Page 22 - Moreno Valley 2019 Popular Annual Financial Report

LONG TERM
DEBT

Governments, just like businesses and individuals, must finance certain purchases with debt. The key is to match the life of the
assets being purchased, with the term of the debt payments. Accordingly, the City’s debt is predominantly related to long-lived
capital assets.

OUTSTANDING DEBT FOR THE Governmental Business Type
YEAR ENDED JUNE 30, 2019 Activities Activities
Direct Placements
Private Placement $1,245,000 $ -
Capital Leases - 8,110,892
Other Debt
Lease revenue bonds 29,630,276 50,502,630
Certificates of participation 18,347,041 -
Compensated absences 6,460,218 295,438
Net Pension and OPEB liability 72,477,086 2,068,668
Self insurance claims and judgments 2,007,000 -
$130,166,621 $60,977,628

At year-end, the City’s governmental activities had $130.2 million in bonds, certificates of participation, compensated absences,
Pension and Other Post-Employment Benefits (OPEB) liability and self-insurance claims and judgments. FY 18/19 is the third
year of recognizing OPEB liability as a result of implementing GASB 75 in fiscal year 16/17. In Fiscal Year 2018-19, the City and
Moreno Valley Utility entered into an Equipment Lease/Purchase Agreement with Banc of America Leasing & Capital for the
purchase and retrofit of streetlights.

DEBT PER
CAPITA

WHY DOES THE CITY BORROW?

Local governments issue bonds to pay for large,

expensive, and long-lived capital projects, including

roads and electric utilities. Without issuing debt, these

important infrastructure needs would be unmet. While
local governments can sometimes pay for capital

investments with current revenues, borrowing allows

them to spread the costs across multiple generations

due to their long term benefit.

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