Murrieta City Council
February 3, 2026

WHEREAS, the City and MPMA have prepared and executed the successor MPMA MOU for the period July 1, 2023, through June 30, 2026, subject to City Council approval, adoption, and implementation.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MURRIETA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. The recitals set forth above are true and correct and incorporated herein by this reference.

Section 2. The successor MPMA MOU for the period July 1, 2023 – June 30, 2026, a fully executed copy of which is attached hereto as Exhibit A, is approved, adopted, and implemented effective February 3, 2026.

Section 3. The City Manager is hereby authorized and directed to implement the provisions of the MPMA MOU for the period July 1, 2023 – June 30, 2026, including the resulting changes to employee compensation and benefits not previously implemented by the Tentative Agreement.

Section 4. The City Clerk shall certify the adoption of this resolution effective February 3, 2026.

PASSED, APPROVED, AND ADOPTED this 3rd day of February 2026 by the City Council of the City of Murrieta, State of California.

Jon Levell, Mayor

ATTEST:

Cristal McDonald, City Clerk

APPROVED AS TO FORM:

Tiffany Israel, City Attorney

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Resolution No. 26-4908

STATE OF CALIFORNIA )

COUNTY OF RIVERSIDE )

CITY OF MURRIETA )

I, Cristal McDonald, City Clerk of the City of Murrieta, California, do hereby certify that the foregoing Resolution No. 25-4908 was duly adopted by the City Council of the City of Murrieta at the regular meeting thereof, held on the 3rd day of February 2026, and was signed by the Mayor of said City, and that the same was passed and adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Cristal McDonald, City Clerk
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MEMORANDUM OF UNDERSTANDING

BETWEEN

THE CITY OF MURRIETA
AND

THE MURRIETA POLICE MANAGEMENT

ASSOCIATION

JULY 1, 2023 through JUNE 30, 2026

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1 MEMORANDUM OF UNDERSTANDING

THE CITY OF MURRIETA AND

THE MURRIETA POLICE MANAGEMENT ASSOCIATION
FOR THE PERIOD: JULY 1, 2023 – JUNE 30, 2026

SECTION I ADMINISTRATION ....................................................................................... 2 ARTICLE 1.01 PARTIES TO THIS MEMORANDUM .......................................................... 2 ARTICLE 1.02 PREVAILING CONDITIONS ....................................................................... 2 ARTICLE 1.03 REPRESENTED POSITIONS ..................................................................... 2 ARTICLE 1.04 BARGAINING WAIVER ............................................................................... 2 ARTICLE 1.05 MAINTENANCE OF EXISTING BENEFITS ................................................ 2 ARTICLE 1.06 SEVERABILITY ........................................................................................... 2 ARTICLE 1.07 TERM .......................................................................................................... 2 ARTICLE 1.08 CITY RIGHTS ............................................................................................. 3 SECTION II COMPENSATION ....................................................................................... 3 ARTICLE 2.01 SALARIES. ................................................................................................. 3 ARTICLE 2.02 OTHER COMPENSATION .......................................................................... 4 ARTICLE 2.03 TOTAL COMPENSATION ........................................................................... 6 ARTICLE 2.04 UNIFORM ALLOWANCE ............................................................................ 6 ARTICLE 2.05 INSURANCE ............................................................................................... 6 ARTICLE 2.06 DEFERRED COMPENSATION ................................................................... 8 ARTICLE 2.08 TUITION REIMBURSEMENT ...................................................................... 8 ARTICLE 2.09 RETIREMENT ............................................................................................. 9 ARTICLE 2.10 PROFESSIONAL ORGANIZATION MEMBERSHIP ...................................10 ARTICLE 2.11 COMPUTER UPGRADE REIMBURSEMENT ............................................10 SECTION III HOURS .................................................................................................... 11 ARTICLE 3.01 ANNUAL LEAVE ........................................................................................11 ARTICLE 3.02 SICK LEAVE BANK....................................................................................13 ARTICLE 3.03 HOLIDAY LEAVE. ......................................................................................14 ARTICLE 3.04 PERSONAL LEAVE ...................................................................................16 ARTICLE 3.05 BEREAVEMENT LEAVE ............................................................................17 SECTION IV WORKING CONDITIONS ........................................................................ 18 ARTICLE 4.01 EXEMPT EMPLOYEES .............................................................................18 ARTICLE 4.02 PROBATIONARY PERIOD ........................................................................18 ARTICLE 4.03 ANNIVERSARY DATE ...............................................................................18 ARTICLE 4.04 DEMOTIONS .............................................................................................18 ARTICLE 4.05 SUBSTANCE ABUSE POLICY ..................................................................18 ARTICLE 4.06 VOLUNTARY DEDUCTIONS .....................................................................18 ARTICLE 4.07 NO STRIKE PROVISIONS .........................................................................18 ARTICLE 4.08 LAYOFF PROCEDURES ...........................................................................19 ARTICLE 4.09 GRIEVANCE PROCEDURES ....................................................................19 ARTICLE 4.10 DISCIPLINARY AND APPEALS PROCEDURES .......................................20 ARTICLE 4.11 OTHER ITEMS ...........................................................................................25 ARTICLE 4.12 RE-OPENERS ...........................................................................................25 APPROVALS ................................................................................................................ 26

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2 SECTION I ADMINISTRATION
ARTICLE 1.01 PARTIES TO THIS MEMORANDUM
This Memorandum of Understanding ("MOU" or "Agreement") is made and entered into by and between the City of Murrieta, a municipal corporation ("CITY"), and the Murrieta Police Management Association ("Association") pursuant to California Government Code Section 3500 et seq.

ARTICLE 1.02 PREVAILING CONDITIONS
This MOU, and any and all side letters to this Agreement, sets forth the entire agreement between the parties hereto, and all negotiated benefits in this Agreement shall remain in full force and effect, unchanged during the term of this Agreement unless altered by mutual written agreement.

This MOU, having been agreed to in good faith by the parties hereto, shall prevail in the event of a conflict between its terms and the terms of any federal, state, or local rules and regulations.

ARTICLE 1.03 REPRESENTED POSITIONS
The following positions are covered by this Agreement: Police Lieutenant and Police Captain.

ARTICLE 1.04 BARGAINING WAIVER
The parties acknowledge that, during the negotiations that resulted in this Agreement, each party had the unlimited right and opportunity to make demands and proposals with respect to any subject or matter not removed by law from the area of collective bargaining regarding the employees covered by this Agreement and that the understandings and agreements arrived at by the parties hereto after the exercise of that right and opportunity are fully set forth in this Agreement.

ARTICLE 1.05 MAINTENANCE OF EXISTING BENEFITS
During the term of this MOU, the specifications included within this specific MOU shall remain unchanged unless and until modified by mutual agreement between the parties. Therefore, any matters within the scope of representation that are not specifically p rovided for in this particular MOU shall be subject to modification or elimination during and/or after the term of this MOU, upon either mutual agreement of the parties or by means of unilateral action taken by the City Council, but only after completion of the meet and confer process and any applicable impasse procedure having been previously implemented by the City.

ARTICLE 1.06 SEVERABILITY
Should any portion of this Agreement be found to be inoperative, void, or invalid by a court of competent jurisdiction, all other provisions of this Agreement shall remain in full force and effect for the duration of this MOU.

ARTICLE 1.07 TERM
This Agreement shall become effective July 1, 2023, and shall remain in effect until June 30, 2026.

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3 ARTICLE 1.08 CITY RIGHTS

The rights of the CITY include, but are not limited to, the exclusive right to determine the mission of its constituent departments, commissions and boards; set standards of service; determine the procedures and standards of selection for employment and promotion; direct its employees; take disciplinary action; relieve its employees from duty because of lack of work or for other legitimate reasons; maintain the efficiency of governmental operations; determine the methods, means and personnel by which government operations are to be conducted; determine the content of job classifications; take all necessary actions to carry out its mission in emergencies; exercise complete control and discretion over its organization and the technology of performing the work; and all the rights, powers and authority exercised or held by it prior to this MOU, except as expressly limited by this Agreement.

SECTION II COMPENSATION
ARTICLE 2.01 SALARIES.

A. Salary/Pay Schedules. Police Lieutenant base monthly salary /pay range and Police Captain base monthly salary/pay range will be maintained with five (5) pay steps titled "A" step through "E" step. Each pay step up to step "E" will be five percent (5%) greater than the previous step.

Effective with the first full pay period in July 2023, the base pay and salary range for Police Lieutenant and Police Captain classifications will be increased by a cost -of-living- adjustment (COLA) of four percent (4.0%). In addition, the base pay and salary range for Police Lieutenant and Police Captain classifications will be increased by a market compensation equity adjustment of five percent (5%). These two adjustments shall not be compounded and represent a total nine percent (9%) base pay and salary range increase.

Effective the first full pay -period in July 2024, the base pay and salary range for Police Lieutenant and Police Captain classifications will be increased by a cost -of-living- adjustment (COLA) of four percent (4.0%). If revenues fall by more than 5% below FY 2023-24 budget, the City can reopen the MOU to discuss modifications to the COLA.

Effective the first full pay -period in July 2025, the base pay and salary range for Police Lieutenant and Police Captain classifications will be increased by a cost -of-living- adjustment (COLA) of four percent (4.0%). If revenues fall by more than 5% below FY 2024-25 budget, the City can reopen the MOU to discuss modifications to the COLA.

The salary ranges for Police Lieutenant and Police Captain shall be adjusted, as necessary, so that the bottom step base salary for Police Lieutenant shall always remain five percent (5%) greater than the top step base salary for Police Sergeant and the salary range for Police Captain shall be adjusted, as necessary, so that the bottom step base salary shall remain five percent (5%) greater than the top step base salary for Police Lieutenant.

In the event that the Murrieta Police Officers’ Association receives an increase in benefits at any time prior to the expiration of this Agreement, the same increase in benefits shall apply to employees subject to this Agreement.
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4 B. Appointment and Advancement. Step A is the normal starting base rate of pay. An employee shall serve six months in this step before becoming eligible for advancement to Step B. Thereafter, the employee shall serve one year in a step prior to eligibility for advancement to the next step.

In exceptional circumstances, a newly hired/promoted employee may be appointed at a higher step, in which case the employee must serve one year before becoming eligible for a step advancement.

Step advancements shall be granted only for meritorious service. The employee's supervisor and the Police Chief shall file with the City Manager the prescribed form of employee evaluation along with a recommendation to approve, deny , or delay a step advancement. The City Manager may approve or modify this recommendation.

When a normal step advance is denied, it may be reconsidered at any time, and if advancement occurs, the employee shall serve one year in the new step before becoming eligible for advancement to the next step.

ARTICLE 2.02 OTHER COMPENSATION
A. Bilingual Pay. The CITY has established a bilingual program that will provide an additional two and one- half percent (2.5%) of base pay for eligible members of the Association who are fluent in the Spanish language. The 2.5% bilingual pay shall be calculated on base salary/pay. The number of members to be eligible shall be determined by the CITY. To become qualified, an employee must be certified by the City Manager or their designee after the employee successfully passes a verbal conversation examination established by the CITY in cooperation with the Association.

B. Administrative On-Call Pay. Association members function as department managers and are required to be available, on and off duty, to give direction to their assigned teams and divisions. In order to compensate members for off -duty managerial responsibilities, on-call pay has been established. All represented employees shall be compensated an additional four percent (4%), calculated on their base salary/pay.

C. Night Premium Pay. Employees assigned to the night shift during the shift selection process (July and January of each year or as determined by police management) shall be paid night shift premium pay of five percent (5%) of the employee’s base salary/pay for the duration of the night shift rotation.

Employees assigned to night shift by police management for operational reasons will be eligible for nightshift premium pay for the duration of their night shift assignment.

Night shift premium pay of 5% of base salary/pay is authorized only through a Personnel Action Form, which will be finalized by the Human Resources Department. Employees assigned to the night shift shall not use any paid shift overtime codes as the 5% base salary/pay will be added automatically to those hours.

D. Promotions. The CITY agrees that all promotions in rank shall result in an increase of at least five percent (5%) over the employee's previous salary , which includes base salary pay and any compensation additives (i.e., Bilingual Pay, Administrative On-Call Pay, Longevity Pay, Educational Achievement Pay ). Temporary Assignment Pay will not be part of this calculation.
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5 E. Temporary Assignment Pay. As a result of vacancies, leaves of absence, or other reasons, it may be necessary to reassign an authorized employee to serve in a higher - ranking position. Since such assignments require the employee to assume additional responsibilities and perform duties that are outside the scope of the employee's regular assignment, the employee shall be entitled to a salary adjustment to reflect the new position duties. The following shall apply in these instances:

1. Approval Required. Upon the recommendation of the Police Chief and with the approval of the City Manager, an employee may temporarily be assigned to a higher level classification provided that:
a. The higher-level position is vacant and is approved by the City Manager for new or continued staffing.
b. The employee is called upon to serve in the higher -level position by the City Manager and the Police Chief.
c. The employee possesses the minimum qualifications to perform the work of the higher-level position.

2. Salary. The employee in such a temporary assignment shall be entitled to a salary adjustment of at least five percent (5%) over the employee's previous salary, which includes base salary and any special assignment pay or the "A" Step of the higher level position, whichever is greater, for the duration of the temporary assignment.

3. All applicable leave accruals, except holiday leave (i.e., annual) are calculated and credited to each employee based upon an eight (8) hour workday. All leave hours taken shall be based upon the length of a given employee's workday (i.e., 8 hrs., 9 hrs., 10 hrs., 12 hrs.) and charged against the applicable accrued leave balance.

F. Longevity Pay . Effective the first full pay -period in July 2023, the base pay of all represented employees with fifteen (15) full years of Murrieta sworn service shall receive a two percent (2%) base salary increase and those with twenty (20) full years shall receive an additional three percent (3%) base salary increase (for a combined total of 5%).

G. Educational Achievement Pay
Employees who qualify by attaining appropriate educational or professional qualifications not specifically required for their position shall be paid a sum in addition to their base pay in the following amounts:

Police Lieutenants having a Supervisory
certificate 5% monthly

OR, BUT NOT BOTH,

A Police Captain having a POST
Management certificate 5% monthly
Police Lieutenants and Captains having in addition to the above POST certificates, a Masters' Degree from an accredited college or university, OR having successfully completed the California 191

6 Post Command College, or having graduated from the FBI National Academy, shall receive an additional 5% monthly sum in addition to their base pay (i.e., a C aptain with both a POST supervisory and management certificate and a Masters' Degree, receives a total 10% monthly allowance.) The certificate pay is non -cumulative. An eligible employee receives compensation for one or the other of the certificates.

Degrees must be directly related to the performance of the duties associated with the classification.

ARTICLE 2.03 TOTAL COMPENSATION
The parties agree to meet and confer to update the definition of total compensation categories and comparable cities during the term of the MOU for purposes of successor MOU negotiations.

ARTICLE 2.04 UNIFORM ALLOWANCE
Represented employees shall be paid an allowance of $1,800 per calendar year for the purposes of acquiring and maintaining prescribed uniforms and equipment required for the performance of their duties, except badges and patches, which are to be provided by the CITY. The allowance will be paid equally across all twenty-six (26) payroll periods in the calendar year and reported to the California Public Employees' Retirement System ( “CalPERS”) as an aggregate amount for each pay period per CalPERS Circular Letter 200 -050-19 dated October 30, 2019. It is agreed that $10 of this amount shall be considered as a “ safety allowance” which is to be used for the purchase of safety equipment such as bulletproof vests, firearms, ammunition, and safety shoes.

The safety allowance is not reportable to CalPERS as a uniform allowance.

Uniform Allowance will be reported to CalPERS as pensionable compensation to the extent allowable under the provisions of pension law. Actual compensability will be determined by the extent to which such compensation is permitted by law pursuant to Title 2 CCR, Sections 571 and 571.1, and any other applicable provisions of State or federal law. Pursuant to subdivision (c)(7) of Gov ernment Code section 7522.34, all employer -provided allowances, reimbursements, or payments made for uniforms are not reportable for “new members” as defined and limited by the Public Employees' Pension Reform Act of 2013 (“PEPRA”) and related legislation and regulations.

ARTICLE 2.05 INSURANCE
A. Cafeteria Plan Effective. The City shall provide funding for medical and related expenditures as follows. The City of Murrieta is a contracting agency for participation in the Public Employees' Medical and Hospital Care Act (“PEMHCA”). Government Code § 22892 provides for the minimum employer contributions to allow enrollment in PEMHCA.

The City contribution for health insurance for purposes of PEMHCA shall be the minimum monthly contribution required by PEMHCA, and shall be adjusted to correspond with changes in the minimum employer contribution requirements. The minimum mandated employer contribution (“MEC”) under PEMHCA changes from time to time pursuant to the Government Code; currently $157 for 2024 and $158 for 2025.) The City shall fund a Section 125 cafeteria plan on behalf of each employee in the amount of two thousand dollars ($2,000. 0) per month, which includes the MEC amount with the following restrictions:

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7 1. Up to $933.43 of the Cafeteria Plan may be utilized only for medical insurance premiums. The remaining amount may be used for other allowable "Cafeteria Plan" expenditures, such as medical premiums, and Flexible Spending Account contributions.

2. Cash-in-lieu is not permitted.

3. Deferred Compensation contributions are not permitted.

Continuation upon Retirement

1. Employees hired prior to January 1, 2008 - eligible retirees shall receive the monthly MEC to participate in PEMHCA ($133.00 per month for calendar year 2018) and a $700.33 monthly contribution to a Retirement Health Savings Plan (“RHS”). The total monthly expenditure for pre- January 1, 2008, employees who thereafter retire shall remain fixed at a maximum $833.43 (consisting of the MEC to participate in PEMHCA, as from time to time changes, and the RHS contribution.)

2. January 1, 2008 and later employees (10 complete years of City service) - Employees hired on and after January 1, 2008 and who thereafter retire from City service with a minimum ten (10) complete years of service with the City, shall receive City-funded medical insurance for the retiree and eligible dependents, in an amount not to exceed $360.00 per month up to the date of eligibility to receive Medicare. (The $360.00 maximum amount is computed by adding the MEC, to an RHS contribution, which shall , when to taled, equal $360.00 per month.) Upon employee eligibility for Medicare, the City contribution to medical insurance shall be in the MEC.

3. January 1, 2008 and later employees (less than 10 complete years of City service) - For those employees hired on and after January 1, 2008, who then retire from City service with less than ten (10) full years of City service, the City medical insurance contribution shall be equivalent to the MEC.

B. Dental and Orthodontic. The City agrees to provide a dental and orthodontic benefit plan.

The City also agrees to pay the monthly premiums for each employee and the employee's dependents.

C. Vision Plan. The City agrees to provide a vision plan for all employees and their dependents. The City also agrees to pay the monthly premiums for each employee and the employee's dependents.

D. Life Insurance. The City agrees to provide a life insurance policy in an amount equal to one year of base salary /pay to a maximum of $150,000.00. The City shall select the insurance company. The City shall pay all monthly premiums. When available through the City, employees may purchase additional life insurance at their own cost.

E. Long Term Disability. The City agrees to provide long term disability insurance. The City shall pay the full premium for this insurance.
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8 F. Short Term Disability. The City agrees to provide short-term disability insurance. The City shall pay the full premium for this insurance.

G. Flexible Spending Accounts. The City agrees to put in place a Cafeteria Plan to allow employees to make pretax deductions from their earnings for the purpose of being reimbursed by a third party administrator for eligible health and dependent care expenses.

The City will pay all administrative costs for this program.

H. Health Care Reopener.

The City may reopen negotiations on the issue of health insurance benefits or cafeteria plan (including, as to both, but not limited to, plan benefits or structure, City or employee contributions and/or opt-out amount or requirements) in order to avoid penalties or taxes under the federal Affordable Care Act (“ACA”) or other statutory schemes that may result from an interpretation of the ACA or other statutory scheme by the Internal Revenue Service or other federal agency (including, but not limited to, a revenue ruling, regulation or other guidance) or state agency, or a ruling by a court of competent jurisdiction.

ARTICLE 2.06 DEFERRED COMPENSATION
For those employees participating in a CITY -sponsored deferred compensation program, the CITY shall contribute a matching amount to the employee's account on a dollar -for-dollar basis according to the following schedule:

Not to exceed $2,400.00 per year.

ARTICLE 2.08 TUITION REIMBURSEMENT
The CITY has previously adopted a tuition reimbursement policy under the CITY's personnel rules (Resolution 91-64 approved November 12, 1991). Under this MOU, the maximum reimbursable amount for eligible expenses shall be $3,450 per employee per fiscal year for those in a traditional college curriculum up to the maximum allowed per employee. In consideration for those employees registered in an accredited accelerated academic program, the maximum reimbursable amount of eligible expenses for a fiscal year shall be $13,800 per employee in an accredited accelerated academic program up to the maximum allowed per employee for the full course of employment ($13,800).

A. Eligibility. After twelve (12) months of full -time employment with the CITY, regular full - time employees shall be eligible to receive financial assistance for approved courses completed at an accredited educational institution, provided:

1. Courses are satisfactorily completed with a grade of C or higher.

2. Appropriate proof of successful completion is submitted to the Personnel Officer.

3. Courses of instruction will enable the employee to perform present duties more effectively or prepare them for future opportunities into which they could reasonably expect promotion or transfer to with the CITY.

4. The hours of instruction for the course do not conflict with the employee's regularly scheduled workday.
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9 5. Reimbursement is limited to a maximum of $13,800 per employee during the course of their employment. Any reimbursements made after July 1, 2007 will apply to the $13,800 maximum.

For purposes of this policy, an accredited educational institution shall be defined as any technical, vocational, college, university, business or high school that has been accredited by a recognized governmental or professional accrediting body and has been approved by the Personnel Officer.

Employees shall obtain approval of the course from their immediate supervisor and the Personnel Officer in advance of taking course to be eligible for reimbursement. Once completed, reimbursement may be requested by filing the appropriate CITY provided form along with a copy of the final grade report.

B. Eligible Costs. Employees shall be eligible for reimbursement of tuition, textbooks, registration fees , and laboratory fees related to an approved course of instruction.

Ineligible for reimbursement are late registration penalties or fees, transportation costs, parking, interest, or any other charge not specified in this Article.

C. Reimbursement. As part of the tuition reimbursement request, employees shall agree that upon voluntary termination of employment within thirty -six ( 36) months following receipt of a tuition reimbursement, there shall be a deduction from their final pay check in an amount equal to the tuition reimbursement prorated over the portion of the thirty-six (36) month period remaining to be completed.

ARTICLE 2.09 RETIREMENT
A. California Public Employees Retirement System. The CITY provides to its classic safety employees (i.e., those who do not qualify as a “new” member under the California Public Employees’ Pension Reform Act (“PEPRA”) the "3% at 50" CalPERS retirement option for those employees hired on or before December 31, 2012 (“Tier 1”). The CITY shall pay the full 9% statutory employee contribution on behalf of all Tier 1 classic members. For classic members hired after December 31, 2012, the CITY shall provide the CalPERS retirement formula of 3% @ 55, plus a final compensa tion period of thirty-six (36) months (Tier 2”). The CITY shall pay 3.34% of the statutory 9% employee contribution on behalf of Tier 2 classic members. For “ new members” under PEPRA, the CITY shall provide the CalPERS retirement formula of 2.7% @ 57, and the thirty-six (36) month final pensionable compensation period, both as mandated by PEPRA (“Tier 3”). The CITY shall not pay any portion of the mandated employee contribution for Tier 3 “new members.” The CITY’s payment of statutory employee contributions for Tier 1 and Tier 2 classic members shall be reported as compensation earnable to CalPERS by resolution.

B. CalPERS 1959 Survivor Benefit. The CITY provides the CalPERS Fourth Level 1959 Survivor Benefit to employees. The CITY shall pay the employer's administrative costs for said benefit, and the employee shall pay their share of the monthly cost for said program.

C. Employee Payment of Employer Contributions (Cost Sharing).

Tier 1 and Tier 2 classic members shall pay 5.66% of their compensation earnable in the form of payroll deductions as cost sharing of the CITY’s employer rate to CalPERS.

These contributions are made pursuant to Government Code section 20516(a) and are 195

10 considered to be employer contributions by CalPERS. They will be treated by the CITY as being pre-income tax to the extent allowed by law. Tier 3 “new members” shall not have any cost-sharing amounts withheld for their payroll.

D. The CITY has amended its contract with CalPERS to provide Military Service Credit as Public Service (CalPERS Section 21024).

ARTICLE 2.10 PROFESSIONAL ORGANIZATION MEMBERSHIP
CITY shall pay for all unit members the annual membership fee in either the Peace Officers Research Association of California ( “PORAC”) and in the PORAC legal defense fund, or in the alternative, and at the individual employee's discretion, the counterpart fees in the California Peace Officers Association. The CITY ’s expenditure shall not exceed $515 annually per unit member.

ARTICLE 2.11 COMPUTER UPGRADE REIMBURSEMENT
Employees who have taken advantage of the computer equipment reimbursement program (Section XVIII of Resolution No. 91 -64), and have had the original reimbursement completely forgiven, will be eligible to receive a one- time computer "upgrade" loan for the purchase of authorized computer equipment and/or software up to $500 as funds permit. Participation in the computer upgrade program must be recommended by the Police Chief and approved by the City Manager. Reimbursement of the loan shall occur over the twelve (12) months following payment to the employee. This additional contribution of funds will be deducted from the employee's paycheck each pay period over a period of time not to exceed twelve (12) months or twenty-six (26) pay periods. If the employee who has received a computer upgrade loan leaves the employment of the CITY prior to the expiration of the loan period, the loan balance will be deducted from the employee's final paycheck.

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11 SECTION III HOURS
ARTICLE 3.01 ANNUAL LEAVE
Annual leave is a modified combination of the leave time previously classified as vacation leave and sick leave.

A. Annual Leave Accrual. Employees covered by the terms and conditions of this Memorandum shall accrue annual leave per the following schedule:

Years of Service Annual Accrual Maximum Accrual 1 to 3 years
4 to 6 years
7 to 10 years
11 to 15 years
16+ years
168 hours per year (21 days x 8 hrs.)
192 hours per year (24 days x 8 hrs.)
216 hours per year (27 days x 8 hrs.)
232 hours per year (29 days X 8 hrs.)
272 hours per year (34 days X 8 hrs.)
644 hours
644 hours
644 hours
644 hours
644 hours
B. Annual Leave Scheduling. The maximum amount of scheduled annual leave time which may be taken shall be thirty (30) working days in a calendar year, unless used for sick leave purposes. Additional annual leave for exceptional situations may be granted on a case-by-case basis by the City Manager or their designee. Use of annual leave in excess of thirty (30) working days in a calendar year will require the City Manager's approval , except for usage as qualified sick leave. Use of annual leave in excess of eighty (80) consecutive hours, excluding usage for qualified sick leave, will require the City Manager's approval or designee.

C. Annual Leave Minimum Use. A minimum of eighty (80) hours of annual leave should be used each calendar year by the employee.

D. Annual Leave Accrual Cap. Annual leave may be accrued up to a maximum of six hundred and forty-four (644) hours. When this maximum amount is reached the employee will no longer accrue additional annual leave. Annual leave accruals will re-commence in the next pay period following the use of annual leave which reduces this balance below the maximum allowed. It is incumbent upon the employee to manage their accrued annual time off so as not to exceed the maximum amount of six hundred and forty -four (644) hours.

E. Annual Leave Use in First Year. Earned and accrued annual leave may be taken before the completion of the first year of service with the approval of the City Manager or their designee. Annual leave may be taken for the purpose of sick leave after completion of ninety (90) days of CITY service and does not require City Manager approval.

F. Vacation Postponement. If an employee does not utilize their annual leave for the purposes of vacation in any calendar year, the employee may, subject to the approval of the City Manager, be allowed such vacation leave during the succeeding calendar year.

In no event, however, shall any employee's vacation leave with pay exceed thirty (30) working days in any calendar year.

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12 G. Holidays Within Vacation Period. Holidays falling within the scheduled vacation leave period shall not be considered as part of an employee's vacation. Should a holiday be declared during an employee's vacation leave period, an equivalent number of hours for the applicable holiday shall be credited back to the employee's annual leave balance.

Illness occurring during a scheduled vacation period shall not be considered unscheduled (sick) leave.

H. Unused Annual Leave. Any employee who is eligible for annual leave benefits and terminates their employment with the CITY will be paid for any unused annual leave hours.

I. Annual Leave for Illness or Health Reason . When an employee is absent from work due to illness or a health-related reason, said leave periods shall utilize annual leave with pay. In the event of absences due to illness or injury, the Police Chief, in consultation with the Human Resources Manager, may require a physician's statement indicating the employee's fitness to return to work, when the sick leave absence due to personal illness or injury exceeds three (3) consecutive workdays.

J. Annual Leave Calendar Year Cash -Out. Four times each fiscal year , during payroll periods as determined by the employee, those individuals may request a cash payout of annual leave. S tarting calendar year 2024, employees shall be limited to cash -outs of leave twice yearly, provided the employee irrevocably designates in writing the amount of leave to be cashed out in the year preceding the cash-out. Cash-out is at the employee’s rate of pay at the time paid. Human Resources and/or Finance will supply the irrevocable designation form upon request. This payment can be made in cash and is taxable or can be used as a contribution to a retirement savings plan. Annual leave cash-outs shall be calculated, including the value of the Education Achievement amount received by the employee. The singular limit on the amount of payout is that no distribution shall result in a total of 299 or fewer annual hours remaining in the accrued annual leave bank after the distribution is made. To the extent allowed by Federal/State law, distributions may be utilized to fund deferred compensation or retirement -related accounts. The CITY makes no representation as to the legality and/or tax consequences of such conversion to cash, and the Association and its members release the CITY from any liability that may arise from an individual's exercise of discretion regarding use of payouts for deferred compensation or other account funding. This provision shall be applicable to SICK LEAVE CASH OUT, as well.

K. Use of Annual Leave as Sick Leave.

1. Personal Sick Leave:

When an employee is absent from work due to personal illness, injury, a health related reason (such as the diagnosis, care or treatment of a health condition), or preventive care, said leave time shall be taken and paid from accrued Annual Leave and/or the employee’s Sick Leave Bank (if any frozen sick leave hours are in the Sick Leave Bank).

2. Family Sick Leave:

When an employee is absent from work, or needs a leave of absence, due to the illness or injury of health related reason (such as the diagnosis, care or treatment of a health condition), or preventive care of a qualified family member, said leave 198

13 time shall be taken and paid from accrued Annual Leave and/or the employee’s Sick Leave Bank (if any frozen sick leave hours are in the Sick Leave Bank).

For the purpose of Family Sick Leave, a qualified family member means the employee’s: child (includes any age or dependency status, or for whom the employee is a legal ward of stands in loco parentis), parent (includes person who stood in loco parentis of the employee as a child), parent-in-law, spouse, registered domestic partner, grandparent, grandchild, or sibling.

3. Other Statutory Use:

Leave time shall be taken and paid from accrued Annual Leave and/or the employee’s Sick Leave Bank (if any frozen sick leave hours are in the Sick Leave Bank) to cover an absence for an employee who is a victim of domestic violence, sexual assault, or stalking to:

a. Obtain or attempt to obtain a temporary restraining order or other court assistance to help ensure the health, safety, or welfare of the employee or their child(ren).

b. Obtain medical attention or psychological counseling services from a shelter, program, or crisis center , or participate in safety planning or other actions to increase safety.

ARTICLE 3.02 SICK LEAVE BANK
A. Sick Leave Bank.

1. All sick leave balances accumulated since the employee’s date of hire up to and including the pay period ending July 6, 1996, are not added to annual leave, but are frozen and placed in a sick leave bank for the respective employee. In an effort to reduce the financial liability to the CITY of an employee’s bank of unused sick time prior to retirement or other separation from employment, the employee may use sick leave time as time off for non-illness-related reasons.

2. At the time of an employee’s resignation or retirement from the CITY, employees with continuous CITY employment of five (5) years or more shall be eligible to receive a payment of twenty-five percent (25%) of the unused sick leave in the sick leave bank at the employee’s then rate of compensation. Employees with continuous CITY employment of ten (10) years or more shall be eligible to receive payment for fifty percent ( 50%) of the unused sick leave in the sick leave bank.

Employees with continuous CITY employment of fifteen (15) years or more shall be eligible to receive payment for seventy -five (75%) of the unused sick leave in the sick leave bank.

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14 B. Sick Leave Bank Cash Out.

1. Four times each fiscal year during payroll periods as determined by the employee, those individuals may request a cash payout or deferral to a Deferred Compensation or Retiree Healthcare Trust Plan of unused sick leave in their frozen sick leave bank accounts on the books in excess of four hundred eighty (480) hours subject to the following schedule:

Years of Service Cash Out Available *
1-5 No cash out during the first five years
6-10 # of excess hours x base hourly rate x .25
11 -15 # of excess hours x base hourly rate x .50
16+ # of excess hours x base hourly rate x .75
*Sick leave bank cash outs shall be calculated to include the Education Achievement Pay received by the employee.

2. When cashing out sick leave bank time, a balance of at least four hundred eighty (480) hours of sick leave shall be maintained at all times.

3. Starting calendar year 2024, employees shall be limited to cash-outs of sick leave twice yearly, provided the employee irrevocably designates in writing the amount of leave to be cashed out in the year preceding the cash -out. Cash-out is at the employee’s rate of pay at the time paid. Human Resources and/or Finance will supply the irrevocable designation form upon request.

ARTICLE 3.03 HOLIDAY LEAVE.

A. The approved CITY holidays shall be as follows:

1. January 1st

2. Dr. Martin Luther King Day (January)

3. The third Monday in February, known as "Presidents' Day"

4. The last Monday in May, known as "Memorial Day"

5. July 4th, "Independence Day"

6. The first Monday in September, known as "Labor Day"

7. November 11th, known as "Veterans' Day"

8. Thanksgiving Day

9. The day after Thanksgiving

10. December 25th

11. Employee's Birthday "(Floating Holiday)

12. Christmas Eve Day (1/2 day holiday)

13. New Year’s Eve Day (1/2 day holiday)
Any day declared to be a holiday by proclamation of the Mayor.

B. CITY employees shall receive ten (10) hours of holiday pay for each holiday except for Christmas Eve Day and New Year’s Eve Day for which employees shall receive five (5) hours of holiday pay.
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15 C. Holiday Leave Bank:

CITY will provide a holiday leave bank of one hundred twenty (120) hours at the beginning of each fiscal year. Holiday hours are earned once the recognized holidays occur.

Represented employees are required to use holiday leave on recognized holidays unless scheduled to work. Holiday hours and Floating Holiday hours are paid using the base hourly pay rate at the time they are used.

D. Employees Required to Work on Holiday:

1. Represented employees are normally required to work on approved holidays because they work in positions that require scheduled staffing without regard to holidays, they accrue holiday “bank hours” or “credits” to be used at a later date, and they are permi tted under this MOU to cash out any unused holiday “bank hours” or “credits” accrued. Accordingly, the City shall report such cash-outs under these circumstances and meeting these criteria as reportable compensation to CalPERS to the extent that CalPERS permits it. [See CalPERS Circular Letter 200- 064-14 and CalPERS Circular Letter 200 -019-20, interpreting Rule 571 and the Government Code.]

2. Employees who work on the actual or observed holidays listed in Article 2.14(B) shall not have their holiday bank hours reduced and shall be paid at the rate of time and one -half for all hours actually worked on those holidays , using the employee’s regular rate of pay . Employees who work a partial day, defined as fewer hours than the employee’s normal workday, shall be paid at the rate of time and one-half for all hours actually worked on those holidays and shall have their holiday bank reduced by the number of hours necessary to cover the difference in the number of hours of their regular shift , if any. The City shall report such time worked under these circumstances as reportable compensation to CalPERS to the extent that CalPERS permits it.

E. Holiday Leave Cash-Out:

At the end of the Fiscal Year, remaining holiday leave hours cannot be used after June 1st and will be cashed out on the second payday in June. The cash-out is paid at straight time and calculated using the employee's regular rate of pay. The regular rate of pay for purposes of the holiday leave cash-out includes base pay plus the hourly equivalent of the following eligible special compensation for the employee at the time paid: Bilingual Pay, Administrative On -Call Pay , Night Premium Pay, Longevity Pay, and Educational Achievement Pay.

F. CalPERS Treatment of Holiday Pay as Special Compensation:

The parties intend to create holiday pay and leave cash- out language that meets the CalPERS criteria for Special Compensation pursuant to Government Code Section 20636.

These payments shall be only for working holidays as part of an employee’s normal duties, not just for unused time off . The cash- out must be done at least annually and paid periodically, consistent with past practice, demonstrating that it's earned regularly . The City is currently working with CalPERS for approval of the necessary language. In the event CalPERS requires additional language changes or does not approve holiday pay as 201

16 special compensation under this MOU, then the parties agree to reopen this Article 3. 03 to meet and confer over the impacts of CalPERS’ decision.

ARTICLE 3.04 PERSONAL LEAVE
A. Administrative Leave. Represented employees shall be granted administrative leave according to the following schedule:
60 hours/year
These hours shall be credited at the beginning of each fiscal year and unused administrative leave shall be compensated at the end of each fiscal year. However, if an employee separates from employment prior to June 30 of any fiscal year, the distribution of remaining administrative leave shall be made on the basis of 1/12 of the total hours multiplied by the number of full months of service completed in the fiscal year. Maintaining employment for fifteen (15) calendar days, shall be deemed completion of the entire month for distribution purposes only.

B. Leave of Absence.

1. Leave Without Pay. An employee may be allowed a leave of absence without pay by submitting a written request to the City Manager, provided the Police Chief has approved the submittal. The City Manager may grant an employee a leave of absence without pay for a period not to exceed six (6) months. During such leave without pay, annual leave, and holiday credits will not be accrued and the employee will be excluded from all other compensation and fringe b enefits.

However, the employee, at their discretion and cost, may take advantage of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) program so that applicable benefits may continue.

2. Pregnancy and Confinement . The Association agrees to abide by the City-wide Family and Medical Leave Policy that has been established separately from this MOU through the meet and confer process.

C. Jury Leave. Employees who are called for jury service in any court in the State of California or in the United States shall be granted a paid leave of absence to serve as a juror. An employee summoned to and serving on jury duty shall submit evidence of the summons to the Human Resources Office and may be absent from duty with full pay. The employee shall be entitled to retain the pay received for jury duty as partial or full reimbursement for the additional expenses associated with jury duty with no additional reimbursement by the CITY.

D. Military Leave. Military leaves of absence shall be governed by the provisions of Sections 395 et seq. of the Military and Veterans Code.

E. Family Illness Leave. When employees need a leave of absence due to a family illness, said leave time shall be taken and paid from accrued annual leave.

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17 ARTICLE 3.05 BEREAVEMENT LEAVE
A. Immediate Family . For purposes of determining Bereavement Leave, the term “immediate family” is defined as spouse, domestic partner, child, parent, sibling, and grandparents; the aforementioned either natural, legally adopted, step or in- law, or any person over whom the employee acts as legal guardian, or a verifiable current member of the employee's immediate household. The CITY and the Association further agree that the definition of immediate family shall include an ex-spouse if the employee is escorting dependent children to the funeral of an ex-spouse who was the parent of the dependent child or children.

B. Travel Less Than 300 Miles. Upon the death of an immediate family member whose memorial/burial services occur within less than 300 miles from the CITY, an employee may use up to three (3) work shifts of paid Bereavement Leave not chargeable to any other leave and an additional two (2) work shifts of any other leave or of unpaid leave for a total of five (5) work shifts.

C. Travel More Than 300 Miles. Upon the death of an immediate family member whose memorial/burial services occur 300 miles or more from the CITY, an employee may use up to five (5) work shifts of paid Bereavement Leave not chargeable to any other leave.

D. Other Terms and Conditions of Use. Bereavement Leave must be completed within three (3) months of the immediate family member’s death and may be intermittent leave and is not required to be used in consecutive amounts. Intermittent leave shall equate to the number of equivalent hours as constitute the employee’s normal work shifts as of the date Bereavement Leave is first requested. Employees are required to provide documentation to the CITY of the immediate family member’s death within thirty (30) days of the first day of use of Bereavement Leave. “Documentation” includes, but is not limited to, a death certificate, a published obituary, or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or governmental agency. The CITY shall maintain the confidentiality of any employee requesting leave under this section. Any documentation provided to the CITY regarding this leave shall be maintained as confidential and shal l not be disclosed except to internal personnel or counsel, as necessary, or as required by law.

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18 SECTION IV WORKING CONDITIONS
ARTICLE 4.01 EXEMPT EMPLOYEES
It is acknowledged that the employees subject to this MOU are exempt employees under the Federal Fair Labor Standards Act (“FLSA”).

ARTICLE 4.02 PROBATIONARY PERIOD
All employees appointed to a position represented by the Association shall serve a twelve ( 12) month probationary period. The probation period shall be considered a part of the examination and selection process and shall not include the time served under any limited service or provisional appointment, but shall date from the time of appointment to a regular position. All such employees shall receive performance evaluations no less than at the end of the sixth (6th) and twelfth (12th) month of the probationary period.

ARTICLE 4.03 ANNIVERSARY DATE
An employee's anniversary date shall be the date of the most recent hire by the CITY.

An employee who is involuntarily terminated by the CITY but who is ordered reinstated by a court or other reviewing body shall be restored to their former seniority with the appropriate benefit accrual formula.

ARTICLE 4.04 DEMOTIONS
A represented employee who does not successfully complete probation and receive a permanent appointment to a position to which the employee was promoted shall be permitted to return to the position and status held prior to promotion.

ARTICLE 4.05 SUBSTANCE ABUSE POLICY
It is the responsibility of all affected employees to cooperate to protect lives, personal safety and property of co -workers and fellow citizens. All employees shall take all reasonable steps to accomplish these goals and to minimize potential dangers. Tow ards this goal, employees will follow the CITY's drug free workplace policy as described in the Employee Handbook.

ARTICLE 4.06 VOLUNTARY DEDUCTIONS
As a convenience to employees, the CITY will, upon submission to the Finance Department of written authorization by the employee, make voluntary payroll deductions for Association dues and will remit these deductions to the Association. Any voluntary deduction authorization may be revoked at any time by the employee by submitting to the Finance Department a written request to cancel any such deduction.

ARTICLE 4.07 NO STRIKE PROVISIONS
The Association, its officers, agents, representatives and/or members agree on behalf of themselves and the employees in the bargaining unit that they will not cause or condone any strike, walkout and work stoppage while this Agreement is in effect.

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19 Any employee who participates in any of the conduct prohibited by this Article shall be subject to discipline up to and including termination by the CITY.

In the event of such activities, the Association shall immediately instruct any persons covered by this MOU who are engaging in such conduct that they are violating this Agreement and to resume the performance of their job duties.

ARTICLE 4.08 LAYOFF PROCEDURES
In the event of a reduction in the workforce, the employee in the classification being reduced with the least seniority in that class shall be laid off first.

No new employee shall be hired into the classification reduced within two (2) years of the layoff until all employees on layoff from the classification have been given the opportunity to return to work. Such employees shall be rehired to the classification held at the time of the separation and in reverse order of their layoff or demotion.

Seniority shall not accrue during periods of layoff.

Employees to be laid off shall be provided twenty-one (21) days advance written notice of the pending action.

ARTICLE 4.09 GRIEVANCE PROCEDURES
A. Matters Subject to the Grievance Procedures. A grievanc e is a complaint by an employee or the A ssociation that the employee has been adversely affected due to a misinterpretation or misapplication of this Agreement, any other work rules, conditions of employment, or regulations of the CITY or department , or actions of management regarding employee relations. Disciplinary actions are subject only to the provisions of the disciplinary procedures section of this Agreement and are not subject to the procedures of this Article.

1. No punitive action will be assessed against an employee for utilizing the grievance procedure.

2. In a hearing or meeting wi th the supervisor, department head or City Manager called to resolve a grievance, a maximum of two employees, or Association representatives, who may or may not include the grievant, may be excused from work, with the exception of those called as witnesses when both parties agree they are necessary to determine certain facts.

3. The preparation of grievances shall not unreasonably interfere with the employee's regularly assigned duties.

4. At any stage of the grievance process, both parties are entitled to representation.

B. Informal Grievance Procedures. Every effort shall be made to resolve a grievance through discussion between the e mployee, and/or the employee's designated representative and the employee's immediate supervisor . If, after such discussion, the employee does not feel the grievance has been satisfactorily resolved, the employee shall have the right to discuss the matter with the supervisor's su perior within the department. 205

20 The discussion with the immediate supervisor shall occur not later than ten (10) calendar days after the employee knew or reasonably should have known of the occurrence of a grievable event. The discussion with the supervisor's superior shall occur not later than ten (10) calendar days after notice is provided of the immediate supervisor's decision.

C. Formal Grievance Procedures. If the employee is not in agreement with the decision rendered in the informal grievance procedure, an employee shall have the right to present a formal grievance in writing to the Police Chief within fourteen ( 14) calendar days after receipt of the decis ion at the informal grievance step. The Chief shall meet with the employee and/or the employee's designated representative within seven (7) calendar days after receipt of the written grievance. The Chief shall review the grievance and render a decision in writing and return it to the employee and/or the employee's designated representative within seven (7) calendar days after meeting with the employee.

D. Appeal Procedures. If the employee disagrees with the decision reached by the Police Chief, the employee may present an appeal in writing to the City Manager within fourteen (14) calendar days after the employee's rec eipt of the Police Chief's decision. The City Manager shall set a meeting with the employee and/or the employee's designated representative to discuss the grievance within fourteen (14) calendar days. Within ten (10) calendar days following the meeting, the City Manager shall deliver a copy of the decision to the employee and/or the employee's designated representative.

E. Binding Arbitration. If the employee disagrees with the decision reached by the City Manager, they may submit a written request to the Human Resources Department within ten (10) calendar days from the date the decision was rendered. The CITY and the Association agree to select a list of arbitrators that can be alternatively used when called on. Arbitrators may be added or deleted from the list only by mutual agreement of the CITY and the Association. Arbitration decisions shall be binding.

The expense of the arbitrator shall be shared equally by the parties. Any costs associated with a request for transcripts of the arbitration proceedings will be pai d for by the requesting party. Each party is responsible for making arrangements and for paying any expenses of any witness that may be called on to testify. Employees of the CITY will be released from work without loss of compensation to attend the arbitration hearing.

The arbitrator shall not decide on any issue that has not already been submitted within the statement of issues as presented p reviously. This includes issues that have not been raised and considered at the earlier steps of the grievance.

Any remedy recommended by an arbitrator may not conflict with the provisions contained within this Agreement or CITY policy.

F. Extension of Time Limits. All time limitations imposed by the grievance procedures described in this section may be extended only by mutual written agreement between the CITY and the employee. Failure to strictly comply with any of the time limits described herein shall be a bar to further processing of the grievance.

ARTICLE 4.10 DISCIPLINARY AND APPEALS PROCEDURES
A. Standards of Conduct. All employees are expected to adhere to standards of reasonable and prudent conduct.
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21 B. Applicability of Discipline. Disciplinary action may be taken against any non- elected employee of the CITY. Employees represented by the Association shall have rights to the notice and hearing requirements set forth in this section.

C. Discretion in Disciplinary Action. The City Manager and Poli ce Chief may exercise their discretion in applying discipline appropriate to the employee's offense(s) and work record.

D. Personnel record. No employee shall have any comment adverse to their interest entered in their official personnel file, without the employee having first read and signed the document containing the adverse comment indicating they are aware of such comment. If after reading the document the employee refuses to sign it, that fact shall be noted on that document, and signed or initialed by the employee and the document will be placed in the personnel file.

E. Permitted Disciplinary Action. Any one or combination of the following disciplinary actions may be taken against any employee for offenses stated in this section or for any other just cause:

Oral admonishment
Directive Memorandum
Corrective Memorandum
Written reprimand
Suspension
Reduction in salary
Demotion
Dismissal
F. Oral Admonishment. Oral admonishments should be given in private. The supervisor shall include in the admonishment a review of appropriate departmental standards and policies, employee performance expected in the future and the likely consequences of failure to correct performance or behavior. Oral admonishments shall be memorialized in writing.

