Indio City Council
June 15, 2022

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TAX MATTERS
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Series 2022A Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2022A Bonds is exempt from State of California personal income tax.

The difference between the issue price of a Series 2022A Bond (the first price at which a substantial amount of the Series 2022A Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to the Series 2022A Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to the Beneficial Owner of the Series 2022A Bond before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by the Beneficial Owner of a Series 2022A Bond will increase the Beneficial Owner’s basis in the applicable Series 2022A Bond. In the opinion of Bond Counsel, the amount of original issue discount that accrues to the Beneficial Owner of a Series 2022A Bond is excluded from the gross income of such Beneficial Owner for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. In the opinion of Bond Counsel, the amount of original issue discount that accrues to the Beneficial Owner of a Series 2022A Bond is exempt from State of California personal income tax.

Bond Counsel’s opinion as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Series 2022A Bonds is based upon certain representations of fact and certifications made by the Authority, the City and others and is subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Series 2022A Bonds to assure that interest (and original issue discount) on the Series 2022A Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause the interest (and original issue discount) on the Series 2022A Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2022A Bonds. The Authority and the City will covenant to comply with all such requirements.

The amount by which a Beneficial Owner’s original basis for determining loss on sale or exchange in the applicable Series 2022A Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable bond premium, which must be amortized under Section 171 of the Code; such amortizable bond premium reduces the Beneficial Owner’s basis in the applicable Series 2022A Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of bond premium may result in a Beneficial Owner realizing a taxable gain when a Series 2022A Bond is sold by the Beneficial Owner for an amount equal to or less (under certain circumstances) than the original cost of the Series 2022A Bond to the Beneficial Owner. Purchasers of the Series 2022A Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.

Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture, the Lease Agreement and the Tax Certificate relating to the Series 2022A Bonds permit certain actions to be taken or to be omitted if a favorable opinion of a bond counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income for federal income tax purposes of interest (or original issue discount) on any Series 2022A Bond if any such action is taken or omitted based upon the advice of counsel other than Bond Counsel.

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Although Bond Counsel will render an opinion that interest (and original issue discount) on the Series 2022A Bonds is excluded from gross income for federal income tax purposes provided that the Authority and the City continue to comply with certain requirements of the Code, the ownership of the Series 2022A Bonds and the accrual or receipt of interest (and original issue discount) with respect to the Series 2022A Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of the Series 2022A Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Series 2022A Bonds.

The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax- exempt bond issues, including both random and targeted audits. It is possible that the Series 2022A Bonds will be selected for audit by the IRS. It is also possible that the market value of the Series 2022A Bonds might be affected as a result of such an audit of the Series 2022A Bonds (or by an audit of similar bonds). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the Series 2022A Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the Series 2022A Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2022A BONDS THERE MIGHT BE

FEDERAL, STATE, OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY

CHANGES TO OR INTERPRETATIONS OF FEDERAL, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE, OR LOCAL TAX TREATMENT OF THE SERIES 2022A BONDS INCLUDING THE

IMPOSITION OF ADDITIONAL FEDERAL INCOME OR STATE TAXES BEING IMPOSED ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE SERIES 2022A BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE SERIES 2022A BONDS. NO ASSURANCE CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2022A BONDS STATUTORY CHANGES WILL NOT BE INTRODUCED

OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE SERIES 2022A BONDS,

ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING

POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR

INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE SERIES 2022A BONDS.

The form of Bond Counsel’s proposed opinion with respect to the Series 2022A Bonds is attached hereto in Appendix D.

CERTAIN LEGAL MATTERS
The validity of the Series 2022A Bonds and certain other legal matters are subject to the approving opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel. Stradling Yocca Carlson & Rauth, a Professional Corporation, is also acting as Disclosure Counsel for the City. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix D hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Bond Counsel and Disclosure Counsel will receive compensation from the City contingent upon the sale and delivery of the Series 2022A Bonds. From time to time, Bond Counsel represents the Underwriters on matters unrelated to the Series 2022A Bonds. Certain legal matters will be passed upon for the Underwriters by Norton Rose Fulbright US LLP. Counsel to the Underwriter will receive compensation contingent upon the issuance of the Series 2022A Bonds.

ABSENCE OF LITIGATION
To the best knowledge of the City and the Authority, there is no action, suit or proceeding pending or threatened either restraining or enjoining the execution or delivery of the Series 2022A Bonds, the Lease

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Agreement, the Ground Lease or the Indenture, or in any way contesting or affecting the validity of the foregoing or any proceedings of the Authority or the City taken with respect to any of the foregoing.

UNDERWRITING
The Series 2022A Bonds are being purchased by Piper Sandler & Co., as representative of Stifel, Nicolaus & Company, Incorporated (collectively, the “Underwriters”). The Underwriters will purchase the Series 2022A Bonds from the Authority at an aggregate purchase price of $__________ (representing the principal amount of the Series 2022A Bonds, plus original issue premium of $__________ and less an Underwriters’ discount of $__________). The purchase agreement relating to the Series 2022A Bonds provides that the Underwriters will purchase all of the Series 2022A Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions.

The initial offering prices that are stated on the inside front cover page of this Official Statement may be changed from time to time by the Underwriters. The Underwriters may offer and sell the Series 2022A Bonds to certain dealers (including dealers depositing Series 2022A Bonds into investment trusts), dealer banks, banks acting as agent and others at prices lower than said public offering prices.

RATING
S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”) has assigned a rating of “____” to the Series 2022A Bonds. Such rating reflects only the views of S&P and any desired explanation of the significance of such rating should be obtained from S&P. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the market price of the Series 2022A Bonds. None of the Authority, the City or the Underwriters has undertaken any responsibility either to bring to the attention of the owners of the Series 2022A Bonds a proposed change in or withdrawal of the rating or to oppose any such proposed revision or withdrawal.

MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc., Irvine, California (the “Municipal Advisor”), served as municipal advisor to the Authority and the City with respect to the sale of the Series 2022A Bonds. The Municipal Advisor will receive compensation contingent upon the sale and delivery of the Series 2022A Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

The Municipal Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

CONTINUING DISCLOSURE
The City has covenanted for the benefit of the Owners of the Series 2022A Bonds to provide annually certain financial information and operating data relating to the Series 2022A Bonds and the City (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events. For a complete listing of items of information which will be provided in each Annual Report and further description of the City’s undertaking with respect to the Annual Report and certain enumerated events, see APPENDIX E—“FORM OF CONTINUING DISCLOSURE AGREEMENT.” The Annual Report is to be provided by the City not later than nine months following the end of the City’s fiscal year (which presently ends on June 30),

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commencing with the report for the fiscal year ending June 30, 2022 and due March 31, 2023. The Annual Report will be filed by the City with the Municipal Securities Rulemaking Board. These covenants have been made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2- 12(b)(5) (the “Rule”).
[Within the last five years, __________.] [TO BE UPDATED]

FINANCIAL STATEMENTS OF THE CITY
Included herein as Appendix C is the Annual Comprehensive Financial Report of the City for the Fiscal Year ended June 30, 2021, together with the report thereon dated January 4, 2022 of Lance, Soll & Lunghard, LLP, certified public accountants (the “Auditor”). The Auditor has not undertaken to update the audited financial statements of the City or its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by the Auditor with respect to any event subsequent to its report dated February 21, 2022.

MISCELLANEOUS
References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive and reference is made to such documents and reports for full and complete statements of the contents thereof. Copies of the Indenture, the Lease Agreement, the Ground Lease and other documents are available, upon request, and upon payment to the City of a charge for copying, mailing and handling, from the City Clerk at the City of Indio, 100 Civic Center Mall, Indio, California 92201.

Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority or the City and the purchasers or Owners of any of the Series 2022A Bonds.

The execution and delivery of this Official Statement have been duly authorized by the Authority and the City.

INDIO PUBLIC FINANCING AUTHORITY
By:

Executive Director

CITY OF INDIO
By:

City Manager

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APPENDIX A

THE CITY OF INDIO

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APPENDIX B

SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS
The following is a brief summary of the provisions of the Indenture, the Ground Lease, the Lease Agreement and the Assignment Agreement. This summary is not intended to be definitive, and Owners of the Series 2022A Bonds should refer to the documents for the complete text thereof. Copies of the documents summarized herein are available from the City.

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APPENDIX C

ANNUAL COMPREHENSIVE FINANCIAL REPORT
OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2021

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APPENDIX D

PROPOSED FORM OF BOND COUNSEL OPINION
_____, 2022
Indio Public Financing Authority
Indio, California
Re:$__________ Indio Public Financing Authority Lease Revenue Bonds, Series 2022A Ladies and Gentlemen:

We have acted as bond counsel to the Indio Public Financing Authority (the “Authority”) in connection with the issuance by the Authority of $__________ Indio Public Financing Authority Lease Revenue Bonds, Series 2022A (the “Bonds”), pursuant to the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), and pursuant to an Indenture, dated as of _____ 1, 2022 (the “Indenture”), by and among the Authority, the City of Indio (the “City”) and U.S. Bank Trust Company, National Association, as Trustee. The Bonds will be principally secured by lease payments to be made by the City pursuant to a Lease Agreement, dated as of _____ 1, 2022 (the “Lease”), by and between the Authority and the City. We have examined the law and such certified proceedings and other documents, agreements, opinions and matters as we deem necessary to render this opinion. This opinion is based on current statutory and constitutional law and published court decisions as of the date hereof. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Indenture.

As to questions of fact material to our opinion, we have relied upon representations of the Authority contained in the Indenture and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation.

We have assumed the genuineness of all documents and signatures presented to us, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions referred to in the preceding paragraphs of this opinion. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture, the Lease and the Ground Lease. We call attention to the fact that the rights and obligations under the Bonds, the Indenture, the Lease, the Ground Lease, the Assignment Agreement and the Tax Certificate may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, by the application of equitable principles and the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against cities and public agencies in the State of California.

Based upon the foregoing we are of the opinion, under existing law, as follows:

1. The Authority is a joint exercise of powers authority duly organized and validly existing under the laws of the State of California with the full power to enter into the Indenture and the Lease, to perform the agreements on its part contained therein and to issue the Bonds.

2. The Indenture and the Lease have each been duly authorized, executed and delivered by the Authority and the Indenture and the Lease constitute the valid and binding obligations of the Authority

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enforceable against the Authority in accordance with their respective terms. The Indenture creates a valid pledge of the Base Rental Payments and other moneys pledged under the Indenture, subject to the provisions of the Indenture.

3. The Indenture and the Lease have each been duly authorized, executed and delivered by the City and the Indenture and the Lease constitute the valid and binding obligations of the City enforceable against the City in accordance with their respective terms.

4. The Bonds have been duly and validly authorized by the Authority and are legal, valid and binding limited obligations of the Authority, enforceable in accordance with their terms and the terms of the Indenture. The Bonds are limited obligations of the Authority payable solely from the Base Rental Payments and other moneys pledged under the Indenture as provided in the Indenture, but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. The Authority has no taxing power.

5. Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals.

6. Interest (and original issue discount) on the Bonds is exempt from personal income taxes imposed in the State of California.

7. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond Owner will increase the Bond Owner’s basis in the applicable Bond. Original issue discount that accrues to the Bond Owner is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals (as described in paragraph 5 above) and is exempt from State of California personal income tax.

8. The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Internal Revenue Code of 1986, as amended (the “Code”); such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner.

The opinions expressed in paragraphs (5) and (7) above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds are subject to the condition that the Authority and the City comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Authority and the City have covenanted to comply with all such requirements. Except as set forth in paragraphs (5), (6), (7) and (8) above, we express no opinion as to any tax consequences related to the Bonds.

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Certain requirements and procedures contained or referred to in the Indenture, the Lease and Tax Certificate may be changed, and certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in the Indenture, the Lease and Tax Certificate, upon the advice or with the approving opinion of counsel nationally recognized in the area of tax-exempt obligations. We express no opinion as to the effect on the exclusion of interest on the Bonds from gross income for federal income tax purposes on and after the date on which any such change occurs or action is taken upon the advice or approval of counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation.

Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

The opinions expressed herein are based upon an analysis of existing statutes, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. We call attention to the fact that the foregoing opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or do occur (or do not occur). Our engagement with respect to the Bonds terminates upon their issuance, and we disclaim any obligation to update the matters set forth herein.

We express no opinion herein with respect to any indemnification, contribution, choice of law, choice of forum, penalty or waiver provisions contained in the Bonds, the Indenture, the Lease, the Ground Lease or the Assignment Agreement; nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Lease or the Ground Lease, or the accuracy or sufficiency of the description contained therein, or the remedies available to enforce liens on, any such property contained therein.

We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Indenture or the Lease, or the accuracy or sufficiency of the description of any such property contained therein. We expressly disclaim any duty to advise the Owners of the Bonds with respect to the matters contained in the Official Statement and any other offering material relating to the Bonds.

We have not made or undertaken to make an investigation of the state of title to any of the real property described in the Lease or of the accuracy or sufficiency of the description of such property contained therein, and we express no opinion with respect to such matters.

Respectfully submitted,

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APPENDIX E

FORM OF CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement, dated as of ________, 2022 (the “Disclosure Agreement”) is by and between the City of Indio (the “City”) and Willdan Financial Services (the “Dissemination Agent”), in connection with the issuance of the Indio Public Financing Authority’s (the “Authority”) $___________ Lease Revenue Bonds, Series 2022A (the “Bonds”).

WHEREAS, the Bonds are being issued pursuant to an Indenture, dated as of _____ 1, 2022 (the “Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

WHEREAS, the Bonds are payable from the base rental payments to be made by the City under the Lease Agreement, dated as of _____ 1, 2022 (the “Lease Agreement”), between the City, as lessee, and the Authority, as lessor; and
WHEREAS, this Disclosure Agreement is being entered into by the City for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Underwriters in complying with the Rule (defined below).

NOW, THEREFORE, the City and the Dissemination Agent agree as follows:

SECTION 1. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Comprehensive Financial Report provided by the City pursuant to, and as described in, Sections 2 and 3 of this Disclosure Agreement. “Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.
“Disclosure Representative” shall mean the City Manager of the City, the Director of Finance of the City, or their designee, or such other officer or employee as the City shall designate in writing from time to time.
“Dissemination Agent” shall mean Willdan Financial Services, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation. “Financial Obligation” means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b). The term “Financial Obligation” shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. “Listed Events” shall mean any of the events listed in Section 4(a) and (b) of this Disclosure Agreement.
“MSRB” shall mean the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule,

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or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” shall mean the Official Statement relating to the Bonds, dated _________, 2022. “Repository” shall mean the Electronic Municipal Market Access system of the Municipal Securities Rulemaking Board, which can be found at http://emma.msrb.org. “Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “State” shall mean the State of California.
“Underwriters” shall mean the original Underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

SECTION 2. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent, not later than nine months following the end of the City’s fiscal year (which presently ends on June 30) (the “Annual Report Date”), commencing with the report for the fiscal year ending June 30, 2022 due March 31, 2023, provide to the MSRB an Annual Report which is consistent with the requirements of Section 3 of this Disclosure Agreement. The Annual Report shall be provided to the MSRB in an electronic format as prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 3 of this Disclosure Agreement; provided that the audited financial statements of the City may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report.

The Annual Report shall be provided at least annually notwithstanding any fiscal year longer than 12 calendar months. The City’s fiscal year is currently effective from July 1 to the immediately succeeding June 30 of the following year. The City will promptly notify the MSRB and the Dissemination Agent (if other than the City) of a change in the fiscal year dates. The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report. (b) If by five (5) Business Days prior to the Annual Report Date, the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall notify the City of such non-receipt.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the MSRB by the Annual Report Date, the Dissemination Agent shall provide in a timely manner to the MSRB (with a copy to the Trustee and the Underwriters) a notice, in substantially the form attached as Exhibit A. (d) Unless the City has done so pursuant to Section 3(a) above, the Dissemination Agent (if other than the City) shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and

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(ii) if the Dissemination Agent is other than the City, file a certificate with the City to the effect that the Annual Report has been provided pursuant to this Disclosure Agreement, stating, to the extent it can confirm such filing of the Annual Report, the date it was provided.

SECTION 3. Content of Annual Reports. The City’s Annual Report shall contain or include by reference the following:
(a) The City’s audited financial statements, prepared in accordance with generally accepted auditing standards for municipalities in the State of California. If the City’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 2(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Numerical and tabular information for the immediately preceding Fiscal Year of the type contained in Appendix A to the Official Statement, in the following charts and tables: Tables 8 (General Fund Balance Sheet), 9 (Statement of Revenues, Expenditures and Changes in General Fund Balance), 11 (Tax Revenues by Source), 15 (Assessed Value of Taxable Property) and 16 (Top Ten Taxpayers Based on Assessed Value).

Financial information relating to the City referenced in this Section 3 may be updated from time to time, and such updates may involve displaying data in a different format or table or eliminating data that is no longer available.

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so included by reference.

SECTION 4. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 4, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten (10) business days after the event:

1. Principal and interest payment delinquencies;

2. Unscheduled draws on debt service reserves reflecting financial difficulties;

3. Unscheduled draws on credit enhancements reflecting financial difficulties;

4. Substitution of credit or liquidity providers, or their failure to perform;

5. Issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposal Issue (IRS Form 5701-TEB);

6. Tender Offers;

7. Defeasances;

8. Rating changes;

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9. Bankruptcy, insolvency, receivership or similar proceedings; and Note: For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.

10. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties.
(b) Pursuant to the provisions of this Section 4, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not more than ten (10) business days after occurrence:

1. unless described in Section 4(a)(5), adverse tax opinions or other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;

2. modifications to the rights of Bondholders;

3. bond calls;

4. release, substitution or sale of property securing repayment of the Bonds;

5. non-payment related defaults;

6. the consummation of a merger, consolidation, or acquisition involving the City or the Authority or the sale of all or substantially all of the assets of the City or the Authority, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms;

7. appointment of a successor or additional trustee or the change of the name of a trustee; and

8. incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect Bond Owners.
(c) If the City determines that knowledge of the occurrence of a Listed Event under subsection (b) would be material under applicable federal securities laws, and if the Dissemination Agent is other than the City, the City shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to file a notice of such occurrence with the MSRB in an electronic format as prescribed by the MSRB in a timely manner not more than ten (10) Business Days after the event. (d) If the City determines that the Listed Event under subsection (b) would not be material under applicable federal securities laws and if the Dissemination Agent is other than the City, the City shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence.

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(e) The City hereby agrees that the undertaking set forth in this Disclosure Agreement is the responsibility of the City and, if the Dissemination Agent is other than the City, the Dissemination Agent shall not be responsible for determining whether the City’s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule.

SECTION 5. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under this Disclosure Agreement shall be accompanied by identifying information as prescribed by the MSRB.

SECTION 6. Termination of Reporting Obligation. The obligations of the City, the Trustee and the Dissemination Agent under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 4(c).

SECTION 7. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the form or content of any notice or report prepared by the City pursuant to this Disclosure Agreement. The Dissemination Agent may resign by providing thirty days written notice to the City and the Trustee. The Dissemination Agent shall not be responsible for the content of any report or notice prepared by the City and shall have no duty to review any information provided to it by the City. The Dissemination Agent shall have no duty to prepare any information report nor shall the Dissemination Agent be responsible for filing any report not provided to it by the City in a timely manner and in a form suitable for filing.

SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver is permitted by the Rule; provided, the Dissemination Agent shall have first consented to any amendment that modifies or increases its duties or obligations hereunder. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 4(c), and (ii) the Annual Report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Agreement, any Owners or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City

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to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the City to comply with this Disclosure Agreement shall be an action to compel performance.

No Bond Owner or Beneficial Owner may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the City satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the City shall have refused to comply therewith within a reasonable time.

SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the City agrees, to the extent permitted by law, to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorney’s fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall also be entitled to any further protections and limitations from liability afforded to the Trustee under the Indenture as if such provisions were fully set forth herein. The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. In performing its duties hereunder, the Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the City, the Bond Owners, or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

SECTION 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows:

City: City of Indio
100 Civic Center Mall
Indio, California 92201
Attention: City Manager
Dissemination Agent: Willdan Financial Services
27368 Via Industria, Suite 200
Temecula, California 92590
Attention: Federal Compliance Group
SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, if any, the Underwriters and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

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SECTION 14. Signature. This Disclosure Agreement has been executed by the undersigned on the date hereof, and such signature binds the City to the undertaking herein provided.

CITY OF INDIO
By:

City Manager
WILLDAN FINANCIAL SERVICES, as Dissemination
Agent
By:

Authorized Officer

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EXHIBIT A

NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD

OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Indio Public Financing Authority
Name of Issue: Indio Public Financing Authority Lease Revenue Bonds, Series 2022A Date of Issuance: ___________, 2022
NOTICE IS HEREBY GIVEN that the City of Indio (the “City”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement, dated as of ________, 2022, by and between the City and Willdan Financial Services. [The City anticipates that the Annual Report will be filed by __________.]
Dated: __________
[DISSEMINATION AGENT]
By: _______________________

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APPENDIX F

BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Series 2022A Bonds, payment of principal, premium, if any, accreted value and interest on the Series 2022A Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Series 2022A Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Series 2022A Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each maturity of the Securities in the aggregate principal amount of such maturity, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has an S&P Global Ratings highest rating: “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org..

