Agenda — Indio City Council, July 19, 2023 (part 4 of 8)

AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 411 of 968 16 2.5.1 Recent Affordable Housing Projects
There was a total of five new construction projects (including recently completed and pipeline projects) with 748 resi- dential units in Indio between 2017 and 2022. Two of the projects, with a total of 168 residential units, recently completed construction. The remaining three projects are in Indio’s affordable housing pipeline as of January 2023, meaning they are expected to complete construction within a few years. Once completed, the pipeline projects will produce a total of 580 new residential units. An overview of the total development costs and funding sources for the new construction projects are provided in the following sections. All five projects, including recently completed and pipeline projects, were accounted for in the overview.

The Cost of Building Affordable Housing
Based on recent Affordable housing projects in Indio, the average cost to develop an affordable multifamily rental project in Indio is $50,133,142 per project, and the average per unit development cost is $359,203. As further detailed in Table 5, Development Costs for Recent Affordable Housing Projects in Indio, the per unit development cost ranges from approximately $260,000 to $275,000 for the largest projects (by unit size) to approximately $420,000 to $450,000 per unit for the smaller projects (by unit size).

Table 5. Development Costs for Recent Affordable Housing Projects in Indio Project Name Total Units Affordable
Units
Development Cost
Total Per Unit
Recently Completed and Pipeline Projects
Villa Hermosa Apartments, Phase II 68 67 $28,599,302 $420,578 Villa Hermosa Apartments, Phase III 100 99 $45,059,263 $450,593 Arroyo Crossing 184 145 $50,724,669 $275,678
Arroyo Crossing II 216 214 $56,592,540 $262,003
Avenue 44 and Golf Center Parkway
Project 180 178 $69,689,938 $387,166
Average, All Projects 150 141 $50,133,142 $359,203
Total, All Projects 748 703 $250,665,712 -
Sources: TCAC, 2022; Indio Housing Authority Board, November 2, 2022, Staff Report, Project Financial Proforma.

Funding Sources
Recent affordable housing projects in Indio, included in Table 5, used an average of seven different funding sources to support development. Figure 7, Funding Sources for Recent Affordable Housing Projects in Indio, provides a breakdown of the various funding sources that were required for the recent affordable housing projects. As shown in Figure 7, T ax Credits provide the largest source of funding, followed by loans, which make up the second largest portion of funding for the recent affordable housing projects. Private and local sources provide the remaining funding and vary by affordable housing project.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 412 of 968 17 Figure 7. Funding Sources for Recent Affordable Housing Projects Indio Sources: TCAC, 2022; Indio Housing Authority Board, November 2, 2022, Staff Report, Project Financial Proforma.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 413 of 968 18 As shown on Figure 7, local gap funding sources account for an average of roughly 8 percent of the required funds to support development of the five recent affordable housing projects. Local gap funding amounts range from approximately $2.7 million in the form of a land donation, to a low of $180,000 for a fee waiver from the Indio Water Authority. Across all pipeline projects, the local funds total $16.56 million, with an average of $3.31 million per project or $35,084 per unit. Refer to Figure 7 for a visual representation of local sources relative to federal, debt, and private sources.

Local Funding Sources
The local gap fund contributions that supported development of the five recent affordable housing projects include a range of local funding sources and vary between one to six local sources per project. Examining the local funding sources that were utilized to finance recent projects can help to define the role that local sources may play in funding future affordable housing projects in Indio. While some funding sources may not be available to support additional development projects in the future, the funding sources detailed below are project-specific funding sources that were used by one or more of the recent affordable housing projects in Indio.

Impact Fee Waivers/ Deferrals
While development impact fees and permitting fees can serve an important purpose, they can also increase the cost of development. Local jurisdictions can encourage the development of new affordable housing by reducing or waiving these fees for qualifying projects to reduce overall development cost. However, when fees are reduced or waived, the jurisdiction must also consider the loss of anticipated revenues, which may impact other programs. T o cover revenues that are lost due to impact fee waivers, the jurisdiction must rely on other local government revenues as the lost revenue must be made up from sources other than impact fees, such as through the reallocation of funds from General Funds. Alternatively, some local jurisdictions allow fee payment on a deferred basis rather than reducing or waiving fees.

Deferred fee payments allow developers to make payments after securing long-term, lower-cost financing, while the jurisdiction still collects the expected revenue after the deferral period and may avoid budget shortfalls in other areas.

All five recent affordable housing projects received fee waivers ranging from approximately $180,000 to $2.3 million.

Specifically, both Phase II and III of the Villa Hermosa Apartments received fee waivers7 from the City for approximately $1.6 million and $2.3 million, respectively, as well as fee waivers from Valley Sanitary District and Indio Water Authority, ranging from approximately $180,000 to $370,000. The other three projects, Arroyo Crossing, Arroyo Crossing II, and Avenue 44 and Golf Center Parkway, each received fee waivers directly from the Coachella Valley Association of Governments (CVAG) which averaged approximately $257,000 per project. (See Section 3.8, Fee Waivers, for additional information related to CVAG fees).
7 The Coachella Valley Housing Coalition’s Villa Hermosa Apartments is a replacement apartment community for low-income farmworkers in Indio. The Villa Hermosa Apartments Phases I, II and III, replaced 253 units of farmworker housing in the Fred Young Labor Camp. It should be noted that if a project involves replacement, redevelopment or intensification of previously existing development, impact fees should be applied only to the portion of the project that represents a net increase in demand for relevant City facilities.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 414 of 968 19 Land Donation or Land Loans
One of the challenges in building new affordable housing units is acquiring land suitable for housing. High land costs can pose as an obstacle to developing affordable housing for lower-income families. However, local funding contributions in the form of land donations or subsidized public land, such as through land sales at reduced prices or below-market land leases, help reduce the cost of land, and therefore, the overall cost of the project. The assistance can provide affordable housing developers a way to compete with market rate developers for land.

Both Phase II and III of the Villa Hermosa Apartments received land donations from a local, nongovernmental organization covering approximately $2 million and $2.7 million of each project’s land costs, respectively. While the local source was non-governmental, the land donations covered all, or most, of the funds otherwise required to purchase each property, playing a critical role as a local funding method for supporting the development of the affordable housing projects.

HOME Funds
The HOME Investment Partnerships Program (HOME) is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. HOME funds are awarded annually based on predetermined formulas to participating jurisdictions. The program’s flexibility allows states and local governments to use HOME funds for grants, direct loans, loan guarantees or other forms of credit enhancements, or rental assistance or security deposits.

Both Phase II and III of the Villa Hermosa Apartments received HOME funds from the County of Riverside in the amounts of $1 million and $1.5 million, respectively.

Low- and Moderate-Income Housing Asset Funds
When California redevelopment agencies were dissolved in 2012, jurisdictions were required to establish successor agencies to take over the duties, assets, and obligations of the former redevelopment agencies. In most cases, the housing successor was either the City that had formed the former redevelopment agency or a City housing authority operating in the jurisdiction of the former redevelopment agency. Successor agencies were required to deposit any proceeds related to housing assets and activities of the former redevelopment agency into a separate fund called the Low- and Moderate-Income Housing Asset Funds (LMIHAF). Funds in the LMIHAF are currently available to fund eligible projects and expenses related to the development of qualified affordable rental housing development projects.

Two of the recent affordable housing projects received a local funding contribution in the form of LMIHAF. Phase III of the Villa Hermosa project received $1.5 million from the Housing Authority of the County of Riverside’s LMIHAF to close the project’s funding gap, and the Avenue 44 and Golf Center Parkway Project will receive a land acquisition loan for approximately $2.47 million from the Indio Housing Authority’s (Housing Successor) LMIHAF.

Other local resources that were not listed above may include allocations of Permanent Local Housing Allocation (PLHA) funds, Section 8 Voucher Program funding, and/or other County funds.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 415 of 968 20 Conclusion
Local resources can provide a critical layer of funding for affordable housing projects. While limited resources can make it difficult for local agencies to make large funding contributions directly to affordable housing projects, a small local contribution can be the critical investment that makes the project work. The local funds can help close the gap between a project’s available funds and the project’s cost, highlighting the important role they can play in funding affordable housing in Indio.

Across five recent affordable housing projects (including recently completed and pipeline projects) in Indio, local funding sources, including but not limited to City and County sources, account for an average of roughly eight percent of the required funds to support development. The funds were contributed by a variety of local agencies, including the City of Indio, County of Riverside, and CVAG, and averaged approximately $3.3 million per project or $35,000 per unit.

However, when accounting only for funds contributed by the City, local funding sources only account for an average of approximately three percent of the required funds to support development of recent affordable housing projects (including two of the recent affordable housing projects which did not receive any funds from the City), or roughly $13,000 per unit.

There are numerous revenue-generating strategies that a local agency can implement to further their impact and support a variety of affordable housing projects. Understanding this essential role that local resources can play in funding affordable housing and examining the City’s role in funding recent affordable housing projects in Indio was critical for forming the recommended Prohousing Policies detailed in Chapter 4, Policy Recommendations. Through implementation of the policies included in Chapter 4, the City can further support the development of affordable housing in Indio.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 416 of 968 21 Chapter 3 Plan and Policy
Review
Chapter 3
Plan and Policy Review
This chapter provides an overview of the city of Indio’s (City) existing plans, policies, and regulations that support the City’s overall prohousing vision by providing opportunities to accelerate, streamline, or encourage housing production in the City of Indio (Indio). The City’s existing plans and policies that align with the intent of the state’s Prohousing Designation Program were further assessed through the lens of the Prohousing Policy categories:
• Favorable Zoning and Land Use
• Accelerating Production Timeframes
• Reducing Construction and Development Costs
• Providing Financial Subsidies

3.1 General Plan 2040
The City adopted the Indio General Plan 2040 (General Plan) in September 2019. The General Plan is a 20-year blueprint for meeting Indio’s long-term vision for future growth and development. The General Plan sets out to achieve a variety of housing types and levels of affordability that serve the needs of the broad and diverse community of new and existing residents. Through the new General Plan, the City brought forth several new and creative strategies for meeting the future needs of Indio, which align with the state’s Favorable Zoning and Land Use Prohousing Policies, and create opportunities to maintain a clean and healthy environment, provide access to educational and employment opportunities, and provide decent and affordable housing.

The General Plan sets forth land use designations that indicate the purpose and intended use for each parcel within Indio. The land use designations provide guidance related to development, including allowed uses and a maximum development capacity allowed for residential land, known as densities, that is described in terms of dwelling units per acre. The new General Plan’s Suburban Neighborhoods, Connected Neighborhoods, and Neighborhood Center land use designations increased densities in traditionally low-density, single-family areas to allow for a mix of single-family detached, attached, duplexes, triplexes, quadplexes, and multifamily housing. The changes in allowed land uses and permitted densities, which increased in some areas from 0.5 to 1 dwelling units per acre to upwards of 20 dwelling units per acre, not only increase development potential in low-density areas but also create pathways for a variety of housing types that are typically referred to as “missing middle housing,8” such as duplexes, triplexes, quadplexes, and townhomes. 8 “Missing Middle Housing,” a term created by Opticos Design, describes a range of diverse housing options, such as duplexes, fourplexes, cottage courts, and multiplexes — compatible in scale with detached single-family homes — that help provide solutions along a spectrum of affordability to address the mismatch between the available housing stock and shifting demographics combined with the growing demand for walkable urban living.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 417 of 968 22 Further, the General Plan created new opportunities for residential and mixed-use communities through the creation of the Downtown, Midtown, and Neighborhood Center land use designations. These land use designations are envisioned as vibrant, mixed-use centers with a variety of educational, office, retail and commercial uses, and medium- and higher- density housing with community-gathering spaces for residents.

3.2 Unified Development Code
The City’s Unified Development Code (UDC) regulates how development can occur in Indio and implements the visions laid out in the City’s General Plan. As the implementing tool, the City UDC must be consistent with the General Plan.

As such, the City adopted the new UDC in fall 2022 that became effective on October 22, 2022, which provides land use and development standards by zones in Indio. The zones implement the General Plan by providing for a range of development intensities and uses that are compatible with the character of the land use designations in Indio. Like the General Plan, the UDC provides new opportunities for housing developments at greater intensities that support a mixture of housing options that meet the strong need for more housing types and units in Indio.

The strategies provided by the UDC also align with the state’s Favorable Zoning and Land Use Prohousing Policies through the creation of new zones that allow for residential and mixed-use communities in non-residential zones, as well as development standards that increase allowed densities in single-family residential areas. The new zones (Neighborhood Center and Connected Neighborhoods -14 and -20) established by the UDC promote missing middle housing types, such as duplexes, triplexes, fourplexes, and cottage courts, so there are more housing options for Indio’s residents. The uses and densities allowed create opportunities for a variety of housing types and ensured the City could not only accommodate, but exceed, the Indio’s housing need as determined by the RHNA (refer to Chapter 2 for details related to Indio’s RHNA).

The UDC further aligns with the state’s Prohousing Policies aimed at Accelerating Production Timeframes through the provision of ministerial approval processes that allow by-right processing for a variety of housing types. Housing types that are permitted by-right include, but are not limited to, single-family dwellings, manufactured or modular housing, accessory dwelling units, and multifamily housing. Additionally, the UDC has replaced subjective standards with objective development design standards to improve approval certainty and permit process timing.

3.3 Highway 111 Corridor Specific Plan
On September 21, 2022, the Indio City Council adopted the Highway 111 Corridor Specific Plan (Highway 111 SP). The Highway 111 SP replaced two specific plans that previously applied to properties along the corridor - the Highway 111 Corridor Mixed-Use Specific Plan and the Central Highway 111 Corridor Specific Plan. The Highway 111 SP is a strategic action plan for the future revitalization along a 4-mile stretch of the Highway 111 corridor from Jefferson Street to Indio Boulevard. The Highway 111 SP provides implementation strategies that align with the state’s Prohousing Policies aimed at Accelerating Production Timeframes. Through implementation of the strategies, the Highway 111 SP aim to attract at least 500 new housing units within the Corridor, including market-rate, affordable, and workforce housing.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 418 of 968 23 Through the development of the Highway 111 SP , most projects may be reviewed and approved based on clear and objective development standards and guidelines. Providing an administrative development process can impact the time and cost associated with new development by reducing delays and the overall cost of time in the development process. Providing objective development and design standards can also impact timing and costs by increasing certainty in the City’s regulations, which provides project applicants with clear expectations that save time and costs otherwise associated with unclear site design criteria. Additionally, the updated environmental analysis associated with the Highway 111 SP minimizes the need for additional environmental analysis as projects are proposed. However, the plan missed key opportunities to remove discretionary approvals for larger, multifamily developments, as all new buildings larger than 10,000 square feet require a Major Planning Review Permit issued by the City’s Planning Commission, and most large sites also require a Master Planned Development Permit.

3.4 Downtown Specific Plan
The Downtown Specific Plan (DTSP) was adopted by the Indio City Council on April 15, 2020. The DTSP addresses high-density residential and mixed uses within 140 acres centrally located within Indio. Through the DTSP the City has established a framework to promote the revitalization of Downtown Indio into a vibrant, walkable, mixed-use environment. One of the DTSP’s goals is to diversify Indio’s housing stock to include new housing types that serve a broad and diverse community of new and existing residents, providing housing opportunities for households of all ages, types, incomes, and lifestyles in an amenity-rich urban environment. The development standards and incentives provided in the DTSP align with the state’s Favorable Zoning and Land Use Prohousing Policies by permitting higher densities and land uses that provide new opportunities for residential and mixed-use communities. The City recognizes that desired components of the Downtown environment are not likely to be provided by the market alone, as such, the DTSP provides incentives for developing specified community benefits, including student housing and residential amenities, in exchange for an increased heigh limit between five to six stories. As such, implementation of the DTSP is anticipated to promote the production and facilitate development of housing in the Downtown.

An associated Environmental Impact Report (EIR) was developed for the DTSP to respond to the anticipated environmental impacts associated with the project. The Final EIR developed for the DTSP ensures the consideration of cumulative impacts, avoiding duplicative efforts on a project-by-project basis. The Final EIR developed for the DTSP , therefore, allows project streamlining as no further environmental review is needed for projects consistent with the DTSP Final EIR.