G. Directive Memorandum. When oral communication has not been sufficient, a directive memorandum can be issued to inform and direct the employee in writing how to complete a task and perform it correctly in the future. It may also be used to give general direction to one or more employees.

H. Corrective Counseling/Memorandum. A pre -disciplinary formal counseling process includes a dialogue between the supervisor and the employee that results in a corrective memorandum issued to the employee which informs the employee that even after previous direction, a task is still being completed incorrectly. This is a warning that future occurrences may result in disciplinary action and is the last pre -disciplinary step. The memorandum requires the correction of performance.

I. Written Reprimand. A written reprimand shall be prepared for the con tinued or more serious offense. The reprimand shall take the form of a memorandum, including a full, accurate, and factual statement of the reason for the reprimand. The memorandum shall be given to the employee in private. The supervisor shall explain appropriate departmental standards and policies, employee performance expected in the future, and likely 207

22 consequences of failure to correct performance or behavior. A copy of the memorandum shall be placed in t he employee's personnel folder. The employee may respond to the memorandum in writing within thirty (30) calendar days and have such response placed in the employee's personnel folder. A dated copy of the written reprimand shall be released to the employee.

J. Suspension Without Pay. When the employee's undesirable conduct has been continuous, repeated, or is deemed by management to be of such severity that lesser penalties are inadequate or have proved ineffective; the Police Chief may impose suspension without pay. Such suspension shall occur only after the notice procedures specified in subsection N have been complied with and shall be subject to appeal in accordance with this Article.

K. Reduction in Salary. In lieu of, or in addition to other forms of discipline, when facts justify, the Police Chief may impose a reduction in salary upon the employee to a lower step on the present salary range or to a lower salary range, as may be appropriate. The reduction may be for a limited period or permanent, as specified by the Police Chief. Any reduction in salary shall be subject to the notice procedures specified in subsection N and shall be subject to appeal in accordance with this Article.

L. Dismissal. When the employee's conduct has been of a continuous nature, uncorrected by previous discipline, or is of such a nature as to make further employment not in the CITY's interests, or for other good cause, the Police Chief shall have the r ight to dismiss the employee. Dismissal shall be the final termination of the employee's employment. Any action of dismissal shall be taken only in compliance with the notice procedures specified in subsection N. and shall be subject to appeal in accordance with this section.

M. Pre-disciplinary Procedures. An employee being considered for any discipline involving loss of time or wages shall be insured due process through pre- disciplinary measures described in this Article.

N. Written Notice. Written notice of any proposed disciplinary action shall be given to the employee in private. This notice shall include the proposed action, the intended effective date, and the spe cific reasons for such action. A written copy of the allegations of misconduct and the grounds for such allegations shall also be included, along with a copy of all supporting documentation upon which the department expects to rely. The employee is entitled to copies of all materials on which the allegations are based, if there are any.

The employee's right to respond orally or in writing , the right to respond in person or through a designated representative, the time in which the response should be made, and to whom and where it should be made shall be specified in the notice of intended discipline.

O. Employee Response. An employee is entitled to a reasonable time, not to exceed fourteen (14) calendar days, to answer a notice of proposed discipline. The Police Chief may grant an extension of the response period if the employee can demonstrate the need.

Should an employee respond, the Police Chief shall consider the response in reaching a decision or disciplinary action. The employee is entitled to respond in writing or orally, personally or through a designated representative, or any combination thereof. If the employee requests a meeting to present a response, the meeting shall not be conducted as an adversarial hearing.
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23 The employee may not cross -examine the department's witnesses nor present a formal case to support the response. The employee shall be given the opportunity to make any representations the employee believes might aff ect the disciplinary decision. Any time extensions shall be permitted only with the consent of the Police Chief. If the employee fails to respond within the time specified, the Police Chief may proceed with a decision.

The Police Chief has the right to conduct further investigations. If new charges result from this investigation, the employee shall be given formal written notice of the same and another opportunity to respond in accordance with this Article.

P. Police Chief Response. The Police Chief shall provide a written answer to an employee's response at the earliest practical date, not to exceed fourteen (14) calendar days following the response of the employee. The Police Chief shall deliver the notice of decision to the employee at or before the time when the action will be effective. The answer shall be dated and signed by the Police Chief. The answer shall inform the employee which of the reasons and grounds in the notice of proposed d iscipline have been sustained. The answer shall include a statement of the employee's right to appeal, as provided herein.

Additionally, the time limit for an appeal and the specific discipline to be imposed or the decision not to impose discipline shall be detailed in the answer. The effective date of discipline shall be included in the answer. Any time extensions shall be permitted only with the consent of the Police Chief.

If the pre-disciplinary meeting with the Police Chief results in a decision that discipline is appropriate, the disciplinary action shall be immediately implemented, with restitution/reinstatement if any, being made following conclusion of either arbitration or the City Manager level appeal, whichever is applicable.

Q. Appeal of Disciplinary Actions by Association through Binding Arbitration . The Association may appeal the imposition of discipline on a represented employee within fourteen (14) calendar days after the receipt by the employee of the Police Chief's answer.

Appeals from discipline shall be in writing, signed by the appellant or t he appellant's representative, and delivered to the Human Resources Department , with a copy to the Police Chief. The CITY and Association agree to select a list of arbitrators that can be alternatively used when called on. Arbitrators may be added or deleted from the list only by mutual agreement of the CITY and the Association. Arbitration decisions shal l be binding.

The expense of the arbitrator shall be shared equally by the parties. Any costs associated with a request for transcripts of the arbitration proceedings will be paid for by the requesting party. Each party is responsible for making arrangements and for pay ing any expenses of any witness that may be called on to testify. Employees of the CITY will be released from work without loss of compensation to attend the arbitration hearing. The arbitrator shall not decide on any issue that has not already been submit ted within the statement of issues as presented previously. This includes issues that have not been raised and considered at the earlier steps of the disciplinary process.

Any remedy issued by an arbitrator may not conflict with the provisions contained within this Agreement or CITY policy.

R. Appeal of Disciplinary Actions by Employee without Association Support. In the event that the Association does not support a represented employee’s disciplinary appeal 209

24 and/or pay half the costs of any proposed arbitration, then the employee shall have the right to appeal the Police Chief’s decision to the City Manager within fourteen (14) calendar days after the receipt by the employee of the Police Chief ’s answer. Appeals from discipline shall be in writing, signed by the appellant , and delivered to the City Manager, who shall set a time for a hearing by the City Manager and/or their designee. The hearing shall be held within thirty (30) calendar days after receipt of the appeal letter. The City Manager shall give not less than seven (7) calendar day's written notice to the affected employee of the time and place of such hearing. The hearing may be open to the public or closed at the employee's option. The appealing employee may appear personally and represent themself or be represented by another of the employee's choosing or by legal counsel.

1. During the examination of witnesses, all other witnesses, except the parties, shall be excluded from the hearing, unless the City Manager, in their discretion and for good cause, otherwise directs.

2. No photography, still or motion shall be taken in the hearing room during the hearing.

3. The City Manager, prior to or during a hearing, may grant a continuance for any reason deemed to be important to the City Manager in reaching a fair and proper decision.

4. The City Manager shall give all parties to the action a reasonable opportunity to be heard on relevant issues. The police department's representative shall first present an opening statement and oral and/or documentary evidence in support of the department's position. The affected employee may present oral or documentary evidence and may cross-examine any witness called by the department. The appellant may make an opening statement on the employee's behalf. The department's representative may cross -examine any witness called by the employee. Both the department and the appellant may present rebuttal evidence. The department may then make a closing statement, followed by the employee's closing statement.

5. The City Manager shall not be bound by technical rules of evidence.

6. The City Manager may, at the City Manager's discretion, appoint a hearing officer to conduct the hearing on the City M anager's behalf and to report findings and recommendations to the City Manager for final decision. In this case, a copy of the hearing officer's report shall be provided to the employee.

7. The employee shall be entitled to copies of any relevant material used in the disciplinary decision- making process , and the CITY shall pay the costs of any recording or reporting, including transcripts, of the hearing. Each party shall bear their own attorney fees and associated costs.

8. The City Manager shall, within fourteen (14) calendar days after the conclusion of the hearing, cause findings and a decision to be prepared in writing. The City Manager shall determine whether the proposed action of the Chief of Police is supported by the evidence. Should the City Manager find that none of the charges are supported by the evidence presented, the decision shall be that no disciplinary action shall be taken. A decision not to impose discipline shall be accompanied by a directive from the City Manager to delete all references to the appealed action from the employee's personnel file. Should the City Manager find that any or all of the charges are supported, the 210

25 manager shall affirm, overrule, or modify in whole or in part the disciplinary action imposed by the Chief of Police. The City Manager shall cause a copy of the findings and decision to be delivered to the affected employee. The decision shall indicate the effective date of any discipline imposed. The decision of the City Manager is final with no other or further right of internal administrative appeal.

S. Employee Status During Pre-Discipline Period. Except as otherwise provided an employee against who disciplinary action is proposed is entitled to be retained in an active status during the pre -disciplinary period. When circumstances are such that retention of the employee on active status may result in damage to the CITY property or may be detrimental to the interests of the CITY or injurious to the employee, fellow employees, or the public, the Police Chief may following discussion with the employee or at the employee's option, temporarily assign the employee to duties in which these conditions do not exist or place the employee on paid suspension until pre-disciplinary proceedings are concluded or circumstances causing the suspension change. Such action shall not be inconsistent with Section 3303 of the California Government Code.

T. Time Limits. All time limitations of this Article may be extended or shortened only by mutual agreement of the parties.

U. Meet and Confer Regarding Written Reprimand Appeals. The parties agree to continue to meet and confer to clarify the appeal process for letters of reprimand, either by adopting a new Departmental policy and placing it in the PD Policy Manual or adding provisions to this MOU.

ARTICLE 4.11 OTHER ITEMS
Items not specifically addressed in the Compensation Plan shall continue to be addressed in Personnel Resolution, No. 91-64, the Employee Relations Resolution, No. 93-214.

ARTICLE 4.12 RE-OPENERS
The parties agree to meet and confer to discuss draft provisions to address SB 2, either by adopting a new Departmental policy and placing it in the PD Policy Manual or adding provisions to the MOU, including a survey of what other cities are doing. This meet and confer is to take place before 2026 . The parties further agree to meet and confer during the term of this MOU regarding the following matters:

A. Update to CITY’s Employer-Employee Relations Resolution and/or local labor relations rules and procedures.

B. Update Personnel Rules and PD Manual.

C. Update the definition of total compensation categories and comparable cities during the term of the MOU for purposes of successor MOU negotiations as identified in Article 2.03.

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26 APPROVALS

CITY OF MURRIETA MURRIETA POLICE

MANAGEMENT ASSOCIATION

By: _________________________________ By: _______________________________ Justin Clifton Spencer Parker
City Manager President

By: _________________________________ By: _______________________________ Diego Chavez Jeremy Durant
Administrative Services Director Treasurer

By: _______________________________
Brendon Carney
Secretary

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CITY OF MURRIETA
City Council Meeting Agenda
Report
2/3/2026
Agenda Item No. 9.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Ashley Lopez, Accounting Manager
SUBJECT:

Presentation and Review of the City of Murrieta’s Fiscal Year 2024/25 Annual Comprehensive Financial Report and Single Audit Report

ABSTRACT
The City of Murrieta has prepared its Annual Comprehensive Financial Report (Financial Statements) and Single Audit Report on Federal Awards for the Fiscal Year ending June 30, 2025. The independent auditing firm of Rogers, Anderson, Malody, and Scott, LLP (RAMS) has issued an unmodified (clean) opinion on the City’s financial statements and Single Audit.

RECOMMENDATION
Receive and file the Fiscal Year 2024/25 Annual Comprehensive Financial and Single Audit Reports.

PRIOR ACTION/VOTE
On April 18, 2023, the City Council awarded an agreement to Rogers, Anderson, Malody, and Scott, LLP for independent audit services (Vote: 4-0-1).

On April 2, 2024, the Fiscal Year 2022/23 Annual Comprehensive Financial Report and Single Audit Report were received and filed with the City Council (Vote: 5-0).

On August 20, 2024, the City Council approved the first amendment to the agreement with Rogers, Anderson, Malody, and Scott, LLP (Vote: 5-0).

On January 21, 2025, the Fiscal Year 2023/2024 Annual Comprehensive Financial Report and Single Audit Report were received and filed with the City Council (Vote: 5-0).

STRATEGIC ALIGNMENT
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.

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Agenda Item No. 9.

DISCUSSION
The City of Murrieta (City) has completed the annual independent audit and prepared its Financial Statements for the Fiscal Year ending June 30, 2025 (Attachment 1). The independent auditing firm of Rogers, Anderson, Malody, and Scott, LLP (RAMS) has issued an unmodified (clean) opinion on the City’sfinancial statements, indicating they are free from material misstatement and present fairly the financial position and results of operations of the various funds and account groups of the City. The financial statements were completed on December 15, 2025.

In addition to the annual independent audit of the City’sfinancial statements, the City is required to complete a Single Audit (Attachment 2) as a condition of spending federal assistance in excess of $750,000.

As a result of their annual independent audit of the City’sfinancial records and statements, the audit firm has rendered an unmodified (or clean) opinion on the City’sfinancial statements. That is, RAMS believes the financial statements are fairly presented in accordance with generally accepted accounting principles. With this item, staff brings forward the City’saudited financial position for Fiscal Year 2024/25 in the form of the financial statements.

Financial Statements
The government-wide financial statements (Statement of Net Position and Statement of Activities) report information on all activities of the City and its component units. The statement of net position presents information on all of the City of Murrieta’sassets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the City of Murrieta's financial position is improving or deteriorating.

The City’scombined net position as of June 30, 2025, was $594,141,046. The City’snet position increased by $19,039,660 compared to the prior fiscal year. The increase in the City’snet position is primarily due to a rise of $6,609,750 in total assets, net of deferred outflows of resources, and a decrease of $12,429,910 in total liabilities, net of deferred inflows of resources. The most substantial growth was seen in the unrestricted net position, which rose by $17,935,018, while the net investment in Capital Assets increased by $2,861,176. The restricted net position decreased by $1,756,534.

Current assets increased by $14,105,455, or 4.3%, compared to the prior year's balance. The increase is primarily attributable to an increase in cash and investments of $18,050,123, resulting from funds being held in interest-bearing accounts with favorable interest rates and revenues exceeding expenditures during the fiscal year. This increase was offset by a decrease in the sum of all receivables totaling $4,218,017, mainly due to a timing difference in receiving an Educational Revenue Augmentation Fund (ERAF) tax payment compared to the prior year.

The capital assets net of accumulated depreciation have increased by $2,660,889. The increase represents the difference between additions, deletions, and depreciation in the current year. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.

Changes in the various components associated with Governmental Accounting Standards Board (GASB) statement 68 Accounting and Financial Reporting for Pension, statement 75 Accounting and Financial Reporting for Postemployment Benefits Other than Pension (OPEB), and statement 87 Leases impacted deferred outflows and inflows, and changes in pension, OPEB, and leases liabilities for the year. GASB 68 and GASB 75 pronouncements required the City to record the net pension and OPEB liabilities on the books. The deferred outflows of resources increased by $10,156,594, while the deferred inflows of resources decreased by $1,604,686.

Current liabilities decreased by $1,903,535, or 3.9%. The decrease is primarily attributable to a decrease of CITY OF MURRIETA Printed on 1/29/2026Page 2 of 6
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Current liabilities decreased by $1,903,535, or 3.9%. The decrease is primarily attributable to a decrease of $4,937,540 in unearned revenue, resulting from the recognition of grant revenue from the American Rescue Plan Act. A reduction of $63,276 in accrued interest and an increase of $24,122 in long-term liabilities due within one year contributed to the overall decrease in current liabilities, as higher portions of debt payments were applied to principal. This decrease was offset by an increase in accounts payable and accrued liabilities of $2,046,724 and $649,543, respectively. Another contributing factor to offsetting the decrease was a $376,892 increase in deposit payables, which is due to an increase in Development Services projects requiring a refundable cash deposit.

Long-term liabilities, including outstanding debt, leases, employee benefit accruals, claims and judgments, and OPEB liability, decreased by $8,921,689, representing a decrease of 4.8% from the prior year. The most significant decrease is attributable to the principal payments made towards bonded debt of $6,131,955. Net pension liability claims and judgements, and OPEB liability decreased by $1,463,160, $732,888, and $944,164, respectively. Some notable offsetting increases were from additions of public safety-related software licenses and leases for public safety radios and equipment, totaling $1,696,776. Compensated absences had a net increase of $565,219. The remaining decrease of $1,911,517 is due to principal payments made during the year for notes payable, leases, and subscriptions.

Approximately 73.3% of the City's net position consists of a net investment in capital assets (i.e., land, construction in progress, buildings, land & building improvements, parkland improvements, vehicles, equipment, and infrastructure), less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; therefore, these assets are not available for future spending.

The restricted net position represents resources subject to external restrictions and earmarked for a specific purpose. The unrestricted net position represents the resources that may be used to meet the government's ongoing obligations to creditors and services to residents.

Governmental Funds
For financial statement presentation purposes, the City maintains twenty-nine (29) individual governmental funds. As of the end of the current fiscal year, the City of Murrieta’sgovernmental funds reported combined ending fund balances of $283,501,861, an increase of $7,402,179 or approximately 2.68% compared to last year's governmental funds balance.

The other net changes in fund balances in the governmental funds include a decrease of $865,529 for the Fire District fund, an increase of $411,662 for the Other Grants fund (which was reclassified this fiscal year to a Major Fund), an increase of $1,876,208 in the Development Impact Fee fund, and a reduction of $4,951,978 for the Non-Major Governmental Funds. The Non-Major Governmental Fund includes the Federal Grants fund, reported in prior fiscal years as a Major fund.

In accordance with GASB Statement No. 54 (thoroughly discussed in the notes to the financial statements, Note 9 - Fund Balance), the combined ending fund balance of $283,501,861 is broken down as follows:

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General Fund
For the financial statement presentation, the General Fund column includes the following funds: General Fund, Measure T Fund, General Capital Fund, Traffic Safety Fund, Crime Prevention Fund, and Vehicle Replacement Fund. At the end of the fiscal year, the General Fund’s revenues exceeded expenditures, including other financing sources (uses) by $10,931,816, thereby increasing the General Fund balance at the end of June 30, 2025, to $153,861,121. The change in fund balance for the General Fund column is broken down by fund as follows:

General Fund revenues increased by $5,004,275 to $111,593,957, including transfers, when compared to the prior year. The increase is primarily attributable to a $2,352,131 increase in Taxes, a $877,833 increase in Intergovernmental Revenues, a $634,458 increase in Miscellaneous Revenues, a $421,509 increase in the Use of Money and Property, and a $34,941 increase in Sales of Capital Assets. Conversely, other revenue types decreased compared to the prior year: Charges for Services decreased by $476,600, License and Permits decreased by $263,026, Transfers In decreased by $225,012, and Fines & Forfeitures decreased by $96,444.

The increase in the Use of Money & Property is due to two factors. The first is an increase in investment income associated with the City’sinvestment portfolio and short-term investment through the City’ssweep account. The investment income increase is $834,973. The other component is related to the accounting required by GASB 31 to recognize unrealized gain or loss of securities that were not sold or matured at year- end. The change in recognition of unrealized gain or loss of securities accounts over the prior year is a decrease of $459,322. While the recognition of unrealized gain was less than in the preceding year, it still represented a gain of approximately $3.28 million, indicating that the value of the City’s securities has increased.

General Fund expenditures increased by $10,213,241 to $100,662,142, which included transfers out and other CITY OF MURRIETA Printed on 1/29/2026Page 4 of 6
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General Fund expenditures increased by $10,213,241 to $100,662,142, which included transfers out and other financing uses. Public Safety operations and services accounted for 57.5% of the expenditure increase, amounting to $5,872,125. Of the $5,872,125 increase, personnel-related expenditures accounted for $4,656,807, while the remaining $1,215,318 is related to operating costs.

Capital Outlay increased by $1,630,985, due to reclassification of a prior year subscription valued at $1,744,485. Had this reclassification not occurred, Capital Outlay would have been $113,500 less than the preceding year. Transfers Out had a net increase of $1,312,983. The category provides funding to special revenue funds that have operating shortfalls. The Fire Fund required $1,359,312 more financial support than the prior year due to higher workers’compensation costs. The balance of Transfers Out totaled a decrease of $46,328. Community Development and Public Works increased by $701,090 and $418,233, respectively. All other expenditure categories had a net increase of $277,828.

Capital Assets
At the end of FY 2024/25, the City had capital assets (net of accumulated depreciation) of $445,132,400, including land, construction in progress (CIP), buildings and improvements, improvements to land, parkland improvements, equipment (including vehicles), infrastructure, leased assets, and right-to-use subscriptions.

Current year additions to all asset categories totaled $18,354,557, while deletions totaled $2,872,158. The accumulated depreciation increased by $16,337,175 net of deletions. Capital assets with the most significant increase were those in Parkland Improvements, at $4,763,029. The asset class with the next most significant increase was Construction in Progress with $3,809,020. The capital asset category with the most significant decrease net of depreciation was Infrastructure, at $8,723,980, followed by Building & Improvements, at $635,961, and then Equipment, at $280,229. The remaining categories had an overall increase of $3,729,010.

The increases were primarily due to the completion of multiple tot lot replacement projects and the reclassification of a piece of land that was previously held for resale.

Long-Term Debt
At the end of the current fiscal year, the City had outstanding bonded debt and leases, along with liability for claims and judgments, an obligation for employee post-employment benefits OPEB, compensated absences payable, and Net Pension liabilities totaling $194,216,335. The total outstanding debt decreased by approximately 4.4% or $8,897,567 during FY 2024/25. The most significant decrease is related to the CFD debt, resulting from principal payments made against the bonded debt.

The pension (CalPERS) liability decreased by $1,43,160 due to changes in assumptions, differences between expected and actual experiences, differences between projected and actual investment earnings, differences between employer’scontributions and proportionate share of contributions, and changes in the employer’s proportion of costs.

The decrease in OPEB liability of approximately $944,164 is attributed to an increase in the discount rate from

5.06% to 5.34%, changes in assumptions, and differences between expected and actual experiences. Claims and Judgments related to the City for general liability and workers’compensation decreased by $732,888 due to the actuarial valuation of future liability. Compensated absences increased by $565,219, due to an increase in the number of employees and increases in the salary and compensation schedules. The remaining outstanding debt items, including notes payable, leases, and subscriptions, decreased due to principal payments made against each debt, with no significant additions to the debt.

Audit Findings
The Fiscal Year 2024/25 Financial Statement Audit and Single Audit Report have no findings.

Award
For Fiscal Year 2023/24, the City’sFinancial Statements were awarded the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and CITY OF MURRIETA Printed on 1/29/2026Page 5 of 6
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Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA). This prestigious national award recognizes the City’s use of the highest standards in preparing the annual financial report. This certificate of achievement is valid for a period of one year only. Staff believes the financial statements for Fiscal Year 2024/25 continue to meet the program’srequirements, and they have submitted to GFOA for award consideration.

FISCAL IMPACT
No fiscal impact is associated with accepting and filing this item.

ATTACHMENTS
ATT 1 - Annual Comprehensive Financial Report for Fiscal Year ending June 30, 2025 ATT 2 - Single Audit Report for Fiscal Year ending June 30, 2025 CITY OF MURRIETA Printed on 1/29/2026Page 6 of 6
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CIT

Y OF MURRIETA, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

CITY COUNCIL
Cindy Warren, Mayor
Jon Levell, Mayor Pro-Tem
Ron Holliday, Councilmember
Lisa DeForest, Councilmember
Lori Stone, Councilmember

CITY MANAGER
Justin Clifton
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Table of Contents

Introductory Section:

Letter of Transmittal ............................................................................................................... i List of Principal Officers ..................................................................................................... . xvi Organizational Chart .......................................................................................................... xvii GFOA Certificate of Achievement for Excellence in Financial Reporting .......................... xviii

Financial Section:

Independent Auditor's Report ..................................................................................................... 1 Management's Discussion and Analysis ..................................................................................... 4 Financial Statements
Government-Wide Financial Statements
Statement of Net Position ................................................................................................ 20 Statement of Activities .................................................................................................... 21 Fund Financial Statements
Balance Sheet – Governmental Funds ........................................................................... 22 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ........................................................................................... 24 Statement of Revenues, Expenditures, and Changes in
Fund Balances – Governmental Funds ..................................................................... . 25 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...................... 27 Statement of Fund Net Position – Proprietary Funds ...................................................... 28 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ........................................................................................................ 29 Statement of Cash Flows – Proprietary Funds ................................................................ 30 Statement of Fiduciary Net Position ................................................................................ 31 Statement of Changes in Fiduciary Net Position ............................................................. 32

Notes to the Financial Statements ............................................................................................ 33

Required Supplementary Information:

Schedule of Proportionate Share of the Net Pension
Liability – Miscellaneous ............................................................................................. 85 Schedule of Contributions – Miscellaneous ....................................................................... 86 Schedule of Proportionate Share of the Net Pension
Liability – Safety ......................................................................................................... 87 Schedule of Contributions – Safety ................................................................................... 88 Schedule of Changes in the Net OPEB Liability and Related Ratios ................................ 89 Schedule of Contributions – OPEB ................................................................................... 91 Budgetary Comparison Schedule – General Fund ............................................................ 93 Budgetary Comparison Schedule – Fire District Special Revenue Fund .......................... 94 Budgetary Comparison Schedule – Other Grants Special Revenue Fund ........................ 95 Notes to Required Supplementary Information .................................................................. 96

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ABLE OF CONTENTS, (Continued)
Supplementary Information:

Consolidating Schedule of Balance Sheet By Sub Fund –
General Fund ............................................................................................................. 97 Consolidating Schedule of Revenues, Expenditures, and Changes in Fund Balance by Sub Fund – General Fund .............................................................. 99 Nonmajor Governmental Funds:

Combining Balance Sheet –Nonmajor Governmental Funds .......................................... 101 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds ..................................................... 107 Budgetary Comparison Schedule – Special Revenue Fund
State Gas Tax .......................................................................................................... 113 Budgetary Comparison Schedule – Special Revenue Fund
Measure A ................................................................................................................. 114 Budgetary Comparison Schedule – Special Revenue Fund
Air Quality Management District ............................................................................... 115 Budgetary Comparison Schedule – Special Revenue Fund
Block Grants ............................................................................................................. 116 Budgetary Comparison Schedule – Special Revenue Fund
Seized Assets Forfeitures ........................................................................................ 117 Budgetary Comparison Schedule – Special Revenue Fund
Supplemental Law Enforcement Services Fund (SLESF) ........................................ 118 Budgetary Comparison Schedule – Special Revenue Fund
Murrieta Public Library ............................................................................................. 119 Budgetary Comparison Schedule – Special Revenue Fund
National Pollutant Discharge Elimination System (NPDES) ..................................... 120 Budgetary Comparison Schedule – Special Revenue Fund
Reimbursement Agreement Fund ............................................................................ 121 Budgetary Comparison Schedule – Special Revenue Fund
TUMF ....................................................................................................................... 122 Budgetary Comparison Schedule – Special Revenue Fund
Housing Authority ..................................................................................................... 123 Budgetary Comparison Schedule – Special Revenue Fund
Community Services District .................................................................................... 124 Budgetary Comparison Schedule – Special Revenue Fund
Road Maintenance and Rehabilitation Account ....................................................... 125 Budgetary Comparison Schedule – Special Revenue Fund
Federal Grants ......................................................................................................... 126 Budgetary Comparison Schedule – Special Revenue Fund
Developer Agreement .............................................................................................. 127 Budgetary Comparison Schedule – Special Revenue Fund
Opioid Settlement ..................................................................................................... 128 221
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ABLE OF CONTENTS, (Continued)
Budgetary Comparison Schedule – Capital Projects Fund - Community Facilities District .................................................................................... 129 Budgetary Comparison Schedule – Capital Projects Fund - Area Drainage .......................................................................................................... 130 Budgetary Comparison Schedule – Capital Projects Fund - South West Road and Bridge ................................................................................... 131 Budgetary Comparison Schedule – Debt Service Fund -
Citywide Debt Service ............................................................................................... 132 Budgetary Comparison Schedule – Debt Service Fund -
2016A LARB ............................................................................................................ 133 Budgetary Comparison Schedule – Debt Service Fund -
2016B LARB ............................................................................................................ 134 Budgetary Comparison Schedule – Debt Service Fund -
2022A LARB ............................................................................................................ 135 Budgetary Comparison Schedule – Permanent Fund -
Town Hall Association .............................................................................................. 136 Internal Service Funds:

Combining Statement Fund of Net Position – Internal Service Funds ............................. 137 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position – Internal Service Funds ............................................................. 138 Combining Statement of Cash Flows – Internal Service Funds ...................................... 139 Statistical Section:

Statistics ......................................................................................................................... 140 Net Position By Component ............................................................................................ 142 Changes in Net Position .................................................................................................. 143 Fund Balances of Governmental Funds .......................................................................... 145 Changes in Fund Balances of Governmental Funds ....................................................... 146 Assessed Value and Estimated Actual Value of Taxable Property ................................. 147 Direct and Overlapping Property Tax Rates .................................................................... 148 Principal Property Tax Payers ......................................................................................... 149 Principal Tax Levies and Collections ............................................................................... 150 Ratios of Outstanding Debt by Type ................................................................................ 151 Ratios of General Bonded Debt Outstanding .................................................................. 152 Direct and Overlapping Governmental Activities Debt ..................................................... 153 Legal Debt Margin Information ........................................................................................ 154 Demographic and Economic Statistics ............................................................................ 155 Principal Employers ......................................................................................................... 156 Full-Time Equivalent City Government Employees By
Function/Program ..................................................................................................... 157 Operating Indicators by Function/Program ...................................................................... 158 Capital Asset Statistics by Function/Program .................................................................. 159 222
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NTRODUCTORY SECTION
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CITY OF MURRIETA
1 Town Square
Murrieta, CA 92562
December 15, 2025
Honorable Mayor, Members of the City Council, and Citizens of the City of Murrieta:

The City of Murrieta (City) is pleased to present the Annual Comprehensive Financial Report (ACFR) for the fiscal year that ended June 30, 2025. The information found in this report is provided by the Murrieta City Manager and Finance Department to the City Council and the public to inform those interested in the City’s fiscal condition.

The City assumes full responsibility for the completeness and reliability of the information contained in this report and has established a framework of internal controls for this purpose. Because the cost of any internal control should not outweigh its benefit, internal controls have been designed to provide reasonable, rather than an absolute, assurance that the financial statements will be free from material misstatement.

The independent auditing firm of Rogers, Anderson, Malody, and Scott, LLP has issued an unmodified (clean) opinion on the City’s financial statements, indicating they are free from material misstatement and present fairly the financial position and results of operations of the city's various funds and account groups. All disclosures necessary to enable the reader to understand the City’s financial activities have been included.

A section titled Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it.

PROFILE OF THE CITY OF MURRIETA
The City of Murrieta is located in Southwestern Riverside County and encompasses approximately 35.5 square miles.

The City of Murrieta was incorporated on July 1, 1991, after voters approved cityhood by an overwhelming margin in
November 1990. It is organized as a general law California city and operates under a council/manager form of government.

Murrieta has experienced significant growth since the mid- 1980s and was previously one of the fastest-growing areas in California. With a population of approximately 2,500 in 1980, Murrieta is now home to an estimated 111,789 residents. 226
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The Murrieta Community Services District (CSD) was established on July 1, 1993, as a subsidiary of the City of Murrieta to assume functions previously provided by Riverside County Service Area 143. The CSD offers parks and recreation services to the city’s residents, as well as street lighting, sweeping, and landscape maintenance services.

The Murrieta Fire District was formed in 1947 as an independent, self-governed special district that provides fire protection services. On July 1, 1993, the district was reorganized as a subsidiary district of the City. Although technically still named Murrieta Fire District, as of April 2017, the Fire District is now referred to as Murrieta Fire & Rescue.

The Murrieta Redevelopment Agency (RDA) was established in July 1992. An amended redevelopment plan was adopted in June 1999 in conformity with the City’s General Plan. The original RDA plan consisted of approximately 1,127 acres across seven non-contiguous land areas throughout the City. The Plan was amended again in July 2006 to add another 1,193 acres. On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26, which directed the dissolution of all redevelopment agencies in California. The RDA was dissolved and ceased to operate as a legal entity on February 1, 2012. This action has impacted the reporting entity of the City, which had previously reported the redevelopment agency as a blended component unit. Now, the activity of the former RDA is being reported in a fiduciary fund named the Successor Agency to the former Murrieta Redevelopment Agency (Successor Agency) in the City’s financial statements through the remainder of the dissolution period. The dissolution period will extend until all recognized obligations of the former RDA are defeased (paid in full). The City elected to create the Murrieta Housing Authority to continue the housing activities of the former RDA. The activity of the Housing Authority is being reported as a special revenue fund.

The Murrieta Public Library officially opened in April 1999, moved to its current location in March 2007, and is under the full authority of the City of Murrieta. The Murrieta Public Library is a welcoming space for all, dedicated to providing free and equitable access to information, services, and technology. The Library is committed to empowering individuals and promoting resilience and a sense of belonging by providing informational, recreational, and educational resources and programs for all ages.

GOVERNANCE
The City is governed by the Murrieta City Council, consisting of five council members under the council-manager form of government. A mayor and mayor pro-tempore are selected as presiding officers by the City Council from amongst the five council members for one-year terms. The City of Murrieta has transitioned to a system where City Council members are elected by district instead of serving "at large.”
The City Council appoints the City Manager and City Attorney. The City Manager appoints all other staff positions. The City Council acts as the Board of Directors for the Murrieta Fire District, Community Services District, Library District, Housing Authority, Successor Agency to the former RDA, and Murrieta Financing Authority.
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MUNICIPAL SERVICES
The City of Murrieta provides a full range of municipal services to its residents and stakeholders:

Animal Control Services Library and Arts Services
Community Development Services Park Land Services
Economic Development Services Recreation Services
Fire and Emergency Medical Services Street Construction and Maintenance General City Administration Traffic Control Services
Law Enforcement Services

FISCAL AND OPERATING CHALLENGES
Approximately 53% of citywide revenues are derived from two sources: Sales tax and Property Tax. Sales Tax revenue is more sensitive to changes in economic conditions. Property Tax revenue remains relatively stable, primarily due to Proposition 13, which limits annual increases in assessed valuation to two percent.

The economic outlook was uncertain, as the economy faced the impact of unprecedentedly high inflationary levels. The Federal Reserve took swift action to combat the rise in inflation by increasing interest rate targets. During periods of high inflation, consumers’ disposable income and personal savings decreased, which impacted sales tax revenue in the preceding fiscal years, resulting in slightly lower collections.

As we entered into Fiscal Year 2024/25, interest rates had not been lowered in more than four years. While the City benefited from the higher interest rates through opportunities to reinvest at higher-yield investments, these same higher interest rates negatively impacted consumer spending because the cost of financing homes, cars, and other high-ticketed purchases increased. Overall, the sales tax collections were steady when compared to the prior fiscal year. The higher interest earnings helped to offset the lack of growth in our sales tax receipts.

On September 18, 2024, the Federal Reserve lowered interest rates by 50 basis points. Since then, it has implemented four additional rate cuts, most recently in October 2025, lowering interest rates by an additional 100 basis points. The Fed initiated these interest rate reductions in response to the decline in inflation, with the goal of supporting economic growth and stabilizing the labor market. These lower interest rates are expected to encourage an increase in consumer spending on homes, automobiles, and other significant purchases.

The City’s property tax revenue remains relatively strong, primarily due to new developments.

However, the high-interest-rate period has impacted the sales of both new and existing homes, which in turn affects the City’s property tax revenue.

Murrieta’s unemployment rate of 5.2% as of August 2025 was lower than the County of Riverside's and the State's rates of 6.3% and 5.8%, respectively. These rates are higher than the rates stated in our report from last year, which reaffirms the Fed's decision to lower interest rates to help manage unemployment. The City of Murrieta’s recruiting efforts have improved, with most positions seeing more qualified candidates for each role we are recruiting for. 228
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Bond Rating
In recent years, S&P Global Ratings has upgraded the City’s bond indebtedness for the 2020A Lease Revenue Refunding Bond, the Murrieta Successor Agency 2017 Tax Allocation Refunding Bonds, and the 2023 Local Agency Revenue Refunding Bonds. These credit rating upgrades demonstrate the strength of the underlying local economy and the City’s financial condition.

The table below summarizes the recent credit rating upgrades:

Grants
Grant funding is an effective way to maximize our local financial resources to provide more support and services for our residents. Staff actively pursue grant opportunities for capital purchases and expand programs provided to residents and employees. Over $4 million in external grant funding was secured. Below is a non-inclusive list of grants the City was awarded during Fiscal Year 2024/25. Many more previously awarded grants were utilized during the fiscal year.
뢻뢼뢽뢾 PUBLIC WORKS
Total Funding: $3,145,720
RCTC MARA Grant — $3,000,000
Supports the Murrieta Hot Springs Widening from Margarita Road to SR-79.

Rubberized Pavement Grant (FY24) — $145,720
Funds pavement rehabilitation on major corridors, including Murrieta Hot Springs Rd, Los Alamos Rd, Antelope Rd, Elm St, and Cherry St.
ꍃꍄꍅꍆꍇꍈꍉꍊꍋꍌꍍꍎꍏꍐꍑꍒꍓꍛꍜꍔꍕꍖꍗꍘꍙꍚ POLICE DEPARTMENT
Total Funding: $345,156
Bulletproof Vest Partnership (FY23) — $1,095
Reimburses the cost of protective vests for police officers.

OTS Traffic Safety Grant — $210,000
Enhances enforcement and educational strategies to reduce traffic-related injuries and fatalities.

Type of Bonds/Debt Agency
Previous
Credit
Rating
Current
Credit
Rating
Lease Revenue Refunding Bonds City of Murrieta A+ AA-
Tax Allocation Refunding Bonds Murrieta Successor Agency A A+ CFD Special Tax Refunding Bonds Murrieta Public Financing Authority A A+ 229
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Cal DOJ Tobacco Grant — $134,061
Supports enforcement and education to prevent illegal tobacco sales to minors. 귻귾근귽귿글긁긂긃긄긅긆 LIBRARY SERVICES
Total Funding: $57,600
LSTA “Library for All” Grant — $20,000
Improves access to library services and information for diverse communities.

Lunch at the Library — $11,700
Provides summer outreach and programming in partnership with MVUSD.

ZipBooks — $31,627
Provides library users with access to books that are not yet available at the library.Community Improvement Designation Grant — $25,900 Supports the Library expansion initiative.
諝諞諣諟諠諡諢 HOMELESSNESS SERVICES
Total Funding: $225,716
Housing & Homelessness Incentive Program (HHIP) — $225,716 Improves access to whole-person care and addresses housing insecurity among Medi-Cal participants.
꽅꽆 FIRE DEPARTMENT
Total Funding: $40,658
Emergency Management Performance Grant (FY23) — $24,680 Strengthens preparedness, mitigation, and recovery capabilities.

State Homeland Security Program (FY23) — $15,978
Supports state-aligned efforts to improve roadway safety and emergency coordination.

Wildfire Prevention State Grant — $2,653,344
Improves public health and safety by reducing wildfire risk.  CITY MANAGER’S OFFICE
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Total Funding: $320,732
SB 1383 Organic Waste Recycling Grant — $292,904
Reduces landfill-bound organic waste and enhances food rescue and recycling programs.

Beverage Container Recycling Grant — $27,828
Supports reduction of litter from beverage containers.

Achievements

As of the date of this report, the City is honored to have received the following awards and recognitions:

2023 Best City in the Region

Murrieta has been voted the best city in the San Gabriel Valley/Inland Empire region in the Los Angeles Times’ Best of the Southland 2023 Survey. Thanks to the dedication and hard work of individuals, businesses, and organizations that consistently contribute to making Murrieta the best place to live, work, and thrive, we are proud to receive this
recognition.

2023 Top Workplaces

The City is honored to receive the Top Workplaces award by Inland Empire. This is a testament of the City Council and Management to always strive to move forward in the
right direction.

2024 Best City in the Inland Empire

The City is excited to share that Murrieta was voted as the 2024 Best City in the Inland Empire by readers of the Inland Empire Magazine. This is the first time Inland Empire Magazine has ranked the votes. The City of Murrieta continues to provide its residents and businesses with an environment where they can thrive and takes pride in its ability to be a great place for people to live, work, and play.

Fire Accreditation International Recognition

Murrieta Fire & Rescue recently renewed its accreditation status from the Commission on Fire Accreditation
International (CFAI). This recognition is a result of Murrieta Fire & Rescue’s commitment to excellence, demonstrated
through the voluntary self-assessment and accreditation program established by CFAI. Including Murrieta Fire &
Rescue, only 23 accredited agencies are in California, and only 333 are worldwide.

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ECONOMIC CONDITION AND OUTLOOK

The City of Murrieta continues to experience relatively strong and sustainable economic growth entering FY 2024/25, reflecting strong community investment, business expansion, and development activity. Murrieta’s diverse industry base and collaborative business environment continue to foster economic stability and optimism for the years ahead.

Located at the confluence of the I-15 and I-215 freeways, Murrieta’s prime position in Southern California—within proximity to San Diego, Los Angeles, and Orange Counties—remains a key driver of its competitive edge. This connectivity continues to attract businesses and residents seeking accessibility, safety, and a high quality of life.

Since its incorporation in 1991, Murrieta has transformed from a small community into a thriving city with one of the region’s most desirable living environments. Excellent schools, affordable housing options, a low crime rate, and a strong sense of community identity continue to make Murrieta a preferred destination for families and entrepreneurs alike. The City’s investment in open space and recreation—featuring 53 parks and extensive community programs—reinforces its reputation as a place where residents truly want to live, work, and play.

In 2025, Murrieta’s development pipeline remains robust, with submittals ranging from hotels and retail to multiple housing types and entertainment destinations. The City currently has eight (8) hotels, two (2) commercial centers, and over 1,500 housing units in our pipeline, signaling continued confidence in Murrieta’s housing market and regional job growth potential.

Murrieta’s unemployment rate consistently remains below the county and state averages, highlighting a resilient local economy. Workforce development remains a top priority for the City, led by the Murrieta Innovation Center (MIC), a hub for biotechnology, medical technology, and entrepreneurship. The MIC’s $4.2 million expansion, supported by the U.S.

Department of Commerce and the County of Riverside, is underway and includes a new wet lab and creative office space. The center now hosts more than a dozen innovative companies, including six international firms attracted through the City’s participation in SelectUSA, the nation’s premier investment summit. Businesses at the MIC continue to secure venture capital, grants, and seed funding, reinforcing Murrieta’s growing reputation as a life sciences hub.

Partnerships remain central to the City’s economic strategy. The Economic Development Department collaborates closely with the Murrieta/Wildomar Chamber of Commerce, local educational institutions, and regional partners to host workforce training programs, job fairs, and small business workshops that strengthen the local economy and foster entrepreneurship.

The City experienced significant development milestones throughout 2025, welcoming new commercial and hospitality projects, including:

 Talia’s Kitchen at Murrieta Hot Springs Resort
 Da Boyz Pizza & Pasta
 Urban Air
 The Meeting Spot
 Wann’s Bar & Grill
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 Lynn’s Grand Buffet

Many Murrieta retailers have experienced significantly greater foot traffic than national brand averages. Further expansions are on the horizon from Nikkiso Cryoquip, CarMax, Walmart, and the next phase of the Makena Medical Center, which includes a new Ambulatory Surgery Center. A second Surgery Center is nearing completion on Hancock Avenue, and a mixed- use retail/residential development is underway in the downtown entryway at Washington and Kalmia Ave. The Murrieta Auto Mall is also experiencing renewed momentum, with the addition of new dealerships and investments enhancing its position as a premier automotive destination.

Murrieta’s thriving healthcare and life sciences sectors remain vital economic engines, with multiple medical projects advancing in 2025, including:

 Ambulatory Surgery Centers at the Makena Medical site and on Hancock Avenue, west of Rancho Springs Medical Center.
 A new Medical Office Building to the north of Loma Linda University Medical Center  A new Medical Office Building on Murrieta Hot Springs Road  An Expansion of United Nursing

Public safety continues to be a cornerstone of Murrieta’s success. For more than a decade, the City has ranked among the safest cities in the nation (for cities over 100,000 residents) based on FBI crime statistics. For cities with a population greater than 100,000, the City of Murrieta is ranked #3 in California in 2025. This record reflects the dedication of Murrieta’s Police Department, Fire & Rescue team, and strong community partnerships. Murrieta Fire & Rescue remains one of only 23 accredited fire departments in California, an achievement that underscores the City’s commitment to excellence in public safety.

As Murrieta enters 2026, the City remains focused on fostering a balanced, family-oriented community supported by economic opportunities, safety, and a strong sense of belonging.

With a growing business ecosystem, an educated workforce, and an outstanding quality of life, Murrieta’s economic outlook remains bright, sustainable, and full of promise.

FINANCIAL INFORMATION

The City’s financial records for general governmental operations are maintained on a modified accrual basis. Revenues are recorded when available and measurable, and expenditures are recorded when the services or goods are received and the liability is incurred.

City management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the government are protected from loss, theft, or misuse and to ensure that adequate accounting data are compiled to allow the preparation of financial statements in conformity with generally accepted accounting principles (GAAP). The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of the control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management.

Reporting Entity

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This ACFR presents information on the financial position and operations of the City as a single comprehensive reporting entity. The City, Murrieta Fire District, Murrieta Community Services District, Murrieta Public Library, and the Murrieta Financing Authority have been included in this report per criteria established by the Governmental Accounting Standards Board (GASB).

The reporting entity consists of all of the funds and account groups of the primary government (the City of Murrieta) and its component units, which are legally separate organizations.

Blended component units, which are legally separate from the City but are so intertwined with the City that they are in substance the same as the City, include the Murrieta Fire District, Murrieta Community Services District, and the Murrieta Public Library.

Long-term Financial Planning
Multi-year financial planning, including the adoption of a two-year budget and a five-year capital improvement plan (CIP), provides the City Council, departments, and the public with a greater plan regarding ongoing funding and staffing for programs, projects, and services. The City manages a long-term financial plan. The long-term financial plan projects revenues and expenditures over a long-term period, using assumptions about economic conditions, future spending scenarios, and other salient variables. The long-term financial plan is not a budget; rather, it represents a point-in-time projection of future revenues and expenditures that will evolve as new information becomes available. Even so, it remains a critical tool for bringing a long-range financial perspective to the annual budget development process.

The two-year budget, five-year CIP plan, and long-term financial plan are processes designed to bring continued transparency to the City’s finances, operations, and strategic goals internally with the City Council, City Manager, employees, and departments, and externally with residents and businesses.

For Fiscal Years 2025/26 and 2026/27, the City Council adopted a balanced biennial operating budget of $182,131,287 and $191,293,967, respectively. As part of the City’s budget framework, the City Manager delivers quarterly reports and recommends providing budget updates to the City Council based on revised revenue and expenditure forecasts. The adopted budget provides a sound financial plan and supports the City Council’s commitment to fostering quality of life for the residents of Murrieta.

Measure T is a one-percent (1%) general-purpose transaction and use tax (or district sales tax), with revenues going directly to the City of Murrieta. Voters approved Measure T on November 6, 2018. The City began receiving Measure T revenues in April 2019. The City has experienced steady growth, but funding for public safety programs and other essential city services has not kept pace to match the increased demand for these vital services. Measure T provides a local revenue source for increased funding of essential services, including but not limited to public safety services such as neighborhood police patrols, crime prevention programs, improved response times for emergency calls, improved fire protection, and paramedic services, improved public infrastructure, and community facilities and services. In addition, Measure T provides future fiscal sustainability through funding reserves and the establishment of new sustainability funds. As of June 30, 2025, the district sales tax (Measure T) proceeds were approximately $28.3 million.

Budget Authority
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The City Council approves a two-year operating budget and an annual five-year CIP, with public meetings/hearings conducted before the budget and CIP adoption. When required during the year, supplemental appropriations are also approved by the City Council.