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an

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authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners.

In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Principal, redemption price and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. If applicable, a Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to tender/remarketing agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to tender/remarketing agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to tender/remarketing agent’s DTC account.

10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Authority or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

11. The Authority may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

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APPENDIX A

THE CITY OF INDIO

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TABLE OF CONTENTS
PAGE
INFORMATION REGARDING THE CITY........................................................................................................1 General...............................................................................................................................................................1 City Government................................................................................................................................................1 Population ..........................................................................................................................................................2 Employment and Industry..................................................................................................................................3 Largest Employers .............................................................................................................................................4 Per Capital Personal Income..............................................................................................................................4 Taxable Transactions .........................................................................................................................................5 Government Services and Community Facilities ..............................................................................................5 Transportation ....................................................................................................................................................7 Climate...............................................................................................................................................................7 CITY FINANCIAL INFORMATION...................................................................................................................8 General...............................................................................................................................................................8 Impacts of COVID-19........................................................................................................................................8 Financial Statements (General Fund)...............................................................................................................10 Budgetary Process and Budget Information ....................................................................................................12 Primary General Fund Tax Revenue Sources..................................................................................................14 Charges for Services ........................................................................................................................................20 Investment Policy and Portfolio.......................................................................................................................20 Long-Term Liabilities......................................................................................................................................21 Direct and Overlapping Debt ...........................................................................................................................24 Pension Plans ...................................................................................................................................................25 Other Post-Employment Benefits (Other Than Pensions) ...............................................................................29 Employee Relations .........................................................................................................................................31 Risk Management ............................................................................................................................................31

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INFORMATION REGARDING THE CITY
General
The City was incorporated in 1930 and encompasses approximately 33 square miles. The City is the geographic mid-point of Riverside County. It is located about 125 miles east of the center of the Los Angeles region, 75 miles north of the California-Baja California Mexican border and 30 miles southeast of Palm Springs and its neighboring communities (including Indian Wells, La Quinta and Palm Desert to the west and Coachella and Mecca to the east).

Known as the “City of Festivals,” the City hosts multiple annual festivals, such as the Coachella Valley Music and Arts Festival (known as the Coachellafest), the Stagecoach Country Music Festival, Riverside County Fair & Date Festival, Palm Springs Kennel Club Dog Show, Southwest Arts Festival, Indio International Tamale Festival, collectively drawing more than one million people to the City annually. The City’s ability to draw and host worldwide festivals is based on being home to the Riverside County Fairgrounds and the adjoining Empire Polo Club Grounds and Eldorado Polo Club Grounds (site of the Coachellafest), which are large-scale, outdoor entertainment venues unique to the City within the Coachella Valley.

The City is the largest city, by population, in the Coachella Valley, a sub-region located in eastern Riverside County. The City is a center for business, government and entertainment within the region. Other cities in the Coachella Valley include Palm Springs, Palm Desert, Rancho Mirage, Indian Wells, La Quinta, Cathedral City, Desert Hot Springs and Coachella. The Coachella Valley is a premium golf region with many well-known golf courses (including PGA West, Indian Wells Country Club, the Quarry at La Quinta and many others), as well as hotels and resorts, and gated retirement communities. Significant industries in the Coachella Valley include leisure, tourism, agriculture, wind farming, construction, Indian gaming, mining and entertainment.

City Government
Indio is a general law city. The City has a Council-City Manager form of municipal government. The City Council appoints the City Manager who is responsible for the day-to-day administration of City business and the coordination of all departments of the City. The City Council is composed of five members elected bi- annually by district to four-year alternating terms. Each year, the City Council selects the mayor on a rotational basis. As of June 30, 2021 the City employed a staff of approximately 285 full-time and eight part- time employees.

The current City Council members and their respective term expiration dates are as follows:

Name and Office District Term Expires
Waymond Fermon, Mayor 2 November 2022
Oscar Ortiz, Mayor Pro Tem 4 November 2022
Glenn Miller, Council Member 1 November 2024
Elaine Holmes, Council Member 3 November 2022
Lupe Ramos Amith, Council Member 5 November 2024
Bryan Montgomery is the City Manager of the City and the Executive Director of the Authority.

Mr. Montgomery is responsible for the efficient administration of all municipal affairs including implementation of City Council policy, state laws, and city ordinances, and he has over 30 years of local government experience. Mr. Montgomery has been the City Manager of the City since May of 2021. Prior to his service in the City, Mr. Montgomery served as the City of Manager of Oakley, California where he served for nearly 16 years. Prior to his time in Oakley, he served as City Manager of Mesquite, Nevada and Rupert, Idaho. He also served as the Assistant City Manager in Alamogordo, New Mexico and as a Management Aide

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in Provo, Utah. Mr. Montgomery has a Bachelor’s degree in International Government Relations and a Master’s degree in Public Administration, both from Brigham Young University. In addition to his local government service, Mr. Montgomery was an Adjunct Professor at San Francisco State University and Los Medanos College, speaks Spanish and periodically lectures in Latin America for the ICMA, the leading organization of local government professionals. In 2015, he was honored with the Volunteer of the Year Award by the Volunteers for Economic Growth Alliance for his decades of pro-bono assistance to ICMA’s Mexico office. In Mexico he conducted field visits to provide technical assistance to multiple cities and participated in workshops and other events to promote professional local government management.

Rob Rockwell is the Assistant City Manager and Finance Director of the City and the Treasurer of the Authority. The posts of Assistant City Manager and Finance Director are appointed by the City Manager.

Mr. Rockwell has been the Finance Director of the City since September 2010 and assumed Assistant City Manager responsibilities in August 2014. Mr. Rockwell has 24 years of experience in municipal government, holding various positions in finance and municipal administration. Prior to his employment with the City, Mr. Rockwell served as Budget Director at the County of Riverside. He holds a bachelor’s degree in Business Administration from California State University, San Bernardino, California.

Scott Trujillo is the Deputy City Manager. Mr. Trujillo has been the Deputy City Manager since February 2019. Mr. Trujillo has over 16 years of municipal government experience, holding various positions in finance and municipal administration, including as an assistant City Manager, Human Services Supervisor, Communications and Outreach Coordinator and Management Analyst. Mr. Trujillo also has ten years of experience in the private sector. Mr. Trujillo holds a bachelor’s degree in Psychology from Colorado State University and a Master’s Degree in Public Administration from Grand Canyon University.

Population
The following table shows the population growth for the City and Riverside County for the years shown:

TABLE 1
City of Indio
City and County Population(1)
Calendar Years 2017-21
Calendar Year City County
2021 91,621 2,454,453
2020 90,804 2,440,719
2019 90,112 2,419,057
2018 88,984 2,397,662
2017 87,892 2,374,555
(1) As of January 1 of each year.

Source: State of California, Department of Finance, E-4 Population Estimates for Cities, Counties, and the State, 2011-2021, with 2010 Census Benchmark. Sacramento, California, May 2021.

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Employment and Industry
The following table shows certain employment statistics for the City, the County and the State for calendar years 2017 through 2021.

TABLE 2
City of Indio
City, County and State Average Annual Employment Statistics(1) Calendar Years 2017 through 2021
City County State
Year Labor Force Employed
Unemployment
Rate
Unemployment
Rate
Unemployment
Rate
2021 47,700 38,300 8.2% 7.3% 7.3%
2020 41,800 36,700 12.2 10.2 10.2
2019 41,200 39,000 5.3 4.3 4.1
2018 40,700 38,400 5.6 4.5 4.3
2017 39,800 37,200 6.5 5.3 4.8
(1) Not seasonally adjusted. Figures represent the 12-month average for each such year.

Source: California Employment Development Department, Labor Market Information Division.

The following table shows the distribution of the labor force in the County from 2016 through 2020.

TABLE 3
County of Riverside
Annual Average Employment by Industry
Calendar Years 2016-20
2016 2017 2018 2019 2020
Total Farm 12,800 12,300 12,300 12,900 12,000
Natural Resources and Mining 300 400 400 500 400
Construction 58,600 62,200 67,400 68,100 66,600
Manufacturing 42,700 42,900 44,500 45,200 42,400
Trade, Transportation and Utilities 152,800 158,900 163,600 169,600 172,600 Information 6,300 6,100 6,200 6,500 5,300
Financial Activities 21,400 21,800 22,100 21,600 20,800 Professional and Business Services 65,200 66,600 70,500 73,700 70,500 Educational and Health Services 100,200 107,000 114,900 115,300 112,300 Leisure and Hospitality 88,200 91,200 93,700 97,800 76,300 Other Services 22,300 22,600 22,800 23,300 19,600
Government 117,600 126,400 130,100 132,100 124,400
Total All Industries 688,400 718,400 748,500 766,500 723,100 Total Civilian Labor Force 1,051,600 1,070,900 1,090,000 1,107,700 1,117,300 Source: California Employment Development Department, Labor Market Information Division.

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Largest Employers
The following table lists the major area employers in the City.

TABLE 4
City of Indio
Major Area Employers
as of June 30, 2021
Employer
Number of
Employees
Desert Sands Unified School District 2,765
County of Riverside 1,212
Fantasy Springs Resort Casino 1,130
John F. Kennedy Memorial Hospital 633
City of Indio 250
Riverside Superior Court 151
Indio Nursing and Rehabilitation Center 145
Fiesta Ford Lincoln 137
Mathis Brothers 110
Cardenas Market 105
Total Employment Listed 6,638
Source: City of Indio, as shown in the Comprehensive Annual Financial Report for the fiscal year ended June 30, 2021.

Per Capital Personal Income
The City is part of the Riverside-San Bernardino-Ontario Metropolitan Statistical Area, as determined by the United States Office of Management and Budget. The following table shows the annual per capita personal income for the Riverside-San Bernardino-Ontario Metropolitan Statistical Area, the State and the United States from 2016 through 2020:

TABLE 5
Riverside-San Bernardino-Ontario Metropolitan Statistical Area, State of California and the United States
Per Capita Personal Income(1)(2)
Calendar Years 2016 through 2020
Year MSA State U.S.
2020 $45,365 $2,763,312 $59,147
2019 40,988 2,544,235 55,724
2018 39,403 2,431,822 53,817
2017 38,074 2,318,644 51,573
2016 37,166 2,218,457 49,613
(1) Dollar estimates in current dollars (not adjusted for inflation). (2) Computed using U.S. Bureau of the Census midyear population estimates. Estimates for 2016-2020 reflect county population estimates available as of March 2021 based on the 2020 census.

Source: U.S. Department of Commerce, Bureau of Economic Analysis.

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Taxable Transactions
A summary of taxable sales within the City, by type of business, during the past five years for which data is available is shown in the following table.

TABLE 6
City of Indio
Taxable Transaction Valuation(1)
Calendar Years 2017-21
Business 2017 2018 2019 2020 2021
Motor Vehicle and Parts Dealers $286,065 $278,913 $270,802 $277,840 $359,756 Home Furnishings and Appliance Stores 44,917 44,082 46,504 42,657 56,077 Building Material, Garden Equip & Supplies 72,924 88,013 86,112 101,743 134,751 Food and Beverage Stores 51,678 52,902 54,511 62,164 66,894 Gasoline Stations 92,524 107,763 114,738 84,946 126,552 Clothing and Clothing Accessories Stores 29,198 30,090 38,354 34,395 52,024 General Merchandise Stores 54,580 56,269 64,376 66,342 70,483 Food Services and Drinking Places 132,663 137,108 143,489 104,165 140,424 Other Retail Group 52,669 49,133 49,398 56,353 65,274
Total Retail and Food Services $817,220 $844,275 $868,288 $830,609 $1,072,241 All Other Outlets 190,897 197,067 217,856 200,715 219,422 Total All Outlets $1,008,117 $1,041,343 $1,086,145 $1,031,325 $1,291,663 (1) In thousands of dollars (‘000s)
Source: California Department of Tax and Fee Administration.

The number of sales permits and the valuation of taxable transaction in the City subject to sales tax are presented in the following table.

TABLE 7
City of Indio
Permit Numbers and Taxable Transaction Valuation
Calendar Years 2017-21
Year
No. of
Retail and Food
Services Permits
Retail and Food
Services Stores(1)
No. of
Total Permits Total All Outlets(1)
2021 1,977 $1,072,241 2,824 $1,291,663
2020 2,137 830,609 2,987 1,031,325
2019 2,162 868,288 2,974 1,086,145
2018 2,159 844,275 2,935 1,041,343
2017 2,165 817,220 2,860 1,008,117
(1) In thousands of dollars (‘000s)
Source: California Department of Tax and Fee Administration.

Government Services and Community Facilities
The City provides a broad range of services to its citizens, including police and fire protection, water service, trash collection, street construction and maintenance, parks and recreation, planning and zoning, housing and community development, building inspection and general and administrative support services. It cooperates with Riverside County in the provision of flood control. The City maintains over 16 parks. The Coachella Valley Recreation District operates a 39,000 square foot comprehensive recreational facility in the City. The City is the alternate county seat for the County of Riverside and contains a large County

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administration and services complex and an alternate emergency operations center for the County (the primary emergency operations center being located in the City of Riverside). (As shown in Table 9 under “CITY FINANCIAL INFORMATION — Financial Statements (General Fund) below, costs for provision of police and fire services, including ambulance services, represent a significant portion of the City’s General Fund current expenditures.

Police Department. The Indio Police Department is a full-service law enforcement agency, nationally recognized for its progressive and innovative community-oriented practices. The department is part of a select group of 15 jurisdictions from across the country selected to participate in The President’s Task Force on 21 st Century Policing, created to strengthen community policing and trust among law enforcement officers and the communities they serve. The department is comprised of 85 sworn and 46 professional staff, and more than 30 police volunteers. The Chief of Police is responsible for directing, coordinating, and participating in the operations of the three police department divisions, namely, Field Services, Investigative Services, and Support Services, which operates a 9-1-1 Communications Center. The Indio Police Department’s 2021 Uniform Crime Reporting (UCR) crime statistics for the City of Indio show the lowest total crime rate in a decade.

Fire Department. The City contracts with the Riverside County Fire Department for fire protection and emergency medical services within the City. The Riverside County Fire Department is administered under contract with the California Department of Forestry and Fire Protection (CAL FIRE). The average fire department response time throughout the City is five minutes or less, 90 percent of the time. There are presently four functional fire stations located in the City.

The City’s minimum daily staffing for emergency incident response is 24 persons, including one Division Chief and one Battalion Chief. Ambulance service is provided on a fee for service basis operating three full time paramedic ambulances. The ambulance service is staffed with personnel trained as certified firefighters and advanced life support paramedics. Because the City contracts with the Riverside County Fire Department, it participates in a Regional Integrated and Cooperative Fire Protection System. In time of need, this makes immediately available to the Incident Commander and the City, a much deeper pool of regional resources to draw from.

The City also staffs a Fire Prevention Bureau. Staffing for the Bureau includes a Fire Marshal, Assistant Fire Marshal, two Fire Safety Specialists, a Fire Systems Inspector, and an Office Assistant. The primary function of the Fire Prevention Bureau is to provide services aimed at reducing the risk of fire and injuries to the public. This is accomplished through the adoption and enforcement of codes and ordinances relative to fire and life safety issues and public education programs via schools, community groups, special meetings printed material and the internet.

Health. The City is served by the JFK Memorial Hospital, a 158-bed acute care hospital founded in 1966 and fully accredited by the Joint Commission on Accreditation of Health Care Organizations. The JFK Memorial Hospital is a part of Tenet Healthcare Corporation, California, and offers 24-hour emergency care, orthopedic and joint replacement services using emerging technology, a sports medicine program, cardiovascular services, maternity care and pediatric services, an ambulatory surgery center, imaging services, and an outpatient rehabilitation center. Health services also available in the City are a Renal Advantage Inc. dialysis center, Novak Urgent Care, a Riverside County Department of Mental Health Clinic, and a Riverside County Family Care Center, which provides services including cancer screening, child health services, family planning and exams, HIV/AIDS, immunizations, nutrition, primary care, pregnancy, prescriptions, referrals to specialists, STD testing, tuberculosis skin testing, and senior services.

Cultural and Recreational Resources. In recognition of the numerous festivals and special events held annually in Indio, the City is known as “The City of Festivals.” The Riverside County Fairgrounds are located at Highway 111 in the heart of the City. Two major annual festivals held in the City are the Riverside County Fair and National Date Festival, held each February at the Riverside County Fairgrounds, and the Indio

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International Tamale Festival, held each December in the streets of Old Town Indio. Year round, the Riverside County Fairgrounds Grandstand Arena Stadium also is the site for live music concerts, 4x4 monster truck rallies, and rodeo or horse riding events. Starting in 1999, the Coachella Valley Music and Arts Festival has taken place annually at the Empire Polo Club and the adjoining Eldorado Polo Club Grounds within the City. Commencing in 2007, the Stagecoach Country Music Festival has also been held annually at the polo club grounds. Other annual festivals held within the City include the Southwest Arts Festival, the Cabazon Indian National Pow Wow, the Palm Springs Kennel Club’s Annual Dog Show at the Empire Polo Club, and the Family Motor Coach Association’s Annual Western Region RV Rally at the Riverside County Fairgrounds.

Education. The City is served by two public school districts: Desert Sands Unified School District (headquartered in the City of La Quinta) and on the southern part of the City, Coachella Valley Unified School District. Within the Desert Sands Unified School District, eleven public elementary schools (grades K-5), four public middle schools (grades 6-8), and three public high schools (grades 9-12) are located within the City.

Within the Coachella Valley Unified School District, one public elementary (grades K-6) is located within the City.

The City is also served by College of the Desert (COD), a community college serving about 12,500 students. As a two-year college, COD offers transfer students an affordable option for starting college and transferring to a four-year institution. COD is the number one source of transfer students to California State University at San Bernardino and offers a number of popular vocational and technical programs. The Indio campus opened in 2014 and construction on an expansion is underway. The expansion entails a new 18,000 sq. ft Child Development Center that includes 7,000 sq. ft of play yards, classrooms, childcare facilities, and observation spaces; and an additional 67,000 sq. ft campus building for a new student center, public safety facilities, student health offices, new classrooms, science laboratories, a Maker Space, and more. Renovations to the existing building are scheduled to begin Winter 2023. The Indio campus is expected to be fully operational in Spring 2024 and accommodate about 8,000 students.

Indio is also home to the California Desert Trial Academy (CDTA) College of Law, which was founded by John Patrick Dolan and Irene Garcia Dolan. CDTA is the only law school in the country dedicated to trial advocacy and the only law school in the Coachella Valley.

Transportation
Interstate 10 connects the City with Los Angeles, California, and Phoenix, Arizona. State Highways 86 and 111 provide access to neighboring communities and the City of Palm Springs.

Commercial rail service to Indio is provided by Southern Pacific Railroad.

Air cargo and passenger flight services are provided at the Palm Springs Airport and at nearby Bermuda Dunes and Thermal Airports.

Climate
The climate of the Coachella Valley is influenced by the surrounding geography. High mountain ranges on three sides contribute to its unique and year-round warm climate, with some of the warmest winters west of the Rocky Mountains. The City has a warm winter/hot summer climate. According to data from the National Oceanic and Atmospheric Administration for 1981-2010, the City’s average annual high temperature is 89.5 degrees Fahrenheit and average annual low is 62.1 degrees. Summer highs above 108 degrees are common and sometimes exceed 120 degrees, while summer night lows often stay above 82 degrees. Winters are warm with daytime highs, often between 68-86 degrees. Under four inches of annual precipitation are average, with typically over 348 days of sunshine per year. The mean annual temperature is 75.8 degrees.

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CITY FINANCIAL INFORMATION
General
The City believes its economic condition and outlook are favorable in spite of the unprecedented economic impacts the COVID-19 pandemic placed on the local economy. Expected declines in sales tax revenue were avoided. When storefronts originally closed, residents gravitated to on-line shopping in mass and spent their federally allocated stimulus monies. Fiscal year 2020-21 sales tax revenue increased approximately $5.5 million (approximately 24%) year-over-year, hitting a record $28.2 million. A small portion of the increase was prompted by the State, who let businesses defer some tax payments the previous year. Sales tax estimates for fiscal year 2021-22 portend further growth of around five percent. The City also continues to experience housing price and associated property value increases that have propelled property tax revenue up 33% over the past five years.

