AGENDA ITEM #8.7
Master Services and Purchasing Agreement with Axon Enterprise Inc. for t... Page 112 of 133 Master Services and Purchasing Agreement
Title: Master Services and Purchasing Agreement between Axon and Agency Department: Legal
Version: 13.0
Release Date: 3/31/2021 Page 17 of 19
purchase any future TAP or OSP.
TASER 7 Appendix
This TASER 7 Appendix applies to Agency’s TASER 7, OSP 7, or OSP 7 Plus purchase from Axon. 1 Duty Cartridge Replenishment Plan. If the Quote includes “Duty Cartridge Replenishment Plan”, Agency must purchase the plan for each CEW user. A CEW user includes officers that use a CEW in the line of duty and those that only use a CEW for training. Agency may not resell cartridges received. Axon will only replace cartridges used in the line of duty. 2 Training. If the Quote includes a training voucher, Agency must use the voucher within 1 year of issuance, or the voucher will be void. Axon will issue Agency a voucher annually beginning on the start of the TASER Subscription Term. The voucher has no cash value. Agency cannot exchange it for another device or service. Unless stated in the Quote, the voucher does not include travel expenses and will be Agency’s responsibility. If the Quote includes Axon Online Training or Virtual Reality Content Empathy Development for Autism/Schizophrenia (collectively, “Training Content”), Agency may access Training Content. Axon will deliver all Training Content electronically.
3 Extended Warranty. If the Quote includes an extended warranty, the extended warranty coverage period warranty will be for a 5-year term, which includes the hardware manufacturer’s warranty plus the 4-year extended term.
4 Trade-in. If the Quote contains a discount on CEW-related line items, including items related to OSP, then that discount may only be applied as a trade-in credit, and Agency must return used hardware and accessories associated with the discount (“Trade-In Units”) to Axon. Agency must ship batteries via ground shipping. Axon will pay shipping costs of the return. If Axon does not receive Trade-In Units within the timeframe below, Axon will invoice Agency the value of the trade-in credit. Agency may not destroy Trade-In Units and receive a trade-in credit.
Agency Size Days to Return from Start Date of TASER 7 Subscription Less than 100 officers 30 days
100 to 499 officers 90 days
500+ officers 180 days
5 TASER 7 Subscription Term. The TASER 7 Subscription Term for a standalone TASER 7 purchase begins on shipment of the TASER 7 hardware. The TASER 7 Subscription Term for OSP 7 begins on the OSP 7 Start date.
6 Access Rights. Upon Axon granting Agency a TASER 7 Axon Evidence subscription, Agency may access and use Axon Evidence for the storage and management of data from TASER 7 CEW devices during the TASER 7 Subscription Term. Agency may not upload any non-TASER 7 data or any other files to Axon Evidence. Agency may not exceed the number of end users than the Quote specifies.
7 Privacy. Axon will not disclose Agency Content or any information about Agency except as compelled by a court or administrative body or required by any law or regulation. Axon will give notice if any disclosure request is received for Agency Content, so Agency may file an objection with the court or administrative body.
8 Termination. If payment for TASER 7 is more than 30 days past due, Axon may terminate Agency’s TASER 7 plan by notifying Agency. Upon termination for any reason, then as of the
AGENDA ITEM #8.7
Master Services and Purchasing Agreement with Axon Enterprise Inc. for t... Page 113 of 133 Master Services and Purchasing Agreement
Title: Master Services and Purchasing Agreement between Axon and Agency Department: Legal
Version: 13.0
Release Date: 3/31/2021 Page 18 of 19
date of termination:
8.1TASER 7 extended warranties and access to Training Content will terminate. No refunds will be given.
8.2Axon will invoice Agency the remaining MSRP for TASER 7 products received before termination. If terminating for non-appropriations, Axon will not invoice Agency if Agency returns the CEW, rechargeable battery, holster, dock, core, training suits, and unused cartridges to Axon within 30 days of the date of termination.