Expenditures may not exceed appropriations at the fund level. The City Manager is authorized to approve operating transfers between departments within a fund without limit. All other budget adjustments (increase in appropriation or transferring budget between funds) require City Council approval. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget.

The City’s five-year CIP provides a financial plan to fund the City’s critical and essential infrastructure projects. Over five years (FY 2025/26 through FY 2029/30), the City anticipates investing $113,526,177 in essential assets. Various funding sources provide funding for these projects, including the General Fund, Measure T Fund, Development Impact Fees, transportation, grants, and reimbursement agreements. The following table summarizes the various funding sources:

The CIP reflects the needs of our residents to ensure the streets, bridges, traffic signals, storm drains, public buildings, and parks are well maintained and operated for optimum health and safety, increased efficiency and functionality, enhanced attractiveness, and beautification.

The following table summarizes the projected capital uses:

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The CIP document places equal emphasis on planning for new projects and improving and preserving existing capital assets. The City’s CIP document includes a list of Capital Improvement Projects by funding source and a list of unfunded Capital Improvement Projects.

This is an attempt to identify and quantify the City’s true CIP needs not only in the short term but also in the long term. Although the list is comprehensive and reflects a good assessment of the City’s needs, it is by no means a complete list, as additional assessments need to be done in the coming years to refine this list, create guidelines to prioritize projects, and prepare a strategic approach to fund and complete these unfunded projects.

The city's website has an electronic copy of its adopted two-year budget and five-year CIP plan, which can be found here.

The CIP plan addresses the City’s critical and essential infrastructure projects. During the Fiscal Year 2024/25, the City substantially completed the following CIP projects:

10041: Town Square Park Parking Lot and Monument Sign $2,514,089 The project includes the construction of a paved parking lot for vehicles using the nearby Town Square Park, a monument sign, and a lighted walking path around Town Square. The final project cost will be reported in the next capital improvement budget update. 13048: FY2023/24 Citywide Slurry Seal $946,036
The slurry seal project covered approximately 25% of local residential streets citywide. The full final project cost will be reported in the next capital improvement budget update.

CIP 21016: Police Building Exterior Paint $90,275
The exterior painting project has successfully restored the over 30-year-old building, addressing visible cracks, damage, defects, and fading caused by age.

CIP : Sykes Ranch Park Windmill and Historical Society Landmarks $446,924 The project consisted of the construction of a commemorative monument windmill that would acknowledge the historic value of the Sykes Ranch property. The windmill was engineered and installed in February 2023, and the historical markers and site furnishings were completed in the Summer of 2024.

CIP 51031 Library Pollinator Garden Project $54,770
The project is a collaboration of the Murrieta Public Library, California State Library, the Western Municipal Water District, and Riverside County. The project will help educate the patrons on sustainability, mitigate the growing threats to diminishing pollinator populations, and encourage sustainable landscaping in the community. The Library held a ribbon-cutting in August 2024, attended by City Council and members of the public, to open the Pollinator demonstration garden.

CIP 21035: Police Department Locker Room Project $81,985

The project successfully transformed the men's and women's locker rooms at the Police Department to accommodate approximately 150 lockers, enhancing the overall functionality and accommodating staff growth.
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CIP 21040: City Hall Annex Project $473,180
The project was substantially completed in August 2024. The annex houses the Community Services and Administrative Services Departments. The City Hall Annex had a ribbon-cutting ceremony in March 2024.

CIP 22026,22035,22036,22038 (Phase 1) CIP 22029,22030,22031,22032,22040 (Phase 2): Tot Lot Equipment Installation/Replacement $3,244,698 The total expenditures paid since the project inception is $3,637,200. The Tot Lots Phase 2 projects were substantially completed in October 2024, and Phase 1 was substantially completed in June 2025. The full final project costs will be reported at the next capital improvement budget update.

MAJOR ACCOMPLISHMENTS AND INITIATIVES
The City accomplished various projects and programs that support the City Council’s goals and objectives. These accomplishments were completed in addition to performing the day-to- day operating activities required of a city government. The following are the significant initiatives completed this year:
 Received the Distinguished Budget Award from the Government Finance Officer Association for the Fiscal Years (FY) 2023/24 and FY 2024/25 Biennial Budget Report.  Received the Capital Budget Excellence Award from the California Society of Municipal Finance Officers for the Capital Improvement Plan & Budget for FY 2024/25.  Received Excellence in Financial Reporting from the Government Finance Officer Association for FY 2023/24 Annual Comprehensive Financial Report.  Received Award for Outstanding Achievement from the Government Finance Officer Association for FY 2023/24 Popular Annual Financial Report.  Maintained bond rating upgrade to A+
 Secured $2.3M through Cal-Fire’s Wildfire Prevention (WP) Grants Program for vegetation clearing.
 Implemented the negotiated medical reimbursement trust (MERP) for the City’s firefighter labor groups.
 Risk Management assisted the Community Services Department to begin utilizing our special event insurance carrier, Alliant, to provide third-party instructors with the ability to purchase insurance coverage that meets the City’s minimum insurance requirements for the use of City facilities.
 Deployed the Tablet Command – Telestaff integration, optimizing incident management capabilities for first responders and streamlining staffing for MFR. 237
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 Transitioned the Police Department's vehicles to the Cradlepoint system, ensuring reliable mobile data connections for officers.

 City Clerk Coordinated with the Riverside Registrar of Voters to hold ballot drop-off locations at City Hall, Fire Station No. 4, and the Murrieta Public Library. In addition, Fire Station No. 4 and the Murrieta Public Library were in-person voting centers.

 City Clerk updated the public records request portal to better meet and address the needs of constituents.

 Library received $31,627 in state Zip Books funding for patron-driven collection development. Patrons can request books/audiobooks not currently in the Library’s circulation and receive them directly from Amazon. When finished, patrons return the material to the Library to be added to the collection.

 Library implemented program Food for Fines: Annual program allows Library patrons to donate food items to waive $1.50 of accrued fines per item, up to $15. This reduces the financial barrier for patrons to access the Library while providing donations to assist individuals experiencing food insecurity.

 Library reached the final stages of design for the Children’s Area Expansion and Storytime Room. Construction starts in FY 2026.

 Community Services partnered with a volunteer community group for the second year in a row to assist with the Santa Stops program. In total, 119 stops were made, while continuing the toy and food drive for seven nights in December.

 The Community Service Department has 33 recreation instructors who teach 814 different contract classes, providing approximately 6,034 adults and children with a variety of programming throughout the year.

 Completed design and construction (including safety fencing) for Tot Lot Replacement Project Phase 1 at Northstar, Palomar, Monte Vista, and Oak Terrace Parks.

 Completed design and construction for Tot Lot Replacement Project Phase 2, which replaced tot lot equipment and play surfaces at Alta Murrieta Park, Firefighters Park, Eastgate Park, Rancho Acacias Park, and Sycamore Park.

 Completed design and construction for the Town Square Park Amphitheater Parking Lot and Entryway Monument project, which included the construction of a new parking lot, a monument with high-resolution video boards for communicating information to the public, and the installation of extensive landscaping along Kalmia Street from Jefferson Avenue to Adams Avenue.

 Received funding from the Substance Abuse and Mental Health Services Administration (SAMHSA), Homeless Housing, Assistance, and Prevention (HHAP), and the Riverside County Continuum of Care to support Homeless Services. 238
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 Murrieta partnered with affordable housing developers to prioritize households experiencing homelessness - particularly those connected to Murrieta Unified School District and the Murrieta Emergency Shelter. City staff collaborated with McKinney- Vento school district representatives and shelter personnel to facilitate smooth housing transitions for affected families.
 Completed permitting for significant projects, including Home Depot, Monamos affordable housing, The Max multi-family project, The Bridges (Canopy) multi-family project, and Willow Springs single-family project.
 Configured the City’s permit software (EP&L) to include a Code Enforcement module, resulting in the creation of a seamless land management software platform with information sharing between Building, Planning, and Code Enforcement.  Initiated amendments to the General Plan to comply with state law and make other improvements to achieve City planning goals.

 Completed the entitlement process for the Triangle.

 Completed an amendment process for the Murrieta Marketplace for over 500,000 square feet of new retail and restaurant space at Clinton Keith and Winchester Road.  Obtained a $4.1 million grant for the City’s Housing Agency to support housing goals.  Assisted CarMax, Nikkiso Cryoquip, and Walmart in the expansion of their existing sites.
 Completed the design phase of the new Wet Lab, Dry Lab, and Office Space at the Murrieta Innovation Center.
 Recruited additional new restaurants and businesses to the city, including Better Buzz, Philz Coffee, Black Rock Coffee, and WSS Shoes.
 The Fire Department implemented EMS supply management software.  Established a regional fire investigation team with Hemet, Pechanga, Canyon Lake, and Cal Fire to serve Southwest Riverside County.
 The Fire Department developed Evacuation Planning for the entire city by implementing Genasys Protect.
 The Police Department implemented the Flock Cameras - Enhanced License Plate Reader Upgrade.
 The Police Department purchased and certified the department’s first “Firearms Detection” K9.
 Public Works completed the City's Local Road Safety Plan (LRSP) to identify safety issues on city streets and submitted it to Caltrans.
 Completed the Draft Environmental Document/Environmental Impact Report for I- 215/Keller Road Interchange with Caltrans; working with Regional Conservation Authority and Wildlife agencies (State and Federal) to facilitate a wildlife corridor in the area of the interchange project.

A complete list of Citywide accomplishments can be found on the City’s website here. 239
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AWARDS AND ACKNOWLEDGEMENTS

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Murrieta for its ACFR for the fiscal year ending June 30, 2024. A government unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report to be awarded a Certificate of Achievement. This report must satisfy both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for one year. The City strives to develop an ACFR that will continue to meet the Certificate of Achievement Program’s requirements. We believe our current report conforms to the program requirements, and we are submitting it to the GFOA to determine its eligibility for the Certificate of Achievement for Excellence in Financial Reporting.

The preparation and development of this complex report are the results of the cooperation and dedication of all City staff, as well as the diligent work of the entire Finance Department, particularly Jennifer Terry, Finance Manager, and Ashley Lopez, Accounting Supervisor. I also appreciate the professionalism of the staff of Rogers, Anderson, Malody, and Scott, LLP, who audited this financial report. I would also like to express my appreciation to the City Council for their leadership and support throughout the year and their dedication to the citizens of Murrieta.

Respectfully submitted,

Justin Clifton Javier Carcamo
City Manager Director of Finance
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List of Principal Officers

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City Manager Justin Clifton
Assistant City Manager Kristen Crane
Administrative Services Director Diego Chavez
City Attorney Tiffany Israel
City Clerk Cristal McDonald
Community Services Director Brian Ambrose
Development Services Director David Chantarangsu
Economic Development Director Scott Agajanian
Director of Finance Javier Carcamo
Director of Public Works/City Engineer Bob Moehling
Fire Chief Bernard Molloy
Police Chief Matthew Henry

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ION
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Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408

CERTIFIED PUBLIC ACCOUNTANTS
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Independent Auditor’s Report
Hon
orable City Council
City of Murrieta, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Murri eta (the City), as of and for the year ended June 30, 2025, and the related notes to the financial stat ements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards ar e further described in the Audito r’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matters
As described in Note 1 to the financial statements, in the year ended June 30, 2025, the City adopted new accounting guidance under Statement of Governmental Acc ounting Standards Board (GASB Statement) No. 101, Compensated Absences and No. 102, Certain Risk Disclosures. Our opinions are not modified with respect to this matter.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principl es generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise subst antial doubt about the City’s ability to continue as a going concern for twelve months beyond the financia l statement date, including any currently known information that may raise substantial doubt shortly thereafter. 248
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Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audi t conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit. 
Identify and assess the risks of material misstat ement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures inclu
de examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement
s.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effective
ness of the City’s internal control. Accordingly, no such opinion is expressed. 
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are condi tions or events, considered in the aggreg ate, that raise su
bstantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We a
re required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the Unit ed States of America require that the management’s discussion and analysis, the schedules of proporti onate share of the net pension liability for the miscellaneous and safety plans, the schedules of plan contributions for the miscellaneous and safety plans, the schedule of changes in the net OPEB liability and related ratios, schedule of contributions for OPEB and the budgetary comparison schedules for the General Fund and major Special Revenue Funds, identified as required supplementary information in the accompanying t able of contents, be presented to supplement the basic financial statements.

Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary inform ation in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, t he basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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Supplementary Information
Our audit was conducted for the purpose of forming opi nions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements and schedules (supplementary information) are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlyi ng accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certai n additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the accom panying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual comprehensive financial report (ACFR). The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsib ility is to read the other information and consider whether a material incons istency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrect ed material misstatement of the other information exists, we are required to describe it in our report.

Othe
r Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 15, 2025 on our consideration of the City’s internal cont rol over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.

The purpose of that report is solely to describe the sco pe of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

San Bernardino,
De
cember 15, 2025
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City of Murrieta
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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As management of the City of Murrieta, we offer readers of the City of Murrieta’s financial statements this narrative overview and analysis of the City’s financial activities for the fiscal year ended June 30, 2025. We encourage readers to consider the info rmation presented here in conjunction with the enclosed letter of transmittal and basic financial statements.

FINANCIAL HIGHLIGHTS
Programs and general revenues 185,966,448$
Cost of governmental activities (166,926,788)
Net revenues over expenditures 19,039,660
Net Position at Beginning of Year, as Restated 575,101,386 Net Position at End of Year 594,141,046$

OVERVIEW

OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of Murrieta’s basic financial statements. The City of Murrieta’s basic financial statements comprise three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements.

COMPONENTS OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT Government-wide financial statements
The government-wide financial statements are designed to provide readers with a broad overview of the City of Murrieta’s finances in a manner similar to a private-sector business. 252
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For the Year Ended June 30, 2025
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The statement of net position presents information on all of the City of Murrieta’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a valuable indicator of whether the Ci ty of Murrieta's financial position is improving or deteriorating.

The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash fl ows in future fiscal periods (i.e., uncollected taxes and earned but unused vacation leave).

Both government-wide financial statements distinguish between the functions of t he City of Murrieta that are principally supported by taxes and intergovernmental revenues (government activities) and other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The City of Murrieta's governmental activities encompass general government, public safety, community development, parks and recreation, and public works.

The government-wide financial statements include not only the City but also the Murrieta Financing Authority, the Murrieta Fire District, the Murrieta Community Services District, and the Murrieta Public Library. Although these entities are legally separate, t hey function, for all practical purposes, as a part of the City. Therefore, they have been included as blended component units as an integral part of the primary government.

Fund financial statements
A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City of Murrieta, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The City of Murrieta's funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds
Governmental funds account for essentially the same f unctions reported as governmental activities in the government-wide financial statements. However, unlike government-wide statements, governmental fund financial statements focus on near-term and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narro wer than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the gov ernment’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of rev enues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
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Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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The City of Murrieta maintains 29 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the Fire District Special Revenue Fund, the Other Grants Special Revenue Fund, and the Development Impact Capi tal Project Fund, all of which are considered to be major funds. Data from the other 25 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the supplementary information section of this report.

The City of Murrieta adopted an operating budget for its General Fund and two of the three other major funds. To demonstrate compliance with the budget, a budgetary comparison statement has been provided for the General Fund, the Fire District Fund, and the Other Grants Special Revenue Fund.

Proprietary Funds
The City of Murrieta maintains only the internal service fund type of proprietary funds. The internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions.

The City uses internal service funds to accoun t for its Information Technology and Risk Management activities. Because the City does not maintain enterprise-type proprietary funds, all activities of the internal service funds have been included within governmental activities in the government-wide financial statements.

Fiduciary Funds
Fiduciary funds are used to account for resources he ld for the benefit of parties outside the government.

Fiduciary funds are not reflected in the government-w ide financial statement be cause the resources of those funds are not available to support the City of Murrieta’s own programs.

Notes to the Financial Statements
The notes provide additional information essential to a complete understanding of the data presented in the government-wide and fund financial statements.

Combining Statements
The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the notes to the financial statements.

Government-Wide Financial Analysis
Our analysis in the Management’s Discussion and Analysis focuses on the net position (Table 1) of the City’s governmental activities reported in the government-wide statements. 254
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For the Year Ended June 30, 2025
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TABLE 1

NET POSITION
For the years ended June 30, 2025 and 2024
2025 2024 Change
Current and Other Assets 341,246,978$ 327,141,523$ 14,105,455$ Capital Assets, Net 445,132,400 442,471,511 2,660,889 TOTAL ASSETS 786,379,378 769,613,034 16,766,344 Deferred Outflows of Resources 42,462,140 52,618,734 (10,156,594) Current and Other Liabilities 47,119,463 49,081,383 (1,961,920) Long-term Liabilities 178,686,428 187,549,732 (8,863,304) TOTAL LIABILITIES 225,805,891 236,631,115 (10,825,224) Deferred Inflows of Resources 8,894,581 10,499,267 (1,604,686) Net Position:

Net Investment
In Capital Assets 435,270,854 432,409,678 2,861,176 Restricted 13
2,206,782 133,963,316 (1,756,534)
Unrestricted 26
,663,410 8,728,392 17,935,018
TOTAL NET POSITION 594,141,046$ 575,101,386$ 19,039,660$ Governmental A ctivities
The Cit
y’s combined net position as of June 30, 2025, as shown in Table 1, was $594,141,046. The City’s net position increased by $19,039,660 compared to the prior fiscal year. The increase in the City’s net position is primarily due to a rise of $6,609,750 in total assets, net of deferred outflows of resources, and a decrease of $12,429,910 in total liabilities, net of deferred inflows of resources. The most substantial growth was seen in the unrestricted net position, which rose by $17,935,018. The restricted net position decreased by $1,756,534.

Current assets increased by $14,105,455, or 4.3%, compared to the prior year's balance. The increase is primarily attributable to an increase in cash and investments of $18,050,123, resulting from funds being held in interest-bearing accounts with favorable interest rates and revenues exceeding expenditures during the fiscal year. This increase was offset by a decrea se in the sum of all receivables totaling $4,218,017, mainly due to a timing difference in receiving an Educational Revenue Augm entation Fund (ERAF) tax payment compared to the prior year.

The capital assets net of accumulated depreciation have increased by $2,660,889. The increase represents the difference between additions, deletions, and depreciation in the current year. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.

Governmental activities' capital assets are discussed in more detail in the capital asset section of this report, and additional detailed information can be found in the Notes to the Basic Financial Statements (Note 6 – Capital Assets).
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Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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Changes in the various components associated with Governmental Accounting Standards Board (GASB) statement 68 Accounting and Financial Reporting for Pension, statement 75 Accounting and Financial Reporting for Postemployment Benefits Other than Pension (OPEB), and statement 87 Leases impacted deferred outflows and inflows, and changes in pension, OPEB, and leases liabilities for the year. GASB 68 and GASB 75 pronouncements required the City to record the net pension and OPEB liabilities on the books. The deferred outflows of re sources increased by $10,156,594, while the deferred inflows of resources decreased by $1,604,686.

Current liabilities decreased by $1,961,920 or 4.0%. The decrease is primarily attributable to a decrease of $4,937,540 in unearned revenue, resulting from the recognition of grant revenue from the American Rescue Plan Act. A reduction of $63,276 in accrued interest and an increase of $24,122 in long-term liabilities due within one year contributed to the overall decrease in current liabilities, as higher portions of debt payments were applied to principal. This decrease was offset by an increase in accounts payable and accrued liabilities of $2,046,724 and $649,543, respectively. Anot her contributing factor to offsetting the decrease was a $376,892 increase in deposit payables, which is due to an increase in development services projects requiring a refundable cash deposit.

Long-term liabilities, including outstanding debt, leases, employee benefit accruals, claims and judgments, and OPEB liability, decreased by $8,9 21,689, representing a de crease of 4.8% from the prior year. The most significant decrease is attributable to the principal payments made towards bonded debt of $6,131,955. Net pension liability, claims and judgements, and OPEB liability decreased by $1,463,160, $732,888, and $944,164, respectively. Some notable offs etting increases were from additions of public safety-related software licenses and leases for publ ic safety radios and equipment, totaling $1,696,776.

Compensated absences had a net increase of $565,219. The remaining decrease of $1,911,517 is due to principal payments made during the year for notes pay able, leases, and subscriptions. Debt activities for the governmental funds can be found in the Long-Term Debt section of this report, and additional detailed information can be found in the Notes to the Basic Financial Statements (Note 7 – Long-Term Debt).

Approximately 73.3% of the City's ne t position consists of a net investment in capital assets (i.e., land, construction in progress, buildings, land & build ing improvements, parkland improvements, vehicles, equipment, and infrastructure), less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; therefore, these assets are not available for future spending.

The restricted net position represents resources subject to external restrictions and earmarked for a specific purpose. The unrestricted net position represents the resources that may be used to meet the government's ongoing obligations to creditors and services to residents.

Government Activities
The Statement of Activities presents program revenues, expenses, and general revenues in detail. 256
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Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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TABLE 2

CHANGES IN NET POSITION
For the years ended June 30, 2025 and 2024
2025 2024 Change
REVENUES:

Program Revenues:

Charges for Services 27,205,036$ 28,113,801$ (908,765)$ Operating Grants and Contributions 11,599,792 9,317,753 2,282,039 Capital Grants and Contributions 21,797,320 15,917,682 5,879,638 Total Program Revenues 60,602,148 53,349,236 7,252,912 General Revenues:

Taxes:

Property Taxes 43,361,855 41,557,398 1,804,457
Sales Taxes 54,372,479 53,880,062 492,417
Franchise Taxes 5,163,531 5,156,401 7,130
Business License Tax 1,160,648 1,185,824 (25,176) Transient Occupancy Taxes 2,824,281 1,989,170 835,111 Property Transfer Tax 607,266 686,263 (78,997)
Motor Vehicle License 174,551 136,741 37,810
Investment Income 15,238,348 14,329,611 908,737
Gain on Sale of Capital Assets 71,134 46,631 24,503 Miscellaneous 2,390,207 1,037,269 1,352,938
Total General Revenues 125,364,300 120,005,370 5,358,930 TOTAL REVENUES 185,966,448 173,354,606 12,611,842 EXPENSES:

General Government 21,935,557 20,331,417 1,604,140 Public Safety 88,850,978 84,583,049 4,267,929
Community Development 8,442,616 8,168,208 274,408 Parks & Recreation 21,689,066 20,377,781 1,311,285 Public Works 23,434,899 20,239,187 3,195,712
Interest on Long-term Debt 2,573,672 3,234,953 (661,281) TOTAL EXPENSES 166,926,788 156,934,595 9,992,193 CHANGE IN NET POSITION 19,039,660 16,420,011 2,619,649 N
ET POSITION, BEGINNING OF YEAR, AS RESTATED 575,101,386 558,681,375 16,420,011 NET POSITION, END OF YEAR 594,141,046$ 575,101,386$ 19,039,660$ Governm ental A ctivities
The City’
s combined net position as of June 30, 2025, as shown above in Table 2, is $594,141,046. The City’s net position increased by $19,039,660 or approximately 3.3% compared to the prior fiscal year. An increase in net position occurs when spending is less than the revenues received. Several factors contributed to the increase in net position, including improved property taxes, investment earnings, and operating and grant revenues.
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Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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When combining general and program revenues, sales and property taxes make up approximately 52.6% of total revenues, which are the City’s two most significant revenue sources. As of June 30, 2025, program revenues totaled $60,602,148, while general revenues totaled $125,364,300. Total revenue for the year totaled $185,996,448, an increase of $12,611,842 compared to the prior fiscal year. The most noteworthy changes are as follows:

Program revenues increased by $7,252,912 to $60, 602,148, representing a 13.6% increase from the previous year.
 Charges for services decreased slightly by $908,768 or 3.2%. A notable decrease include d a decrea
se of $614,295 in special assessment rates and charges under the NPDES program. This was a 75% decrease from the prior year. Plan check charges for services also decreased for both the engineering and building and safety divisions by $310,386 and $210,830, respectively.  Operating contributions and grant revenue incr eased in total by $2,282,039. That represent s an increa
se of approximately 24.5% as compared to last year. The most significant increase occurred in the Fire Department’s revenue from reimbursements received from the state’s CAL OES for City person
nel responding to fire incidents. These reimbursements increased $1,406,948 due to increased responses to incidents, such as the Airport and Mountain fire. Another increa se in operating co
ntributions and grant revenues is due to an $888,779 increase in reimbursemen ts received from the City
of Menifee for the agreement to utilize the City of Murrieta’s dispatch servi
ces. Menifee’s share of the dispatch division’s costs increased due to additional services being eligible for reimbursement.

Capital contributions and grants increased by $5,879,638, an increase of 36.9% compared to the prio
r year. This is primarily due to recognizing revenues under the American Rescue Plan Act for capital proje
cts, including the Madison Avenue Water, Amphitheater Parking Lot, and Homele ss Shelterin
g projects. The amount of revenue recognized in Fiscal Year 2025 is $8,246,478, which is an increase of $6,098,221 compared to the prior year.

General revenues increased by $5,358,930 to $125,364,300 in the current year.  The most significant increases in general re venues were property taxes by $1,804,4 57, miscellan
eous revenue by $1,352,938, and transi ent occupancy tax (TOT) by $835,111. This represents an increase of approximately 4.3% in property tax revenues, 130.4% in miscellaneous revenue, and 42% in TOT.

The increase in property tax revenue was from new residential and comm ercial developm
ents and changes in valuation due to existing home sales. 
The increase in miscellaneous revenue is partially due to lawsuit settlement funds, with the main source being the opioid settlement. Other increases to miscellaneous revenue come from sources such as donations and prior year revenues. 
The increase in transient occupancy tax is due to the addition of the Murrieta Hot Spring s Re
sort that opened in February 2024. Fiscal Year 2025 is the first full year of collectin g TOT from the
resort, which has experienced increasing revenues since its opening. 
Investment income increased $908,737 due to the higher investment yields in the City’s investment portfolio, Local Agency Investment Fund, and Cash Sweep investment program. This was a 6.3% increase compared to the prior year.
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Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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 Sales tax slightly increased by $492,417 or 0.9% from the prior year. Inflation had a negative impact on sales tax generation in fiscal year 2024, particularly in the auto sales, building and con
struction, and fuel and service station industrie s. The Federal Reserve lowered interest rates durin
g fiscal year 2025, which positively impacted sales tax revenue.

Total go
vernmental activities expenses increas ed by $9,992,193 from $156,934 ,595 to $166,926,788, or approximately 6.4% compared to the prior year. The highest dollar increase was in Public Safety expenses, at $4,267,929, or 5%, primarily due to higher pers onnel costs, workers’ compensation costs, and an increase in their allocation of risk management general liability insurance charges. The highest percentage increase in expenditure was for Public Works, at $3,195,712 or 15.8%, due to increased construction activity on capital improvement projects, including the Murrieta Hot Springs Road Widening, Glen Arbor Dog Park, North Amphitheater Parking Lot, and Citywide Slurry Seal Project.

General government expenses increased by $1,604,140, or 7.9%, partially due to general election costs occurring in even years and higher risk management general liability insurance charges. Parks and recreation expenses increased $1,311,285 or 6.4%. More than half of this increase was due to increased water costs, maintained parks, and lighting and landscape districts. The only decrease in expenses was in interest on long-term debt, which declined by $661,281 due to a greater share of payments being applied to principal as the debt matures.

The General Government, Public Safety, Public Works, and Parks and Recr eation expense categories experienced an increase in expenditures associated with personnel-related salary and benefits as a result of new labor agreements and increases in operating-rela ted expenses such as legal, contract services, landscape maintenance, and animal control services.

Chart 1 – Expenses & Program Revenues
The chart below highlights the costs for each of the Ci ty’s five largest programs, as well as the revenue generated by each program (fees generated by the activities, contributions, and intergovernmental funding).

The net cost (the difference betw een adjoining bars in the graph) shows the financial burden that was placed on the city’s taxpayers by each of these programs (costs covered by the program’s revenues). The chart indicates that the overall cost of the government exceeds the program revenues generated to support it.

General Government, Public Safety, and Community Development are mostly funded with general revenues, including taxes and other sources. The chart indicates that the overa ll cost of the government exceeds the revenues generated to support it.

The operating expenditures for Parks & Recreation are primarily funded by program revenue such as assessments and charges for services, with general re venues providing additional financial support as needed. The Public Works program includes both st affing and the construction of large-scale capital projects. Public Works operations are primarily funded by general revenue, and large-scale capital projects are primarily funded by program revenues, including charges for services, DIF, capital grants, and contributions. Funds needed to construct large-scale capital projects are collected over several years until there is sufficient funding to support the project. This is evident in the chart below, which shows higher revenues collected than expenditures.
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Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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Financial Analysis of the City’s Funds
The City of Murrieta uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the City of Murrieta’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information helps assess the City of Murrieta’s financing requirements. In particular, unassigned fund balance may serve as a valuable measure of a government’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City of Murrieta’s governmental funds reported combined ending fund balances of $283,501,861, an increase of $7,402,179 or approximately 2.68% compared to last year's governmental funds balance. The change in fund balance for the General Fund column totaled $10,931,816, broken down by fund as follows.

Fund Title
Change in Fund
Balance
General Fund 8,493,784 $
Transaction Sales Tax (Measure T) 2,793,340
General Capital Fund (292,709)
Traffic Safety Fund 6,450
Crime Prevention Fund (123,649)
Vehicle Replacement Fund 54,600
Total Net Changes in Fund Balance 10,931,816$
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Management’s Discussion and Analysis
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Additional information can be found in the consolidating schedule on pages 97-100 of this report.

The other net changes in fund balances in the governmental funds include a decrease of $865,529 for the Fire District fund, an increase of $411,662 for the Other Grants fund (which was reclassified this fiscal year to a Major Fund), an increase of $1,876,208 in the Development Impact Fee fund, and a reduction of $4,951,978 for the Non-Major Governmental Funds. The Non-Major Governmental Fund includes the Federal Grants fund, reported in prior fiscal years as a Major fund.

In accordance with GASB Statement No. 54 (thoroughly discussed in the notes to the financial statements, Note 9 - Fund Balance), the combined ending fund balance of $283,501,861 is broken down as follows:

Fund Balance Classification 2025 2024 Change
Non-Spendable 3,
851,118$ 4,310,607$ (459,489)$
Restricted 131,706,
782 133,463,316 (1,756,534)
Committed 85,771,421 86,200,190 (428,769)
Assigned 42,753 52,482 (9,729)
Unassigned 62,129,
787 52,073,087 10,056,700
Total Fund Balance 283,501,861$ 276,099,682$ 7,402,179$ Governmental Funds
The n
on-spendable category represents that portion of fund balance that cannot be spent because it is either (a) not in a spendable form or (b) legally or contractually required to be maintained intact. The restricted category represent s that portion of fund balance that refl ects constraints placed on the use of resources that are either (a) externally imposed by cr editors, grantors, contributors, or laws/regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. The committed category represents that po rtion of fund balance that can only be used for specific purposes pursuant to constraints imposed by formal action of the City of Murrieta’s highest level of decision-making authority (City Council) and remains binding unless removed in the same manner. The assigned category represents that portion of fund balance that includes am ounts constrained by the City of Murrieta’s intent to be used for specific purposes that are neither re stricted nor committed. The in tent was established at either the highest level of decision-making or by an o fficial designated for that purpose, typically through the adoption of the Budget. The remaining category, unassigned, is that portion of fund balance that does not fall into one of the four other categories and may only be reported as a positive number in the General Fund. In other governmental funds, if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned, it may be necessary to report a negative unassigned fund balance.

General Fund
For the financial statement presentat ion, the General Fund column includes the following funds: General Fund, Measure T Fund, General Capital Fund, Traffic Safety Fund, Crime Prevention Fund, and Vehicle Replacement Fund, and deposits. At the end of the fi scal year, the General Fund’s revenues exceeded expenditures, including other financing sources (use s) by $10,931,816, thereby increasing the General Fund balance at the end of June 30, 2025, to $153,861,121. 261
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Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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General Fund revenues increased by $5,004,275 to $111,593,957, including transfers, when compared to the prior year. The increase is primarily attributable to a $2,352,131 increase in Taxes, a $877,833 increase in Intergovernmental Revenues, a $634,458 increase in Miscellaneous Revenues, a $421,509 increase in the Use of Money and Property, and a $34,941 increase in Sales of Capital Assets. Conversely, other revenue types decreased compared to the prior ye ar: Charges for Services decreased by $476,600, License and Permits decreased by $263,026, Transfers In decreased by $225,012, and Fines & Forfeitures decreased by $96,444. Capital lease proceeds increased by $1,744,485.

The increase in the Use of Money & Property is due to two factors. The first is an increase in investment income associated with the City’s investment portfolio and short-term investment through the City’s sweep account. The investment income increase is $834,973. The other component is related to the accounting required by GASB 31 to recognize unrealized gain or loss of securities that weren’t sold or matured at year- end. The change in recognition of unrealized gain or lo ss of securities accounts over the prior year is a decrease of $459,322. While the recognition of unrealized gain was less than in the preceding year, it still represented a gain of approximately $3.28 million, indicating that the value of our securities has increased.

General Fund expenditures increased by $10,213,24 1 to $100,662,141, which in cluded transfers out and other financing uses. Public Safety operations and services accounted for 57.5% of the expenditure increase, amounting to $5,872,125. Of the $5,872,125 increase, personnel-related expenditures accounted for $4,656,807, while the remaining $1,215,318 is related to operating costs.

The Capital Outlay increased by $1,630,985. This incr ease is due to a reclassification of a prior year subscription $1,744,485. Had this reclassification not occurred, Capital Outlay would have been $113,500 less than the preceding year. Transfers Out had a net increase of $1,312,983. The category provides funding to special revenue funds that have operat ing shortfalls. The Fire Fund required $1,359,312 more financial support than the prior year due to higher workers’ compensation costs. The balance of the Transfers Out totaled a decrease of $46,328. Comm unity Development and Public Works increased by $701,090 and $418,233, respectively. All other expenditure categories had a net increase of $277,828.

The total fund balance includes funds classified as n on-spendable in the amount of $3,250,243, primarily comprising long-term note receivables, long-term advanc es to other funds, inventory, and prepaid costs, which are not in a spendable form. A non-spendable classification means the funds are set aside, as those resources cannot be accounted for as City funds until t hey are collected or, in the case of inventory and prepaid expenses, until they are used or goods/services are received.

The restricted fund balance of $208, 240 represents cash in an escrow ac count for the streetlight retrofit project, and a partial annual debt service obligation by the General Fund. Additional information regarding the capital lease can be found on Note 7 - Capital Lease Liability of this report.

Committed funds totaled $85,771,421. These funds are slated for capital projects, continuing appropriations, economic contingency reserves, operati ng reserves, pension rate stabilization reserves, fleet replacement reserves, and facility replacem ent reserves. It includes an operating reserve of $21,250,000 from the General Fund and $9,774,334 from the Measure T fund, of which $4,498,550 is set aside to fund the Fire District, Community Services District, and Library operating reserves at an average level of 29% of the amended budget.
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The combined operating reserve of $31,024,334 is approximately 29% of the final operating expenditures.

The operating reserve is established by a City Council Policy No. 100-11 Fund Balance and Reserve Policy to provide sufficient cash flow and resources to pay the yearly debt and obligated long-term debt requirements and to maintain City operations should a catastrophic event, such as a natural disaster or an economic or legislative change occur that might hav e an adverse impact on the City’s financial position.

The current operating reserve polic y requires a 25% reserve. The committed fund balance includes a $8,382,884 economic contingency reserve, $9,000,000 in pension and other post-employment benefit trust reserves, $8,135,258 for fleet replacement, $9,807,850 for facilities and equipment reserve, $6,025,000 for continuing operations, and $1,000,000 for an information technology reserve. The balance of the committed reserves, $12,396,095, is set aside for land acquisition , encumbrances (open purchase orders at the end of the fiscal year that will be utilized in the following year), public safety, and capital improvement projects.

The assigned fund balance totaling $42,753 is set aside for City programs. The second most significant portion of the fund balance is the unassigned fund balance in the amount of $64,588,466. The unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. More detailed information about the City’s fund balance is presented in Note 9 to the financial statements.

General Fund Budgetary Highlights
As customary, the Finance staff delivers quarterly budget update reports to the City Council. As necessary, staff recommends budget adjustments to revenue and expenditures to align the budget with actual financial activities, unanticipated revenue or expenses, or revised forecasts.

The revised revenue budget for FY 2024/25 totaled $103,478,168, while actual revenues totaled $111,593,957, outperforming revenue projections by $8,115,789. The most significant budgetary variance is in the use of money and property (interest ear nings), taxes, intergovernmental revenue, and miscellaneous revenue categories. Sales of capital as sets increased slightly compared to the amended budget. However, charges for services, fines & fo rfeitures, licenses and pe rmits, underperformed when compared to the amended budget.

The General Fund Sales & Use tax and Transaction tax outperformed the amended budget by $908,519 (or two percent). During the third-quarter budget update, staff evaluated year-to-date revenues and sought approval from the City Council to decrease the sales tax budget. The budget reduction coincided with the general economy's downturn, which was caused by an extended period of high interest rates. This affected sales of both new and used automobiles, as well as sales of general consumer goods. Had the budget not been adjusted, sales tax would have been short approx imately $5.8 million (or ten percent). The higher interest rates also impacted property transfer taxes, which were down 16% or $113,310, coming in under budget.

Property tax revenue, on the other hand, outperfor med the budget by $254,832, primarily due to conservative budgeting and new residential and commercial development. Additionally, franchise taxes outperformed the budget by $418,731.

The increase in the use of money and property is primarily due to extended periods of high interest rates, which have yielded positive outcomes with higher interest earnings. The General Fund’s portion of interest earnings from the investment portfolio was $5,650,631, which exceeded the amended budget by $600,931.

As required by GASB Statement 31 - Accounting and Financial Reporting for Investments, a non-cash accounting adjustment is made to record gains or losses in investments that are either not yet sold or matured. The positive change in the valuation of in vestment at year-end was $3,279,938. The value of fixed-income securities can fluctuate in response to changes in interest rates. 263
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For the Year Ended June 30, 2025
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As interest rates rise, the fair value of securities may decrease, and vice versa; when interest rates fall, the fair value of securities may increase. The difference between book value and fair value is considered an unrealized gain or loss.

The Intergovernmental revenue category was $876,246 higher than the budget, primarily due to additional services eligible for reimbursement associated with the intergovernmental agreement for dispatch services, reimbursements for federal task force participation, and reimbursements from the state for SB90 claims.

Alternatively, other accounts were le ss than expected for the share of cost payments for school resource officers, riverbed cleanup, and homeless services due to a delay in payment from other agencies.

Licenses and permits, as well as charges for se rvices, underperformed the budget by $82,924 and $331,302, respectively. The net budget shortage for lic enses and permits resulted from fewer Planning- issued temporary and conditional use permits, pre-application reviews, and addressing fees, as well as Building & Safety-issued permits for electrical, air conditioning/furnace replacements, patio, garage, solar, and swimming pool installations. Convers ely, Building & Safety-issued permits for single-family and multifamily residential buildings, new commercial buildings, tenant improvements, certificates of occupancy, trash enclosures, wall signs, and monument signs exceeded their budgets, which helped offset the budgetary shortfall.

Charges for services were lower than expected for several reasons. Revenue collected for police security requested at private events and school district functions was lower than expected by $29,510. Plan check and inspection services were down a combined $302, 525. However, fees for police records requests, special events, and records retention exceeded the budget by $59,135. The negative balance of approximately $58,400 resulted from a combination of several accounts being over or under budget.

General Fund
Budget A ctuals Variance
Revenues
Taxes 84,739,592$ 86,519,222$ 1,779,630$
Licenses and permits 2,930,589 2,847,665 (82,924)
Intergovernmental 4,463,695 5,339,941 876,246
Charges for services 4,475,543 4,144,241 (331,302) Use of money and property 5,333,700 9,359,729 4,026,029 Fines & forfeiture 344,400 249,473 (94,927)
Miscellaneous revenues 847,455 1,032,749 185,294
Transfers in 275,490 281,680 6,190
Capital lease proceeds - 1,744,485 1,744,485
Sales of capital assets 67,704 74,772 7,068
Total Revenues 103,478,168 111,593,957 8,115,789
Expenses
General government 14,374,569 13,553,001 (821,568)
Public safety 56,513,510 55,302,709 (1,210,801)
Community development 10,018,481 8,468,784 (1,549,697) Parks and recreation 2,059,188 1,505,155 (554,033) Public works 7,488,838 6,928,281 (560,557)
Capital outlay 3,154,671 5,482,951 2,328,280
Debt service 25,699 1,192,508 1,166,809
Transfers out 7,515,269 8,228,752 713,483
Total Expenses 101,150,225 100,662,141 (488,084)
Net Revenues over Expenses 2,327,943$ 10,931,816$ 8,603,873$

GENERAL FUND

BUDGET TO ACTUAL
264
City of Murrieta
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
-17-
The total amended General Fund operating expenditure budget in FY 2024/25 totaled $101,150,225, while actual expenses at year-end totaled $100,662,145. T he actual operating expenses were $488,084 lower than the budgeted figures. This negative variance (or budgetary savings) is comprised of Personnel, Operations & Maintenance, and Allocations (or Internal Service Charges). Transfers Out and Capital Outlay were over budget, which offset the budgetary savings.

General Government was under budget by $821,568. There were savings from pers onnel vacancies and contract services for anticipated but unused services. Public Safety was $1,210,801 under budget, primarily due to conservative personnel costs and operations & maintenance budget approach. Salaries and benefits were under budget due to a conservative personnel budget approach and sev eral vacant positions; however, overtime was higher to backfill the vacant positions. Operations & maintenance costs were lower in building and vehicle maintenance, as well as c ontract services. Community Development was under budget by $1,549,697, primarily due to a c onservative personnel budget approach, temporary vacancies, and contract services that were anticipated for plan check but weren’t ultimately needed.

Expenditures for Capital Outlay exceeded the amended budget by $2,328,280. The bulk of the overage is a result of a reclass ification of a prior year subscription $1,744,485. The remaining variance is due to the capital improvement budget being budgeted in a sub-ledger that is carried over from year to year. When capital improvement projects expend funds, they are recorded in the general ledger, which ultimately shows as unbudgeted expenses.

Debt Service appears to be over budget by $1,071, 358; however, the expenses related to SBITAs (Subscription-Based Information Technology Arrangement) and other lease agreements were reclassified from other operating accounts for presentation purposes. This reclassification results in budgetary savings in the areas of public s afety, public works, parks and recreation, general government, and community development.

The Transfers Out category had a variance of $713,483 over budget, reflecting a combination of overages and budgetary savings related to funds that are financially subsidized by the General Fund. The Fire Fund required an additional $1.3 million in operating transfers to balance its shortfall, primarily due to increased workers’ compensation costs. The Community Services District (CSD) came in under budget and required a lower operating transfer of $731k than expected. The remaining amounts are from unanticipated transfers to special revenue funds for project overruns and to ens ure that certain Lettered CSD Zones and the Lighting & Landscape District Fund were made whole.

Capital assets
At the end of FY 2024/25, the City had capital ass ets (net of accumulated depreciation) of $445,132,400, including land, construction in progress (CI P), buildings and improv ements, improvements to land, parkland improvements, equipment (including vehic les), infrastructure, lease assets, and right-to-use subscriptions. Current year’s additions to all asset categories totaled $18,354,557, while deletions totaled $2,872,158. The ac cumulated depreciation increased by $16,337,175 net of deletions. Capital assets with the most significant increase were those in Parkland Improvements, at $4,763,029. The asset class with the nex t most significant increase was Construction in Progress with $3,809,020. The capital asset category with the most significant decrease net of depreciation was Infrastructure, at $8,723,980, followed by Building & Improvements, at $635,961, and then Equipment, at $280,229. The remaining categories had an overall increase of $3,729,010. The inc reases were primarily due to the completion of multiple tot lot replacement projects and the reclassification of a piece of land that was previously held for resale.

Note 6, Capital Assets, on page 54 of this report provides additional information on the city's capital assets. 265
City of Murrieta
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
-18-

CAPITAL ASSETS, NET OF DEPRECIATION
2025 2024
Land 182,076,919$ 178,561,254$
Construction in Progress 16,547,286 12,738,266
Buildings & Improvements 29,931,886 30,567,847
Improvements to Land 1,491,066 1,605,958
Parkland Improvements 20,028,905 15,265,876
Equipment 13,
196,241 13,476,470
Infrastructure 1
77,758,542 186,482,522
Lease Assets 2,486,853 1,884,022
Right-to-use Subscriptions 1,614,702 1,889,296
Total Capital Assets 445,132,400$ 442,471,511$
*More detailed information about the City’s capital assets is presented in Note 1 and Note 6 to the financial statements.

Governmental A ctivities
Long-Ter
m Debt
At the end of the current fiscal year, the City of Murrieta had outstanding bonded debt and leases, along with liability for claims and judgments, an obligat ion for employee post-employment benefits (OPEB), compensated absences payable, and Net Pension liab ilities totaling $194,216,335. The total outstanding debt decreased by approximately 4.4% or $8,897,567 during FY 2024/25. The most significant decrease is related to the CFD debt, resulting from principal payments made against the bonded debt.

The pension (CalPERS) liability decreased by $1,463,160 due to changes in assumptions, differences between expected and actual experiences, differences between projected and actual investment earnings, differences between employer’s contributions and proportionate share of contributions, and changes in the employer’s proportion of costs.

The decrease in Other Post Employment Benefits (OPEB) liability of approximately $944,164 is attributed to an increase in the discount rate from 5.06% to 5.34%, changes in assumptions, and differences between expected and actual experiences. Claims and Judgments related to the City’s general liability and Workers’ Compensation decreased by $732,888 due to the actuar ial valuation of future liability. Compensated absences increased by $565,219 due to an increase in the number of employees and increases in the salary and compensation schedules. The remaining outstanding debt items, including notes payable, leases, and subscriptions, decreased due to principal payments made against each debt, with no significant additions to the debt.
266
City of Murrieta

Management’s Discussion and Analysis
For the Year Ended June 30, 2025

-19-

OUTSTANDING DEBT

City Related Debt 2025 2024
Lease Revenue Bond Series 2020A 1,500,562 $ 2,214,504 $ Leases, Subscriptions & Notes Payable 8,161,041 8,351,960 Net Pension Liability 68,946,994 70,410,154
Claims and Judgments 12,462,425 13,195,313
OPEB Liability 33,677,284 34,621,448
Compensated Absences 7,928,606 7,363,387
Total City Related Debt 132,676,912 136,156,766
CFD Related Debt
Local Agency Revenue Bond, Series 2022 24,889,423 27,407,136 Local Agency Revenue Bond, Series 2016A 31,045,000 33,510,000 Local Agency Revenue Bond, Series 2016B 5,605,000 6,040,000 Total CFD Related Debt 61,539,423 66,957,136
Total Outstanding Debt 194,216,335$ 203,113,902 $
Note 7 to the financial statements.