It is often assumed that City revenue is exceedingly dependent on local music festival activity. While the local economic impact of these famous festivals is significant; Indio is a dynamic City with a diverse revenue base, supported by a wide range of sources and activities. When the COVID-19 pandemic hit, the City slowed hiring and deferred capital expenditures, expecting significant revenue loses. Such revenue losses did not manifest and instead, the City's spendable General Fund balance (Committed, Assigned, and Unassigned fund balance) doubled in fiscal year 2020-21, increasing approximately $19.4 million (or approximately 80%). Certain of these resources are expected to be spent in future years to catch up on deferred maintenance and capital improvements, along with the $20.4 million in Coronavirus State and Local Fiscal Recovery Funds.

The City uses a five-year planning model that forecasts General Fund revenues as well as future year expenditures. The City’s current financial model assumes modest revenue growth at a slower pace than actual growth over the past few years. Projections indicate positive operational cash flow of about $13 million a year, maintained by revenue growth of three percent ($1.5 million) each year. On-going General Fund revenue, including tax revenue transferred into the General Fund to support public safety services, grew 27% between fiscal year 2016-17 and fiscal year 2020-21, from $67.1 million to $85.3 million. A source of financial pressure to the City continues to be from rising pension costs, which are projected to increase by $400,000 a year for the next four years. The City’s projections are based on the existing provisions of the City’s labor contracts. See “Employee Relations” below. The projections do not take into account any potential negotiated terms of labor beyond 2023.

The City continues to review and update policies to ensure the City’s long-term financial stability. As the City’s General Fund revenue has grown, so has its reserve. The City’s reserve benchmarks established under the Budget Management Policy, adopted in 2010, sets the policy benchmark is 15% of ongoing general- purpose revenue. At $15 million, the reserve represents 15% of all projected fiscal year 2022-23 General Fund revenue.

More detailed discussions of the highlights of the City’s fiscal year 2021-22 Adopted Budget, the fiscal year 2021-22 Mid-year Budget Report, and the fiscal year 2022-23 Recommended Budget. Economic outlook and financial position as of the end of fiscal years 2021-22 and 2022-23 can be found under the caption “—Budgetary Process and Budget Information” below.

Impacts of COVID-19
Financial Impacts. The spread of the novel strains of coronavirus collectively called SARS-CoV-2, which cause the disease known as COVID-19 (“COVID-19”), and local, State and federal actions in response to COVID-19, have impacted the City’s operations and finances. In response to the increasing number of COVID-19 infections and fatalities, health officials and experts recommended, and some governments mandated, a variety of responses ranging from travel bans and social distancing practices to complete

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shutdowns of certain services and facilities. The World Health Organization has declared the COVID-19 outbreak to be a pandemic and, on March 4, 2020, as part of the State’s response to address the outbreak, the Governor declared a state of emergency. On March 13, 2020, the President declared a national emergency, freeing up funding for federal assistance to state and local governments. Many school districts across the State temporarily closed some or all school campuses (including schools within the City) in response to local and State directives or guidance.

On March 19, 2020, the Governor issued Executive Order N-33-20, a mandatory Statewide shelter-in- place order applicable to all non-essential services. Certain aspects of the shelter-in-place directives were extended indefinitely until indicators for modifying the stay-at-home order were met. The County also declared a state of emergency in response to the COVID-19 outbreak. On May 4, 2020, the Governor issued an executive order informing local health jurisdictions and industry sectors that they could gradually re-open under new modifications and guidance provided by the State. A phased re-opening of various sectors was underway since mid-2020 in accordance with a four-stage re-opening plan that ended with a full reopening of the economy on June 15, 2021. Although pursuant to the re-opening plan certain restrictions on activities were eased, restrictions were also re-imposed in various jurisdictions (including neighboring Los Angeles County) as local conditions warranted, and such restrictions may be renewed as the pandemic continues.

In addition, the Governor extended the deadline to file and pay spring 2020 property taxes for residential and certain commercial property owners and first quarter 2020 sales and use tax returns by 90 days for all but the very largest taxpayers. As a result of the extended deadline to file sales and use tax returns, it is estimated that up to 361,000 California businesses with less than $5 million in taxable annual sales were permitted to defer up to $50,000 in sales tax and enter into 12-month payment plans at zero interest. These actions have resulted in delays in the receipt by the City of its portion of such tax payments.

On March 27, 2020, the President signed the $2.2 trillion Coronavirus Aid, Relief, and Economic Stabilization Act (the “CARES Act”) which provides, among other measures, $150 billion in financial aid to states, tribal governments and local governments to provide emergency assistance to those most significantly impacted by COVID-19. Under the CARES Act, local governments are eligible for reimbursement of certain costs which were expended to address the impacts of the pandemic. The City received a total reimbursement of $1,120,515 under the CARES Act which it applied to food distribution and public safety, among other uses.

The funds received by the City under the CARES Act are not available for payment of the 2022 Bonds and cannot be used to backfill any City revenue losses related to COVID-19.

On December 27, 2020, the President signed the $900 billion Coronavirus Response and Relief Supplemental Appropriations Act. Although the act did not provide additional financial assistance to state and local governments, it did extend the deadline (to October 2021) for them to use unspent funds that were previously approved under the CARES Act.

On March 11, 2021, the President signed the American Rescue Plan Act of 2021 (the “ARP Act”), a $1.9 trillion economic stimulus package designed to help the United States’ economy recover from the adverse impacts of the COVID-19 pandemic. The ARP Act includes approximately $350 billion in aid to state and local governments such as the City, consisting of both direct funding from the United States Department of Treasury and program moneys that will flow from other federal agencies. Half of the aid to state and local governments was distributed in spring 2021, with the other half following in 2022. The City has been allocated a total of approximately $20.4 million, of which approximately half was received in spring 2021 and of which approximately half is expected by the end of fiscal year 2021-22. This funding is available for a broad range of uses, including responding directly to the health emergency, addressing its negative economic impacts with assistance to households and small businesses, restoring government services that were reduced in response to pandemic-related revenue losses and making certain necessary infrastructure improvements.

The City’s Adopted Fiscal Year 2021-22 Budget appropriates the $10.2 million received prior to adoption of the Adopted Fiscal Year 2021-22 Budget, and the City has not yet determined how the remainder of the

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expected ARP Act funds that it has received and expects to receive will ultimately be spent, but planning efforts are underway.

See the captions “—Financial Statements (General Fund”) and “—Budgetary Process and Budget Information” for more information with respect to the impacts of COVID-19 on the City’s finances.

Service Impacts. The City continued to provide core services including public safety (police and fire), without disruption during the COVID-19 pandemic. However, the COVID-19 pandemic has impacted certain other services that the City provides. While the stay at home order was in effect, recreation centers and City administrative centers were closed, and libraries were open for public use on a limited basis. Parks were also open for limited use.

Financial Statements (General Fund)
Set forth in the following pages are the City’s General Fund Balance Sheets and Statements of Revenues, Expenditures and Changes in General Fund Balance for fiscal years 2016-17 through 2020-21, based on the City’s audited financial statements. The Balance Sheets and Statements presented in this Official Statement are subject to the various notes attached to the City’s audited financial statements for the respective years. The City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2021 and the Independent Auditor’s Report issued by Lance, Soll & Lunghard, LLP (the “Auditors”) regarding such financial statements, are set forth in Appendix C. The Auditor was not requested to consent to the inclusion of its report in Appendix C and it has not undertaken to update financial statements included in Appendix C. No opinion is expressed by the Auditor with respect to any event subsequent to its report.

The City’s audited financial statement have been prepared in conformity with the accounting principles generally accepted in the United States as applied to government units, and pursuant to the accounting and financial principles established by the Governmental Accounting Standards Board (“GASB”).

A summary of the significant accounting policies applied in the City’s fiscal year 2020-21 audited financial statements can be found in Note No. 1 to such financial statements.

At the close of fiscal year 2020-21, the General Fund reported an ending balance of $53.7 million, up $15.4 million in comparison to the ending balance of the prior fiscal year. Approximately 82 percent ($43.9 million) of the $53.7 million was available for spending at the City’s discretion (unassigned, assigned or committed). Nonspendable fund balance represents resources that cannot be spent because they are not in a spendable form. Nonspendable fund balance totaled $8.7 million, consisting of prepaid expenditures ($0.2 million), property held for resale ($4.9 million), and notes receivable ($3.6 million). Restricted fund balance represents amounts that can only be spent for a specific purpose. Restricted fund balance totaled $1.2 million, which is an increase from the prior fiscal year. This $1.2 million represents a Section 115 trust fund established for pension stabilization. Assigned fund balance represents resources that are earmarked by City administration for a particular governmental purpose. Assigned fund balance totaled $12.0 million, an increase of $2.8 million from the prior fiscal year. Committed fund balance represents resources that are formally set aside by the City Council for emergencies or critical City priorities. Committed fund balance totaled $12 million, the same as the prior fiscal year. Unassigned fund balance represents resources that have not been categorized as nonspendable, restricted, committed, or assigned. Unassigned fund balance totaled $19.8 million, an increase of $16.6 million from the prior fiscal year.

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TABLE 8
City of Indio
General Fund Balance Sheets
Fiscal Years 2016-17 through 2020-21
2016-17 2017-18 2018-19 2019-20 2020-21
Assets
Cash and investments $ 22,689,188 $ 25,471,570 $ 31,205,489 $ 27,449,261 $ 41,402,083 Receivables:

Accounts 183,090 381,137 515,478 451,958 686,526
Taxes 1,520,542 1,904,787 1,558,202 3,231,959 5,894,897 Notes and loans 4,017,025 3,978,417 3,870,551 3,758,307 3,576,455 Accrued interest 24,857 32,655 82,387 40,214 15,511
Other 888,242 1,657,214 991,687 - -
Prepaid costs 320,767 193,945 295,749 239,834 163,662
Due from other governments 3,460,077 5,334,497 5,785,104 3,426,391 4,000,490 Due from other funds 1,041,988 4,006,977 1,835,747 532,311 2,315,680 Property held for resale 5,803,655 6,336,548 7,347,049 8,858,514 4,911,067 Restricted assets: - - - - -
Cash and investments - - - 980,597 1,209,917
Total assets $ 39,949,431 $ 49,297,747 $ 53,487,443 $ 48,969,346 $ 64,176,288 Liabilities and fund balance
Liabilities:

Accounts payable $ 5,933,379 $ 5,241,497 $ 7,673,948 $ 4,487,695 $ 4,402,545 Accrued liabilities 656,428 990,822 1,393,581 1,228,645 915,421 Deposits payable 3,481,459 3,900,885 3,432,440 3,929,180 4,061,976 Total liabilities $ 10,071,266 $ 10,133,204 $ 12,499,969 $ 9,645,520 $ 9,379,942 Deferred Inflows of Resources:

Unavailable revenue - $ 2,569,522 $ 1,243,951 $ 1,008,271 $ 1,056,402 Total Deferred Inflows of Resources - $ 2,569,522 $ 1,243,951 $ 1,008,271 $ 1,056,402 Fund Balances:

Nonspendable $ 10,141,447 $ 10,508,910 $ 11,513,349 $ 12,856,655 $ 8,651,184 Restricted - - - 980,597 1,209,917
Committed(1) 11,284,880 11,284,880 12,000,000 12,000,000 12,000,000 Assigned(2) 8,451,838 12,652,777 11,602,583 9,283,186 12,081,898 Unassigned - 2,148,454 4,627,591 3,195,117 19,796,945
Total fund balance $ 29,878,165 $ 36,595,021 $ 39,743,523 $ 38,315,555 $ 53,739,944 Total liabilities & fund balance $ 39,949,431 $ 49,297,747 $ 53,487,443 $ 48,969,346 $ 64,176,288 (1) Represent funds available for use only if directed by the City Council. (2) Represents funds appropriated to be used at the City Manager’s direction.

Source: City of Indio audited financial statements for fiscal years ended June 30, 2017, 2018, 2019, 2020 and 2021, as included in the City’s Comprehensive Annual Financial Reports for the respective fiscal years.

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TABLE 9
City of Indio
Statements of Revenues, Expenditures and Changes in General Fund Balance Fiscal Years 2016-17 through 2020-21
2016-17 2017-18 2018-19 2019-20 2020-21
Revenues
Taxes(1) $ 47,416,935 $ 57,614,270 $ 61,690,433 $ 57,647,370 $ 68,920,690 Licenses and permits 2,736,810 2,338,054 2,289,518 2,525,599 3,152,539 Intergovernmental 414,448 470,953 663,382 798,992 608,198 Charges for services(2) 8,718,918 6,381,875 9,741,963 4,971,965 4,788,751 Use of money and property 594,636 932,209 1,450,318 1,404,691 1,210,350 Fines and forfeitures 805,712 464,066 502,007 688,809 594,033 Miscellaneous 2,936,524 2,725,410 2,312,136 279,282 249,973 Total revenues $ 63,623,983 $ 70,926,837 $ 78,649,757 $ 68,316,708 $ 79,524,534 Expenditures
Current
General government $ 4,303,641 $ 4,685,453 $ 5,237,275 $ 6,954,097 $ 8,594,253 Public safety(3) 39,999,060 41,515,353 43,862,078 43,431,971 43,478,782 Community development 4,588,178 4,240,030 4,838,149 3,900,759 4,800,350 Community services 2,523,974 2,849,553 2,673,765 2,670,556 2,583,137 Public works 6,995,757 7,082,880 14,434,431 10,450,192 6,830,649 Capital outlay 84,911 467,844 62,657 29,633 109,811
Debt Service(4) 362,368 352,090 352,091 - -
Total expenditures $ 58,857,889 $ 61,193,203 $ 71,460,446 $ 67,437,208 $ 66,396,982 Excess (deficiency) of revenues
over (under) expenditures
$ 4,766,094 $ 9,733,634 $ 7,189,311 $ 879,500 $ 13,127,552 Other financing sources (uses):

Transfers in(5) $ 3,438,658 $ 3,740,084 $ 3,957,334 $ 3,976,838 $ 6,007,410 Transfers out(6) (3,780,530) (6,756,862) (7,998,143) (6,284,306) (3,710,573) Total other financing sources
(uses)
$ (341,872) $( 3,016,778) $ (4,040,809) $ (2,307,468) $ 2,296,837 Net change in fund balance $ 4,424,222 $ 6,716,856 $ 3,148,502 $( 1,427,968) $ 15,424,389 Fund balance – beginning 25,453,943 29,878,165 36,595,021 39,743,523 38,315,555 Fund balance – ending $ 29,878,165 $ 36,595,021 $ 39,743,523 $ 38,315,555 $ 53,739,944 (1) See “Primary General Fund Tax Revenue Sources” for a discussion regarding certain top tax revenues sources. (2) The City imposes fees and charges to help offset the cost of services that benefit an individual or a group, such as various safety inspections, officers assigned to schools or other facilities, ambulance services and the administration of local assessment districts. A large source of revenues from such charges is tied to services provided during the three music festivals that are held in the City. See “INFORMATION REGARDING THE CITY — General.” Decreases in fiscal years 2019-20 and 2020-21 are largely attributable to the impacts of COVID-19. (3) Primarily relate to costs for police and fire services, including ambulance services. See “INFORMATION REGARDING THE CITY — Government Services and Community Facilities” for a description of the police and fire services provided by the City.
(4) Includes only payments pursuant to a 10-year contract relating to the City’s acquisition of certain police radio equipment.

The last payment on such contract occurred in fiscal year 2018-19. (5) A significant portion of which reflect moneys transferred from the Community Facilities District Fund to reimburse the General Fund for police and fire related expenditures (e.g., $5,212,410 in fiscal year 2020-21); remaining amount for various other operating purposes.
(6) Include funds transferred to the General Debt Service Fund to cover outstanding lease revenue bond payments. See discussion under “Long-Term Liabilities.”
Source: City of Indio Annual Comprehensive Financial Report for fiscal years 2016-17 through 2020-21.

Budgetary Process and Budget Information
General. The fiscal year of the City begins on July 1 of each year and ends on June 30 of the following year. The City Manager and key staff members review revenues and expenditures for each department for the ensuing fiscal year. Prior to the beginning of each fiscal year, the City Manager submits to the City Council a budget proposal. In at least one public meeting (but more commonly three to four), the City

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Council considers the proposed budget and makes any revision that it deems appropriate. On or before June 30 it adopts the budget with revisions, if any, by the affirmative vote of at least three of the five members of the City Council. Upon approval of the budget by the City Council, the expenditure levels and revenue assumptions stated in the proposed become adopted and are appropriated to the various agencies, departments and units for the objects and purposes authorized. During the fiscal year The City Manager may transfer appropriations from one object or purpose to another within a divisional budget unit, without seeking City Council approval. All appropriations lapse at the end of the fiscal year to the extent that they have not been expended or lawfully encumbered.

Fiscal Year 2021-22 Adopted Budget. The City’s Fiscal Year 2021-22 Budget was approved on June 16, 2021 (the “Fiscal Year 2021-22 Budget”). The Fiscal Year 2021-22 Budget revenue projection for fiscal year 2021-22 was approximately $83.6 million, which is approximately $11.1 million (or approximately

15.3%) greater than the Fiscal Year 2020-21 adopted budget and approximately $4.1 million (or approximately

5.2%) greater than the Fiscal Year 2020-21 audited results.

The Fiscal Year 2021-22 Budget, established spending authority for fiscal year 2021-22 of approximately $93 million, which is approximately $14.1 million (or approximately 17.9%) greater than the Fiscal Year 2020-21 adopted budget and approximately $13.5 million (or approximately 32.7%) greater than the Fiscal Year 2020-21 audited results.

This increase in spending authority reflects the City’s efforts to normalize spending levels after a year of spending reductions in response to COVID-19. Police protection accounts for the largest portion (approximately 38%) of all General Fund appropriations, totaling approximately $35.7 million. In addition to typical policing operations, the police department budget also includes code enforcement operations.

Approximately $17.2 million (or approximately 18%) is appropriated for fire, emergency operations, and ambulance services, which are contracted through the County. Combined, these public safety operations represent approximately 56% of all planned General Fund expenditures.

Fiscal Year 2021-22 Mid-Year Budget Update. On February 16, 2022, the City Manager presented the City Council with the Fiscal Year 2021-22 Mid-Year Budget Report (the “Mid-Year Budget Report”). The Mid-Year Budget Report recommended a mid-year budget adjustment of approximately $8.9 million in additional general fund revenue when compared to the Fiscal Year 2021-22 Budget, bringing the total budgeted general fund revenues to approximately $92.5 million. The additional general fund revenue was derived from additional sales tax revenue (approximately $5 million), transient occupancy tax revenue (approximately $2.6 million), utility users’ tax revenue (approximately $800,000), and property tax revenue (approximately $500,000). With the Fiscal Year 2021-22 Budget gap essentially mitigated by the increased revenues, the Mid-Year Budget Report found that approximately $25 million in sales tax revenues were available for one-time expenditures and projects. The Mid-Year Budget Report also recommended that the City’s emergency reserve fund be increased from $12 million to $15 million, effectively 16% of general fund revenues.

Fiscal Year 2022-23 Recommended Budget. The City’s Fiscal Year 2022-23 Recommended Budget was presented the City Council and the public during public hearings held on May 4, 2022 and May 18, 2022 (the “Fiscal Year 2022-23 Recommended Budget”). The Fiscal Year 2022-23 Recommended Budget revenue projection for fiscal year 2022-23 is approximately $98.4 million, which is approximately $5.8 million (or approximately 6.3%) greater than the Fiscal Year 2021-22 budget as amended in the Mid-Year Budget Report.

The Fiscal Year 2022-23 Recommended Budget assumed a Fiscal Year 2021-22 ending general fund balance of approximately $65.7 million and recommended appropriations for fiscal year 2022-23 of approximately $89.4 million, which is approximately $3.6 million (or approximately 4.0%) greater than the Fiscal Year 2021- 22 budget as amended in the Mid-Year Budget Report. Based on the approximately $8.9 million budgeted surplus, the City’s Fiscal Year 2022-23 Recommended Budget appropriates such surplus, together with an existing approximately $30.5 million fund balance, towards approximately $30.5 in capital improvement

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projects. The Fiscal Year 2022-23 Recommended Budget is expected to be considered by the City Council for approval on June 15, 2022.

Historical Budget Information. Set forth in Table 10 below are the adopted General Fund budgets for fiscal years 2019-20, 2020-21 and 2021-22, as well as the actual results for fiscal years 2019-20 and 2020- 21 (shown on a budgetary basis). Table 10 also includes the Recommended Fiscal Year 2022-23 Budget, which is expected to be presented to the City Council on June 15, 2022. The General Fund budgets and actuals shown in Table 10 below do not reflect the application of GAAP and therefore differ in certain respects to the audited General Fund Statement of Revenues, Expenditures and Change in Fund Balance shown in Table 9.

