Page 106 - Moreno Valley 2025 Annual Financial Report

City of Moreno Valley, California

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

Note 12. Successor Agency Trust for Assets of the Former Redevelopment Agency

On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (“the Bill”)
that provides for the dissolution of all redevelopment agencies in the State of California. This
action impacted the reporting entity of the City of Moreno Valley that previously had reported
a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the city or another
unit of local government will agree to serve as the “successor agency” to hold the assets until
they are distributed to other units of state and local government. On January 10, 2012, the
City Council elected to become the Successor Agency for the former redevelopment agency
in accordance with the Bill as part of City resolution number 2012-04.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the
State of California cannot enter into new projects, obligations or commitments. Subject to
the control of a newly established oversight board, remaining assets can only be used to pay
enforceable obligations in existence at the date of dissolution (including the completion of
any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is
necessary to pay the estimated annual installment payments on enforceable obligations of
the former redevelopment agency until all enforceable obligations of the prior redevelopment
agency have been paid in full and all assets have been liquidated.

The City acts as the Successor Agency for the former redevelopment agency and accounts
for its activities in a private purpose trust fund.

Cash and Investments

Cash and investments of the Successor Agency reported in the accompanying financial
statements consisted of the following:

Cash and Investments $ 2,938,268
Cash and Investments with Fiscal Agent 5,527

$ 2,943,795

The Successor Agency’s cash and investments are pooled with the City’s cash and investments
in order to generate optimum interest income. The share of the pooled cash account is
separately accounted for, and investment income is allocated to all participating funds based
on the relationship of their average daily cash balances to the total of the pooled cash and
investments. Information regarding the authorized types of deposits and investments, the type
of risks (i.e. credit, interest rate, custodial, etc.) and other disclosures associated with the City’s
pooled cash and investments is reported in Note 3.

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