Governmental A ctivities
*More detailed information about the City’s long-term debt is presented in

Contacting the City’s Financial Management

This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact Finance Director Javier Carcamo, Finance Department at:

Finance Department
City of Murrieta
1 Town Square
Murrieta, CA 92562
(951) 461-6090
[email protected]

267

FINANCIAL STATEMENTS
268

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269
City of Murrieta

Statement of Net Position
June 30, 2025

The accompanying notes are an integral part of these financial statements. -20-
ASSETS
Governmental
Activities
Cash and Investments 290,654,513$
Receivables, net:

Accounts 3,051,750
Taxes 11,931,528
Loans 11,756,396
Accrued interest 2,718,292
Leases 3,039,374
Prepaid Costs 1,212,361
Inventories 66,536
Deposits Held with Others 3,031,228
Due from Other Governments 8,204,796
Restricted Assets:

Cash and Investments with Fiscal Agents 5,580,204
Capital Assets, Not Depreciable 198,624,205
Capital Assets, Net of Accumulated Depreciation 246,508,195 Total Assets 786,379,378

DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Refunding 284,796
Deferred Pension-Related Items 28,917,512
Deferred OPEB-Related Items 13,259,832
Total Deferred Outflows of Resources 42,462,140

LIABILITIES
Accounts Payable 7,218,842
Accrued Liabilities 6,300,115
Accrued Interest 831,255
Due to Other Governments 5,517
Deposits Payable 12,224,648
Unearned Revenues 5,009,179
Long-term Liabilities, Due Within One Year 15,529,907
Due in More Than One Year:

Long-term Liabilities 76,062,150
Net Pension Liability 68,946,994
Net OPEB Liability 33,677,284
Total Liabilities 225,805,891

DEFERRED INFLOWS OF RESOURCES
Deferred Pension-Related Items 943,733
Deferred OPEB-Related Items 5,211,074
Deferred Amounts Related to Leases 2,739,774
Total Deferred Inflows of Resources 8,894,581

NET POSITION
Net Investment in Capital Assets 435,270,854
Restricted for:

Community Development:

Nonexpendable 500,000
Expendable 18,002,306
Public Safety 4,552,490
Public Works 100,504,572
Capital Projects 3,454,875
Public Education and Government 1,118,507
Debt Service 4,074,032
Unrestricted 26,663,410
Total Net Position 594,141,046$

270

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271
City of Murrieta

Statement of Activities
For the Year Ended June 30, 2025

The accompanying notes are an integral part of these financial statements. -21-
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Net
Governmental
Activities
Governmental Activities:

General Government 21,935,557 $ 738,356 $ 4,209,866 $ - $ (16,987,335)$ Public Safety 88,850,978 2,607,931 6,409,159 - (79,833,888) Community Development 8,442,616 10,474,600 307,645 - 2,339,629 Parks and Recreation 21,689,066 10,991,429 673,122 37,960 (9,986,555) Public Works 23,434,899 2,392,720 - 21,759,360 717,181 Interest on Long-Term Debt 2,573,672 - - - (2,573,672) Total Governmental Activities 166,926,788$ 27,205,036 $ 11,599,792 $ 21,797,320 $ (106,324,640) General Revenues:
26,333,601
17,028,254
607,266
2,824,281
54,372,479
5,163,531
1,160,648
174,551
15,238,348
Sale of Assets 71,134
2,390,207
125,364,300
19,039,660
Net Position - Beginning of Year 575,101,386
594,141,046$ Net Position - End of Year
Motor Vehicle License
Investment Income
Miscellaneous
Total General Revenues
Change in Net Position
Transient Occupancy Taxes
Sales and Use Taxes
Franchise Taxes
Business Licenses Taxes
Program Revenues
Taxes:

Property Taxes, Levied for General Purposes
Property Taxes, Levied for Fire Safety
Property Transfer Taxes

272
City of Murrieta

Balance Sheet – Governmental Funds
June 30, 2025

The accompanying notes are an integral part of these financial statements. -22-
Capital Projects
General Fire District
Other Grants
(formerly
nonmajor)
Development
Impact
ASSETS
Pooled Cash and Investments 148,427,671 $ 4,279,797 $ 4,795,470 $ 59,544,041 $ Receivables:

Accounts 1,243,689 72,475 - 100,000 Taxes 10,925,527 546,943 - - Loans 2,844,733 - - - Accrued Interest 1,618,085 - - - Leases - 2,508,962 - - Prepaid Costs and Other Assets 323,609 42,767 - - Inventories 33,642 7,568 - - Due from Other Governments 3,356,270 131,787 230,651 - Due from Other Funds 3,674,749 - - - Land Held for Resale - - - - Advance to Other Funds 62,941 - - - Restricted Assets:

Cash and Investments with Fiscal Agents 56,229 - - - Total Assets 172,567,145 $ 7,590,299 $ 5,026,121 $ 59,644,041 $

LIABILITIES
Accounts Payable 2,880,117 $ 148,688 $ 97,762 $ 418,179 $ Accrued Liabilities 3,854,130 1,272,446 15,495 22,610 Deposits Payable 9,584,611 2,300 - - Unearned Revenue 200,055 5,264 4,467,929 - Due to Other Governments 701 - - 4,816 Due to Other Funds - - 327,761 - Advances from Other Funds - - - 62,941 Total Liabilities 16,519,614 1,428,698 4,908,947 508,546

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue 2,186,410 128,310 73,340 100,000 Deferred Inflows Related to Leases - 2,258,471 - - Total Deferred Inflows of Resources 2,186,410 2,386,781 73,340 100,000 FUND BALANCES (DEFICITS):

Nonspendable 3,264,925 50,335 - - Restricted 208,240 3,724,485 43,834 59,035,495 Committed 85,771,421 - - - Assigned 42,753 - - - Unassigned 64,573,782 - - - Total Fund Balances (Deficits) 153,861,121 3,774,820 43,834 59,035,495 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances (Deficits) 172,567,145$ 7,590,299 $ 5,026,121 $ 59,644,041 $ Special Revenue
273
City of Murrieta
Balance Sheet – Governmental Funds (Continued)
June 30, 2025
-23-
Total Nonmajor
Governmental
Funds
Total
Governmental
Funds
59,563,302$ 276,610,281$
1,624,029 3,040,193
459,058 11,931,528
8,911,663 11,756,396
1,100,207 2,718,292
530,412 3,039,374
15,038 381,414
20,820 62,030
4,409,516 8,128,224
- 3,674,749
- -
- 62,941
5 ,523,975 5,580,204
82,158,020$ 326,985,626$
3,270,408$ 6,815,154$
997,874 6,162,555
2,637,737 12,224,648
334,783 5,008,031
- 5,517
3 ,346,988 3,674,749
- 62,941
10 ,587,790 33,953,595
4,302,336 6,790,396
481,303 2,739,774
4,783,639 9,530,170
535,858 3,851,118
68,694,728 131,706,782
- 85,771,421
- 42,753
(
2,443,995) 62,129,787
66,786,591 283,501,861
82,158,020$ 326,985,626$
274

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275
City of Murrieta

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2025

The accompanying notes are an integral part of these financial statements. -24-
Fund Balances - Total Governmental Funds 283,501,861$
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, net of depreciation (excluding those in the internal service fund) have not been included as financial resources in governmental fund activity. 444,908,210 Long-term debt and compensated absences that have not been included in the governmental fund activity (excluding those in the internal service fund):

Lease Revenue Bonds (1,365,000) $
Local Agency Revenue Bonds (59,580,000)
Premium (2,094,985)
Notes, Leases and Subscription Liabilities (8,157,708)
Loss on Refunding 284,796
Compensated Absences (7,836,186) (78,749,083) Accrued interest payable for the current portion of interest due on bonds are not reported in the governmental funds. (831,255)

Pension-related debt is not due and payable in current period and accordingly is not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions are only reported in the statement of net position as the changes in these amounts affect only the government-wide statements for governmental activities.

Deferred Outflows of Resources 28,917,512
Deferred Inflows of Resources (943,733)
Pension Liability (68,946,994) (40,973,215)
OPEB-related debt is not due and payable in current period and accordingly is not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions are only reported in the statement of net position as the changes in these amounts affect only the government-wide statements for governmental activities.

Deferred Outflows of Resources 13,259,832
Deferred Inflows of Resources (5,211,074)
Net OPEB Liability (33,677,284) (25,628,526)
Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 6,790,396 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. 5,122,658
Net Position of Governmental A ctivities 594,141,046$

276
City of Murrieta

Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds
For the Year Ended June 30, 2025

The accompanying notes are an integral part of these financial statements. -25-
General Fire District
Other Grants
(formerly
nonmajor)
Federal Grants
(formerly major)

REVENUES
Taxes 86,519,222 $ 17,028,254 $ - $
Assessments - 1,587,906 - Licenses and Permits 2,847,665 28,065 - Intergovernmental 5,339,941 2,411,709 1,129,204 Charges for Services 4,144,241 628,595 - Use of Money and Property 9,359,729 261,523 20,471 Fines and Forfeitures 249,473 139,317 - Developer Participation - - - Miscellaneous 1,032,749 112,440 56 Total Revenues 109,493,020 22,197,809 1,149,731

EXPENDITURES
Current:

General Government 13,553,001 - 3,541 Public Safety 55,302,709 28,030,605 244,789 Community Development 8,468,784 - - Parks and Recreation 1,505,155 - 205,122 Public Works 6,928,281 - - Capital Outlay 5,482,951 - 201,702 Debt Service:

Principal Retirement 1,097,054 151,005 - Interest and Fiscal Charges 95,454 24,945 - Total Expenditures 92,433,389 28,206,555 655,154

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 17,059,631 (6,008,746) 494,577

OTHER FINANCING SOURCES (USES)
Transfers In 281,680 5,143,217 10,898 Transfers Out (8,228,752) - (93,813) Lease Acquisition 1,744,485 - - Proceeds from Sale of Capital Assets 74,772 - - Transfer of land held for resale - - - Total Other Financing Sources (Uses) (6,127,815) 5,143,217 (82,915) NET CHANGE IN FUND BALANCES 10,931,816 (865,529) 411,662 Fund Balances (Deficit), beginning of year 142,929,305 4,640,349 - (206,361) Adjustment - change from major to nonmajor fund - - (367,828) 206,361 Fund Balances (Deficit), beginning of year,
as restated (Note 19) 142,929,305 4,640,349 (367,828) - Fund Balances (Deficit), end of year 153,861,121 $ 3,774,820 $ 43,834 $ - $ Special Revenue Funds
277
City of Murrieta

Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds (Continued)
For the Year Ended June 30, 2025

The accompanying notes are an integral part of these financial statements. -26-
Capital Projects
Development
Impact
Total Nonmajor
Governmental
Funds
Total
Governmental
Funds
-$ 2,961,054$ 106,508,530$
- 17,914,950 19,502,856
- - 2,875,730
- 19,526,618 28,407,472
- 950,914 5,723,750
2,432,289 3,021,310 15,095,322
- 14,344 403,134
2,858,983 195,782 3,054,765
- 421,668 1,566,913
5,291,272 45,006,640 183,138,472
- 6,811,239 20,367,781
- 1,102,428 84,680,531
- 33,453 8,502,237
- 17,437,209 19,147,486
79,029 3,586,210 10,593,520
3,338,485 11,296,706 20,319,844
- 6,283,978 7,532,037
- 2,776,050 2,896,449
3,417,514 49,327,273 174,039,885
1,873,758 (4,320,633) 9,098,587
2,450 4,309,668 9,747,913
- (1,425,348) (9,747,913)
- - 1,744,485
- - 74,772
- (3,515,665) (3,515,665)
2,450 (631,345) (1,696,408) 1,876,208 (4,951,978) 7,402,179
57,159,287 71,577,102 276,099,682
- 161,467 -
57,159,287 71,738,569 276,099,682
59,035,495$ 66,786,591 $ 283,501,861 $

278
City of Murrieta

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2025

The accompanying notes are an integral part of these financial statements. -27-
Net Change in Fund Balances - Total Governmental Funds 7,402,179$ Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period.

Capital Outlays 20,273,641 $
Depreciation and amortization (18,923,129) 1,350,512 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. These amounts are the net effect of these differences in the treatments of long-term debt and related items.

Principal Payments 7,532,037
Amortization of Premium 291,655
Amortization on Loss on Refunding (31,644) 7,792,048 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 63,276
Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (594,309)
Pension obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (4,560,089)
OPEB obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (1,750,250)
Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 2,343,379 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the internal service fund is reported with governmental activities. 6,992,914
Change in Net Position of Governmental Activities 19,039,660$

279
City of Murrieta

Statement of Fund Net Position – Proprietary Funds
June 30, 2025

The accompanying notes are an integral part of these financial statements. -28-
Internal Service
Funds
ASSETS
Current Assets:

Cash and Investments 14,044,232 $
Accounts Receivable 11,557
Prepaid Costs 830,947
Inventory 4,506
Due From Other Governments 76,572
Deposits Held with Others 3,031,228
Total Current Assets 17,999,042
Noncurrent:

Capital Assets, Net of Accumulated Depreciation 224,190 Total Assets 18,223,232

LIABILITIES
Current Liabilities:

Accounts Payable 403,688
Accrued Liabilities 137,560
Unearned Revenue 1,148
Compensated Absences 67,323
Claims and Judgments 5,775,525
Note Payable 3,333
Total Current Liabilities 6,388,577
Noncurrent:

Compensated Absences 25,097
Claims and Judgments 6,686,900
Total Noncurrent Liabilities 6,711,997
Total Liabilities 13,100,574

NET POSITION
Net Investment in Capital Assets 220,857
Restricted for Public, Education, Government 462,216
Unrestricted 4,439,585
Total Net Position 5,122,658 $

280
City of Murrieta

Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds
For the Year Ended June 30, 2025

The accompanying notes are an integral part of these financial statements. -29-
Internal Service
Funds

OPERATING REVENUES
Interdepartmental Charges 18,281,485 $
Franchise Taxes 30,723
Miscellaneous 19,523
Total Operating Revenues 18,331,731

OPERATING EXPENSES
Administration and General 9,807,856
Claims Expense 1,506,168
Depreciation Expense 434,108
Total Operating Expenses 11,748,132
OPERATING INCOME 6,583,599

NONOPERATING REVENUES (EXPENSES)
Interest Revenue 409,825
Interest Expense (510)
Total Nonoperating Revenues (Expenses) 409,315
CHANGES IN NET POSITION 6,992,914
Net Position (Deficit), beginning of year (1,870,256)
Net Position, end of year 5,122,658 $
281
City of Murrieta

Statement of Cash Flows – Proprietary Funds
For the Year Ended June 30, 2025

The accompanying notes are an integral part of these financial statements. -30-
Internal Service
Funds

CA SH FLOWS FROM OPERA TING A CTIVITIES
Cash Received from Interfund Service Provided 18,256,328 $ Cash Paid to Suppliers for Goods and Services (7,485,982) Cash Paid to Employees for Services (2,020,655)
Claims Paid (3,188,572)
Net Cash Provided by Operating Activities 5,561,119

CA SH FLOWS FROM CA PITAL AND RELA TED FINANCING A CTIVITIES Principal payments on subscription-based liability (203,561) Principal payments on note (39,806)
Interest payments on note (510)
Net Cash Used by Capital and Related Financing Activities (243,877)

CA SH FLOWS FROM INVESTING A CTIVITIES
Interest Received 409,825
Net Cash Provided by Investing Activities 409,825
NET CHA NGES IN CA SH A ND CA SH EQUIVALENTS 5,727,067
Cash and Cash Equivalents, beginning of year 8,317,165
Cash and Cash Equivalents, end of year 14,044,232 $

RECONCILIA TION OF OPERA TING INCOME TO NET CA SH

PROVIDED BY OPERATING ACTIVITIES
Operating Income 6,583,599 $
Adjustments to Reconcile Operating Income to
Net Cash Provided by Operating Activities:

Depreciation Expense 434,108
(Increase) Decrease in Accounts Receivable (1,831)
(Increase) Decrease in Prepaid Costs 15,216
(Increase) Decrease in Inventory 7,091
(Increase) Decrease in Due From Other Governments (73,572) (Increase) Decrease in Deposits Held with Others (949,516) Increase (Decrease) in Accounts Payable 291,985
Increase (Decrease) in Accrued Liabilities 16,017
Increase (Decrease) in Claims and Judgments (732,888)
Increase (Decrease) in Compensated Absences (29,090)
Total Adjustments (1,022,480)
Net Cash Provided by Operating Activities 5,561,119 $

282
City of Murrieta

Statement of Fiduciary Net Position
June 30, 2025

The accompanying notes are an integral part of these financial statements. -31-
Custodial Fund
Successor
Agency Private-
Purpose Trust
Fund
ASSETS
Pooled Cash and Investments 214,837 $ 2,442,581 $ Receivables, net:

Accounts 25,802 -
Taxes 80,221 -
Prepaid Costs - 405
Restricted Assets:

Cash and Investments with Fiscal Agents 11,435,176 2,298,973 Total Assets 11,756,036 4,741,959

LIABILITIES
Accounts Payable 18,520 12,323
Accrued Liabilities - 20,021
Deposits Payable 12,848 -
Interest Payable - 445,507
Long-Term Liabilities:

Due in One Year - 1,819,978
Due in More than One Year - 27,036,491 Total Liabilities 31,368 29,334,320

NET POSITION (DEFICIT)
Restricted for Other Organizations 11,724,668 -
Unrestricted for Successor Agency - (24,592,358) Total Net Position (Deficit) 11,724,668 $ (24,592,358) $

283
City of Murrieta

Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2025

The accompanying notes are an integral part of these financial statements. -32-
Custodial Fund
Successor
Agency Private-
Purpose Trust
Fund

A DDITIONS
Taxes 1,817,673 $ 2,835,322 $
Interest Income 557,496 120,971
Total Additions 2,375,169 2,956,293

DEDUCTIONS
Administrative Costs 303,298 47,792
Residual Commitments of the Agency 508,453 141,379 Interest on Bonds 854,356 1,024,018
Total Deductions 1,666,107 1,213,189
CHANGES IN NET POSITION 709,062 1,743,104
Net Position (Deficit), beginning of year 11,015,606 (26,335,462) Adjustment - correction of error -
Net Position (Deficit), beginning of year, as restated 11,015,606 (26,335,462) Net Position (Deficit), end of year 11,724,668 $ (24,592,358) $

284

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285
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-33-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A) Reporting Entity

The City of Murrieta (the City) is a reporting entity, which consists of the primary government and component units:

Reporting Entity:

Primary Government
City of Murrieta
Component Units:

Murrieta Financing Authority
Murrieta Fire Protection District
Murrieta Community Services District
Murrieta Public Library Board
Murrieta Housing Authority

As required by accounting principles generally accepted in the United States of America, these financial statements present the City of Murrieta (the primary government) and its component units. Component units are entities for which the government is considered to be financially accountable.

The City was incorporated on July 1, 1991, under the laws of the state of California and enjoys all the rights and privileges applicable to a General Law City. It is governed by an elected five- member board. The City operates under a council-manager form of government and currently provides a wide variety of services to its ci tizens, including police, fire, public services, community development, general and administrativ e, and other services. As required by accounting principles generally accepted in the United States of America, these financial statements present the City and its component units. Component units are legally separate entities that meet any one of the following three tests:

1. The City appoints the voting majority of the board of the potential component unit and is able to impose its will on the component unit and/or is in a relationship of financial benefit or burden with the potential component unit.

2. The potential component unit is fiscally dependent upon the City.

3. The financial statements would be misleading if data from the potential component units were not included.

Component units are legally separate entities. However, the City Council serves in separate sessions as the governing body of these related agencies and they are, in substance, part of the City’s operations, so data from these units are combined with data of the City. Based on the above criteria, the accompanying financial statements include the financial activities of the entities listed below.

286
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-34-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

A) Reporting Entity, (Continued)

Blended Component Units

The Murrieta Financing Authority (the Authority) was formed on March 1, 1993, by a joint powers agreement between the City and the Redevelopment Agency of the City of Murrieta (the Agency). The City appoints the voting majority of the board and the City has operational responsibility for the Authority. It was created for the purpose of assisting in the financing and refinancing of certain redevelopment activities of the Agency and certain public programs and projects of the City and for the purpose of aiding in the financing and refinancing of public capital improvements. The operations of the Authority are reported as a debt service fund.

The Murrieta Fire Protection District (MFPD) was an independent (self-governed) special district formed pursuant to the State of California Health and Safety Code commencing with Section 13800, for the purpose of providing fire protection services. Effective July 1, 1993, the MFPD was reorganized as a subsidiary district of the City of Murrieta. The MFPD continues to operate as a special district under the same Health and Safety Code provisions. As a subsidiary district, the City Council of the City of Murrieta now serves as MFPD’s governing Board of Directors and the City has operational responsibility for the District. The operations of the MFPD are reported as a special revenue fund.

On June 25, 1992, the Board of Supervisors of the County of Riverside adopted Resolution No. 50 90 to form the Murrieta Community Services District (MCSD) as a subsidiary of the City of Murrieta and detach the area within the City boundaries from the county service area (CSA143). The formation of MCSD and the detachment from CSA143 were effective on July 1, 1993. As a subsidiary district, the City Council of the City of Murrieta now serves as the District’s governing Board of Directors and the City has operational responsibility for the District. The operations of the Community Services District are reported as a special revenue fund.

The Murrieta Public Library’s (the Library) board was established on February 17, 1998, by City Ordinance 185. The City provides for the Murrieta public library system and adopted the provisions of an act of the legislature of the state of California entitled “Municipal Libraries” as set forth in Education Code Section 18900 et seq. regarding the regulation and maintenance of a public library system. The City Council of the City of Murrieta now serves as the Library’s governing Board of Directors and the City has operational responsibility for the Library. The operations of the Murrieta Public Library are reported as a special revenue fund.

On April 5, 2011, the City established the Murrieta Housing Authority (the Housing Authority).

The majority of the Housing Authority’s activities began when it became the successor housing entity to the former Murrieta Redevelopment Agency. The City Council of the City of Murrieta serves as the governing Board of Directors and the City has operational responsibility for the Housing Authority. The operations of the Housing Authority are reported as a special revenue fund.

Separate financial statements are not prepared for the component units. 287
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-35-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

B) Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities that rely, to a significant extent, on fees and charges for support. Certain eliminations have been made as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34 in regard to interfund activities, payables, and receivables. All internal balances in the statement of net position have been eliminated. In the statement of activities, all interfund services have been eliminated.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead, as general revenues.

The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Governmental 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.

Separate financial statements for the City’s governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and other governmental and proprietary funds in the aggregate for nonmajor funds. Fiduciary fund statements, even though excluded from the government-wide financial statements, include financial information for private-purpose trust funds and custodial funds.

C) Basis of Accounting and Measurement Focus

The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.

288
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-36-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

C) Basis of Accounting and Measurement Focus, (Continued)

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary funds financial statements. Under t he economic resources measurement focus, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on their statements of net position. Operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The City’s fiduciary fund financial statements report custodial fund and private purpose trust fund. Custodial funds are used to account for situations where the government’s role is purely custodial.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources measurement focus, only current assets, current liabilities, and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of “available spendable resources.” Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus.

Under the modified accrual basis of accounting, revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.

However, debt service expenditures, as well as expenditures related to compensated absences, claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

289
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-37-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

C) Basis of Accounting and Measurement Focus, (Continued)

The City reports the following major governmental funds:

The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The Fire District Special Revenue Fund accounts for proceeds of property taxes and other sources that are restricted by law or administrative action to expenditures for the operation of the City’s fire stations.

The Other Grants Special Revenue Fund accounts for revenues and expenditure made under state and local grant programs.

The Development Impact Capital Projects Fund accounts for developer contributions and other revenue sources that are restricted by law or administrative action to expenditures for development purposes.

The City also reports the following fund types:

Governmental Fund Types

Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments, expendable trusts, or major capital projects) that are restricted to expenditures for special purposes.

Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major facilities other than those financed by Proprietary, Special Assessment and/or Trust Funds.

Debt Service Funds are used to account for the accumulation of resources for, and the payment of, long-term debt principal, interest and related costs other than those being financed by proprietary funds.

Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government’s programs - that is, for the benefit of the government or its citizenry. These funds are a type of governmental fund and are typically used to account for endowments.

Proprietary Fund Types

Internal Service Funds – These funds account for goods and services provided by one City department to other City departments or agencies. These activities include self- insurance and information technology.
290
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-38-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

C) Basis of Accounting and Measurement Focus, (Continued)

Fiduciary Fund Types

The Private-Purpose Trust Fund is used to account for the balances and transactions of the Successor Agency to the Murrieta Redevelopment Agency (Successor Agency). The Successor Agency private purpose trust fund accounts for the assets and liabilities of the former redevelopment agency and its allocated revenue to pay estimated installment payments of enforceable obligations until the obligations of the former redevelopment agency are paid in full and assets have been liquidated.

Custodial funds are used to report fiduciary activities that are not required to be reported in private-purpose trust funds. The City uses the custodial fund to account for various assessment districts for which the City acts as an agent for debt service activity.

Proprietary funds distinguish operating revenues and expenses from nonoperating items.

Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with proprietary fund’s principal ongoing operations.

The principal operating revenues of the City’s internal service funds are charges to funds for services. Operating expenses for the internal service funds include the costs of sales and services, maintenance of capital assets, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

The City’s internal service funds are presented in the proprietary fund financial statements.

Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal service funds are consolidated in the governmental activities column when presented in the governmentwide financial statements. To the extent possible, the cost of these services is reported in the appropriate functional activity (general government, public safety, community development, etc.).

D) Implementation of New Accounting Pronouncements

The City adopted the Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences . This standard provides a unified approach for recognizing and measuring all types of compensated absences, such as vacation and sick leave. The related disclosures required by this standard are included in Note 7.

The City adopted the Governmental Accounting Standards Board (GASB) Statement No 102, Certain Risk Disclosures . This statement requires governments to evaluate whether any events related to significant concentrations or constraints have occurred, are occurring or likely to occur within 12 months of issuing the financial statements. As part of this evaluation, the City reviewed potential risks and did not identi fy any events or conditions that meet this criteria for disclosure under GASB Statement No. 102.
291
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-39-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

E) Cash and Investments

Investments for the City, as well as for its component units, are reported at fair value. The State Treasurer’s Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.

For purposes of the statement of cash flows, cash equivalents represent demand deposits of proprietary funds held in financial institutions or in cash management pools where funds can be added or withdrawn at any time without prior notice or penalty and cash equivalents are highly liquid investments with a maturity of three months or less from the date of purchase.

F) Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of the interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.”

Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in the general fund to indicate that they are not available for appropriation and are not expendable available financial resources.

All trade and property tax receivables are shown net of an allowance for uncollectibles.

Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available. Available means when due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities of the current period. The County of Riverside collects property taxes for the City. Tax liens attach annually as of 12:01 a.m. on the first day in January preceding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent on August 31.

G) Inventories and Prepaid Items

All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.
292
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-40-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

H) Restricted Assets

Certain proceeds of debt issues, as well as certain resources set-aside for their repayment, are classified as restricted assets in the financial statements because their use is limited by applicable bond covenants.

I) Capital Assets and Right-to-Use Lease Assets

Capital assets, which include property, plant, equipment, right-to-use lease and subscription assets and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the Governmental Activities column of the government-wide and proprietary fund financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.

Donated capital assets received are recorded at acquisition value as of the date received.

Right-to-use lease/subscription assets, which include equipment and vehicles, follow the same capitalization thresholds as capital assets. Right-to-use lease/subscription assets are recorded at the amount of the initial measurement of the lease/subscription liabilities and modified by any lease/subscription payments made to the lessor at or before the commencement of the lease term.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant, and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated useful lives:

Buildin
gs and improvements 20 to 50 years
Equipment 5 to 20 years
Furniture and fixtures 10 to 20 years
Infrastructure 20 to 50 years
Lease and subscription assets Life of associated contract

J) Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to future periods and will not be recognized as an outflow of resources (expense/expenditure) until that time. The City has the following items that qualify for reporting in this category:

293
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-41-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

J) Deferred Outflows/Inflows of Resources, (Continued)

 Deferred loss on refunding, net of accumulated amortization. A deferred loss on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

 Deferred outflows related to pensions and other postemployment benefits (OPEB) equal to employer contributions made after the measurement date of the net pension liability and OPEB liability. These amounts will be recognized in the next fiscal year.

 Deferred outflows related to pensions and OPEB for differences between expected and actual experience. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions and OPEB through the plans.

 Deferred outflows from OPEB resulting from changes in assumptions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with OPEB through the plans.

 Deferred outflows related to pensions for the changes in employer’s proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

In addition to liabilities, the Statement of Net Position and the Governmental Funds Balance Sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net asset that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:

 Deferred inflows from unavailable revenues, which arises only under a modified accrual basis of accounting, is reported only in the governmental funds balance sheet.

The governmental funds report unavailable revenues from three sources, which are taxes, interest, and grants. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

 Deferred inflows from lease receivable is in itially measured at the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

294
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-42-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

J) Deferred Outflows/Inflows of Resources, (Continued)

 Deferred inflows related to OPEB for differences between expected and actual experience. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with OPEB through the plans.

 Deferred inflows from pensions and OPEB resulting from changes in assumptions.

These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions and OPEB through the plans.

 Deferred inflows related to pensions for the changes in proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts are amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans.

 Deferred inflows related to pensions and OPEB resulting from the net differences between projected and actual earnings on plan investments of the pension and OPEB plans’ fiduciary net position. These amounts are amortized over five years.

K) Lease Receivable

The City measures lease receivable at the present value of lease payments expected to be received during the lease term. Interest revenue is recognized ratably over the contract term.

L) Unearned Revenue

Unearned revenues are reported in connection with resources that have been received but not yet earned.

M) Compensated Absences

All vacation and sick leave pay is accr ued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

Murrieta has six employee bargaining groups, and each group has its own Memorandum of Understanding (MOU). Management is unrepres ented and has a compensation plan. All MOUs or plans provide for annual leave (used for both vacation and sick leave) or vacation leave when taken, with a cash-out of unused/accrued leave upon termination.

295
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-43-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

M) Compensated Absences, (Continued)

Maximum accrual limits for each MOU or plan are:

Murrieta General Employees Association (MGEA) 544 Hours Murrieta Police Officers Association (MPOA) 544 Hours
Murrieta Police Management Association (MPMA) 544 Hours Murrieta Supervisors Association
Management/Confidential (M/C):
594 Hours
Confidential 644 Hours
At-will Employees 1,000 Hours

The Murrieta Firefighters Association (MFA) and Murrieta Fire Management Association (MFMA) 24 hour battalion chiefs’ vacation leave maximum accruals are limited to the equivalent of two years’ accrual (annual accruals vary with longevity of employee). MFMA 40- hour battalion chiefs’ maximum annual leave accrual is limited to 644 hours.

Sick leave is payable when an employee is unable to work because of illness. Employees with continuous employment of five years or more may receive a payment of 25% of unused sick leave when they resign or retire at the then rate of compensation. Employees with continuous employment over 10 years may receive a payment of 50% of the unused sick leave when they resign or retire at the then rate of compensation. Police management employees with continuous employment over 15 years may re ceive a payment of 75% of the unused sick leave when they resign or retire.

The liability for compensated absences will be paid in future years from the Fire, Library, Community Services District, Information Technology, and General Funds.

N) Long-Term Obligations

Long-term debt and other long-term obligations are reported as liabilities in the governmental activities and proprietary fund statements of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the governmental fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses.

296
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-44-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

O) Net Position Flow Assumption

Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position.

P) Fund Balances

In the fund financial statements, governmental funds report the following fund balance classification:

Nonspendable Fund Balance – Amounts that cannot be spent either because they are in nonspendable form or are required to be maintained intact.

Restricted Fund Balance – Amounts that are constrained to specific purposes by state or federal laws, or externally imposed conditions by grantors or creditors.

Committed Fund Balance – The City Council, as the City’s highest level of decision-making authority, may commit fund balance for specific purposes pursuant to constraints imposed by resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council action to commit fund balance needs to occur within the fiscal reporting period; however, the amount can be determined subsequently.

Assigned Fund Balance – Amounts that are constrained by the City’s intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. The City’s fund balance policy delegates the authority to assign amounts to be used for specific purposes to the City Manager or designee for the purpose of reporting these amounts in the annual financial statements.

Unassigned Fund Balance – These are either residual positive net resources of fund balance in excess of what can properly be classified in one of the other four categories, or negative balances. The General Fund is the only fund that reports a positive unassigned fund balance.

When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balance are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the governing board has provided otherwise in its commitment or assignment actions.

297
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-45-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

Q) Pensions

For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retire ment System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

R) Postemployment Benefits Other Than Pensions

For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB plans and additions to/deductions from th e OPEB plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, the City’s OPEB plans recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value.

S) Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

2) STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

Deficit Fund Balances

The following funds had deficit fund balances at June 30, 2025:

Deficits
Nonmajor Governmental Funds:

Federal Grants (1,774,118) $
Block Grants (364,325)
SLESF (31,321)
Reimbursement Agreement Fund (26,604)

These deficits will be eliminated by future revenues or transfers from General Fund. 298
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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2) STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued)

Expenditures in Excess of Appropriations

The following departments/funds reported expenditures in excess of appropriations at June 30, 2025:

Final Budget Actual
Variance with
Final Budget
General Fund
Animal Control 522,982 $ 523,587 $ (605) $ Emergency Services - 32,412 (32,412) Human Resources 1,807,861 1,845,690 (37,829) City Clerk 1,558,343 1,729,560 (171,217) Police Communications 5,963,240 6,320,133 (356,893) Fire Operations 5,166,959 5,607,264 (440,305) Facilities Maintenance 1,622,167 1,669,260 (47,093) Debt Service - Principal - 1,097,054 (1,097,054) Debt Service - Interest 25,699 95,454 (69,755) State Gas Tax
Capital Outlay 180,000 739,233 (559,233) Measure A
Capital Outlay - 3,192,463 (3,192,463) AQMD
Public Works 327 23,338 (23,011) Block Grants
General Government 101,500 389,028 (287,528) Seized Assets Forfeiture
Capital Outlay 42,145 86,619 (44,474) SLESF
Public Safety 319,786 377,793 (58,007) Debt Service - Principal - 14,978 (14,978) TUMF
Capital Outlay 10 59,011 (59,001) Community Service District
Parks and Recreation 14,018,113 14,074,057 (55,944) Capital Outlay - 374,044 (374,044) RMRA
Public Works 1,920 6,091 (4,171) Capital Outlay - 1,981,421 (1,981,421) Other Grants
Public Safety 221,677 244,789 (23,112) Parks and Recreation 56,433 205,122 (148,689) Capital Outlay 7,975 201,702 (193,727) Developer Agreement
Parks and Recreation - 2,802 (2,802) Capital Outlay - 212,722 (212,722) Opioid Settlement
General Government 3 197,263 (197,260) Prop 68
General Government - 562 (562) Capital Outlay - 247,065 (247,065) Community Facilities District
Capital Outlay - 761,474 (761,474) Area Drainage
Capital Outlay - 97,918 (97,918) 2022 A LARB
Debt Service - principal 2,290,000 2,300,000 (10,000) Debt Service - interest 1,204,250 1,204,555 (305)

299
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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3) CASH AND INVESTMENTS

As of June 30, 2025, cash and investments were reported in the accompanying financial statements:

Statement of Net Position
Cash and Investments 290,654,513 $
Restricted:

Cash and Investments with Fiscal Agent 5,580,204
Statement of Net Position Fiduciary Funds
Cash and Investments 2,657,418
Restricted:

Cash and Investments with Fiscal Agent 13,734,149
Total 312,626,284 $

Cash and investments as of June 30, 2025, consisted of the following:

Cash on hand 7,700 $
Deposits with Financial Institutions (488,904)
Investments 313,107,488
Total 312,626,284 $

Investments Authorized by the California Government Code and the City’s Investment Policy

The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

300
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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3) CASH AND INVESTMENTS, (Continued)

Authorized Investment Type
M aximum
Maturity
Percentage of
Portfolio
Investment in
One Issuer
United States Treasury Obligations 5 Years None None
United States Government Sponsored
Agency Securities 5 Years 30% 20%
Mortgage-Backed Securities 5 Years 20% 5%
Repurchase Agreements 1 Year 20% None
Commercial Paper 270 Days 25% 5%
Banker's Acceptances 180 Days 30% 5%
Medium Term Notes 5 Years 30% 5%
Supranational 5 Years 30% 10%
State of California Local Agency
Investment Fund (LAIF) None None None
California Local Agency Bonds 5 Years 30% 5%
Money Market Funds 5 Years 20% 10%
Mutual Funds 5 Years 20% 10%
Negotiable Certificates of Deposits 5 Years 30% 5%
Federally Insured Time Deposits
(Non-Negotiable Certificates of Deposits) 5 Years 20% None Collateralized Non- Negotiable
Certificates of Deposits 5 Years 20% None
Certificate of Deposit Placement
Service (CDARS) 5 Years 30% None
Collateralized Bank Deposits 5 Years None None

Investments Authorized by Debt Agreements

The above investments do not address investment of debt proceeds held by a bond trustee.

Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy.

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flow s from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flows and liquidity needed for operations. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. As of June 30, 2025, the City had the following investments and original maturities:

301
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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3) CASH AND INVESTMENTS, (Continued)

6 Months
or Less
6 Months to 1
Year 1 to 3 Years 3 to 5 Years Total
U.S. Treasury Securities 12,683,440$ 4,461,064 $ 19,932,865 $ 16,122,502 $ 53,199,871 $ Federal Agency Securities 2,335,489 3,018,635 29,505,577 10,675,019 45,534,720 Money Market Mutual Fund 138,410,560 - - - 138,410,560 LAIF 2,002,077 - - - 2,002,077 Asset-Backed Securities - 70,709 3,393,620 10,142,307 13,606,636 Commercial Paper - - - - - Medium-Term Notes 3,796,816 4,746,416 27,740,931 1,524,289 37,808,452 Negotiable Certificates of Deposit - - - - - Supranational - - 1,827,225 - 1,827,225 Cash with Fiscal Agent:

Money Market Mutual Fund 20,717,947 - - - 20,717,947 Total 179,946,329 $ 12,296,824 $ 82,400,218 $ 38,464,117 $ 313,107,488 $ Remaining Investment Maturities

Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating, by Standard & Poor’s, as of fiscal year end for each investment type.

Total
Minimum
Legal Rating AAA AA+ Other
Exempt/
Not Related
U.S. Treasury Securities 53,199,871 $ N/A - $ 53,199,871$ - $ - $ Federal Agency Securities 45,534,720 N/A - - - 45,534,720 Money Market Mutual Fund 138,410,560 AAA - - 1,393,264 137,017,296 LAIF 2,002,077 N/A - - - 2,002,077 Asset-Backed Securities 13,606,636 AA 11,059,209 - - 2,547,427 Commercial Paper - A - - - - Medium-Term Notes 37,808,452 A - - 36,289,098 1,519,354 Negotiable Certificates of Deposit - A - Supranational 1,827,225 AA 1,827,225 - - - Cash with Fiscal Agent:

Money Market Mutual Funds 20,717,947 AAA 20,717,947 - - - Total 313,107,488 $ 33,604,381 $ 53,199,871 $ 37,682,362 $ 188,620,874 $ Ratings as of Fiscal Year End

The actual ratings for the “Other” category above are as follows:

A A+/AA+ A- AA- AA Total
Medium-Term Notes 13,064,630 $ 14,408,386 $ 2,524,134 $ 4,882,534 $ 1,409,414 $ 36,289,098 $ AAAm Total
Money Market Mutual Fund 1,393,264 $ 1,393,264 $

302
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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3) CASH AND INVESTMENTS, (Continued)

Credit Risk (continued)

The City’s investment policy imposes restrictions on percentages that the City can invest in certain types of investments and with any one issuer for certain types of investments. GASB 40 requires a separate disclosure if any single issuer comprises more than 5% of the total investment value. As of June 30, 2025, the City had investments in Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage Corporation (FHLMC) and Farm Credit System in excess of 5% of total investments.

Custodial Credit Risk

The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The California Government Code requires California banks and savings and loan associations to secure the City’s deposits by pledging government securities with a value of 110% of a City’s deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City’s total deposits. The City Treasurer may waive the collateral requirement for deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). The collateral for deposits in federal and state-chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the state of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California, as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an “Agent of Depository” has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository is considered to be held for, and in the name of, the local governmental agency.

Investments in State Investment Pool

The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the state of California. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with state statute. The state Treasurer’s Office audits the fund annually. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts bas ed upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

303
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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3) CASH AND INVESTMENTS, (Continued)

Fair Value Measurements

The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted prices of similar assets in active markets and Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2025:

Quoted Prices
Level 1
Observable Inputs
Level 2
Unobservable
Inputs
Level 3 Total
U.S. Treasury Securities - $ 53,199,871$ - $ 53,199,871$ Federal Agency Securities - 45,534,720 - 45,534,720 Asset-backed Securities 13,606,636 13,606,636 Commercial Paper - - - - Medium-Term Notes - 37,808,452 - 37,808,452 Supranational - 1,827,225 - 1,827,225 Total Leveled Investments - $ 151,976,904$ - $ 151,976,904 LAIF* 2,002,077
Money Market Mutual Funds* 159,128,507
Total Investment Portfolio 313,107,488$
*Not subject to fair value measurements.

4) LOANS RECEIVABLE

In October 2020, the City sold property that resulted in a note receivable of $4,500,000 due to the City. $2,400,000 of the note is payable in monthly interest and principal payment of $17,957 and bears interest at 4.25% per annum. Each monthly payment is due on the first day of each calendar month. The remaining $2,100,000 of the note is paid by sales tax generated by and directly attributable to business owned or operated by the borrower, or owned or operated by an affiliate of the borrower, which are located on the property. The balance of this note as of June 30, 2025, is $2,844,732.

In February 2004, the former Murrieta Redevelopment Agency (Agency) entered into a Participation Agreement with a California limited partnership for the development, construction and operation of a 64-unit apartment complex of which units shall be available to qualified low and moderate income tenants. Under the terms of the agreement, the Agency loaned $610,046 of its low and moderate income housing funds toward the actual cost for the development, construction, and operation of the project. The loan is for a term of not more than fifty-five years and bears interest at a rate of one percent (3%).

304
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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4) LOANS RECEIVABLE (Continued)

The agreement is secured by a deed of trust on the property. Due to the dissolution of redevelopment agencies by AB 26x1, the Housing Authority assumed responsibility of the Agency notes receivable. The balance of the loan outstanding at June 30, 2025 was $512,420.

Payments on the note are based on a percentage of residual receipts as defined in the agreement. Any unpaid balance is due and payable at the maturity date.

In April 2010, the former Murrieta Redevelopment Agency (Agency) entered into a Disposition and Development Agreement (DDA) with a developer for the development, construction and operation of 40 units which shall be rented exclusively to extremely low income, very low income and low income households. As part of the DDA, the Developer promised to pay the Agency $2,222,222 and is evidenced by a nonrecourse residual receipts promissory note.

The loan is for a term of not more than fifty-five years and bears interest at a rate of one percent (3%). The agreement is secured by a deed of trust on the property. Due to the dissolution of redevelopment agencies by AB 26x1, the Housing Authority assumed responsibility of the Agency notes receivable. The principal balance of the loan outstanding at June 30, 2025 was $2,222,222. Payments on the loan are based on a percentage of the Partnership’s surplus cash as defined in the agreement. Any unpaid balance is due and payable at the maturity date.

In June of 2023, the Murrieta Housing Authority finalized an agreement with National Community Renaissance of California (National CORE) to a loan using ARPA funds of $1,500,000 and a Housing Authority Loan for $6,142,807. These loans provide financing for the construction of affordable housing on the property known as 24960 Adams Avenue in the City of Murrieta. Both loans are for a term of not more than sixty-five years and bears interest at a rate of one percent (3%). The Housing Authority Note is secured by the Housing Successor Deed of Trust. As of June 1, 2023, only $6,142,807 was loaned to National CORE, the ARPA Loan was funded on June 17, 2025. Payments on the loan are based on a percentage of the Partnership's surplus cash as defined in the agreement under the Housing Successor's Share of Residual Receipts. Any unpaid balance is due and payable at the maturity date. All payments applied to this Note will be applied first to penalties and late fees, then to interest, then to reduce the principal amount owed. As of June 30, 2025, the principal balance of the loan outstanding is $7,642,807.

Housing loans receivable of $20,000 in the Housing Authority Special Revenue Fund consist of various low-interest home loans made to low-income families.

305
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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5) LEASE RECEIVABLE

As of June 30, 2025, the City had 7 active land leases. The leases have receipts that range from $7,481 to $54,915 and interest rates that range from 0.8927% to 2.5833%. As of June 30, 2025, the total combined value of the lease receivable is $3,039,374, the total combined value of the short-term lease receivable is $117,598, and the combined value of the deferred inflow of resources is $2,739,774.

Certain leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases.

Total future minimum lease payments to be received under lease agreements are as follows:

Year Ending June 30, Principal Interest Total
2026 117,598 $ 70,985 $ 188,583 $ 2027 101,468 68,740 170,208 2028 109,227 66,427 175,654 2029 117,350 63,937 181,287 2030 125,854 61,259 187,113 2031 - 2035 709,850 260,037 969,887 2036 - 2040 679,937 177,190 857,127 2041 - 2045 447,492 103,047 550,539 2046 - 2050 292,712 63,655 356,367 2051 - 2055 337,886 21,077 358,963 Totals 3,039,374 $ 956,354 $ 3,995,728 $

Remainder of this page left intentionally blank.
306
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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6) CAPITAL ASSETS

Capital asset activity for the year ended June 30, 2025, is as follows:

Governmental Activities
Beginning
Balance Additions Deletions Transfers
Ending
Balance
Capital Assets, not being- depreciated:

Land 178,561,254 $ - $ - $ 3,515,665$ 182,076,919$ Construction in progress 12,738,266 15,212,474 - (11,403,454) 16,547,286 Total capital assets, not being depreciated 191,299,520 15,212,474 - (7,887,789) 198,624,205 Capital assets being depreciated/amortized:

Buildings and improvements 59,609,884 45,872 (113,718) 924,956 60,466,994 Improvements to land 3,328,592 - - - 3,328,592 Parkland improvements 37,833,109 - - 6,913,079 44,746,188 Equipment 37,849,268 1,156,004 (1,647,417) 1,419,506 38,777,361 Infrastructure 412,729,265 - - 2,145,913 414,875,178 Right-to-use leases 2,988,333 1,245,623 (392,191) - 3,841,765 Right-to-use subscriptions 2,756,655 694,584 (718,832) - 2,732,407 Total capital assets being depreciated/amortized 557,095,106 3,142,083 (2,872,158) 11,403,454 568,768,485 Less: accumulated depreciation:

Buildings and improvements 29,042,037 1,504,443 (11,372) - 30,535,108 Improvements to land 1,722,634 114,892 - - 1,837,526 Parkland improvements 22,567,233 2,150,050 - - 24,717,283 Equipment 24,372,798 2,766,318 (1,557,996) - 25,581,120 Infrastructure 226,246,743 10,869,893 - - 237,116,636 Less: accumulated amortization:

Right-to-use leases 1,104,311 642,792 (392,191) - 1,354,912 Right-to-use subscriptions 867,359 874,741 (624,395) - 1,117,705 Total accumulated depreciation and amortization 305,923,115 18,923,129 (2,585,954) - 322,260,290 Total capital assets being depreciated/amortized, net 251,171,991 (15,781,046) (286,204) 11,403,454 246,508,195 Government activities capital assets, net 442,471,511 $ (568,572) $ (286,204) $ 3,515,665 $ 445,132,400$

Depreciation and amortization expense was charged to functions/programs of the primary government as follows:

Governmental Activities:

General Government 1,160,717 $
Public Safety 3,449,292
Community Development 116,056
Parks and Recreation 2,575,578
Public Works 11,187,379
Internal Service Fund 434,107
Total Depreciation and Amortization Expense 18,923,129$

307
City of Murrieta
Notes to the Financial Statements
For the Year Ended June 30, 2025
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7) LONG-T

ERM LIABILITIES
The followin
g is a schedule of changes in long-term liabilities of the City for the fi scal year ended June 30, 2025:

Beginning
Balance Additions D
eletions
Ending
Balance
Due Within
One Year
Other Debt:

Lease Revenue Refunding
Bonds, Series 2020A 2,005,000$ -$ (640,000)$ 1,365,000$ 670,000$ Premium 2
09,504 - (73,942) 135,562 73,942
Local Agency Revenue
Bonds, Series 2016B 6,040,000 - (435,000) 5,605,000 445,000 Local Agency Revenue
Bonds, Series 2022 25,230,000 - (2,300,000) 22,930,000 2,405,000 Premium 2,177,136 - (217,713) 1,959,423 217,713
Private Placement:

Local Agency Revenue
Bonds, Series 2016A 33,510,000 - (2,465,000) 31,045,000 2,555,000 Direct Borrowings
Note payable 4,736,137 - (468,804) 4,267,333 446,333 Lease Liability 1,864,052 1,245,843 (716,603) 2,393,292 586,242 Subscription Liability 1,751,771 498,642 (749,997) 1,500,416 485,788 Other Long-Term Liabilities:

Claims and Judgments 13,195,313 1,296,957 (2,029,845) 12,462,425 1,869,364 Compensated Absences 7,363,387 565,219 - 7,928,606 5,775,525 Total Long-Term Debt 98,082,300$ 3,606,661$ (10,096,904)$ 91,592,057$ 15,529,907$ Lease Reve
nue Bonds, Series 2020
On February 27, 2020
, the Murrieta Financing Authority issued $3,790,000 of Lease Refunding Bonds, Series 2020A to advance refund the 2007 Certificates of Participation. The bonds consist serial bonds with annual maturity dates from May 1, 2022 through May 1, 2027, with interest rates ranging from .89% to 1.100%. Interest is payable semiannually beginning May 1, 2020. The Bonds have no reserve requirement. The balance outstanding on the Bonds at June 30, 2025 was $1,365,000.