8.3Agency will be responsible for payment of any missed payments due to the termination before being allowed to purchase any future TASER 7 plan.
AGENDA ITEM #8.7
Master Services and Purchasing Agreement with Axon Enterprise Inc. for t... Page 114 of 133 Master Services and Purchasing Agreement
Title: Master Services and Purchasing Agreement between Axon and Agency Department: Legal
Version: 13.0
Release Date: 3/31/2021 Page 19 of 19
Axon Auto-Tagging Appendix
1 Scope. Axon Auto-Tagging consists of the development of a module to allow Axon Evidence to interact with Agency’s Computer-Aided Dispatch (“CAD”) or Records Management Systems (“RMS”). This allows end users to auto-populate Axon video meta-data with a case ID, category, and location-based on data maintained in Agency’s CAD or RMS. 2 Support. For thirty days after completing Auto-Tagging Services, Axon will provide up to 5 hours of remote support at no additional charge. Axon will provide free support due to a change in Axon Evidence, so long as long as Agency maintains an Axon Evidence and Auto-Tagging subscription. Axon will not provide support if a change is required because Agency changes its CAD or RMS.
3 Changes. Axon is only responsible to perform the Services in this Appendix. Any additional Services are out of scope. The Parties must document scope changes in a written and signed change order. Changes may require an equitable adjustment in fees or schedule. 4 Agency Responsibilities. Axon’s performance of Auto-Tagging Services requires Agency to:
4.1Make available relevant systems, including Agency’s current CAD or RMS, for assessment by Axon (including remote access if possible);
4.2Make required modifications, upgrades or alterations to Agency’s hardware, facilities, systems and networks related to Axon’s performance of Auto-Tagging Services;
4.3Provide access to the premises where Axon is performing Auto-Tagging Services, subject to Agency safety and security restrictions, and allow Axon to enter and exit the premises with laptops and materials needed to perform Auto-Tagging Services;
4.4Provide all infrastructure and software information (TCP/IP addresses, node names, network configuration) necessary for Axon to provide Auto-Tagging Services;
4.5Promptly install and implement any software updates provided by Axon;
4.6Ensure that all appropriate data backups are performed;
4.7Provide assistance, participation, and approvals in testing Auto-Tagging Services;
4.8Provide Axon with remote access to Agency’s Axon Evidence account when required;
4.9Notify Axon of any network or machine maintenance that may impact the performance of the module at Agency; and
4.10Ensure reasonable availability of knowledgeable staff and personnel to provide timely, accurate, complete, and up-to-date documentation and information to Axon. 5 Access to Systems. Agency authorizes Axon to access Agency’s relevant computers, network systems, and CAD or RMS solely for performing Auto-Tagging Services. Axon will work diligently to identify as soon as reasonably practicable resources and information Axon expects to use and will provide an initial list to Agency. Agency is responsible for and assumes the risk of any problems, delays, losses, claims, or expenses resulting from the content, accuracy, completeness, and consistency of all data, materials, and information supplied by Agency.
AGENDA ITEM #8.7
Master Services and Purchasing Agreement with Axon Enterprise Inc. for t... Page 115 of 133 City of Indio
City Council
March 2, 2022
STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Liberty Urban, Finance Manager
Subject: Independent auditor's report and the City's Annual Comprehensive Financial report for fiscal year 2020-21
RECOMMENDATION:
Receive and file the City of Indio Annual Comprehensive Financial Report for the year ended June 30, 2021.
SUMMARY:
The City is required to have an independent auditor conduct a financial audit each year. For the fiscal year ended June 30, 2021, the firm of Lance, Soll & Lunghard LLP conducted the audit. It is the opinion of Lance, Soll & Lunghard LLP that the city’s an nual financial reports present fairly, in all material respects, the financial position of the City; and that the reports are in conformity with accounting principles generally accepted in the United States.