3.5 General Plan Housing Element
The City’s General Plan 6th Cycle Housing Element was adopted in January 2022 and received its certification from the State Department of Housing and Community Development in April 2022. The Housing Element establishes a roadmap for specific actions to be taken over the eight-year planning period (2021-2029). Through the Housing Element, the City has committed to providing a pathway for the development of housing, especially for lower- and moderate- income earning households, through a set of aggressive policies and programs. The actions to be taken will facilitate the development of a variety of housing types to meet the diverse housing needs of existing and future residents; further Indio’s affordable housing supply for lower- and moderate-income earning households; ensure that housing is safe and habitable; assist existing households with their housing needs; prevent household displacement; and promote equity and inclusion through housing that increases access to opportunities for economic, educational, and environmental advancement.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 419 of 968 24 Further, the programs in the Housing Element align with the state’s Favorable Zoning and Land Use and Accelerating Production Timeframes Prohousing Policies by committing to: not only accommodating, but exceeding, Indio’s housing need as determined by the RHNA (refer to Chapter 2 for details related to Indio’s RHNA); exploring opportunities for enhancing the local Density Bonus Program; establishing objective development and design standards; and providing priority permit processing for specific housing types, and transparency of permit approvals. In addition, programs in the Housing Element align with the state’s Prohousing Policies aimed at Reducing Construction and Development Costs and Providing Financial Subsidies by committing to providing: technical assistance with ADUs, and fee reduction strategies; and financial subsidies through actions such as establishing a local housing trust fund, or enhanced infrastructure financing districts. (See Chapter 4, Policy Recommendations, for related policy recommendations).

3.6 Transformative Climate Communities
The City’s T ransformative Climate Communities (TCC) Plan was adopted in January 2021. This plan establishes a roadmap to identify and prioritize future projects and investments to support community-based environmental, public health, workforce, and economic benefits. The TCC plan focuses on three census tracts in Indio, encompassing portions of Downtown Indio, the residential neighborhood known as the Sun Gold Community, and an area commonly referred to as the Jewel Community. The TCC focuses on opportunities for enhancing neighborhood-level projects in four key areas:
community, transportation, urban greening, and housing. Housing related recommendations focus on the preservation and maintenance of established affordable housing, with an emphasis on policies that avoid the displacement of existing households. The TCC plan provides recommendations for grant applications that can better position the City to receive funding for the implementation of identified community projects. Such community investments can advance households and create pathways for upward mobility through improved access to educational, economic, and environmental opportunity. These community and economic development investments aimed at improving access to opportunity further align the City’s existing plans with the state’s Prohousing Policies.

3.7 Surplus Lands Act
One of the challenges in building new affordable housing units is acquiring land suitable for housing. T o help address this challenge, the California Surplus Land Act aims to make public lands available for affordable housing development by connecting developers who are interested in building more affordable housing units to surplus local public land that is both available and suitable for housing development. Land owned by a public agency, such as a city or county, that the local agency has declared is not necessary for their use is referred to as “surplus land”. In order to declare publicly owned land as surplus, an agency must follow a formal process outlined in the California Surplus Land Act, including prioritizing land declared as surplus for affordable housing development.

In November 2021, the City declared 52 city-owned properties as surplus, in accordance with the Surplus Lands Act.

Through the declaration of these properties as surplus, the City has undergone the process of prioritizing these properties for affordable housing development. Due to the City’s abundance of publicly owned lands, there is opportunity to further prioritize such sites for affordable housing development through a comprehensive program that aligns with the state’s Prohousing Policies aimed at Providing Financial Subsidies. The program can utilize mechanisms such as land sales at reduced prices or below-market land leases, as further detailed in Chapter 4’s policy recommendations.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 420 of 968 25 3.8 Fee Waivers
T ransportation Uniform Mitigation Fees (TUMF) are paid to the City as part of the building permit process to fund transportation-related capital facilities and infrastructure required to address new growth within the Coachella Valley.

The fee amounts, as recommended by CVAG, are adopted and imposed by the City. Once the fees are collected by the City, they are placed in CVAG’s transportation mitigation trust fund. In October 2022, the City adopted an updated ordinance that exempts affordable housing from paying the fee. The exemption includes single-family, multifamily, and mobile home units built for lower-income households earning 80 percent or less of the area median income. Further, the City’s updated ordinance also provides opportunities for developers to receive credit for projects that provide street improvements meeting specified criteria beyond the City’s requirements established for on-site and off-site development improvements. The credit is awarded against the TUMF in the amount equal to the actual engineering and construction costs at the time of development. The TUMF waivers and credits, further provide opportunities to reduce construction and development costs in Indio.

3.9 Funds for Affordable Housing
The City provides funding to support the development of affordable housing through the Low- and Moderate- Income Housing Asset Fund (LMIHAF) (see Section 2.5 for additional LMIHAF details). The Indio Housing Authority serves as the Housing Successor to the former Redevelopment Agency and oversees the LMIHAF. A portion of the funds in the LMIHAF must be used to cover a grant-match commitment and operating expenses of the Indio Housing Authority, but the remaining funds are currently available to fund eligible projects and expenses related to affordable housing. Eligible projects and expenses include the development of qualified affordable rental housing development projects, operating expenses, and development and implementation of affordable housing strategies. As such, on November 2, 2022, the Indio Housing Authority Board approved a request for conditional land acquisition loan in the amount of $2,471,850 from the LMIHAF for the development of 180 affordable housing units on Avenue 44, west of Golf Center Parkway.

These actions align with the state’s Prohousing Policies aimed at Providing Financial Subsidies. (Refer to Chapter 4 for additional policy recommendations).

Additionally, the City allocates funds to support affordable housing through the US Department of Housing and Urban Development’s (HUD) Community Development Block Grant (CDBG) program. As required by HUD, the City must adopt a 5-Y ear Consolidated Plan that identifies the priorities for the City’s use of CDBG funding during the term. The City’s 2019-2024 Five-Y ear Consolidated Plan identified five essential priorities for the 5-year implementation period including:
public infrastructure improvement projects in residential neighborhoods, such as street light improvements and street rehabilitation projects; public services and programs for families and individuals experiencing homelessness; fair and affordable housing programs; and home improvement and energy-efficiency programs for low-income residents.

Additional opportunities may exist through CDBG funds to provide needed housing-supportive infrastructure to offset the cost of affordable housing. Implementing actions to prioritize public infrastructure improvement projects in CDBG neighborhoods aligns with the state’s Prohousing Policies aimed at Reducing Construction and Development Costs. (See full policy recommendations in Chapter 4).

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 421 of 968 26 Establising a Local T rust Fund with Dedication Funding Source(s) Prioritize General Funds for Affordable Housing
Incentivizing Development Through a Robust Density Program Simplifying ADU and JADU Development for Property Owners Streamlining Projects Through Priority Processing/Reduced Plan Check Times Adopting Fee Reduction Strategies
Reducing T ransportation-Related Infrastructure Costs
Encouraging the Use of Public Land for Affordable Housing Establishing an Enhanced Infrastructure Financing District Increasing Accessibility Through Universal Design
Establishing Pre-Approved Plans for Missing Middle Housing Types The policy actions are intended to
provide a short, action-oriented
summary of each Prohousing
Policy included in Section 4.1. For a
full description of each Prohousing
Policy, refer to Section 4.1,
Prohousing Policies.

Chapter 4
Policy Recommendations
This chapter provides a set of Prohousing Policies (Section 4.1, Prohousing Policies), recommended policy financing tools (Section 4.2, Financing Tools), and commitments the City can take to further its commitment as a prohousing City and support the community’s housing needs. Furthermore, the set of Prohousing Policies (detailed in Section 4.1) correspond to policies set forth in the state’s Prohousing Designation Program and are those that the City must commit to enacting in order to pursue an official Prohousing Designation through the state’s Prohousing Designation Program.

Overview
The City of Indio can commit to enacting the following meaningful actions to facilitate a variety of housing types across levels of affordability and qualify for a Prohousing Designation by:

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 422 of 968 27 There is a clear need for meaningful actions to meet Indio’s current and future housing needs. As such, the policy actions provided above are further detailed in the Prohousing Policies in Section 4.1. However, future policy decisions are to be made upon implementation and in accordance with the City’s Prohousing Designation application.

While the Prohousing Policies detailed in Section 4.1 should be considered in the pursuit of a Prohousing Designation, each policy has associated costs either through the dedication of staff time and resources or through the direct allocation of funds. T o cover those associated costs, several Prohousing Policies will require funding sources beyond those that the City currently has, so City staff and City Council will have to analyze the potential for establishing dedicated funding sources. While the amount of funding raised by dedicated revenue sources can fluctuate from year-to-year, dedicated sources provide an ongoing committed stream of revenue that will continue to provide needed funding on an ongoing basis. Therefore, a set of recommended revenue-generating policies referred to as policy financing tools have been provided in Section 4.2, Financing Tools. The financing tools, including a sales tax measure, housing impact fee, commercial linkage fee, and development agreements, are recommended as potential ongoing revenue sources needed to support various Prohousing Policies.

4.1 Prohousing Policies
The Prohousing Policies detailed below provide the recommended programs and actions that the City must commit to enacting to pursue an official Prohousing Designation awarded by the California Department of Housing and Community Development (HCD). Future policy decisions are to be made upon implementation of the Prohousing Policies and in accordance with the City’s official Prohousing Designation application.

Overview
T o receive a Prohousing Designation from HCD, the City must submit an application detailing the enacted or proposed Prohousing Policies that the City will implement within two-years of submitting the application (refer to Section 1.1.1, Prohousing Designation Program, for additional details). Each Prohousing Policy identified in an application receives a point allocation. Jurisdictions must score a minimum of 30 points with at least one policy in each of the four categories.

The City must commit to enacting the following recommended Prohousing Policies to meet the minimum thresholds and qualify for an official Prohousing Designation through the state’s Prohousing Designation Program.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 423 of 968 28 Policy #1
Establish a Local Housing Trust Fund and Dedicated
Funding Source
Refer to Section 4.2,
Financing Tools, for an
overview of recommended
dedicated revenue sources.

A housing trusts is a financial program that is used to establish funding sources to support a variety of affordable housing activities. A housing trust raises funds for affordable housing production, preservation, and related activities. A housing trust can provide a mechanism for local agencies to make ongoing investments in affordable housing. Local agencies can both contribute revenue directly to the housing trust fund, and also use the funds to attract – or leverage – matching funds available from state and federal sources, which offer matching grants available exclusively for housing trust programs. Housing trusts have many benefits including, but not limited to, serving as a flexible source of gap financing for affordable housing, giving localities the ability to compete for otherwise restricted state funds, increasing housing opportunities for lower- and middle-income earning households, and providing housing and services for those experiencing homelessness.

The City should establish a local housing trust fund with a dedicated funding source to leverage additional outside funds and investment for affordable housing projects into the City. While there are many available funding sources that can support housing trusts, the State’s Local Housing T rust Fund Program is the most attractive source of funds. This program provides dollar-to-dollar matching grant funds on an annual basis that are only available for housing trusts. T o receive these funds, the City must establish a housing trust fund with a dedicated source of ongoing revenues that can pay for the housing trust’s operating costs for at least 5-years. Establishing a dedicated source of funding, as detailed in Section 4.2, Financing Tools, will ensure the successful implementation of a housing trust.

Steps to establish and implement a housing trust include:
• Establish a housing trust fund by legislation, ordinance, or resolution. • Adopt an Administrative Plan for the housing trust.
• Pursue funds. Funds can include dedications from grant pursuits, budget allocations (local or State), taxes (e.g., sales tax measures), fees (e.g., housing impact or commercial linkage fees) or other ongoing revenues from dedicated sources (e.g., development agreements). See Section 4.2, for an overview of recommended dedicated revenue sources.
• Ongoing implementation and administration of the housing trust fund through dedicated staff. • Continue to build funds, receive ongoing revenues, and allocate funds for affordable housing activities. Funding is often placed into a revolving loan fund to ensure ongoing revenues are accrued through interest gained.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 424 of 968 29 Policy #2
Prioritize General Funds for Affordable Housing
Policy #3
Adopt a Robust Density Bonus Program
A General Fund is a City’s primary operating fund and source for discretionary spending. The major sources for this fund are taxes, fines, fees, grants, and other general revenue sources. The General Fund pays for most of the City’s basic functions, including neighborhood services, public safety, and infrastructure, and makes up the bulk of the annual budget. A City may choose to contribute funding for affordable housing from the City’s General Fund. This can include a direct annual allocation from the General Fund to further support the production and preservation of affordable housing, such as through a direct contribution to the housing trust fund. However, it is important to acknowledge that allocating general funds for affordable housing limits the City’s ability to use those funds for another purpose. As general funds are appropriated for affordable housing, the City must consider where those funds were previously allocated and what funds may be available to offset any potential funding gaps. Therefore, as detailed in Section 4.2, Financing Tools, new dedicated funding sources may need to be established to ensure the successful implementation of Prohousing Policies.

The City should prioritize dedicated funding for affordable housing from the City’s General Fund. Although there are various funding sources that can support affordable housing, City resources can play a significant role. General Fund appropriations can provide a consistent and reliable funding source to support the development of affordable housing in Indio.
• There are numerous, competing priorities when it comes time to approve the annual budget. However, annual contributions from the General Fund to a housing trust fund creates opportunities to leverage the funds for additional investments for affordable housing (as described in Prohousing Policy recommendation #1).

The State’s Density Bonus Program provides local jurisdictions with tools to encourage the development of affordable and senior housing. In exchange for the development of affordable and senior housing, the Density Bonus Program provides a density bonus beyond what is permitted under local zoning. In addition to the density bonus, the Density Bonus Program offers a package of incentives and concessions. These incentives and concessions can play a critical part in helping a project pencil out when direct financial assistance may be unavailable. The amount of the density bonus and number of incentives or concessions is set on a sliding scale, based on the percentage of affordable units provided at each income level. Jurisdictions may expand on the program at a local level to create more flexibility for development.

The City should amend its local Density Bonus ordinance to provide standards that exceed the State’s requirements by at least 10 percent. This should include an increase in permitted density based on the percentage of affordable units provided at each income level.
• The City can further build upon its local Density Bonus Program through additional concessions for housing that includes childcare facilities and affordable ownership opportunities.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 425 of 968 30 Policy #4
Create a Program to Incentivize ADU and JADU
Development
Reduce Plan Check Times or Provide Opportunities
for Priority Permit Processing
Policy #5
Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs) can provide low-cost housing options in low-density, residential neighborhoods where affordable housing types might otherwise be unavailable. ADUs and JADUs can help to expand access to resource-rich areas for lower- and moderate-income households without requiring the development of additional infrastructure. Others that may benefit from ADUs and JADUs include caregivers, older adults, family members with disabilities, or adult children.

The City should amend its local ADU ordinance to reduce barriers for property owners to create ADUs and JADUs. This can be done through reduced development standards, priority permit processing or technical assistance through dedicated staff, or pre-approved plans.
• Because ADUs and JADUs can offer independent living options for those with disabilities, the City should incorporate direct incentives for those applicants that incorporate increased accessibility features. Incentives can be strategically considered to tailor solutions that will not result in increased parking need.

All proposed development projects must go through a local permitting process to ensure they comply with building code, land use laws, and other regulations. This process can be challenging for even the most experienced developers.

Lengthy processing can contribute to project delays, raising overall costs and reducing profit margins in what are often already tight budgets. However, through the permitting process, Cities can prioritize low-cost and affordable housing types to help reduce processing times and facilitate housing production and affordability.

The City should establish a priority permit review process for ADUs and multifamily developments that incorporate affordable units. This process would allow qualifying proposals to move to the front of the permit review line, guaranteeing a permitting decision within a set number of days. • ADU law already requires localities to act on an application within 60 days. ADU permit review timelines can be further prioritized, especially for those utilizing any ADU incentives (as detailed in Prohousing Policy recommendation #4).
• Best practices to streamline the permit review process can include a single point of contact at the staff level, a project technical review team, adequate staffing, concurrent applications, permitting flow charts and checklists, and regularly scheduled inter-departmental meetings.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 426 of 968 31 Policy #6
Adopt a Fee Reduction Strategy
Development fees can be broadly classified into service fees or impact fees. Services fees cover the City’s staff and overhead costs required for plan reviews, building permit approvals, inspections, and other services. Impact fees are necessary for funding additional services and covering the cost of infrastructure improvements associated with new development. The use of revenue generated by impact fees is restricted by law only for this purpose. However, in some cases, the cost of fees can increase the overall cost of development beyond what the market will support. This pushes developers to other areas where their projects may yield greater returns to make the project possible.