TABLE 10
City of Indio
General Fund Budgets to Actual Comparisons
Fiscal Years 2019-20 through 2022-23
Fiscal Year
2019-20
Budget
Fiscal Year
2019-20
Results
Fiscal Year
2020-21
Budget
Fiscal Year
2020-21
Results
Fiscal Year
2021-22
Amended
Budget(1)
Recommended
Fiscal Year
2022-23
Budget(2)
Budgetary Fund Balance, July 1 $39,743,523 $39,743,523 $38,315,000 $38,315,000 $53,739,944 $65,768,734 Resources (Inflows)
Taxes $61,789,600 $57,647,370 $53,696,300 $68,920,690 $72,632,557 $75,887,600 Licenses and permits 2,937,500 2,525,599 2,184,000 3,152,539 2,059,000 3,397,800 Intergovernmental 259,000 798,992 289,000 608,198 270,000 120,000 Charges for services 8,337,600 4,971,965 8,384,600 4,788,751 9,509,600 10,932,000 Fines and forfeitures 655,500 688,809 655,500 594,033 365,000 465,000 Use of money and property 774,870 1,404,691 585,080 1,210,350 810,000 772,694 Miscellaneous 2,472,500 279,282 2,482,500 249,973 2,659,500 2,766,000 Transfers in 3,917,000 3,976,838 4,205,702 6,007,410 4,215,702 4,323,000 Amounts Available for
Appropriations $120,887,093 $112,037,069 $110,798,237 $123,847,499 $146,261,303 $164,432,828 Charges to Appropriations
(Outflows)
General government $8,835,586 $6,954,097 $7,698,281 $8,594,253 $17,035,986 $11,994,860 Public safety 50,160,189 43,431,971 51,174,844 43,478,782 52,531,807 55,948,906 Community development 4,939,338 3,900,759 4,625,116 4,800,350 4,387,352 4,167,226 Community services 3,168,854 2,670,556 3,240,506 2,583,137 2,339,810 2,751,434 Public Works 12,438,864 10,450,192 7,179,862 6,830,649 7,264,106 7,461,990 Capital outlay 232,500 29,633 32,500 109,811 292,500 2,830,000 Transfers out 11,748,094 6,284,306 5,007,374 3,710,573 9,177,073 52,587,258 Total Charges to Appropriations $91,523,425 $73,721,514 $78,958,483 $70,107,555 $93,028,634 $137,741,644 Budgetary Fund Balance, June 30 $29,363,668 $38,315,555 $31,958,754 $53,739,944 $53,232,669 $26,691,184 (1) Represents the Fiscal Year 2021-22 Mid-Year Budget Report presented to the City Council on February 16, 2022. See the caption “— Fiscal Year 2021-22 Mid-Year Budget Update.”
(2) The Fiscal Year 2022-23 Recommended Budget was presented the City Council and the public during public hearings held on May 4, 2022 and May 18, 2022. The Fiscal Year 2022-23 Recommended Budget is expected to be considered by the City Council for approval on June 15, 2022. See the caption “—Fiscal Year 2022-23 Recommended Budget.” Source: City of Indio Annual Comprehensive Financial Report for fiscal years 2019-20 and 2020-21; City of Indio Adopted Budget for Fiscal Year 2021-22; City of Indio Recommended Budget for Fiscal Year 2022-23.

Primary General Fund Tax Revenue Sources
As shown in Table 9, the largest source of the City’s General Fund revenues is from tax revenues.

Such revenues are based on various types of taxes, such as property taxes, documentary transfer tax, sales tax, utility taxes, franchise tax and transient occupancy tax. The table below provides the tax revenues by source and the share of General Fund revenues that each represents for fiscal years 2016-17 through 2020-21.

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TABLE 11
City of Indio
Tax Revenues by Source
Fiscal Years 2016-17 through 2020-21
2016-17 2017-18 2018-19 2019-20 2020-21
Revenue Source Revenues
% of General
Fund
Revenues Revenues
% of General
Fund
Revenues Revenues
% of General
Fund
Revenues Revenues
% of
General
Fund
Revenues Revenues
% of
General
Fund
Revenues
Sales Tax(1) $13,132,400 20.6% $22,076,408 31.1% $24,503,228 31.2% $22,622,369 33.1% $28,150,408 35.4% Property Tax 16,006,639 25.2 16,764,645 23.6 17,834,098 22.7 18,539,985 27.1 19,690,559 24.8 Utility Users Tax 8,534,925 13.4 8,512,701 12.0 8,019,337 10.2 7,972,183 11.7 8,417,319 10.6 Transient Occupancy Tax 6,298,367 9.9 6,760,340 9.5 7,768,004 9.9 5,011,616 7.3 8,699,125 10.9 Other(2) 3,444,604 5.4 3,500,176 4.9 3,565,766 4.5 3,501,217 5.1 3,963,279 5.0 Total $47,416,935 74.5% $57,614,270 81.2% $61,690,433 78.4% $57,647,370 84.4% $68,920,690 86.7% Total General Fund
Revenues $63,623,983 $70,926,837 $78,649,757 $68,316,708 $79,524,534 $63,623,983 (1) Includes both the standard sales tax received by the City as well as the Measure X sales tax, which was approved by the voters in 2017. See the caption “—Sales Tax” below. (2) Includes franchise taxes on certain public utilities to offset wear and tear to the City’s streets and for the maintenance of the City right-of-way, business license taxes and other miscellaneous taxes.

Source: City of Indio Annual Comprehensive Financial Report for fiscal years 2016-17 through 2020-21.

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Sales Tax. A sales tax is imposed on retail sales or consumption of personal property. As shown in Table 11, sales tax revenues represented the top source of tax revenues for the City’s General Fund in fiscal year 2020-21, comprising approximately 35.4 percent of the City’s total General Fund Revenues. See the caption “INFORMATION REGARDING THE CITY — Taxable Transactions” for information regarding taxable transactions in the City for calendar years 2017 through 2021.

The City’s sales tax revenue represents the City’s share of the sales and use tax, imposed on taxable transactions occurring within the City’s boundaries. The sales tax is governed by the Bradley-Burns Uniform Local Sales and Use Tax Law, set forth in California Revenue and Taxation Code Section 7200 et seq. As of April 1, 2022, the local sale tax rate in the City is 8.75 percent, which includes the City’s one percent City of Indio Neighborhood Safety/Essential City Services Improvement Measure, which is referred to as “Measure X.” The Measure X sales tax was originally approved by the voters of the City on November 8, 2016 for a term of 20 years; however, on November 2, 2021, the voters of the City approved extending the Measure X sales tax indefinitely.

The table below sets forth the historical receipts of the City’s share of the sales tax and the City’s revenues from the Measure X sales tax for fiscal years 2016-17 through 2020-21.

TABLE 12
City of Indio
Sales Tax Revenues by Source
Fiscal Years 2016-17 through 2020-21
Fiscal Year Ended
June 30 Sales Tax Measure X Sales Tax
Total Sales Tax
Revenues
2021 $14,180,425 $13,969,983 $28,150,408
2020 11,456,596 11,165,773 22,622,369
2019 12,986,397 11,516,832 24,503,229
2018 11,457,788 10,618,620 22,076,408
2017 11,205,941 1,926,459 13,132,400
Source: City of Indio.

The State collects and administers the tax, and makes distributions on taxes collected within the City.

Businesses remit sale tax collections to the California Department of Tax and Fee Administration at the end of each month. The California Department of Tax and Fee Administration makes distribution to the City and the County, after deduction of the State’s administrative costs, three months after the end of each fiscal quarter, based on the following:

TABLE 13
City of Indio
Sales Tax Rate
As of April 1, 2022
Jurisdiction Rate
State of California 7.25%
County of Riverside (including Riverside County Transportation Commission) 0.50 City of Indio (Measure X) 1.00
Total 8.75%
Source: California Department of Tax and Fee Administration.

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From time to time, the City enters agreements with developers or business owners, pursuant to which the City makes certain payments that are contingent, and calculated based, on the tax revenues generated by the designated businesses. For purposes of Table 9 (the City’s Statements of Revenues, Expenditures and Changes in General Fund Balance), payments for such agreements are included in the line item labeled as “community development” under “Expenditures.” For fiscal year 2020-21, the City’s payments under such agreements totaled $806,063.

As shown in Table 11, the City’s revenues from sales and use tax was approximately $28.1 million in fiscal year 2020-21 (or approximately 35.4% of General Fund revenues). The City has budgeted to receive approximately $30.1 million from sales and use tax revenue (or approximately 32.5% of General Fund revenues) in fiscal year 2021-22.

Property Taxes. Property taxes represent a significant source of the City’s General Fund revenues.

The figures shown in Table 11 for property tax revenues include property taxes received by the City in-lieu of motor vehicle license fees. As shown in Table 11, the City’s revenues from property taxes was approximately $19.7 million in fiscal year 2020-21 (or approximately 24.8% of General Fund revenues). The City has budgeted to receive approximately $20.7 million in property tax revenues (or approximately 22.4% of General Fund revenues) in fiscal year 2021-22.

The City’s assessed value increased by approximately $484 million, or approximately 5.2%, between fiscal years 2020-21 and 2021-22, primarily due to transfers in ownership. Median sales prices of single- family residential properties in the City rose by 22.8% in 2021.

Proposition 13 Limitations. Article XIIIA of the State of California Constitution imposes limits on annual adjustments to real property assessed values and to the amount of ad valorem tax that may be levied on real property. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS— Article XIIIA of the State Constitution.” Tax Levies and Delinquencies. Taxes are levied by the County for each fiscal year on taxable real and personal property which is situated in the County as of the preceding January 1. Effective July 1, 1983, real property that changes ownership or is newly constructed is reassessed at the time the change in ownership occurs or the new construction is completed. If the property is reassessed at a higher value, one or more supplemental tax statements will be added to the annual tax bill. If the property is reassessed at a lower value, the property owner may receive a refund.

Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year, and if unpaid become delinquent on December 10 and April 10, respectively. If the first installment is not paid by December 10, a ten percent delinquent penalty is added to any unpaid balance. If the second installment is not paid by April 10, a ten percent penalty plus a charge of $10 is added to the unpaid balance. Since supplemental tax bills are mailed throughout the year, they may or may not be due or delinquent at the same time as annual tax bills. The same penalties and charges accrue for delinquent supplemental taxes as for delinquent annual taxes.

Property on the secured roll with respect to which taxes are delinquent becomes tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of a penalty of

1.5 percent of the unpaid tax per month to the time of redemption, plus costs and a redemption fee. If taxes remain unpaid for a period of five years following tax default, the property becomes subject to the County Tax Collector’s power of sale. Properties may be redeemed under an installment plan by paying the current year’s taxes, plus an initial payment of twenty percent of the redemption amount and an installment setup fee. The installment plan of redemption allows for the payment of delinquent taxes over a five-year period beginning the date the installment plan account is opened. An installment plan account can be opened any time after the property becomes tax defaulted and within five years of that date. After the five-year period an installment plan account may not be opened, as the property becomes subject to the County Tax Collector’s power of sale.

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Property taxes on the unsecured roll are due as of the January 1 lien date and, in general, become delinquent on August 31 and are thereafter subject to a ten percent penalty plus a collection fee. If unsecured taxes are unpaid on October 31, an additional penalty of 1.5 percent attaches to them on the first day of each month until paid. The City has four ways of collecting delinquent unsecured personal property taxes:
(1) bringing a civil action against the taxpayer; (2) filing a certificate in the office of the clerk of the court specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the county recorder’s office, in order to obtain a lien on certain property of the taxpayer; and (4) seizing and selling personal property, improvements or possessory interests belonging or assessed to the assessee.

A five-year history of property tax levies and collections set forth in the table below; however, see the caption “—County Teeter Plan” below for a description of the City’s participation in the County’s Teeter Plan and the Teeter Plan’s impact on property tax collections within the City.

TABLE 14
City of Indio
Property Tax Levies and Collections
Fiscal Year 2021-22
Fiscal Year Ended
June 30
Total Property Tax
Levied Amount Collected Percent of Levy
2021 $8,291,384 $8,386,828 101.15%
2020 7,554,590 7,760,907 102.73
2019 7,142,930 7,208,517 100.92
2018 6,821,440 6,902,696 101.19
2017 6,533,653 6,494,092 99.39
Source: City of Indio Annual Comprehensive Financial Report for fiscal year 2020-21.

County Teeter Plan. The County has implemented the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), which applies to property taxes levied for the City. Under the Teeter Plan, the County guarantees that the City will receive 100 percent of the taxes levied for it. Any delinquencies are borne by the County, which in return collects and retains all penalties and interest which accrue on the delinquent taxes. Consequently, the City’s tax receipts do not reflect any delinquencies. If, however, the County Board of Supervisors were to determine to discontinue the Teeter Plan, the City’s receipt of property tax revenues would reflect actual delinquencies and the actual collection rate.

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Assessed Valuation; Top Tax Payers. A five-year history of the City’s assessed valuation is as follows:

TABLE 15
City of Indio
Assessed Value of Taxable Property
(dollar amounts expressed in thousands (000’s))
Fiscal Years 2017-18 through 2021-22
Fiscal Year
Ended
June 30
Residential
Property
Commercial
Property
Industrial
Property
Other
Property
Less: Tax-
Exempt
Property
Total
Taxable
Assessed
Value
2022 $7,776,969 $999,232 $258,724 $706,085 -- $9,741,010 2021 7,324,840 954,038 264,707 713,119 -- 9,256,704
2020 6,974,129 900,025 253,666 696,518 $(1,930) 8,822,408 2019 6,499,481 957,306 270,856 786,077 (94,058) 8,419,662 2018 6,162,303 919,705 259,047 769,151 (89,925) 8,020,281 Source: City of Indio, based on information originally compiled from Riverside County tax rolls.

The top ten property tax payers, based on assessed values of taxable property in the City, as shown on the 2021-22 tax roll, are set forth in the following table:

TABLE 16
City of Indio
Top Ten Taxpayers Based on Assessed Value
Fiscal Year 2021-22
Property Owner
Primary
Land Use
Taxable
Assessed Value % of Total(1)

1. Worldmark The Club Residential $ 67,627,398 0.69%

2. Desert Polo Land Company Recreational 58,542,382 0.60

3. Indio Towne Center LLC Commercial 54,610,000 0.56

4. Spectrum Pacific West LLC. Unsecured 44,224,880 0.45

5. Wal-Mart Real Estate Business Trust Commercial 41,380,566 0.42

6. Trendwest Resorts Inc Residential 40,875,579 0.42

7. Aljacks Commercial 32,178,543 0.33

8. JFK Memorial Hospital Inc Commercial 30,799,90 0.32

9. JDG Properties Industrial 30,032,458 0.31

10. Andorra Apartments LLC. Residential 26,417,487 0.27 (1) Based on 2021-22 total taxable assessed valuation: $9,741,010,122.

Source: City of Indio, based on information originally compiled from Riverside County tax rolls.

Utility Users Taxes. Revenues from the utility users taxes represent a significant source of revenues for the General Fund. Pursuant to State law, the City may impose utility users tax on consumption of utilities services. The current tax rate of the City’s utility users tax on telecommunication services, video services, electricity, gas and water is six percent, based on result of a November 2, 2010 election held within the City.

The City’s utility users taxes constitute taxes levied for general governmental purposes, are not considered restricted funds, and can be used by the City for any General Fund purpose. As shown in Table 11, the City’s revenues from utilities users tax was approximately $8.4 million in fiscal year 2020-21 (or approximately

10.6% of General Fund revenues). The City has budgeted to receive approximately $8.6 million in revenues from utility users taxes (or approximately 9.3% of General Fund revenues) in fiscal year 2021-22.

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Transient Occupancy Tax. The City imposes a transient occupancy tax on persons stating 30 days or less in a hotel, inn, home rental or other lodging facility. The City’s transient occupancy tax has been in effect since 1989; however, in November 2014 the voters of the City approved increasing the rate of the City’s transient occupancy tax to the current rate for the City’s transient occupancy tax is 13 percent on most lodging facilities and ten percent on facilities with more than 50 rooms. The City’s transient occupancy tax constitutes a tax levied for general governmental purposes and can be used by the City for any General Fund purpose. As shown in Table 11 the City’s revenues from the transient occupancy tax was approximately $8.7 million in fiscal year 2020-21 (or approximately 10.9% of General Fund revenues). The City has budgeted to receive approximately $9.5 million in revenues from the transient occupancy tax (or approximately 10.3% of General Fund revenues) in fiscal year 2021-22.

Other Tax Revenues. Other sources of General Fund tax revenues for the City include franchise taxes on certain public utilities to offset wear and tear to the City’s streets and for the maintenance of the City right- of-way, business license taxes and other miscellaneous taxes. As shown in Table 11, the City’s revenues from these other tax revenue sources were approximately $3.9 million in fiscal year 2020-21 (or approximately

5.0% of General Fund revenues). The City has budgeted to receive approximately $3.2 million in revenues from such other tax revenue sources (or approximately 3.5% of General Fund revenues) in fiscal year 2021-22.

Charges for Services
As shown in Table 10 (Statements of Revenues, Expenditures and Charges in General Fund Balance), “Charges for services” represent a category of significant source of General Fund revenues. The City imposes fees and charges to help offset the cost of services that benefit an individual or a group, such as various safety inspections, officers assigned to schools or other facilities, ambulance services and the administration of local assessment districts. A large source of revenues from such charges is tied to services provided during the three music festivals that are held in the City. See “INFORMATION REGARDING THE CITY — General.” Before fiscal year 2014-15, the City also received approximately $1.3 million annually from the Indio Water Authority for leasing of City water system assets, pursuant to a lease agreement between the Indio Water Authority and the City. In March 2015, the Indio Water Authority made a $6 million rent prepayment (primarily from existing unrestricted reserves). The lease was amended and restated in 2015 to provide only a nominal rent amount due by the Authority during the remaining term of the lease (which currently is scheduled to expire in November 2040).

As shown in Table 10, the City’s revenues from charges for services was approximately $4.8 million in fiscal year 2020-21 (or approximately 6.0% of General Fund revenues). The City has budgeted to receive approximately $9.5 million in revenues from charges for services (or approximately 10.3% of General Fund revenues) in fiscal year 2021-22.

Investment Policy and Portfolio
The City’s current investment policy (the “Investment Policy”) was approved by the City Council on August 21, 2019. The Investment Policy provides that the City’s investment program must be operated in conformance with federal, state, and other legal requirements, including various applicable provisions of the California Government Code. The Investment Policy applies to all investments and deposits of the City of Indio, its component units and any government agency in which the City participates or is a member and whose monetary resources are managed by the City (excluding employees’ retirement and deferred compensation funds and money held by a trustee or fiscal agent pledged to the payment or security of bonds or other indebtedness, the latter of which must comply with the specific statutory provisions and the indentures or other authorizing documents governing such bonds or indebtedness). The City may amend or update its Investment Policy from time to time, as permitted by State law.

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Pursuant to the Investment Policy, except for cash in certain restricted and special funds, the City consolidates cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. The Finance Director allocates all interest earned to the General Fund unless otherwise required by law, including Federal or State regulation or local ordinance. The Investment Policy allows for a variety of investments, provided that they meet the prescribed criteria and State law. In order of priority, the goals of the Investment Policy are safety, liquidity, and return.

An Investment Committee has been established, comprising of one citizen, the elected City Treasurer and two City Council members. The Finance Director prepares quarterly investment reports, which are submitted to the Investment Committee for review. The Investment Committee also annually reviews the City’s investment policy and makes recommendations to City Council regarding any modifications.

Investment Report as of Mach 31, 2022 Set for the below is the summary information included in the quarterly investment report prepared by Chandler Asset Management for the quarter ended March 31, 2022:

TABLE 17
City of Indio
Investment Report
(Inclusive of General Fund and Other City Funds)
as of March 31, 2022
Market Value
Percentage of Total
Investments
Asset-Backed Securities $ 6,199,373.49 5.27%
Federal Agencies 16,893,846.38 14.37
Collateralized Mortgage Obligations 5,034,400.57 4.28
Corporate Medium Term NOtes 18,786,407.23 15.98
Money Market Fund 53,422.69 0.05
Municipal Bonds 548,340.85 0.47
Negotiable Certificates of Deposit 501,050.06 0.43
Supranational Obligations 6,217,388.85 5.29
U.S. Treasuries 16,128,046.01 13.72
Local Agency Investment Fund (LAIF) 47,180,666.43 40.14 Total investments $ 117,542,942.56 100.00%
Source: City of Indio Finance Department.

Long-Term Liabilities
In addition to the lease payments related to the lease payments related to the 2012 Bonds (which will be to be refunded by the 2022 Bonds), the City makes scheduled periodic payments pursuant to certain other outstanding long term agreements. Below are descriptions of some outstanding long-term agreements, in connection with which General Fund appropriations are made annually, as appropriate. For each of these agreements, the City reviews periodically if it would be appropriate to make a portion of the payment from sources other than the General Fund (e.g., impact fees, enterprise fund revenues). Based on such reviews, the City has from time to time, used moneys from such other sources to make the applicable portion of the payment. For additional information, see the notes to the City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2021 set forth in Appendix C.

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Authority’s 2012 Lease Revenue
Refunding Bonds
The 2012 Bonds were issued to refund prior bonds, the proceeds of which were used to finance various City projects. The 2012 Bonds will be redeemed prior to maturity using the proceeds of the Series 2022B Bonds, as described below.