BACKGROUND INFORMATION:
The Annual Comprehensi ve Financial Report (ACFR) is a set of government financial statements prepared by City staff that comply with Governmental Accounting Standards Board (GASB) regulations and standards. The financial statements have been audited and validated by the accounting firm Lance, Soll & Lunghard LLP (LSL) to be in compliance with GASB requirements.
Unlike the City’s budget, which shows where resources are to be spent in the future, the ACFR contains financial results as of the end of the fiscal year. In order to provide a wide range of facts and figures, the ACFR is composed of three sections: Introductory, Financial, and Statistical. Overall, the ACFR provides a comprehensive picture of the City’s financial condition, contains a comparison of the annual budget pla n to actual expenditures, and includes information on municipal operating activities. Incorporated into the ACFR is information on all City funds on the accrual basis of accounting, which recognizes amounts owed by the City but not paid at the end of the f iscal year as well as amounts due to the City but not received by the end of the fiscal year. The ACFR provides information which is used by credit rating companies such as Fitch Ratings Inc. and Standard and Poor’s to determine the City’s fiscal integrity and bond (credit) rating.
Within the Financial Section of the ACFR, beginning on page five, Management’s Discussion and Analysis (MD&A) provides and overview of the City’s financial activities. As reported in the financial section of the ACFR, the City’s net position totaled $550.8 million on June 30, 2021, a year-over-year increase of $6.4 million, an increase of about one percent. Fund balance for the General Fund totaled AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 116 of 133 $53.7 million, up $15.4 million from the year before. From that total, $12 millio n represents the City’s set aside in case of emergency.
Annually, each ACFR is presented to the Government Finance Officers Association (GFOA), which conducts a review of local government ACFRs and upon review, awards their Certificate of Achievement Awa rd for Excellence in Financial Reporting to those local governments that are in compliance with their ACFR accounting standards of preparation. Last year, the City earned the GFOA award for “Outstanding Financial Reporting” for the fourteenth successive year. The Fiscal Year 2020- 21 ACFR has been submitted to the GFOA and staff anticipates earning the award for the fifteenth consecutive year.
The ACFR can be reviewed on the City's website. Attached are three documents prepared by LSL:
Auditor’s Communication Letter (Attachment 1), Auditor’s Report on Internal Controls (Attachment 2), and the Appropriation Limit Report (Attachment 3).
The Auditor’s Communication Letter (Attachment 1) reflects auditor conclusions concerning the City’s accounting policie s and procedures. The Communication Letter confirms that all the information enclosed within the City’s financial statements is true and accurate and that all the required information has been disclosed. The letter is also used to communicate concerns and suggestions noted during the audit.
The Auditor’s Report on Internal Controls (Attachment 2) expresses LSL’s opinion on the effectiveness of City internal controls over financial reporting. In order to form a basis for expressing an opinion, the auditor must plan and perform the audit to obtain appropriate evidence that is sufficient to obtain reasonable assurance about whether material weaknesses exist.
The Appropriations Limit Report (Attachment 3) confirms that the City met state regulations limiti ng the level of appropriations sourced from tax revenue. Specifically, LSL reviewed the City’s worksheet used to determine the state required annual appropriations limit, as required by Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative) and determined that City tax revenue did not exceed the appropriations limit set by statute. Financial limitations can be placed on a City when the amount of tax revenue exceeds the calculated appropriation limit.
