Page 103 - Moreno Valley 2025 Annual Financial Report

City of Moreno Valley, California

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

Note 10. Commitments and Contingencies (Continued)

Agreement # 1

The terms of Agreement # 1, approved by City Council Resolution 2015-54, require that
sales tax is refunded based on preset percentages over the life of the agreement. The
original agreement covered a ten-year period but on August 23, 2018, the participating
business completed the additional conditions which were required to extend the agreement
to the full twenty-year period. Payments are made to the business on a quarterly basis as
the detailed sales tax data is received from the California Board of Equalization.
The participating business is required to certify their compliance annually. If hiring levels
fall below the 30% for a given year, the City is entitled to recapture a pro-rate share of the
revenues abated for that year. The recapture clause is limited to the payments that pertain
to the particular year where the requirement was not met and cannot be applied to any
payments previously earned.

Agreement Years Tax Abatement Rate
Years 1 through 5 60%
Years 6 through 10 50%
Years 11 through 15 50%
Years 16 through 20 40%

86