Authority’s 2016 Lease Revenue
Bonds
In April 2016, the Authority issued its City of Indio Public Financing Authority Lease Revenue Refunding Bonds Series 2016A and 2016B (collectively, the “2016 Bonds”) in the aggregate principal amount of $28,300,000 for the purpose of refunding certain prior obligations of the Authority and the City. The City makes lease payments from its General Fund to the Authority to pay debt service on the 2016 Bonds.

As of June 30, 2021, the 2016 Bonds were outstanding in the aggregate principal amount of $16,375,000 with a final maturity of November 1, 2031.

City’s 2017 Judgment Obligation
Bonds
In May 2017, the City issued its $16,300,000 initial aggregate principal amount Judgment Obligation Bonds, Series 2017 (the “2017 Bonds”). The proceeds of the 2017 Bonds were used to pay the judgment ordered against the City in the case of Jefferson Street Ventures, LLC v. City of Indio. The City makes payments from its General Fund to pay debt service on the 2017 Bonds. As of June 30, 2021, the 2017 Bonds were outstanding in the aggregate principal amount of $13,770,000 with a final maturity of November 1, 2036.

Energy Conservation Equipment
Lease
The City entered into this lease-purchase agreement in 2013 in connection with the acquisition of energy conservation equipment for various City facilities. The term of this agreement will end in fiscal year 2023-24. The City’s quarterly payment under this lease is $26,303.

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Authorities Series 2022[A/B]
Bonds
On the date of issuance of the Series 2022[A/B] Bonds, the City also expects to enter into a separate Lease Agreement with the Authority in connection with the issuance by the Authority of the Indio Public Financing Authority Lease Revenue Bonds, Series 2022[A/B] (the “Series 2022[A/B] Bonds”).
[The Series 2022A Bonds are expected to be issued in the aggregate principal amount of $__________  for the purposes of financing the City’s proposed Public Safety Campus Project. The lease payments made in connection with the Series 2022A Bonds do not secure the Series 2022B Bonds and are not available to pay debt service on the Series 2022B Bonds. Furthermore, the properties leased under the Lease Agreement with respect to the Series 2022A Bonds are different from those subject to the Ground Lease and the Lease Agreement. See the caption “THE CITY HALL AND LIBRARY PROJECT.”]
[The Series 2022B Bonds are expected to be issued in the aggregate principal amount of $__________ * for the purpose of refunding the outstanding Indio Public Financing Authority Lease Revenue Refunding Bonds, Series 2012 (Public Capital Improvements) (the “2012 Bonds”) and the City’s lease obligations in connection therewith, as well as financing the City’s proposed new City Hall and Library Project. See the caption “THE PROPERTY AND THE PROJECT”.]
 Preliminary, subject to change.

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Direct and Overlapping Debt
Set forth below is a direct and overlapping debt report as of June 1, 2022, prepared by California Municipal Statistics, Inc. This report is included for informational purposes only. The Authority and the City have not reviewed the report for completeness or accuracy and make no representation in connection therewith:

TABLE 18
City of Indio
Direct and Overlapping Debt
(As of June 1, 2022)
2021-22 Assessed Valuation: $9,740,238,046
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/1/22 Desert Community College District 10.486% $ 53,556,721 Coachella Valley Unified School District 11.995 27,176,760 Desert Sands Unified School District 18.349 71,458,346
City of Indio Community Facilities District No. 2004-3 100. 11,430,000 City of Indio Community Facilities District No. 2005-1, I.A. No. 1 and 2 100. 12,288,000 City of Indio Community Facilities District No. 2006-1 100. 6,569,000 City of Indio 1915 Act Bonds 100. 17,406,545
Valley Sanitary District Assessment District No. 2004-VSD 100. 4,285,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $204,170,372
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Riverside County General Fund Obligations 2.943% $21,196,026 Riverside County Pension Obligation Bonds 2.943 24,134,366 Coachella Valley Unified School District Certificates of Participation 11.995 3,918,167 Desert Sands Unified School District Certificates of Participation 18.349 3,578,972 City of Indio General Fund Obligations 100. 32,610,000
City of Indio Judgment Obligation Bonds 100. 13,115,000 TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT $98,552,531 OVERLAPPING TAX INCREMENT DEBT:

Successor Agency to Indio Redevelopment Agency 100. % $46,220,000 TOTAL OVERLAPPING TAX INCREMENT DEBT $46,220,000
COMBINED TOTAL DEBT $348,942,903 (1)
(1) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.

Ratios to 2021-22 Assessed Valuation:

Total Overlapping Tax and Assessment Debt ...................2.10% Combined Direct Debt ($45,725,000) 0.47%
Combined Total Debt.........................................................3.58% Ratios to Redevelopment Incremental Valuation ($1,661,838,093):

Total Overlapping Tax Increment Debt.............................2.78% Source: California Municipal Statistics.

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Pension Plans
All qualified City employees are eligible to participate in the Public Employee’s Retirement Fund of the California Public Employees Retirement System (“CalPERS”). CalPERS is an agent multiple employer public employee retirement system and issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. CalPERS acts as a common investment and administrative agent for participating public entities within the State. A menu of benefit provisions as well as other requirements of the CalPERS program are established by the Public Employees’ Retirement Law set forth in California Government Code (commencing with Section 20000). The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance (or other local methods).

Contribution requirements of the plan members are established by State statute and the employer contribution rate is established and may be amended by CalPERS. CalPERS participants are required to make contribution to the CalPERS fund based on a percentage of their covered annual salary.

CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

California Governor Jerry Brown signed the California Public Employee’s Pension Reform Act of 2013 (“PEPRA”) into law on September 12, 2012. For non-safety CalPERS participants hired after January 1, 2013 (the “Implementation Date”), the Reform Act changes the normal retirement age by increasing the eligibility for the 2 percent age factor from age 55 to 62 and also increases the eligibility requirement for the maximum age factor of 2.5 percent to age 67. PEPRA also implements certain other changes to CalPERS including the following: (a) all new participants enrolled in CalPERS after the Implementation Date are required to contribute at least 50 percent of the total annual normal cost of their pension benefit each year as determined by an actuary, (b) CalPERS is required to determine the final compensation amount for employees based upon the highest annual compensation earnable averaged over a consecutive 36-month period as the basis for calculating retirement benefits for new participants enrolled after the Implementation Date, and (c) “pensionable compensation” is capped for new participants enrolled after the Implementation Date at 100 percent of the federal Social Security contribution and benefit base for members participating in Social Security or 120 percent for CalPERS members not participating in social security.

The City participates in a Miscellaneous Plan, a Classic Safety Plan, a Safety Police Second Tier Plan and a PEPRA Safety Police Plan. Because the City’s plan with CalPERS with respect to safety employees had fewer than 100 active members in at least one valuation since June 30, 2003, the City’s Safety Plan is required to participate in a PERS risk sharing pool with other pension plans providing similar benefits (the “Safety Risk Sharing Pool”). Prior to June 30, 2003, all PERS retirement plans were non-pooled, and each had its own unfunded liability or surplus. As each participating agency plan joined the Safety Risk Sharing Pool, it continued to carry its respective prior unfunded liability or surplus in a “side fund” specific to such agency.

Unfunded liabilities accruing after the date of participation (generally June 30, 2003) have been, and continue to be, accounted for collectively (without allocation to any particular agency) in the Safety Risk Sharing Pool as a whole. As a result, a side fund (the “Safety Plan Side Fund”) was created to account for the difference between the funded status of the pool and the funded status of the City’s plan, in addition to the existing unfunded liability.

The provisions and benefits in effect at June 30, 2021 for each of the plans, are summarized in the table below:

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City Miscellaneous Plans City Safety Plans
Classic PEPRA Classic I Classic II PEPRA
Hire Date Prior to 7/1/2013 After 7/1/2013 Prior to 7/1/2011 7/1/2011-7/1/2013 After 7/1/2013 Benefit formula 2.7% @ 55 2.7% @ 62 3.0% @ 50 3.0% @ 50 2.7% @ 57 Benefit vesting schedule 5 yr. of service 5 yr. of service 5 yr. of service 5 yr. of service 5 yr. of service Benefit payments monthly for life monthly for life monthly for life monthly for life monthly for life Retirement age 50-55 52-67 50-55 50-55 50-57
Monthly benefits,
as a % of eligible compensation

2.0% - 2.7% 1.0% - 2.5% 3.0% 2.4% - 3.0% 2.0% - 2.7%
Required employee contribution rate 7.41% 7.400 8.99% 8.99% 13.75 Required employer contribution rate 12.204% 11.450% 25.540% 22.397% 13.884% Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. For the year ended June 30, 2021, the contributions recognized as a reduction to the net pension liability was $3,775,732 and $4,143,360 for the miscellaneous and safety plans, respectively.

On June 25, 2012, the Governmental Accounting Standards Board approved GASB Statement No. 68 (“GASB 68”) with respect to pension accounting and financial reporting standards for state and local governments and pension plans. GASB 68 states that, for pensions within the scope of the statement, a cost- sharing employer that does not have a special funding situation is required to recognize a net pension liability, deferred outflows of resources, deferred inflows of resources related to pensions, and pension expense based on its proportionate share of the net pension liability for benefits provided through the pension plan. While the new accounting standards change financial statement reporting requirements, they do not impact funding policies of the pension systems. The audited financial statements of the City for fiscal year 2014-15 reflect the application of the GASB 68. GASB 68 is a change in accounting reporting standards but it does not change the City’s CalPERS plan funding obligations.

The tables below set forth the schedule of contributions for the City’s Miscellaneous and Safety plans.

Miscellaneous Plan(1)
Fiscal Year
Ending
June 30,
Actuarially
Determined
Contribution
Actual
Employer
Contribution
Contribution
Deficiency
(Excess)
Covered
Payroll
Contribution
as a % of
Covered Payroll
2021 $3,856,017 $3,856,017 $- $13,262,250 29.1%
2020 3,527,169 3,527,169 - 12,926,402 27.3
2019 3,523,191 3,523,191 - 12,267,411 28.7
2018 3,032,168 3,032,168 - 11,882,620 25.5
2017 2,858,434 2,858,434 - 12,075,341 23.7
2016 2,619,245 2,619,245 - 12,067,635 21.7
2015 2,446,688 2,446,688 - 11,307,076 21.6
2014 2,331,161 2,331,161 - 10,908,447 21.4
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2014-15 was the first year of implementation for GASB 68, however information for the year prior to implementation was available, therefore only eight years are shown.

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Safety Plan(1)
Fiscal Year
Ending
June 30,
Actuarially
Determined
Contribution
Actual
Employer
Contribution
Contribution
Deficiency
(Excess)
Covered
Payroll
Contribution
as a % of
Covered Payroll
2021 $4,675,712 $4,675,712 $- $8,252,401 56.7%
2020 4,143,360 4,143,360 - 6,750,274 61.4
2019 3,571,705 3,571,705 - 7,696,899 46.4
2018 2,977,907 2,977,907 - 6,666,249 44.7
2017 2,409,717 2,409,717 - 6,451,760 37.4
2016 2,567,055 2,567,055 - 6,467,561 39.7
2015 2,286,752 2,286,752 - 6,624,055 34.5
2014 2,105,331 2,105,331 - 6,236,527 33.8
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2014-15 was the first year of implementation for GASB 68, however information for the year prior to implementation was available, therefore only eight years are shown.

The information above is derived from the City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2021 set forth in Appendix C. Please refer to the Note 12 to the basic financial statements portion and the various related schedules in the required supplementary information section for further details.

PERS Actuarial Calculations; Plans Funding Status. Each year, CalPERS provides the City report (each, a “PERS Report”) providing the actuarial valuation (as of June 30 of the calendar year preceding the year of the PERS Report) for each of the City’s Plans. The following information is based on information available from PERS and the PERS Reports. The Authority and the City have not independently verified the information provided by PERS and express no opinion regarding the accuracy of such information. PERS’ actuarial assessments are based on various assumptions (including demographic assumptions and economic assumptions) made by PERS, its actuaries, accountants and other consultants. One or more assumptions may not materialize or be changed in the future. The Authority and the City express no opinion regarding the quality of such assumptions and cannot provide any guarantee as to the eventual results.

The tables below show the recent history of actuarial accrued liability, market value of assets, unfunded accrued liability, funded ratio and annual covered payroll for each of the City’s CalPERs plans:

Miscellaneous Plan
Valuation Date
Accrued
Liability
Market Value
of Assets
Unfunded
Accrued
Liability Funded Ratio
Annual
Covered Payroll
6/30/2011 $62,588,244 $41,983,840 $20,604,404 67.1% $10,786,146 6/30/2012 65,850,661 41,089,205 24,761,456 62.4% 10,591,364 6/30/2013 69,964,502 46,154,274 23,810,228 66.0% 10,590,725 6/30/2014 76,817,390 53,945,672 22,871,718 70.2% 10,977,744 6/30/2015 80,796,732 55,093,727 25,703,005 68.2% 11,716,150 6/30/2016 85,198,733 55,216,829 29,981,904 64.8% 11,723,632 6/30/2017 90,340,387 61,493,517 28,846,870 68.1% 11,564,594 6/30/2018 97,559,153 66,517,652 31,041,501 68.2% 11,859,669 6/30/2019 102,127,204 70,415,644 31,711,560 68.9% 12,000,765 6/30/2020 106,964,352 73,573,878 33,390,474 68.8% 13,077,416

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Safety (Tier 1) Plan
Valuation Date
Accrued
Liability
Market Value
of Assets
Unfunded
Accrued
Liability Funded Ratio
Annual
Covered Payroll
6/30/2011 $82,226,503 $61,464,342 $20,762,161 74.8% $6,449,256 6/30/2012 86,533,346 60,638,399 25,894,947 70.1% 5,937,267 6/30/2013 90,678,387 67,014,989 23,663,398 73.9% 6,127,718 6/30/2014 99,384,518 76,887,823 22,496,695 77.4% 6,031,940 6/30/2015 102,651,391 75,431,114 27,220,277 73.5% 5,875,012 6/30/2016 106,336,743 72,495,085 33,841,658 68.2% 5,443,966 6/30/2017 112,419,583 78,129,358 34,290,225 69.5% 5,289,352 6/30/2018 121,455,606 82,753,307 38,702,299 68.1% 4,959,739 6/30/2019 127,954,700 87,688,782 40,265,918 68.5% 5,542,657 6/30/2020 131,679,780 88,721,731 42,958,049 67.4% 5,404,885 Safety (Tier 2) Plan
Valuation Date
Accrued
Liability
Market Value
of Assets
Unfunded
Accrued
Liability Funded Ratio
Annual
Covered Payroll
6/30/2014 $131 $137 ($6) 104.2% $213,274
6/30/2015 65,356 59,858 5,498 91.6% 171,899
6/30/2016 172,611 152,323 20,288 88.2% 315,435
6/30/2017 297,797 277,061 20,736 93.0% 343,315
6/30/2018 510,229 466,246 43,983 91.4% 533,024
6/30/2019 772,427 706,912 65,515 91.5% 670,945
6/30/2020 931,496 839,607 91,889 90.1% 685,974
Safety (PEPRA) Plan
Valuation Date
Accrued
Liability
Market Value
of Assets
Unfunded
Accrued
Liability Funded Ratio
Annual
Covered Payroll
6/30/2014 $1,884 $1,964 ($80) 104.2% $74,705
6/30/2015 77,480 72,809 4,671 94.0% 382,456
6/30/2016 174,275 156,094 18,181 89.6% 459,088
6/30/2017 317,464 298,050 19,414 93.9% 758,257
6/30/2018 623,443 570,391 53,052 91.5% 1,088,276
6/30/2019 972,251 881,406 90,845 90.7% 1,433,064
6/30/2020 1,484,923 1,347,311 137,612 90.7% 2,013,535
The table below shows the unfunded liability balance for the Safety Plan Side Fund for fiscal years ended June 30, 2011 through 2020, based on the PERS Reports for the Safety Plan for the relevant years:

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Safety Plan Side Fund
Valuation Date Unfunded Liability Balance
6/30/2011 $4,342,434
6/30/2012 4,304,256
6/30/2013 4,240,630
6/30/2014 4,111,192
6/30/2015
6/30/2016
6/30/2017
6/30/2018
6/30/2019
6/30/2020
Information regarding CalPERS’ administration of the plans, actuarial methods assumptions and asset valuation can be obtained from CalPERS at Lincoln Plaza North, 400 Q Street Sacramento, California 95811 or (888) 225-7377. The comprehensive annual financial reports of CalPERS are available on CalPERS’ website at www.calpers.ca.gov. The website reference is for informational purposes only. None of the content of the website is any way incorporated into this Official Statement. The City and the Authority make no representation concerning, and do not take any responsibility for, the accuracy or timeliness of information posted on such website or the continued maintenance of such website Other Post-Employment Benefits (Other Than Pensions)
In addition to providing pension benefits, the City provides integrated medical/prescription drug coverage through CalPERS under the Public Employees' Medical and Hospital Care Act (“PEMHCA”).

Employees can choose from a number of HMO and PPO options. The City offers the same medical plans to its retirees as to its active employees, with the exception that once a retiree becomes eligible for Medicare (that is, reaches age 65), he or she must join a Medicare HMO or a Medicare Supplement plan under PEMHCA.

Employees become eligible to retire and receive City-paid healthcare benefits upon attainment of age 50 and five years of covered PERS service, or by qualifying disability retirement status. Benefits are paid for the lifetime of the retiree, spouse or surviving spouse, and adult children to the age of 26. The City contribution is limited to $1,600/month for retirees in 2020 for employees hired prior to August 1, 2009.

Employees first hired on or after August 1, 2009 are subject to the "100/90" State contribution formula and the 10-year vesting schedule set forth in Government Code section 22893. The vesting schedule provides for a City contribution of 50% of the "100/90" dollar amounts after 10 years of credited PERS service (5 of which must be with the City), with an additional 5% per year of service until fully vested after 20 years. The 2020 "100/90" monthly dollar amounts are $767 single, $1,461 two-party, and $1,868 family. In addition, the City pays a 0.24%-of-premium administrative fee to PEMHCA for each retiree.

At July 1, 2019, membership consisted of the following:

Inactive members or beneficiaries currently receiving benefit payments 181 Inactive members or beneficiaries entitled to but not currently receiving benefit payments
16 Active plan members 240
Total 437
Source: City of Indio Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2021.

The contribution requirements of plan members and the City are established and may be amended by the City Council. The City currently pays pay-as-you-go costs outside its irrevocable OPEB trust. The City

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contributes the excess, if any, of budgeted pay-go costs over the actual pay-go to the trust on an annual basis.

For fiscal year 2020-21, the City recognized contributions in reduction to the net other post-employment benefit (“OPEB”) liability of $1,980,041. The table below sets forth a schedule of recent contributions by the City to its OPEB plan.

Fiscal Year
Ending
June 30,(1)
Actuarially
Determined
Contribution
Actual
Employer
Contribution
Contribution
Deficiency
(Excess)
Covered-Employee
Payroll
Contribution
as a % of
Covered-Employee
Payroll
2021 $2,548,493 $2,030,042 $518,451 $27,980,084 7.26%
2020 2,474,265 1,978,822 495,443 27,980,084 7.07
2019 2,701,432 1,799,999 901,433 26,345,041 6.83
2018 2,706,641 1,975,214 731,427 31,815,516 6.21
(1) Historical information is required only for measurement for which GASB 75 is applicable. Fiscal Year 2017-18 was the first year of implementation for GASB 75, therefore only four years are shown.

In June 2015, GASB issued Statement No. 75, which became effective for fiscal years beginning after June 15, 2017. The primary objective of Statement No. 75 is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (i.e. OPEB). Statement No. 75 is also intended to improve information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. Statement No. 75 results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for all postemployment benefits (pensions and OPEB) with regard to providing decision-useful information, supporting assessments of accountability and inter-period equity, and creating additional transparency.

More specifically, Statement No. 75 requires the liability of employers to be measured as the portion of the present value of projected benefit payments to be provided to current active and inactive employees that is attributed to those employees’ past periods of service (total OPEB liability), less the amount of the OPEB plan’s fiduciary net position. Statement No. 75 requires the recognition of the total OPEB liability in the Statement of Net Position. As a result of the implementation of GASB Statement No. 75, in the City’s audited financial statements for fiscal year 2017-18, prior period adjustments (reductions) were made to the City’s beginning net position for governmental activities in the amount of $7,281,782 and for business-type activities in the amount of $6,325,659. The table below sets forth a schedule of changes in the City’s net OPEB liability for the four most recent fiscal years.

