2022 Popular Annual Financial Report — Riverside City Council, March 14, 2023

000
City of Riverside, City Hall
3900 Main Street
Riverside, CA 92522
ExploreRiverside.com
City of Arts & Innovation

POPULAR ANNUAL

FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
Riverside, California

It is important to note, this PAFR is unaudited and is presented on a non-GAAP basis*. This means that the presentation of financial data in this report differs from the GAAP basis presentation in the City’s ACFR. The differences are as follows: the use of prescribed accounting methods and financial statement formats; the presentation of segregated funds; and the disclosure of all material financial and non-financial matters in notes to the financial statements.

We hope that you find this report helpful and encourage you to acce ss the City’s website (www.RiversideCA.gov/Finance) or contact the Finance Department at (951) 826 -5660 for more detailed information about the City’s finances.

Sincerely,

Edward Enriquez
Chief Financial Officer/City Treasurer

Dear Reader,
The City of Riverside is pleased to present our Popular Annual Financial Report (PAFR) for the fiscal year ending June 30, 2022. Our PAFR provides an overview of the City’s financial position in a manner that is easy to understand. The information in thi s report is based on the audited results presented in the City’s Annual Comprehensive Financial Report (ACFR). This report also includes information about the City’s economic outlook and organizational outstanding debt structure. * Generally Accepted Accounting Principles (GAAP) is a combination of authoritative standards and the commonly accepted way of recording and reporting accounting information. To review the audited GAAP-based, full disclosure financial statements, please refer to the City’s ACFR, which is available on the City’s website at www.RiversideCA.gov/Finance/

IN THIS REPORT
ABOUT THE CITY AND ITS LEADERSHIP ............................................................................................... 2 CITY DEMOGRAPHICS AND KEY STATISTICS ...................................................................................... 3 WHAT’S NEW: FINANCIAL HIGHLIGHTS ............................................................................................. 4 THE CITY’S FINANCIAL POSITION ........................................................................................................ 5 THE CITY’S ASSETS AND INVESTMENTS ............................................................................................... 6 WHAT THE CITY OWES ......................................................................................................................... 7 STATEMENT OF ACTIVITIES .................................................................................................................. 8 CITY VISION, ACTIVITIES AND SPENDING ......................................................................................... 9 GOVERNMENTAL ACTIVITY: FINANCIAL HIGHLIGHTS ................................................................... 10 MEASURE Z REVENUE AND SPENDING ............................................................................................. 11 BUSINESS-TYPE ACTIVITIES: FINANCIAL HIGHLIGHTS ..................................................................... 12 GOVERNMENT FINANCE OFFICERS ASSOCIATION (GFOA) PAFR AWARD ................................. 14

1 14
Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Report to the City of Riverside for its Popular Annual Financial Report for the fiscal year ended June 30, 2021. The Award for Outstanding achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports.

In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandability, and reader appeal.

An Award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only. Since the City’s inception of the Popular Annual Financial Report, the City h as received a Popular Award for the last five consecutive years (fiscal years ended 2017-2021). We believe our current report continues to conform to the Popular Annual Financial Reporting requirements and we are submitting it to GFOA to determine its eligibility for another Award.

GOVERNMENT FINANCE OFFICERS ASSOCIATION (GFOA) PAFR AWARD

BUSINESS-TYPE ACTIVITIES: FINANCIAL HIGHLIGHTS (CONTINUED) 13 ABOUT THE CITY AND ITS LEADERSHIP

2 The City of Riverside, incorporated on October
11, 1883, is in the western portion of Riverside
County, about 60 mile east of Los Angeles. The
City currently occupies a land area of 81.5
square miles.

The City is a part of Inland Southern California,
which consists of Riverside and San Bernardino
Counties (the “MSA”). The population of Inland
Southern California, at approximately 4 .6
million, is larger than 2 5 states. The population
of the City is 317,847 which places it as the 12th
largest in California.
12th
largest city in
California
65th
largest
incorporated
city in the United
States by population
The City of Riverside operates under the council-manager form of government. Under this organizational structure, the City Council appoints a City Manager to act as the Chief Operating Officer. The City Council sets policy direction and the City Manager implements those policies. The Mayor is elected at-large, while Council members are elected by voters in each of seven separate wards. The Mayor shall be the presiding officer at all meetings of the City Council and shall have a voice in all its proceedings but shall not vote except to break a City Council tie- vote. The Mayor shall be the official head of the City for all ceremonial purposes.