Cities who want to facilitate development must ensure that their fees are sufficient to address the need for new infrastructure and facilities without compromising the financial viability of new developments. Further, some Cities may reduce the cost of development through strategies that reduce or waive fees for qualifying projects, typically for affordable housing or other low-cost housing types. However, when fees are reduced or waived, the City must also consider the loss of anticipated revenues, which may impact other City programs. T o cover revenues that are lost due to impact fee waivers, the City must rely on other local government revenues, such as reallocating General Funds.

Cities may also consider strategies that defer fees for qualifying projects rather than reducing or waiving fees. Through fee deferrals the City still collects the revenue after the deferral period and can avoid budget shortfalls in other areas, but allows developers to make payments after securing long-term, lower-cost financing rather than at the start of the development process. In addition, new dedicated funding sources as detailed in Section 4.2, Financing Tools, may need to be established to avoid budget shortfalls in other areas and ensure the successful implementation of Prohousing Policies.

For housing developments, fees are commonly charged on a per-unit basis. However, factors such as density, location, unit type, and unit size can influence the per-unit demand on infrastructure and services. When development fees are calculated in a manner that considers the actual demand for infrastructure and services, cities can use their impact fees to better facilitate the types of housing that are most needed. • The City should assess the proportionality of fees imposed on residential development. This can be done by calculating fees based on square footage, location and development density, providing reduced fees for multifamily developments that demand fewer resources per unit than lower density developments. • The City should offer fee reductions or waivers in exchange for affordable housing developments meeting certain criteria. Fee reductions or waivers can be offset through allocations through other funding sources that can be used for housing-supportive infrastructure such as a housing trust fund or Community Development Block Grant (CDBG) funds.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 427 of 968 32 Policy #7
Reduce Transportation-Related Infrastructure Costs
Through Prioritized Projects in Residential Neighborhoods Policy #8
Develop a Comprehensive Surplus Land Act Program
How cities prioritize public improvements can have a lasting impact on the daily lives of residents. When investments in parks, streets, sidewalks, and other improvements are prioritized in wealthier neighborhoods, disparities in access to opportunity and resources may be created. However, when capital improvement projects are prioritized in a manner that promotes equitable investment, cities can help to remove inequities and build up those communities with the greatest needs. Additionally, prioritizing investments in housing-supportive infrastructure can help to offset the cost of development and attract additional affordable housing development. Lower- and moderate-income households typically have lower rates of car ownership. Investing in multimodal infrastructure tied to affordable housing can increase transportation options for those with the greatest need.

The City should ensure the equitable prioritization of capital investments. Prioritization of projects should factor in equity indicators such as racial and economic segregation, past capital investments, and the quality of public infrastructure.

The City should prioritize public infrastructure improvement projects using CDBG funds. Funding opportunities can include programs to expand sidewalks or protect bike/micro-mobility lanes; creation of on-street parking for bikes; or transit-related improvements.
• Priorities can be set for public infrastructure improvement projects in residential neighborhoods within the City’s next 5-Y ear Consolidated Plan.
• CDBG funds can be used to invest in neighborhoods with the greatest need. • Public improvements should be invested in areas with the greatest need, especially in areas that have been historically underserved.

The Surplus Land Act requires local agencies to prioritize land declared as surplus for affordable housing development.

This prioritizes publicly owned lands for affordable housing development by providing qualifying developers with a first right of refusal. Through a comprehensive Surplus Land Act program, localities can commit to providing surplus lands at a discounted rate in exchange for affordable housing development. Offsetting the high costs of acquiring land suitable for housing can help to attract affordable housing development. Many jurisdictions find that the revenues lost through discounted sale of property is offset by the value added through new affordable housing development.

The City should adopt a program that commits to reductions in the sale or lease of surplus lands in exchange for affordable housing development. This can take advantage of the City’s abundance of publicly owned land and lead to long-term affordable housing investments in Indio. • Discounts for surplus properties, such as land sales at reduced prices or below-market rate land leases, could be tiered based on the percentage of affordable units and level of affordability to best suit the community’s needs.

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 428 of 968 33 Policy #9
Establish an Enhanced Infrastructure Financing District Enhanced Infrastructure Financing Districts (EIFD) are place-based tools used to fund economic development projects through the use of tax increment financing. EIFDs capture the value of future development to reinvest in community infrastructure to support residents and businesses. EIFDs work by establishing a defined district where the property tax revenues are frozen at the year of establishment and additional tax revenues (caused by increased property values and new business activity) are collected and invested within the district. EIFDs can be used to fund infrastructure maintenance, housing development, economic development, transportation improvements, sewage treatment, climate adaptation projects, and more.

The State of California encourages EIFDs to be paired with federally designated Opportunity Zones, which are census tracts that have been added to the federal tax code as a “low-income community” and offer prioritization in federal grants and loans. Opportunity Zones encourage private investment by offering a tax incentive to allow investors to defer, reduce, or eliminate taxes on their unrealized capital gains. There are two census tracts in Indio that are designated as Opportunity Zones. When paired with Opportunity Zones, EIFDs can offer creative financing opportunities in Indio to invest in community infrastructure and affordable housing development, while attracting significant development interest.

The City should establish an EIFD that overlaps with a designated Opportunity Zone. This would allow the City to attract investment while capitalizing on future tax revenues. • EIFDs do not increase property taxes and do not pull property taxes from school districts. • Funds generated in the EIFD should directly support developments where at least 20 percent of the units will be affordable to lower-income households.
• EIFDs are eligible for a variety of funding sources, including federal sources (Economic Development Administration, Department of T ransportation, and Environmental Protection Agency), state grant and loan programs (Active T ransportation Program, Affordable Housing Sustainable Communities, Infill Infrastructure Grant, and T ransformative Climate Communities), Senate Bill 1 Road funds, Senate Bill 2 T ransfer T ax funds, and more.
• EIFDs can be used to fund climate change adaptation projects, including projects that address conditions that impact public health and extreme weather events, which could assist the City in implementing the T ransformative Climate Communities Plan.
• There is no voter requirement for the formation of an EIFD. T o establish an EIFD, the City must adopt an infrastructure Financing Plan (IFD) that describes the district, the proposed facilities and development, financing, goals, and a financial analysis. No action is required to take advantage of the Opportunity Zone.

Page 38 of 46 ends

AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 429 of 968 34 Policy #10
Increase Housing Accessibility through the
Adoption of Universal Design Standards
Homes built with universal design features such as no-step entries, wide doorways for wheelchair access, and easy- grasp lever style handles in place of doorknobs, are livable for a range of residents, especially older adults and people with disabilities. Localities can adopt universal design ordinances to incentivize increased housing accessibility. Universal design incentives can be paired with other programs, such as through a Density Bonus or ADU Incentive program (see policy recommendations #3 and 4).

The City should adopt a Universal Design ordinance that is offered in exchange for incentives. This should be paired with an ADU Incentive program, as ADUs offer unique independent living opportunity for those with disabilities.

A universal design ordinance could also be offered in exchange for additional density for projects utilizing the Density Bonus program.
• Universal design ordinances only require accessibility features when requested by the owner/buyer or when offered in exchange for an incentive to the project applicant and do not pose a constraint on development.

Missing Middle Housing9 types include a range of diverse housing types, such as duplexes, triplexes, fourplexes, cottage courts, and townhomes that are compatible in scale and form with single-family homes. Missing middle housing can provide housing solutions along a spectrum of affordability to increase homeownership opportunities for middle-income earning households, while utilizing land and infrastructure more efficiently to create walkable neighborhoods.

The City can facilitate the production of missing middle housing by establishing pre-approved or prototypical development plans for missing middle housing types. Preapproved plans are development plans that have been reviewed for conformance with applicable building codes and development regulations to be used for future developments.

Facilitating the production of missing middle housing through preapproved plans can translate into reduced housing costs that can be passed on to the home buyer.

The City should establish pre-approved or prototype plans for missing middle housing. This can either be through coordination with applicants to develop a library of preapproved plans as plans are reviewed and approved by the City, or by hiring a licensed architect to develop preapproved plans to be used for future developments in the City. • The City should only utilize previously approved development plans where explicit, written permission is granted.
9 “Missing Middle Housing” is a term created by Opticos Design to define a range of diverse housing types, such as duplexes, fourplexes, cottage courts, and multiplexes. These house-scale buildings fit seamlessly into existing residential neighborhoods and support walkability, locally serving retail, and public transportation options. They provide solutions along a spectrum of affordability to address the mismatch between the available housing stock and shifting demographics combined with the growing demand for walkability.

Policy #11
Establish Development Plans for Missing Middle
Housing Types

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 430 of 968 35 What is a Sales Tax Measure?
The State of California establishes a mandated minimum sales tax. Local jurisdictions are allowed to increase the sales tax within their boundaries to increase local revenues. Sales tax measures can be placed on the ballot by local governmental bodies to be considered by a vote of the people. Local taxes can be earmarked for a specific government program as a “special tax, ” while local taxes that are not earmarked are “general taxes. ” The revenue generated through sales tax measures can be used for public benefits such as affordable housing.

Key Step to Adopting a
Sales Tax Measure
FAQs/Considerations
• Special taxes are those taxes that are
earmarked for specified purposes
and require a two-thirds vote.
• General taxes are placed into the
localities general fund and only
require a simple majority vote.
• Voter approval requirements must be
considered, as general tax revenues
may be easier to pass but there is
less certainty the funds will be used
for their intended purpose, such
as a dedicated funding source for
affordable housing.
• T ax measures require significant
investment on behalf of the local
government. Early engagement of
residents and stakeholders can be
critical for gaining support for the
sales tax measure.

4.2 Financing Tools
How to Fund Local Prohousing Policies
Implementation of local Prohousing Policies requires allocated resources either through the dedication of staff time and resources or through the direct allocation of funds. T o cover those associated costs, several Prohousing Policies, as detailed in Section 4.1, will require funding sources beyond those that the City currently has, so City staff and City Council will have to analyze the potential for establishing dedicated funding sources. It is important to consider how dedicating a revenue stream to support local Prohousing Policies that accelerate or encourage affordable housing production may limit a jurisdictions ability to use those funds for another purpose. However, it can also present a key opportunity for the City to establish new dedicated revenue sources beyond those that the City currently has and expand the total amount of public resources available to address local housing needs.

There are many revenue-generating policies cities can adopt to establish dedicated funding sources for local prohousing strategies. While the total amount may vary from year-to-year, these dedicated funding sources provide an ongoing, committed stream of revenue for affordable housing and other prohousing related activities, often deposited into a housing trust fund. As such, a set of recommended revenue-generating policies referred to as policy financing tools are detailed in this section. These financing tools, including a sales tax measure, housing impact fee, commercial linkage fee, and development agreements, are recommended as potential dedicated revenue sources needed to support various Prohousing Policies and programs detailed in Section 4.1. The financing tools will be further analyzed through a subsequent market-based analysis and future policy decisions are to be made upon implementation.

T o place a sales tax measure on the ballot, a locality must go through their county elections office.

In California, a local sales tax measure will require voter approval, either by a two-thirds vote or by a simple majority of the voters.

Sales Tax Measure

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 431 of 968 36 What is a Housing Impact Fee?
Housing impact fees are tools that generate revenue by charging a fee to market-rate or luxury residential developments to support the creation of affordable housing. Housing impact fees assume that new market-rate and luxury residential development will generate increased demand for services needed to serve new residents, which will require lower-earning jobs to fill that demand. This creates a need for housing that is affordable to those workers. The revenue generated from the housing impact fees can be used to support their affordable housing needs.

Key Steps to Adopting a
Housing Impact Fee
Housing Impact Fee
A nexus study should be prepared to establish the relationship between market-rate residential development and the increased need for affordable housing.

A feasibility study should be prepared to determine how housing impact fees affect development costs for market-rate housing based on recommended fee levels.

An implementation strategy should be developed to ensure that the collected fees are used to address local priorities. Fees could be placed into a local housing trust fund to provide opportunities for leveraging funds.

FAQs/Considerations
• Housing impact fees can be focused
on areas where market-rate housing is
projected to occur at higher rates.
• Housing impact fees can be placed into
a local housing trust (see Prohousing
Policy recommendation #1 in Section

4.1) and used to leverage available
state and federal funds.
• Housing impact fees may be assessed
on a per-unit or per-square foot basis.

Fees assessed on a square-foot basis
are more equally distributed than fees
assessed on a per unit basis.
• Housing impacts fees can apply to
all rental and for-sale units, or only to
certain development types.

A nexus study should be prepared to establish the relationship between market-rate residential development and the increased need for affordable housing.

A feasibility study should be prepared to determine how housing impact fees affect development costs for market-rate housing based on recommended fee levels.

Page 41 of 46 ends

AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 432 of 968 37 What is a Commercial Linkage Fee?
Commercial linkage fees are tools that generate funds for affordable housing by charging a fee on non-residential, commercial development, including retail centers and other commercial projects. New commercial developments often generate jobs that are filled by employees at a variety of income levels, including extremely low-income through moderate-income ranges, and therefore increase housing demand at various levels of affordability. The revenue generated by commercial linkage fees can fund the housing needed to support the workers in the newly created lower- wage jobs. This can help close the gap between where people work and where they can afford to live.

Key Steps to Adopting a
Commercial Linkage Fee
Commercial Linkage Fee
A fee ordinance should be adopted. This should include
details on fee phasing, waivers or deferrals, how the fee will be calculated, and at what point in the permitting process the fee is to be collected.

A feasibility study should be prepared to determine how a commercial linkage fee would coordinate with economic
development goals based on recommended fee levels.

An implementation strategy should be developed to
ensure that the collected fees are used to address local priorities. Fees could be placed into a local housing
trust fund to provide opportunities for leveraging funds.

Fees could also be earmarked to be expended within a
certain distance of the employment, to ensure a balanced housing supply in proximity to employment uses.

A nexus study should be prepared to establish the relationship between new commercial development and the corresponding need for affordable housing. This should distinguish between varying types of commercial uses (e.g. office, retail, warehousing, etc.), and should consider the occupation and income
distribution of employees being created.

A fee ordinance should be adopted. This should include
details on fee phasing, waivers or deferrals, how the fee will be calculated, and at what point in the permitting process the fee is to be collected.
• Commercial linkage fees should
balance economic development and
housing goals.
• Incentives, such as reduced fees,
could be provided in exchange for
community serving amenities, such
as the inclusion of childcare facilities.

Such amenities should meet greater
goals of reducing the proximity
barrier between employment and
affordable housing options. This
can reduce the overall need for
employees to travel great distances
between home, employment, and
day-to-day needs.

A feasibility study should be prepared to determine how a commercial linkage fee would coordinate with economic
development goals based on recommended fee levels.

An implementation strategy should be developed to ensure that the collected fees are used to address local priorities.

Fees could be placed into a local housing trust fund to provide opportunities for leveraging funds. Fees could also be earmarked to be expended within a certain distance of the employment, to ensure a balanced housing supply in
proximity to employment uses.

FAQs/Considerations
A nexus study should be prepared to establish the relationship between new commercial development and the corresponding need for affordable housing. This should distinguish between varying types of commercial uses (e.g. office, retail, warehousing, etc.), and should consider the occupation and income
distribution of employees being created.

Page 42 of 46 ends

AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 433 of 968 38 What is a Developer Agreement?
A development agreement (DA) is a voluntary contract between a jurisdiction and a developer, detailing the conditions of approval that will govern development of the property. These conditions are terms that are not otherwise required through existing regulations. DAs are commonly used for larger projects that require multiple levels of review and negotiation for approval, often resulting in public benefits concurrent with development. The types of conditions associated with DAs can vary and may include annual allocations of revenues generated, the development of infrastructure or community serving amenities, or one-time donations for a community benefit. Funds agreed upon through DAs can be used by the jurisdiction for other projects and expenses related to the development of affordable housing. Funds for housing trusts are often negotiated through DAs.