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2021 2020 2019 2018
Measurement Date(1) June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Total OPEB Liability:

Service cost $ 1,170,693 $ 1,059,988 $ 789,088 $ 766,105 Interest on the total OPEB liability 1,681,183 2,085,750 2,238,791 2,175,102 Difference between expected and actual experience - (1,203,586) - - Changes in assumptions 5,809,571 1,444,873 12,452,155 - Benefit payments (1,955,604) (1,899,929) (1,885,304) (1,863,797) Net change in total OPEB liability 6,705,843 1,487,096 13,594,730 1,077,410 Total OPEB liability - beginning 53,511,499 52,024,403 38,429,673 37,352,263 Total OPEB liability - ending (a) 60,217,342 53,511,499 52,024,403 38,429,673 Plan Fiduciary Net Position:

Contribution - employer (2) 1,980,041 1,975,767 1,975,214 1,994,056 Net investment income 94,472 108,437 86,160 84,532
Benefit payments (1,955,604) (1,899,929) (1,885,304) (1,863,797) Trustee fees - - (519) (431)
Administrative expense (860) (335) (711) (592)
Net change in plan fiduciary net position 118,049 183,940 174,840 213,768 Plan fiduciary net position - beginning 1,742,553 1,558,613 1,383,773 1,170,005 Plan fiduciary net position - ending (b) 1,860,602 1,742,553 1,558,613 1,383,773 Net OPEB Liability/(Assets) - ending (a) - (b) $ 58,356,740 $ 51,768,946 $ 50,465,790 $ 37,045,900 Plan fiduciary net position as a percentage of the total OPEB liability 3.1% 3.3% 3.0% 3.6% Covered-employee payroll $ 27,980,084 $ 27,980,084 $ 26,345,041 $ 31,815,516 Net OPEB liability as a percentage of covered-employee payroll 208.6% 185.0% 191.6% 116.4% (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years’ information will be displayed up to 10 years as information becomes available. (2) Includes cash pay-as-you-go contributions made from sources outside of trust, plus an implicit subsidy amount on benefit payments from sources outside of trust.

See Note 13 to the basic financial statements portion of the City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2021 set forth in Appendix C for more information with respect to the City’s OPEB plan.

Employee Relations
The City currently has agreements with five bargaining groups: Indio City Employees’ Association (“ICEA”), Indio Water Authority Employee’s Association (“IWAEA”), Service Employees International Union (“SEIU”), Indio Police Officers’ Association (“IPOA”), and the Police Command Unit (“PCU”). The current agreements with the IPOA and the PCU expire December 30, 2023, and the current agreements with the ICEA, the IWAEA and the SEIU expire on June 30, 2024.

Risk Management
The City is a member of the California Joint Powers Insurance Authority (the “Insurance Authority”).

The purpose of the Insurance Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group-purchased insurance for property and other coverages. The Insurance Authority’s pool began covering claims of its members in 1978. Each member government has an elected official as its representative on the Insurance Authority’s Board of Directors.

The Insurance Authority’s liability program claims are pooled separately between police and general government exposures. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance.

The City also participates in the workers compensation pool administered by the Insurance Authority and the all-risk property protection program of the Insurance Authority, which is underwritten by several

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insurance companies. Total all-risk property insurance coverage is $152.1 million, with a $10,000 deductible per occurrence except for non-emergency vehicle insurance, which as a $2,500 deductible.

The City purchases crime insurance coverage in the amount of $3,000,000 with a $2,500 deductible.

The fidelity coverage is provided through the Insurance Authority.

See Note 14 to City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2021 set forth in Appendix C for more information regarding the City’s insurance coverage.

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Draft of 5/19/22
4892-0405-9168v1/200973-0001

INDENTURE
by and among

INDIO PUBLIC FINANCING AUTHORITY
and

CITY OF INDIO
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of _____ 1, 2022
Relating to
$___________

INDIO PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2022B

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ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions .................................................................................................................. 2 Section 1.02 Equal Security .......................................................................................................... 12

ARTICLE II

THE BONDS
Section 2.01 Authorization of Bonds ............................................................................................ 12 Section 2.02 Terms of Series 2022B Bonds.................................................................................. 12 Section 2.03 Form of Series 2022B Bonds ................................................................................... 14 Section 2.04 Transfer and Exchange of Bonds ............................................................................. 14 Section 2.05 Registration Books ................................................................................................... 14 Section 2.06 Execution of Bonds .................................................................................................. 14 Section 2.07 Authentication of Bonds........................................................................................... 15 Section 2.08 Temporary Bonds ..................................................................................................... 15 Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen ............................................................ 15 Section 2.10 Book-Entry Bonds .................................................................................................... 16

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2022B Bonds .............................................................................. 17 Section 3.02 Application of Proceeds of the Series 2022B Bonds................................................ 17 Section 3.03 Costs of Issuance Fund............................................................................................. 18 Section 3.04 Project Fund.............................................................................................................. 18 Section 3.05 Conditions for the Issuance of Additional Bonds..................................................... 18 Section 3.06 Procedure for the Issuance of Additional Bonds...................................................... 20 Section 3.07 Additional Bonds...................................................................................................... 21

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2022B Bonds......................................................................... 21 Section 4.02 Notice of Redemption............................................................................................... 22 Section 4.03 Selection of Bonds for Redemption ......................................................................... 23 Section 4.04 Partial Redemption of Bonds.................................................................................... 23 Section 4.05 Effect of Notice of Redemption ............................................................................... 23

ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations...................................................................................... 23 Section 5.02 Flow of Funds........................................................................................................... 24 Section 5.03 Application of Net Insurance Proceeds .................................................................... 25 Section 5.04 Title Insurance .......................................................................................................... 26 Section 5.05 Reserve Fund ............................................................................................................ 26 Section 5.06 Rebate Fund.............................................................................................................. 26 Section 5.07 Investment of Moneys .............................................................................................. 27

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ARTICLE VI

COVENANTS
Section 6.01 Compliance with Agreements .................................................................................. 28 Section 6.02 Compliance with Ground Lease and Lease Agreement ........................................... 28 Section 6.03 Observance of Laws and Regulations ...................................................................... 28 Section 6.04 Other Liens ............................................................................................................... 28 Section 6.05 Prosecution and Defense of Suits ............................................................................. 29 Section 6.06 Accounting Records and Statements ........................................................................ 29 Section 6.07 Recordation and Filing ............................................................................................. 29 Section 6.08 Tax Covenants .......................................................................................................... 29 Section 6.09 Continuing Disclosure .............................................................................................. 30 Section 6.10 Further Assurances ................................................................................................... 30

ARTICLE VII

DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Action on Default ..................................................................................................... 30 Section 7.02 Other Remedies of the Trustee ................................................................................. 30 Section 7.03 Non-Waiver .............................................................................................................. 31 Section 7.04 Remedies Not Exclusive........................................................................................... 31 Section 7.05 No Liability by the Authority to the Owners............................................................ 31 Section 7.06 No Liability by the City to the Owners .................................................................... 31 Section 7.07 No Liability of the Trustee to the Owners................................................................ 32 Section 7.08 Application of Amounts After Default..................................................................... 32 Section 7.09 Trustee May Enforce Claims Without Possession of Bonds.................................... 32 Section 7.10 Limitation on Suits ................................................................................................... 32

ARTICLE VIII

THE TRUSTEE
Section 8.01 Employment of the Trustee ...................................................................................... 33 Section 8.02 Duties, Removal and Resignation of the Trustee ..................................................... 33 Section 8.03 Compensation of the Trustee.................................................................................... 34 Section 8.04 Protection of the Trustee .......................................................................................... 34

ARTICLE IX

MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted .............................................................. 37 Section 9.02 Effect of Supplemental Indenture............................................................................. 38 Section 9.03 Endorsement of Bonds; Preparation of New Bonds................................................. 38 Section 9.04 Amendment of Particular Bonds .............................................................................. 39 Section 9.05 Execution of Supplemental Indentures..................................................................... 39

ARTICLE X

DEFEASANCE
Section 10.01 Discharge of Indenture ............................................................................................. 39 Section 10.02 Bonds Deemed To Have Been Paid ......................................................................... 40

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Section 10.03 Payment of Bonds After Discharge of Indenture ..................................................... 40

ARTICLE XI

MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties .................................................................. 40 Section 11.02 Successor Deemed Included in all References to Predecessor................................. 41 Section 11.03 Execution of Documents by Owners........................................................................ 41 Section 11.04 Waiver of Personal Liability .................................................................................... 41 Section 11.05 Destruction of Bonds................................................................................................ 41 Section 11.06 Funds and Accounts ................................................................................................. 41 Section 11.07 Article and Section Headings Gender and References............................................. 42 Section 11.08 Partial Invalidity ....................................................................................................... 42 Section 11.09 Disqualified Bonds ................................................................................................... 42 Section 11.10 Money Held for Particular Bonds............................................................................. 43 Section 11.11 Payment on Non-Business Days .............................................................................. 43 Section 11.12 California Law.......................................................................................................... 43 Section 11.13 Notices...................................................................................................................... 43 Section 11.14 Execution in Counterparts ........................................................................................ 43 Signatures .................................................................................................................................S-1 EXHIBIT A FORM OF SERIES 2022B BOND ........................................................................A-1 EXHIBIT B FORM OF PROJECT FUND REQUISITION.......................................................B-1 EXHIBIT C DESCRIPTION OF PROJECT ..............................................................................C-1

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INDENTURE
THIS INDENTURE (this “Indenture”), executed and entered into as of _____ 1, 2022, is by and among the INDIO PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “Authority”), the CITY OF INDIO, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”) and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States, as Trustee (the “Trustee”); WITNESSETH:

WHEREAS, the City and the Authority desire to refund the outstanding Indio Public Financing Authority Lease Revenue Refunding Bonds, Series 2012 (Public Capital Improvements) (the “2012 Bonds”) and to prepay the City’s lease obligations entered into in connection therewith; WHEREAS, the City and the Authority also desire to finance the costs of the acquisition, construction and/or installation of capital improvement projects of the City; WHEREAS, the Project (as defined herein) described in Exhibit C hereto includes the construction of the City’s proposed new City Hall;
WHEREAS, in order to cause the refunding of the 2012 Bonds and the prepayment of the City’s lease obligations entered into in connection therewith, and to finance the Project, the City will lease certain real property and the improvements located thereon to the Authority pursuant to a Ground Lease, dated as of _____ 1, 2022, and the City will sublease the Property (as defined in the Lease Agreement (defined below)) back from the Authority pursuant to a Lease Agreement, dated as of _____ 1, 2022;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to cause the refunding of the 2012 Bonds and the prepayment of the City’s lease obligations entered into in connection therewith, and to finance the Project, through the issuance by the Authority of bonds payable from the Base Rental Payments (defined below) to be made by the City under the Lease Agreement; WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of _____ 1, 2022;
WHEREAS, the Authority and the City desire to provide for the issuance by the Authority of Indio Public Financing Authority Lease Revenue Bonds, Series 2022B (the “Series 2022B Bonds”), in the aggregate principal amount of $___________, in order to finance the Project described in Exhibit C hereto;
WHEREAS, the Series 2022B Bonds will be payable equally and ratably from the Base Rental Payments;
WHEREAS, the Authority and the City desire to provide for the issuance of Additional Bonds (defined below) payable from the Base Rental Payments on a parity with the Series 2022B

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Bonds (the Series 2022B Bonds and any such Additional Bonds being collectively referred to herein as the “Bonds”);
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Authority and the City have authorized the execution and delivery of this Indenture; and WHEREAS, the Authority and the City have determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture has been in all respects duly authorized; NOW THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties do hereby agree as follows:

ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the Bonds and of any certificate, opinion, request or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Lease Agreement. “Act” means the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code.
“Additional Bonds” means Bonds other than the Series 2022B Bonds issued hereunder in accordance with the provisions of Sections 3.05 and 3.06 hereof. “Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 of the Lease Agreement. “Assignment Agreement” means the Assignment Agreement, dated as of _____ 1, 2022, by and between the Authority and the Trustee.
“Authority” means the Indio Public Financing Authority, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California. “Authorized Authority Representative” means the Chair, the Vice Chair, the Executive Director or the Treasurer of the Authority, or any other person authorized by the Authority Board to act on behalf of the Authority under or with respect to this Indenture.

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“Authorized City Representative” means the Mayor, the Mayor Pro Tem, the City Manager, the Treasurer or the Finance Director of the City, or any other person authorized by the City Council of the City to act on behalf of the City under or with respect to this Indenture. “Authorized Denominations” means $5,000 or any integral multiple thereof. “Base Rental Payment Fund” means the fund by that name established in accordance with Section 5.02 hereof.
“Base Rental Payments” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01 of the Lease Agreement. “Beneficial Owner” means, whenever used with respect to a Book-Entry Bond, the person whose name is recorded as the beneficial owner of such Book-Entry Bond or a portion of such Book- Entry Bond by a Participant on the records of such Participant or such person’s subrogee. “Bonds” means the Series 2022B Bonds and any Additional Bonds issued hereunder. “Book-Entry Bonds” means the Bonds of a Series registered in the name of the nominee of DTC, or any successor securities depository for such Series of Bonds, as the registered owner thereof pursuant to the terms and provisions of Section 2.10 hereof. “Business Day” means a day which is not (a) a Saturday, Sunday or legal holiday, (b) a day on which banking institutions in the State of California, or in any state in which the Office of the Trustee is located, are required or authorized by law (including executive order) to close, or (c) a day on which the New York Stock Exchange is closed.
“Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to a Series of Book-Entry Bonds.
“City” means the City of Indio, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Closing Date” means _____, 2022.
“Code” means the Internal Revenue Code of 1986, as amended. “Continuing Disclosure Agreement” means the Continuing Disclosure Agreement executed by the City in connection with the issuance of a Series of Bonds, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Costs of Issuance” means all the costs of issuing and delivering the Bonds, including, but not limited to, all printing and document preparation expenses in connection with this Indenture, the Lease Agreement, the Ground Lease, the Assignment Agreement, the Bonds, the Escrow Agreement and any preliminary official statement and final official statement pertaining to the Bonds, rating agency fees, CUSIP Service Bureau charges, market study fees, legal fees and expenses of counsel, fees and expenses of the municipal advisor, the initial fees and expenses of the Trustee and its counsel and other fees and expenses incurred in connection with the issuance and delivery of the Bonds, to the extent such fees and expenses are approved by the City.

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“Costs of Issuance Fund” means the fund by that name established in accordance with Section 3.03 hereof.
“DTC” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors as securities depository for any Series of Book-Entry Bonds, including any such successor appointed pursuant to Section 2.10 hereof. “Escrow Agent” means U.S. Bank Trust Company, National Association, as escrow agent under the Escrow Agreement.
“Escrow Agreement” means the Escrow Agreement by and among the Authority, the City and the Escrow Agent, with respect to the refunding of the 2012 Bonds. “Escrow Fund” means the fund by that name established and held by the Escrow Agent under the Escrow Agreement with respect to the refunding of the 2012 Bonds. “Federal Securities” means (a) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), and (b) obligations of any agency, department or instrumentality of the United States of America the timely payment of principal of and interest on which are fully guaranteed by the United States of America. “Fitch” means Fitch Ratings, Inc., New York, New York, or its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority.
“Ground Lease” means the Ground Lease, dated as of _____ 1, 2022, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and of the Lease Agreement. “Indenture” means this Indenture, as originally executed and as it may be amended or supplemented from time to time by any Supplemental Indenture. “Information Services” means Municipal Securities Rulemaking Board through the Electronic Municipal Marketplace Access (EMMA) website; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee.
“Interest Fund” means the fund by that name established in accordance with Section 5.02 hereof.
“Interest Payment Date” means May 1 and November 1 of each year, commencing on [November 1, 2022].
“Lease Agreement” means the Lease Agreement, dated as of _____ 1, 2022, by and between the City and the Authority, as originally executed and as it may be from time to time amended in accordance with the provisions thereof.

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“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, or its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority.
“Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as specified to the Authority and the City by the Trustee in writing.
“Opinion of Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the Authority or the City and which written opinion is satisfactory to the Trustee.
“Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09 hereof) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except:
(a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation;
(b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.01 hereof; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture. “Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books.
“Participant” means any entity which is recognized as a participant by DTC in DTC’s book- entry system of maintaining records with respect to Book-Entry Bonds. “Participating Underwriter” means the original underwriter or underwriters of a Series of Bonds required to comply with Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, in connection with the offering of such Series of Bonds.
“Permitted Investments” means any of the following to the extent then permitted by the general laws of the State of California:
(1) (a) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America (“United States Treasury Obligations”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or

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(d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated (collectively “United States Obligations”). These include, but are not necessarily limited to:
-U.S. Treasury obligations
All direct or fully guaranteed obligations
-Farmers Home Administration
Certificates of beneficial ownership
-General Services Administration
Participation certificates
-U.S. Maritime Administration
Guaranteed Title XI financing
-Small Business Administration
Guaranteed participation certificates
Guaranteed pool certificates
-Government National Mortgage Association (GNMA)
GNMA-guaranteed mortgage-backed securities
GNMA-guaranteed participation certificates
-U.S. Department of Housing & Urban Development
Local authority bonds
-Washington Metropolitan Area Transit Authority
Guaranteed transit bonds
(2) Federal Housing Administration debentures.
(3) The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America:
-Federal Home Loan Mortgage Corporation (FHLMC)
Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) Senior debt obligations
-Farm Credit Banks (formerly: Federal Land Banks, Federal intermediate Credit Banks and Banks for Cooperatives)
Consolidated systemwide bonds and notes
-Federal Home Loan Banks (FHL Banks)
Consolidated debt obligations
-Federal National Mortgage Association (FNMA)
Senior debt obligations
Mortgage-backed securities (excluded are stripped mortgages securities which are purchased at prices exceeding their principal amounts) -Financing Corporation (FICO)
Debt obligations
-Resolution Funding Corporation (REFCORP)
Debt obligations
- Federal Agricultural Mortgage Corporation (Farmer Mac)

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Debt obligations
(4) Bank deposit products, unsecured certificates of deposit (including those placed by a third party pursuant to an agreement between the City and the Trustee), trust funds, trust accounts, overnight banking deposits, interest bearing deposits, interest bearing money market accounts, time deposits, demand deposits, and bankers’ acceptances (having maturities of not more than 30 days) of any bank (including the Trustee and any affiliate) the short-term obligations of which are rated “A-1” or “A-2” without regard to qualifier by a nationally recognized rating agency service.
(5) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks, including the Trustee and its affiliates, which have capital and surplus of at least $5 million.
(6) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, “A-1” or better by S&P or “Prime-1” by Moody’s. (7) Money market mutual funds rated “AAm” or “AAm-G” by a nationally recognized rating agency service, or better (including those for which the Trustee or its affiliates receives and retains a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise) but excluding such funds with a floating net asset value. (8) Investments in repurchase agreements which comply with the requirements of California Government Code Section 53601(j) pursuant to which the seller will repurchase the securities on or before a specified date and for a specified amount and will deliver the underlying securities to the Trustee by book entry, physical delivery, or by third party custodial agreement. The term “securities,” for the purpose of repurchase agreements, means securities of the same issuer, description, issue date and maturity.

Repurchase agreements are required to be collateralized by securities or cash authorized under California Government Code Section 53601(j)(2) as described below:
(a) To anticipate market changes and provide a level of security for all repurchase agreement transactions, the market value of securities that underlie a repurchase agreement shall be valued at 102% or greater for U.S. securities listed in paragraph (1) above and 105% for U.S. Government Agency securities listed in paragraph (3) above, of the funds borrowed against those securities and the value shall be adjusted no less frequently than weekly. Since the market value of the underlying securities is subject to daily market fluctuations, the investments in repurchase agreements shall be in compliance if the value of the underlying securities is brought back up to 102% or 105%, as applicable, no later than the next business day.
(b) Collateral will be limited to U.S. Treasury securities listed in paragraph (1) above and U.S. Government Agency securities listed in paragraph (3) above. Collateral will be held by an independent third party with whom the Trustee has a current custodial agreement. A clearly marked evidence of ownership (safekeeping/custody receipt) must be supplied to the Trustee and retained. The Trustee retains the right to substitute or grant substitutions of collateral.