SEWER FUND
Water
Sewer
192,236 gallons
average per residential
customer
17,588
New Connections

26.01 Average Daily
Sewage Treatment
(Millions of gallons)
The Water Fund accounts for the activities of the City’s water distribution operations and the Sewer Fund accounts for the activities of the City’s sewer systems. To give an overview of the overall financial health of each fund, a five-year history of the fund balance is below. The total includes non-spendable assets and funds that are restricted for specific purposes. Fund balance does not reflect funds available for new water and sewer operations spending.

FUND BALANCE – WATER AND SEWER FUNDS
In thousands of dollars

$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22

CITY KEY STATISTICS
Average Household
Size: 3.29*
Unemployment Rate: 3.2%
Source: September 2022 U.S. Bureau of
Labor Statics
Median Age: 32.9*
Average Household
Income: $95,658*
2021 Estimated Population
317,847
Source: California Department of Finance

31.2% of the Population
25 years & over
have a college degree*
(Associates, Bachelor’s, Graduate/Professional)
EXPENSES: BUSINESS-TYPE ACTIVITIES
The business-type activities of the City include Electric, Water, Sewer, Civic Entertainment and Others (Refuse, Public Parking, Airport, and Transportation services).

(In thousands of dollars)

FY 2017-18
FY 2018-19
FY 2019-20
FY 2020-21
FY 2021-22
$340,000
$350,000
$360,000
$370,000
$380,000
$390,000
$400,000

CHARGES FOR SERVICE - ELECTRIC
In thousands of dollars
Fire
Police
4 Police Stations &
1 Police Substations
604 Police Personnel
(Sworn & Non-Sworn)

CITY DEMOGRAPHICS AND KEY STATISTICS
14 Fire Stations
1 Training Facility
250 Fire Personnel
38,801 Calls Answered
BUSINESS-TYPE ACTIVITIES: FINANCIAL HIGHLIGHTS
3 12

CITY DEMOGRAPHICS

$570,000
Median Sale Price in Riverside
Source: Redfin calculations of home data from
MLS and/or public records October 2022

* Source: United States Census Bureau, 2021 American Community Survey 1-Year Estimates – Most recent data available at time of publication Hispanic or Latino
(of any race)*

55.9%
White*

25.3%
Asian*

8.5% Black*

6.6%
Mixed or
Other
Race*

3.7%
2022 SPENDING – BUSINESS-TYPE ACTIVITIES

Electric is the largest business -type function
in the City with $ 349 million in spending
during Fiscal Year 2021-22. Water and Sewer
business activities have the next largest level
of spending with more than $ 128.4 million
during the fiscal year ($69.3 million and $59.1
million, respectively).

Electric
$349,004

64.8%
Water
$69,303

12.9% Sewer
$59,060
11% Refuse
$28,449

5.3%
Civic
Entertainment
$21,804

4.1%
Others
$10,268

1.9%
2,988
Acres of Parks
8 Library Branches
Culture &
Recreation
12 Community
Centers
43 Playgrounds &
44 Softball/Baseball
Diamonds
The Electric Fund accounts for the activities of the City’s electric distribution operat ions. To give an overview of the overall financial health of the fund, a five- year history of the fund balance is below.

The total includes non -spendable assets and funds that are restricted for specific purposes. Fund balance does not reflect funds available for new electric distribution operations spending.

FUND BALANCE – ELECTRIC FUND
In thousands of dollars

ELECTRIC FUND
112,328 Active Electric
Meters - includes Residential,
Commercial, and Industrial

17.71 average price
(cents/kWh) per residential
customer
468.50 employee
positions approved to
provide Electric – related
services
FY 2020-21
$497,373
FY 2021-22
$505,563
FY 2017-18
$505,412
FY 2019-20
$514,885 FY 2018-19
$510,732
Public Works
891.17
Streets (miles)

17.35 Street Resurfacing
(miles)
30,489 Streetlights

FY 2017-18
$902,792
FY 2018-19
$928,034
2019-20
$933,925
2020-21
$986,646
2021-22
$1,051,974
FY 2017-18
$866,154
FY 2018-19
$886,921
2019-20
$930,318
2020-21
$966,751
2021-22
$880,131
Revenue Expenses
Overall, the City as a whole has seen revenue
increasing and expense reductions. For the year
ended June 30, 2022, revenue exceeded expenses by
nearly $171.8 million. This had a positive impact on the City’s overall financial position . This was primarily
attributed to increase in Sales Tax revenue ($24M),
ARPA grant received ($73.5M) with minimal associated
expenses, and a decrease in expenses due to the
elimination of the CalPERS net pension liability ($74M).