The following is a schedule by years of future minimum debt service requirements as of June 30, 2025:

Year Ending June 30, Principal Interest Total
2026 670,000$ 54,600$ 724,600$
2027 695,000 27,800 722,800
Totals 1,365,000$ 82,400$ 1,447,400$
308
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-56-
7) LONG-TERM LIABILITIES, (Continued)

2016 Local Agency Refunding Bonds Series B

On June 2, 2016, the Murrieta Financing Authority issued $8,850,000 Local Agency Refunding Bonds 2016 Series B (the “2016B Bonds”). The 2016B Bonds were issued to (i) acquire $3,195,000 City of Murrieta Community Facilities District No. 2004-1 (“CFD 2004-1”) 2016 Special Tax Refunding Bonds; $1,810,000 Community Facilities District 2004-2 (“CFD 2004- 2”) 2016 Special Tax Refunding Bonds; and $3,845,000 Community Facilities District 2004-3 (“CFD 2004-3”) 2016 Special Tax Refunding Bonds, – (collectively, the “Local Obligations” or the “Districts”), (ii) to purchase a municipal bond insurance policy from Build America Mutual Assurance Company guaranteeing the scheduled payment of principal and interest on the Bonds maturing on and between September 1, 2028 and September 1, 2035, inclusive, and (iii) to purchase a debt service reserve insurance policy relating to the Bonds.

The 2016B Bonds are special obligations of the Authority secured and payable solely from pledged Special Tax Revenues derived by Special Taxes (“Special Taxes”) collected by the Districts from real property within their boundaries and other amounts held under the Fiscal Agent Agreement. The 2016B Bonds are not a debt or liability of the City, the State of California, or any of its political subdivisions and neither the City, the State of California, nor any of its political subdivisions is liable. The Bonds do not constitute indebtedness within the meaning of any constitutional or statutory debt limit or restriction.

Principal ranges from $345,000 to $595,000 maturing annually through September 1, 2035.

The bonds bear interest at rates ranging from 2.0% to 5.0%, due semiannually on March 1 and September 1.

The following is a schedule by years of future minimum debt service requirements as of June 30, 2025:

Year Ending June 30, Principal Interest Total
2026 445,000 $ 182,637 $ 627,637 $
2027 455,000 166,813 621,813
2028 475,000 143,562 618,562
2029 500,000 125,437 625,437
2030 515,000 112,750 627,750
2031 - 2035 2,825,000 302,656 3,127,656 2036 390,000 5,850 395,850
Totals 5,605,000 $ 1,039,705 $ 6,644,705 $

309
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-57-
7) LONG-TERM LIABILITIES, (Continued)

2022 Local Agency Refunding Bonds

On May 12, 2022, the Murrieta Financing Authority issued $29,075,000 Local Agency Refunding Bonds 2022 (the “2022 Bonds”). The 2022 Bonds were issued to (i) acquire $6,710,000 City of Murrieta Community Facilities District No. 2000-1 (“CFD 2000-1”) 2022 Special Tax Refunding Bonds; $4,180,000 Community Facilities District 2001-1 Area A (“CFD 2001-1 A”) 2022 Special Tax Refunding Bonds; $3,170,000 Community Facilities District 2001-1 Area B (“CFD 2001-1 B”) 2022 Special Tax Refunding Bonds, $11,945,000 Community Facilities District No. 2003-1 (“CFD 2003-1”) 2022 Special Tax Refunding Bonds and $3,070,000 Community Facilities District No. 2003-2 (“CFD 2003-2”) 2022 Special Tax Refunding Bonds – (collectively, the “Local Obligations” or the “Districts”), (ii) to purchase a municipal bond insurance policy from Build America Mutual Assurance Company guaranteeing the scheduled payment of principal and interest on the Bonds when due, (iii) to purchase a debt service reserve insurance policy relating to the Bonds to satisfy 50% of the reserve requirement, and (iv) to fund a cash deposit to the reserve fund for the remaining 50% of the reserve requirement. The Local Obligations, together with certain available funds on hand, were issued to refund 2012 Local Agency Bonds.

The 2022 Bonds are special obligations of the Authority secured and payable solely from pledged Special Tax Revenues derived by Special Taxes (“Special Taxes”) collected by the Districts from real property within their boundaries and other amounts held under the Fiscal Agent Agreement. The 2022 Bonds are not a debt or liability of the City, the State of California, or any of its political subdivisions and neither the City, the State of California, nor any of its political subdivisions is liable. The Bonds do not constitute indebtedness within the meaning of any constitutional or statutory debt limit or restriction.

Principal ranges from $1,395,000 to $3,065,000 maturing annually through September 1, 2034. The bonds bear interest at rates ranging from 4.0% to 5.0%, due semiannually on March 1 and September 1.

The following is a schedule by years of future minimum debt service requirements as of June 30, 2025:

Year Ending June 30, Principal Interest Total
2026 2,405,000 $ 1,086,875 $ 3,491,875 $
2027 2,520,000 963,750 3,483,750
2028 2,645,000 834,625 3,479,625
2029 2,770,000 699,250 3,469,250
2030 2,915,000 557,125 3,472,125
2031 - 2035 9,675,000 1,017,125 10,692,125 Totals 22,930,000$ 5,158,750 $ 28,088,750 $

310
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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7) LONG-TERM LIABILITIES, (Continued)

2016 Local Agency Refunding Bonds Series A

On January 20, 2016, the Murrieta Financing Authority issued $49,790,000 Local Agency Refunding Bonds 2016 Series A (the “2016A Bonds”). The 2016A Bonds were issued to (i) acquire $20,100,000 City of Murrieta Community Facilities District No. 2000-2 Area A (“CFD 2000-2 A”) 2016 Special Tax Refunding Bonds; $9,195,000 Community Facilities District 2000-2 Area B (“CFD 2000-2 B”) 2016 Special Tax Refunding Bonds, $14,865,000 Community Facilities District 2003-3 (“CFD 2003-3”) 2016 Special Tax Refunding Bonds, $1,980,000 Community Facilities District No. 2003-4 (“CFD 2003-4”) 2016 Special Tax Refunding Bonds, and $3,650,000 Community Facilities District No. 2005-1 (“CFD 2005-1”) 2016 Special Tax Refunding Bonds – (collectively, the “Local Obligations” or the “Districts”), and (ii) to fund a cash deposit to the reserve fund for the reserve requirement. The 2016A Bonds were issued by a private sale through a placement agent.

The 2016A Bonds are special obligations of the Authority secured and payable solely from pledged Special Tax Revenues derived by Special Taxes (“Special Taxes”) collected by the Districts from real property within their boundaries and other amounts held under the Fiscal Agent Agreement. The 2016A Bonds are not a debt or liability of the City, the State of California, or any of its political subdivisions and neither the City, the State of California, nor any of its political subdivisions is liable. The Bonds do not constitute indebtedness within the meaning of any constitutional or statutory debt limit or restriction.

Principal ranges from $1,065,000 to $3,470,000 maturing annually through September 1, 2035. The bonds bear interest at rates ranging from 3.030% to 3.680%, due semiannually on March 1 and September 1.

The following is a schedule by years of future minimum debt service requirements as of June 30, 2025:

Year Ending June 30, Principal Interest Total
2026 2,555,000 $ 1,064,488 $ 3,619,488 $
2027 2,630,000 981,174 3,611,174
2028 2,710,000 895,430 3,605,430
2029 2,795,000 800,492 3,595,492
2030 2,900,000 695,704 3,595,704
2031 - 2035 16,170,000 1,766,952 17,936,952 2036 1,285,000 23,644 1,308,644
Totals 31,045,000$ 6,227,884 $ 37,272,884 $

311
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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7) LONG-TERM LIABILITIES, (Continued)

Notes Payable

On December 19, 2017, the City entered into a purchase and sale agreement with Southern California Edison to acquire an estimated 6,424 streetlight poles (property) to allow for conversion of the current high-pressure sodium fixtures to energy efficient light-emitting diodes. On April 10, 2018, the City entered into a finance agreement with Banc of America Leasing and Capital LLC to finance the cost of acquiring the streetlight poles. On October 6, 2020, the City entered into a refinancing agreement with Banc of America to take advantage of lower interest rates. Payments are to be paid by the City on each June 1 and December 1 consist of principal and interest at a rate of 3.25% per annum. The balance outstanding on the lease payable at June 30, 2025, was $4,264,000. The following is a schedule by years of future minimum debt service requirements as of June 30, 2025:

Year Ending June 30, Principal Interest Total
2026 443,000 $ 134,989 $ 577,989 $
2027 458,000 120,461 578,461
2028 473,000 105,437 578,437
2029 488,000 89,961 577,961
2030 504,000 73,970 577,970
2031 - 2034 1,898,000 125,205 2,023,205 Totals 4,264,000 $ 650,023 $ 4,914,023 $

On May 21, 2020, the City entered into purchase agreement to purchase copiers. The agreement is payable in annual principal and interest payments of 40,029 through 2026. The agreement bears an annual rate of .8927%. The balance outstanding on the note payable at June 30, 2025, was $3,333. The following is a schedule by years of future minimum debt service requirements as of June 30, 2025:

Year Ending June 30, Principal Interest Total
2026 3,333 $ 3 $ 3,336$
Totals 3,333 $ 3 $ 3,336$

Lease Liability

As of June 30, 2025, the City had 3 active equipment leases. The leases have payments that range from $23,578 to $1,449,740 and interest rates that range from 1.6063% to 3.8650%.

As of June 30, 2025, the total combined value of the lease liability is $1,449,740, the total combined value of the short-term lease liability is $311,029. The combined value of the right to use asset and accumulated amortization as of June 30, 2025 is included within the Lease Class activities table found below.

312
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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7) LONG-TERM LIABILITIES, (Continued)

Lease Liability (continued)

As of June 30, 2025, the City had 1 active other lease. The lease has payments of $111,823 and an interest rate of 2.7520%. As of June 30, 2025, the total combined value of the lease liability is $550,433, the total combined value of the short-term lease liability is $101,292. The combined value of the right to use asset and accumulated amortization as of June 30, 2025 is included within the Lease Class activities table found below.

As of June 30, 2025, the City had 45 active vehicle leases. The leases have payments that range from $789 to $19,894 and interest rates that range from 3.6100% to 8.1396%. As of June 30, 2025, the total combined value of the lease liability is $393,117, the total combined value of the short-term lease liability is $173,921. The combined value of the right to use asset and accumulated amortization as of June 30, 2025 is included within the Lease Class activities table found below.

Asset Class
Lease Asset
Value
Accumulated
Amortization
Vehicles 1,125,263 $ 760,660 $
Equipment 2,049,811 461,651
Other 666,691 132,601
Total Leases 3,841,765 $ 1,354,912 $

Total future minimum lease payments under lease agreements are as follows:

Year Ending June 30, Principal Interest Total
2026 586,242 $ 72,959 $ 659,201 $
2027 571,335 50,977 622,312
2028 502,310 30,411 532,721
2029 448,602 16,251 464,853
2030 194,788 4,216 199,004
2031 90,015 1,446 91,461
Totals 2,393,292 $ 176,260 $ 2,569,552 $

Subscription Liability

As of June 30, 2025, the City had 12 active subscriptions. The subscriptions have payments that range from $1,657 to $391,416 and interest rates that range from 0.0% to 3.480%. As of June 30, 2025, the total combined value of the subscription liability is $1,500,416, and the total combined value of the short-term subscription liability is $485,788. The combined value of the right to use asset, as of June 30, 2025 of $2,732,407 with accumulated amortization of $1,117,705 is included within the right to use subscriptions class of capital assets, found in Note 6.

313
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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7) LONG-TERM LIABILITIES, (Continued)

Subscription Liability (continued)

Total future minimum lease payments under lease agreements are as follows:

Year Ending June 30, Principal Interest Total
2026 485,788 $ 52,954 $ 538,742 $
2027 502,648 34,407 537,055
2028 511,980 21,691 533,671
Totals 1,500,416 $ 109,052 $ 1,609,468 $

Long-term liabilities are generally liquidated by the General Fund.

Fiduciary Fund

As of June 30, 2025, long-term debt is reported in a private-purpose trust fund due to the dissolution of redevelopment agencies by the state of California.

The following is a schedule of changes in long-term debt of the Successor Agency for the fiscal year ended June 30, 2025:

Beginning
Balance Additions Deletions
Ending
Balance
Due Within
One Year
Due Beyond
One Year
Other Debt:
2017 Series A 10,135,000 $ - $ (785,000)$ 9,350,000 $ 815,000 $ 8,535,000 $ Premium 851,098 - (76,218) 774,880 76,218 698,662 2017 Series B 19,920,000 - (930,000) 18,990,000 950,000 18,040,000 Discount (279,651) - 21,240 (258,411) (21,240) (237,171) Total 30,626,447 $ - $ (1,769,978)$ 28,856,469 $ 1,819,978 $ 27,036,491 $

On October 16, 2017, the Successor Agency to the Murrieta Redevelopment Agency issued $14,480,000 Tax Allocation Refunding Bonds, Series 2017 A. The Bonds were issued (i) to currently refund the outstanding principal balances of the Murrieta Redevelopment Project Tax Allocation Bonds of 2002 and Murrieta Redevelopment Project Tax Allocation Bonds of 2005, (ii) to purchase a municipal bond insurance policy and (iii) to pay certain issuance costs.

The Bonds bear interest at rates varying from 2% to 5%. Interest on the bonds is payable semiannually each February 1 and August 1 beginning February 1, 2018. The Bonds are due in annual installments from $545,000 to $1,105,000 through August 2035.

The Successor Agency to the Murrieta Redevelopment Agency is required by the 2017 A Tax Allocation Parity Bonds to maintain reserve funds of the lesser of (1) 125% average annual debt service, (2) maximum annual debt service, and (3) 10% original proceeds. As of the fiscal year ended June 30, 2025, this reserve requirement was met.

314
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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7) LONG-TERM LIABILITIES, (Continued)

Fiduciary Fund (continued)

The following is a schedule by years of future minimum debt service requirements as of June 30, 2025:

Year Ending June 30, Principal Interest Total
2026 815,000 $ 360,731 $ 1,175,731 $
2027 855,000 318,981 1,173,981
2028 895,000 275,231 1,170,231
2029 935,000 229,481 1,164,481
2030 985,000 187,240 1,172,240
2031 - 2035 4,285,000 403,600 4,688,600 2036 580,000 9,063 589,063
Totals 9,350,000 $ 1,784,327 $ 11,134,327 $

On October 16, 2017, the Successor Agency to the Murrieta Redevelopment Agency issued $25,230,000 Tax Allocation Refunding Bonds, Series 2017 B. The Bonds were issued (i) to currently refund the outstanding principal balance of the Murrieta Redevelopment Project Tax Allocation Bonds of, (ii) to purchase a municipal bond insurance policy and (iii) to pay certain issuance costs. The bonds consist of $9,175,000 serial bonds with annual maturity dates from August 1, 2018 through August 1, 2027, with interest rates ranging from 1.60% to 3.25%, term bonds of $5,165,000 with an interest rate of 3.625% and annual maturity dates from August 1, 2028 through August 1, 2032 and term bonds of $5,615,000 with an interest rate of 3.75% and term bonds of $10,440,000 with annual maturity dates from August 1, 2033 through August 1, 2037. Interest is payable semiannually beginning February 1, 2018.

The Successor Agency to the Murrieta Redevelopment Agency is required by the 2017 B Tax Allocation Parity Bonds to maintain reserve funds of the lesser of (1) 125% average annual debt service, (2) maximum annual debt service, and (3) 10% original proceeds. As of the fiscal year ended June 30, 2025, this reserve requirement was met.

The following is a schedule by years of future minimum debt service requirements as of June 30, 2025:

Year Ending June 30, Principal Interest Total
2026 950,000 $ 672,588 $ 1,622,588 $
2027 975,000 643,103 1,618,103
2028 1,010,000 611,457 1,621,457
2029 1,045,000 576,102 1,621,102
2030 1,080,000 537,587 1,617,587
2031 - 2035 7,060,000 2,017,786 9,077,786 2036 - 2038 6,870,000 410,999 7,280,999 Totals 18,990,000$ 5,469,622 $ 24,459,622 $

315
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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8) INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS

Due To/From Other Funds

The following represents the composition of interfund balances as of June 30, 2025:

Due To Due From Amount
General Fund Other Grants 327,761 $
Nonmajor Governmental Funds 3,346,988
Total 3,674,749 $

These were the result of temporary deficit cash balances. The deficits are expected to be repaid when receivables are collected in the following fiscal year.

Advances To/From Other Funds

The General Fund has advanced $62,941 to the Development Impact Fees Capital Projects Fund for construction of City facilities. The advance is expected to be repaid from future development fees collected over several years.

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316
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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8) INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (Continued)

lnterfund Transfers
Transfers In General Fund Other Grants
Nonmajor
Governmental
Funds Total
General Fund - $ 6,190 $ 275,490$ 281,680 $ Fire District 5,143,217 - - 5,143,217 Development Impact - - 2,450 2,450 Other Grants 10,898 - - 10,898 Nonmajor Governmental Funds 3,074,637 87,623 1,147,408 4,309,668 Total 8,228,752 $ 93,813 $ 1,425,348$ 9,747,913 $ Transfers Out

During the year, interfund transfers were made for purposes of financing administrative costs, capital improvements and repayment of debt. Specifically, the following transfers were made:

 The Other Grants Fund transferred $6,190 to General Fund for prior year reclass of grant eligible expenses. Nonmajor Governmental Funds transferred $275,490 to the General Fund for The Federal American Rescue Plan Act (ARPA) capital project costs.  The General Fund transferred $5,143,217 to the Fire District Fund for the purpose of augmenting the Fire District Fund budget to support the district's programs and services.

Transfer was trued up at the end of the year based on the actual expenditures for the district.
 Nonmajor Governmental Fund transferred $2,450 to DIF Fund to cover prior year expenses paid out of the incorrect fund.
 The General Fund transferred $10,898 to Other Grants for grant-eligible expenses.  The Other Grants transferred $87,623 to Nonmajor Governmental Funds to cover design costs that were not eligible for grant funds.
 The General Fund transferred $87,622 to Nonmajor Governmental Funds to cover design costs that were not eligible for federal grant funds.
 The General Fund transferred $1,752,491 to the Community Services District Fund budget to support the district's programs and services. The transfer was trued up at the end of the year based on the actual expenditures for the district.  The General Fund transferred $300,000 to Nonmajor Governmental Fund NPDES to control pollutant discharges into surface waters.
 The General Fund transferred $782,497 to Nonmajor Governmental Funds to support operations and maintenance of Local Zones and Lighting and Landscape Districts.  The General Fund transferred $152,027 to Nonmajor Governmental Fund to support debt service.
 Nonmajor Governmental Funds- Measure A transferred $721,381 to Nonmajor Governmental Funds - 2020A LRB for Debt Service.
 Nonmajor Governmental Funds transferr ed $426,027 to Nonmajor Governmental Funds to cover Debt Service for Streetlights.

317
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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9) FUND BALANCE

Details of the City’s governmental fund balances at June 30, 2025, are presented below:

General Fund Fire District Other Grants
Development
Impact
Other
Governmental
Funds
Total
Governmental
Funds
Nonspendable:

Prepaid Costs and Other Assets 323,609$ 42,767 $ - $ - $ 15,038$ 381,414 $ Inventories 33,642 7,568 - - 20,820 62,030 Long-Term Advances and Loans 2,907,674 - - - - 2,907,674 Endowments - - - - 500,000 500,000 Restricted:

Infrastructure Development - - - - 1,228,789 1,228,789 Fire Protection - 3,724,485 - - - 3,724,485 Public Safety - - - - 771,776 771,776 Public Library Services - - - - 1,098,803 1,098,803 Regional Transportation
Improvement Projects - - - 59,035,495 2,226,086 61,261,581 Grants - - 43,834 - - 43,834 Housing - - - - 11,948,644 11,948,644 Street Maintenance - - - - 32,803,117 32,803,117 Area Drainage - - - - 6,434,745 6,434,745 Air Pollution Reduction Measures - - - - 1,112,121 1,112,121 Storm Drain Pollution
Reduction Measures - - - - 1,119,094 1,119,094 Community Service Programs - - - - 6,009,828 6,009,828 Historic Preservation - - - - 19,704 19,704 Cash Escrow - Street Lights 56,229 - - - - 56,229 Debt Service 152,011 - - - 3,922,021 4,074,032 Committed to:

Public Safety 123,110 - - - - 123,110 Capital Improvement Projects 9,716,457 - - - - 9,716,457 Continuing Appropriations 790,281 - - - - 790,281 Land Acquisitions 1,766,247 - - - - 1,766,247 Economic Contingency Reserve 8,382,884 8,382,884
Operating Reserve 31,024,334 - - - - 31,024,334 Pension Rate Stabilization Reserve 7,000,000 - - - - 7,000,000 OPEB 115 Trust (CERBT) 2,000,000 - - - - 2,000,000 Fire Fleet Replacement Reserve 3,815,443 - - - - 3,815,443 Fleet Replacement Reserve 4,319,815 - - - - 4,319,815 Facility Repairs Reserve 1,167,000 - - - - 1,167,000 CSD Facility Repair Reserve 7,605,850 - - - - 7,605,850 Fire Facility Repair Reserve 1,035,000 1,035,000 Information Technology Reserve 1,000,000 1,000,000 Continuing Operations 6,025,000 - - - - 6,025,000 Assigned:

General Plan 11,452 - - - - 11,452 Repairs and Equipment 22,920 - - - - 22,920 Produce for People 8,381 - - - - 8,381 Unassigned 64,573,782 - - - (2,443,995) 62,129,787 Total Fund Balance (Deficit) 153,861,121$ 3,774,820 $ 43,834 $ 59,035,495$ 66,786,591 $ 283,501,861 $

The unassigned category above encompasses fund designations that do not satisfy the criteria of the other categories presented. Included in Committed fund balance of the General Fund are continuing appropriations of $790,281. The continuing appropriations represent open contract amounts and their related appropriation at year-end that are expected to be honored upon performance by the vendors in the following fiscal year. 318
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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10) SUMMARY DISCLOSURE OF SELF-INSURANCE CONTINGENCIES

The City is exposed to various risks of losses, including tort claims; theft of, damage to, and destruction of property; cyber-crimes; employment practices claims; professional errors and omissions; and natural disasters. The City currently reports all of its risk management activities in its Risk Management Internal Service Fund. The City participates in a risk retention pool and jointly funds coverage programs with other public agencies. The City’s self-insured retention varies by program.

The General Liability program provides a cove rage limit of $50 million with a $125,000 self- insured retention. The Liability Program provides defense and indemnity coverage against claims and suits arising from covered occurrences, including auto liability, bodily injury, property damage, personal injury, and public officials’ errors and omissions.

The Workers’ Compensation program provides a coverage limit of $5 million with a $250,000 self-insured retention. The Workers’ Compensation program provides statutory benefits for employee injuries arising out of and in the course of employment and $5,000,000 in employers’ liability coverage.

The all-risk Property program provides group-purchased commercial insurance coverage on a replacement cost basis. The program provides a coverage limit of $200 million with a $100,000 pool deductible (inclusive of a $10,000 City deductible). The auto physical damage program provides coverage to City-owned vehicl es. Coverage is available on a replacement cost basis.

The Auto Physical Damage program provides group-purchased commercial insurance for physical damage to vehicles. The program provi des a coverage limit of $10 million with a $25,000 pool deductible (inclusive of $5,000 City deductible).

The Employment Practices Liability (EPL) program provides a coverage limit of $1 million with a $100,000 self-insured retention. The EPL program provides coverage for employment- related lawsuits, such as wrongful termination and discrimination.

The Cyber Liability program provides a coverage limit of $18 million with a $5,000 self-insured retention. Cyber liability provides coverage for information security and privacy liability, privacy notification costs, regulatory defense & penalties, website media content liability, cyber extortion, first-party data protection & business interruption losses.

The Crime program provides a coverage limit of $1 million with a $2,500 City deductible. The Crime program provides coverage for public em ployee dishonesty, forgery or alteration, and computer fraud coverage.

The Deadly Weapon Response program provides a coverage limit of $500,000 per occurrence and $2.5 million in the aggregate with a $10,000 deductible. This coverage is for third-party injuries while on City property, including defense costs when a weapon has been used or brandished. The program also covers crisis management services and first-party property damage, including business interruption.
319
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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10) SUMMARY DISCLOSURE OF SELF-INSURANCE CONTINGENCIES, (Continued)

Claims expenditures and liabilities are reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (IBNR). At June 30, 2025, the amount of these liabilities was $12,462,425. The amount represents an estimate of $7,172,094 for June 30, 2025, and $5,290,330 of IBNR. This liability is the City’s best estimate based on available information.

The following represents the changes in claims liabilities:

Year
Beginning of
Year
Changes in
Estimates Claim Payments End of Year
2025 13,195,313$ 1,296,957 $ 2,029,845 $ 12,462,425 $ 2024 13,306,371 34,349 145,407 13,195,313 2023 9,991,726 3,372,569 57,924 13,306,371

The City of Murrieta is a member of the Public Entity Risk Management Authority (a joint powers authority) for the purpose of pooling losses and claims of general liability and workers’ compensation with those of other member ci ties and agencies. The City continues to carry commercial insurance, both primary and excess, for all other risks of loss.

11) PENSION PLANS

A) General Information about the Pension Plans

Plan Description

All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public Empl oyees’ Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under generally accepted accounting principles. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City participates in four rate plans (two miscellaneous and two safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website, at www.calpers.ca.gov.

320
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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11) PENSION PLANS, (Continued)

A) General Information about the Pension Plans, (Continued)

Benefits Provided

CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries.

Benefits are based on years of credited service, equal to one year of full-time employment.

Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.

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321
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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11) PENSION PLANS, (Continued)

A) General Information about the Pension Plans, (Continued)

The Plan’s provisions and benefits in effect at June 30, 2025 are summarized as follows:

Hire Date
Tier I
Prior to
January 1, 2013
Tier II
On or After
January 1, 2013
PEPRA
On or After
January 1, 2013
Benefit Formula 2.7% @ 55 2% @ 60 2% @ 62
Benefit Vesting Schedule 5 Years of Service 5 Years of Service 5 Years of Service Benefit Payments Monthly for Life 50 Monthly for Life
Retirement Age 55 60 62
Monthly Benefits, as a Percent of Eligible
Compensation Highest Single Year 3-Year Average 3-Year Average Required Employee Contribution Rates 8.00% 7.00% 7.00%
Required Employer Contribution Rates:

Normal Cost Rate 16.31% 10.43% 7.94%
Payment of Unfunded Liability 1,633,732 $ 38,981 $ 22,027 $ Hire Date
Tier I
Prior to
October 15, 2011
Tier II
On or After
October 15, 2011

TIER III - PEPRA
On or After
January 1, 2013
Benefit Formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit Vesting Schedule 5 Years of Service 5 Years of Service 5 Years of Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement Age 50 55 57
Monthly Benefits, as a Percent of Eligible
Compensation Highest Single Year 3-Year Average 3-Year Average Required Employee Contribution Rates 9.00% 9.00% 13.00% Required Employer Contribution Rates:

Normal Cost Rate 27.32% 23.00% 13.76%
Payment of Unfunded Liability 2,273,205 $ 78,416 $ 12,854 $ Hire Date
Tier I
Prior to
January 1, 2013

TIER III - PEPRA
On or After
January 1, 2013
Benefit Formula 3% @ 50 2.7% @ 57
Benefit Vesting Schedule 5 Years of Service 5 Years of Service Benefit Payments Monthly for Life Monthly for Life
Retirement Age 50 57
Monthly Benefits, as a Percent of Eligible
Compensation Highest Single Year 3-Year Average
Required Employee Contribution Rates 9.00% 13.00%
Required Employer Contribution Rates:

Normal Cost Rate 27.32% 13.76%
Payment of Unfunded Liability 1,283,927 $ 10,461 $ Miscellaneous
Safety - Police
Safety - Fire

322
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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11) PENSION PLANS, (Continued)

A) General Information about the Pension Plans, (Continued)

Contributions

Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process.

The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identifi ed by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2025 were $13,047,439.

B) Net Pension Liability

The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.

323
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

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11) PENSION PLANS, (Continued)

B) Net Pension Liability, (Continued)

Actuarial Methods and Assumptions Used to Determine Total Pension Liability

The collective total pension liability for the June 30, 2024 measurement period was determined by an actuarial valuation as of June 30, 2023, with update procedures used to roll forward the total pension liability to June 30, 2024. The collective total pension liability was based on the following assumptions:

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry Age Actuarial Cost Method
Asset Valuation Method Fair Value of Assets
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table
(1) Derived using CalPERS' membership data for all funds Post Retirement Benefit Increase Contract COLA up to 2.30% until Purchasing Power Protection Allowance floor on purchasing power
applies, 2.30% thereafter
(1) The mortality table used w as developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS w ebsite.

Long-term Expected Rate of Return

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short- term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

324
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-72-
11) PENSION PLANS, (Continued)

B) Net Pension Liability, (Continued)

The expected real rates of return by asset class are as follows:

Asset Class
Assume d Asse t
Allocation Real Return 1,2
Global equity - cap-weighted 30.00% 4.54%
Global equity - non-cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage (5.00%) (0.59%)
2 Figures are based on the 2021 Asset Liability Management study. 1 An expected inflation of 2.30% used for this period.

Discount Rate

The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Subsequent Events

There were no subsequent events that would materially affect the results presented in this disclosure.

325
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-73-
11) PENSION PLANS, (Continued)

B) Net Pension Liability, (Continued)

Pension Plan Fiduciary Net Position

Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value.

C) Proportionate Share of Net Pension Liability

The following table shows the City’s proportionate share of the Plan’s net pension liability over the measurement period.

Miscellaneous Plan:

Proportionate Share
of Total Pension
Liability
Proportionate Share
of Fiduciary Net
Pension Liability
Proportionate Share
of Net Pension
Liability
Balance at 6/30/2023 (VD) 101,041,972 $ 78,080,515 $ 22,961,457 $ Balance at 6/30/2024 (MD) 110,883,472 88,529,119 22,354,353 Net Changes during 2023-24 (9,841,500) $ (10,448,604) $ 607,104 $ Safety Plan:

Balance at 6/30/2023 (VD) 202,469,462 $ 155,020,765 $ 47,448,697 $ Balance at 6/30/2024 (MD) 220,107,445 173,514,804 46,592,641 Net Changes during 2023-24 (17,637,983) $ (18,494,039) $ 856,056 $

The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The City’s proportionate share of the net pension liability for the total Plan as of the June 30, 2023 and 2024 measurement dates was as follows:

Miscellaneous Safety
Proportion - June 30, 2023 0.44785% 0.46975%
Proportion - June 30, 2024 0.44732% 0.60775%
Change - Increase (Decrease) -0.00053% 0.13800%
326
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-74-
11) PENSION PLANS, (Continued)

C) Proportionate Share of Net Pension Liability, (Continued)

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate

The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percent) or 1 percentage-point higher (7.9 percent) than the current rate:

Miscellaneous Safety
One Percent Decrease 5.90% 5.90%
Net Pension Liability 37,317,012 $ 76,659,107 $
Current Discount Rate 6.90% 6.90%
Net Pension Liability 22,354,353 $ 46,592,641 $
One Percent Increase 7.90% 7.90%
Net Pension Liability (Asset) 10,037,882 $ 22,002,499 $

Amortization of Deferred Outflows and Deferred Inflows of Resources

Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pens ion expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.

The amortization period differs depending on the source of the gain or loss:

Net difference between
projected and actual earnings
on pension plan investments

5-year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all
members that are provided with benefits (active,
inactive and retired) as of the beginning of the
measurement period

327
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-75-
11) PENSION PLANS, (Continued)

D) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions

As of the start of the measurement period (July 1, 2023), the City’s net pension liability was $70,410,154. For the measurement period ending June 30, 2024 (the measurement date), the City incurred a pension expense of $17,607,527. As of June 30, 2025, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Changes of assumption 1,722,501$ - $
Differences between expected and
actual experience 5,735,113 199,046
Differences between projected and
actual investment earnings 3,538,988 -
Differences between employer's
contributions and proportionate
share of contributions 2,516,943 713,087
Change in employer's proportion 2,356,528 31,600
Pension contributions made subsequent
to the measurement date 13,047,439 -
28,917,512$ 943,733 $

The amounts above are net of outflows and inflows recognized in the 2023-24 measurement period expense. Contributions subsequent to the measurement date of $13,047,439 reported with deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

Year Ending June 30,
Deferred
Outflows/(Inflows) of
Resources
2026 5,970,047 $
2027 9,499,393
2028 668,469
2029 (1,211,569)
2030 -
Thereafter -
Total 14,926,340 $

328
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-76-
11) PENSION PLANS, (Continued)

E) Payable to the Pension Plan

At June 30, 2025, the City reported a payable of $699,994 for the outstanding amount of contributions to the pension plan required for the year then ended.

12) OPEB PLANS

A) General Information about the OPEB Plans

Plan Description

The City provides other postemployment benefits (OPEB) through the California Employers’ Retiree Benefit Fund (CERBT), a single-employer defined benefit post-employment healthcare plan administered by the California Public Employees’ Retirement System (CalPERS) as follows:

Members of all groups who retired prior to July 1, 2007, receive a monthly contribution of $695.

The MGEA and MSA groups and employees covered by the Management and Confidential Compensation Plan hired prior to January 1, 2008, who choose to continue their CalPERS health insurance upon retirement, are eligible to receive a monthly contribution to a Retirement Health Savings Plan (RHS) in the amount of $833. Those hired after January 1, 2008, but before July 14, 2014, and retire with 10 years of City service can receive $360 per month until Medicare age and then will receive the minimum mandated amount for employer contributions to participate in Public Employees Medical and Hospital Care Act (PEMHCA). Those hired after January 1, 2008, but before July 14, 2014, and retire with less than 10 years of City service and those hired after July 15, 2014, and retire from the City, will receive the minimum mandated amount for employer contributions to participate in PEMCHA (PEMCHA minimum).

Employees of the MPOA and MPMA groups hired prior to July 1, 2007, who choose to continue their CalPERS health insurance upon retirement are eligible to receive a monthly contribution to a Retirement Health Savings Plan (RHS) in the amount of $833. Those hired after July 1, 2007 who retire with 10 years of City service can receive $360 per month until Medicare age and then will receive the PEMCHA minimum contribution. Those hired after July 1, 2007, who retire with less than 10 years of City service will receive the PEMCHA minimum contribution.

329
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-77-
12) OPEB PLANS, (Continued)

A) General Information about the OPEB Plans, (Continued)

Plan Description (Continued)

Employees of the MFA and MFMA groups hired prior to January 1, 2010 who choose to continue their CalPERS health insurance upon retirement are eligible to receive a monthly contribution to a Retirement Health Savings Plan (RHS) in the amount of $833. Those hired after January 1, 2010, who retire with 10 years of City service can receive $360 per month until Medicare age and then will receive the PEMCHA minimum contribution. Those hired after January 1, 2010, who retire with less than 10 years of City service will receive the PEMCHA minimum contribution.

Separate financial statements for the CERBT may be obtained by writing to CalPERS at Lincoln Plaza, North 400 Q Street, Sacramento, CA 95814 or by visiting the CalPERS website at www.calpers.ca.gov.

Employees Covered

As of the June 30, 2023 valuation date, the following current and former employees were covered by the benefit terms under the plan:

Inactive Employees or Beneficiaries Currently Receiving Benefits 167
Inactive Employees or Beneficiaries Entitled to but not yet Receiving Benefits 30
Active Employees 403
Total 600

Contributions

The plan and its contribution requirements are established by City policy and may be amended by the City Council. The annual contribution is based on the actuarially determined contribution. For the year ended June 30, 2025, the City’s cash contributions were $1,577,817 in premium payments and the estimated implied subsidy was $751,171 resulting in total contributions of $2,328,988.

B) Net OPEB Liability

The City’s net OPEB liability was measured as of June 30, 2024, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023. A summary of the principal assumptions and methods used to determine the net OPEB liability is shown below.

330
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-78-
12) OPEB PLANS, (Continued)

B) Net OPEB Liability, (Continued)

Actuarial Assumptions

The total OPEB liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Normal, Level Percent of Pay Actuarial Assumptions:

Discount Rate 5.34%
Inflation 2.30%
Projected Salary Increase 2.80% Per Annum, in Aggregate Expected Long-Term Investment Rate of Return 5.34%
Healthcare Cost Trend Rates 6.80%, trending down to 4.14% over 51 years Pre-Retirement Turnover Derived from CalPERS Pension Plan Mortality Derived from CalPERS Pension Plan Updated
to Reflect Most Recent Experience Study

Long-Term Expected Rate of Return

The long-term expected rate of return was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plans’ target asset allocation as of June 30, 2024, are summarized in the following table:

Asset Class
Strategy I
Allocation
Long-Term
Expected Real
Rate of Return
CEBRT:

Global Equity 49.00% 6.90%
Fixed Income 23.00% 4.10%
REITs 20.00% 6.30%
TIPs 5.00% 3.90%
Commodities 3.00% 4.60%
Total 100.00%

331
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-79-
12) OPEB PLANS, (Continued)

B) Net OPEB Liability, (Continued)

Discount Rate

The discount rate of 5.34% was used in the valuation. It is assumed that the City will contribute in accordance with the Funding Policy. Under this Funding Policy, the OPEB Trust is not expected to be depleted in the future.

Changes in Assumption

The discount rate was changed from 5.06% to 5.34%.

C) Changes in the Net OPEB Liability

The changes in the net OPEB liability are as follows:

Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability (Asset)
Balance - June 30, 2023
(Measurement Date) 40,721,803 $ 6,100,355 $ 34,621,448 $ Changes in the Year:

Service Cost 1,097,599 - 1,097,599 Interest on the Total OPEB Liability 2,057,138 - 2,057,138 Differences Between Actual and
Expected Experience 53,103 - 53,103 Changes in Assumptions (1,154,991) - (1,154,991) Contribution - Employer - 1,577,817 (1,577,817) Contribution - Implicit Subsidy - 751,171 (751,171) Net Investment Income - 670,014 (670,014) Administrative Expenses - (1,989) 1,989 Benefit Payments (1,577,817) (1,577,817) - Implicit Subsidy (751,171) (751,171) - Net Changes (276,139) 668,025 (944,164) Balance - June 30, 2024
(Measurement Date) 40,445,664 $ 6,768,380 $ 33,677,284 $ Increase (Decrease)

Change of Benefit Terms

There were no changes of benefit terms.

Subsequent Events

There were no subsequent events that would materially affect the results presented in this disclosure.
332
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-80-
12) OPEB PLANS, (Continued)

C) Changes in the Net OPEB Liability, (Continued)

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate

The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (4.06%) or one percentage point higher (6.06%) than the current discount rate:

One Percent
Decrease
(4.34%)
Discount Rate
(5.34%)
One Percent
Increase
(6.34%)
Net OPEB Liability 38,061,082$ 33,677,284 $ 29,950,777 $

Sensitivity of the Net OPEB Liability to Changes in Healthcare Cost Trend Rates

The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current healthcare cost trend rates:

One Percent
Decrease
Current
Healthcare
One Percent
Increase
Net OPEB Liability 32,528,652$ 33,677,284 $ 34,978,980 $

D) OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB

For the year ended June 30, 2025, the City recognized OPEB expense of $4,388,223. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflows of
Resources
Deferred Inflows
of Resources
OPEB Contributions Subsequent to Measurement Date 2,372,832$ - $ Differences Between Actual and Expected Experience 3,673,386 (164,458) Change in Assumptions 7,188,314 (5,046,616)
Differences Between Projected and Actual Earnings 25,300 - Total 13,259,832 $ (5,211,074) $

333
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-81-
12) OPEB PLANS, (Continued)

D) OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB, (Continued)

Deferred outflows of resources related to contributions subsequent to the measurement date of $2,372,832 will be recognized as a reduction of the net OPEB liability in the subsequent fiscal year.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

Fiscal Year Ending June 30, Amount
2026 1,507,776 $
2027 1,200,345
2028 930,377
2029 189,721
2030 261,507
Thereafter 1,586,200

At June 30, 2025, the City had no outstanding amount of contributions to the OPEB plans required for the year ended June 30, 2025.

13) JOINT FINANCING ACQUISITION AGREEMENTS

On September 1, 1991, the City entered into a joint financing and acquisition agreement with the Community Facilities District No. 89-5 (Rancon Business Center) of the County of Riverside and Rancon Business Center/Rancho California, a California joint venture. The boundaries of the CFD No. 89-5 are completely within the boundaries of the City of Murrieta; however, the Rancho California Water District now functions as the legislative body of the CFD No. 89-5. On October 24, 1991, the CFD No. 89-5 issued its $18,825,000 Series 1991.

Bonds to provide financing for the construction and acquisition of certain public facilities, which include the acquisition and construction of certain roads and associated landscaping facilities.

Funds for the bond debt service requirements, as they come due, are to be obtained from a special tax levied against properties within the CFD No. 89-5. The road facilities that were previously to be owned, maintained, and operated by the County are to be owned, maintained, and operated by the City.

334
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-82-
13) JOINT FINANCING ACQUISITION AGREEMENTS, (Continued)

On December 1, 1991, the City entered into a joint financing and acquisition agreement with the Community Facilities District No. 89-4 (Walsh Medical Arts Center) of the County of Riverside and Kevin P. Walsh and Regina M. Walsh. The boundaries of the CFD No. 89-4 are completely within the boundaries of the City; however, the board of the County will continue to function as the legislative body of the CFD No. 89-4. On December 20, 1991 the CFD No. 89-4 issued its $4,825,000 Series 1991 Bonds to provide financing for the construction and acquisition of certain public facilities, which include the acquisition and construction of certain roads and associated landscaping facilities and certain flood control and drainage facilities.

Funds for the bonds debt service requirements, as they come due, are to be obtained from a special tax levied against properties within the CFD No. 89-4. The road facilities that were previously to be owned, maintained, and operated by the County are to be owned, maintained, and operated by the City. The flood facilities that were previously to be owned, maintained, and operated by the Riverside County Flood Control and Water Conservation District are to be owned, maintained, and operated by the City.

14) COMMUNITY FACILITIES DISTRICT (CFD) BONDS (NONCITY OBLIGATION)

The City has issued special tax bonds for various CFDs, which are payable from special taxes levied on property within the Community Facilities Districts according to a methodology approved by the voters within the District and by the City Council. Neither the faith and credit nor taxing power of the City is pledged to the payment of the bonds. Reserves have been established from the bond proceeds to meet delinquencies should they occur. If delinquencies occur beyond the amounts held in those reserves, the City has no duty to pay the delinquency out of any available funds of the City. The City acts solely as an agent for those paying taxes levied and the bondholders. As of June 30, 2025, the remaining balance on the bonds was $59,580,000.

15) JOINTLY GOVERNED ORGANIZATION

The City, in conjunction with six other governmental entities, created the Southwest Communities Financing Authority (Financing Authority) on November 30, 2004. The Financing Authority was formed to issue bonds for the construction of an animal shelter to be used by the member agencies. The Financing Authority’s board is composed of one member from each participating entity. The City has the following fiscal obligations: debt repayment of any bonds issued, administrative costs, and operation of the animal shelter. The debt service payments and the animal shelter operating costs will be prorated to each member based on the percentage of the animals housed at the facility, on an annual basis. The administrative costs will be borne equally by all members. For the year ended June 30, 2025, the City’s share of the payments was $98,648 and was paid from the General Fund.

335
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-83-
16) CONTINGENT LIABILITIES AND COMMITMENTS

Claims and Lawsuits

Various claims and lawsuits are pending against the City. Although the outcome of these claims and lawsuits is not presently determinabl e, in the opinion of the City’s management, on advice of legal counsel, it is unlikely that they will have a material adverse effect on the accompanying financial statements.

The City has received Federal and State funds for specific purposes that are subject to review by the grantor agencies. These programs are subject to audit by the grantor agencies and upon further examination by the grantors, certain costs could be disallowed. The City expects any such amounts to be immaterial.

The decision of Flores v. City of San Gabriel highlighted not only the need for cities to audit their policies and practices related to Fair Labor Standards Act (FLSA) compliance but also to revisit long held and generally accepted assumptions and practices related to such. In June 2017, the City of Murrieta engaged an employment law firm to conduct an audit of its FLSA regular rate of pay and payroll practices. Through the employment law firm, a forensic accounting analysis has been completed for two labor groups including an analysis and settlement of the underpayment for nonexempt employees. The City has engaged the same employment law firm to conduct an audit of its FLSA regular rate of pay and underpayment for the remaining labor groups.

The estimated amount of remaining construction contract commitments at year-end is $7,329,235.

17) TOWN HALL ASSOCIATION ENDOWMENT

In March 2014, the City received a permanent endowment from the Town Hall Association upon dissolution of the Town Hall Association’s Board. The City maintains the $500,000 principal nonexpendable endowment in the Town Hall Association Permanent nonmajor fund.

The investment earnings on the nonexpendable endowment are to be spent 25% to the Murrieta Friends of the Library, 25% to the Murrieta High School’s Scholarship Foundation (aka Dollar for Scholars), and 50% to the Murrieta Library.

18) TAX ABATEMENTS

In accordance with California Government Code § 53083, the City provides sales tax rebates to a local sales tax generators based on sales tax generated at a site developed within the City of Murrieta. The City entered into an economic development agreement for sales tax rebates with a local sales tax generator in order to retain one of the City’s significant tax- generating business, jobs, and occupancy of land within City boundaries. The rebates are calculated based on the total taxes generated by the business.

For the fiscal year ended June 30, 2025, the City abated local sales tax totaling $195,924. 336
City of Murrieta

Notes to the Financial Statements
For the Year Ended June 30, 2025

-84-
19) PRIOR PERIOD RESTATEMENT

The Federal Grants fund was previously reported as a major fund and qualified as nonmajor for the year ending June 30, 2025. The Other Grants fund was previously reported as nonmajor and qualified as major for the year ending June 30, 2025. This qualifies as a change to or within the financial reporting entity under the guidance of GASB 100. The reclassification of these funds did not result in any changes to the government-wide financial statements’ net position. Changes in fund balance as of June 30, 2024, were as follows:

Federal Grants Other Grants
Total Nonmajor
Governmental
Funds
Fund balance, beginning of year,
as previously reported - $ (367,828)$ 71,577,102$ Adjustment - change from major to
nonmajor fund (206,361) 367,828 161,467 Fund balance, beginning of year,
as restated (206,361) $ - $ 71,738,569$ Nonmajor Governmental Funds

337

REQUIRED SUPPLEMENTARY INFORMATION
338

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339
City of Murrieta

Schedule of Proportionate Share of the Net Pension Liability – Miscellaneous Last Ten Fiscal Years

-85-
Measurement Date
Employer's
Proportion of the
Collective Net
Pension Liability1
Employer's
Proportionate
Share of the
Collective Net
Pension Liability Covered Payroll
Employer's
Proportionate
Share of the
Collective Net
Pension Liability as
a percentage of the
Covered Payroll
Pension Plan's
Fiduciary Net
Position as a
percentage of the
Total Pension
Liability
6/30/2015 0.05956% 11,366,253 $ 9,517,674 $ 119.42% 78.40% 6/30/2016 0.51059% 13,728,601 10,158,506 135.14% 74.06% 6/30/2017 0.36862% 15,796,583 9,962,258 158.56% 73.31% 6/30/2018 0.40440% 15,240,675 10,070,150 151.35% 75.26% 6/30/2019 0.41123% 16,467,905 11,695,857 140.80% 75.26% 6/30/2020 0.40933% 17,265,656 13,637,452 126.60% 76.89% 6/30/2021 0.44785% 8,503,848 14,879,086 57.15% 76.89% 6/30/2022 0.44732% 20,930,986 15,803,799 132.44% 77.66% 6/30/2023 0.45920% 22,961,457 18,443,881 124.49% 77.28% 6/30/2024 0.46219% 22,354,353 22,222,171 100.59% 79.84% 1 Proportion of the net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool. 340
City of Murrieta

Schedule of Contributions – Miscellaneous
Last Ten Fiscal Years

-86-
Fiscal Year
Actuarially
Determined
Contribution
Contributions in
Relation to the
Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of
Covered Payroll
6/30/2016 1,695,346$ (1,695,346) $ - $ 10,158,506$ 16.69% 6/30/2017 2,369,575 (2,369,575) - 9,962,258 23.79% 6/30/2018 1,953,751 (1,953,751) - 10,070,150 19.40% 6/30/2019 2,314,203 (2,314,203) - 11,695,857 19.79% 6/30/2020 2,604,872 (2,604,872) - 13,637,452 19.10% 6/30/2021 3,022,322 (3,022,322) - 14,876,806 20.32% 6/30/2022 4,316,257 (4,316,257) - 15,803,799 27.31% 6/30/2023 3,674,268 (3,674,268) - 18,443,881 19.92% 6/30/2024 4,024,435 (4,024,435) - 22,222,171 18.11% 6/30/2025 4,096,731 (4,096,731) - 23,156,545 17.69% Notes to Schedule:

Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool.

