Page 3 - Moreno Valley City 2022 Bonded Debt Summary

bondeDDEBT

S U M M A RY

public benefit of using MUNICIPAL DEBT

The municipal debt markets provide a valuable tool for the construction of capital improvement projects. They provide the funding
necessary to build large, high priority capital improvements that benefit the citizens, such as roads and other infrastructure, when
needed rather than waiting until sufficient levels of cash have been built up. The municipal debt market includes fixed-rate bonds,
variable-rate bonds, private placement bonds, bank loans and other similar financing instruments. These municipal financings can be
either tax-exempt or taxable to the bond buyer. Generally, the municipal debt market is able to provide funding on a tax-exempt basis,
which reduces the overall borrowing costs.

The City’s Debt Policy states that “debt will only be used to finance capital projects when it is an appropriate means to achieve an
equitable allocation of costs between current and future beneficiaries as determined by the City Council.”

moreno valley DEBT PROGRAM
The City has utilized the financial markets to construct various local projects. The following pages summarize the City’s debt portfolios,
as well as important components in the overall management of the portfolio.

debt POLICY
In compliance with state law and industry best practices, the City has developed and maintains a Debt Policy. This policy directs
all aspects of the debt program and is reviewed annually by the City Council. The City also developed a Special District Financing
Policy, which provides guidance on conduit land secured financing. Copies of these policies are available on the City’s Investor
Relations website.

bond RATING
Bond ratings are designations used by rating agencies to give relative indications of credit quality or risk. Moreno Valley has been rated
“AA- stable outlook” by Standard & Poor’s (S&P) since September 2021 and undergoes an annual review with the rating agency. A
description of S&P’s rating process and what the ratings mean can be found on their website at the following location: https://www.
spratings.com/en_US/understanding-ratings.

continuing DISCLOSURE
As a condition of issuing bonds, the City has agreed to provide continuing disclosure to bondholders or lenders. This data consists of
certain financial or demographic data or other material events identified by the Securities and Exchange Commission (SEC). The City
has agreed to these requirements as part of the Continuing Disclosure Agreement for each financing. The data elements that must
be reported are unique to each bond issue and the disclosure reports must be filed within a specified time frame on the Electronic
Municipal Market Access database (EMMA) which is managed by the Municipal Securities Rulemaking Board (MSRB). As a result of the
passage of SB 1029, signed by the governor in 2016, certain data elements are also required to be reported annually to the California
Debt & Investment Advisory Commission (CDIAC). This will also be considered a requirement of the City’s ongoing continuing
disclosure program.
The City is current on all of their continuing disclosure filings and working with outside third parties to ensure that the filings are
complete and on-time. The complete filing history can be found on the EMMA website (https://emma.msrb.org) and the latest filings
can be found on the City’s website on the Investor Relations tab. The status of the most recent disclosure filings can be found later in
this document.

activity during THE YEAR
During FY 2022 the City was able to take advantage of the continued low interest rates available in the financial market by refinancing
the 2015 LRB, the 2016 LRB and the 2018 Streetlight Financing at lower interest rates which reduced the overall debt service costs.