FIVE-YEAR REVENUES VS EXPENSES – CITYWIDE
In thousands of dollars

WHAT’S NEW: FINANCIAL HIGHLIGHTS MEASURE Z REVENUE AND SPENDING 11 4
Long-Term Financial Planning
On June 2 1, 2022 , the City Council adopted
the City’s 2022-2024 Biennial Budget. For Fiscal
Year 2022 -23 it ’s comprised of $1. 4 billion in
funding for citywide operations including $163
million for capital projects. The Biennial Budget
embraces the concepts of Priority Based
Budgeting (PBB) that align City resources with
the strategic priorities outlined in the Envision
Riverside Strategic Plan 2025.
*excludes Measure Z spending
$309.1 Million
General Fund
2021-22 Budget
Final Budget*
$305.7 Million
General Fund
2022-23 Budget
Original Budget*
1 Priority Based Budgeting Strategy
implementation process progressing.

2,576.91 Full-Time Equivalent
City Employees providing services to
the community
1 General Fund Reserve aspiration
goal of 20% of expenditures
reaffirmed by City Council and met
($61 million).

In May 2017, the City began receiving revenue for the Measure Z additional one-cent sales and use tax authorized by voters during the November 2016 election. In Fiscal Year 2021-22, the City received $83.7 million in Measure Z revenue. Unspent revenue will be used for approved purposes in future fiscal years.

Strategic Smoothing of Pension Related Obligations
The unfunded accrued liability (UAL) payment schedule per the CalPERS actuarial report and the pension obligation bond (POB) payment schedule were analyzed to determine optimal Section 115 Trust contributions and withdrawals to smooth the fiscal impact of the pension payment obligations. This is important because the City’s UAL payments are based on CalPERS investment returns. These returns are expected to be volatile over the next decade. The proposed smoothing will result in level payments annually for 12 years beginning Fiscal Year 2024/25. The combination of current reserves and proposed contributions will build the Section 115 Trust Fund to a balance of approximately $40 million which is projected to be sufficient to smooth the projected volatility of UAL payment requirements. $74 million decrease in expenses
due to the reduction of the CalPERS net
pension liability.

American Rescue Plan Act (ARPA)
On March 11, 2021, President Biden passed the $1.9 trillion American Rescue Plan Act (ARPA).

The ARPA established the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund, which provide assistance to eligible state, local, territorial, and Tribal governments to assist in the recovery from economic and health impacts of the COVID -19 pandemic. The City received one-time funding of approximately $73.5 million from ARPA with the first installment of $36.7 million received in June 2021 and $36.8 million received in June 2022. The City may use the funds to best support the needs of the community providing the use of the funds aligns with statutory categories . For more inform ation about the City’s plan for ARPA spending, please visit:
www.riversideca.gov/citymanager/arpa

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

MEASURE Z
In thousands of dollars
Measure Z - Revenue
Taxes $83,157
Rental and Investment Income 551
Miscellaneous 1
Total Revenue $83,709

Measure Z - Expenditures
Current:

General Government 1,923
Public Safety 23,028
Highways and Streets 983
Culture and Recreation 986
Capital Outlay 1,312
Total Expenditures $28,232
Excess of Revenues Over Expenditures $55,477

Measure Z - Other Financing Sources (Uses)
Transfers in $11,292
Transfers out (18,430)
Transfers in/(out) to General Fund* (18,266)
Total Other Financing Sources (Uses) ($25,404)
INCREASE IN MEASURE Z BALANCE $30,073
Measure Z -Net Position
Net Change in Fund Balance $30,073
Fund Balance, Beginning of Year 59,372
FUND BALANCE, END OF YEAR $89,445

* Measure Z funds are within the General Fund. Per accounting standards, transfers within the same fund are not reflected in the Statement of Revenues, Expenditures and Changes in Fund Balances; however, General Fund transfers are reflected in this schedule for transparency purposes.

Functions of the City can be separated into two categories, those that are principally supported by taxes and intergovernmental revenues (governme ntal activities ) and those that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities).

