Page 33 - Moreno Valley 2025 Annual Financial Report

This Statement requires a government to assess whether a concentration or constraint makes the primary
government reporting unit or other reporting units that report a liability for revenue debt vulnerable to
the risk of a substantial impact. Additionally, this Statement requires a government to assess whether
an event or events associated with a concentration or constraint that could cause the substantial impact
have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the
date the financial statements are issued.

Economic Factors and Outlook for Future Years

Although this Annual Report focuses on the City’s economic condition for the fiscal year ending June 30,
2025, it is also important for the City’s financial management to address current issues affecting the City
and their economic impact on FY 2024-25 and future years.
Moreno Valley’s local economy continues to demonstrate steady improvement, with tax revenues showing
moderate growth over the past several years. With an estimated population of 210,823, the City remains the
second-largest in Riverside County and the fourth-largest in the Inland Empire. This stability is supported
by Moreno Valley’s strategic location at the junction of Interstate 215 and State Route 60, its diverse range
of quality housing options, its family-oriented lifestyle, and its strong array of quality-of-life amenities.

In recent years, Moreno Valley has also experienced significant non-residential growth, including major
new commercial, retail, and industrial developments. While commercial development has slowed across
Southern California, the City continues to attract new business opportunities. In FY 2024-25, several
new medical, retail, and industrial projects opened, expanding the City’s property and sales tax base and
supporting moderate revenue growth in the upcoming budget cycle.

The City’s Economic Development Department remains dedicated to actively promoting Moreno Valley
as the region’s leading destination for businesses seeking to locate in the Inland Empire. Benefiting from
its prime Southern California location, the City continues to be a preferred hub for the logistics industry,
offering a robust supply of developable parcels, available facilities, and projects entitled by some of the
nation’s most prominent development and investment firms. Additionally, on November 5, 2024, Moreno
Valley residents approved Measure U, the Moreno Valley Essential Services Reauthorization Measure,
which authorizes a one-cent (1%) increase in the sales tax rate. This measure is expected to generate
additional revenue for the City in the years ahead.

The City’s credit rating of AA-, as assigned by Standard & Poor’s, reflects its strong financial position.
A key factor in achieving and maintaining this rating is the commitment of the City Council and the City
Manager to balancing the General Fund budget. The City’s dedication to fiscal responsibility and effective
management is consistently demonstrated, as we continue to navigate complex financial challenges
without relying on General Fund reserves. Through strategic planning and disciplined execution, the City
Council and management team have delivered balanced financials. As revenues continue to grow steadily
for now, we remain focused on planning for sustained economic recovery.

The City is closely monitoring several economic indicators that signal a slowing economy, including
potential recessionary and inflationary pressures at the national, state, and regional levels; the State’s
projected deficit heading into 2026-27 and beyond; and the impact of newly enacted, unfunded State
mandates. Given its strong financial standing, the City is well positioned to withstand a moderate recession.
However, we will continue to exercise fiscal prudence to ensure future budgets remain balanced while
maintaining high-quality services that enhance the well-being of our residents.

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