Key Steps to Adopting a
Developer Agreement
Developer Agreement
The long-term costs and benefits should be considered
through the development of the DA.

The DA should consider how the benefits to the developer are balanced with the benefits to the community.

FAQs/Considerations
• DAs can provide a pathway by which
projects that would not otherwise be
developed can be approved. This
can lead to creative developments
paired with community benefits.
• DAs offer a scenario in which all
parties can benefit from, resulting
in applicant, government, and
community benefits. One such
scenario could be where a developer
agrees to provide a set contribution
to a housing trust fund that would
benefit the community through future
affordable housing opportunities.
• DAs are already being considered in
Indio. One such example includes a
developer who wants to ensure that
a luxury residential development
can operate as short-term vacation
rentals. The City is utilizing the DA
process to allow for a long-term
commitment from the City, in
exchange for an annual commitment
of gross receipts per households paid
to the City. These funds can be used
to fund affordable housing.

The local government and the developer should work
together, along with legal counsel, elected officials, and the public to develop a contract between the locality and the developer.

The DA should consider why the conditions are needed
and ensure that the conditions are consistent with citywide policies.

Page 43 of 46 ends

AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 434 of 968 Formal Resolution for the Prohousing Designation Program (New 04/21)
RESOLUTION NO. 10382

A RESOLUTION OF THE GOVERNING BODY OF THE CITY OF INDIO

AUTHORIZING APPLICATION TO AND PARTICIPATION IN THE

PROHOUSING DESIGNATION PROGRAM
WHEREAS, Government Code section 65589.9 established the Prohousing Designation Program (“PDP” or “Program”), which creates incentives for jurisdictions that are compliant with state housing element requirements and that have enacted Prohousing local policies; and
WHEREAS, such jurisdictions will be designated Prohousing, and, as such, will receive additional points or other preference during the scoring of their competitive applications for specified housing and infrastructure funding; and WHEREAS, the Department of Housing and Community Development (“Department”) has adopted emergency regulations (Cal. Code Regs., tit. 25, § 6600 et seq.) to implement the Program (“Program Regulations”), as authorized by Government Code section 65589.9, subdivision (d); and
WHEREAS, the City of Indio (“Applicant”) desires to submit an application for a Prohousing Designation (“Application”).

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF INDIO,

CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1.Applicant is hereby authorized and directed to submit an Application to the Department.

Section 2. Applicant acknowledges and confirms that it is currently in compliance with applicable state housing law.

Section 3. Applicant acknowledges and confirms that it will continue to comply with applicable housing laws and to refrain from enacting laws, developing policies, or taking other local governmental actions that may or do inhibit or constrain housing production. Examples of such local laws, policies, and action include moratoriums on development; local voter approval requirements related to housing production; downzoning; and unduly restrictive or onerous zoning regulations, development standards, or permit procedures. Applicant further acknowledges and confirms that it commits itself to affirmatively furthering fair housing pursuant to Government Code section 8899.50.

Section 4.If the Application is approved, Applicant is hereby authorized and directed to enter into, execute, and deliver all documents required or deemed necessary or appropriate to participate in the Program, and all amendments thereto (the “Program Documents”).

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AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 435 of 968 Formal Resolution for the Prohousing Designation Program (New 04/21)
Section 5. Applicant acknowledges and agrees that it shall be subject to the Application; the terms and conditions specified in the Program Documents; the Program Regulations; and any and all other applicable law.

Section 6.The City Manager is authorized to execute and deliver the Application and the Program Documents on behalf of the Applicant for participation in the Program.

PASSED, APPROVED AND ADOPTED this 19th day of July 2023.

AYES: [Insert #]NOES: [Insert #]ABSENT: [Insert #]ABSTAIN: [Insert #]
The undersigned, Sabdi Sanchez, City Clerk Administrator of Applicant, does hereby attest and certify that the foregoing is a true and full copy of a resolution of the Applicant’s governing body adopted at a duly convened meeting on the date above- mentioned, and that the resolution has not been altered, amended, or repealed.

SIGNATURE: __________________ DATE: ________________
NAME: SABDI SANCHEZ TITLE: CITY CLERK ADMINISTRATOR

Page 45 of 46 ends

AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 436 of 968 Formal Resolution for the Prohousing Designation Program (New 04/21)

Page 46 of 46 ends

AGENDA ITEM #10.3
Resolution No. 10382 , Authorizing the Preparation and Submittal of an A... Page 437 of 968 City of Indio
City Council
July 19, 2023

STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Bryan H. Montgomery, City Manager
Subject: Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) that includes: a) Establishing officers of the IEFA; b) Adopting the City's Conflict of d) and, Policy; Investment City's c) Adopting Code; Interest the Appointing the City Attorney as IEFA General Counsel.

RECOMMENDATION:

By motion as the Board of the Indio Electric Finance Authority (IEFA), approve the Bylaws for the IEFA, and adopt the City's Conflict of Interest Code, adopt the City's Investment Policy; and, appoint the City Attorney as IEFA General Counsel.

SUMMARY:

The Indio Electric Financing Authority (the “IEFA”) was created pursuant to a Joint Exercise of Powers Agreement, dated June 21, 2023 (the “JPA ”), by and between the City of Indio and the Imperial Irrigation District (“IID”). The purpose of the JPA is to provide and enhance electrical service within the territorial boundaries of Indio. As the first meeting of the JPA, the Board is to consider adopting bylaws that will help govern the JPA's operations.

BACKGROUND INFORMATION:

Attached are the proposed Bylaws for the Indio Electric Finance Authority. Key components of the Bylaws include:
(1) Establishing the offices of: (a) Chair, which office is held by the person serving as the Mayor of the City of Indio; (b) Vice Chair, which office is held by the person serving as Mayor Pro Tem of the City of Indio; (c) Secretary, which office is held by the person serving as the City Clerk Administrator of the City of Indio; (d) Executive Director, which office is held by the person serving as the City Manager of the City of Indio; and (e) Treasurer, which office is held by the person serving as Assistant City Manager/Finance Director of City of Indio;

(2) Designating the dates and locations of regular meetings of the Authority on the same date, at the same time and at the same location as the regular meetings of the City Council of Indio, unless otherwise determined by the Board of Directors of the Authority.

(3) Adopting the City’s Conflict of Interest Code.

(4) Adopting the City's Investment Policy.

AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t... Page 438 of 968 (5) Appointing the City Attorney as General Counsel.

ATTACHMENTS:

Attachment 1 - Bylaws (Indio Electric Financing Authority) Attachment 2 - EXECUTED - Joint Powers Agreement (Indio - IID)

Page 2 of 55 ends

AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t... Page 439 of 968 Stradling Yocca Carlson & Rauth
Draft of 7/12/23
4854-8366-2427/200973-0003
BYLAWS
OF THE

INDIO ELECTRIC FINANCING AUTHORITY
Adopted July 19, 2023

Page 3 of 55 ends

AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t... Page 440 of 968 4854-8366-2427/200973-0003

TABLE OF CONTENTS
Page

ARTICLE I

DEFINITIONS
Section 1.1 Definitions ................................................................................................................ 1

ARTICLE II

THE AUTHORITY
Section 2.1 Name......................................................................................................................... 1 Section 2.2 Authority Board Members........................................................................................ 1 Section 2.3 Office ........................................................................................................................ 1 Section 2.4 Compensation ........................................................................................................... 1 Section 2.5 Conflicts of Interest .................................................................................................. 1

ARTICLE III

OFFICERS
Section 3.1 Officers ..................................................................................................................... 1 Section 3.2 Chair ......................................................................................................................... 2 Section 3.3 Vice Chair................................................................................................................. 2 Section 3.4 Executive Director.................................................................................................... 2 Section 3.5 Secretary ................................................................................................................... 2 Section 3.6 Treasurer................................................................................................................... 2 Section 3.7 Confirmation of Officers .......................................................................................... 2 Section 3.8 Authority to Bind Authority ..................................................................................... 2

ARTICLE IV

EMPLOYEES AND AGENTS
Section 4.1 Appointment of Employees and Agents................................................................... 2

ARTICLE V

MEETINGS
Section 5.1 Regular Meetings...................................................................................................... 3 Section 5.2 Special Meetings....................................................................................................... 3 Section 5.3 Closed Sessions ........................................................................................................ 3 Section 5.4 Public Hearings......................................................................................................... 3 Section 5.5 Adjourning Meetings and Continuing Public Hearings to Other Times or Places... 3 Section 5.6 Ralph M. Brown Act ................................................................................................ 4 Section 5.7 Quorum..................................................................................................................... 4

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AGENDA ITEM #10.4
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Section 5.8 Order of Business ..................................................................................................... 4 Section 5.9 Parliamentary Procedure........................................................................................... 4

ARTICLE VI

AMENDMENTS
Section 6.1 Amendments to Bylaws............................................................................................ 4

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ARTICLE I

DEFINITIONS
Section 1.1 Definitions. All capitalized terms used but not otherwise defined in the Bylaws of the Indio Electric Financing Authority (these “Bylaws”) shall have the respective meanings assigned to such terms in the Joint Exercise of Powers Agreement dated and effective June 21, 2023 (the “Agreement”), by and between 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 (“Indio”), and the Imperial Irrigation District, an irrigation district that is duly organized and existing under and by virtue of the laws of the State of California, including but not limited to Division 11 of the Water Code (“IID”), creating the Indio Electric Financing Authority (the “Authority”).

ARTICLE II

THE AUTHORITY
Section 2.1 Name. The official name of the Authority shall be the “Indio Electric Financing Authority.”
Section 2.2 Authority Board Members. The Authority shall be administered by a governing Board of Directors (the “Board”) that shall consist of the Councilmembers of the City Council of Indio (the “City Council of Indio”). The term of office as a member of the Board shall terminate when such member of the Board shall cease to hold his or her respective office at Indio, and the successor to such officer or director of Indio shall become a member of the Board, upon assuming such office.

Section 2.3 Office. The principal office of the Authority shall be the principal office of Indio, the Indio City Hall at 100 Civic Center Mall, Indio, CA 92201, or at such other place as may be designated by the Board.

Section 2.4 Compensation. Members of the Board shall not receive any compensation for serving as such, but shall be entitled to reimbursement for any expenses actually incurred in connection with serving as a member if the Board shall determine that such expenses shall be reimbursed and there are unencumbered funds available for such purpose.

Section 2.5 Conflicts of Interest. The Authority shall adopt the City of Indio Conflict of Interest Code adopted by Indio, as revised on August 19, 2020.

ARTICLE III

OFFICERS
Section 3.1 Officers. The Officers of the Authority shall be the Chair, Vice Chair, Executive Director, Secretary and Treasurer. Such officers may be directors or officers of Indio serving ex officio.

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Section 3.2 Chair. The Chair of the Authority shall be the Board member who is the Mayor of Indio. The term of office of the Chair shall be the same as the term of the Mayor of Indio.

The Chair shall preside at all meetings of the Authority,and shall submit such information and recommendations to the Board as he or she may consider proper concerning the business, policies and affairs of the Authority.

Section 3.3 Vice Chair. The Vice Chair of the Authority shall be the Board member who is the Mayor Pro Tem of Indio. The term of office of the Vice Chair shall be the same as the term of the Mayor Pro Tem of Indio. The Vice Chair shall perform the duties of the Chair in the absence or incapacity of the Chair. In case of the resignation or death of the Chair, the Vice Chair shall perform such duties as are imposed on the Chair, until such time as a new Chair is selected or appointed.

Section 3.4 Executive Director. The City Manager of Indio is hereby designated as the Executive Director of the Authority and shall be responsible for execution and supervision of the affairs of the Authority. Except as otherwise authorized by resolution of the Board, the Executive Director or the Executive Director’s designee shall sign all contracts, deeds and other instruments executed by the Authority.

Section 3.5 Secretary. The City Clerk Administrator of Indio is hereby designated as the Secretary of the Authority. The Secretary shall keep the records of the Authority, shall act as Secretary at the meetings of the Authority and record all votes, and shall keep a record of the proceedings of the Authority in a journal of proceedings to be kept for such purpose, and shall perform all duties incident to the office. The Secretary of the Authority shall cause minutes of all meetings of the Board to be kept and shall, as soon as practicable after each meeting, cause a copy of the minutes to be forwarded to each member of the Board, Indio, and IID. Any assistant City Clerk of Indio shall also serve as an assistant secretary of the Authority and may take any actions for which the Secretary has become authorized by the Agreement, any Indenture, and any resolution of the Board of the Authority or otherwise.

Section 3.6 Treasurer. The Assistant City Manager/Finance Director is hereby designated as the Treasurer of the Authority. In addition, subject to the applicable provisions of any trust agreement, indenture or resolution providing for a trustee or other fiscal agent, the Treasurer of the Authority is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond as required by the Board, and as such shall have the power, duties and responsibilities that are specified in Section 6505.1 of the California Government Code. The cost of the bond shall be paid by the Authority.

Section 3.7 General Counsel. The appointed City Attorney of Indio is hereby designated to advise and provide guidance and opinions on various legal matters relating the operations and activities of the Authority.

Section 3.8 Confirmation of Officers. Confirmation of officers shall be the first order of business at the first meeting of the Authority, regular or special, held in each calendar year.

Section 3.9 Authority to Bind Authority. No Board member, officer, agent or employee of the Authority, without prior specific or general authority by a vote of the Board, shall have any power or authority to bind the Authority by any contract, to pledge its credit, or to render it liable for any purpose in any amount.

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ARTICLE IV

EMPLOYEES AND AGENTS
Section 4.1 Appointment of Employees and Agents. The Authority may from time to time request from Indio and/or IID the services of such personnel, counsel or agents, permanent or temporary, as may be necessary to carry out the business and affairs of the Authority. The Board may in addition employ temporary professional and technical personnel on such terms and at such rates of compensation as the Board may determine, for the performance of Authority business and affairs, provided that adequate sources of funds are identified for the payment of such temporary professional and technical services.

ARTICLE V

MEETINGS
Section 5.1 Regular Meetings. The time and place for holding Board meetings shall be established, and may be changed at any time, by resolution of the Board. The Board shall conduct regular meetings on the same date, at the same time and at the same location as the regular meetings of the City Council of Indio. Such regular meetings may occur either during or after the regular meetings of the City Council of Indio, but may not commence earlier than the starting time for the regular meetings of the City Council of Indio. If the Secretary does not post an agenda for a regular meeting pursuant to the Ralph M. Brown Act (the “Brown Act”), then such failure to post shall be deemed to be a determination by the Chair that no items require discussion and, therefore, that the regular meeting has been cancelled, except as otherwise provided in the Brown Act.

Section 5.2 Special Meetings. The Board may hold special meetings at any time and from time to time in accordance with law. Special meetings will be held in accordance with the Brown Act.

Section 5.3 Closed Sessions. Nothing contained in these Bylaws shall be construed to prevent the Board from holding closed sessions during a regular or special meeting concerning any matter permitted by law to be considered in a closed session.

Section 5.4 Public Hearings. All public hearings held by the Board shall be held during regular or special meetings of the Board.

Section 5.5 Adjourning Meetings and Continuing Public Hearings to Other Times or Places. The Board may adjourn any meeting to a time and place specified in the order of adjournment. Less than a quorum may so adjourn from time to time. If all Board members are absent from any regular meeting or adjourned regular meeting, the Secretary or acting Secretary of the Authority may declare the meeting adjourned to a stated time and place and shall cause a written notice of the adjournment to be given in the same manner as provided for special meetings unless such notice is waived as provided for special meetings. A copy of the order or notice of adjournment shall be conspicuously posted on or near the door of the place where the meeting was held within 24 hours after the time of the adjournment. When a regular or adjourned regular meeting is adjourned as provided in this section, the resulting adjourned regular meeting is a regular meeting for all purposes.

When an order of adjournment of any meeting fails to state the hour at which the adjourned meeting is to be held, it shall be held at the hour specified for regular meetings.

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Any public hearing being held, or any hearing noticed or ordered to be held at any meeting may by order or notice of continuance be continued or recontinued to any subsequent meeting in the same manner and to the same extent set forth herein for the adjournment of the meetings; provided, that if the hearing is continued to a time less than 24 hours after the time specified in the order or notice of hearing a copy of the order or notice of continuance shall be posted immediately following the meeting at which the order or declaration of continuance was adopted or made.