FIVE-YEAR REVENUE HISTORY – GOVERNMENTAL
In thousands of dollars

Sales and Use Tax – consumable tax placed on retail sales, leases or rentals of most goods, and any taxable services as mandated.

Property Tax – legally enforceable lien on property as of January 1. Taxes are levied on July 1 and are payable in two installments on December 10 and April 10.

Charges for Services – revenues that arise from charges to customers, applicants, or others who purchase, use, or directly benefit from the goods, services, or privileges provided, or are otherwise directly affected by the service.

Grants and Contributions (operating and capital) – revenues arising from mandatory and voluntary non-exchange transactions with other governments, organizations, or individuals that are restricted for use in a particular program.

Utility User’s Tax – 6.5% usage tax on landline telephone, electricity, gas, water, and cable. The tax is collected by the utility company as part of its regular billing procedure and then remitted to the City.

Other – consists of transit occupancy tax, franchise fees, and investment income.

$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
Sales and Use
Tax
Property Tax Charges for
Services
Grants and
Contributions
Utility User's Tax Other
FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-222

THE CITY’S FINANCIAL POSITION GOVERNMENTAL ACTIVITY: FINANCIAL HIGHLIGHTS 5 10
The Statement of Net Position financial statement presents information about the City’s assets, liabilities, deferred outflows (e.g., prepaid items), and deferred inflows (e.g., advance collections) . The City’s net financial position is the balance of all assets and deferred outflows, less all liabilities and def erred inflows. Over time, increases or decreases in the City’s net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. For the fiscal year ended June 30, 2022, the City’s net position improved by $172.5 million.

STATEMENT OF NET POSITION – ALL FUNDS
In thousands of dollars
City Assets – What We Own 2021 2022
Current Assets consisting mainly of cash and amounts owed to the City $1,227,474 $1,567,526 Net Capital Assets consisting primarily of buildings, equipment, and vehicles 3,313,464 3,306,450 TOTAL CITY ASSETS $4,540,938 $4,873,976
Deferred Outflows of Resources, positive effect on Net Position 171,049 109,078 Total City Assets and Deferred Outflows $4,711,987 $4,983,054

City Liabilities – What We Owe 2021 2022
Current Liabilities consisting of all amounts the City owes $169,564 $218,480 Non-Current Liabilities consisting of long-term debt owed, including pension obligations 2,464,963 2,144,757
TOTAL CITY LIABILITIES $2,634,527 $2,363,237
Deferred Inflows of Resources, negative effect on Net Position 10,294 380,165 Total City Liabilities and Deferred Inflows $2,644,821 $2,743,402 CITY NET FINANCIAL POSITION $2,067,166 $2,239,652

GENERAL FUND
The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be recorded in another fund. Fund balance highlights are below.

FUND BALANCE OVERVIEW – GENERAL FUND
Excludes Measure Z Activity
(In thousands of dollars)
FY 2021-22 Fund Balance
$137,773
Non-Spendable
(e.g., Deposits & Inventory)
$1,901
Committed (Fund use
determined by formal Council
or Board Approval)
$77,801
Restricted (Fund use
restricted for a specific
purpose)
$19,423
Assigned (Fund use intended
for a specific purpose)
$9,828
Unassigned
(Available for Use)
$28,820

SPENDING: GOVERNMENTAL ACTIVITIES
The City’s g overnmental activities include general government, public safety, highways and streets, and culture and recreation. These activities are principally supported by general revenue including taxes and investment income. The table below reflects a five -year history of spending for these activities.

FIVE-YEAR SPENDING HISTORY – GOVERNMENTAL
In thousands of dollars

Public Safety expenditures reflect the costs associated with providing police and fire services to residents and visitors. Expenditures decreased significantly in FY 2021-22 due to the elimination of the net pension liability.

Culture and Recreation expenditures enrich the quality of life in Riverside through recreational and cultural activities as well as support the educational and informational needs of the community.

Highways and Streets expenditures are related to the design, construction, maintenance, and operation of public facilities and infrastructure within the City.

General Government expenditures are for the administration offices, including the Mayor, City Council, City Manager, City Attorney, City Clerk, Community Development, Finance, General Services, Human Resources, and Innovation Technology.