However, individual employers in the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases, and other prior service costs. Employers that have done so may need to report this information as a separate liability in their financial statement as CalPERS considers such amounts to be separately financed employer-specific liabilities. These employers should consult with their auditors. Additionally, the figures above do not include any liability impact that occurred after the June 30, 2023, valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.

Change in Assumptions: There were no assumption changes in 2023 or 2024. Effective with the June 30, 2021, valuation date (June 30, 2022, measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017, through June 30, 2021, and 7.65% for measurement dates June 30, 2015, through June 30, 2016.

341
City of Murrieta

Schedule of Proportionate Share of the Net Pension Liability – Safety Last Ten Fiscal Years

-87-
Measurement Date
Employer's
Proportion of the
Collective Net
Pension Liability1
Employer's
Proportionate
Share of the
Collective Net
Pension Liability Covered Payroll
Employer's
Proportionate
Share of the
Collective Net
Pension Liability as
a percentage of the
Covered Payroll
Pension Plan's
Fiduciary Net
Position as a
percentage of the
Total Pension
Liability
6/30/2015 0.01046% 20,107,047 $ 15,256,435 $ 131.79% 78.40% 6/30/2016 0.77879% 25,005,813 16,124,346 155.08% 74.06% 6/30/2017 0.54565% 28,723,325 15,382,210 186.73% 73.31% 6/30/2018 0.48605% 28,518,996 15,967,350 178.61% 75.26% 6/30/2019 0.50053% 31,245,479 15,990,879 195.40% 75.26% 6/30/2020 0.52295% 34,841,083 19,219,826 181.28% 76.17% 6/30/2021 0.46975% 16,485,795 19,879,940 82.93% 76.17% 6/30/2022 0.60775% 41,761,824 21,489,931 194.33% 77.49% 6/30/2023 0.63477% 47,448,697 19,277,127 246.14% 76.57% 6/30/2024 0.63906% 46,592,641 23,158,170 201.19% 78.83% 1 Proportion of the net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool. 342

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343
City of Murrieta

Schedule of Contributions– Safety
Last Ten Fiscal Years

-88-
Fiscal Year
Actuarially
Determined
Contribution
Contributions in
Relation to the
Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of
Covered Payroll
6/30/2016 3,536,719$ (3,536,719) $ - $ 16,124,346$ 21.93% 6/30/2017 3,418,924 (3,418,924) - 15,382,210 22.23% 6/30/2018 4,565,327 (4,565,327) - 15,967,350 28.59% 6/30/2019 4,164,182 (4,164,182) - 15,990,879 26.04% 6/30/2020 6,002,858 (6,002,858) - 19,219,826 31.23% 6/30/2021 6,946,768 (6,946,768) - 19,879,940 34.94% 6/30/2022 5,738,839 (5,738,839) - 21,489,931 26.70% 6/30/2023 7,167,644 (7,167,644) - 19,277,127 37.18% 6/30/2024 8,230,766 (8,230,766) - 23,158,170 35.54% 6/30/2025 8,950,708 (8,950,708) - 23,446,805 38.17% Notes to Schedule:

Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool.

However, individual employers in the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases, and other prior service costs. Employers that have done so may need to report this information as a separate liability in their financial statement as CalPERS considers such amounts to be separately financed employer-specific liabilities. These employers should consult with their auditors. Additionally, the figures above do not include any liability impact that occurred after the June 30, 2023, valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.

Change in Assumptions: There were no assumption changes in 2023 or 2024. Effective with the June 30, 2021, valuation date (June 30, 2022, measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017, through June 30, 2021, and 7.65% for measurement dates June 30, 2015, through June 30, 2016.

344
City of Murrieta

Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Fiscal Years*

-89-
Fiscal Year End 6/30/2025 6/30/2024 6/30/2023
Measurement Date 6/30/2024 6/30/2023 6/30/2022
Total OPEB Liability:

Service Cost 1,097,599 $ 811,752 $ 608,999 $ Interest on Total OPEB Liability 2,057,138 1,916,190 2,008,234 Change in Assumptions (1,154,991) 2,344,073 4,100,386 Differences Between Expected
and Actual Experience 53,103 3,833,913 (56,650) Benefit Payments (2,328,988) (1,979,518) (1,859,804) Net Change in Total OPEB Liability (276,139) 6,926,410 4,801,165 Total OPEB Liability - Beginning of Year 40,721,803 33,795,393 28,994,228 Total OPEB Liability - End of Year (a) 40,445,664 40,721,803 33,795,393 Plan Fiduciary Net Position:

Contributions - Employer 2,328,988 1,979,518 1,859,804 Net Investment Income 670,014 368,209 (886,356) Administrative Expenses (1,989) (1,666) (1,677) Benefit Payments (2,328,988) (1,979,518) (1,859,804) Net Change in Plan Fiduciary Net Position 668,025 366,543 (888,033) Plan Fiduciary Net Position - Beginning of Year 6,100,355 5,733,812 6,621,845 Plan Fiduciary Net Position - End of Year (b) 6,768,380 6,100,355 5,733,812 Net OPEB Liability - Ending (a)-(b) 33,677,284 $ 34,621,448 $ 28,061,581 $ Plan Fiduciary Net Position as a Percentage of
the Total OPEB Liability 16.73% 14.98% 16.97%
Covered - Employee Payroll 42,549,902 $ 41,390,955 $ 37,293,730 $ Net OPEB Liability as Percentage of Covered -
Employee Payroll 79.15% 83.64% 75.20%
Notes to Schedule:

Benefit Changes:

There w ere no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2024 to June 30, 2025,
the discount rate w as changed from 5.06% to 5.34%
* Fiscal year 2018 w as the first year of implementation; additional years w ill be presented as information is available. 345
City of Murrieta

Schedule of Changes in the Net OPEB Liability and Related Ratios (continued) Last Ten Fiscal Years*

-90-
6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018
6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017
951,994$ 624,020 $ 665,335 $ 1,134,456 $ 1,096,570 $ 1,802,951 1,921,683 1,611,799 1,284,754 1,189,368 (7,228,470) 6,301,882 1,760,802 (8,713,953) (46,095) 625,952 (337,835) 1,881,782 - - (1,734,698) (1,498,358) (1,429,954) (1,357,606) (1,052,317) (5,582,271) 7,011,392 4,489,764 (7,652,349) 1,187,526 34,576,499 27,565,107 23,075,343 30,727,692 29,540,166 28,994,228 34,576,499 27,565,107 23,075,343 30,727,692 1,734,698 1,498,358 1,429,954 1,357,606 1,052,317 1,428,310 177,392 291,907 349,279 419,455 (1,966) (2,453) (1,013) (8,145) (2,129) (1,734,698) (1,498,358) (1,429,954) (1,357,606) (1,052,317) 1,426,344 174,939 290,894 341,134 417,326 5,195,501 5,020,562 4,729,668 4,388,534 3,971,208 6,621,845 5,195,501 5,020,562 4,729,668 4,388,534 22,372,383$ 29,380,998 $ 22,544,545 $ 18,345,675 $ 26,339,158 $

22.84% 15.03% 18.21% 20.50% 14.28%
32,857,278$ 28,448,165 $ 27,686,736 $ 26,037,530 $ 25,344,468 $

68.09% 103.28% 81.43% 70.46% 103.92%

346
City of Murrieta

Schedule of Contributions - OPEB
Last Ten Fiscal Years

-91-
6/30/2025 6/30/2024 6/30/2023
Actuarially Determined Contribution 4,947,079 $ 3,805,686 $ 3,277,322 $ Contributions in Relation to the Actuarially
Determined Contributions (2,372,832) (2,328,988) (1,979,518) Contribution Deficiency (Excess) 2,574,247 $ 1,476,698 $ 1,297,804 $ Covered - Employee Payroll 43,741,299 $ 42,549,902 $ 41,390,955 $ Contributions as a Percentage of Covered -
Employee Payroll 5.42% 5.47% 4.78%
Assumptions and Methods:

Actuarial cost method: Entry-age normal, level percent of pay Amortization method: Closed period, level dollar
Amortization period: 21 years
Inflation: 2.30%
Assumed payroll growth: 2.80%
Healthcare trend rates: 7.40%, trending down to 4.14%
Rate of return on assets: 6.40%
Mortality rate: CalPERS Rates
Retirement rates: CalPERS Rates
* Fiscal year 2018 w as the first year of implementation; additional years w ill be presented as information is available.

347
City of Murrieta
Schedule of Contributions - OPEB (continued)
Last Ten Fiscal Years
-92-
6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018
3,019,917$ 3,043,480 $ 2,953,121 $ 2,396,299 $ 2,375,564 $ (1,859,804) (1,734,698) (1,498,358) (1,429,954) (1,357,606) 1,160,113$ 1,308,782$ 1,454,763$ 966,345$ 1,017,958$ 37,293,730$ 32,857,278$ 28,448,165$ 27,686,736$ 26,037,530$

4.99% 5.28% 5.27% 5.16% 5.21%
348
City of Murrieta

Budgetary Comparison Schedule – General Fund
For the Year Ended June 30, 2025

-93-
Original Final Actual
Variance with
Final Budget

REVENUES
Taxes 91,288,900 $ 84,739,592 $ 86,519,222 $ 1,779,630 $ Licenses and Permits 3,062,475 2,930,589 2,847,665 (82,924) Intergovernmental 3,655,772 4,463,695 5,339,941 876,246 Charges for Services 4,870,960 4,475,543 4,144,241 (331,302) Use of Money and Property 488,111 5,333,700 9,359,729 4,026,029 Fines and Forfeitures 391,750 344,400 249,473 (94,927) Miscellaneous 151,870 847,455 1,032,749 185,294 Total Revenues 103,909,838 103,134,974 109,493,020 6,358,046

EXPENDITURES
Current:

General Government:

City Council 197,758 195,490 182,065 13,425 City Attorney 180,000 300,000 252,566 47,434 General Administration 2,667,925 2,776,419 2,628,405 148,014 Animal Control 433,830 522,982 523,587 (605) Emergency Services - - 32,412 (32,412) Administrative Services 856,509 861,842 825,080 36,762 Human Resources 1,793,344 1,807,861 1,845,690 (37,829) City Clerk 1,569,354 1,558,343 1,729,560 (171,217) Finance 3,449,211 3,191,172 2,798,065 393,107 Nondepartmental 2,291,058 3,160,460 2,735,571 424,889 Subtotal General Government 13,438,989 14,374,569 13,553,001 821,568 Public Safety:

Police Administration 4,666,583 4,388,400 4,132,262 256,138 Police Operations 20,685,537 22,779,124 21,794,564 984,560 Police Support 15,732,562 17,556,870 16,863,462 693,408 Police Communications 6,263,468 5,963,240 6,320,133 (356,893) Fire Administration 822,222 658,917 585,024 73,893 Fire Operations 5,110,334 5,166,959 5,607,264 (440,305) Subtotal Public Safety 53,280,706 56,513,510 55,302,709 1,210,801 Community Development:

Economic Development 1,277,329 1,247,097 1,138,505 108,592 Planning 3,698,826 4,385,059 3,473,786 911,273 Building and Safety 3,157,441 2,847,195 2,344,704 502,491 Code Enforcement 1,552,808 1,539,130 1,511,789 27,341 Subtotal Community Development 9,686,404 10,018,481 8,468,784 1,549,697 Parks and Recreation 2,197,864 2,059,188 1,505,155 554,033 Public Works:

Public Works Nondepartmental - 5,000 28 4,972 Engineering 4,633,060 4,395,102 4,246,915 148,187 Maintenance 1,417,953 1,285,569 879,002 406,567 Street Lights 181,000 181,000 133,076 47,924 Facilities Maintenance 1,698,523 1,622,167 1,669,260 (47,093) Subtotal Public Works 7,930,536 7,488,838 6,928,281 560,557 Capital Outlay 2,021,991 3,154,671 5,482,951 (2,328,280) Debt Service:

Principal - - 1,097,054 (1,097,054) Interest 12,699 25,699 95,454 (69,755) Subtotal Debt Service 12,699 25,699 1,192,508 (1,166,809) Total Expenditures 88,569,189 93,634,956 92,433,389 1,201,567 Excess of Revenues Over Expenditures 15,340,649 9,500,018 17,059,631 7,559,613

OTHER FINANCING SOURCES (USES)
Transfers In - 275,490 281,680 6,190 Transfers Out (12,155,459) (7,515,269) (8,228,752) (713,483) Capital Lease Proceeds - - 1,744,485 1,744,485 Proceeds from Sale of Capital Assets - 67,704 74,772 7,068 Total Other Financing Sources (Uses) (12,155,459) (7,172,075) (6,127,815) 1,044,260 NET CHA NGE IN FUND BA LA NCES 3,185,190 2,327,943 10,931,816 8,603,873 Fund Balances, beginning of year 142,929,305 142,929,305 142,929,305 - Fund Balances, end of year 146,114,495$ 145,257,248 $ 153,861,121 $ 8,603,873 $ Budgeted Amounts

349
City of Murrieta

Budgetary Comparison Schedule – Fire District Special Revenue Fund For the Year Ended June 30, 2025

-94-
Original Final Actual
Variance with
Final Budget

REVENUES
Taxes 14,293,353 $ 17,214,099 $ 17,028,254 $ (185,845) $ Assessments 1,577,711 1,577,711 1,587,906 10,195 Licenses and permits 10,500 10,500 28,065 17,565 Intergovernmental 715,000 2,198,892 2,411,709 212,817 Charges for Services 538,826 520,201 628,595 108,394 Use of Money and Property 192,654 201,054 261,523 60,469 Fines and Forfeitures 30,000 180,000 139,317 (40,683) Miscellaneous 23,771 55,500 112,440 56,940 Total Revenues 17,381,815 21,957,957 22,197,809 239,852

EXPENDITURES
Current:

Public Safety 24,737,048 26,638,985 28,030,605 (1,391,620) Debt Service:

Principal Retirement - - 151,005 (151,005) Total Expenditures 24,750,080 26,654,517 28,206,555 (1,552,038)

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (7,368,265) (4,696,560) (6,008,746) (1,312,186)

OTHER FINANCING USES
Transfers In 7,368,265 3,828,780 5,143,217 1,314,437 Total Other Financing Uses 7,368,265 3,828,780 5,143,217 1,314,437 NET CHANGE IN FUND BALA NCES - (867,780) (865,529) 2,251 Fund Balances, beginning of year 4,640,349 4,640,349 4,640,349 - Fund Balances, end of year 4,640,349$ 3,772,569 $ 3,774,820 $ 2,251 $ Budgeted Amounts

350
City of Murrieta

Budgetary Comparison Schedule – Other Grants Special Revenue Fund For the Year Ended June 30, 2025

-95-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental 29,840 $ 1,182,842$ 1,129,204 $ (53,638) $ Use of Money and Property 22,650 39,400 20,471 (18,929) Miscellaneous - - 56 56 Total Revenues 52,490 1,222,242 1,149,731 (72,511)

EXPENDITURES
Current:

General Government 119,504 651,278 3,541 647,737 Public Safety 30 221,677 244,789 (23,112) Parks and Recreation 25,050 56,433 205,122 (148,689) Capital Outlay - 7,975 201,702 (193,727) Total Expenditures 144,584 937,363 655,154 282,209

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (92,094) 284,879 494,577 209,698

OTHER FINANCING SOURCES (USES)
Transfers In - - 10,898 10,898 Transfers Out - - (93,813) (93,813) NET CHA NGE IN FUND BA LA NCE (92,094) 284,879 411,662 126,783 Fund Balance (Deficit), beginning of year - - - - Fund Balance (Deficit), end of year (92,094) $ 284,879 $ 411,662 $ 126,783 $ Budgeted Amounts

351
City of Murrieta

Notes to Required Supplementary Information
For the Year Ended June 30, 2025

-96-
NOTE 1 BUDGETARY DATA

General Budget Policies

The City Council approves the bi-annual budget submitted by the City Manager prior to the beginning of the new fiscal year. A workshop and public meetings are held prior to its adoption by Council. Supplemental appropriations, where required during the period, are also approved by the Council. There were several supplemental appropriations required during the year. At fiscal year-end, all operating budget appropriations lapse.

Expenditures are monitored at the departmental level for the general fund and the fund level for all other funds with a legally adopted budget. These levels are considered the legal level of control.

Department heads are authorized to transfer budgeted amounts within their departments, within the same fund, with the approval of the City Manager. Transfers of appropriations between departments may be made only by authority of the City Manager. Transfers of appropriations between funds may be made only by authority of the City Council. Formal budgetary integration is employed as a management control device during the fiscal year for all governmental funds.

Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds except for certain special revenue and capital projects funds, which adopt project-length budgets.

Encumbrances

Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue, and similar governmental funds. Encumbrances outstanding at year-end are reported as a committed fund balance. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year-end are completed.

They do not constitute expenditures or estimated liabilities.

The Developer Agreement, Development Impact Fee, Other Grants, Reimbursement Agreement, TUMF, Federal Grants, Road Maintenance, and Rehabilitation Account Special Revenue funds and the Area Drainage Capital Projects Fund are appropriated on a project length capital improvement budget process.

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353

SUPPLEMENTARY INFORMATION
354
City of Murrieta

Consolidating Schedule of Balance Sheet by Sub Fund – General Fund June 30, 2025

-97-
General Measure T Capital Traffic Safety
ASSETS
Pooled Cash and Investments 73,484,860 $ 57,285,496 $ 8,148,937 $ 123,116 $ Receivables:

Accounts 514,055 - - - Taxes 6,113,125 4,812,402 - - Loans 2,722,862 121,871 - - Accrued Interest 1,618,085 - - - Prepaid Costs and Other Assets 294,282 29,327 - - Inventories 31,209 2,433 - - Due from Other Governments 3,348,009 - - - Due from Other Funds 3,845,259 - - - Advance to Other Funds 62,941 - - - Restricted Assets:

Cash and Investments with Fiscal Agents 56,229 - - - Total Assets 92,090,916 $ 62,251,529 $ 8,148,937 $ 123,116 $

LIABILITIES
Accounts Payable 2,297,911 $ 360,931 $ 194,927 $ 6 $ Accrued Liabilities 2,829,246 1,006,224 12,869 - Deposits Payable 749,339 - 4,074 - Unearned Revenue 200,055 - - - Due to Other Governments 701 - - - Due to other Funds - - - - Total Liabilities 6,077,252 1,367,155 211,870 6

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues:

Accounts 2,111,990 - - - Total Deferred Inflows of Resources 2,111,990 - - -

FUND BALANCES (DEFICITS)
Nonspendable 3,111,294 153,631 - - Restricted 208,240 - - - Committed 39,571,376 40,201,343 4,788,777 123,110 Assigned 42,753 - - - Unassigned 40,968,011 20,529,400 3,148,290 - Total Fund Balances (Deficits) 83,901,674 60,884,374 7,937,067 123,110 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances (Deficits) 92,090,916$ 62,251,529 $ 8,148,937 $ 123,116 $

355
City of Murrieta

Consolidating Schedule of Balance Sheet by Sub Fund – General Fund (Continued) June 30, 2025

-98-
Crime
Prevention
Vehicle
Replacement Deposits Elimination Total
-$ 1,181,760$ 8,203,502 $ - $ 148,427,671$ 77,570 372 651,692 - 1,243,689 - - - - 10,925,527 - - - - 2,844,733 - - - - 1,618,085 - - - - 323,609 - - - - 33,642 6,091 - 2,170 - 3,356,270 - - - (170,510) 3,674,749 - - - - 62,941 - - - - 56,229 83,661$ 1,182,132$ 8,857,364 $ (170,510) $ 172,567,145$ 141$ 35 $ 26,166$ - $ 2,880,117$ 5,791 - - - 3,854,130 - - 8,831,198 - 9,584,611 - - - - 200,055 - - - - 701 170,510 - - (170,510) - 176,442 35 8,857,364 (170,510) 16,519,614 74,420 - - - 2,186,410 74,420 - - - 2,186,410 - - - - 3,264,925 - - - - 208,240 - 1,086,815 - - 85,771,421 - - - - 42,753 (167,201) 95,282 - - 64,573,782 (167,201) 1,182,097 - - 153,861,121 83,661$ 1,182,132$ 8,857,364 $ (170,510) $ 172,567,145$

356
City of Murrieta

Consolidating Schedule of Revenues, Expenditures, and
Changes in Fund Balance by Sub Fund – General Fund
For the Year Ended June 30, 2025

-99-
General Measure T Capital Traffic Safety

REVENUES
Taxes 58,210,987 $ 28,308,235 $ - $ - $ Licenses and Permits 2,847,665 - - - Intergovernmental 5,339,941 - - - Charges for Services 4,144,241 - - - Use of Money and Property 9,306,716 - - 5,001 Fines and Forfeitures 201,703 - - 11,029 Miscellaneous 896,149 - 136,600 - Total Revenues 80,947,402 28,308,235 136,600 16,030

EXPENDITURES
Current:

General Government 12,688,172 864,349 - - Public Safety 41,902,945 13,229,794 - 9,580 Community Development 7,607,298 861,486 - - Parks and Recreation 1,046,246 458,909 - - Public Works 6,109,302 818,979 - - Capital Outlay 3,229,578 1,643,596 609,777 - Debt Service:

Principal Retirement 425,342 671,712 - - Interest and Fiscal Charges 17,692 77,762 - - Total Expenditures 73,026,575 18,626,587 609,777 9,580

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 7,920,827 9,681,648 (473,177) 6,450

OTHER FINA NCING SOURCES (USES)
Transfers In 6,190 7,400 275,490 - Transfers Out (1,245,422) (6,895,708) (95,022) - Lease Acquisition 1,744,485 - - - Sale of Capital Assets 67,704 - - - Total Other Financing Sources (Uses) 572,957 (6,888,308) 180,468 - NET CHA NGE IN FUND BA LANCES 8,493,784 2,793,340 (292,709) 6,450 Fund Balances, beginning of year 75,407,890 58,091,034 8,229,776 116,660 Fund Balances, end of year 83,901,674 $ 60,884,374 $ 7,937,067 $ 123,110 $

357
City of Murrieta

Consolidating Schedule of Revenues, Expenditures, and
Changes in Balances by Sub Fund – General Fund (Continued) For the Year Ended June 30, 2025

-100-
Crime
Prevention
Vehicle
Replacement Deposits Elimination Total
-$ - $ - $ - $ 86,519,222$ - - - - 2,847,665 - - - - 5,339,941 - - - - 4,144,241 - 48,012 - - 9,359,729 36,741 - - - 249,473 - - - - 1,032,749 36,741 48,012 - - 109,493,020 - 480 - - 13,553,001 160,390 - - - 55,302,709 - - - - 8,468,784 - - - - 1,505,155 - - - - 6,928,281 - - - - 5,482,951 - - - - 1,097,054 - - - - 95,454 160,390 480 - - 92,433,389 (123,649) 47,532 - - 17,059,631 - - - (7,400) 281,680 - - - 7,400 (8,228,752) - - - - 1,744,485 - 7,068 - - 74,772 - 7,068 - - (6,127,815) (123,649) 54,600 - - 10,931,816 (43,552) 1,127,497 - - 142,929,305 (167,201)$ 1,182,097 $ - $ - $ 153,861,121$

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NONMAJOR GOVERNMENTAL FUNDS
360
City of Murrieta

Combining Balance Sheet – Nonmajor Governmental Funds
June 30, 2025

-101-
State Gas Tax Measure A
Air Quality
Management
District Block Grants
ASSETS
Pooled Cash and Investments 10,959,242 $ 14,513,380 $ 1,111,641 $ - $ Receivables:

Accounts - - 504 - Taxes 265,481 - - - Loans - - - - Accrued Interest - - - - Leases - - - - Prepaid Costs - - - - Inventory 20,820 - - - Due from Other Governments - 615,950 38,002 126,737 Restricted Assets:

Cash and Investments with Fiscal Agents - - - - Total Assets 11,245,543 $ 15,129,330 $ 1,150,147 $ 126,737 $

LIABILITIES
Accounts Payable 96,452 $ 646,352 $ 24 $ 322,742$ Accrued Liabilities 279,496 143,555 - 16,967 Deposits Payable - - - - Unearned Revenue - - - - Due to Other Funds - - - 72,718 Total Liabilities 375,948 789,907 24 412,427

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues:

Accounts - - 38,002 78,635 Deferred Inflows Related to Leases - - - - Total Deferred Inflows of Resources - - 38,002 78,635

FUND BALANCES (DEFICITS)
Nonspendable 20,820 - - - Restricted 10,848,775 14,339,423 1,112,121 - Unassigned - - - (364,325) Total Fund Balances (Deficits) 10,869,595 14,339,423 1,112,121 (364,325) Total Liabilities, Deferred Inflows of
Resources, and Fund Balances (Deficits) 11,245,543$ 15,129,330 $ 1,150,147 $ 126,737 $ Special Revenue Funds

361
City of Murrieta

Combining Balance Sheet – Nonmajor Governmental Funds (Continued) June 30, 2025

-102-
Seized Assets
Forfeitures SLESF
Murrieta Public
Library NPDES
Reimbursement
Agreement
Fund TUMF
630,574$ 29,217 $ 1,300,046$ 1,153,635 $ 6,097 $ 815,318$ - - 680 - - - - - 93,410 - - - - - - - - - - - - - - - - - - - - - - - 5,052 3,780 - - - - - - - - 50,519 - - 485,807 55,000 59,011 - - - - - - 681,093$ 29,217 $ 1,399,188$ 1,643,222 $ 61,097 $ 874,329 $ 3$ 5 $ 152,057$ 23,558 $ 28,408 $ - $ 777 60,533 141,976 10,983 4,293 - 20 - 1,300 - - - - - - - - - - - - - - - 800 60,538 295,333 34,541 32,701 -
30,844 - - 485,807 55,000 59,011 - - - - - - 30,844 - - 485,807 55,000 59,011 - - 5,052 3,780 - - 649,449 - 1,098,803 1,119,094 - 815,318 - (31,321) - - (26,604) - 649,449 (31,321) 1,103,855 1,122,874 (26,604) 815,318 681,093$ 29,217 $ 1,399,188$ 1,643,222 $ 61,097 $ 874,329 $ Special Revenue Funds
362
City of Murrieta

Combining Balance Sheet – Nonmajor Governmental Funds (Continued) June 30, 2025

-103-
Housing
Authority
Community
Services District
Road
Maintenance and
Rehabilitation
Account
Federal Grants
(formerly major)

AS SE T S
Pooled Cash and Investments 1,497,343 $ 7,318,810 $ 7,207,715 $ 517,765 $ Receivables:

Accounts 1,572,729 17,739 1,760 - Taxes - 100,167 - - Loans 8,911,663 - - - Accrued Interest 1,100,207 - - - Leases - 530,412 - - Prepaid Costs 169 6,037 - - Inventory - - - - Due from Other Governments - - 532,374 1,755,480 Restricted Assets:

Cash and Investments with Fiscal Agents - - - - Total Assets 13,082,111 $ 7,973,165 $ 7,741,849 $ 2,273,245 $

LIABILITIES
Accounts Payable 3,086 $ 1,173,727$ 34,298 $ 589,560 $ Accrued Liabilities - 244,647 92,632 - Deposits Payable - 54,234 - - Unearned Revenue - - - 334,783 Due to Other Funds - - - 1,392,220 Total Liabilities 3,086 1,472,608 126,930 2,316,563

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues:

Accounts 1,130,212 3,389 - 1,730,800 Deferred Inflows Related to Leases - 481,303 - - Total Deferred Inflows of Resources 1,130,212 484,692 - 1,730,800

FUND BA LA NCES (DEFICITS)
Nonspendable 169 6,037 - - Restricted 11,948,644 6,009,828 7,614,919 - Unassigned - - - (1,774,118) Total Fund Balances (Deficits) 11,948,813 6,015,865 7,614,919 (1,774,118) Total Liabilities, Deferred Inflows of
Resources, and Fund Balances (Deficits) 13,082,111$ 7,973,165 $ 7,741,849 $ 2,273,245 $ Special Revenue Funds

363
City of Murrieta

Combining Balance Sheet – Nonmajor Governmental Funds (Continued) June 30, 2025

-104-
Developer
Agreement
Opioid
Settlement Prop 68 Grant
Community
Facilities
District Area Drainage
South West
Road
and Bridge
4,907,257$ 91,714 $ - $ - $ 6,449,067$ 356,298 $ - 30,617 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 690,636 - - - 1,780,417 - - 4,907,257$ 122,331 $ - $ 1,780,417$ 6,449,067 $ 1,046,934 $ 96,973$ 4 $ 30,526$ 58,287 $ 14,322 $ 8 $ 2,015 - - - - - 2,582,183 - - - - - - - - - - - - - 217,101 1,664,949 - - 2,681,171 4 247,627 1,723,236 14,322 8 - - - - - 690,636 - - - - - - - - - - - 690,636 - - - - - - 2,226,086 122,327 - 57,181 6,434,745 356,290 - - (247,627) - - - 2,226,086 122,327 (247,627) 57,181 6,434,745 356,290 4,907,257$ 122,331 $ - $ 1,780,417$ 6,449,067 $ 1,046,934 $ Capital Projects FundsSpecial Revenue Funds

364
City of Murrieta

Combining Balance Sheet – Nonmajor Governmental Funds (Continued) June 30, 2025

-105-
Citywide Debt
Service 2016A LARB 2016B LARB 2022A LARB
ASSETS
Pooled Cash and Investments 6,738 $ 75,458 $ 14,296 $ 81,971 $ Receivables:

Accounts - - - - Taxes - - - - Loans - - - - Accrued Interest - - - - Leases - - - - Prepaid Costs - - - - Inventory - - - - Due from Other Governments - - - - Restricted Assets:

Cash and Investments with Fiscal Agents 3,767 1,896,525 332,266 1,511,000 Total Assets 10,505 $ 1,971,983$ 346,562 $ 1,592,971 $

LIABILITIES
Accounts Payable - $ - $ - $ - $ Accrued Liabilities - - - - Deposits Payable - - - - Unearned Revenue - - - - Due to Other Funds - - - - Total Liabilities - - - -

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues:

Accounts - - - - Deferred Inflows Related to Leases - - - - Total Deferred Inflows of Resources - - - -

FUND BA LA NCES (DEFICITS)
Nonspendable - - - - Restricted 10,505 1,971,983 346,562 1,592,971 Unassigned - - - - Total Fund Balances (Deficits) 10,505 1,971,983 346,562 1,592,971 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances (Deficits) 10,505$ 1,971,983$ 346,562 $ 1,592,971 $ Debt Service
365
City of Murrieta

Combining Balance Sheet – Nonmajor Governmental Funds (Concluded) June 30, 2025

-106-
Permanent
Town Hall
Association
Total Other
Governmental
Funds
519,720$ 59,563,302$
- 1,624,029
- 459,058
- 8,911,663
- 1,100,207
- 530,412
- 15,038
- 20,820
- 4,409,516
- 5,523,975
519,720$ 82,158,020$
16$ 3,270,408$
- 997,874
- 2,637,737
- 334,783
- 3,346,988
16 10,587,790
- 4,302,336
- 481,303
- 4,783,639
500,000 535,858
19,704 68,694,728
- (2,443,995)
519,704 66,786,591
519,720$ 82,158,020$
366
City of Murrieta
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds
For the Year Ended June 30, 2025
-107-
Special Revenue Funds
State Gas Tax Measure A
Air Quality
Management
District B
lock Grants

REVENUES
Taxes -$
-$ -$
-$
Assessments - - - -
Intergovernmental 3
,113,177 3,885,627 144,530 170,837
Charges for Services - - - -
Use of Money and Property 462,832 608,574 42,501 - Fines and Forfeitures - - - -
Developer Participation - - - -
Miscellaneous 862
- - -
Total Revenues 3,576,871 4,494,201 187,031 170,837

EXPENDITURES
Current:

General Government - - - 389,028
Public Safety - - - -
Community Development - - - -
Parks and Recreation - - - -
Public Works 2,807,191 24,787 23,338 -
Capital Outlay 739,233 3,192,463 20,655 -
Debt Service:

Principal Retirement - - - -
Interest and Fiscal Charges - - - -
Total Expenditures 3,546,424 3,217,250 43,993 389,028

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 30,447 1,276,951 143,038 (218,191)

OTHER FINA NCING SOURCES (USES)
Transfers In - - - -
Transfers Out - (721,381) - -
Transfer of land held for resale - - - -
Total Other Financing Sources (Uses) - (721,381) - - NET CHA NGE IN FUND BA LA NCES 30,447 555,570 143,038 (218,191) Fund Balances (Deficits), beginning of year,
previously reported 10,839,148 13,783,853 969,083 (146,134) Adjustment - change from major to nonmajor fund - - - - Fund Balances (Deficits), beginning of year, as
restated (Note 19) 10,839,148 13,783,853 969,083 (146,134) Fund Balances (Deficits), end of year 10,869,595$ 14,339,423$ 1,112,121$ (364,325)$ 367
City of Murrieta

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds (Continued)
For the Year Ended June 30, 2025

-108-
Special Revenue Funds
Seized Assets
Forfeitures SLESF
Murrieta Public
Library NPDES
Reimbursement
Agreement
Fund TUMF
-$ - $ 2,961,054$ - $ - $ - $ - - - 208,170 - - 204,833 330,498 - - 57,000 - - - 26,242 - - - 18,156 4,535 88,981 52,219 62 38,295 - - 14,344 - - - - - - - - - 117 48 72,291 - - - 223,106 335,081 3,162,912 260,389 57,062 38,295 - - - - - - 44 377,793 - - - - - - - - - - - - 3,324,574 - - - - - - 720,160 - - 86,619 67,897 - - 85,859 59,011 - 14,978 - - - - - - - - - - 86,663 460,668 3,324,574 720,160 85,859 59,011 136,443 (125,587) (161,662) (459,771) (28,797) (20,716) - - - 300,000 - - - - - - - - - - - - - - - - - 300,000 - - 136,443 (125,587) (161,662) (159,771) (28,797) (20,716) 513,006 94,266 1,265,517 1,282,645 2,193 836,034 - - - - - - 513,006 94,266 1,265,517 1,282,645 2,193 836,034 649,449$ (31,321) $ 1,103,855 $ 1,122,874 $ (26,604) $ 815,318 $ 368
City of Murrieta

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds (Continued)
For the Year Ended June 30, 2025

-109-
Housing
Authority
Community
Services District
Road
Maintenance and
Rehabilitation
Account
Other Grants
(formerly
nonmajor)

REVENUES
Taxes - $ - $ - $
Assessments - 9,964,905 - Intergovernmental - - 3,022,827 Charges for Services - 924,672 - Use of Money and Property 143,948 398,579 272,253 Fines and Forfeitures - - - Developer Participation - - - Miscellaneous 6,500 21,824 - Total Revenues 150,448 11,309,980 3,295,080

EXPENDITURES
Current:

General Government - 3,263 - Public Safety - - - Community Development 33,453 - - Parks and Recreation - 14,074,057 - Public Works - - 6,091 Capital Outlay - 374,044 1,981,421 Debt Service:

Principal Retirement - - - Interest and Fiscal Charges - - - Total Expenditures 33,453 14,451,364 1,987,512

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 116,995 (3,141,384) 1,307,568

OTHER FINA NCING SOURCES (USES)
Transfers In - 2,534,988 - Transfers Out - (428,477) - Transfer of land held for resale (3,515,665) - - Total Other Financing Sources (Uses) (3,515,665) 2,106,511 - NET CHA NGE IN FUND BA LA NCES (3,398,670) (1,034,873) 1,307,568 Fund Balances (Deficits), beginning of year,
previously reported 15,347,483 7,050,738 6,307,351 (367,828) Adjustment - change from major to nonmajor fund - - - 367,828 Fund Balances (Deficits), beginning of year, as
restated (Note 19) 15,347,483 7,050,738 6,307,351 - Fund Balances (Deficits), end of year 11,948,813 $ 6,015,865 $ 7,614,919 $ - $ Special Revenue Funds
369
City of Murrieta

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds (Continued)
For the Year Ended June 30, 2025

-110-
Federal Grants
(formerly major)
Developer
Agreement
Opioid
Settlement Prop 68 Grant
Community
Facilities
District Area Drainage
-$ - $ - $ - $ - $ - $ - - - - - - 8,530,635 - - - - - - - - - - - 334,549 195,550 2,839 - 71,238 265,393 - - - - - - - - - - - 195,782 - - 320,026 - - - 8,865,184 195,550 322,865 - 71,238 461,175 6,221,123 - 197,263 562 - - 724,591 - - - - - - - - - - - 16,657 2,802 - - - - - 1,951 - - - 2,575 3,370,325 212,722 - 247,065 761,474 97,918 - - - - - - - - - - - - 10,332,696 217,475 197,263 247,627 761,474 100,493 (1,467,512) (21,925) 125,602 (247,627) (690,236) 360,682 175,245 - - - - - (275,490) - - - - - - - - - - - (100,245) - - - - - (1,567,757) (21,925) 125,602 (247,627) (690,236) 360,682 - 2,248,011 (3,275) - 747,417 6,074,063 (206,361) - - - - - (206,361) 2,248,011 (3,275) - 747,417 6,074,063 (1,774,118)$ 2,226,086 $ 122,327 $ (247,627) $ 57,181 $ 6,434,745$ Capital Projects FundsSpecial Revenue Funds

370
City of Murrieta

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds
For the Year Ended June 30, 2025

-111-
Capital Projects
Funds
South West
Road
and Bridge
Citywide Debt
Service 2016A LARB 2016B LARB

REVENUES
Taxes - $ - $ - $ - $ Assessments - - 3,610,887 626,438 Intergovernmental 66,654 - - - Charges for Services - - - - Use of Money and Property 12,266 3,744 (11,210) (1,964) Fines and Forfeitures - - - - Developer Participation - - - - Miscellaneous - - - - Total Revenues 78,920 3,744 3,599,677 624,474

EXPENDITURES
Current:

General Government - - - - Public Safety - - - - Community Development - - - - Parks and Recreation - - - - Public Works 117 - - - Capital Outlay - - - - Debt Service:

Principal Retirement - 1,069,000 2,465,000 435,000 Interest and Fiscal Charges - 234,170 1,145,887 191,438 Total Expenditures 117 1,303,170 3,610,887 626,438

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 78,803 (1,299,426) (11,210) (1,964)

OTHER FINA NCING SOURCES (USES)
Transfers In - 1,299,435 - - Transfers Out - - - - Transfer of land held for resale - - - - Total Other Financing Sources (Uses) - 1,299,435 - - NET CHA NGE IN FUND BA LA NCES 78,803 9 (11,210) (1,964) Fund Balances (Deficits), beginning of year,
previously reported 277,487 10,496 1,983,193 348,526 Adjustment - change from major to nonmajor fund - - - - Fund Balances (Deficits), beginning of year, as
restated (Note 19) 277,487 10,496 1,983,193 348,526 Fund Balances (Deficits), end of year 356,290 $ 10,505 $ 1,971,983$ 346,562 $ Debt Service Funds
371
City of Murrieta

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds (Concluded)
For the Year Ended June 30, 2025

-112-
Debt Service
Funds Permanent
2022A LARB
Town Hall
Association
Total Other
Governmental
Funds
-$ - $ 2,961,054$
3,504,550 - 17,914,950
- - 19,526,618 - - 950,914
(3,842) 21,812 3,021,310 - - 14,344
- - 195,782
- - 421,668
3,500,708 21,812 45,006,640
- - 6,811,239
- - 1,102,428
- - 33,453
- 19,119 17,437,209
- - 3,586,210
- - 11,296,706 2,300,000 - 6,283,978
1,204,555 - 2,776,050
3,504,555 19,119 49,327,273
(3,847) 2,693 (4,320,633) - - 4,309,668
- - (1,425,348) - - (3,515,665) - - (631,345)
(3,847) 2,693 (4,951,978) 1,596,818 517,011 71,577,102
- - 161,467
1,596,818 517,011 71,738,569
1,592,971$ 519,704 $ 66,786,591$
372
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
State Gas Tax
For the Year Ended June 30, 2025

-113-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental 3,386,600 $ 3,128,646 $ 3,113,177 $ (15,469) $ Use of Money and Property 70,000 446,000 462,832 16,832 Miscellaneous - - 862 862 Total Revenues 3,456,600 3,574,646 3,576,871 2,225

EXPENDITURES
Current:

Public Works 2,791,569 3,036,352 2,807,191 229,161 Capital Outlay - 180,000 739,233 (559,233) Total Expenditures 2,791,569 3,216,352 3,546,424 (330,072) NET CHA NGE IN FUND BA LA NCE 665,031 358,294 30,447 (327,847) Fund Balance, beginning of year 10,839,148 10,839,148 10,839,148 - Fund Balance, end of year 11,504,179 $ 11,197,442 $ 10,869,595 $ (327,847) $ Budgeted Amounts

373
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Measure A
For the Year Ended June 30, 2025

-114-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental 2,635,000 $ 3,388,000 $ 3,885,627 $ 497,627 $ Use of Money and Property 10,000 585,000 608,574 23,574 Total Revenues 2,645,000 3,973,000 4,494,201 521,201

EXPENDITURES
Current:

Public Works 41,300 75,245 24,787 50,458 Capital Outlay - - 3,192,463 (3,192,463) Total Expenditures 41,300 75,245 3,217,250 (3,142,005)

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 2,603,700 3,897,755 1,276,951 (2,620,804)

OTHER FINA NCING SOURCES (USES)
Transfers out (727,300) (727,300) (721,381) 5,919 NET CHA NGE IN FUND BA LA NCE 1,876,400 3,170,455 555,570 (2,614,885) Fund Balance, beginning of year 13,783,853 13,783,853 13,783,853 - Fund Balance, end of year 15,660,253 $ 16,954,308 $ 14,339,423 $ (2,614,885) $ Budgeted Amounts

374
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Air Quality Management District
For the Year Ended June 30, 2025

-115-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental 143,000 $ 143,000 $ 144,530 $ 1,530 $ Use of Money and Property 4,000 46,935 42,501 (4,434) Total Revenues 147,000 189,935 187,031 (2,904)

EXPENDITURES
Current:

Public Works 250 327 23,338 (23,011) Capital Outlay - 20,655 20,655 - Total Expenditures 250 20,982 43,993 (23,011) NET CHA NGE IN FUND BA LA NCE 146,750 168,953 143,038 (25,915) Fund Balance, beginning of year 969,083 969,083 969,083 - Fund Balance, end of year 1,115,833 $ 1,138,036 $ 1,112,121 $ (25,915) $ Budgeted Amounts

375
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Block Grants
For the Year Ended June 30, 2025

-116-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental 590,000 $ 590,000 $ 170,837 $ (419,163) $ Total Revenues 590,000 590,000 170,837 (419,163)

EXPENDITURES
Current:

General Government 100,000 101,500 389,028 (287,528) Total Expenditures 100,000 101,500 389,028 (287,528) NET CHA NGE IN FUND BA LA NCE 490,000 488,500 (218,191) (706,691) Fund Balance (Deficit), beginning of year (146,134) (146,134) (146,134) - Fund Balance (Deficit), end of year 343,866 $ 342,366 $ (364,325) $ (706,691) $ Budgeted Amounts
376
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Seized Assets Forfeitures
For the Year Ended June 30, 2025

-117-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental 8,000 $ 8,000 $ 204,833$ 196,833 $ Use of Money and Property 1,070 13,320 18,156 4,836 Miscellaneous - - 117 117 Total Revenues 9,070 21,320 223,106 201,786

EXPENDITURES
Current:

Public Safety 4,000 4,097 44 4,053 Capital Outlay - 42,145 86,619 (44,474) Total Expenditures 4,000 46,242 86,663 (40,421) NET CHA NGE IN FUND BALA NCE 5,070 (24,922) 136,443 161,365 Fund Balance, beginning of year 513,006 513,006 513,006 - Fund Balance, end of year 518,076 $ 488,084 $ 649,449 $ 161,365 $ Budgeted Amounts

377
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Supplemental Law Enforcement Services Fund (SLESF)
For the Year Ended June 30, 2025

-118-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental 280,561 $ 280,561 $ 330,498 $ 49,937 $ Use of Money and Property 1,000 4,180 4,535 355 Miscellaneous - - 48 48 Total Revenues 281,561 284,741 335,081 50,340

EXPENDITURES
Current:

General Government - 36,500 - 36,500 Public Safety 265,299 319,786 377,793 (58,007) Capital Outlay - 86,134 67,897 18,237 Debt Service:

Principal Retirement - - 14,978 (14,978) Total Expenditures 265,299 442,420 460,668 (18,248) NET CHANGE IN FUND BALANCE 16,262 (157,679) (125,587) 32,092 Fund Balance, beginning of year, as restated 94,266 94,266 94,266 - Fund Balance, end of year 110,528 $ (63,413) $ (31,321) $ 32,092 $ Budgeted Amounts

378
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Murrieta Public Library
For the Year Ended June 30, 2025

-119-
Original Final Actual
Variance with
Final Budget

REVENUES
Assessments 2,467,294 $ 2,990,979 $ 2,961,054 $ (29,925) $ Charges for services 20,300 20,900 26,242 5,342 Use of Money and Property 18,600 60,990 88,981 27,991 Fines and Forfeitures 30,000 20,000 14,344 (5,656) Miscellaneous 46,600 66,100 72,291 6,191 Total Revenues 2,582,794 3,158,969 3,162,912 3,943

EXPENDITURES
Current:

Parks and Recreation 3,389,290 3,623,921 3,324,574 299,347 Total Expenditures 3,389,290 3,623,921 3,324,574 299,347

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (806,496) (464,952) (161,662) 303,290

OTHER FINANCING SOURCES (USES)
Transfers in 806,496 52,773 - (52,773) NET CHA NGE IN FUND BA LA NCE - (412,179) (161,662) 250,517 Fund Balance, beginning of year 1,265,517 1,265,517 1,265,517 - Fund Balance, end of year 1,265,517 $ 853,338 $ 1,103,855 $ 250,517 $ Budgeted Amounts

379
City of Murrieta
Budgetary Comparison Schedule – Special Revenue Fund –
National Pollutant Discharge Elimination System (NPDES) For the Year Ended June 30, 2025
-120-
Original Final A ctual
Variance with
Final Budget

REVENUES
Assessments 4
88,000$ 512,000$ 208,170$ (303,830)$
Use of Money and Property 4,700 50,000 52,219 2,219 Total Revenues 492,700 562,000 260,389 (301,611)

EXPENDITURES
Current:

Public Works 1,357,800 1,136,343 720,160 416,183 Total Expenditures 1,357,800 1,136,343 720,160 416,183