ALTERNATIVES:
None
ATTACHMENTS:
Att. 1 City of Indio Audit Communication Letter Final 2-23-22 Att. 2 City of Indio Report on IC Final 2-23-22
Att. 3 City of Indio AUP Appropriations Limit
APPROVAL(S):
Rob Rockwell, Asst. City Manager & Dir. Of Finance Approved - 25 Feb 2022 Roxanne Diaz, City Attorney Approved - 25 Feb 2022
Bryan H. Montgomery, City Manager Approved - 25 Feb 2022
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 117 of 133
203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 February 21, 2022
To the Honorable Mayor and Members of the City Council
City of Indio, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Indio, California (the “City”) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 19, 2021. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings and Other Issues
Qualitative Aspects of Significant Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. As described in Note 1 to the financial statements, the City changed accounting policies related to accounting for fiduciary activities by adopting Statement o f Governmental Accounting Sta ndards (GASB Statement) No. 84, Fiduciary Activities, in fiscal year 2020-21. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the statement of ch anges in fiduciary net position. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period
Accounting estimates are an integral part of the financial stat ements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly se nsitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
Management’s estimates of its net pension liability, net other post-employment benefits liability, and self-insurance liability are based on actuarial valuation specialist assumptions.
We evaluated the key factors and assumptions used to develop th e net pension liability, net other post-employment benefits liability, and self-insuranc e liability to determine that they are reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensit ive because of their significance to financial statement users. The financial statement disclosures are neutral, consistent, and clear.
Significant Unusual Transactions
Management is responsible for the policies and practices used t o account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021.
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 118 of 133
To the Honorable Mayor and Members of the City Council
City of Indio, California
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with mana gement in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require u s to accumulate all known and l ikely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management.
Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were mat erial, either individually or in the aggregate, to the financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such dis agreements arose during the course of our audit.
Circumstances that Affect the Form and Content of the Auditor’s Report
New auditing standards were implemented in fiscal year 2020-202 1 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements , through Statement of Auditing Standards 140, Supplementary Information in Relation to the Financial Statements as a Whole. These standards updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated February 21, 2022.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain sit uations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine t hat the consultant has all the r elevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues Discussed with Management
We generally discuss a variety of matters, including the signif icant events or transactions that occurred during the year, business conditions affecting the City and bus iness plans and strategies that may affect the risks of material misstate ments, the application of account ing principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 119 of 133
To the Honorable Mayor and Members of the City Council
City of Indio, California
Other Matters
We applied certain limited procedures to management’s discussion and analysis, the budgetary comparison schedule for the General Fund, and the required pension and oth er post-employment benefits schedules, as listed in the Annual Report’s table of contents, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures cons isted of inquiries of management regarding the methods of preparing the information and comparin g the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the combining and individual fund statements and schedules which accompany the financial statement s but are not RSI. With respec t to this supplementary information, we made certain inquiries of management and evaluated the form, co ntent, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not ch anged from the prior period, and the information is appropriate and complete in relation to our audi t of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the introductory and statistic al sections of the Annual Report, which accompany the financial statements but are not RSI. Such inform ation has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit:
GASB Statement No. 84, Fiduciary Activities.
GASB Statement No. 90, Majority Equity Interests - an Am endment of GASB Statement Nos. 14 and 61.
GASB Statement No. 98, the Annual Comprehensive Financial Report.
The following GASB pron ouncements are effect ive in the followin g fiscal years’ audits and should be reviewed for proper implementation by management:
Fiscal year 2022
GASB Statement No. 87, Leases.
GASB Statement No. 89, Accounting for Interest Cost Incurr ed before the End of a Construction Period.
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans.
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 120 of 133
To the Honorable Mayor and Members of the City Council
City of Indio, California
Fiscal year 2023
GASB Statement No. 91, Conduit Debt Obligations.
GASB Statement No. 94, Public-Private and Public-Public Part nerships and Availability Payment Arrangement.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements.
Restriction on Use
This information is intended solely for the use of the City Cou ncil and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Brea, California
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 121 of 133
203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Indio, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the fin ancial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Indio, California (the “City”), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Ci ty’s basic financial statements, and have issued our report thereon dated February 21, 2022.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statement s, we considered the City’s internal control over financial reporting (internal control) as a basis for desi gning audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that ther e is a reasonable possibility t hat a material misstatement of the entity’s financial statements will not be prevented or detected and corr ected on a timely basis. A significant deficiency is a deficiency, or a combinati on of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal c ontrol was for the limited purpo se described in the first paragraph of this section and was not designed to i dentify all deficiencies in internal control that might be material weaknesses or, significant defic iencies. Given these limitation s, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Cit y’s financial statements are free from material misstatement, we performed tests of its compliance wit h certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on complian ce with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are require d to be reported under Government Auditing Standards.