Section 5.6 Ralph M. Brown Act. The Brown Act (Chapter 9 of Part 1 of Division 2 of Title 5 of the California Government Code) applies to all meetings of the Board.

Section 5.7 Quorum. A majority of the members of the Board shall constitute a quorum for the purpose of conducting its business and exercising its powers and for all other official purposes, except that less than a quorum may adjourn from time to time until a quorum is obtained.

Any action or decision of the Authority shall be on motion duly approved by a majority of a quorum of the Board at a lawfully held meeting.

Section 5.8 Order of Business. The Chair or Executive Director shall prepare or approve the agenda of all meetings. Business will be conducted according to the agenda, except when determined by the Board as permitted by law.

Section 5.9 Parliamentary Procedure. The presiding officer at the meeting shall determine the rules of conduct. The presiding officer may be guided by the rules of parliamentary procedure set forth in Robert’s Rules of Order, but failure to follow Robert’s Rules of Order shall not affect the validity of any action or motion duly taken or adopted by the Board at any lawfully held meeting.

ARTICLE VI

AMENDMENTS
Section 6.1 Amendments to Bylaws. These Bylaws may be amended by the Board at any regular or special meeting by majority vote, provided that a description of the proposed amendment to any particular section is included in the notice of such meeting and that the Board shall not adopt, amend, or repeal any provision of these Bylaws that would cause these Bylaws to be inconsistent with the Agreement.

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AGENDA ITEM #10.4
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JOINTEXERCISEOFPOWERSAGREEMENT
byandbetween
CITYOFINDIOandIMPERIALIRRIGATIONDISTRICT
creatingthe