Interest on Long -Term Debt and Fiscal Charges expenditures are for the interest expense and fiscal charges associated with debt financing.
$0
$50
$100
$150
$200
$250
Public Safety Culture and
Recreation
Highways and
Streets
General
Government
Interest on Long-
Term Debt and
Fiscal Charges
Millions
FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22

THE CITY’S ASSETS AND INVESTMENTS CITY VISION, ACTIVITIES AND SPENDING 9 6
Improvements other
than Buildings
$1,319,665

39.9%
Infrastructure
$658,525

19.9%
Buildings
$572,466

17.3%
Land
$476,898

14.4%
Construction in
Progress
$180,174

5.5%
Machinery &
Equipment
$65,054

2.0%
Intangibles
$31,838

1.0%
$3,302,790
(In thousands of dollars)

CAPITAL ASSETS, NET OF DEPRECIATION

The City’s capital asset investment
includes land, intangibles, buildings
and improvements, machinery and
equipment, park facilities, roads,
highways, and bridges.

Major capital improvements included
projects for road ( $22.5 million), storm
drains ($8.6 million), Youth Innovation
Center ($7.1 million), water utility ($15.2
million), electric utility capital
improvements ($26.4 million) and The
Cheech Marin Center ($11 million).

INVESTMENT MANAGEMENT AND FUNDS ALLOCATION
The prioritized objective of the City’s investment program is to preserve principal, ensure enough liquidity, and generate a market rate of return. The City’s investments comply with California Government Code Section 53601 guidelines for permissible investment types and limits. In addition, all investments comply with the City Council’s adopted investment policy which mitigates the City’s risk.

The chart below reflects the types of investments held by the City or its Fiscal Agent as of June 30, 2022.

In thousands of dollars

US Treasury
Obligations
$209,401

22.1%
Medium Term
Corporate Notes
$159,217

16.8%
Securities
$141,591

14.9%
Joint Power
Authority Pools
$131,756

13.9% Federal
Agency
Obligations
$116,209

12.3%
Local Agency
Investment Fund
$101,362

10.7%
Money Market
Funds
$56,557

6.0%
Other Investment
Types
$32,158

3.3%
INVESTMENT TYPE ● $ 94 8,251

Average Purchase Yield to Maturity
Yield to maturity is the total return of
investment anticipated on a bond if the
bond is held until it matures. This figure
is expressed as an annual rate. Based
on information prepared by the City’s
investment consultant at year -end, the
City’s average purchase
yield to
maturity increased significantly when
compared to the previous year.

0.82 %
June 2021

1.23 %
June 2022
To review more comprehensive information about the City’s funds in the audited GAAP -based, f ull disclosure financial statements, please refer to the City’s ACFR which is available on the City’s website at www.RiversideCA.gov/Finance/

The City of Riverside is committed to providing high quality municipal services to ensure a safe, inclusive, and livable community.

The City provides a full range of services which include general government, public safety, highway and street maintenance, economic development, culture and recreation, electric, water, airport, refuse, sewer, and senior citizen/handicap transportation.

The City issues bonds to support spending for construction, capital asset purchases and improvements and unfunded pension liability.

Water, Electric, and Sewer
Revenue Bonds
$1,139.1 million
Issued to acquire, purchase, construct, or improve
major capital facilities. The revenue generated by
the facility or activity supporting the facility is
pledged as security for the repayment of debt.

Certificates of Participation
$111.4 million
Used as a lease-purchase financing mechanism for
public buildings such
as the Convention Center.

Pension Obligation Bonds
$449.0 million
Used to pay some of the pension plan’s unfunded
pension liability. Th
e City’s net pension asset as of
June 30, 2022, was $140.3 million.*
Lease Revenue Bonds
$75.5 million
Used to finance public improvements such as City
Hall, Galleria at Tyler, Police Patrol Center and a
Ma
in Library Project.

General Obligation Bonds
$5.0 million
Issued for the construction or acquisition of major
capital assets. The security pledged for the bonds
is t
he general taxing power of the government.

Net Pension Liability/(Asset)*
Miscellaneous vs
Safety Employees The largest impact to the City’s long- term financial stability relates to the
increase in pension costs from
CalPERS. In Fiscal Year 202 1-22, the
City has a net pension asset instead
of a liability . This means the present
value of pension assets is greater
than the projected pension
obligations.**
For more information about how the
City is handling the CalPERS
challenge, please visit:

Miscellaneous Safety
FY 2021-22 FY 2020-21
Governmental Business-Type
FY 2021-22 FY 2020-21
Net Pension Liability/(Asset)* by
Fund Type
Governmental vs Business -Type
Activities
($88.7)
Million ($95.1)
Million
As of June 30, 2022, the City had outstanding long-term bonded debt totaling $1.8 billion. A five-year history of the long-term debt for governmental and business-type activities is below.

