contained therein, or the remedies available to enforce liens on, any such property contained therein.

We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Indenture or the Lease, or the accuracy or sufficiency of the description of any such property contained therein. We expressly disclaim any duty to advise the Owners of the Bonds with respect to the matters contained in the Official Statement and any other offering material relating to the Bonds.

We have not made or undertaken to make an investigation of the state of title to any of the real property described in the Lease or of the accuracy or sufficiency of the description of such property contained therein, and we express no opinion with respect to such matters.

Respectfully submitted,
4909-7645-4603v8/022432-0051 E-1

APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the City of Moreno Valley (the “City”) in connection with the issuance by the Moreno Valley Public Financing Authority (the “Authority”) of its $____ Lease Revenue Bonds, Series 2026A (the “Bonds”). The Bonds are being issued pursuant to an Indenture, dated as of November 1, 2026 (the “Indenture”), by and among the Authority, the City and Wilmington Trust, National Association, as trustee (the “Trustee”). The City covenants and agrees as follows:

1. Purpose of this Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Insurer, the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.

2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

Annual Report. The term “Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

Beneficial Owner. The term “Beneficial Owner” means any person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries); or (b) is treated as the owner of any Bonds for federal income tax purposes.

EMMA. The term “EMMA” means the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at http://emma.msrb.org/.

Financial Obligation. The term “Financial Obligation” means a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (C) guarantee of (A) or (B). The term “Financial Obligation” does not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.1
Fiscal Year. The term “Fiscal Year” means the one-year period ending on the last day of June of each year.

Holder. The term “Holder” means a registered owner of the Bonds.

Insurer. The term “Insurer” means Assured Guaranty Municipal Corp.

Listed Events. The term “Listed Events” means any of the events listed in Sections 5(a) and (b) of this Disclosure Certificate.

Official Statement. The term “Official Statement” means the Official Statement dated October 16, 2026 relating to the Bonds.
1 The City shall interpret the events identified in Sections (5)(a)(10) and 5(b)(8) hereof in accordance with Release No. 34-83885 adopted by the Securities and Exchange Commission on August 20, 2018, or any future guidance or releases provided by the Securities and Exchange Commission.
4909-7645-4603v8/022432-0051 E-2
Participating Underwriter. The term “Participating Underwriter” means any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds.

Rule. The term “Rule” means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

3. Provision of Annual Reports.
(a) The City shall provide not later than each March 31 following the end of its Fiscal Year (commencing March 31, 2027 with the Fiscal Year ended June 30, 2026) to EMMA an Annual Report relating to the immediately preceding Fiscal Year which is consistent with the requirements of Section 4 of this Disclosure Certificate, which Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate.
(b) If the City is unable to provide to EMMA an Annual Report by the date required in subsection (a), the City shall send in a timely manner to EMMA a notice in the manner prescribed by the Municipal Securities Rulemaking Board.

4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference the following:
(a) audited financial statements of the City for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they come available.
(b) To the extent not included in the audited financial statements provided pursuant to the foregoing Section 4(a), the Annual Report shall contain the following information:
(i) revenues, expenditures, and beginning and ending fund balances relating to the General Fund of the City for the most recently completed Fiscal Year; (ii) assessed valuations of property in the City;
(iii) property tax levies and collections for the most recently completed Fiscal Year;
(iv) top ten property taxpayers in the City;
(v) State of California motor vehicle in-lieu payments received; and (vi) outstanding debt of the City for the most recently completed Fiscal Year, including revenue and lease indebtedness.

The items described above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to EMMA; provided, that if any document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board; and provided further, that the City shall clearly identify each such document so included by reference.
4909-7645-4603v8/022432-0051 E-3

5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten (10) Business Days after the event:

1. principal and interest payment delinquencies;

2. unscheduled draws on debt service reserves reflecting financial difficulties;

3. unscheduled draws on credit enhancements reflecting financial difficulties;

4. substitution of credit or liquidity providers, or their failure to perform;

5. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability or Notices of Proposed Issue (IRS Form 5701 TEB);

6. tender offers;

7. defeasances;

8. ratings changes;

9. bankruptcy, insolvency, receivership or similar proceedings; Note: For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person; and

10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties.
(b) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material:

1. unless described in Section 5(a)(5), other notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other events affecting the tax status of the Bonds;

2. modifications to the rights of security holders;

3. optional, unscheduled or contingent Bond redemptions;

4. release, substitution or sale of property securing repayment of the securities;

5. non-payment related defaults;
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6. the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms;

7. appointment of a successor or additional trustee or the change of the name of a trustee; and

8. incurrence of a Financial Obligation of the City, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect security holders.
(c) If the City determines that knowledge of the occurrence of a Listed Event under Section 5(b) would be material under applicable federal securities laws, the City shall file a notice of such occurrence with EMMA in a timely manner not more than ten (10) Business Days after the event.

6. Termination of Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).

7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver is permitted by the Rule, taking into account any subsequent change in or official interpretation of the Rule.

8. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall not thereby have any obligation under this Disclosure Certificate to update such information or include it in any future notice of occurrence of a Listed Event.

9. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, the Insurer or any Holders or Beneficial Owners of at least 50% aggregate principal amount of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate.

A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

No Holder or Beneficial Owner of the Bonds may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the City satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the City shall have refused to comply therewith within a reasonable time.
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10. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Insurer, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Dated: ______, 2026 CITY OF MORENO VALLEY
By:

Its: City Manager
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APPENDIX F

BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Series 2026A Bonds, payment of principal, premium, if any, accreted value and interest on the Series 2026A Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Series 2026A Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Series 2026A Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each maturity of the Securities in the aggregate principal amount of such maturity, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has an S&P Global Ratings highest rating: “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information set forth on such website is not incorporated herein by reference.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
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4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners.

In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Principal, redemption price and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. If applicable, a Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to tender/remarketing agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to tender/remarketing agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to tender/remarketing agent’s DTC account.

10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Authority or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

11. The Authority may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 4909-7645-4603v8/022432-0051 G-1

APPENDIX G

SPECIMEN MUNICIPAL BOND INSURANCE POLICY

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