INDIOELECTRICFINANCINGAUTHORITY
June21,2023
4856—1616—1105V9/200973-0003

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AGENDA ITEM #10.4
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JOINTEXERCISEOFPOWERSAGREEMENT
THISAGREEMENT,datedJune21,2023,byandbetweentheCITYOFINDIO,amunicipalcorporationandgenerallawcitydulyorganizedandexistingunderandbyvirtueoftheConstitutionandlawsoftheStateofCalifornia(“Indio”),andtheIMPERIALIRRIGATIONDISTRICT,anirrigationdistrictthatisdulyorganizedandexistingunderandbyvirtueofthelawsoftheStateofCalifornia,includingbutnotlimitedtoDivisionlloftheWaterCode(“IID”).DECLARATIONOFPURPOSEA.Chapter5ofDivision7ofTitleloftheCaliforniaGovernmentCode(the“Act”)authorizesIndioandIIDtocreateajointexerciseofpowersentitywhichhasthepowertoexerciseanypowerscommontoIndioandIIDandtoexerciseadditionalpowersgrantedtoitundertheAct.ThisAgreementcreatessuchanagency,whichshallbeknownastheIndioElectricFinancingAuthority(the“Authority”)forthepurposesandtoexercisethepowersdescribedherein.B.IndioandIIDeachhavethepowerundertheConstitutionandlawsoftheStatetofurnishelectricalpowerandtoprocure,construct,own,operate,maintainand/orleasefacilitiestosupplysuchelectricalpower.C.IndioandIIDdesiretocreatetheAuthorityforthepurposesofprocuring,designing,?nancing,constructing,owning,operatingandmaintainingenergysystemimprovements,systemef?ciencyandreliabilityimprovementsandenergyserviceenhancementsinordertofacilitatetheprovisionandenhancementofelectricalservicewithintheterritorialboundariesofIndio,andIndioandIIDeachdesiretouseanyandeverypowercommontothem,andanyotherpowersreasonablynecessaryandappropriate,toaccomplishsuchpurposes.D.ThisAgreementdoesnotlegallybindorotherwisecommittheAuthorityortheMemberstoparticipateinorotherwiseproceedwiththeacquisition,design,constructionoroperationofanyProject(asde?nedherein).TheMemberswillcomplywiththeCaliforniaEnvironmentalQualityAct(“CEQA”),asapplicable,priortoproceedingwiththeacquisition,design,constructionoroperationofanyProject.E.EstablishingandjoiningtheAuthorityareadministrativeandorganizationalactionsthatwillnotresultinadirectphysicalchangeintheenvironmentorareasonablyforeseeableindirectchangetotheenvironment,andthusisnotaprojectasde?nedbyCEQAGuidelinessectionl5378(b)(5).Now,therefore,IndioandIIDagreeasfollows:Sectionl. De?nitions.Unlessthecontextotherwiserequires,thetermsde?nedinthisSection1shallforallpurposesofthisAgreementhavethemeaningshereinspeci?ed.“Act”shallmeanArticles1through4ofChapter5ofDivision7ofTitle1oftheCaliforniaGovernmentCode(commencingwithSection6500),asamendedorsupplementedfromtimetotime.4856—l616—llO5v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 448 of 968 “Agreement”shallmeanthisJointExerciseofPowersAgreement,asitmaybeamendedfromtimetotime,creatingtheAuthority.“Authority”shallmeantheIndieElectricFinancingAuthoritycreatedbythisAgreement.“Board”or“BoardofDirectors”shallmeanthegoverningboardoftheAuthority.“Bonds”shallmeanbonds,notes,commercialpaperandanyotherevidencesofindebtednessoftheAuthorityauthorizedandissuedpursuanttotheAct,andanyindebtednessissuedorincurredbytheAuthoritypursuanttoanyactsupplementarytotheAct,including,butnotlimitedto,refundingbondsauthorizedandissuedpursuanttoArticlellofChapter3ofPart1ofDivision2ofTitle5oftheGovernmentCodeoftheStateofCalifornia.“BrownAct”shallmeantheRalphM.BrownAct(Chapter9ofPart1ofDivision2ofTitle5oftheCaliforniaGovernmentCode),oranysuccessorlegislationhereafterenacted.“Budget”shallhavethemeaningascribedtosuchterminSectionl4(a)ofthisAgreement.“BusinessDay”shallmeanadaywhichisnotaSaturday,SundayorlegalholidayonwhichbankinginstitutionsintheStateareclosed.“DisputingParty”shallhavethemeaningascribedtosuchterminSectionl9(a).“Indenture”shallmeaneachindenture,trustagreement,resolutionorothersuchinstrumentpursuanttowhichBondsareissued.“Members”shallmeanIndioand11D.“NoticeofDispute”shallhavethemeaningascribedtosuchterminSectionl9(a).“Project”or“Projects”shallmeantheenergysystemimprovements,systemefficiencyandreliabilityimprovementsandenergyserviceenhancementsorotherfacilitiesnecessaryandappropriateforcarryingoutthepurposesofthisAgreementandtheapplicableProjectAgreement,andasfurtherspecifiedinsuchProjectAgreement.“ProjectAgreement”shallmeananagreementsubstantiallyintheformattachedheretoasExhibitAbetweentheAuthorityandHD,orasuccessorthereto,enteredintoforaProjectthat,amongotherthings,willidentifytheProject(oranysubcomponentsofsuchProject,ifapplicable),establishthescopeoftheProject,establishtheownershipofthecomponentsoftheProject,thetermsoftheleaseofequipment,propertyoralloraportionoftheProject,ifapplicable,toIID,definetheresponsibilitiesoftheAuthorityandIIDwithrespecttothedesign,acquisition,andconstruction,andandfortheinterconnectionofsuchProjectintoHD’ssystem.“ServicingAgreement”shallmeantheagreementsubstantiallyintheformattachedheretoasExhibitBbetweentheAuthorityandHD,oranysuccessortoIID,pursuanttowhichIIDwillagreetocollectonbehalfof,andremitto,theAuthoritytheSurcharge.“Surcharge”shallmeanthefeeorchargechargedbytheAuthorityfortheprovisionofelectricalservice.4856-1616-ll05v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 449 of 968 “State”shallmeantheStateofCalifornia.“SystemAverageRate”shallmeanthetotalrevenuesgeneratedbyIIDfromthesaleofelectricitytoallrateclassesdividedbythetotalkilowatthoursofelectricitysoldbyIIDtoallrateclasses.“1934Agreement”shallmeantheAgreementofCompromise,datedFebruaryl4,1934,byandbetweentheCoachellaValleyWaterDistrictandIID.Section2.Purpose.ThisAgreementismadepursuanttotheActforthepurposeofprovidingandenhancingelectricalservicewithintheterritorialboundariesoflndiothroughtheprocurement,design,construction,?nancing,leasing,ownership,operationandmaintenanceofenergysystemimprovements,systemefficiencyandreliabilityimprovementsandenergyserviceenhancements.Section3.Term.ThisAgreementshallbecomeeffectiveasofthedatehereofandshallcontinueinfullforceandeffectuntiltheMembersterminatethisAgreementinwriting;providedhoweverthisAgreementshallnotterminatesolongasanyBondsorotherobligationsoftheAuthorityremainoutstandingunderthetermsofanyIndenture,contract,agreement,lease,subleaseorotherinstrumentpursuanttowhichsuchBondsareissuedorotherobligationsareincurred.NotwithstandingthepriorprovisionsofthisSection3,thisAgreementandtheAuthorityshallcontinuetoexistforthepurposeofdisposingofallclaims,distributionofassetsandallotherfunctionsnecessarytoconcludetheaffairsoftheAuthority.Section4.CreationoftheAuthority.ThereisherebycreatedpursuanttotheActanauthorityandpublicentitytobeknownasthe“IndieElectricFinancingAuthority.”AsprovidedintheAct,theAuthorityshallbeapublicentityseparatefromtheMembers.ThegeographicboundariesoftheAuthorityshallbecoextensivewiththeterritorialboundariesofIndio.Thedebts,liabilitiesandobligationsoftheAuthorityshallnotconstitutedebts,liabilitiesorobligationsoftheMembers.NotwithstandinganyotherprovisionofthisAgreement,theAuthorityshallnothavethepowertoincuranydebt,liabilityorobligationthatisnotsubjecttotheprecedingsentence,includingbutnotlimitedtoanydebt,liabilityorobligationtoapublicretirementsystemorotherwiseforpension,healthcareorotherretirementbenefits.Section5.Powers.(a)GeneralPowers.TheAuthorityshallhaveanyandallpowerswhicharecommonpowersoftheMembers,andthepowersseparatelyconferredbylawupontheAuthority.Allsuchpowers,whethercommontotheMembersorseparatelyconferredbylawupontheAuthority,arespeci?edaspowersoftheAuthority,exceptanysuchpowerswhicharespecificallypowersofIndio.(b)SpeczfcPowers.TheAuthorityisherebyauthorized,initsownname,todoallactsnecessary,convenientandappropriatefortheexerciseoftheforegoingpowersforthepurposessetforthinthisAgreementandtodoanyorallofthefollowing:(1)Tomakeandenterintocontracts;4856-1616-ll05v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 450 of 968 (2)Toemployagentsandemployees;(3)Tolease,acquire,design,construct,manage,maintainoroperateanybuilding,worksorimprovementsforthepurposessetforthinSection2ofthisAgreement;(4)ToenterintoarealorpersonalpropertyleaseorleaseswithIIDtofacilitatethepurposessetforthinSection2ofthisAgreement;(5)Toacquire,holdordisposeofpropertyortherighttousepropertyorfacilitiesforthepurposessetforthinSection2ofthisAgreement;(6)Toincurdebts,liabilities,orobligationswhichdonotconstituteadebt,liability,orobligationofanyMember;(7)TochargetheSurcharge;(8)Toreceivegifts,contributions,anddonationsofproperty,funds,services,andotherformsofassistancefrompersons,?rms,corporations,andgovernmentalentities,providedthattheAuthorityconsentstosuchgifts,contributions,anddonations;(9)Toprescribetheduties,compensation,andothertermsandconditionsofemploymentofotheragents,of?cers,andemployees;(l0)Toadoptreasonablerulesandregulationsfortheconductoftheday—to-dayoperationsoftheAuthority;(ll)Toapplyfor,accept,receive,anddisbursegrantsandloansfromlocal,state,orfederalagenciesorfromindividualsorbusinesses;(12)Tosueandbesuedinitsownname;(l3)Tofundandmaintainadequatereservefundstosupportdebtandoperationalrequirements;(14)Toinvestmoneyinitstreasury,pursuanttoGovernmentCodeSection6505.5etseq.,thatisnotrequiredfortheimmediatenecessitiesoftheAuthority,astheAuthoritydeterminesadvisable,inthesamemannerandonthesameconditionsaslocalagencies,pursuanttoSection53601oftheGovernmentCode;(15)ToenterintoProjectAgreementsinconnectionwithanyProjects;(17)ToissueBondsorincurotherobligationsoftheAuthority;(l8)ToexerciseanyandallpowerswhichareprovidedforintheActandinGovernmentCodeSection6584etseq.,including,withoutlimitationGovernmentCodeSection6588,astheyexistonthedateofthisAgreementormayhereafterbeamended;4856-l6l6—llO5v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 451 of 968 (19)Totakeactionbyresolution,ordinance,ormotion,asapprovedbytheBoardasspecifiedherein;(20)TocarryoutandenforceallprovisionsofthisAgreementwithrespecttotheactivitiesnecessarytoundertaketheacquisition,design,construction,ownership,operationandmaintenanceofanyProjects;(21)ToconductsuchotheractivitiesasarenecessaryandappropriatetocarryoutpurposessetforthinSection2ofthisAgreement;and(22)Toexerciseanypowernecessaryorincidentaltotheforegoingpowers.Notwithstandingtheforegoing,theAuthorityshallhaveanyadditionalpowersconferredundertheActorunderapplicablelaw,insofarassuchadditionalpowersmaybenecessarytoaccomplishthepurposessetforthinSection2hereof.(c)LimitationonPowers.ThepowerssetforthinSections5(a)and5(b)shallbesubjecttothelimitationsonthepowersoftheAuthoritysetforthinSection4.InnoeventshalltheAuthoritybeauthorizedtoprovideelectricalserviceconsistingofthedistributionofelectricalpowerdirectlytoendusercustomers.(d)TerminationofPowers.TheAuthorityshallcontinuetoexercisethepowershereinconferreduponituntiltheterminationofthisAgreementinaccordancewithSection3hereof.Section6.GoverningBoard.(a)MembersoftheGoverningBoard.TheAuthorityshallbeadministeredbytheBoard.HDandIndioagreethattheBoardshallconsistoftheCityCouncilofIndio.Thetermofof?ceasamemberoftheBoardshallterminatewhensuchmemberoftheBoardshallceasetoholdhisorherrespectiveof?ceatIndio,andthesuccessortosuchofficerordirectorofIndioshallbecomeamemberoftheBoard,uponassumingsuchof?ce.MembersoftheBoardshallnotreceiveanycompensationforservingassuch,butshallbeentitledtoreimbursementforanyexpensesactuallyincurredinconnectionwithservingasamemberiftheBoardshalldeterminethatsuchexpensesshallbereimbursedandthereareunencumberedfundsavailableforsuchpurpose.(b)MeetingsofBoard.(1)ThetimeandplaceforholdingBoardmeetingsshallbeestablished,regularmeetingsonthesamedate,atthesametimeandatthesamelocationastheregularmeetingsoftheCityCouncilofIndio;providedthatthefirstregularmeetingoftheBoardshalloccuronJuly19,2023.SuchregularmeetingsmayoccureitherduringoraftertheregularmeetingsoftheCityCouncilofIndio,butmaynotcommenceearlierthanthestartingtimefortheregularmeetingsoftheCityCouncilofIndio.IftheSecretarydoesnotpostanagendaforaregularmeetingpursuanttotheBrownAct,thensuchfailuretopostshallbedeemedtobeadeterminationbytheChairthatnoitemsrequirediscussionand,therefore,thattheregularmeetinghasbeencancelled,exceptas4856-1616-ll05v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 452 of 968 otherwiseprovidedintheBrownAct.TheBoardmayholdspecialmeetingsatanytimeandfromtimetotimeinaccordancewithlaw.(2)AllregularandspecialmeetingsoftheBoardshallbecalled,noticed,heldandconductedsubjecttotheprovisionsoftheBrownAct,oranysuccessorlegislationhereafterenacted.TheAuthorityshallprovideHDwithnoticeofallsuchregularandspecialmeetingsoftheBoard.(3)TheSecretaryoftheAuthorityshallcauseminutesofallmeetingsoftheBoardtobekeptandshall,assoonaspracticableaftereachmeeting,causeacopyoftheminutestobeforwardedtoeachmemberoftheBoardandtotheMembers.(4)AmajorityofthemembersoftheBoardshallconstituteaquorumforthetransactionofbusiness,exceptthatlessthanaquorummayadjournmeetingsfromtimetotime.(0)V oting.EachmemberoftheBoardshallhaveonevote.SubjecttoSection5(d)below,allactionsoftheBoard,including,butnotlimitedto,approvalofAuthoritybudgetsandapprovaloftheissuanceorrefundingofBondsshallbeapprovedontheaffirmativevoteofamajorityoftheBoardmembersoftheAuthorityvotingontheissue.IntheeventofatievoteamongthemembersoftheBoard,thematterwillnotbeconsideredtohavepassed.((1)Lz'mz'tatz'onsonBoardAction;MattersReservedtoMembers.NotwithstandingSection5(c)above,inadditiontoapprovaloftheBoardasprovidedinSection5(0),thewrittenapprovalof11DandIndioshallberequiredto:(1)amendthisAgreementinanymanner;(2)alterthepurpose,powersorauthorityoftheAuthorityortheBoard;(3)initiatelitigationoranalternativedisputeresolutionprocessagainstanyParty;(4)inconnectionwithanylitigationoralternativedisputeresolutionprocess,hirecounsel,ordefendanyactionorclaimwithoutconferringandcooperatingwiththeotherMember;(5)borrowfundsinexcessoftheamountreasonablynecessarytopayforaProjectidentifiedinanexecutedProjectAgreement;(6)enterintoaProjectAgreement,ServicingAgreementorLeaseAgreementwithanypartyotherthanHD;(7)modifyanyProjectAgreement,ServiceAgreementorLeaseAgreement;or (8)increasetheSurchargebyanamountinexcessof10%ofthethen-existingSystemAverageRate.ForpurposesofthisSection6(d)(8),thewrittenapprovaloftheMembersshallbeevidencedbyanactionofthegoverningbodyoftheapplicableMember.Forallotherpurposesunderthis64856-1616-llO5v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 453 of 968 Section6(d),writtenapprovalmaybeevidenced,forIID,byacertificateoftheGeneralManagerofIIDorhisorherdesignee,andforIndio,byacertificateoftheCityManageroflndioorhisorherdesigneeSection7.Officers‘Duties‘Bonds.(a)Officers.TheofficersoftheAuthorityshallbetheChair,ViceChair,ExecutiveDirector,SecretaryandTreasurer.Suchof?cersmaybedirectorsorof?cersofIndioservingexo?icio.(b)Chair.TheChairoftheAuthorityshallbetheBoardmemberwhoistheMayorofIndio.Thetermofof?ceoftheChairshallbethesameasthetermoftheMayorofIndio.TheChairshallpresideatallmeetingsoftheAuthority,andshallsubmitsuchinformationandrecommendationstotheBoardasheorshemayconsiderproperconcerningthebusiness,policiesandaffairsoftheAuthority.(c)ViceChair.TheViceChairoftheAuthorityshallbetheBoardmemberwhoistheMayorProTermoflndio.ThetermofofficeoftheViceChairshallbethesameasthetermoftheMayorProTemofIndio.TheViceChairshallperformthedutiesoftheChairintheabsenceorincapacityoftheChair.IncaseoftheresignationordeathoftheChair,theViceChairshallperformsuchdutiesasareimposedontheChair,untilsuchtimeasanewChairisselectedorappointed.(d)ExecutiveDirector.TheCityManagerofIndioisherebydesignatedastheExecutiveDirectoroftheAuthorityandshallberesponsibleforexecutionandsupervisionoftheaffairsoftheAuthority.ExceptasotherwiseauthorizedbyresolutionoftheBoard,theExecutiveDirectorortheExecutiveDirector’sdesigneeshallsignallcontracts,deedsandotherinstrumentsexecutedbytheAuthority.(e)Secretary.TheCityClerkoflndioisherebydesignatedastheSecretaryoftheAuthority.TheSecretaryshallkeeptherecordsoftheAuthority,shallactasSecretaryatthemeetingsoftheAuthorityandrecordallvotes,andshallkeeparecordoftheproceedingsoftheAuthorityinajournalofproceedingstobekeptforsuchpurpose,andshallperformalldutiesincidenttotheoffice.AnyassistantCityClerkofIndioshallalsoserveasanassistantsecretaryoftheAuthorityandmaytakeanyactionsforwhichtheSecretaryhasbecomeauthorizedbytheAgreement,anyIndenture,andanyresolutionoftheBoardoftheAuthorityorotherwise.(f)Treasurer.TheAssistantCityManager/FinanceDirectoroflndioisherebydesignatedastheTreasureroftheAuthority.Inaddition,subjecttotheapplicableprovisionsofanytrustagreement,indentureorresolutionprovidingforatrusteeorotherfiscalagent,theTreasureroftheAuthorityisdesignatedasthepublicofficerorpersonwhohaschargeof,handles,orhasaccesstheAct.ThecostofthebondshallbepaidbytheAuthority.(1)SolongasrequiredbySections6505and6505.5oftheAct,theTreasureroftheAuthorityshallprepareorcausetobeprepared:(a)aspecialauditasrequiredpursuanttoSection6505oftheActeveryyearduringthetermofthisAgreement;and(b)areportinwritingonthefirstdayofJuly,October,JanuaryandAprilofeachyeartotheBoardandtheMembers,whichreportshalldescribetheamountofmoneyheldbytheTreasureroftheAuthority4856-1616-1l05v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 454 of 968 fortheBoard,theamountofreceiptssincethelastsuchreport,andtheamountpaidoutsincethelastsuchreport(whichmayexcludeamountsheldbyatrusteeorother?duciaryinconnectionwithanyBondstotheextentthatsuchtrusteeorother?duciaryprovidesregularreportscoveringsuchamounts).(g)NoCompensation.TheservicesoftheofficersshallbewithoutcompensationbytheAuthority.IndioandIIDwillprovidesuchotheradministrativeservicesasrequiredbytheAuthority,andshallnotreceiveeconomicremunerationfromtheAuthorityfortheprovisionofsuchservices,exceptthatHDwillbeentitledtorecoveritsAdministrativeCostsassetforthintheServicingAgreement.(h)LegalCounselandOtherConsultants.TheBoardshallhavethepowertoappointsuchotherofficersandemployeesasitmaydeemnecessaryandtoretainindependentcounsel,consultantsandaccountants.(i)EmploymentbytheAuthority.(1)Noneoftheof?cers,agentsoremployees,ifany,directlyemployedbytheAuthorityshallbedeemed,byreasonoftheiremploymentbytheAuthority,tobeemployedbyanyMemberor,byreasonoftheiremploymentbytheAuthority,tobesubjecttoanyoftherequirementsorbene?tsofanyMember.(2)Alloftheprivilegesandimmunitiesfromliability,exemptionsfromlaws,ordinancesandrules,allpension,relief,disability,worker’scompensationandotherbene?tswhichapplytotheactivitiesofofficers,agentsoremployeesoftheMemberswhenperformingtheirrespectivefunctionswithintheterritoriallimitsoftherespectiveMembers,shallapplytothemtothesamedegreeandextentwhileengagedintheperformanceofanyoftheirfunctionsanddutiesextraterritoriallyundertheprovisionsofthisAgreement.(j)Con?rmationofO?icers.Con?rmationofof?cersshallbethefirstorderofbusinessatthefirstmeetingoftheAuthority,regularorspecial,heldineachcalendaryear.(k)LimitationonContractingonBehalfoftheAuthority.NoBoardmember,officer,agentoremployeeoftheAuthority,withoutpriorspeci?corgeneralauthoritybyaV oteoftheBoard,shallhaveanypowerorauthoritytobindtheAuthoritybyanycontract,topledgeitscredit,ortorenderitliableforanypurposeinanyamount.Section8.ProvisionforBylaws.TheBoardmaycausetobedevelopedandmayadopt,fromtimetotime,suchbylawsfortheAuthoritytogovernitsday-to-dayoperations.EachMembershallreceiveacopyofanybylawsdevelopedandadoptedunderthissection.dateofthisAgreementtoJune30,2023.Eachsubsequent?scalyearoftheAuthorityshallbetheperiodfromJulylofeachyearthroughJune30ofthesucceedingyear,unlesschangedbyresolutionoftheBoard. ‘