Long-Term Bond Debt Outstanding*
In thousands of dollars

www.Riversideca.gov/CityManager/
CalPERSchallenge
*Based on Governmental Accounting Standards Board Pronouncement No. 68 Generally Accepted Accounting Principles reporting requirements which differs from the annual CalPERS actuarial report which contains information regarding the current financial status of the City’s retirement plans and employer funding requirements. **At June 30, 2021, CalPERS net return on investment was 21.3% creating a net pension asset in FY 2021-22. At June 30, 2022, CalPERS preliminary net return on investment was a loss of 6.1% which can potentially cause a net pension liability in FY 2022-23.

The Statement of Activities presents the City’s revenue and expenses in a format that reflects the financial burden for each of the City’s functions. All changes are reported as soon as the underlying event for the change occurs, regardless of the timing of the related cash flow.

For the fiscal year ended June 30, 2022, the City’s governmental and business activities resulted in an increase of net position totaling more than $172.5 million. The table below provides an overview of the effect of the City’s functions on its net financial position.

STATEMENT OF ACTIVITIES – ALL FUNDS
In thousands of dollars
Program Revenue 2021 2022
Charges for services $589,373 $639,546
Operating grants and contributions 68,381 56,244
Capital grants and contributions 40,557 59,035
Total Program Revenue $698,311 $754,825

General Revenue and Net Transfers 2021 2022
Sales Tax $150,321 $173,933
Property Tax 71,986 79,790
Utility Users Tax 30,577 32,464
Franchise Tax 5,527 5,955
Transient Occupancy Tax 5,801 8,764
Intergovernmental, unrestricted 499 661
Rental and Investment Income 5,650 (20,937)*
Miscellaneous and Transfers, net 18,575 16,519
Total General Revenue and Net Transfers $288,936 $297,149 TOTAL PROGRAM, GENERAL REVENUES, AND NET TRANSFERS $987,247 $1,051,974

Program Expenses 2021 2022
General Government $97,927 $66,937
Public Safety 219,136 169,742
Highways and Streets 42,034 41,125
Culture and Recreation 37,693 38,885
Interest on Long-Term Debt and Fiscal Charges 19,083 19,806 Electric 366,165 354,752
Water 71,738 69,303
Sewer 61,029 59,060
Refuse 28,428 28,449
Civic Entertainment 11,885 21,804
Other Business-Type Activities 11,633 10,268
TOTAL PROGRAM EXPENSES $966,751 $880,131
INCREASE IN NET POSITION $20,496 $171,843
Net Position 2021 2022
Net Position, beginning of year, as previously stated $1,966,386 $2,067,166 Prior period adjustment** 80,284 643
Add increase in net position 20,496 171,843
NET POSITION, ENDING $2,067,166 $2,239,652

WHAT THE CITY OWES STATEMENT OF ACTIVITIES
7 8
$63.8
Million
FY 2021-2022
$1,779,938 FY 2017-2018
$1,416,505
FY 2019-2020
$1,911,768 FY 2018-2019
$1,533,336
*Excludes debt issued by the City that is not a financial obligation of the City such as Fiduciary Funds.

$120.1
Million
*Negative revenue was due to investments adjusted to fair market value at June 30, 2022. **A prior period adjustment was made for Fiscal Year 2020-21 to land and infrastructure additions due to a change in calculation of street mileage from a system upgrade. For Fiscal Year 2021-22, the adjustment was made to the Sewer Enterprise Fund for previously expensed items that should have been included as inventory.

FY 2020-2021
$1,849,092
$109.4
Million
($45.2)
Million

$165.7
Million
($51.6)
Million
The City issues bonds to support spending for construction, capital asset purchases and improvements and unfunded pension liability.

Certificates of Participation
$111.4 million
Used as a lease-purchase financing mechanism for
public buildings such
as the Convention Center.

General Obligation Bonds
$5.0 million
Issued for the construction or acquisition of major
capital assets. The security pledged for the bonds
is t
he general taxing power of the government.