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 122 of 133
To the Honorable Mayor and Members of the City Council
City of Indio, California
Purpose of this Report
The purpose of this report is solely to describe the scope of o ur testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report i s an integral part of an audit p erformed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Acc ordingly, this communication is not suitable for any other purpose.
Brea, California
February 21, 2022
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 123 of 133 Ls� .... ••••••
INDEPENDENT ACCOUNT ANTS' REPORT ON AGREED-UPON
PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS
To the Honorable Mayor and Members of the City Council
City of Indio, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Worksheet No. 6 (or other alternative computation) of the City of Indio, California (the City), for the year ended June 30, 2022. These procedures are the responsibility of the City, which were agreed to by the City and the League of California Cities (as presented in the publication entitled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by Article Xlll-8 of the California Constitution), were performed solely to assist the City in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. The City's management is responsible for the Appropriations Limit Worksheet No. 6 (or other alternative computation).
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of recomputing the Appropriations Limit Worksheet No. 6 (or other alternative computation). This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures performed and our findings were as follows:
1. We obtained the completed Worksheets No. 1 through No. 7 (or other alternative computations) and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Worksheet No. 6, we multiplied line A, last year's limit, by line D, ratio of change and compared the resulting amount to line E, this year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the current year information presented in the accompanying Appropriations Limit Worksheet No. 6 to the other worksheets described in No. 1 above.
Finding: No exceptions were noted as a result of our procedures.
4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year.
Finding: No exceptions were noted as a result of our procedures.
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AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 124 of 133 Ls� .... ••••••
To the Honorable Mayor and Members of the City Council
City of Indio, California
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriations Limit Worksheet No. 6 (or other alternative computation). Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information of the City Council and management of the City of Indio and is not intended to be, and should not be, used by anyone other than these specified parties.
Brea, California
August 11, 2021
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 125 of 133
CITY OF INDIO, CALIFORNIA
FISCAL YEAR 2021-2022
APPROPRIATIONS LIMIT CALCULATION
A. 2020-2021 APPROPRIATIONS LIMIT:
B. 2021-2022 CHANGE IN PER CAPITA
PERSONAL INCOME:
C. 2021-2022 CHANGE IN POPULATION:
D. RATIO OF CHANGE (1.0573 X 1.0090):
E. 2021-2022 APPROPRIATIONS LIMIT:
($127,409,079 X 1.0668)
$ 127,409, 179
5.73%
0.90%
X 1.0668
i jJ5 92QJ jJ
AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 126 of 133 City of Indio
City Council
March 2, 2022
STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Rob Rockwell, Asst. City Manager & Dir. Of Finance Subject: Resolution No. 10268, declaring the City of Indio’s intent to reimburse certain expenditures for the new Public Safety Campus project from proceeds of bonds.
RECOMMENDATION:
Adopt Resolution No.10268 declaring the City of Indio’s intent to reimburse certain expenditures for the new Public Safety Campus project from proceeds of bonds.
SUMMARY:
The purpose of this item is to enable the City to be reimbursed from proceeds of bonds to be issued by the Indio Public Financing Authority or other related entity for costs paid by the City for the Public Safety Campus construction project prior to the issuance of such bonds.
BACKGROUND INFORMATION:
The City has commenced the Public Safety Campus construction project (Project), which includes the design, construction, and furnishing of a new public safety administration building, a new fire station, and a new police dispatch center building to be located generally on the property known as Assessor’s Parcel No. 612 -070-004 (northeast of the intersection between Jackson Street and Dr. Carreon Blvd/Avenue 47) and adjacent to the site of the City’s existing fire station no. 1, as well as demolition of fire station no. 1.