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(9) State Obligations:
(a) Direct general obligations of any state of the United States or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated “A2” by Moody’s or “A” by S&P or Fitch, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated. (b) Direct, general short-term obligations of any state agency or subdivision described in (a) above and rated “A-1+” by S&P or “F1+” by Fitch or “Prime-1” by Moody’s.
(c) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (a) above and rated “AA” or better by S&P or Fitch or “Aa” or better by Moody’s. (10) Local Agency Investment Fund of the State of California. (11) Any investment agreement with a domestic or foreign bank or insurance company whose senior long-term debt obligations, deposit rating or claims-paying ability are rated, or guaranteed by an entity whose obligations are rated (at the time the investment is entered into) at least “A+” by S&P, “A1” by Moody’s” or “A+” by Fitch; provided, that prior written notice of an investment in the investment agreement is provided to S&P, and provided, further by the terms of the investment agreement:
(a) interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service on the Bonds;
(b) the invested funds are available for withdrawal without penalty or premium, at any time for purposes identified in this Indenture other than acquisition of alternative investment property upon not more than seven days prior notice (which notice may be amended or withdrawn at any time prior to the specified withdrawal date); provided that the Indenture specifically requires the Trustee or the City to give notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid;
(c) the investment agreement shall state that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof;
(d) a guaranteed rate of interest is to be paid on invested funds and all future deposits, if any, required to be made to restore the amount of such funds to the level specified under the Indenture;
(e) the Trustee and the City receive the opinion of domestic counsel (which opinion shall be addressed to the City) that such investment agreement is legal, valid and binding and enforceable against the provider in accordance with its terms and of foreign counsel (if applicable);

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(f) The investment agreement shall provide that if during the term thereof, the provider’s rating by any two of the following rating agencies, S&P, Moody’s, or Fitch, is withdrawn or suspended of falls below “A-” by S&P, “A3” by Moody’s, or “A-” by Fitch, the provider must at the direction of the City within ten (10) days of receipt of such downgrade, (i) deliver and grant, or cause to be delivered and granted, to a third party custodian a first priority security interest under the applicable Uniform Commercial Code, or other applicable law, in and to Permitted Collateral; or (ii) transfer the investment agreement and the rights and obligations of the provider thereunder to an entity reasonably satisfactory to the City and the Trustee whose long-term, senior unsecured debt obligations or claims-paying ability, or whose guarantor’s long term, senior unsecured debt obligations or claims-paying ability are rated at not less than “A-” by S&P, “A3” by Moody’s or “A-” by Fitch or its equivalent from another Rating Agency; or (iii) repay the principal of and accrued by unpaid interest on the investment with no penalty or premium to the City and the Trustee;
(g) the investment agreement shall state, and an opinion of counsel shall be rendered to the effect, that the Trustee has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Trustee is in possession); and (h) the investment agreement must provide that if during its term (A) the provider shall default in its payment obligations, the provider’s obligation under the investment agreement shall, at the direction of the City or the Trustee, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City or Trustee, as appropriate, and (B) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. (“event of insolvency”), the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City or Trustee, as appropriate.
(12) Pre-refunded municipal obligations rated “AAA” by S&P or Fitch or “Aaa” by Moody’s meeting the following requirements:
(a) the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions;
(b) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations;
(c) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”);

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(d) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations;
(e) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and
(f) the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent.

The Trustee shall have no responsibility to monitor the ratings of Permitted Investments after the initial purchase of such Permitted Investments.
“Person” means an individual, corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.
“Principal Fund” means the fund by that name established in accordance with Section 5.02 hereof.
“Project” means the acquisition, construction and/or installation of a new City Hall, and related improvements, facilities and equipment, and such other capital facilities that may be financed from proceeds of Additional Bonds as set forth in a Supplemental Indenture. “Project Fund” means the fund of that name established pursuant to Section 3.04 hereof. “Property” has the meaning ascribed thereto in the Lease Agreement. “Rating Agency” means Fitch, Moody’s and S&P, or any one of such entities, as the context requires.
“Rebate Fund” means the fund by that name established in accordance with Section 5.05 hereof.
“Rebate Requirement” has the meaning ascribed thereto in the Tax Certificate. “Record Date” means the fifteenth day of the month next preceding an Interest Payment Date, whether or not such day is a Business Day.
“Redemption Fund” means the fund by that name established in accordance with Section 5.02 hereof.
“Redemption Price” means the aggregate amount of principal of and premium, if any, on the Bonds upon the redemption thereof pursuant hereto.
“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.05 hereof.

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“Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the period from the Closing Date through November 1, 2022 and, thereafter, the twelve-month period commencing on November 2 of each year during the term of the Lease Agreement.
“Representation Letter” means the Letter of Representations from the Authority to DTC, or any successor securities depository for any Series of Book-Entry Bonds, in which the Authority makes certain representations with respect to issues of its securities for deposit by DTC or such successor depository.
“Reserve Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.05.
“Reserve Fund Requirement” means, with respect to the Series 2022B Bonds, an amount equal to $___________ and with respect to any Additional Bonds, such amounts as shall be determined in accordance with the Supplemental Indenture. “S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Securities Depositories” means The Depository Trust Company, New York, New York 10041-0099, Fax-(212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee. “Series” means all of the Series 2022B Bonds or the Additional Bonds issued and designated under a Supplemental Indenture as being of the same series, authenticated and delivered in a simultaneous transaction, regardless of variations in maturity, interest rate, redemption and other provisions, and any bonds thereafter authenticated and delivered upon transfer or exchange of or in lieu of or in substitution for (but not to refund) such bonds as herein provided. “Series 2022B Bonds” means the Indio Public Financing Authority Lease Revenue Bonds, Series 2022B issued hereunder.
“Supplemental Indenture” means any supplemental indenture amendatory of or supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means the Tax Certificate executed by the Authority and the City at the time of issuance of a Series of Bonds relating to the requirements of Section 148 of the Code, as originally executed and as it may from time to time be amended in accordance with the provisions thereof.
“Term Bonds” means the Bonds maturing on November 1, 20__ and on November 1, 20__, and any term maturities of an issue of Additional Bonds as specified in a Supplemental Indenture.”

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“2012 Bonds” means the Indio Public Financing Authority Lease Revenue Refunding Bonds, Series 2012 (Public Capital Improvements).
“Trustee” means U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States, or any successor thereto as Trustee hereunder, appointed as provided herein. “Written Certificate of the Authority” and “Written Request of the Authority” mean, respectively, a written certificate or written request signed in the name of the Authority by an Authorized Authority Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. “Written Certificate of the City” and “Written Request of the City” mean, respectively, a written certificate or written request signed in the name of the City by an Authorized City Representative. Any such certificate or request may, but need, not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

Section 1.02 Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the City, the Trustee and the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the principal of, premium, if any, and interest on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority or the City shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein.

ARTICLE II

THE BONDS
Section 2.01 Authorization of Bonds. The Authority hereby authorizes the issuance of the Bonds under and subject to the terms of this Indenture and applicable laws of the State of California for the purpose of financing and/or refinancing the Project. The Bonds may consist of one or more Series of Bonds of varying denominations, dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein.

Section 2.02 Terms of Series 2022B Bonds.
(a) The Series 2022B Bonds shall be designated the “Indio Public Financing Authority Lease Revenue Bonds, Series 2022B.” Each Series of Additional Bonds shall bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series, of Bonds.

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(b) The Series 2022B Bonds shall be issued in fully registered form without coupons in Authorized Denominations, so long as no Series 2022B Bond shall have more than one maturity date. The Series 2022B Bonds shall be dated as of the Closing Date, shall be issued in the aggregate principal amount of $___________, shall mature on November 1 of each year and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows:

Maturity Date
(November 1)
Principal
Amount
Interest
Rate
$ %
T
T
T Term Bond
(c) Interest on the Series 2022B Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2022B Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest Payment Date, (ii) a Series 2022B Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the dated date thereof, or (iii) interest on any Series 2022B Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest shall be paid in lawful money of the United States on each Interest Payment Date to the Persons in whose names the ownership of the Series 2022B Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Except as otherwise provided in Section 2.10(a), interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Series 2022B Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date

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or by wire transfer to Owners of more than $1,000,000 in principal amount of Series 2022B Bonds who have provided account information and wiring instructions satisfactory to the Trustee. (d) The principal and premium, if any, of the Series 2022B Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee. (e) The Series 2022B Bonds shall be subject to redemption as provided in Article IV.

Section 2.03 Form of Series 2022B Bonds. The Series 2022B Bonds shall be in substantially the form set forth in Exhibit A hereto, with appropriate or necessary insertions, omissions and variations as permitted or required hereby.

Section 2.04 Transfer and Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

Prior to any transfer of Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Section 6045 of the Code. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.

The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series of other authorized denominations. The Trustee shall require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series pursuant to this Section during the period established by the Trustee for the selection of Bonds of such Series for redemption, or with respect to any Bonds of such Series selected for redemption.

Section 2.05 Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be open to inspection during regular business hours and upon reasonable notice by the City; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as hereinbefore provided.

Section 2.06 Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Authority with the manual or facsimile signature of an Authorized Officer of the Authority attested by the manual or facsimile signature of the Secretary of the Authority. The Bonds shall then

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be delivered to the Trustee for authentication by it. In case any of such officers of the Authority who shall have signed or attested any of the Bonds shall cease to be such officers of the Authority before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers of the Authority, and also any Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority.

Section 2.07 Authentication of Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form as that set forth in Exhibit A hereto, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

Section 2.08 Temporary Bonds. The Bonds of a Series may be issued in temporary form exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds of a Series it will execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series, may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series in Authorized Denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Indenture as definitive Bonds of such Series authenticated and delivered hereunder.

Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and Series in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or in accordance with the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and Series in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been selected for redemption, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any

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time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds of such Series secured by this Indenture.

Section 2.10 Book-Entry Bonds.
(a) Prior to the issuance of a Series of Bonds, the Authority may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds and, in such event, the Bonds of such Series for each maturity shall be in the form of a separate single fully registered Bond (which may be typewritten). The Series 2022B Bonds shall initially be issued as Book-Entry Bonds.

Except as provided in subsection (c) of this Section, the registered Owner of all of the Book-Entry Bonds shall be Cede & Co., as nominee of DTC. Notwithstanding anything to the contrary contained in this Indenture, payment of interest with respect to any Book-Entry Bond registered as of each Record Date in the name of Cede & Co. shall be made by wire transfer of same- day funds to the account of Cede & Co. on the Interest Payment Date at the address indicated on the Record Date for Cede & Co. in the Registration Books or as otherwise provided in the Representation Letter.
(b) The Trustee and the Authority may treat DTC (or its nominee) as the sole and exclusive Owner of Book-Entry Bonds registered in its name for the purposes of payment of the principal, premium, if any, or interest with respect to Book-Entry Bonds, selecting Book-Entry Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Owners of Book-Entry Bonds under this Indenture, registering the transfer of Book-Entry Bonds, obtaining any consent or other action to be taken by Owners of Book-Entry Bonds and for all other purposes whatsoever, and neither the Trustee nor the Authority shall be affected by any notice to the contrary. Neither the Trustee nor the Authority shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in Book-Entry Bonds under or through DTC or any Participant, or any other person which is not shown on the Registration Books as being an Owner, with respect to the accuracy of any records maintained by DTC or any Participant, the payment by DTC or any Participant of any amount in respect of the principal, premium, if any, or interest with respect to Book-Entry Bonds, any notice which is permitted or required to be given to Owners of Book-Entry Bonds under this Indenture, the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of Book-Entry Bonds, or any consent given or other action taken by DTC as Owner of Book-Entry Bonds. The Trustee shall pay all principal, premium, if any and interest with respect to Book-Entry Bonds, only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to the principal, premium, if any, and interest with respect to the Book-Entry Bonds to the extent of the sum or sums so paid. Except under the conditions of subsection (c) of this Section, no person other than DTC shall receive an executed Book-Entry Bond for each separate stated maturity. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to record dates, the term “Cede & Co.” in this Indenture shall refer to such new nominee of DTC.
(c) In the event (i) DTC, including any successor as securities depository for a Series of Bonds, determines not to continue to act as securities depository for such Series of Bonds, or (ii) the Authority determines that the incumbent securities depository shall no longer so act, and delivers a written certificate to the Trustee to that effect, then the Authority will discontinue the book-entry system with the incumbent securities depository for such Series of Bonds. If the

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Authority determines to replace the incumbent securities depository for such Series of Bonds with another qualified securities depository, the Authority shall prepare or direct the preparation of a new single, separate fully registered Bond of such Series for the aggregate outstanding principal amount of Bonds of such Series of each maturity, registered in the name of such successor or substitute qualified securities depository, or its nominee, or make such other arrangement acceptable to the Authority, the Trustee and the successor securities depository for the Bonds of such Series as are not inconsistent with the terms of this Indenture. If the Authority fails to identify another qualified successor securities depository for such Series of Bonds to replace the incumbent securities depository, then the Bonds of such Series shall no longer be restricted to being registered in the Registration Books in the name of the incumbent securities depository or its nominee, but shall be registered in whatever name or names the incumbent securities depository for such Series of Bonds, or its nominee, shall designate. In such event the Authority shall execute, and deliver to the Trustee, a sufficient quantity of Bonds of such Series to carry out the transfers and exchanges provided in Sections 2.04, 2.08 and 2.09 hereof. All such Bonds of such Series shall be in fully registered form in Authorized Denominations.
(d) Notwithstanding any other provision of this Indenture to the contrary, so long as any Book-Entry Bond is registered in the name of DTC, or its nominee, all payments with respect to the principal, premium, if any, and interest with respect to such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Representation Letter.
(e) In connection with any notice or other communication to be provided to Owners of Book-Entry Bonds pursuant to this Indenture by the Authority, the City or the Trustee with respect to any consent or other action to be taken by Owners, the Authority, the City or the Trustee, as the case may be, shall establish a record date for such consent or other action and give DTC notice of such record date not less than 15 calendar days in advance of such record date to the extent possible.

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2022B Bonds. The Authority may, at any time, execute the Series 2022B Bonds for issuance hereunder and deliver the same to the Trustee. The Trustee shall authenticate the Series 2022B Bonds and deliver the Series 2022B Bonds to the original purchaser thereof upon receipt of a Written Request of the Authority and upon receipt of the purchase price therefor.

Section 3.02 Application of Proceeds of the Series 2022B Bonds. On the Closing Date, the net proceeds of the sale of the Series 2022B Bonds received by the Trustee, $___________, shall be deposited by the Trustee as follows:
(a) The Trustee shall deposit the amount of $__________ in the Costs of Issuance Fund;
(b) The Trustee shall transfer the amount of $__________ to the Escrow Agent for deposit in the Escrow Fund pursuant to the Escrow Agreement; and

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(c) The Trustee shall deposit the amount of $__________ to the Project Fund.

Section 3.03 Costs of Issuance Fund. The Trustee shall establish and maintain a separate fund designated the “Costs of Issuance Fund.” On the Closing Date, there shall be deposited in the Costs of Issuance Fund the amount specified in Section 3.02 hereof. There shall be additionally be deposited in the Cost of Issuance Fund the portion, if any, of the proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued.

The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the Costs of Issuance upon submission of a Written Request of the Authority stating (a) the Person to whom payment is to be made, (b) the amount to be paid, (c) the purpose for which the obligation was incurred, (d) that such payment is a proper charge against the Costs of Issuance Fund, and (e) that such amounts have not been the subject of a prior disbursement from the Costs of Issuance Fund, in each case together with a statement or invoice for each amount requested thereunder. Each such Written Request of the Authority shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On the date that is six months after the Closing Date, all amounts, if any, remaining in the Costs of Issuance Fund shall be withdrawn therefrom by the Trustee and transferred to the Project Fund.

Section 3.04 Project Fund. The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Project Fund.” The moneys in the Project Fund or the accounts therein shall be disbursed by the Trustee on behalf of the City as specified in a Written Request of the City in the form attached hereto as Exhibit B. Each Written Request of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On the date on which the City determines that amounts in the Project Fund are no longer necessary for payment of the cost of the Project, the City shall submit a Written Request to the Trustee to transfer any remaining balance in the Project Fund not needed for Project Fund purposes, at the City’s sole discretion, either (a) to the Base Rental Payment Fund for application in accordance with Section 5.02 hereof, or (b) to the City for use on eligible capital facilities, and the Project Fund shall be closed.

Investment earnings on amounts on deposit in the Project Fund shall remain on deposit in the Project Fund for application in accordance with this Section.

Section 3.05 Conditions for the Issuance of Additional Bonds. The Authority may at any time issue one or more Series of Additional Bonds (in addition to the Series 2022B Bonds) payable from Base Rental Payments as provided herein on a parity with all other Bonds theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) The issuance of such Additional Bonds shall have been authorized under and pursuant hereto and shall have been provided for by a Supplemental Indenture which shall specify the following:
(1) The application of the proceeds of the sale of such Additional Bonds; (2) The principal amount and designation of such Series of Additional Bonds and the denomination or denominations of the Additional Bonds;

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(3) The date, the maturity date or dates, the interest payment dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, however, that (i) the serial Bonds of such Series of Additional Bonds shall be payable as to principal annually on November 1 of each year in which principal falls due, and the term Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on November 1, (ii) the Additional Bonds shall be payable as to interest semiannually on May 1 and November 1 of each year, (iii) all Additional Bonds of a Series of like maturity shall be identical in all respects, except as to number or denomination, and (iv) serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates;
(4) The redemption premiums and terms, if any, for such Additional Bonds;
(5) The form of such Additional Bonds;
(6) if necessary; that from such proceeds or other sources an amount shall be deposited in the Reserve Fund so that following such deposit there shall be on deposit in the Reserve Fund an amount at least equal to the Reserve Fund Requirement, as may be reduced after issuance of the Additional Bonds; and
(7) Such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof;
(b) The Authority shall be in compliance with all agreements, conditions, covenants and terms contained herein, in the Lease Agreement and in the Ground Lease required to be observed or performed by it;
(c) The City shall be in compliance with all agreements, conditions, covenants and terms contained herein, in the Lease Agreement and in the Ground Lease required to be observed or performed by it; and
(d) The Ground Lease and the Lease Agreement shall have been amended, to the extent necessary, (i) so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds, payable at such times and in such manner as may be necessary to provide for the payment of the principal of and interest on such Additional Bonds; provided, however, that no such amendment shall be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period shall be in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith (evidence of the satisfaction of such condition shall be made by a Written Certificate of the City); and (ii) to include provisions for the prepayment of Base Rental Payments attributable to such Additional Bonds.

Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set forth in this Section 3.05, no such issuance may occur if (1) an event of default (within the meaning of Article VI of the Lease Agreement) (or any event which, once all notice or grace periods have passed, would constitute such event of default) exists unless such event of default shall be cured upon

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such execution or issuance or (2) the Reserve Fund is not fully funded at the Reserve Fund Requirement.

Nothing contained herein shall limit the issuance of any bonds or other obligations payable from Base Rental Payments if, after the issuance and delivery of such bonds or other obligations, none of the Bonds theretofore issued hereunder will be Outstanding.

Section 3.06 Procedure for the Issuance of Additional Bonds. At any time after the sale of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed by the Authority for issuance hereunder and shall be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) Certified copies of the Supplemental Indenture authorizing the issuance of such Additional Bonds, the amendment to the Lease Agreement requited by Section 3.05 hereof and the amendment to the Ground Lease, if any, required by Section 3.05 hereof, together with satisfactory evidence that provision has been made for such amendment to the Lease Agreement and such amendment to the Ground Lease, if any, to be recorded in the official records of the appropriate county;
(b) A Written Request of the Authority as to the delivery of such Additional Bonds;
(c) An opinion of Bond Counsel substantially to the effect that (i) the Indenture (including all Supplemental Indentures), the Lease Agreement (including the amendment thereto required by Section 3.05 hereof) and the Ground Lease (including any amendment thereto required by Section 3.05 hereof) have been duly authorized, executed and delivered by, and constitute the valid and binding obligations of, the Authority and the City, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases and subject to the limitations on legal remedies against political subdivisions in the State of California), and (ii) such Additional Bonds constitute valid and binding special obligations of the Authority payable solely from Base Rental Payments as provided herein and are enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases and subject to the limitations on legal remedies against political subdivisions in the State of California);
(d) a Written Certificate of the Authority that the requirements of Section 3.05 hereof have been met;
(e) a Written Certificate of the City that the requirements of Section 3.05 hereof and Sections 5.01 and 5.02 of the Lease Agreement have been met, and a Written Certificate of the City as to the annual fair rental value of the Property, after giving effect to the issuance of the Additional Bonds, and to the use of proceeds received therefrom; and (f) Such further documents as are required by the provisions hereof or by the provisions of the Supplemental Indenture authorizing the issuance of such Additional Bonds.

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Section 3.07 Additional Bonds. So long as any of the Bonds remain Outstanding, the Authority shall not issue any Additional Bonds or obligations payable from the Base Rental Payments, except pursuant to Sections 3.05 and 3.06 hereof.

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2022B Bonds.
(a) Extraordinary Redemption. The Series 2022B Bonds shall be subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of:
(i) Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund pursuant to Sections 5.03 and 5.04 hereof, and (ii) eminent domain proceeds received pursuant to Section 7.01 of the Lease Agreement, at a Redemption Price equal to the principal amount of the Series 2022B Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.
(b) Optional Redemption. The Series 2022B Bonds maturing on or after November 1, 20__, shall be subject to optional redemption, in whole or in part, on any date on or after _____ 1, 20__, in Authorized Denominations, from and to the extent of prepaid Base Rental Payments paid pursuant to subsection (a) of Section 7.02 of the Lease Agreement, at a Redemption Price equal to the principal amount of the Series 2022B Bonds to be redeemed, plus accrued interest thereon to the date of redemption.
(c) Mandatory Sinking Fund Redemption. The Series 2022B Bonds with stated maturities on November 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each November 1 on and after November 1, 20__, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Redemption Date
(November 1)
Principal
Amount
* Final Maturity.