Net Pension Liability/(Asset)*
Miscellaneous vs
Safety Employees
The largest impact to the City’s long-
term financial stability relates to the
increase in pension costs from
CalPERS. In Fiscal Year 202 1-22, the
City has a net pension asset instead
of a liability . This means the present
value of pension assets is greater
than the projected pension
obligations.**
For more information about how the
City is handling the CalPERS
challenge, please visit:

Long-Term Bond Debt Outstanding*
In thousands of dollars

www.Riversideca.gov/CityManager/
CalPERSchallenge
*Based on Governmental Accounting Standards Board Pronouncement No. 68 Generally Accepted Accounting Principles reporting requirements which differs from the annual CalPERS actuarial report which contains information regarding the current financial status of the City’s retirement plans and employer funding requirements. **At June 30, 2021, CalPERS net return on investment was 21.3% creating a net pension asset in FY 2021 -22. At June 30, 2022, CalPERS preliminary net return on investment was a loss of 6.1% which can potentially cause a net pension liability in FY 2022-23.

FY 2020-2021
$1,849,092
$109.4
Million
($45.2)
Million

$165.7
Million
($51.6)
Million
SPENDING: GOVERNMENTAL ACTIVITIES
The City’s g overnmental activities include general government, public safety, highways and streets, and culture and recreation. These activities are principally supported by general revenue including taxes and investment income. The table below reflects a five -year history of spending for these activities.

FIVE-YEAR SPENDING HISTORY – GOVERNMENTAL
In thousands of dollars

Culture and Recreation expenditures enrich the quality of life in Riverside through recreational and cultural activities as well as support the educational and informational needs of the community.

Highways and Streets expenditures are related to the design, construction, maintenance, and operation of public facilities and infrastructure within the City.

THE CITY’S ASSETS AND INVESTMENTS CITY VISION, ACTIVITIES AND SPENDING 9 6
Improvements other
than Buildings
$1,319,665

39.9%
Infrastructure
$658,525

19.9%
Buildings
$572,466

17.3%
Land
$476,898

14.4%
Construction in
Progress
$180,174

5.5%
Machinery &
Equipment
$65,054

2.0%
Intangibles
$31,838

1.0%
$3,302,790
(In thousands of dollars)

CAPITAL ASSETS, NET OF DEPRECIATION

The City’s capital asset investment
includes land, intangibles, buildings
and improvements, machinery and
equipment, park facilities, roads,
highways, and bridges.

The chart below reflects the types of investments held by the City or its Fiscal Agent as of June 30, 2022.

In thousands of dollars

US Treasury
Obligations
$209,401

22.1%
Medium Term
Corporate Notes
$159,217

16.8%
Securities
$141,591

14.9%
Joint Power
Authority Pools
$131,756

13.9% Federal
Agency
Obligations
$116,209

12.3%
Local Agency
Investment Fund
$101,362

10.7%
Money Market
Funds
$56,557

6.0%
Other Investment
Types
$32,158

3.3%
INVESTMENT TYPE ● $ 94 8,251

0.82 %
June 2021

The City of Riverside is committed to providing high quality municipal services to ensure a safe, inclusive, and livable community.

FIVE-YEAR REVENUE HISTORY – GOVERNMENTAL
In thousands of dollars

Sales and Use Tax – consumable tax placed on retail sales, leases or rentals of most goods, and any taxable services as mandated.

Property Tax – legally enforceable lien on property as of January 1. Taxes are levied on July 1 and are payable in two installments on December 10 and April 10.

Other – consists of transit occupancy tax, franchise fees, and investment income.

FIVE-YEAR REVENUES VS EXPENSES – CITYWIDE
In thousands of dollars

2,576.91 Full-Time Equivalent
City Employees providing services to
the community
1 General Fund Reserve aspiration
goal of 20% of expenditures
reaffirmed by City Council and met
($61 million).

Strategic Smoothing of Pension Related Obligations
The unfunded accrued liability (UAL) payment schedule per the CalPERS actuarial report and the pension obligation bond (POB) payment schedule were analyzed to determine optimal Section 115 Trust contributions and withdrawals to smooth the fiscal impact of t he pension payment obligations. This is important because the City’s UAL payments are based on CalPERS investment returns. These returns are expected to be volatile over the next decade. The proposed smoothing will result in level payments annually for 12 years beginning Fiscal Year 2024/25. The combination of current reserves and proposed contributions will build the Section 115 Trust Fund to a balance of approximately $40 million which is projected to be sufficient to smooth the projected volatility of UAL payment requirements. $74 million decrease in expenses due
to the reduction of the CalPERS net
pension liability.