Architect, design and engineering costs (known as “preliminary expenditures”) generally are eligible for reimbursement from bonds without a reimbursement resolution. Under federal tax laws, adoption of the attached reimbursement resolution will provide flexibility for the City to be reimbursed from proceeds of bonds for other Project costs, in addition to preliminary expenditures, that are paid by the City prior to bond issuance and within 60 days before the adoption date of the reimbursement resolution.
Design plans for the Project are bid -ready. Notice inviting construction bids for the Project was published on February 9, 2022 and February 16, 2022 in The Desert Sun. Staff currently expects that the selection of contractors for the construction work for the Project will be presented to the City Council for award and approval in or about April 2022, and that the construction work will commence in or about June 2022. Lease revenue bonds ar e expected to be issued in or about August 2022, which is after the construction contracts are expected to be awarded and the commencement of construction work for the Project.
With the assistance of the City’s municipal advisor for bonds, Fieldman Rolap p & Associates, staff reviewed various bond issuance and timing scenarios prepared by Piper Sandler & Co., the City’s lead underwriter for the lease revenue bonds. The scenarios evaluated separate and consolidated AGENDA ITEM #9.2
Resolution No. 10268 , declaring the City of Indio’s intent to reimburse... Page 127 of 133 financings at different points in time fo r three purposes: to finance the cost of the Public Safety Campus Project, to finance the cost of the new City Hall/library project, and to refinance existing 2012 lease revenue bonds for savings. A consolidated bond issuance in August 2022 for all three purposes is projected to result in the lowest overall debt service, as well as the largest amount of savings for the refinance of the 2012 lease revenue bonds.
The attached reimbursement resolution relates only to the Public Safety Campus Project.
ATTACHMENTS:
Reimbursement Resolution (Indio 2022 Public Safety Center Project)
APPROVAL(S):
Roxanne Diaz, City Attorney Approved - 24 Feb 2022
Hector Orozco, Accountant Approved - 24 Feb 2022
Bryan H. Montgomery, City Manager Approved - 24 Feb 2022
AGENDA ITEM #9.2
Resolution No. 10268 , declaring the City of Indio’s intent to reimburse... Page 128 of 133 -1-
12183-0001\2610558v1.doc
RESOLUTION NO. 10268
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF INDIO DECLARING ITS INTENT TO REIMBURSE
CERTAIN EXPENDITURES FOR THE NEW PUBLIC
SAFETY CAMPUS PROJECT FROM PROCEEDS OF
BONDS
Recitals:
WHEREAS, the City Council of the City of Indio (the
“City”) has commenced the Public Safety Campus construction project, which includes without limitation the design, construction, and furnishing of a new public safety administration building, a new fire station, and a new police dispatch center building to be located generally on the property known as Assessor’s Parcel No. 612-070-004 and adjacent to the site of the City’s existing fire station no. 1, as well as the demolition of the City’s existing fire station no. 1 (collectively, the “Project”).
WHEREAS, the City intends that its payments for such
Project costs be reimbursed to the City from the proceeds of bonds or other obligations to be issued by the City, by the Indio Public Financing Authority, or by a related public entity (the “Bonds”).
WHEREAS, the City expects to expend moneys (other
than moneys derived from the issuance of bonds or other obligations) on expenditures relating to the costs of the Project, prior to the issuance of the Bonds. All expenditures will be properly chargeable to a capital account under general federal income tax principles. The City reasonably expects to reimburse such capital expenditures with the proceeds of the Bonds.
WHEREAS, the City expects that the maximum principal
amount of Bonds which will be issued to pay for the costs of the Project (and related issuance costs) will not exceed $65,000,000.
WHEREAS, at the time of the reimbursement, the City
will evidence the reimbursement in a writing which identifies the allocation of the proceeds of the Bonds for the purpose of reimbursing the City for the capital expenditures made prior to the issuance of the Bonds.