The Series 2022B Bonds with stated maturities on November 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each November 1 on and after November 1, 20__, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

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Redemption Date
(November 1)
Principal
Amount
* Final Maturity.

In the event of a partial optional redemption or extraordinary mandatory redemption of any of the Term Bonds, each of the remaining mandatory sinking fund payments for such Term Bonds will be reduced, as nearly as practicable, on a pro rata basis in the amount of $5,000 or any integral multiple thereof as directed by an Authorized City Representative, which direction shall include a revised schedule of the remaining mandatory sinking fund payments.

Section 4.02 Notice of Redemption. Unless otherwise provided in a Supplemental Indenture, notice of redemption shall be given by the Trustee, not less than 20 nor more than 60 days prior to the redemption date (i) as to Bonds not registered in the name of a Securities Depository or its nominee, to the respective Owners of the Bonds designated for redemption at their addresses appearing on the Registration Books, (ii) as to Bonds registered in the name of a Securities Depository or its nominee, to such Securities Depository for such Bonds, and (iii) the Information Services. Notice of redemption to the Owners pursuant to (i) above shall be given by mail at their addresses appearing on the Registration Books, or any other method agreed upon by such Owner and the Trustee. Notice of redemption to the Securities Depositories pursuant to (ii) above and the Information Services pursuant to (iii) above shall be given by electronically secure means, or any other method agreed upon by such entities and the Trustee. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities (except in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. Such notice of redemption may state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds.

Neither the failure to receive any notice so given, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.

With respect to any notice of optional redemption of the Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys sufficient to pay the principal of, premium if any, and interest on the Bonds to be redeemed and upon other conditions set forth therein and that, if such money shall not have been so received or such other conditions shall not have been satisfied, said notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds. If any condition stated in the redemption notice for an optional redemption shall not have been satisfied on or prior to the redemption date: (i) the redemption notice shall be of no force and effect, (ii) the Authority shall not be required to redeem such Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.

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Section 4.03 Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed by lot from all Bonds not previously called for redemption (a) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Authority provided to the Trustee at least 30 but no more than 60 days prior to the date of such redemption, (b) with respect to any redemption pursuant to Section 4.01(a) hereof and the corresponding provision of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, as directed in a Written Request of the Authority provided to the Trustee at least 30 but no more than 60 days prior to the date of such redemption, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 denominations and such separate denominations shall be treated as separate Bonds which may be separately redeemed.

Section 4.04 Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in authorized denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered.

Section 4.05 Effect of Notice of Redemption. Notice having been given as aforesaid, and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption, having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.

If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been given as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon.

All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed.

ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund are hereby pledged to secure the payment of the principal of, premium, if any, and interest on

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the Bonds in accordance with their terms, the provisions of this Indenture and the Act. Said pledge shall constitute a first lien on such assets.

All obligations of the Authority under this Indenture shall be special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor hereunder; provided, however, that all obligations of the Authority under the Bonds shall be special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor hereunder. Neither the faith and credit nor the taxing power of the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds. The Authority has no taxing power.

Section 5.02 Flow of Funds.
(a) The Trustee shall establish and maintain separate funds designated the “Base Rental Payment Fund,” the “Interest Fund,” the “Principal Fund,” the “Redemption Fund” and the “Reserve Fund.”
All Base Rental Payments shall be paid directly by the City to the Trustee, and if received by the Authority at any time shall be transferred by the Authority with the Trustee within one Business Day after the receipt thereof. All Base Rental Payments received by the Trustee shall be deposited by the Trustee in the Base Rental Payment Fund. (b) The Trustee shall transfer the amounts on deposit in the Base Rental Payment Fund, at the times and in the manner hereinafter provided, to the following respective funds:
(i) Interest Fund. On the Business Day immediately preceding each Interest Payment Date, the Trustee shall transfer from the Base Rental Fund to the Interest Fund the amount, if any, necessary to cause the amount on deposit in the Interest Fund to be equal to the interest due on the Bonds on such Interest Payment Date. (ii) Principal Fund. On the Business Day immediately preceding each November 1, commencing November 1, 20__, the Trustee shall transfer from the Base Rental Fund to the Principal Fund the amount, if any, necessary to cause the amount on deposit in the Principal Fund to be equal to the principal amount of the Bonds due on such November 1, either as a result of the maturity thereof or mandatory sinking fund redemption payments required to be made with respect thereto. Moneys in the Principal Fund shall be used by the Trustee for the purpose of paying the principal of the Bonds when due and payable at their maturity dates or upon earlier mandatory sinking fund redemption.
(iii) Redemption Fund. The Trustee, on the redemption date specified in the Written Request of the City filed with the Trustee at the time that any prepaid Base Rental Payment is paid to the Trustee pursuant to the Lease Agreement, shall deposit in the Redemption Fund that amount of moneys representing the portion of the Base Rental Payments designated as prepaid Base Rental Payments. Additionally, the Trustee shall deposit in the Redemption Fund any amounts required to be deposited therein pursuant to Sections 5.03 and 5.04 hereof and Section 7.01 of the Lease Agreement. Moneys in the Redemption Fund shall be used by the Trustee for the purpose of paying the principal of and interest and premium, if any, on Series 2022B Bonds redeemed pursuant to the provisions of subsections (a) and (b) of Section 4.01 hereof and Additional

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Bonds redeemed pursuant to the corresponding provisions of the Supplemental Indenture pursuant to which such Additional Bonds are issued.
(iv) Reserve Fund. All amounts on deposit in the Base Rental Payment Fund on November 2, to the extent not required to pay the principal of any Outstanding Bonds then having come due and payable, shall be transferred to the Reserve Fund, to the extent necessary to satisfy the Reserve Fund Requirement, to the extent such amounts are due and payable.

Section 5.03 Application of Net Insurance Proceeds. If the Property or any portion thereof shall be damaged or destroyed, subject to the further requirements of this Section, the City shall, as expeditiously as possible, continuously and diligently prosecute or cause to be prosecuted the repair or replacement thereof, unless the City elects not to repair or replace the Property or the affected portion thereof in accordance with the provisions hereof.

The Net Insurance Proceeds (other than Net Insurance Proceeds of rental interruption insurance), including the proceeds of any self-insurance, received on account of any damage or destruction of the Property or a portion thereof shall as soon as possible be deposited with the Trustee and be held by the Trustee in a special fund entitled the “Insurance and Condemnation Fund” and made available for and, to the extent necessary, shall be applied to the cost of repair or replacement of the Property or the affected portion thereof upon receipt of a Written Request of the City, together with invoices therefor. Each such Written Request of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. Pending such application, such proceeds may be invested by the Trustee as directed by the City in Permitted Investments that mature not later than such times moneys are expected to be needed to pay such costs of repair or replacement.

Notwithstanding the foregoing, the City shall, within 60 days of the occurrence of the event of damage or destruction, notify the Trustee in writing as to whether the City intends to replace or repair the Property or the portions of the Property which were damaged or destroyed. If the City does intend to replace or repair the Property or portions thereof, the City shall deposit with the Trustee the full amount of any insurance deductible to be credited to the special account.

If the damage, destruction or loss was such that there resulted in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement of Rental Payments results from such damage or destruction pursuant to Section 3.06 of the Lease Agreement, then the City shall be required either to (a) apply sufficient funds from the insurance proceeds and other legally available funds to the replacement or repair of the Property or the portions thereof which have been damaged to the condition which existed prior to such damage or destruction, or (b) apply sufficient funds from the insurance proceeds and other legally available funds to the redemption, as set forth in subsection (a) of Section 4.01 hereof and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued, in full of all the Outstanding Bonds or all of those Outstanding Bonds which would have been payable from that portion of the Base Rental Payments which are abated as a result of the damage or destruction. Funds to be applied to the redemption of Bonds in accordance with clause (b) above shall be deposited in the Redemption Fund. If the City is not required to replace or repair the Property, or the affected portion thereof, as set forth in clause (a) above or to use such amounts to redeem Bonds as set forth in clause (b) above, then such proceeds shall, if there is first delivered to the Trustee a Written Certificate of the City to the effect that the annual fair rental value of the Property after such damage or destruction, and after any repairs or replacements made as a result of such damage or destruction, is at least equal to 100%

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of the maximum amount of Base Rental Payments becoming due under the Lease Agreement in the then current Rental Period or any subsequent Rental Period and the fair replacement value of the Property after such damage or destruction is at least equal to the principal amount of the Outstanding Bonds, be paid to the City to be used for any lawful purpose.

The proceeds of any award in eminent domain received in respect to the Property shall be deposited by the Trustee in the Redemption Fund and applied to the redemption of Bonds pursuant to subsection (a) of Section 4.01 hereof and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued.

Section 5.04 Title Insurance. Proceeds of any policy of title insurance received by the Trustee in respect of the Property shall be applied and disbursed by the Trustee as follows:
(a) if the City determines that the title defect giving rise to such proceeds has not substantially interfered with its use and occupancy of the Property and will not result in an abatement of Rental Payments payable by the City under the Lease Agreement, upon Written Request of the City, such proceeds shall be remitted to the City and used for any lawful purpose thereof; or (b) if the City determines that the title defect giving rise to such proceeds has substantially interfered with its use and occupancy of the Property and will result in an abatement of Rental Payments payable by the City under the Lease Agreement, then, upon Written Request of the City, the Trustee shall immediately deposit such proceeds in the Redemption Fund and such proceeds shall be applied to the redemption of Bonds in the manner provided in subsection (a) of Section 4.01 hereof and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued.

Section 5.05 Reserve Fund. The Authority hereby agrees to establish a separate fund titled the “Reserve Fund” and within the Reserve Fund, the “Series 2022B Bonds Account,” which shall be held and maintained by the Trustee. The Trustee shall deposit into the Reserve Fund or accounts therein, any amounts transferred from the Base Rental Fund pursuant to Section 5.02(b)(iv) above. The Trustee may establish additional accounts in the Reserve Fund in connection with the issuance of Additional Bonds, if any. All moneys in the Reserve Fund and accounts therein shall be used and withdrawn by the Trustee solely for the purpose of funding the Interest Fund or the Principal Fund, in that order, in the event of any deficiency in either of such accounts on an Interest Payment Date.

On the final maturity date for the Bonds, amounts in the Reserve Fund shall be transferred to the Interest Fund and the Principal Fund to make the final payment on the Bonds, and the amount transferred shall be deemed to be a credit against the remaining Base Rental Payments to be made by the City under the Lease Agreement.

Section 5.06 Rebate Fund.
(a) The Trustee shall establish and maintain a special fund designated the “Rebate Fund.” There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate, as specified in a Written Request of the Authority.

All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement, for payment to the United States of America.

Notwithstanding defeasance of the Bonds pursuant to Article X hereof or anything to the contrary

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contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Authority, and shall have no liability or responsibility to enforce compliance by the Authority with the terms of the Tax Certificate. The Trustee may conclusively rely upon the Authority’s determinations, calculations and certifications required by the Tax Certificate. The Trustee shall have no responsibility to independently make any calculation or determination or to review the Authority’s calculations. (b) Any funds remaining in the Rebate Fund after payment in full of all of the Bonds and after payment of any amounts described in this Section, shall be withdrawn by the Trustee and remitted to the Authority.

Section 5.07 Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Indenture and held by the Trustee shall be invested by the Trustee solely in Permitted Investments, as directed in writing by the Authority filed with the Trustee at least two Business Days in advance of the making of such investments. Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Indenture; provided, however, that such Permitted Investments may be redeemed at par so as to be available on each Interest Payment Date. Absent timely written direction from the Authority, the Trustee shall hold any funds held by it uninvested. The Trustee may conclusively rely upon the Authority’s written instructions as to both the suitability and legality of the directed investments and such written direction shall be deemed to be a certification that such directed investments constitute Permitted Investments.

Subject to the provisions of Section 5.05 hereof, all interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Indenture shall be retained therein.

Permitted Investments acquired as an investment of moneys in any fund established under this Indenture shall be credited to such fund. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued by the Trustee at the cost thereof.

The Trustee may act as principal or agent in the making or disposing of any investment.

Upon the Written Request of the Authority, the Trustee shall sell or present for redemption any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder.

The Trustee may make any investments hereunder through the bond or investment department or trust investment department of the entity acting as Trustee hereunder, or those of such entity’s parent or any affiliate, and such entity, or its parent or affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for such services.

The entity acting as Trustee hereunder, or any of its affiliates, may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder and such entity, or its

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affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for such services.

The Authority and the City acknowledge that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority and the City the right to receive brokerage confirmations of security transactions as they occur, at no additional cost, the Authority and the City specifically waive receipt of such confirmations to the extent permitted by law.

ARTICLE VI

COVENANTS
Section 6.01 Compliance with Agreements. The Trustee will not authenticate or deliver any Bonds in any manner other than in accordance with the provisions hereof, and the Authority and the City will not suffer or permit any default by them to occur hereunder, but will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms hereof required to be complied with, kept, observed and performed by them.

Section 6.02 Compliance with Ground Lease and Lease Agreement. The Authority and the City will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Ground Lease and the Lease Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, will enforce the Ground Lease and the Lease Agreement against the other party thereto in accordance with their respective terms.

Section 6.03 Observance of Laws and Regulations. The Authority, the City and the Trustee will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the United States of America or of the State of California, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by them, including their right to exist and carry on their respective businesses, to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired.

Section 6.04 Other Liens. The City will keep the Property and all parts thereof free from judgments and materialmen’s and mechanics’ liens and free from all claims, demands, encumbrances and other liens of whatever nature or character, and free from any claim or liability which materially impairs the City in conducting its business or utilizing the Property, and the Trustee at its option (after first giving the City ten days’ written notice to comply therewith and failure of the City to so comply within such ten-day period) may, but is in no event obligated to, defend against any and all actions or proceedings, or may pay or compromise any claim or demand asserted in any such actions or proceedings; provided, however, that, in defending against any such actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall not in any event be deemed to have waived or released the City from liability for or on account of any of its agreements and covenants contained herein, or from its liability hereunder and to perform such agreements and covenants.

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So long as any Bonds are Outstanding, none of the Trustee, the Authority or the City shall create or suffer to be created any pledge of or lien the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien hereof.

The Authority, the City and the Trustee shall not encumber the Property other than in accordance with the Ground Lease, the Lease Agreement, the Indenture and the Assignment Agreement.

Section 6.05 Prosecution and Defense of Suits. The City will promptly, upon request of the Trustee (which request the Trustee is not required to make), take such action from time to time as may be necessary or proper to remedy or cure any cloud upon or defect in the title to the Property or any part thereof, whether now existing or hereafter developing, will prosecute all actions, suits or other proceedings as may be appropriate for such purpose and will indemnify and save the Trustee harmless from all cost, damage, expense or loss, including attorneys’ fees and expenses, which it or the Owners may incur by reason of any such cloud, defect, action, suit or other proceeding.

Section 6.06 Accounting Records and Statements. The Trustee will keep proper accounting records in which complete and correct entries shall be made of all transactions relating to the receipt, deposit and disbursement of the Base Rental Payments, and such accounting records shall be available for inspection by the Authority and the City at reasonable hours and under reasonable conditions.

Section 6.07 Recordation and Filing. The City will record, or cause to be recorded, with the appropriate county recorder, the Lease Agreement, the Ground Lease and the Assignment Agreement, or memoranda thereof.

Section 6.08 Tax Covenants.
(a) Neither the Authority nor the City will take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on any tax-exempt Bonds under Section 103 of the Code. Without limiting the generality of the foregoing, the Authority and the City will comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein, This covenant shall survive payment in full or defeasance of the Bonds.
(b) In the event that at any time the Authority is of the opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by the Trustee in any of the funds or accounts established hereunder, the Authority shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions.
(c) Notwithstanding any provisions of this Section, if the Authority shall provide to the Trustee an Opinion of Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Bonds, the Trustee may conclusively rely on such opinion in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.

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Section 6.09 Continuing Disclosure. The City will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Indenture, failure of the City to comply with the Continuing Disclosure Agreement shall not constitute an event of default hereunder; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate principal amount of Outstanding Bonds, and upon being indemnified to its reasonable satisfaction therefor, shall) or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.

Section 6.10 Further Assurances. Whenever and so often as requested to do so by the Trustee, the Authority and the City will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon it hereby or by the Assignment Agreement, the Ground Lease or the Lease Agreement.

ARTICLE VII

DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Action on Default. If an event of default (within the meaning of Article VI of the Lease Agreement) shall happen, then such event of default shall constitute an event of default hereunder. The Trustee shall give notice, as assignee of the Authority, of an event of default under the Lease Agreement to the City. In each and every case during the continuance of an event of default, the Trustee may and, at the direction of the Owners of not less than a majority of the aggregate principal amount of Bonds then Outstanding, and upon being indemnified to its reasonable satisfaction therefor, shall, upon notice in writing to the City and the Authority, exercise any of the remedies granted to the Authority under the Lease Agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners by this Indenture or by the Bonds, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 7.02 hereof.

Section 7.02 Other Remedies of the Trustee. Subject to the provisions of Section 7.01 hereof, the Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Authority or the City or any member, director, officer or employee thereof, and to compel the Authority or the City or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee; or

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(c) by suit in equity upon the happening of any event of default hereunder to require the Authority and the City to account as the trustee of an express trust.

Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners so affected.

Notwithstanding any provision of this Indenture to the contrary, no event of default hereunder or under the Lease by the Authority or the City shall result in the acceleration of debt service on the Bonds hereunder.

Section 7.03 Non-Waiver. A waiver of any default or breach of duty or contract by the Trustee shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by law or by this Article may be enforced and exercised from time to time and as often the Trustee shall deem expedient.

If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or any Owner, then subject to any adverse determination, the Trustee, such Owner, the Authority and the City shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.

Section 7.04 Remedies Not Exclusive. Subject to the provisions of Section 7.01 hereof, no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 7.05 No Liability by the Authority to the Owners. Except as expressly provided herein, the Authority shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the City of the other agreements and covenants required to be performed by it contained in the Lease Agreement or herein, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.

Section 7.06 No Liability by the City to the Owners. Except for the payment when due of the Base Rental Payments and the performance of the other agreements and covenants required to be performed by it contained in the Lease Agreement, the Ground Lease or herein, the City shall not have any obligation or liability to the Owners with respect to the Trust Indenture or the preparation, execution, delivery or transfer of the Bonds or the disbursement of the Base Rental Payments by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.

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Section 7.07 No Liability of the Trustee to the Owners. Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the Authority or the City of the other agreements and covenants required to be performed by them contained in the Lease Agreement, the Ground Lease or herein.

Section 7.08 Application of Amounts After Default. All payments received by the Trustee with respect to the rental of the Property after a default by the City pursuant to Article VI of the Lease Agreement (including, without limitation, any proceeds received in connection with the sale, assignment or sublease of the Authority’s right, title and interest in the Ground Lease), and all damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under Article VI of the Lease Agreement, shall be deposited into the Base Rental Payment Fund and as soon as practicable thereafter applied, together with all other funds held hereunder (except funds in the Rebate Fund):
(a) to the payment of all amounts due the Trustee under Article VIII hereof; (b) to the payment of all amounts then due for interest on the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable-prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest on such Bonds due and payable; and
(c) to the payment of all amounts then due for principal of the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal of such Bonds due and payable.

Section 7.09 Trustee May Enforce Claims Without Possession of Bonds. All rights of action and claims under this Indenture or the Bonds may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners in respect of which such judgment has been recovered.

Section 7.10 Limitation on Suits. No Owner of any Bond shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or Trustee, or for any other remedy hereunder, unless (a) such Owner shall have previously given written notice to the Trustee of a continuing event of default, (b) the Owners of not less than 25% of the aggregate principal amount of Bonds then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such event of default in its own name as Trustee hereunder, (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceedings, and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60 day period by the Owners of

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a majority of the aggregate principal amount of Bonds then Outstanding; it being understood and intended that no one or more Owners shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Owner, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Owners.

ARTICLE VIII

THE TRUSTEE
Section 8.01 Employment of the Trustee. The Authority hereby appoints and employs the Trustee to receive, deposit and disburse the Base Rental Payments, to authenticate, deliver and transfer the Bonds and to perform the other functions contained herein, all in the manner provided herein and subject to the conditions and terms hereof. By executing and delivering this Indenture, the Trustee accepts the appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein, subject to the conditions and terms hereof. Other than when an event of default has occurred and is continuing, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an event of default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

Section 8.02 Duties, Removal and Resignation of the Trustee. The Authority may, by an instrument in writing, remove the Trustee initially a party hereto with 30-days’ prior notice and any successor thereto unless an event of default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (a) requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal amount of Bonds at the time Outstanding (or their attorneys duly authorized in writing), or (b) the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The Trustee and any successor Trustee shall be a banking corporation or association or trust company having (or if such banking corporation or association or trust company is a member of a bank holding company, its bank holding company has) a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities. If such banking corporation or association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such banking corporation, association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the Authority does not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the Authority, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any