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (865,100) (574,343) (459,771) 114,572

OTHER FINA NCING SOURCES (USES)
Transfers In 300,000 (300,000) 300,000 600,000
NET CHANGE IN FUND BALANCES (565,100) (874,343) (159,771) 714,572 Fund Balance, beginning of year 1,282,645 1,282,645 1,282,645 - Fund Balance, end of year 717,545$ 408,302$ 1,122,874$ 714,572$ Budgeted Amounts
380
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Reimbursement Agreement Fund
For the Year Ended June 30, 2025

-121-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental - $ 212,614$ 57,000 $ (155,614)$ Use of Money and Property - 100 62 (38) Total Revenues - 212,714 57,062 (155,652)

EXPENDITURES
Capital Outlay - 104,764 85,859 18,905 Total Expenditures - 104,764 85,859 18,905 NET CHA NGE IN FUND BA LA NCE - 107,950 (28,797) (136,747) Fund Balance (Deficit), beginning of year 2,193 2,193 2,193 - Fund Balance (Deficit), end of year 2,193 $ 110,143$ (26,604) $ (136,747) $ Budgeted Amounts
381
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
TUMF
For the Year Ended June 30, 2025

-122-
Original Final Actual
Variance with
Final Budget

REVENUES
Use of Money and Property - 29,060 38,295 9,235 Total Revenues - $ 29,060$ 38,295 $ 9,235 $

EXPENDITURES
Current:

Public Safety - 10 - 10 Capital Outlay - 10 59,011 (59,001) Total Expenditures - 20 59,011 (58,991) NET CHA NGE IN FUND BA LA NCE - 29,040 (20,716) (49,756) Fund Balance, beginning of year 836,034 836,034 836,034 - Fund Balance (Deficit), end of year 836,034 $ 865,074 $ 815,318 $ (49,756) $ Budgeted Amounts
382
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Housing Authority
For the Year Ended June 30, 2025

-123-
Original Final Actual
Variance with
Final Budget

REVENUES
Use of Money and Property 44,000 $ 155,000 $ 143,948 $ (11,052) $ Miscellaneous 6,500 6,500 6,500 - Total Revenues 50,500 161,500 150,448 (11,052)

EXPENDITURES
Current:

Community Development 82,120 114,293 33,453 80,840 Total Expenditures 82,120 114,293 33,453 80,840

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (31,620) 47,207 116,995 69,788

OTHER FINANCING SOURCES (USES)
Transfer of land held for resale - - (3,515,665) (3,515,665) NET CHA NGE IN FUND BA LA NCE (31,620) 47,207 (3,398,670) (3,445,877) Fund Balance, beginning of year, as restated 15,347,483 15,347,483 15,347,483 - Fund Balance, end of year 15,315,863 $ 15,394,690 $ 11,948,813 $ (3,445,877) $ Budgeted Amounts

383
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Community Services District
For the Year Ended June 30, 2025

-124-
Original Final Actual
Variance with
Final Budget

REVENUES
Assessments 9,720,630 $ 9,732,022 $ 9,964,905 $ 232,883 $ Charges for Services 531,775 653,478 924,672 271,194 Use of Money and Property 156,805 288,584 398,579 109,995 Miscellaneous 22,000 22,100 21,824 (276) Total Revenues 10,431,210 10,696,184 11,309,980 613,796

EXPENDITURES
Current:

General Government - 48,667 3,263 45,404 Parks and Recreation 13,902,163 14,018,113 14,074,057 (55,944) Capital Outlay - - 374,044 (374,044) Total Expenditures 13,902,163 14,066,780 14,451,364 (384,584)

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (3,470,953) (3,370,596) (3,141,384) 229,212

OTHER FINANCING SOURCES (USES)
Transfers In 3,528,671 3,181,689 2,534,988 (646,701) Transfers Out (426,027) (426,027) (428,477) (2,450) Total Other Financing Sources (Uses) 3,102,644 2,755,662 2,106,511 (649,151) NET CHA NGE IN FUND BA LA NCE (368,309) (614,934) (1,034,873) (419,939) Fund Balances, beginning of year 7,050,738 7,050,738 7,050,738 - Fund Balances, end of year 6,682,429 $ 6,435,804 $ 6,015,865 $ (419,939) $ Budgeted Amounts

384
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Road Maintenance and Rehabilitation Account
For the Year Ended June 30, 2025

-125-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental 2,107,697 $ 2,904,570 $ 3,022,827 $ 118,257 $ Use of Money and Property - 261,000 272,253 11,253 Total Revenues 2,107,697 3,165,570 3,295,080 129,510

EXPENDITURES
Current:

Public Works - 1,920 6,091 (4,171) Capital Outlay - - 1,981,421 (1,981,421) Total Expenditures - 1,920 1,987,512 (1,985,592) NET CHANGE IN FUND BALANCE 2,107,697 3,163,650 1,307,568 (1,856,082) Fund Balance, beginning of year 6,307,351 6,307,351 6,307,351 - Fund Balance, end of year 8,415,048 $ 9,471,001 $ 7,614,919 $ (1,856,082) $ Budgeted Amounts
385
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Federal Grants
For the Year Ended June 30, 2025

-126-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental - $ 4,084,501$ 8,530,635 $ 4,446,134 $ Use of Money and Property - 346,440 334,549 (11,891) Total Revenues - 4,430,941 8,865,184 4,434,243

EXPENDITURES
Current:

General Government 23,014 156,209 6,221,123 (6,064,914) Public Safety - 3,172,495 724,591 2,447,904 Parks and Recreation - - 16,657 (16,657) Capital Outlay - 912,006 3,370,325 (2,458,319) Total Expenditures 23,014 4,240,710 10,332,696 (6,091,986)

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (23,014) 190,231 (1,467,512) (1,657,743)

OTHER FINANCING USES
Transfers In - - 175,245 175,245 Transfers Out - (275,490) (275,490) - Total Other Financing Uses - (275,490) (100,245) 175,245 NET CHA NGE IN FUND BA LA NCES (23,014) (85,259) (1,567,757) (1,482,498) Fund Balances, beginning of year (206,361) (206,361) (206,361) - Fund Balances, end of year (229,375)$ (291,620) $ (1,774,118)$ (1,482,498) $ Budgeted Amounts
386
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Developer Agreement
For the Year Ended June 30, 2025

-127-
Original Final Actual
Variance with
Final Budget

REVENUES
Use of Money and Property 27,000 $ 184,650 $ 195,550 $ 10,900 $ Total Revenues 27,000 184,650 195,550 10,900

EXPENDITURES
Current:

Parks and Recreation - - 2,802 (2,802) Public Works 2,250 2,134 1,951 183 Capital Outlay - - 212,722 (212,722) Total Expenditures 2,250 2,134 217,475 (215,341) NET CHA NGE IN FUND BA LA NCE 24,750 182,516 (21,925) (204,441) Fund Balance, beginning of year 2,248,011 2,248,011 2,248,011 - Fund Balance, end of year 2,272,761 $ 2,430,527 $ 2,226,086 $ (204,441) $ Budgeted Amounts

387
City of Murrieta

Budgetary Comparison Schedule – Special Revenue Fund –
Opioid Settlement
For the Year Ended June 30, 2025

-128-
Original Final Actual
Variance with
Final Budget

REVENUES
Use of Money and Property - $ 2,500 $ 2,839 $ 339 $ Miscellaneous - 31,658 320,026 288,368 Total Revenues - 34,158 322,865 288,707

EXPENDITURES
Current:

General Government - 3 197,263 (197,260) Total Expenditures - 3 197,263 (197,260) NET CHA NGE IN FUND BA LA NCE - 34,155 125,602 91,447 Fund Balances, beginning of year (3,275) (3,275) (3,275) - Fund Balances, end of year (3,275) $ 30,880 $ 122,327 $ 91,447 $ Budgeted Amounts

388
City of Murrieta

Budgetary Comparison Schedule – Capital Projects Fund – Community Facilities District
For the Year Ended June 30, 2025

-129-
Original Final Actual
Variance with
Final Budget

REVENUES
Use of Money and Property - $ 66,000$ 71,238 $ 5,238 $ Total Revenues - 66,000 71,238 5,238

EXPENDITURES
Capital Outlay - - 761,474 (761,474) Total Expenditures - - 761,474 (761,474) NET CHA NGE IN FUND BA LA NCE - 66,000 (690,236) (756,236) Fund Balance, beginning of year 747,417 747,417 747,417 - Fund Balance, end of year 747,417 $ 813,417 $ 57,181 $ (756,236)$ Budgeted Amounts

389
City of Murrieta

Budgetary Comparison Schedule – Capital Projects Fund – Area Drainage
For the Year Ended June 30, 2025

-130-
Original Final Actual
Variance with
Final Budget

REVENUES
Use of Money and Property 60,000 $ 255,000 $ 265,393 $ 10,393 $ Developer Participation 110,000 484,139 195,782 (288,357) Total Revenues 170,000 739,139 461,175 (277,964)

EXPENDITURES
Current:

Public Works 4,200 2,814 2,575 239 Capital Outlay - - 97,918 (97,918) Total Expenditures 4,200 2,814 100,493 (97,679) NET CHA NGE IN FUND BALA NCE 165,800 736,325 360,682 (375,643) Fund Balance, beginning of year 6,074,063 6,074,063 6,074,063 - Fund Balance, end of year 6,239,863 $ 6,810,388 $ 6,434,745 $ (375,643) $ Budgeted Amounts

390
City of Murrieta

Budgetary Comparison Schedule – Capital Projects Fund – South West Road and Bridge
For the Year Ended June 30, 2025

-131-
Original Final Actual
Variance with
Final Budget

REVENUES
Intergovernmental - $ - $ 66,654$ 66,654 $ Use of Money and Property 1,000 8,665 12,266 3,601 Total Revenues 1,000 8,665 78,920 70,255

EXPENDITURES
Current:

Public Works 60 126 117 9 Total Expenditures 60 126 117 9 NET CHANGE IN FUND BALANCE 940 8,539 78,803 70,264 Fund Balance, beginning of year 277,487 277,487 277,487 - Fund Balance, end of year 278,427 $ 286,026 $ 356,290 $ 70,264 $ Budgeted Amounts
391
City of Murrieta

Budgetary Comparison Schedule – Debt Service Fund –
Citywide Debt Service
For the Year Ended June 30, 2025

-132-
Original Final Actual
Variance with
Final Budget

REVENUES
Current
Use of Money and Property 50 $ 450 $ 3,744 $ 3,294 $

EXPENDITURES
Current:

General Government - 10 - 10 Debt service:

Principal Retirement 1,069,000 1,069,000 1,069,000 - Interest and Fiscal Charges 236,400 236,325 234,170 2,155 Total Expenditures 1,305,400 1,305,335 1,303,170 2,165

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,305,350) (1,304,885) (1,299,426) 5,459

OTHER FINANCING SOURCES (USES)
Transfers In 1,305,354 (1,305,354) 1,299,435 2,604,789 NET CHA NGE IN FUND BA LA NCE 4 (2,610,239) 9 2,610,248 Fund Balance, beginning of year 10,496 10,496 10,496 - Fund Balance, end of year 10,500 $ (2,599,743)$ 10,505 $ 2,610,248$ Budgeted Amounts

392
City of Murrieta

Budgetary Comparison Schedule – Debt Service Fund –
2016A LARB
For the Year Ended June 30, 2025

-133-
Original Final Actual
Variance with
Final Budget

REVENUES
Assessments - $ 3,610,887$ 3,610,887 $ - $ Use of Money and Property - 47,000 (11,210) (58,210) Total Revenues - 3,657,887 3,599,677 (58,210)

EXPENDITURES
Debt Service:

Principal Retirement 2,465,000 2,465,000 2,465,000 - Interest and Fiscal Charges 1,145,887 1,145,887 1,145,887 - Total Expenditures 3,610,887 3,610,887 3,610,887 - NET CHA NGE IN FUND BA LA NCE (3,610,887) 47,000 (11,210) (58,210) Fund Balances, beginning of year, as restated 1,983,193 1,983,193 1,983,193 - Fund Balances, end of year (1,627,694) $ 2,030,193 $ 1,971,983 $ (58,210) $ Budgeted Amounts

393
City of Murrieta

Budgetary Comparison Schedule – Debt Service Fund –
2016B LARB
For the Year Ended June 30, 2025

-134-
Original Final Actual
Variance with
Final Budget

REVENUES
Assessments - $ 626,438$ 626,438 $ - $ Use of Money and Property - 9,300 (1,964) (11,264) Miscellaneous - - - - Total Revenues - 635,738 624,474 (11,264)

EXPENDITURES
Debt Service:

Principal Retirement 435,000 435,000 435,000 - Interest and Fiscal Charges 191,438 191,438 191,438 - Total Expenditures 626,438 626,438 626,438 - NET CHANGE IN FUND BALANCE (626,438) 9,300 (1,964) (11,264) Fund Balances, beginning of year 348,526 348,526 348,526 - Fund Balances, end of year (277,912) $ 357,826 $ 346,562 $ (11,264) $ Budgeted Amounts

394
City of Murrieta

Budgetary Comparison Schedule – Debt Service Fund –
2022A LARB
For the Year Ended June 30, 2025

-135-
Original Final Actual
Variance with
Final Budget

REVENUES
Assessments - $ 3,494,250$ 3,504,550 $ 10,300 $ Use of Money and Property - 18,000 (3,842) (21,842) Total Revenues - 3,512,250 3,500,708 (11,542)

EXPENDITURES
Debt Service:

Principal Retirement 2,290,000 2,290,000 2,300,000 (10,000) Interest and Fiscal Charges 1,204,250 1,204,250 1,204,555 (305) Total Expenditures 3,494,250 3,494,250 3,504,555 (10,305) NET CHA NGE IN FUND BA LA NCE (3,494,250) 18,000 (3,847) (21,847) Fund Balances, beginning of year 1,596,818 1,596,818 1,596,818 - Fund Balances, end of year (1,897,432) $ 1,614,818 $ 1,592,971 $ (21,847) $ Budgeted Amounts

395
City of Murrieta

Budgetary Comparison Schedule – Permanent Fund –
Town Hall Association
For the Year Ended June 30, 2025

-136-
Original Final Actual
Variance with
Final Budget

REVENUES
Use of Money and Property 5,000 $ 15,000 $ 21,812 $ 6,812 $ Total Revenues 5,000 15,000 21,812 6,812

EXPENDITURES
Current:

Parks and recreation 5,000 19,156 19,119 37 Total Expenditures 5,000 19,156 19,119 37 NET CHA NGE IN FUND BA LA NCE - (4,156) 2,693 6,849 Fund Balances, beginning of year 517,011 517,011 517,011 - Fund Balances, end of year 517,011 $ 512,855 $ 519,704 $ 6,849 $ Budgeted Amounts

396

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397

INTERNAL SERVICE FUNDS
398

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399
City of Murrieta

Combining Statement of Fund Net Position – Internal Service Funds June 30, 2025

-137-
Information
Technology
Risk
Management Total
ASSETS
Current Assets:

Cash and Investments 3,414,491 $ 10,629,741 $ 14,044,232 $ Accounts Receivable 7,424 4,133 11,557 Prepaid Costs 715,883 115,064 830,947 Inventory - 4,506 4,506 Due From Other Governments - 76,572 76,572 Deposits Held with Others - 3,031,228 3,031,228 Total Current Assets 4,137,798 13,861,244 17,999,042 Noncurrent:

Capital Assets, net 224,190 - 224,190 Total Assets 4,361,988 13,861,244 18,223,232

LIABILITIES
Current Liabilities:

Accounts Payable 340,239 63,449 403,688 Accrued Liabilities 99,732 37,828 137,560 Unearned Revenues 15 1,133 1,148 Accrued Compensated Absences 61,183 6,140 67,323 Accrued Claims and Judgments - 5,775,525 5,775,525 Note Payable 3,333 - 3,333 Total Current Liabilities 504,502 5,884,075 6,388,577 Noncurrent:

Accrued Compensated Absences 22,808 2,289 25,097 Accrued Claims and Judgments - 6,686,900 6,686,900 Total Noncurrent Liabilities 22,808 6,689,189 6,711,997 Total Liabilities 527,310 12,573,264 13,100,574

NET POSITION (DEFICIT)
Net Investment in Capital Assets 220,857 - 220,857 Restricted for PEG 462,216 - 462,216 Unrestricted 3,151,605 1,287,980 4,439,585 Total Net Position (Deficit) 3,834,678$ 1,287,980 $ 5,122,658 $ Governmental Activities - Internal
Service Funds

400
City of Murrieta

Combining Statement of Revenues, Expenses, and Changes in Fund Net Position – Internal Service Funds
For the Year Ended June 30, 2025

-138-
Information
Technology
Risk
Management Total

OPERATING REVENUES
Interdepartmental Charges 3,712,068 $ 14,569,417 $ 18,281,485 $ Franchise Taxes 30,723 - 30,723 Miscellaneous 857 18,666 19,523 Total Operating Revenues 3,743,648 14,588,083 18,331,731

OPERATING EXPENSES
Administration and General 3,869,485 5,938,371 9,807,856 Claims - 1,506,168 1,506,168 Depreciation and Amortization 434,108 - 434,108 Total Operating Expenses 4,303,593 7,444,539 11,748,132 OPERATING INCOME (LOSS) (559,945) 7,143,544 6,583,599

NONOPERATING REVENUES (EXPENSES)
Interest Revenue 149,791 260,034 409,825 Interest Expense (510) - (510) Gain (loss) on sale of equipment - - - Total Nonoperating Revenues (Expenses) 149,281 260,034 409,315 CHANGES IN NET POSITION (410,664) 7,403,578 6,992,914 Net Position (Deficit), beginning of year 4,245,342 (6,115,598) (1,870,256) Net Position (Deficit), end of year 3,834,678 $ 1,287,980 $ 5,122,658 $ Governmental Activities - Internal
Service Funds

401
City of Murrieta

Combining Statement of Cash Flows – Internal Service Funds For the Year Ended June 30, 2025

-139-
Information
Technology
Risk
Management Total

CA SH FLOWS FROM OPERA TING A CTIVITIES
Cash Received from Interfund Service Provided 3,744,817$ 14,511,511 $ 18,256,328 $ Cash Paid to Suppliers for Goods and Services (1,921,324) (5,564,658) (7,485,982) Cash Paid to Employees for Services (1,636,862) (383,793) (2,020,655) Claims Paid - (3,188,572) (3,188,572) Net Cash Provided by Operating Activities 186,631 5,374,488 5,561,119

CASH FLOWS FROM CAPITAL AND RELATED

FINA NCING A CTIVITIES
Principal payments on subscription-based liability (203,561) (203,561) Principal payments on note (39,806) - (39,806) Interest payments on note (510) - (510) Net Cash Provided by, (used or) Noncapital
Financing Activities (243,877) - (243,877)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received 149,791 260,034 409,825 Net Cash Provided by Investing Activities 149,791 260,034 409,825 NET CHA NGE IN CA SH A ND CA SH EQUIVA LENTS 92,545 5,634,522 5,727,067 Cash and Cash Equivalents, beginning of year 3,321,946 4,995,219 8,317,165 Cash and Cash Equivalents, end of year 3,414,491 $ 10,629,741 $ 14,044,232 $

RECONCILIA TION OF OPERA TING (INCOME)

TO NET CA SH PROVIDED BY OPERA TING

A CTIVITIES
Operating Income (Loss) (559,945) $ 7,143,544 $ 6,583,599 $ Adjustments to Reconcile Operating Income (loss) to
Net Cash Provided by Operating Activities:

Depreciation and Amortization Expense 434,108 - 434,108 (Increase) Decrease in Accounts Receivable 1,169 (3,000) (1,831) (Increase) Decrease in Prepaid Costs 14,767 449 15,216 (Increase) Decrease in Inventory - 7,091 7,091 (Increase) Decrease in Due From Other Governments - (73,572) (73,572) (Increase) Decrease in Deposits Held with Others - (949,516) (949,516) (Increase) Decrease in Accounts Payable 317,771 (25,786) 291,985 Increase (Decrease) in Accrued Liabilities 2,271 13,746 16,017 Increase (Decrease) in Claims and Judgments - (732,888) (732,888) Increase (Decrease) in Compensated Absences (23,510) (5,580) (29,090) Total Adjustments 746,576 (1,769,056) (1,022,480) Net Cash Provided by Operating Activities 186,631 $ 5,374,488 $ 5,561,119 $ Governmental Activities - Internal
Service Funds

402

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403

STATISTICAL SECTION
404

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405
City of Murrieta

Statistical Section
For the Year Ended June 30, 2025

-140-
Statistical Section

This part of the City of Murrieta’s annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health.

CONTENTS:

Financial Trends

These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time.

 Net Position by Component
 Changes in Net Position
 Fund Balances of Governmental Funds
 Changes in Fund Balances of Governmental Funds

Revenue Capacity

These schedules contain information to help the reader assess the factors affecting the City’s ability to generate its property taxes.

 Assessed Value and Estimated Actual Value of Taxable Property  Direct and Overlapping Property Tax Rates
 Principal Property Tax Payers
 Property Tax Levies and Collections

Debt Capacity

These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

 Ratios of Outstanding Debt by Type
 Ratios of General Bonded Debt Outstanding
 Direct and Overlapping Governmental Activities Debt
 Legal Debt Margin Information

Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place and help make comparisons over time and with other governments.

 Demographic and Economic Statistics
 Principal Employers
406
City of Murrieta

Statistical Section
For the Year Ended June 30, 2025

-141-
Operating Information

These schedules contain information about the City’s operations and resources to help the reader understand how the City’s financial information relates to the services the City provides and the size and scope of its operations.

 Full-Time Equivalent City Government Employees by Function/Program  Operating Indicators by Function/Program
 Capital Assets Statistics by Function/Program

Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year.

407
City of Murrieta

Net Position by Component
Last Ten Fiscal Years (Accrual Basis of Accounting)

-142-
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Governm ental A ctivities
Net Investment in Capital Assets 474,770,950 $ 471,916,723 $ 473,090,324 $ 470,821,893 $ 465,074,857 $ 453,497,550 $ 442,591,027 $ 436,191,370 $ 432,409,678 $ 435,270,854 $ Restricted 87,273,906 89,929,796 105,088,044 111,079,503 103,136,669 94,056,151 186,274,667 123,733,392 133,963,316 132,206,782 Unrestricted (14,653,798) (13,848,839) (41,046,353) (31,457,063) (9,829,207) 23,522,302 (25,236,928) (840,095) 8,728,392 26,663,410 Total Governm ental A ctivities Net Position 547,391,058$ 547,997,680 $ 537,132,015 $ 550,444,333 $ 558,382,319 $ 571,076,003 $ 603,628,766 $ 559,084,667 $ 575,101,386 $ 594,141,046 $ Prim ary Governm ent
Net Investment in Capital Assets 474,770,950 $ 471,916,723 $ 473,090,324 $ 470,821,893 $ 465,074,857 $ 453,497,550 $ 442,591,027 $ 436,191,370 $ 432,409,678 $ 435,270,854 $ Restricted 87,273,906 89,929,796 105,088,044 111,079,503 103,136,669 94,056,151 186,274,667 123,733,392 133,963,316 132,206,782 Unrestricted (14,653,798) (13,848,839) (41,046,353) (31,457,063) (9,829,207) 23,522,302 (25,236,928) (840,095) 8,728,392 26,663,410 Total Prim ary Governm ent A ctivities Net Position 547,391,058$ 547,997,680 $ 537,132,015 $ 550,444,333 $ 558,382,319 $ 571,076,003 $ 603,628,766 $ 559,084,667 $ 575,101,386 $ 594,141,046 $ Fiscal Year

408
City of Murrieta
Changes in Net Position
Last Ten Fiscal Years (Accrual Basis of Accounting)
-143-
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Expenses
Governmental Activities:

General Government 7,147,019$ 6,897,851$ 8,792,429$ 9,946,480$ 9,585,480$ 10,584,605$ 9,948,145$ 17,679,910$ 20,331,417$ 21,935,557$ Public Safety 36,159,079 39,540,555 46,256,080 45,498,308 49,295,183 58,821,008 55,338,998 72,862,928 84,583,049 88,850,978 Community development 3,785,546 3,583,540 4,520,971 4,238,848 5,758,019 5,440,727 5,385,148 8,202,449 8,168,208 8,442,616 Parks and recreation 13,285,200 14,036,956 15,937,895 14,346,304 12,702,695 15,090,578 16,246,798 19,336,947 20,377,781 21,689,066 Public works 16,499,024 15,479,683 14,632,165 16,196,832 7,014,041 24,720,807 21,449,510 19,808,063 20,239,187 23,434,899 Interest on Long-term debt 378,892 337,616 320,046 613,581 705,260 323,746 4,278,037 2,462,044 3,234,953 2,573,672 Principal retirement - - - - 1,111,972 - - - - - Cost Issuance - - - - 37,395 - - - - - Total Governmental Activities Expenses 77,254,760 79,876,201 90,459,586 90,840,353 86,210,045 114,981,471 112,646,636 140,352,341 156,934,595 166,926,788 Total Prim ary Governm ent Expenses 77,254,760$ 79,876,201$ 90,459,586$ 90,840,353$ 86,210,045$ 114,981,471$ 112,646,636 $ 140,352,341 $ 156,934,595 $ 166,926,788$ Program Revenues
Governmental Activities:

Charges for Services:

General Government 393,066$ 380,150$ 339,285$ 506,317$ 358,992$ 407,393$ 766,593$ 1,846,704$ 737,081$ 738,356$ Public Safety 3,173,165 3,054,659 2,835,262 2,531,423 2,302,332 2,127,808 2,216,612 3,458,096 2,600,341 2,607,931 Community development 1,619,494 1,543,461 1,801,558 2,161,102 2,105,244 2,436,099 2,736,683 5,025,514 10,981,702 10,474,600 Parks and recreation 9,210,859 9,228,886 9,789,417 10,110,756 9,720,311 9,575,095 10,139,229 10,222,700 10,463,663 10,991,429 Public works 2,519,618 2,372,120 2,181,995 3,711,312 1,536,320 2,705,445 2,878,347 5,805,023 3,331,014 2,392,720 Operating Contributions:

General Government - - - - 28.00 100213 52,631 4,201,413 2,407,204 4,209,866 Public Safety 1,912,293 2,125,732 2,846,717 2,193,855 3,048,607 6,307,152 5,412,566 3,261,229 4,010,312 6,409,159 Community development - 87.00 978185 357,434 192,013 393,691 67,755 122,061 435,336 307,645 Parks and recreation - - 7,210.00 6,551 565,563 8,252 1,619 73,554 2,464,901 673,122 Public works - - - - - - - - - -
Capital Contributions and Grants:

Public Safety 702,382 286,376 478,295 684,204 449,730 - - 100,744.00 - - Community development - - - - - - - - - - Parks and recreation 126,167.00 439,480 284,038 34,897 22,845 17,233 44,605 23,785 28,734 37,960 Public works 11,082,791 13,934,929 16,346,203 13,726,110 10,418,244 11,867,320 18,048,160 27,296,307 15,888,948 21,759,360 Total Governmental Activities Revenues 30,739,835 33,365,880 37,888,165 36,023,961 30,720,229 35,945,701 42,364,800 61,437,130 53,349,23 6 60,602,148
Total Prim ary Governm ent Revenues 30,739,835$ 33,365,880$ 37,888,165$ 36,023,961$ 30,720,229$ 35,945,701$ 42,364,800$ 61,437,130$ 53,349,236$ 60,602,148 Net (Expense)/Revenue
Government Activities (46,514,925) (46,510,321) (52,571,421) (54,816,392) (55,489,816) (79,035,770) (70,281,836) (78,915,211) (103,585,3 59) (106,324,640) Total Prim ary Governm ent Net Expenses (46,514,925)$ (46,510,321) $ (52,571,421)$ (54,816,392)$ (55,489,816) $ (79,035,770) $ (70,281,836) $ (78,915,211)$ (103,585,359)$ (106,324,640)$ Fiscal Year
409
City of Murrieta
Changes in Net Position (Continued)
Last Ten Fiscal Years (Modified Accrual Basis of Accounting) -144-
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Changes in Net Position
Governmental Activities:

Taxes:

Property taxes, levied for general purpose 26,976,510$ 27,365,716$ 18,318,390$ 19,249,637$ 20,426,934$ 21,298,548$ 21,804,948$ 24,419,742$ 25,165,760$ 26,333,601$ Property taxes, levied for Fire Safety - - 10,638,490.00 11,130,640 11,474,940 12,322,314 12,828,976 14,125,562 16,391,638 17,028,254 Property transfer tax 570,417 587,705 688,336 604,380 605,043 958,733 1,224,304 576,080 686,263 607,266 Transient occupancy taxes 406,402 588,862 1,034,918 1,377,892 1,275,998 1,388,646 2,111,609 1,907,457 1,989,170 2,824,281 Sales taxes 14,827,391 15,633,644 17,813,627 23,410,479 36,672,600 47,903,495 54,788,375 55,580,286 53,880,062 54,372,479 Franchise tax 3,645,115 3,557,828 3,648,879 3,609,689 4,027,797 4,692,590 4,644,997 4,915,332 5,156,401 5,163,531 Business licenses taxes 690,342 752,963 769,637 779,147 780,905 797,738 920,357 928,285 1,185,824 1,160,648 Intergovernmental, unrestricted:

Motor Vehicle in Lieu - - 60,489.00 54,500 93,491 84,757 133,053 113,965 136,741 174,551 Investment Income - - 783,865.00 3,844,936 5,304,590 (80,196) 2,168,412 4,579,089 14,329,611 15,238,348 Use of money and property 1,835,084 444,274 - - - - - - - Gain on sale of asset - 456,254.00 14,615 808,656 87,574 1,370,549 - 21,566.00 46,631.00 71,134 Other 310,880 269,945 366,363 3,258,754 838,135 925,222 1,067,693 1,082,009 1,037,269 2,390,207 Total Governmental Activities 49,262,141 49,657,191 54,137,609 68,128,710 81,588,007 91,662,396 101,692,724 108,249,373 120,005,370 125,364,300 Total Primary Government 49,262,141$ 49,657,191$ 54,137,609$ 68,128,710$ 81,588,007$ 91,662,396$ 101,692,724$ 108,249,373 $ 120,005,370 $ 125,364,300$ Changes in Net Position
Governmental Activities (1,045,687)$ 2,747,216$ 3,146,870$ 1,566,188$ 13,312,318$ 26,098,191$ 12,626,626$ 29,334,162$ 16,420,011$ 19,039,660$ Total Primary Government (1,045,687)$ 2,747,216$ 3,146,870$ 1,566,188$ 13,312,318$ 26,098,191$ 12,626,626$ 29,334,162$ 16,420,011$ 19,039,660$ Fiscal Year
410
City of Murrieta

Fund Balances of Governmental Funds
Last Ten Fiscal Years (Modified Accrual Basis of Accounting)

-145-
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
General Fund
Nonspendable 4,823,933 $ 3,331,733 $ 2,557,690 $ 1,732,505 $ 3,102,003 $ 1,388,443 $ 4,480,717 $ 4,181,606 $ 3,742,577 $ 3,264,925 $ Restricted - - 6,760,566.00 1,102,039 1,102,039 795,242 203,435 225,188 137,371 208,240 Committed 4,778,387 4,521,921 16,212,641 22,506,936 22,504,550 39,848,266 59,624,816 51,229,664 83,200,190 85,771,421 Assigned 147,482 57,042 57,042 57,042 57,042 52,482 52,482 57,042 52,482 42,753 Unassigned 18,048,951 16,562,140 10,218,675 16,573,369 34,261,832 40,804,323 40,602,221 71,473,681 55,796,685 64,573,782 Total General Fund 27,798,753 $ 24,472,836 $ 35,806,614 $ 41,971,891 $ 61,027,466 $ 82,888,756 $ 104,963,671 $ 127,167,181 $ 142,929,305 $ 153,861,121 $ All other Governmental Funds
Nonspendable 500,000 $ 500,000 $ 500,000 $ 506,158 $ 528,501 $ 531,288 $ 536,360 $ 556,728 $ 568,030 $ 586,193 $ Restricted 76,089,575 79,129,454 94,839,481 100,524,128 96,978,550 98,428,363 181,919,349 123,008,204 133,326,695 131,498,542 Committed 8,856,754 8,306,021 - - - - - - - - Assigned 90,042 90,042 - - - - - - - - Unassigned (695,719) (1,112,972) (2,575,834) (1,276,679) (1,442,029) (301,651) (1,481,934) (939,852) (723,598) (2,443,995) Total all other Governmental Funds 84,840,652$ 86,912,545 $ 92,763,647 $ 99,753,607 $ 96,065,022 $ 98,658,000 $ 180,973,775 $ 122,625,080 $ 133,171,127 $ 129,640,740 $ Fiscal Year

411
City of Murrieta
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years (Modified Accrual Basis of Accounting) -146-
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Revenues:

Taxes and Assessments 57,904,070$ 59,007,161$ 62,790,280$ 70,126,890 $ 85,350,816$ 100,053,513 $ 109,123,680 $ 119,646,012 $ 123,213,972$ 126,011,386$ Licenses and permits 1,105,445 1,023,259 2,040,716 2,399,579 2,080,504 2,439,357 2,772,424 3,397,879 3,125,112 2,875,730 Intergovernmental 8,495,466 12,731,256 16,225,261 12,342,123 12,668,577 14,115,138 13,431,231 22,948,591 22,054,052 28,407,472 Charges for services 4,844,048 4,468,015 4,581,800 5,510,046 3,518,657 3,924,451 4,955,346 6,694,073 6,008,710 5,723,750 Use of money and property 1,691,970 263,706 927,905 3,725,701 5,083,461 180,913 1,581,529 4,578,267 14,215,797 15,095,322 Fines and Forfeitures 597,323 577,938 523,318 363,662 437,562 291,770 445,223 601,204 526,408 403,134 Developer participation 6,018,530 3,386,587 4,246,835 5,640,778 2,895,414 3,647,776 6,564,016 12,363,259 3,694,209 3,054,765 Miscellaneous 310,884 269,949 655,483 3,259,352 885,465 577,356 2,145,070 861,994 768,251 1,566,913 Total Revenues 80,967,736 81,727,871 91,991,598 103,368,131 112,920,456 125,230,274 141,018,519 171,091,279 173,606,511 183,138,472 E
xpenditures:

General Government 6,588,183 8,453,497 6,980,621 9,218,519 9,585,480 8,884,662 9,601,609 16,026,437 16,904,616 20,367,781 Public Safety 37,201,869 38,655,871 39,811,607 44,155,921 49,295,183 54,706,927 61,449,186 66,154,902 73,855,905 84,680,531 Community development 3,785,546 3,583,540 3,842,370 4,383,037 5,758,019 5,373,799 6,100,867 7,574,717 7,799,638 8,502,237 culture and recreation 11,292,830 11,984,108 12,914,472 12,547,690 12,702,695 13,018,592 14,619,911 15,907,301 17,332,491 19,147,486 Public works 5,290,180 5,322,975 5,675,492 13,065,711 7,014,041 8,626,873 7,621,552 9,737,147 10,032,164 10,593,520 Capital outlay 4,759,269 12,060,800 11,485,200 5,387,355 11,581,057 13,565,571 10,044,523 9,687,885 10,818,189 20,319,844 Debt service:

Principal retirement 929,396 964,320 1,366,431 1,381,616 1,111,972 7,560,798 6,456,648 5,571,915 7,107,548 7,532,037 Interest 391,209 358,887 329,372 503,045 705,260 440,514 4,463,883 2,829,855 3,091,878 2,896,449 Debt issuance costs - - - - 37,395.00 161,468 488,630 - - - T
otal Expenditures 70,238,482 81,383,998 82,405,565 90,642,894 97,791,102 112,339,204 120,846,809 133,490,159 146,942,429 174,039,885 Excess (Deficiency) of Revenues 10,729,254 343,873 9,586,033 12,725,237 15,129,354 12,891,070 20,171,710 37,601,120 26 ,664,082 9,098,587 Over (Under) Expenditures
Other Financing Sources (uses):

Transfers in 2,691,218 3,296,696 2,313,376 4,368,720 2,441,067 5,429,618 6,503,052 8,071,183 8,744,385 9,747,913 Transfers out (2,691,218) (3,886,696) (2,913,376) (4,968,720) (2,441,067) (5,429,618) (6,503,052) (8,071,183) (8,744,385) (9,747,913) Long-term debt issued - - - - 4,319,919 6,343,000 - - - - Bond Proceeds - - - - - - 29,075,000 - - - Bonds Premium - 668,975
8,184,232 - - - 2,612,562 - - -
Payment to refunding escrow agent - - - - (4,889,733) - (37,788,065) - - -
Proceeds from sale of capital assets 35,367 863,376
14,615 1,030,000 87,574 4,908,825 65,866 21,566 74,772 Capital lease proceeds - - - - 578,545 452,704 - - 46,631 - Lease/SBITA acquisition - - - - - - 825,604 110,390 - 1,744,485 Transfer of land held for resale - - - - - - - - - (3,515,665) Total Other Financing Sources (uses) 35,367 942,351 7,598,847 430,000 96,305 11,704,529 (5,209,033) 131,956 46,631 (1,696,408) Net change in fund balances 10,764,621$ 1,286,224$ 17,184,880$ 13,155,237 $ 15,225,659$ 24,595,599 $ 14,962,677$ 37,733,076$ 26,710,713$ 7,402,179$ Debt services as a percentage of noncapital
expenditures 1.70% 2.00% 1.90% 2.40% 2.20% 2.10% 8.10% 9.90% 7.49% 6.78% Fiscal Year
412
City of Murrieta
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (Dollars in Thousands)
-147-
Total Estimated Taxable Assessed
Less: Total Taxable Effective Actual Value Value as a
Fiscal Residential Commercial Other Tax-Exempt Assessed Tax Taxable Percentage of Year Property Property Property Property Value Rate Property* Actual Taxable Value 2016 9,110,367$ 1,429,009 $ 1,086,358 $ (37,924) $ 11,587,810$ 0.0770% N/A N/A 2017 9,562,560 1,285,780 1,124,523 (39,773) 11,933,090 0.0770% N/A N/A 2018 10,094,631 1,439,680 1,116,132 (39,528) 12,610,915 0.0771% N/A N/A 2019 10,630,537 1,603,699 1,178,540 (40,317) 13,372,459 0.0772% N/A N/A 2020 11,201,218 1,666,691 1,156,797 (391) 14,024,315 0.0772% N/A N/A 2021 11,738,707 1,775,724 1,182,204 - 14,696,635 0.0773% N/A N/A 2022 12,322,242 1,841,340 1,220,136 - 15,383,718 0.0774% N/A N/A 2023 13,297,795 1,940,273 1,328,166 - 16,566,234 0.0773% N/A N/A 2024 14,192,005 2,115,061 1,415,224 - 17,722,290 0.0776% N/A N/A 2025 14,845,869 2,279,083 1,547,875 - 18,672,827 0.0778% N/A N/A N/A - Data Not Available
*In 1978 the voters passed Proposition 13 which sets the property tax rate at a 1% fixed amount. The assessed valuation data show above represents the only data currently available with respect to the actual fair value of taxable property and is subject to the limitations described above.

Source:

The HdL Companies
City of Murrieta Finance Department
413
City of Murrieta
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years (Rate Per $100 of Taxable Value)
-148-
Agency 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Direct Rate
City of Murrieta Library 0.02850 0.02850 0.02850 0.02850 0.02850 0.02850 0.02850 0.02850 0.02850 0.02850 County Free Library - - - - - - - - - - Riverside County General 0.22270 0.22270 0.22270 0.22274 0.11130 0.11130 0.11130 0.11130 0.11130 0.11130 Elsinore Area Elementary School Fund 0.07560 0.07560 0.07560 0.07560 0.07560 0.07560 0.07560 0.07560 0.07560 0.75600 Flood Control Administration 0.00279 0.00279 0.00279 0.00279 0.00279 0.00279 0.00279 0.00279 0.00279 0.00279 Flood Control Zone 7 0.01720 0.01720 0.01720 0.01720 0.01720 0.01720 0.01720 0.01720 0.01720 0.01720 Mt. San Jacinto Junior College 0.04140 0.04140 0.04140 0.04140 0.04140 0.04140 0.04140 0.04140 0.04140 0.04140 Murrieta Cemetery 0.00298 0.00298 0.00298 0.00298 0.00298 0.00298 0.00298 0.00298 0.00298 0.00298 ERAF Share of Murrieta Fire Protection District-Cnty 0.00599 0.00599 0.00599 0.00599 0.00599 0.00599 Murrieta Fire Protection-County 0.06130 0.06130 0.06130 0.06129 0.05530 0.05530 0.05530 0.05530 0.05530 0.05530 ERAF Share of Murrieta Fire Protection District-City 0.00151 0.00151 0.00151 0.00151 0.00151 0.00151 Murrieta Fire Protection-City 0.05310 0.05310 0.05310 0.05311 0.05160 0.05160 0.05160 0.05160 0.05160 0.05160 ERAF Share of Murrieta General Fund 0.01247 0.01247 0.01247 0.01247 0.01247 0.01248 Murrieta General Fund 0.07108 0.07108 0.07120 0.07117 0.05870 0.05870 0.05870 0.05870 0.05870 0.05870 Murrieta Unified School District 0.33370 0.33370 0.33370 0.33370 0.33370 0.33370 0.33370 0.33370 0.33370 0.33370 Riverside County Office of Education 0.04390 0.04390 0.04390 0.04390 0.04390 0.04390 0.04390 0.04390 0.04390 0.04390 Riverside County Reg Park & Open Space 0.00445 0.00445 0.00445 0.00445 0.00445 0.00445 0.00445 0.00445 0.00445 0.00445 Eastern Municipal Water District 0.04130 0.04130 0.04130 0.04130 0.04130 0.04130 0.04130 0.04130 0.04130 0.04130 Western Municipal Water 9th Fringe - - - - - - - - - - ERAF Share of County General 0.11144 0.11144 0.11144 0.11144 0.11144 0.11144 Total Direct Rate(1) 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Overlapping Rates:

Eastern Municipal Water District 0.02400 0.02400 0.01900 0.01900 0.01900 0.01900 0.01900 0.00860 0.00860 0.00860 Metropolitan Water District (original area) 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00700 Mt. San Jacinto Junior College 0.01394 0.01320 0.01320 0.01320 0.01320 0.01320 0.01320 0.01320 0.01320 0.00268 Menifee School District 0.03010 0.03269 0.06080 0.06303 0.06277 0.06111 0.06319 0.06201 0.06063 0.05080 Murrieta Unified School District 0.13703 0.13294 0.12587 0.11946 0.11945 0.11945 0.11955 0.11955 0.11955 0.08645 Perris Union High School District 0.06236 0.06092 0.05675 0.05243 0.08244 0.08569 0.08859 0.08859 0.08173 0.06850 Rancho California Water District 0.80000 0.80000 0.80000 0.80000 0.80000 0.80000 0.80000 0.80000 0.80000 0.80000 Temecula Unified School District 0.02741 0.03164 0.03287 0.03061 0.02938 0.02389 0.02389

0.02389 0.02389 0.01924
Total Overlapping Rates(2) 1.09834 1.09889 1.11199 1.10123 1.12974 1.12584 1.13092 1.11934 1.11110 1.04327 Combined Total 2.09834 2.09889 2.11199 2.10123 2.12974 2.12584 2.13092 2.11934 2.11110 2.04327 City's Share of 1% Levy Per Prop 13(3) 0.07369 0.07369 0.07369 0.07369 0.07369 0.73690 0.07369 0.07369 0.07369 0.07367 Redevelopment Rate(4) - - - - - - - - - - Total Effective Rate(5) 0.07702 0.07706 0.07714 0.07718 0.07720 0.07726 0.07741 0.07733 0.07756 0.07778 Source: The HdL Companies
Notes:
(5) T
otal Direct Rate is the weighted average of all indirect rates applied by the City/Agency preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City/Agency in the same proportions as general fund revenue.

Fiscal Year
(1) I
n 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides. In addition to the 1.00% fixed amount, property owners are charged taxes as a % of assessed property values for the payment of any voter approved bonds. (2) O
verlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners. (3) T
he City's share of 1% levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figures.
(4) T
he RDA rate is based on the largest RDA tax rate area (TRA) and includes only rate(s) from indebtedness adopted prior to 1989 per California state statute. RDA direct and overlapping rates are applied only to the incremental property values. 414
City of Murrieta

Principal Property Taxpayers
Current Year and Nine Years Ago

-149-
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Ran k Value
Sreit Waterstone at Murrieta Apartments 163,054,598$ 1 0.87% CH Realty IX MF San Diego Eagle Glen 139,442,687 2 0.75% Kaiser 126,051,566 3 0.68%
MG Mitchell Place Apartments LLC 83,039,525 4 0.44% Universal Health Services of Rancho Springs 821,195,023 5 0.44% Murrieta Town Centera Retail Owner LP 73,508,482 6 0.39% Pacific Landing 73,110,996 7 0.39%
Arbors at California Oaks Properties 64,332,801 8 0.34% Bridges Murrieta I Owner LLC 63,508,581 9 0.34% ZL Murrieta 60,383,999 10 0.32%
Total 1,667,628,258 $ 4.96%
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Ran k Value
Loma Linda Univ Medical 247,364,753 $ 1 2.13%
Universal Health Service 65,682,688 2 0.56%
Strata Waterstone LLC 59,679,259 3 0.51%
Murrieta 492 59,460,989 4 0.51%
Arbors at CA Oaks 54,613,817 5 0.47%
Eagle Glen Apartments 49,945,265 6 0.43%
FG Murrieta Senior Apts 47,552,179 7 0.41%
Wal Mart Realty Co 44,472,814 8 0.38%
Target Corporation 42,670,859 9 0.37%
Oleanders Capital Group 42,598,689 10 0.37%
714,041,312$ 6.14%
Source: The HdL Companies and Riverside County Assessor 2025
2016

415
City of Murrieta
Principal Tax Levies and Collections
Last Ten Fiscal Years
-150-
Fiscal
Year
Ended
June 30
Taxes Levied
for the Fiscal
Year Amount
Percent
of Levy
Collections
in
Subsequent
Years(1) Amount Percent of Levy
2016 16,391,822$ 15,415,384$ 94% 405,410$ 15,820,794$ 97% 2017 17,158,388 16,281,633 95% 430,059 16,711,692 97% 2018 17,710,620 15,519,448 88% 116,863 15,636,311 88% 2019* 20,136,391 19,619,766 97% 600,825 20,220,591 100% 2020 21,320,104 20,359,445 95% 586,840 20,946,285 98% 2021 21,415,972 20,577,475 96% 775,040 21,352,515 100% 2022 22,395,811 21,515,766 96% 826,078 22,341,844 100% 2023 24,180,725 23,239,106 96% 660,030 23,899,136 99% 2024 25,807,679 24,608,498 95% 951,385 25,559,883 99% 2025 26,938,485 25,739,981 96% 740,184 26,480,165 98% Source:

City of Murrieta Finance Department
Office of Auditor-Controller, Riverside County
*Restatement
Collected Within the Fiscal
Year of Levy Total Collections to Date
(1) T
he City of Murrieta participates in the Riverside County Teeter program which allows for a 30% advance, one settlement pay
ment for the first installment, a 10% advance and a settlement payment for the second installment, all of which are r
emitted within the year of levy. One additional settlement payment is made during the subsequent year. After that, data pr
ovided by the Riverside County Office of Auditor-Controller for collection of prior year taxes, does not segregate payment infor
mation by fiscal year. Therefore, the City is not able to report any additional prior year remittances by specific year of levy. 416
City of Murrieta
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
-151-
Percentage
Fiscal of Personal Per
Year
Other
Leases Total Debt Income c Capita c
2016 7,530,000$ - $ - $ -$ 628,225$ -$ -$ 8,158,225$ 0.26% 71 2017 6,770,000 -
- - 1,092,880 -
- 7,862,880

0.25% 68
2018 5,970,000 -
- - 8,710,681 -
- 14,680,681

0.44% 124
2019 5,145,000 -
- - 7,883,717 -
- 13,028,717

0.37% 113
2020 3,790,000 505,272 - - 7,375,583 -
- 11,670,855

0.33% 101
2021 3,790,000 431,330 - - 6,491,619 -
- 10,712,949

0.29% 93
2022 3,215,000 357,388 1,354,046 -
6,032,183 76,787,562 2,612,562 87,746,179

2.17% 789
2023 2,620,000 283,446 1,492,303 428,506 5,393,589 72,184,849 2,394,849 82,402,693

1.95% 749
2024 2,005,000 209,504 1,864,052 1,751,771 4,736,137 64,780,000 2,177,135 75,346,464

1.79% 685
2025 1,365,000 135,562 2,393,291 1,500,416 4,263,997 59,580,000 1,959,422 71,197,688

1.64% 619
N/A - Data Not Available
Notes:

S
ource: City of Murrieta Finance Department
Unamortized
Premium b
General
Bonded
Certificates
of
Unamortized
Premium a
GASB 87
Leases Subscriptions
Murrieta
Financing
Author ity
Debtd
Details regarding the city's outstanding debt can be found in the notes to the financial statements. In fiscal year 2017-18, presentation has been modified to exclude non-general bonded debt and include net position restricted for debt service. In fiscal year 2022-23, presentation has been modified to remove Tax Allocations Bonds that the City has not had for a The 2007 Certificates of Participation Bonds were refunded in 2020 into Lease Revenue Refunding Bonds, Series 2020A, which included a Premium of $529,919.10. b The FY22 Financial Statements were restated to include the previous Community Facilities Districts Debt that was refunded by the Murrieta Financing Authority. Local Agency Revenue Bonds, Series 2022 included a Premium of $2,612,562.
c See Demographic and Economic Statistics schedule for personal income and population data. d Fiscal year 22 and 23 included the unamortized premium in both the Murrieta Financing Authority Debt column and the unamortized premium column, resulting in overreported debt. Fiscal year 24 is reported separately.
417
City of Murrieta
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
-152-
Tax Certificates Amount Percent
Fiscal Allocation of Restricted for of Assessed Per
Year Bonds Participation Debt Service Total Value(1) Capita b 2015 -$ 8,260,000$ -$ (415,000)$ 7,845,000$ 0.07% 69 2016 -
7,530,000
-
(435,000)
7,095,000 0.06% 62
2017 -
6,770,000
-
(450,000)
6,320,000 0.05% 55
2018 -
5,970,000
-
(475,000)
5,495,000 0.04% 47
2019 -
5,145,000
-
(490,000)
4,655,000 0.03% 40
2020 -
3,790,000
505,272 (26,951)
3,763,049 0.03% 33
2021 -
3,790,000
431,330 (151,600)
3,638,400 0.02% 32
2022 -
3,215,000
357,388 (726,600)
2,488,400 0.02% 22
2023 -
2,620,000
283,446 (723,600)
1,896,400 0.01% 17
2024 -
2,005,000
209,504 (719,800)
1,285,200 0.01% 12
2025 -
1,365,000
135,562 (724,600)
640,400 0.00% 6
N/A-Data not available
Note:

Source: City of Murrieta Finance Department
(1) Assessed value has been used because the actual value of taxable property is not readily available in the State of a The 2007 Certificates of Participation Bonds were refunded in 2020 into Lease Revenue Refunding Bonds, Series 2020A, which included a Premium of $529,919.10.
b See Demographic and Economic Statistics schedule for population data.