Section10.TransferandDispositionofAssets.UntilallBondsarenolongeroutstandingpursuanttotheirtermsandtheSurchargeisnolongerbeingchargedandcollectedbytheAuthority,titletoanyimprovements?nancedwiththeproceedsofanyBondsorfundedwiththeproceedsof4856-1616-1l05v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 455 of 968 theSurchargeshallremainheldsolelybytheIPA,andtheimprovements?nancedwiththeproceedsofanyBondsorfundedwiththeproceedsoftheSurchargeshallnotbeconsideredassets,works,facilitiesorpowerrightsinwhichllDhasaninterestorinvestment,andtheimprovementsfinancedwiththeproceedsofanyBondsorfundedwiththeproceedsoftheSurchargearenottransferrableforanyreasontoanyparty,includinganysuccessorto11D,andSectionl7(p)ofthe1934AgreementisinapplicabletotheimprovementsfinancedwiththeproceedsofanyBondsorfundedwiththeproceedsoftheSurcharge.UponterminationofthisAgreementpursuanttoSection3hereof,andafterthepaymentofallliabilities,costs,expensesandchargesvalidlyincurredunderthisAgreementandpayablebytheAuthority,anyremainingassetsoftheAuthorityoramountsondepositinanyfundoraccountoftheAuthorityshallbetransferredtoHD,or,intheeventthatIIDisnolongerprovidingelectricalservicewithintheboundariesofIndio,tothesuccessorelectricalserviceproviderthen-providingelectricalpowerwithintheboundariesoflndio.IntheeventfundsaretransferredtolIDpursuanttothisSection,IIDagreestoapplysuchfundstoenhanceelectricalserviceand/orProjectswithinIndio.Section11.ContributionsandAdvances.Contributionsoradvancesofpublicfundsandofpersonnel,equipmentorpropertymaybemadetotheAuthoritybyIndioorIIDforanyofthepurposesofthisAgreement.Paymentofpublicfundsmaybemadetodefraythecostofanysuchcontribution.Anysuchadvancemadeinrespectofarevenue-producingfacilityshallbemadesubjecttorepayment,andshallberepaid,inthemanneragreeduponbytheMembers,andtheAuthorityatthetimeofmakingsuchadvanceasprovidedbySection6512.1oftheAct.ItismutuallyunderstoodandagreedthattheMembershavenoobligationtomakeadvancesorcontributionstotheAuthoritytoprovideforthecostsandexpensesofadministrationoftheAuthority.Section12.Projects.(a)AcquisitionandConstructionofProjects.Thedesign,acquisitionandconstructionofanyProjectsshallbeundertakenpursuanttothetermsofaProjectAgreementrelatingtotheapplicableProject.IftheProjectAgreementprovidesfortheacquisition,designand/orconstructionofanyProject,orportionsofaProject,byapartyotherthanIIDpursuanttothetermsofaseparateagreementwithsuchparty,suchagreementandanyrelateddesignsorequipmentmustcomplywithllD’srequirements,practicesandstandards,assetforthintheapplicableProjectAgreement,andIIDwillhavetherighttoreviewanysuchagreement,designsorequipmentspecificationstoconfirmcompliancewithlID’srequirements,practicesandstandardsinaccordancewithsuchProjectAgreement.Thecostsofthedesign,acquisitionand/orconstructionofanyProjectsareexpectedtobepaidwiththeproceedsofBonds,theproceedsoftheSurchargeandanyotherlawfullyavailablesourceoffundsoftheAuthority.thatIIDcanmostefficientlyoperate,maintainandrepairsuchProjectsand,asaresult,llDshallberesponsiblefortheoperation,maintenanceandrepairoftheProjectspursuanttothetermstheProjectAgreementrelatingtotheapplicableProject.Thecostsofoperating,maintainingandrepairingtheProjectsshallbepaidfromamountscollectedbyIIDthroughtheratesandchargesthatIIDchargesforelectricalserviceprovidedbyIID.IntheeventthatIIDnolongerprovideselectricalservicewithintheboundariesofIndioandtheProjectsarenolongerpartofIlD’selectricalsystem,IIDshallnolongerberesponsibleforoperating,maintainingorrepairingtheProjects.4856-1616-1l05V9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 456 of 968 SolongasIIDisoperating,andmaintainingandrepairingaProject,IIDshallhaveunfetteredaccessandcontroloversuchProjectandtheoperationofsuchProject,includingwithoutlimitationtheabilitytounilaterallytakeanyandallactionsnecessarytoensuretheoverallintegrity,safety,efficiencyandreliabilityofIlD’selectricpowersystemandtorespondasnecessarytoanyemergencyconditions.ForpurposesofthisSectionl2(b),IIDshallhavethesameaccessandcontroltotheapplicableProjectasIIDwouldhavetosuchProjectiftheProjectweresolelyfundedandownedbyIID.(c)OwnershipofProjectsAcquiredorConstructedbytheAuthority.AnyProjectsacquiredorconstructedbytheAuthorityshallbeownedbytheAuthority,unlessotherwisespecifiedintheProjectAgreement.(d)LeaseofProjectandRelatedLandandEquipment.AProjectAgreementmayprovidefortheleaseofanyequipment,land,aProjectorpartofaProjectownedbytheAuthoritytoHDorincludetheleaseprovisions.IftheAuthorityandHDdeterminenottoincludeleaseprovisionsinaProjectAgreement,theAuthorityandIIDmayenterintoaseparateleaseagreement.SubjecttoSection6(d)(6),totheextentprovidedforundertheapplicableProjectAgreement,theAuthoritymayenterintoaleaseagreementwithapartyotherthanlIDforanyequipment,land,aProjectorpartofaProjectownedbytheAuthorityforthepurposessetforthinsuchProjectAgreement.(e)Interconnectiontothe[IDElectricalSystem.IIDwilluseitsbesteffortstoprovidefortheinterconnectionofaProjectintoIIDElectricalSystem.(f)NoAssignmentorSublettingof[ID’sPowerRightsorPrivileges.NothinginthisAgreement,anyProjectAgreement,theServicingAgreementoranyleaseagreementshallconstituteorbeinterpretedasanassignmentorsublettingbyIIDtotheAuthorityortoIndioofanyofIlD’spowerrightsandprivilegesunderthe1934Agreement.Section13.Surcharge.(a)EstablishmentofSurcharge.PursuanttoSections5(c)and((1)above,theBoardoftheAuthoritybyresolutionorordinancemayauthorizethechargeoftheSurcharge.ThetermsoftheresolutionorordinanceshallsetforththeamountoftheSurchargetobechargedanddurationofthechargeoftheSurcharge,amongotherterms.TheBoardmaymodifythetermsofanySurchargepursuanttoasubsequentresolutionorordinance,subjecttotheprovisionsofSection5(d)andanyrestrictionscontainedinanyBondsordocumentsrelatedtoanyBondstowhichtheAuthorityisaparty.TheSurchargeauthorizedbytheAuthorityisforthepurposeofimprovingthedeliveryofSurchargeshallhavenoimpacton,andshallbeentirelyindependentof,theratellDchargestopowercustomersintheCoachellaandImperialValleys.(b)CollectionofSurcharge.TheSurchargeshallbechargedbytheAuthorityandcollectedbyIIDpursuanttothetermsoftheServicingAgreement.IIDshallincludetheSurchargeonthebillofIIDcustomersreceivingelectricalpowerwithintheboundariesoflndio,orasotherwisespeci?edintheresolutionorordinanceapprovingtheSurcharge.TheSurchargeshallbe104856—1616—1105v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 457 of 968 billedandcollectedinamannerconsistentwithIlD’sgeneralbillingandcollectionpracticesandprocedures.HDshallremittotheTreasurer,or,ifdirectedbytheAuthorityinwriting,directlytothetrusteeforanyBondsissuedbytheAuthority,anyamountscollectedandreceivedduringacalendarmonthrepresentingtheSurchargebynotlaterthanthe151*‘(?fteenth)dayofthesecondcalendarmonthsucceedingthemonthinwhichsuchamountswerecollectedandreceivedbyllD(e.g.,amountsrepresentingtheSurchargecollectedinJanuaryshallberemittedbynolaterthanMarch15),unlessadifferentdateforsuchremittanceisagreedtointheServicingAgreement.Sectionl4.Budget.(a)AnnualBudget.TheBoardshalladoptabudget(the“Budget”)priortothestartofeachFiscalYear.TheBudgetshallincludecomponentstofundtheAuthority’sadministrativeandoperationalcosts,debtserviceonanyBondsandanycapitalimprovements.TheBoardmayupdateandrevisetheBudgetasnecessarythroughouttheFiscalYeartowhichtheBudgetapplies.TheAuthorityshallprovideHDwithacopyofsuchBudgetoranyamendmentthereto.Section15.Bonds.(a)AuthoritytoIssueBonds.WhenauthorizedbytheActorotherapplicableprovisionsoflawandbyresolutionoftheBoard,theAuthoritymayissueBondsforthepurposeofraisingfundsfortheexerciseofanyofitspowersortootherwisecarryoutitspurposesunderthisAgreement.SaidBondsshallhavesuchtermsandconditionsasareauthorizedbytheBoard.(b)BondsLimitedObligations.TheBonds,includingtheprincipalandanypurchasepricethereof,andtheinterestandpremium,ifany,thereon,shallbespecialobligationsoftheAuthoritypayablesolelyfrom,andsecuredsolelyby,therevenues,fundsandotherassetsthatarepledgedthereforundertheapplicablelndenture(s)andshallnotconstituteachargeagainstthegeneralcreditoftheAuthorityortheMembers.TheBondsshallnotbesecuredbyalegalorequitablepledgeof,orlienorchargeuponorsecurityinterestin,anypropertyoftheAuthorityoranyMembersoranyAuthorityincomeorreceiptsoranyMembersincomeorreceiptsexcepttheproperty,incomeandreceiptspledgedthereforundertheapplicableIndenture(s).TheBondsshallnotconstituteadebt,liabilityorobligationoftheStateoranypublicagencythereof,includinganyMember,otherthanthespecialobligationoftheAuthorityasdescribedabove.NeitherthefaithandcreditnorthetaxingpoweroftheStateoranypublicagencythereof,includinganyMember,shallbepledgedtothepaymentoftheprincipalorpurchasepriceo?orthepremium,ifany,orinterestontheBonds,norshalltheStateoranypublicagencyorinstrumentalitythereof,includinganyMember,inanymannerbeobligatedtomakeanyappropriationforsuchpayment.TheAuthorityshallhavenotaxingpower.hisorherindividualcapacity,andnodirectororof?ceroftheAuthorityexecutingaBondshallbeliablepersonallyonsuchBondorbesubjecttoanypersonalliabilityoraccountabilitybyreasonoftheissuanceofsuchBond.Section16.RecordRetention.Inanyevent,theAuthorityshallcauseallrecordsregardingtheAuthority’sformation,existence,operations,anyBondsissuedbytheAuthority,obligationsincurredbyitandproceedingspertainingtoitsterminationtoberetainedforatleastsix114856-1616-1lO5v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 458 of 968 (6)yearsfollowingterminationoftheAuthorityor?nalpaymentofanyBondsissuedbytheAuthority,whicheverislater. i
Section17.Indemni?cation.Tothefullextentpermittedbylaw,theBoardshallprovideforindemni?cationbytheAuthorityofanypersonwhoisorwasamemberoftheBoard,oranof?cer,employeeorotheragentoftheAuthority,andwhowasorisapartyoristhreatenedtobemadeapartytoaproceedingbyreasonofthefactthatsuchpersonisorwassuchamemberoftheBoard,oranof?cer,employeeorotheragentoftheAuthority,againstexpenses,judgments,?nes,settlementsandotheramountsactuallyandreasonablyincurredinconnectionwithsuchproceeding,ifsuchpersonactedingoodfaithandinthecourseandscopeofhisorherof?ce,employmentoragency.Inthecaseofacriminalproceeding,theBoardmayprovideforindemni?cationanddefenseofamemberoftheBoard,oranof?cer,employeeorotheragentoftheAuthoritytotheextentpermittedbylaw.TheMembersherebycon?rmtheirintentandagreethat,asprovidedinSection4(a)hereofandintheAct,thedebts,liabilitiesandobligationsoftheAuthorityshallnotconstitutedebts,liabilitiesorobligationsoftheMembers,andtheydonotintendbythefollowingsentencetoimpairthisprovision.NotwithstandingSection4hereof,thecon?rmationprovidedimmediatelyabove,andtheAct,theAuthorityshallindemnify,defendandholdharmlessIIDandIndioandeachofIID’sandIndio’sof?cers,directors,employees,attorneysandagentsfromandagainstanyandallcosts,expenses,losses,claims,damages,andliabilitiesdirectlyorindirectlyarisingoutoforinconnectionwiththeactivitiesoftheAuthority.Indioshallindemnify,defendandholdharmlessIIDandeachofIID’sof?cers,directors,employees,attorneysandagentsfromandagainstanyandalldemands,claimsorlawsuitsarisingoutoftheestablishment,collection,oruseoftheSurcharge,oranyactorfailuretoactbytheAuthority.HDmayelecttodefenditselfinanysuchactionwithcounselofitschoice,thereasonablefeesofsuchcounseltobepaidbyIndio.lndioshallindemnify,defendandholdharmlesstheAuthorityandeachoftheAuthority’sof?cers,directors,employees,attorneysandagentsfromandagainstanyandalldemands,claimsorlawsuitsarisingoutoftheestablishment,collection,oruseoftheSurcharge,ortheexerciseofanyoftherightsandobligationsofthisAgreement.ProceedsofanyBondsremainingfollowingthecompletionoftheProjectforwhichsuchBondswereissued(excludinganyamountspledgedtothepaymentofprincipalorinterestonsuchBonds)thatarelegallyavailabletouseforindemnity,defenseorholdharmlesspurposesandanySurchargeproceedsheldbytheAuthoritythatarelegallyavailabletouseforindemnity,defenseorholdharmlesspurposesshallbemadeavailabletotheAuthority,IndioandIIDtopayforexpensesassociatedwiththeindemni?cation,defenseorholdharmlessobligationssetforthinthisSection17resultininterestonanysuchBondsbeingincludableingrossincomeforfederalincometaxpurposes.ThisSection17shallsurvivetheterminationofthisAgreement.124856-1616-1105v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 459 of 968 Section18.MemberInsurancePolicies.IndioshalladdIIDasanadditionalinsured,orforanyself—insurance,shalltreatIIDasaninsuredbene?ciary,andIIDshalladdIndioasanadditionalinsured,oraddIndioorforanyself—insuranceshalltreatIndioasaninsuredbene?ciary.Section19.DisputeResolution.(a)Submz'ssz'0n.IntheeventaMemberortheAuthorityhaveadispute,orassertaclaim,thatarisesoutoforinconnectionwiththisAgreement,ortheirperformancethereunder,suchMemberortheAuthority(the“DisputingParty”)shallprovidetheapplicableMemberandtheAuthority,asthecasemaybe,withwrittennoticeofthedisputeorclaim(“NoticeofDispute”).TheNoticeofDisputeshall:(a)describewhatisdisputedorclaimedandincludeanidentificationoftheallegedfactsandAgreementsectionsrelevanttosuchdisputeorclaim;and(b)providethenameandcontactinformationforthedesignatedrepresentativeoftheDisputingPartywhowillrepresentitininformalnegotiations.SuchdisputeorclaimshallbereferredtoadesignatedrepresentativeofeachMemberinvolvedinthedisputeandAuthority(iftheAuthorityisinvolvedinthedispute)forresolutiononaninformalbasisaspromptlyaspracticableafterreceiptoftheNoticeofDisputebyaMemberortheAuthority,asapplicable.Intheeventthedesignatedrepresentativesareunabletoresolvetheclaimordisputewithinthirty(30)calendardaysofthereceiptoftheNoticeofDisputebyaMemberortheAuthority,asapplicable,theDisputingPartyshall,withinthirty-?ve(35)calendardaysofthereceiptoftheNoticeofDisputebyaMemberortheAuthority,asapplicable,notifytheapplicableMemberandtheAuthority(iftheAuthorityisinvolvedinthedispute),whethertheDisputingPartyeither:(a)isnolongerpursuingitsdispute;or(b)electstoproceedtoassistednegotiationormediation.IftheDisputingPartyelectstoproceedtoassistednegotiationormediation,theDisputingPartyshallincludeinitsnoticethenamesandcontactinformationforatleastthree(3)possibleneutralmediators,meetingthequalificationsdescribedinSectionl9(b)below,whichwouldbeacceptabletotheDisputingParty.Withinfive(5)BusinessDaysofreceiptoftheDisputingParty’selectiontoproceedtoassistednegotiationormediation,theapplicableMemberand/ortheAuthority,asthecasemaybe,shall,inturn,notifytheDisputingPartyofthenamesandcontactinformationforatleastthreepossibleneutralmediators,meetingthequali?cationsdescribedinSectionl9(b)below,whichwouldbeacceptabletotheapplicableMemberand/ortheAuthority,asthecasemaybe.(b)AssistedNegotiationorMediation.AnyassistednegotiationormediationinitiatedunderthisSection19shallbeconductedbeforeasingleneutralmediatorappointedbytheMembersandAuthority(iftheAuthorityisinvolvedinthedispute).IftheMembersandAuthority,asapplicable,failtoagreeuponasinglemediatorwithinfifteen(15)calendardaysoftheDisputingParty’snoticeofelectiontoproceedtoassistednegotiationormediation,eachMemberinvolvedinthedisputeandAuthority(iftheAuthorityisinvolvedinthedispute)shallchooseasingleneutralpartywhoshallsitonathree-membermediationpanel.Thetwoneutralpartiessochosenshallwithinpowerissues,andshallnothaveanycurrentorpastsubstantialbusinessorfinancialrelationshipswiththeMembersinvolvedinthemediationandtheAuthority(iftheAuthorityisinvolvedinthemediation).Themediator(s)shallprovideeachoftheMembersinvolvedinthemediationandtheAuthority(iftheAuthorityisinvolvedinthemediation)anopportunitytobeheard.IntheeventtheMembersortheAuthority,asapplicable,areunablethrougheitherassistednegotiationormediationtoresolvethedisputewithinninety(90)calendardays,eachoftheapplicableMembersandthe134856-1616-1105v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 460 of 968 Authority,asthecasemaybe,mayexercisewhateverrightsandremediesitmayhaveinequityoratlawconsistentwiththetermsofthisAgreement.(c)Costs.TheMembersindisputeandtheAuthority(iftheAuthorityisinvolvedinthedispute)shallberesponsiblefortheirowncostsincurredduringtheassistednegotiationormediationprocessandforonehalfofthecostofthemediator(s)chosentoassistsuchMembersandtheAuthority,asapplicable.Section20.AgreementnotExclusive.ThisAgreementshallnotbeexclusiveandshallnotbedeemedtoamendoralterthetermsofotheragreementsbetweentheMembers,exceptasthetermsofthisAgreementshallconflicttherewith,inwhichcasethetermsofthisAgreementshallprevail.Section21.AccountsandReports.AllfundsoftheAuthorityshallbestrictlyaccountedforinbooksofaccountand?nancialrecordsmaintainedbytheAuthority,includingareportofallreceiptsanddisbursements.TheAuthorityshallestablishandmaintainsuchfundsandaccountsasmayberequiredbygenerallyacceptedaccountingprinciplesandbyeachIndentureforoutstandingBonds(totheextentthatsuchdutiesarenotassignedtoatrusteeforownersofBonds).RevenuesorfundsreceivedormadeavailabletotheAuthorityfromanysourcewhatsoever,shallbedepositedintosuchfundsandaccounts,andmaybeexpendedbytheAuthorityinanylegalmanner,subjecttosuchreservationsasmaybeimposedbytheAuthorityfromtimetotime.ThebooksandrecordsoftheAuthorityshallbeopentoinspectionatallreasonabletimesbytheMembersandtheirrepresentatives.TheAuthorityshallrequirethateachIndentureprovidethatifatrusteeisappointedthereunder,suchtrusteeshallestablishsuitablefunds,furnish?nancialreportsandprovidesuitableaccountingprocedurestocarryouttheprovisionsofsuchIndenture.SaidtrusteemaybegivensuchdutiesinsaidIndentureasmaybedesirabletocarryouttherequirementsofthisSectionl9.(a)Audits.TheTreasureroftheAuthorityshallcauseanindependentaudittobemadeofthebooksofaccountsand?nancialrecordsoftheAuthorityincompliancewiththerequirementsoftheAct.Anycostsoftheaudit,includingcontractswith,oremploymentof,certi?edpublicaccountantsorpublicaccountantsinmakinganauditpursuanttothisSection19,shallbebornebytheAuthorityandshallbeachargeagainstanyunencumberedfundsoftheAuthorityavailableforthatpurpose.IIDmayrequestanindependentauditoftheAuthority’s?nancialstatementsfora?scalyear(aswellasassociatedsupportingdocumentation)forpurposesofverifyingcollectionsoftheSurchargeandexpendituresoftheAuthoritymadepursuanttothisAgreement,aProjectAgreement(b)AuditReports.TheTreasureroftheAuthority,assoonaspracticableafterthecloseofeach?scalyearbutinanyeventwithinthetimenecessarytocomplywiththerequirementsoftheActshall?leareportoftheauditperformedpursuanttothisSectionl9(b)asrequiredbytheActandshallsendacopyofsuchreporttopublicentitiesandpersonsinaccordancewiththerequirementsoftheAct. 144856—l6l6—ll05v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 461 of 968 Section22.Funds.SubjecttotheprovisionsofeachlndentureforoutstandingBondsprovidingforatrusteetoreceive,havecustodyofanddisbursefundswhichconstituteAuthorityfunds,theTreasureroftheAuthorityshallreceive,havethecustodyofanddisburseAuthorityfundspursuanttoaccountingproceduresapprovedbytheBoardandshallmakethedisbursementsrequiredbythisAgreementorotherwisenecessarytocarryouttheprovisionsandpurposesofthisAgreement.Section23.AdoptionofCertainCodesandPolicies.TheAuthorityshall,byresolution,adoptaCon?ictofInterestCode,aninvestmentpolicyandadebtmanagementpolicytotheextentrequiredbylaw.Section24.Notices.Noticesandothercommunicationshereundertothepartiesshallbesufficientifdeliveredtotheclerkorsecretaryofthegoverningbodyofeachparty.Section25.FormsofAgreements.TheformsoftheProjectAgreementattachedheretoasExhibitAandtheServicingAgreementattachedheretoasExhibitBmaynotbemodifiedwithouttheexpresswrittenconsentofHD.ExecutionofsuchagreementsbyIIDshallevidencesuchconsent.Section26.AdditionalMembers.TheinitialMembersoftheAuthorityshallbeIIDandlndio.NoadditionalMembersshallbeadmittedtotheAuthorityunlessexpresswrittenconsentoftheadmittanceofsuchadditionalMemberisprovidedbybothIIDandIndio,whichconsentmaybewithheldforanyreason.Section27.Withdrawal.NoMembermaywithdrawfromthisAgreementpriortotheendofthetermofthisAgreementdeterminedinaccordancewithSection3.Section28.Effectiveness.ThisAgreementshallbecomeeffectiveandbeinfullforceandeffectandalegal,validandbindingobligationoftheMemberswheneachpartyhasexecutedacounterpartofthisAgreement.Section29.Severability.Shouldanypart,term,orprovisionofthisAgreementbedecidedbythecourtstobeillegalorinconflictwithanylawoftheState,orotherwiseberenderedunenforceableorineffectual,theValidityoftheremainingparts,termsorprovisionshereofshallnotbeaffectedthereby.Section30.Successors;Assignment.ThisAgreementshallbebindinguponandshallinuretothebenefitofthesuccessorsofthepartieshereto.Excepttotheextentexpresslyprovidedherein,neitherpartymayassignanyrightorobligationhereunderwithouttheconsentoftheother.31.Amendmentof This beamendedbyAgreementmaybeterminatedonlyinaccordancewithSection3hereofand,providedfurther,thatsuchsupplementalagreementshallbesubjecttoanyrestrictionscontainedinanyBondsordocumentsrelatedtoanyBondstowhichtheAuthorityisaparty.Section32.WaiverofPersonalLiability.NoMember,memberoftheBoard,officeroremployeeoftheAuthorityortheMembersshallbeindividuallyorpersonallyliableforanyclaims,losses,damages,costs,injuryandliabilityofanykind,natureordescriptionarisingfromtheactions154856—l6l6—ll05v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 462 of 968 oftheAuthorityortheactionsundertakenpursuanttothisAgreement,andtheAuthorityshalldefendsuchMembers,membersoftheBoard,officersoremployeesagainstanysuchclaims,losses,damages,costs,injuryandliability.Withoutlimitingthegeneralityoftheforegoing,noMember,memberoftheBoard,of?ceroremployeeoftheAuthorityorofanyMembershallbepersonallyliableonanyBondsorbesubjecttoanypersonalliabilityoraccountabilitybyreasonoftheacquisition,construction,design,ownership,leasing,operation,maintenanceorrepairoftheProjectsortheissuanceofBondspursuanttotheActandthisAgreement.Section33.Notices.NoticestoaMemberhereundershallbesufficientifdeliveredtotheGeneralManagerofIIDandtheCityManagerofIndio,asapplicable.Section34.SectionHeadings.AllsectionheadingscontainedhereinareforconvenienceofreferenceonlyandarenotintendedtodefineorlimitthescopeofanyprovisionofthisAgreement.Section35.Miscellaneous.ThisAgreementmaybeexecutedinseveralcounterparts,eachofwhichshallbeanoriginalandallofwhichshallconstitutebutoneandthesameinstrument.WherereferenceismadetodutiestobeperformedfortheAuthoritybyapublicofficialoremployee,suchdutiesmaybeperformedbythatperson’sdulyauthorizeddeputyorassistant.WherereferenceismadetoactionstobetakenbyaMember,suchactionmaybeexercisedthroughtheofficers,stafforemployeesofsuchMemberinthemannerprovidedbylaw.TheprincipalofficeoftheAuthorityshallbetheprincipalofficeofIndio.THISAGREEMENTISMADEINTHESTATE,UNDERTHECONSTITUTIONANDLAWSOFTHESTATEANDISTOBECONSTRUEDASACONTRACTMADEANDTOBEPERFORIVIEDINTHESTATE.ThisAgreementisthecompleteandexclusivestatementoftheagreementamongthepartieswithrespecttothesubjectmatterhereof,whichsupersedesandmergesallpriorproposals,understandings,andotheragreements,whetheroral,written,orimpliedinconduct,betweenthepartiesrelatingtothesubjectmatterofthisAgreement. l64856-1616-1IOSV9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 463 of 968 INWITNESSWHEREOF,thepartiesheretohavecausedthisAgreementtobeexecutedbytheirproperofficersorof?cialsthereuntodulyauthorized,asofthedayandyearfirstabovewritten.CITYOFINDIO OscarOrtiz,MayorATTEST'La21!Z3SabdiSanchez,CityClerkAdministrator