WHEREAS, the City expects to make the reimbursement
allocation no later than 18 months after the later of (i) the date on which the earliest original expenditure for the Project is paid or (ii) the date on which the Project is placed in service (or abandoned),
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WHEREAS, the City will not, within one year of the
reimbursement allocation, use the proceeds of the Bonds received in the reimbursement allocation in a manner that will result in the creation of replacement proceeds of the Bonds or another issue (e.g., the City will not pledge or use the proceeds received for the payment of debt service on the Bonds or another issue, except that the proceeds of the Bonds can be deposited in a bona fide debt service fund).
WHEREAS, Section 1.150-2 of the U.S. Treasury
Regulations governs the allocation of expenditures of a reimbursement bond. A reimbursement bond is that portion of an issue of bonds (or other obligations) allocated to reimburse an original expenditure (i.e., an expenditure for a governmental purpose that is originally paid from a source other than a reimbursement bond) that was paid before the date of issue of the bonds. Section 1.150-2 provides rules to determine when an allocation of proceeds of bonds to reimburse an original expenditure will be treated as an expenditure of those proceeds.
WHEREAS, in order for such an allocation of those
proceeds to be treated as an expenditure, the issuer (or in certain cases, a conduit borrower) of the bonds must, in accordance with Section 1.150-2 and generally not later than 60 days after payment of the original expenditure, adopt an official intent for the original expenditure. The official intent is a declaration of intention by the issuer to reimburse the original expenditure with proceeds of bonds. This Resolution is intended to be a “declaration of official intent” in accordance with Section 1.150-2 of the U.S. Treasury Regulations.
NOW, THEREFORE, THE CITY COUNCIL OF THE
CITY OF INDIO DOES HEREBY RESOLVE, DETERMINE
AND ORDER AS FOLLOWS:
Section 1. In accordance with Section 1.150-2 of the
U.S. Treasury Regulations, the City hereby declares its intention to issue Bonds in a principal amount not expected to exceed $65,000,000, the proceeds of which will be used to pay for the costs of the Project (and related issuance costs), including the reimbursement to the City for capital expenditures relating to the Project made prior to the issuance of the Bonds.
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Resolution No. 10268 , declaring the City of Indio’s intent to reimburse... Page 130 of 133 Section 2. This Resolution shall take effect
immediately upon its passage.
PASSED, APPROVED AND ADOPTED this 2nd day of
March, 2022.
___________
___________
_________
WAYMOND
FERMON,
MAYOR
ATTEST:
__________________________
CYNTHIA HERNANDEZ, CMC
CITY CLERK
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CERTIFICATION
I, Sabdi Sanchez, City Clerk Administrator of the City of Indio, California, hereby certify that Resolution No. 10268 was duly and regularly adopted at a meeting of the City Council held on the 2nd day of March 2022 by the following vote, to wit:
Ayes:
Noes:
Abstain:
Absent:
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed the official seal of the City of Indio, California, this 2nd day of March 2022.
_____________
_____________
_______
SABDI
SANCHEZ,
CMC
City Clerk
Administrator
City of Indio
AGENDA ITEM #9.2
Resolution No. 10268 , declaring the City of Indio’s intent to reimburse... Page 132 of 133 City of Indio
City Council
March 2, 2022
STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Kevin H. Snyder, Dir. Of Community Development Subject: Tentative Parcel Map No. 38238 (TPM 21-08-411).
SUMMARY:
The Applicant has requested that the matter be continued to a date uncertain. Because notices were sent out and published, the item has to remain on the agenda; therefore, staff recommends that no action be taken and matter will be re-noticed for another date.
BACKGROUND INFORMATION:
APPROVAL(S):
AGENDA ITEM #10.1
Tentative Parcel Map No. 38238 (TPM 21-08-411) (Kevin H. Snyder, Directo... Page 133 of 133