American Rescue Plan Act (ARPA)
On March 11, 2021, President Biden passed the $1.9 trillion American Rescue Plan Act (ARPA). The ARPA established the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund, which provide assistance to eligible state, local, territorial, and Tribal governments to assist in the recovery from economic and health impacts of the COVID -19 pandemic. The City received one-time funding of approximately $73.5 million from ARPA with the first installment of $36.7 million received in June 2021 and $36.8 million received in June 2022. The City may use the funds to best support the needs of the community providing the use of the funds aligns with statutory categories. For more information about the City’s plan for ARPA spending, please visit:
www.riversideca.gov/citymanager/arpa

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

MEASURE Z
In thousands of dollars
Measure Z - Revenue
Taxes $83,157
Rental and Investment Income 551
Miscellaneous 1
Total Revenue $83,709

Measure Z - Expenditures
Current:

General Government 1,923
Public Safety 23,028
Highways and Streets 983
Culture and Recreation 986
Capital Outlay 1,312
Total Expenditures $28,232
Excess of Revenues Over Expenditures $55,477

(In thousands of dollars)

FY 2017-18
FY 2018-19
FY 2019-20
FY 2020-21
FY 2021-22
$340,000
$350,000
$360,000
$370,000
$380,000
$390,000
$400,000

CHARGES FOR SERVICE - ELECTRIC
In thousands of dollars
Fire
Police
4 Police Stations &
1 Police Substations
604 Police Personnel
(Sworn & Non-Sworn)

CITY DEMOGRAPHICS AND KEY STATISTICS
14 Fire Stations
1 Training Facility
250 Fire Personnel
38,801 Calls Answered
BUSINESS-TYPE ACTIVITIES: FINANCIAL HIGHLIGHTS
3 12

CITY DEMOGRAPHICS

$570,000
Median Sale Price in Riverside
Source: Redfin calculations of home data from
MLS and/or public records October 2022

* Source: United States Census Bureau, 2021 American Community Survey 1-Year Estimates – Most recent data available at time of publication Hispanic or Latino
(of any race)*

55.9%
White*

25.3%
Asian*

8.5% Black*

6.6%
Mixed or
Other
Race*

3.7%
2022 SPENDING – BUSINESS-TYPE ACTIVITIES

Electric
$349,004

64.8%
Water
$69,303

12.9% Sewer
$59,060
11% Refuse
$28,449

5.3%
Civic
Entertainment
$21,804

4.1%
Others
$10,268

The total includes non -spendable assets and funds that are restricted for specific purposes. Fund balance does not reflect funds available for new electric distribution operations spending.

FUND BALANCE – ELECTRIC FUND
In thousands of dollars

ELECTRIC FUND
112,328 Active Electric
Meters - includes Residential,
Commercial, and Industrial

17.35 Street Resurfacing
(miles)
30,489 Streetlights

BUSINESS-TYPE ACTIVITIES: FINANCIAL HIGHLIGHTS (CONTINUED) 13 ABOUT THE CITY AND ITS LEADERSHIP

SEWER FUND
Water
Sewer
192,236 gallons
average per residential
customer
17,588
New Connections

FUND BALANCE – WATER AND SEWER FUNDS
In thousands of dollars

$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22

CHARGES FOR SERVICE - WATER AND SEWER
In thousands of dollars
$2.98 average price
($/CCF*) per residential
customer
*CCF = Centum Cubic Feet = 748 gallons
FY 2020-21
$234,397
FY 2021-22
$245,674
FY 2017-18
$218,186
FY 2019-20
$228,532 FY 2018-19
$221,576
WATER FUND FY 2020-21
$308,360
FY 2021-22
$322,304 FY 2017-18
$305,078 FY 2019-20
$300,635
FY 2018-19
$302,701
It is important to note, this PAFR is unaudited and is presented on a non-GAAP basis*. This means that the presentation of financial data in this report differs from the GAAP basis presentation in the City’s ACFR. The differences are as follows: the use of prescribed accounting methods and financial statement formats; the presentation of segregated funds; and the disclosure of all material financial and non-financial matters in notes to the financial statements.

Sincerely,

Edward Enriquez
Chief Financial Officer/City Treasurer

GOVERNMENT FINANCE OFFICERS ASSOCIATION (GFOA) PAFR AWARD

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City of Riverside, City Hall
3900 Main Street
Riverside, CA 92522
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FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
Riverside, California

Riverside City CouncilMarch 14, 2023

Riverside City Council
March 14, 2023