Details regarding the city's outstanding debt can be found in the notes to the financial statements.

Unamortized
Premium a
418
City of Murrieta
Direct and Overlapping Governmental Activities Debt
For the Year Ended June 30, 2025
-153-
2024-25 Assessed Valuation: 18,748,456,861$
Gross Bonded Gross Non-Bonded City’s Share
Overlapping Tax and As s es s ment Debt: Debt Balance Debt Balance of Debt City of Murrieta 1915 Act Bonds 1,105,000$ 100.000% 1,105,000$ City of Murrieta Community Facilities Districts 78,020,000 100.000% 78,020,000$ Total Direct Tax and Ass es sment Debt 79,125,000
Other Overlapping Tax and Assessment Debt:

Metropolitan Water District 17,155,000$ 0.458% 78,570 Riverside County Flood Control and Water Conservation District, Zone 4 - Mt. San Jacinto Community College District 237,330,000 13.414% 31,835,446 Murrieta Valley Unified School District 140,650,542 83.229% 117,062,040 Murrieta Valley Unified School District Community Facilities Districts 78,357,058 100.000% 78,357,058 Temecula Valley Unified School District 156,329,085 0.015% 23,449 Perris Union High School District 284,456,372 5.523% 15,710,525 Perris Union High School District Community Facilities District No. 92-1 29,055,000 12.500% 3,631,875 Menifee Union School District 184,411,292 8.959% 16,521,408 Eastern Municipal Water District Improvement Districts 12,405,000 0.866-99.906% 1,982,749 Rancho California Water District Community Facilities Districts 9,790,000 100.000% 9,790,000 Eastern Municipal Water District Community Facilities Districts 17,845,000 100.000% 17,845,000 Elsinore Valley Municipal Water District Community Facilities Districts 2,498,000 100.000% 2,498,000 Western Municipal Water District Community Facilities Districts 1,355,896 100.000% 1,355,896 Riverside County Community Facilities Districts 1,195,000 100.000% 1,195,000 California Statewide Community Development Authority
Assessment District No. 2018-01 1,872,000 100.000% 1,872,000 Eastern Municipal Water District 1915 Act Bonds 1,090,000 2.917% 31,795 Total Other Overlapping Tax and As ses sment Debt 299,790,811 Combined Total Overlapping Tax and Assessment Debt 378,915,811 Ratios to 2022-23 Assessed Valuations:

Total City Overlapping Tax and Assessment Debt 0.42%
Combined Total Overlapping Tax and Assessment Debt 2.02% Direct Debt:

City of Murrieta General Fund Obligations 1,365,000$ 100.000% 1,365,000 Premium 135,562 100.000% 135,562
Lease Liabilities 2,393,291 100.000% 2,393,291
Subscription Liabilities 1,500,415 100.000% 1,500,415 Other Leases 4,263,997 100.000% 4,263,997
Murrieta Financing Authority Debt 59,580,000 100.000% 59,580,000 Premium 1,959,423 100.000% 1,959,423
Total Direct General Fund Debt 71,197,688
Overlapping General Fund Debt:

Riverside County General Fund Obligations 1,134,209,783$ 4.417% 50,098,046 Riverside County Pension Obligations 603,055,000 4.417% 26,636,939 Murrieta Valley Unified School District Certificates of Participation 34,720,000 83.229% 28,897,109 Other School District Certificates of Participation 87,906,131 Various 6,510,712 Western Municipal Water District General Fund Obligations 1,377,594 1.955% 26,932 Total Gross Overlapping General Fund Debt 112,169,738
Less: Riverside County self-supporting obligations -
Total Net Overlapping General Fund Debt 112,169,738$
Overlapping Tax Increment Debt (Successor Agencies): 198,160,000$ 0.425-100% 30,525,763$ Total Direct Debt 71,197,688$
Total Gross Overlapping Debt 521,611,312$
Total Net Overlapping Debt 521,611,312$
Grand Total Gross Direct and Overlapping Debt 592,809,000$ (2) Grand Total Net Direct and Overlapping Debt 59 2,809,000$ Notes:
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages w ere e
stimated by determining the portion of the overlapping district's assessed value that is w ithin the boundaries of the city divided by the district's to
tal taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratios to 2024-25 Assessed Valuation:

Total Direct Debt ($)…..………………………………………..... .......... … 0.01% Grand Total Gross Direct and Overlapping Debt……..……….……… … 2.79% Grand Total Net Direct and Overlapping Debt………………………...… 2.79% Ratios to Redev elopment Incremental Valuation ($):

Total Overlapping Tax Increment Debt………….………….……………. 1.79% Source:

Avenu Insights & Analytics
California Municipal Statistics, Inc.
% Applicable
to City (1)
419
City of Murrieta
Legal Debt Margin Information
Last Ten Fiscal Years (Dollars in Thousands)
-154-
Legal Debt Margin Calculation for Fiscal Year 2025
Assessed value 18,748,456,861$
Conversion percentage 25%
Adjusted assessed valuation 4,687,114,215
Debt limit (15% of assessed value) 703,067,132
Debt applicable to limit:

General obligation bonds -
Total net debt applicable to limit -
Legal debt margin 703,067,132$
Legal Debt
Total net debt Legal Margin as a
Applicable to Debt Percentage of
Fiscal Year Debt Limit Limit Limit Debt limit
2016 435,965,052$ -$ 435,965,052$ 100%
2017 448,982,354 - 448,982,354 100%
2018 474,580,891 - 474,580,891 100%
2019 503,136,609 - 503,136,609 100%
2020 525,930,240 - 525,930,240 100%
2021 551,096,877 - 551,096,877 100%
2022 576,758,166 - 576,758,166 100%
2023 621,780,408 - 621,780,408 100%
2024 665,142,646 665,142,646 100%
2025 703,067,132 - 703,067,132 100%
Note:

The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation, however; this provision was enacted when assessed valuation was based upon 25% of fair value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of fair value (as of the most recent change in ownership for that parcel). The computations shown above reflects a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time the legal debt margin was enacted by the State of California for local governments located within the state.
420
City of Murrieta
Demographic and Economic Statistics
Last Ten Fiscal Years
-155-
Personal Per Capita
Income* Personal Unemplo yme nt
Fiscal Population (In Thousands) Income Rate
Year (1) (3
) (1) (1) (1) (2
)
2016 114,914$ 3,091,951$ 26,906$ 4.8% 2017 114,904 3,178,810 27,662 5.0% 2018 118,125 3,350,224 28,361 3.5% 2019 115,561 3,568,992 30,884 3.3% 2020 115,172 3,731,498 32,399 8.8% 2021 111,183 4,047,908 36,408 5.8% 2022 109,998 4,220,667 38,370 3.3% 2023 109,177 4,582,265 41,970 3.8% 2024 111,789 4,910,486 43,926 4.7% 2025 111,789 N/A N/A N/A
N/A-Data not available
Source (1) The HdL Companies
(2) State of California Economic Development Department (3) State of California Department of Finance
421
City of Murrieta

Principal Employers
Current Year and Nine Years Ago

-156-
2025
Percentage
of Total City
Employer Employees Rank Employment
Southwest Healthcare - Rancho Springs Medical Center 2,399 1 4.52% Murrieta Valley Unified School District 2,138 2 4.03% Loma Linda University Medical Center 1,514 3 2.85% County of Riverside 941 4 1.77%
City of Murrieta 476 5 0.90%
Costco Wholesale 425 6 0.80%
Target Department Store (2 locations) 420 7 0.79% Oak Grove Center 354 8 0.67%
The Springs Health and Rehabilitation Center 310 9 0.58% Walmart Store 247 10 0.47%
9,224 17.38%
Percentage
of Total City
Employer Employees Rank Employment
Southwest Healthcare - Rancho Springs Medical Center 1,474 1 2.98% Murrieta Valley Unified School District 2,355 2 4.76% Loma Linda University Medical Center 929 3 1.88% County of Riverside 547 4 1.11%
City of Murrieta 347 5 0.70%
Costco Wholesale 6
Target Department Store (2 locations) 330 7 0.67% Oak Grove Center 375 8 0.76%
The Springs Health and Rehabilitation Center 9
Walmart Store 350 0.71%
Sam's Club 209 0.42%
The Home Depot 200 10 0.40%
7,116 14.39%

Source:

Source: Muniservices, LLC / Avenu Insights & Analytics Source: 2016, prior published ACFR
Results based on direct correspondence with city’s local businesses.

Note: Amazon Fresh has not responded to our employee headcount inquires. 2016
422
City of Murrieta
Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years
-157-
Fiscal Years: 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Function/Program
General government
City Council 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Administration² 38.70 39.00 40.00 41.38 41.00 50.50 51.00 51.00 61.00 60.00 Community Development
Economic Development 4.00 4.00 3.00 3.00 2.00 3.00 3.00 3.00 4.50 4.00 Planning 9.10 9.00 9.00 11.00 11.00 12.00 12.00 12.00 15.00 15.00 Building and Safety 8.20 8.00 9.00 9.00 9.00 14.00 12.00 12.00 14.00 14.00 Housing Services 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Code Enforcement¹ 5.00 5.00 5.00 5.00 5.00 6.00 7.00 7.00 9.00 9.00 Redevelopment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Police
Administration 2.00 2.00 2.00 2.00 3.00 2.00 2.00 2.00 2.00 2.00 Operations 66.00 64.00 64.00 61.00 60.00 80.00 89.50 90.50 80.50 80.50 PD Support 63.00 65.00 65.00 71.77 82.50 73.50 81.00 81.00 99.50 100.00 Fire
Administration (including Maintenance) 8.00 8.00 8.50 12.47 10.75 10.75 10.75 10.75 11.00 11.00 Fire Suppression (including Paramedics) 49.00 48.00 48.00 54.00 50.00 61.00 61.00 61.00 62.00 64.00 Fire Prevention/Inspection 1.00 4.00 4.00 5.00 4.00 6.00 7.00 7.00 7.00 7.00 Public Works
Admin/Engineering 8.80 13.00 13.00 11.00 11.00 25.00 29.00 29.00 20.00 18.00 Maintenance³ 15.80 13.00 13.00 21.00 20.00 21.00 21.00 21.00 17.00 19.00 Recreation & Community Services
Administration 12.65 12.00 12.00 10.00 12.00 1.00 2.00 2.00 3.00 3.00 Recreation 9.00 9.00 9.00 7.42 12.25 17.25 19.25 19.25 34.00 35.00 Librar
y 12.20 12.00 12.00 16.41 16.59 18.59 18.59 18.59 21.59 22.59 Total Authorized Personnel * 317.45 320.00 321.50 346.45 355.09 406.59 431.09 432.09 466.09 469.09 * E
xcludes part-time Crossing Guards.
¹ Code Enforcement Division was moved to Development Services Department in FY 2018/19 ² City Manager, City Clerk, Finance, and Administrative Services departments Notes: A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick leave). Full-time-equivalent employment is calculated by dividing total labor hours by 2,080.

Source: City of Murrieta Annual Budget
³ Community Services Support staff were moved to the Public Works & Engineering Department in FY 2018/19, and this division was not reported on prior years.

Fiscal Year
423
City of Murrieta

Operating Indicators by Function/Program
Last Ten Fiscal Years

-158-
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Function/Program
Community development
Number of:

Business licenses (A) 5,051 4,442 4,796 4,744 5,054 4,992 4,434 4,543 4,518 4,745 Plan checks (B) 322 410 410 478 301 262 234 350 N/A 425 Permits issued 2,933 2,395 2,815 2,869 2,603 3,128 3,434 3,700 3,600 2,672 NPDES inspections 293 349 403 445 568 247 69 655 655 763 Code violations (calendar basis) 5,898 6,946 5,378 4,072 2,447 1,940 1,700 1,737 1,777 1,763 Police
Number of:

Part 1 Crimes3
1,695 1,673 1,499 1,579 1,472 1,095 3,777 3,634 3,475 3,442 Crimes Against Persons 711 695 789 850 Crimes Against Property 2,143 2,249 2,007 1,815 Crimes Against Society 923 690 679 777 Parking violations 1,121 1,048 1,098 1,014 495 210 314 486 152 51 Traffic (moving) violations 4,994 3,703 3,439 3,332 3,532 3,917 3,768 2,701 5,092 4,160 Traffic Collision Reports 760 813 843 815 685 715 834 766 753 635 Crime reports 7,917 8,409 7,826 8,189 7,487 8,492 5,869 5,715 5,997 5,818 Arrests 2,445 2,134 2,216 2,031 1,911 2,221 1,895 1,632 1,652 1,923 Public works
Miles of:

Slurry Seal4 95 - 51 - - 58 Street resurfacing/repair 1 2.8 - 0.5 3.3 1.9 - 2.20 1.54 1.00 Street sweeping 11,952 11,952 11,952 12,027 12,132 12,132 12,552 12,552 12,552 12,552 Number of:

Traffic signals maintained 93 92 96 96 99 100 101 105 110 110 Trees pruned per year 4,074 2,467 3,774 5,735 4,418 4,574 4,296 4,469 4,277 4,597 Trees/stumps removed 143 184 152 154 247 261 168 231 156 123 Greenwaste to Mulch (tons) 901 720 406 557 972 1,030 977 1,232 1,047 1,039 Recreation & community services
Number of enrollees/attendees:

Aquatics 1,5 6,600 6,750 7,638 3,888 2,197 - 628 3,282 493 2,336 Community services/seniors¹ 18,000 18,791 18,683 24,762 18,038 174 13,043 17,992 28,174 25,648 Small Recreation Centers6 2 2
Day camp¹ 450 637 826 810 508 88 473 473 333 1,579 Park programs¹ 1,208 1,115 1,375 972 1,895 1,423 2,719 2,719 7,963 20,023 Classes¹ 17,274 26,311 23,487 12,213 10,033 1,493 6,565 8,137 8,013 7,859 Special events¹ 58,000 58,900 55,500 64,193 43,741 18,449 66,740 62,900 75,435 69,445 Skate park2 1,098 2,521 3,178 2,545 2,857 - - - - - Youth center¹ 21,042 20,360 18,900 20,270 16,444 4,991 8,645 16,789 20,655 18,956 N/A - Data not available
(A) - Includes new & renewal licenses, excludes temporary licenses (B) - Excludes temporary plan checks; FY23 data provided through February 2023 and will no longer be reported due to a change in software 4 FY2021 - Data unavailable prior to 2020
5 FY2024 - The aquatics season for 2023 was closed for July and August, but the City rented a high school pool and the season th at started in June 2024. 6 The City has had the Small Recreation Centers but did not start reporting them until 2024. 7 Increase in FY25 is from adding sessions during the summer and increasing the maximum participation limit. Winter and spring ca mps were also added during school breaks.

Sources: Various city departments.
2 FY2021 - No longer manned to count attendance per Council direction March 16, 2020 3 FY2021 - Information reported is for July-March due to move to NIBRS (National Incident-Based Reporting System); FY2022 - Increase in numbers due to reporting according to NIBRS standards which includes over 50 types of crimes as compared to 8 types in previous reporting ¹ FY2021 - Drop in numbers due to closures in Mid-March 2020 for COVID-19; Pool closed for second season in a row; pool reopened mid-June 2022; pool non-operational June 2023
Fiscal Year

424
City of Murrieta
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
-159-
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Function/Program
General Government
C i v i c C e n t e r 1 111111111
I n n o v a t i o n C e n t e r 1 111111111
Vehicles 10 10 14 10 5 5 11 11 10 12
E q u i p m e n t 4 1 4 75 65 76 57 55 05 23 83 3
Community Development
V e h i c l e s 7 7897922 1 1 3
Public Safety
P o l i c e S t a t i o n s 1 111111111
Police Vehicles 120 120 127 127 145 160 125 140 132 147 Police Equipment 308 308 347 347 353 353 334 339 310 273 F i r e S t a t i o n s 5 555555555
Fire Vehicles 32 37 35 37 42 48 36 36 35 34
Fire Equipment 110 112 112 112 115 115 91 93 76 58
Public Works
Vehicles 27 27 29 27 19 20 30 30 36 28
E q u i p m e n t 2 6 2 62 62 62 62 62 93 02 92 8
Culture and recreation
P a r k S i t e s 5 0 5 05 15 25 25 25 35 35 35 3
S e n i o r C e n t e r s 1 111111111
C o m m u n i t y C e n t e r s1 111111111
Y o u t h C e n t e r s 1 111111111
E q u e s t r i a n C e n t e r 1 111111111
Municipal Pools
1 1 111111111
P u b l i c L i b r a r y 1 111111111
Vehicles 23 25 26 23 25 13 10 11 7 9
E q u i p m e n t 3 2 3 43 13 13 13 13 63 63 43 1
1 - FY 24 The pool is closed until renovations can take place. Timeline is TBD.

Sources:

Various city departments.

Fiscal Year
425
City of Murrieta
Singl
e Audit Report on Federal Awards
Year Ended June 30, 2025
426
City of Murrieta
Single Audit Report on Federal Awards
Table of Contents

Page

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................. 1

Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance .......................................................... 3

Schedule of Expenditures of Federal Awards .............................................................................. 6

Notes to the Schedule of Expenditures of Federal Awards

Schedule of Findings and Questioned Costs:

Section I: Summary of Auditor's Results ................................................................................ 8

Section II: Financial Statements Findings .............................................................................. 9

Section III: Federal Awards Findings and Questioned Costs ................................................. 9

Summary Schedule of Prior Audit Findings ............................................................................... 10

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CERTIFIED PUBLIC ACCOUNTANTS

-1-

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

Independent Auditor’s Report

To the Honorable City Council
City of Murrieta, California

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Murrieta (the entity), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the entity’s basic financial statements, and have issued our report thereon dated December 15, 2025.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the entity’s internal control over financial reporting (internal control) as a basis for designing procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we do not express an opinion on the effectiveness of the entity’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.

However, material weaknesses or significant deficiencies may exist that were not identified.

428

-2-
Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the entity’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

San Bernardino, California
December 15, 2025

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CERTIFIED PUBLIC ACCOUNTANTS

-3-

REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF

EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE

Independent Auditor’s Report

The Honorable City Council
City of Murrieta, California

Report on Compliance for Each Major Federal Program

Opinion on Each Major Federal Program

We have audited the City of Murrieta’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2025. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying Schedule of Findings and Questioned Costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025.

Basis for Opinion on Each Major Federal Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States (Government Auditing Standards) ; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s federal programs.
430

-4-
Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards , and the Uniform Guidance, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.
 Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
 Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or em ployees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

431
-5-
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report, thereon dated December 15, 2025, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

San Bernardino, California
December 15, 2025
432
City of Murrieta
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2025

See accompanying notes to the schedule of expenditures of federal awards. -6-
Federal Grantor/Pass-Through Grantor/Program Title
Assistance
Listing
Number
Program/Project
Identification Number
Federal
Expenditures
Amount
Provided to
Subrecipients
U.S. Department of Commerce
Direct Assistance:

Economic Development Cluster:

Economic Development Administration Grant 11.300 NA 653,929 $ - $ Total Assistance Listing 11.300 / Economic Development Cluster 653,929 - Total U.S. Department of Commerce 653,929 -
U.S. Department of Justice
Direct Assistance:

COPS Technology and Equipment Program (TEP) 16.710
5JCOPS-24-GG-02076-
TECP 480,000 -
Edward Byrne Memorial Justice Assistance Grant 16.738 N/A 12,006 - Equitable Sharing Funds 16.922 CA0334200 42,145 - Total U.S. Department of Justice 534,151 -
U.S. Department of Transportation
Passed through the State of California Office of Traffic Safety:

Highway Safety Cluster:

Selective Traffic Enforcement Program 20.600 PT24126 26,462 - Selective Traffic Enforcement Program 20.600 PT23051 37,252 Total Assistance Listing 20.600 / Highway Safety Cluster 63,714 - Selective Traffic Enforcement Program 20.608 PT24126 28,558 - Selective Traffic Enforcement Program 20.608 PT23051 53,218 - Total Assistance Listing 20.608 81,776 -
Total U.S. Department of Transportation 145,490 - U.S. Department of the Treasury
Direct Assistance:

Coronavirus State and Local Fiscal Recovery Funds (ARPA) 21.027 NA 8,246,478 - Total U.S. Department of the Treasury 8,246,478 -
U.S. Department of Energy
Direct Assistance:

Energy Efficiency and Conservation Block Grant 81.128 NA 157,040 - Total U.S. Department of Energy 157,040 -
U.S. Department of Health and Human Services
Direct Assistance:

Regional Homeless Alliance Program - SAMHSA Grant 93.493 1H79FG000733-01 16,657 - Total U.S. Department of the Health and Human Services 16,657 - U.S. Department of Homeland Security
Passed through California Governor's Office of Emergency Services:

Federal Hazard Mitigation Grant 97.039 FEMA-4558-DR-CA 217,944 - Federal Emergency Management Agency Safer 97.083 EMW-2019-FF-01158 79,953 - Fire Prevention and Safety Grant 97.044 EMW-2023-FP-01003 163,987 Passed through the County of Riverside Emergency Management Department Homeland Security Grant Program 97.067 NA 650 - Total U.S. Department of Homeland Security 462,534 - Total Expenditures of Federal Awards 10,216,279$ - $
433
City of Murrieta
Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2025

-7-

1. Basis of Presentation

The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal awards activity of the City of Murrieta (the City) under federal programs of federal government for the year ended June 30, 2025. The information in this SEFA is presented in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the SEFA presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or fund balance, or cash flows of the City.

For the purposes of this schedule, federal financial assistance includes both federal financial assistances received directly from a federal agency, as well as federal funds received indirectly by the City from a nonfederal agency or other organization. Only that portion of program expenditures reimbursable with such federal funds are reported in the accompanying schedule.

Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with state, local or other non-federal funds are excluded from the accompanying schedule.

2. Summary of Significant Accounting Policies

Expenditures reported on the SEFA are reported on the modified accrual basis of accounting.

Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the SEFA, if any, represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.

3. De Minimis Indirect Cost Rate

The City did not elect to use the 10-percent indirect cost rate allowed under the Uniform Guidance .

434
City of Murrieta
Schedule of Findings and Questioned Costs
Year Ended June 30, 2025

-8-
SECTION I. SUMMARY OF AUDITOR'S RESULTS
Financial Statements
audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting:

Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X None Reported Noncompliance material to financial
statements noted? Yes X No
Federal Awards
Internal control over major federal programs:

Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X None Reported Type of auditor's report issued on compliance for major federal programs: unmodified Any audit findings disclosed that
are required to be reported in
accordance with 2 CFR 200.516(a) Yes X No
Identification of major federal programs:

CFDA Number

21.027
Dollar threshold used to distinguish
between type A and type B programs: 750,000 $
Auditee qualified as low-risk auditee? X Yes No
Name of Federal Program
Type of auditor's report issued on whether the financial statements Coronavirus State and Local Fiscal
Recovery Funds (ARPA)
435
City of Murrieta
Schedule of Findings and Questioned Costs
Year Ended June 30, 2025

-9-
Section II: Financial Statement Findings

No findings to be reported.

Section III: Federal Awards Findings and Questioned Costs

No findings to be reported.

436
City of Murrieta
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2025

-10-
No prior year findings were reported.
437

CITY OF MURRIETA
City Council Meeting Agenda
Report
2/3/2026
Agenda Item No. 10.

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David Chantarangsu, AICP, Development Services Director PREPARED BY: Chris Tracy, Senior Planner, Advanced Planning SUBJECT:

Hillside Updates (DCA-2021-2396) - Workshop 6

RECOMMENDATION
Receive public comments and discuss the proposed ordinance; and Provide guidance on policy options within the proposed ordinance framework.

PRIOR ACTION/VOTE
On March 29, 2022, the City Council directed staff to review the hillside development standards (Non-Action Item).

On June 28, 2023, the Planning Commission recommended the introduction and first reading of an Ordinance updating the hillside development standards, amending Murrieta Municipal Code (MMC) Chapters 8.20 and

15.52, and updating portions of Title 16 (Vote 4-0-1) (Attachment 1).

On August 15, 2023, the City Council hosted a workshop on this item. The City Council requested additional information, so the workshop was continued to a future meeting date (Attachment 2).

On March 5, 2024, the City Council hosted a second workshop on this item. Due to the additional time required for discussion and feedback, the workshop was continued for a second time (Attachment 3).

On June 17, 2025, the City Council held a third workshop on this item. At that meeting, the Council directed staff to provide more detailed examples to assist in moving forward, with particular emphasis on retaining wall criteria (Attachment 4).

On October 21, 2025, the City Council held its fourth workshop on this item. The discussion centered on when the standards would apply. The City Council reached a consensus that “Hillside Areas” apply only to residential and open space parcels with slopes of 25% or greater, as mapped in the Hillside Overlay Area (Attachment 5), while Specific Plans retain their original standards. Applicants may use the GIS map or the existing average slope formula with a CAD-based program to determine compliance (Attachment 6).

On November 18, 2025, the City Council held its fifth workshop on this item (Attachment 7). Guidance CITY OF MURRIETA Printed on 1/29/2026Page 1 of 10
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received included the following:
· Retaining wall updates need to be addressed on more of a Citywide basis rather than specific to Hillside Areas.
· Colors should generally be muted as they relate to retaining walls, and exact shades or blends should be defined upfront in the Development Code to ensure a consistent and desirable appearance. · Earthtone colors may be a desired design element for hillside areas, as they relate to structures. · Retaining walls over six feet in height may be too high in some circumstances on a Citywide basis. · Having landscaping retaining wall tiers is a desired design element. · Keystone walls with landscaping are a desired design element. · Landscaping is an important standard for the City Council. Establishing larger planting sizes earlier in the development process is a desired outcome. Further clarification from the Fire Department regarding the specifics of the Fuel Modification Plan's planting was desired. Diagrams of potential landscaping configurations are provided in the Unfinished Topics Area - Landscaping portion of this report. It is broken into three different zones as it relates to the proximity of a residence and fire risk reduction.
· Rural residential custom lots are different from tract home development. Front-yard areas need to be defined differently.

To add more definition to the City Council’sdiscussion, staff prepared a baseline comparison of the various elements in the current hillside development regulations with other common sections (e.g., grading, landscaping, fencing, etc.) of the Municipal Code. This comparison is provided in Appendix I (Attachment 8).

There may be instances where a specific item needs to be updated more broadly in a future Citywide update of the Development Code, rather than as part of this exercise. Lastly, time permitting, staff will introduce the discussion on “Developedversus Undeveloped”properties as they relate to hillside areas. Staff is prepared to discuss the topic at Workshop 6 time permitting, otherwise it can be covered in a future workshop should the Council want to do so.

CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.

BACKGROUND
The City Council directed staff at its annual priority and goal-setting workshop on March 29, 2022, to review the hillside development standards, as concerns had been raised about how they were being interpreted and implemented at the project level. The City’sexisting hillside development standards, contained in Chapter

16.24 (Hillside Development) of the Murrieta Development Code (MDC), were added in 1997 to support the City’s1994 General Plan land use goals and policies associated with the City’shillside features. The General Plan continues to contain goals and policies about hillside areas to “maintain the natural character and the environmental and aesthetic values of sloped areas.”
For details about the historical context of the hillside development standards and why these updates are being brought forward, please refer to the “BackgroundSection”as provided within Attachments 1, 2, 3, 4, 6, and 7.

Staff is bringing forward these updates in a continued workshop format for the City Council to review the proposed standards and provide input ahead of a future public hearing.

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DISCUSSION
The primary goal of these updates is to enhance the clarity and precision of the development standards, thereby supporting their consistent application in the City’sdevelopment process. By refining language and enhancing accuracy, the revisions aim to reduce ambiguity, streamline the review process, and increase efficiency in the use of time and resources associated with hillside development.

Within the General Plan framework, the statements below promote responsible development, conservation, and sustainable management of the City’shillside resources. The City’sstandards are intended to strike an appropriate balance between protecting community interests and supporting responsible, feasible development in hillside areas.

General Plan Statements - Hillside Development
The focus of today’sworkshop, as noted in the introduction, will be to provide a baseline comparison between the current hillside development regulations and other common Municipal Code sections (e.g., grading, landscaping, fencing). Staff is providing this comparison at this juncture, as this would help everyone understand how hillside regulations differ from other established Municipal Code standards, and perhaps some of those updates could be considered as part of a broader Development Code update outside of this specialized topic.

Staff plans to then conclude the retaining wall and landscaping discussion from the last Workshop, and, if time allows, provide an initial overview/opportunity for feedback of “Developed”versus “Undeveloped”hillside areas. A full discussion of this topic is planned for Workshop 7 in the future.

Follow-Up Discussions from Workshop 5
In response to feedback and direction from Council Workshop No. 5, unfinished focus topics to be discussed will center on potential retaining wall and landscaping standards. The intent is to provide clearer examples of how these elements could be designed and integrated to ensure compatibility with surrounding areas, be responsive to site conditions, and align with applicable City policies and requirements.

Retaining Wall Use and Design
Wall and fencing requirements on hillside properties covered within Chapter 16.24 include standards prioritizing hillside stabilization, aesthetics, and visual impact mitigation, often allowing flexible heights, terraced designs, and native-material finishes, whereas non-hillside emphasizes uniformity, function, and prescriptive measurements such as wall height relative to property zoning setbacks.

At the November 18, 2025, Council Workshop, there was a consensus by the City Council on the following retaining walls design elements:
· Provide flexibility with defined options, while providing some specifics as it relates to retaining walls.

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· Retaining walls design standards should be implemented on a Citywide basis. · Colors should generally be muted as they relate to retaining walls, and exact shades or blends should be defined upfront to ensure a consistent and desirable appearance. · Retaining walls over six feet in height may be too high in some circumstances on a Citywide basis. · Having landscaping retaining wall tiers is a desired design element.

However, the City Council wanted to revisit certain aspects of the City’s wall standards as identified below:

Unfinished Focus Topics - Retaining Walls

1. If an applicant needs to propose a retaining wall taller than six feet (a desired Council height based on the last Workshop), should a review process be created so that it goes before a decision-maker? (e.g., Planning Commission)

2. Should retaining wall standards apply on a citywide basis?

3. Councilmembers Warren and DeForest emphasized using larger plantings of shrubs and trees earlier in the development process to provide more effective screening of newly installed retaining walls, though the exact timing was not specified.

4. Does the Council desire any exceptions to this process? For example, if the wall is not visible from the public right-of-way since it is located behind a structure or integrated into a structure? With further direction, staff will update the draft ordinance to be approved by the City Council.

Landscaping and Aesthetics
Landscaping is a critical component of hillside development because it can help preserve the natural character and visual integrity of prominent landforms while accommodating development in a fire-sensitive environment.

Inadequately screened development in hillside areas can result in visually intrusive structures, exposed grading, and sharp contrasts with surrounding natural terrain, thereby undermining the aesthetic and character of Murrieta’slandscape backdrop. Additionally, landscape screening not only mitigates these visual impacts but also provides significant environmental and functional benefits. Strategically placed vegetation and landscaping can help stabilize slopes, reduce erosion, manage stormwater runoff, and enhance soil retention which are important in mitigating potential impacts on hillside properties from development. It also safeguards For context, the following comparison is intended to help the City Council and the public understand how hillside regulations differ from the City’sstandard development requirements as they relate to landscaping, and to highlight where hillside-specific standards are more tailored or restrictive to address unique topographic conditions, grading impacts, visual prominence, and long-term maintenance considerations.

As demonstrated by Appendix I, hillside landscaping standards in Chapter 16.24 contrast with those in non- hillside properties in Chapter 16.28 by emphasizing preservation, slope stabilization, and visual integration with natural landforms, rather than the prescriptive, quantity-based, and site-oriented requirements applied elsewhere in the Municipal Code. The main conflicts arise when prescriptive, minimum landscaping standards clash with hillside preservation goals, especially in terms of vegetation retention, slope stability, and visual integration.

The following points summarize the Council’sprior Workshop direction regarding landscaping and aesthetics CITY OF MURRIETA Printed on 1/29/2026Page 4 of 10
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The following points summarize the Council’sprior Workshop direction regarding landscaping and aesthetics and provide a framework for closing this discussion topic. · Landscaping is an important topic for the Council. Establishing larger planting sizes earlier in the development process is a desired outcome. Further clarification from the Fire Department regarding the specifics of the Fuel Modification Plan's planting is needed. · Rural residential versus tract home development. Front-yard areas need to be clarified differently. · Earthtone colors may be a desired design element for hillside areas as they relate to structures, as an alternative to landscaping screening.

The City Council left the following topics open for further consideration:

Unfinished Focus Topics - Landscaping
At the previous workshop, the Council requested additional input from the Murrieta Fire and Rescue regarding the limitations of landscaping in hillside areas, which are typically located in a fire hazard severity zone, in order to better understand potential screening standards. The following summarizes the current requirements for what are generally referred to as “Defensible Space Zones”. · Zone 0 (0-5 feet from structures):

Zone 0 is the immediate area adjacent to buildings and attachments where all vegetation and combustible materials are removed to eliminate direct fire ignition risks, focusing on hardscaping and noncombustible treatments closest to structures.
· Zone 1 (5-30 feet from structures or to the property line):

Zone 1 emphasizes intensive vegetation management by removing dead or dying vegetation, increasing spacing between plants and trees, and reducing fuel continuity to slow fire spread and reduce radiant heat exposure to structures.
· Zone 2 (30-100 feet, up to 200 feet where warranted):

Zone 2 provides a broader fuel-reduction buffer through mowing, thinning, pruning, and controlled retention of vegetation to reduce fire intensity, ember production, and crown fire potential, with spacing adjusted based on slope and site conditions.

The following graphic illustrates how screening might look using the Defensible Space approach where the primary strategy relies on tree planting for screening:

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Source: <https://www.nfpa.org/education-and-research/wildfire/preparing-homes-for-wildfire> Both Murrieta Fire and Rescue Fire Prevention staff and the City’s landscaping consultant will be available at the workshop to support the City Council’s discussion concerning this topic.

If the City Council reaches consensus on the questions presented within the preceding focus topics, the next step will be to conclude the discussions on Developed and Undeveloped focus topic discussions. The topic is presented below should the City Council wish to begin the discussion at the workshop.

Developed versus Undeveloped Hillside Properties
The City’s General Plan establishes policy direction for development in hillside areas by recognizing slopes, ridgelines, and associated landforms as physically sensitive and visually prominent parts of the City. These policies do not prohibit development in hillside areas; rather, they call for development to be responsive to site conditions, to avoid unnecessary landform alteration, and to maintain the long-term character of hillside areas as development occurs.

For context, the following information provides an overview of the number of parcels located within the Hillside Area Overlay, categorized according to their status as either Developed or Undeveloped. This classification is based on a comprehensive review of County property tax records, in conjunction with current aerial photography, to determine development status. Parcels identified as Developed generally contain permanent structures and improvements. Undeveloped parcels are largely vacant or maintain their natural terrain with minimal disturbance.
• 319 parcels are developed and are privately owned.
• 179 parcels that are developed are privately owned and are within an MSHCP Criteria Cell. • 51 parcels in the study area are undeveloped and privately owned. • 30 parcels are undeveloped, are privately owned, and are within an MSHCP Criteria Cell. • 25 parcels are undeveloped and owned by the RCA.
• 1 parcel is undeveloped and is privately owned by an entity for conservation purposes. • Properties included in a specific plan are omitted.

For properties located within the potential Hillside Overlay area, the following list describes major implementation policies of the Hillside Ordinance relative to the General Plan policies. · Applies standards based on site conditions
Hillside standards are triggered by slope and terrain, not prior development, consistent with General CITY OF MURRIETA Printed on 1/29/2026Page 6 of 10
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Plan conservation policies (General Plan - Conservation Element; MMC §16.24.020) · Directs development to suitable areas of a site
Development is guided toward less steep and less prominent slopes, limiting disturbance on more constrained areas (General Plan - Landform & Grading Policies; MMC §§16.24.060, 16.24.070(A)) · Limits the extent and scale of grading
Standards require development to follow existing topography and avoid excessive cut-and-fill (General Plan - Hillside and Ridgeline Policies; MMC §§16.24.060, 16.24.070(A)) · Manages physical and visual scale of development
Retaining wall height, terracing, materials, and landscaping standards address long-term visibility and site integration (General Plan - Visual Character Policies; MMC §§16.24.060, 16.24.070(D)) · Integrates environmental and safety considerations
Hillside review incorporates biological resources, fire hazard conditions, access, and site stability (General Plan - Conservation & Safety Policies; MMC §16.24.070)
As the City Council continues to weigh the considerations of development policy in hillside areas, staff identified the following aspects of the approaches being discussed that are associated with the absence of hillside standards once a property is developed. Included in this evaluation is Appendix II (Attachment 9) which provides a high-level comparison between the City’s Hillside Development regulations and the standards applied to non-hillside areas. This comparison is intended to help the City Council and the public understand why hillside regulations differ from the City’sstandard residential development requirements based on unique hillside property conditions such as slope, terrain, aesthetics, hazardous conditions, and other considerations.

The table is only intended for context and clarity by comparing the standards that apply to non-hillside areas with those of hillside areas.

Examples of How the Table Should Be Interpreted
For the topic identified below, the comparison matrix sets the City’snon-hillside conditions as the baseline and identifies the additional needs of hillside properties, and why they are needed. · Site suitability:

In non-hillside areas, most of a parcel is typically considered buildable. In hillside areas, development is more often directed to less steep portions of a site, with remaining areas potentially constrained by slope or other conditions.
· Grading:

While all properties are subject to City grading permit limits, grading in hillside areas is subject to additional aesthetic criteria due to its permanence and potential to alter natural landforms. · Retaining walls:

In non-hillside areas, retaining walls are usually accessory features. In hillside areas, retaining walls are often structural elements that shape the site and therefore are subject to additional height, terracing, and design considerations.
· Fire hazard and access:

While fire and life-safety standards apply citywide, hillside development may involve additional considerations related to slope, fuel loading, and emergency access that are less common on flatter sites.

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· Visual context:

Development on flatter terrain typically has visual impacts limited to adjoining properties. In hillside areas, grading and structures may be visible over longer distances and time periods, which is reflected in additional design considerations such as landscaping and landform grading design.

Staff also identified potential risks and tradeoffs of modifications to the City’scurrent approach of managing its hillside resources which are described below.

Potential Risks
· Incremental visual change: Exempting developed parcels may allow future additions, grading, or walls to occur without the design controls that address long-range visibility, potentially resulting in gradual but cumulative changes to hillside appearance over time.
· Inconsistent visual outcomes: Similar slopes and ridgelines could be subject to different design expectations based solely on development status, leading to uneven visual patterns within the same hillside area.
· Reduced ability to manage scale: Without hillside standards, tools that manage retaining wall height, terracing, materials, and screening may not apply to later modifications, increasing the likelihood of visually dominant site features.
· Ridgeline exposure: Developed parcels often retain undeveloped or partially graded areas near ridgelines; removing standards could limit the City’sability to address new work in visually prominent locations.
· Substantial alterations to topography cannot be undone.

Potential Tradeoffs
· Regulatory simplicity for property owners: Removing developed parcels could reduce review requirements for future improvements on those properties. · Clearer distinction by development status: Standards would apply primarily to initial development, rather than to subsequent changes on already-developed sites. · Reduced discretionary review: Fewer projects would be subject to hillside-specific design considerations, potentially shortening review timelines saving applicants/ property owners time and money.

Planning Consideration
As properties develop and become exempted from hillside standards, the City’soriginal intent of managing important hillsides features will be progressively reduced. The General Plan recognizes hillsides, ridgelines, steep slopes, and prominent landforms as features whose sensitivity and visibility persist over time, regardless of development status. The City’shillside standards are the primary mechanism through which those features are addressed in the City’sdevelopment review process. When developed parcels are exempted from hillside requirements, controls on steep slope grading, structure placement, retaining walls, landscaping, and visual scale will no longer apply to future site changes that may affect remaining natural slopes, ridgelines, or visually prominent areas. Removing developed parcels from hillside standards favors property owners and property rights but may limit the City’sability to address incremental visual change and maintain consistent community character in hillside areas over time.

As the City Council considers its policy direction on the applicability of hillside standards to developed/ undeveloped properties, staff provided the discussion prompts below that could be used to frame the discussion given the public feedback received and the City Council’s discussion during the workshops. · No Change In Current Status - Should properties in the proposed overlay zone continue to be subject to the hillside standards to maintain the current General Plan approach to hillside management? · Exempt from Hillside Standards - For parcels that are considered fully developed, does the City CITY OF MURRIETA Printed on 1/29/2026Page 8 of 10
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· Exempt from Hillside Standards - For parcels that are considered fully developed, does the City Council wish to establish a specific development threshold in order for a property to become exempt from the hillside overlay standards?
· New Applicability Threshold - Is there an interest in distinguishing between minor property alterations and larger expansions (e.g., grading over a certain quantity, new retaining walls, or significant building area increases) when determining hillside applicability? · Accessory Building Development - Should hillside standards apply to accessory structures or to Accessory Dwelling Units (ADUs) on developed hillside parcels, particularly where new grading or visual exposure is involved?
Conclusion
Through a renewed examination of the original intent of these updates and a careful evaluation of the most appropriate path forward, staff remains committed to developing clear, balanced, and practical standards for a future draft ordinance. These refinements are designed to support responsible hillside development that aligns with the City’sGeneral Plan goals, responds to community input, and fosters a more efficient, transparent, and predictable review process for all stakeholders.

The primary objective of these updates is to refine the development standards, thereby improving clarity, precision, and ease of application for homeowners, project applicants, and City staff. Enhanced organization, simplified language, and improved accuracy are designed to reduce ambiguity, streamline the review process, and conserve time and resources, ultimately enhancing overall implementation and administration.

Concurrently, staff recognize the importance of avoiding the imposition of undue burdens on homeowners and applicants. The proposed feedback aims to strike an appropriate balance between protecting hillside resources and accommodating reasonable development. This balanced approach is intended to facilitate responsible growth that is responsive to site-specific environmental conditions while advancing the City’slong- term vision for hillside management.

FISCAL IMPACT
None.

ATTACHMENTS
ATT 1 - Planning Commission Ordinance Introduction Staff Report, June 28, 2023 ATT 2 - City Council Workshop 1 Staff Report, August 15, 2023 ATT 3 - City Council Workshop 2 Staff Report, March 5, 2024 ATT 4 - City Council Workshop 3 Staff Report, June 17, 2025 ATT 5 - Citywide - Hillside Overlay Map Exhibit - With Specific Plans ATT 6 - City Council Workshop 4 Staff Report, October 21, 2025 ATT 7 - City Council Workshop 5 Staff Report, November 18, 2025 ATT 8 - Appendix I Comparison of Hillside Development Requirements Versus Standard Municipal Code Requirements
ATT 9 - Appendix II - Comparison of Major Hillside and Non-Hillside Residential Development Policies and Standards
ATT 10 - Draft Ordinance - Title 16 - Strikeout-Underline ATT 11 - Correspondence - Prior to Workshop 3
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Template Version 012019
Final Action
☒ City Council
☐ Planning Commission
Subject: Hillside Updates (DCA-2021-2396) to amend Chapters 8.20 and

15.52 of the Murrieta Municipal Code, and to amend the Murrieta Development Code (Title 16) for the purpose of revising and updating Chapters 16.08, 16.10, 16.11, 16.12, 16.13, 16.14, 16.18,

16.22, 16.24, 16.28 and new Sections 16.24.080, entitled “Exceptions”, 16.24.090, entitled “Reserved”, 16.24.100, entitled “Hillside Overlay Map”, and 16.24.110, entitled “Prominent Ridgelines Map”
Date: June 28, 2023
Prepared by: Christopher Tracy, AICP, Senior Planner
Reviewed by: Carl Stiehl, Interim City Planner
Approved by: Jarrett Ramaiya, Deputy Development Services Director David Chantarangsu, AICP - Development Services Director

RECOMMENDATION

1. Find that the proposed action is consistent with the Public Resources Code Section 21000 et.

Seq. (the California Environmental Quality Act (CEQA)) pursuant to Title 14, Division 6, Chapter 3 of the California Code of Regulations (CEQA Guidelines), Section 15162 for the reasons specified in this report; and

2. Receive public comments; and

3. Adopt a Resolution (Attachment 1) recommending that the City Council introduce and place on first reading an Ordinance for the Title 16 updates reflective of Attachment 1.3 and Attachment 1.4 (Exhibits “C” and “D”).

BACKGROUND
The City adopted a General Plan in 1994 following incorporation in 1991. At that time, it was determined that all development decisions were to continue using Riverside County’s Ordinance No. 348 (Zoning) until such time that the City adopted its own zoning code, provided that the County’s Ordinance No. 348 was not in conflict with the General Plan. For context, Title 16 of the Murrieta Development Code (Development Code) within the Murrieta Municipal Code (MMC) is the primary instrument for implementing the City’s General Plan. It provides the City’s regulations for the development and use of property within the City limits and provides standards for development, subdivisions, and other related land use activities.

Planning Commission Meeting Agenda Report
448