IMPERIALIRRIGATIONDISTRICT
By:é,<__/President
ATTEST:

Secretary
4856-1616-1IOSV9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 464 of 968

EXHIBITAFORMOFPROJECTAGREEMENT
4856-1616-1105v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 465 of 968 SYCRDra?‘of6/14/23

PROJECTAGREEMENT
byandbetween

IMPERIALIRRIGATIONDISTRICT
and
INDIOELECTRICFINANCINGAUTHORITY,2023
4877-8791-7416v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 466 of 968 PROJECTAGREEMENTThisProjectAgreement,dated,2023forreferenceonly,ismadebyandbetweentheImperialIrrigationDistrict(“IID”),anirrigationdistrictestablishedunderDivision11oftheCaliforniaWaterCode,sections20500etseq.,andtheIndioElectricFinancingAuthority(the“Authority”),aCaliforniajointexerciseofpowersagency.(IIDandAuthorityaresometimesreferredtohereinindividuallyasa“Party,”andcollectivelyasthe“Parties”.).RECITALSA.TheAuthoritywasformed,andisgovernedby,theJointExerciseofPowersAgreementbetweentheCityofIndio(“Indio”)andIID,dated2023(the“JPA”).AllcapitalizedtermsthatareusedhereinandnotdefinedhereinshallhavethemeaningsthatareascribedtheretointheJPA.B.TheAuthoritywasformedfortheexpresspurposeofprovidingandenhancingelectricalservicewithintheterritorialboundariesofIndiothroughtheacquisition,design,construction,?nancing,leasing,ownership,operationandmaintenanceofenergysystemimprovements,systemefficiencyandreliabilityimprovementsandenergyserviceenhancements.C.TheAuthorityrealizesitspurposethroughtheimplementationofProjects.D.[insertnameofapplicableentity]isthefeesimpleowneroftherealpropertyconsistingofapproximatelyacresofundevelopedlandlocatedintheCityofIndio,CountyofRiverside,StateofCalifornia,APNI |(the“ProjectProperty”).]E.IIDprovideselectricutilityservicetotheresidentsofIndiothroughitselectricpowerdistributionsystem(the“HDElectricSystem”)andinordertobetterservetheresidentsofIndio,theAuthoritydesirestoimplementanessentialinfrastructureelectricalimprovementprojectattheProjectPropertythatwillexpandandenhancethereliabilityoftheIIDElectricSystem(the“InitialProject”)asfurtherdescribedinExhibit“A”hereto,whichisattachedheretoandincorporatedhereinbythisreference.F.ThePartiesacknowledgethatthedesign,acquisition,construction,operation,maintenanceandrepairoftheInitialProjectwillfurtherthepurposesforwhichtheAuthoritywasformedandwillbene?telectricalserviceusersinIndio.G.TheInitialProjecthasundergonereviewundertheCaliforniaEnvironmentalQualityAct(“CEQA”)assummarizedinExhibit“A”andtheAuthorityhasapprovedtheInitialProjectatadulynoticedmeetingon ,202_.H.ThePartiesdesiretoenterintothisAgreementtomemorializetheirresponsibilitiesandobligationsinrespecttothedesign,development,funding,construction,acquisition,procurement,ownershipanduse,operationandmaintenanceoftheProjects,includingtheInitialProject.4856-6242-2886.1391901.0000l/6-14-234877-8791-7416V3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 467 of 968 AGREEMENTSNOWTHEREFORE,forgoodandvaluableconsiderationandinconsiderationofthemutualpromisesandcovenantshereincontained,thePartiesagreeasfollows:Section1.ScopeoftheProject..(a)ScopeofInitialProject.Asusedherein,the“ScopeoftheInitialProject”shallmeanthedesign,acquisition,procurement,construction,operation,maintenanceandrepairoftheInitialProjectasdescribedintheRecitalsandasfurtherdescribedinExhibit“A”hereto.(b)ModifiedProjects.IftheBoardofDirectorsofIIDandtheAuthoritymutuallydeterminethatthedesign,acquisitionand/orconstructionoftheInitialProjectisinfeasible,thePartiesmayagreeinwritingtomodifytheInitialProject(a“ModifiedProject”)providedthatsaidModi?edProjecthasundergoneCEQAreview.IntheeventthatthePartiesagreetoaModi?edProjectandtheAuthorityapprovestheModi?edProjectatadulynoticedmeeting,Exhibit“A”ofthisProjectAgreementshallbemodi?edtoreflectsuchModi?edProject.Suchmodi?edExhibit“A”shallbemadeanattachmenttothisProjectAgreementbyamendmentapprovedbyIIDandtheAuthority,anduponattachment,shallsupersedeallpriorversionsofExhibit“A”withouttherequirementoffurtheramendmenttothisProjectAgreement.(c)Projects.Asusedherein“Projects”shallmeancollectively,theInitialProjectandanyModi?edProjectdescribedinExhibit“A”tothisProjectAgreement.Theterm“Project”shallrefertoanindividualInitialProjectoraModi?edProjectasdescribedinExhibit“A”ofthisProjectAgreement.Section2.Term.(a)EffectiveDate.ThisProjectAgreementshallbecomeeffectiveupon?nalapprovalbytheBoardofDirectorsofeachPartyandexecutionbyanauthorizedsignatorybyeachParty.(b)Duration.ThisProjectAgreementshallremainineffectfromtheEffectiveDateandendupontheearlierof(1)theterminationoftheJPA;(2)thetransferofownershipoftheProjectfromtheAuthoritytoIIDpursuanttothetermsoftheJPAandthisProjectAgreement;and(3)thedateonwhichIIDisnolongerobligatedtooperate,maintainandrepairtheProject,asprovidedinSection4(c)ofthisProjectAgreement(the“Term”).Section3.Authoritv’sResponsibilities.definedinSection4(c)(the“ProjectCosts”).TheProjectCostsshallbesetforthinabudgetfortheProjectthatistobedevelopedbyIIDandagreedtoinwritingbytheParties(the“ProjectBudget”).(b)TheAuthorityshallberesponsibleforobtainingallgovernmentpermitsorapprovalsregardedfortheProjects,exclusiveofthosefromIndioorIID.4856-6242-28861391901.0000]/6-14-23 -2-4877-8791-7416V3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 468 of 968 (c)TheAuthorityshallberesponsibleforensuringIIDhasunfetteredaccessandcontrolovertheProjectsduringtheTermsothatIIDisabletoexerciseallofitsrightsandremediesinSection9below.(d)TheAuthorityshallberesponsibleforrespondingpromptlytoanyinquiriesorrequestsforinformationfromIIDrelatedtothedesign,equipmentacquisition,construction,operation,repairormaintenanceoftheProjects.(e)TheAuthorityshallberesponsibleforensuringthattheProjectcompliesinallrespectswithanyandallBondorindenturecovenantsoragreementsrelatedtothe?nancingoftheProject.Section4.IID’sResponsibilities.(a)IIDshallberesponsibleforthedesign,procurementandconstructionoftheProjects.IIDmay,initssolediscretion,enterintocontractswiththird—partiesforthedesign,acquisitionand/orconstructionofallorpartoftheProjects.IIDshallcausethedesign,procurementand/orconstructionoftheProjectstocomplywithallapplicablefederal,Stateandlocallaws,ordinances,rules,regulations,ordersandpoliciesrelatingtotheProjects(“ApplicableLaws”).(b)IIDshallberesponsibleforallworkrelatedtointerconnectingtheProjecttotheIIDElectricSystem(the“lnterconnection”).(c)OnceaProjectisinterconnectedtotheIIDElectricSystemandenergized,HDshallberesponsiblefortheoperation,maintenanceandrepairofsuchProjecttothePointofInterconnectionasprovidedinSection9below.ForpurposesofthisProjectAgreement,the“PointofInterconnection”shallmeanthepoint,assetforthintheone-linedrawinginExhibit“B”,thatdemonstrateswheretheProjectfacilitiesconnecttotheHDSystem.Theone-linedrawingshallalsoprovideapointofdemarcationforpurposesofidentifyingownershipoftheProjectfacilities.Thecostsofoperating,maintainingandrepairingtheProjectshallbepaidfromamountscollectedbyIIDthroughtheratesandchargesthatllDchargesforelectricalserviceprovidedby11DandtheAuthorityshallnotberesponsibletopayanysuchcostsoftheoperation,maintenanceandrepairoftheProject.IID’sobligationtooperate,maintainandrepairtheProjectwillterminateifIIDnolongerprovideselectricalservicewithintheboundariesofIndio.(d)IIDshallberesponsibleforrespondingpromptlytoanyreasonableinquiriesorrequestsforinformationfromtheAuthorityrelatedtotheProjects,butonlytotheextenttheinformationrequestedisnotconfidentialand/orproprietaryundertheCaliforniaPublicRecordsActcodifiedinGovernmentCodesections7920.000,etseq.construction,operation,maintenanceand/orrepairoftheProjectthatwouldviolateanytaxcovenantssetforthinanyBond,indentureorother?nancingdocumentoftheAuthorityrelatingtothefinancingoftheProjectorwouldotherwisecauseinterestonBondsissuedonatax-exemptbasistobeincludableingrossincomeforfederalincometaxpurposes.4sse.e242-2sse.139190100001/6-14-23-3-4877-8791—74l6v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 469 of 968 Section5.FundingofProjectCosts(a)ProjectCostswillbepaidwiththeproceedsofBonds,theproceedsoftheSurchargeandanyotherlawfullyavailablesourceoffundsoftheAuthority.(b)ItistheintentofthePartiesthattheactualtotalProjectCostswillnotexceedthetotalamountshownintheProjectBudget.Notwithstandingthissharedintent,shouldeitherPartyidentifyorbecomeawareofanyactualorpotentialcostoverruns,thePartiesshallendeavor,workingtogetherreasonablyandingoodfaith,toavoidthecostoverrunandtootherwisereducetheextenttowhichtheincreaseintotalProjectCostsisinexcessoftheProjectBudget.AsofEffectiveDate,thePartiesacknowledgethattheAuthorityhasnoadditionalsourcesoffundsfortheProjectCostsotherthanasspecifiedinSection5(a)ofthisProjectAgreementandIIDshallendeavoratalltimestomanagethecostsandexpensesoftheProjectswithinthetotalamountoftheProjectBudget.(c)NoPartywillvoluntarilycauseorpermitanyincreaseincostsorexpensesforthedesign,acquisitionand/orconstructionoftheProjectsthatwillcausetheestimatedProjectCoststoexceedthetotalamountofProjectCostssetforthintheProjectBudgetwithoutthewrittenconsentoftheAuthority.(d)TheProjectBudgetmaybemodi?edwiththewrittenapprovaloftheParties.Section6.OwnershipofImprovementsandIIDElectricSystem.(a)FeeTitletoImprovements.FeetitletotheProjectanditsimprovementsasidenti?edinExhibit“A”shallbevestedintheAuthorityduringtheTerm.TheProjectshallhaveappropriatesignageidentifyingthesubstationasanAuthoritysubstationtotheextentallowedbyApplicableLaw.(b)TransferofProjectImprovements.UponterminationoftheJPA,andafterthepaymentofallliabilities,costs,expensesandchargesvalidlyincurredundertheJPAandpayablebytheAuthorityandassumingIIDisstillprovidingelectricalservicetoIndio,theAuthorityshalltransferfeetitletotheProjectandimprovementstoIIDpursuanttoandinaccordancewiththetermsoftheJPAintheir“ASIS”and“WHEREIS”conditionunderaquitclaimdeedsubstantiallyintheformofExhibit“C.”Section7.GrantofLeaseholdInterestsandPermittedUse.(a)IndiaProperty.I insertIndiaortheIndiaWaterAuthority,asapplicable],aslandlord,willleasetotheAuthority,astenant,portionsofname]underthetermsandconditioninagroundleasesubstantiallyinformofExhibit“D”(the“GroundLease”).[UserNote:ifIIDPropertyisProjectPremises,usefollowingSubsection(a)]4856-6242-2886139l90l.O000l/6-14-23-4-4877-8791—74l6v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 470 of 968 (a)IIDProperty.IID,aslandlord,willleasetotheAuthority,astenant,aportionof[ insertpropertyname]asrequiredfortheconstruction,use,maintenance,repairandoperationof| insertpropertyname]underthetermsandconditionsinagroundLeasesubstantiallyinformofExhibit“D”(the“GroundLease”).(b)ModifiedProject.IntheeventthatIIDandtheAuthoritydeterminetodesign,acquire,construct,operate,maintainandrepairaModifiedProjectpursuanttothisProjectAgreement,theAuthorityand/orIIDwillenterintothenecessaryandappropriateleasedocumentationtoallowforthedeliveryofsuchModifiedProject.Section8.ProjectCompletionSchedule.(a)IIDandtheAuthorityshallcoordinatetodevelopacompletionschedulefortheProjects(the“ProjectCompletionSchedule”).TheProjectCompletionSchedulewillincludemajordesignandconstructionactivities,durationsandmilestonesthroughthecompletionoftheProjectsorthecomponentsthereof.ThePartiesagreethattheProjectCompletionScheduleshallbedevelopedbythePartiestocomplywithanyrequirementsregardingtheexpenditureofBondproceedssetforthunderfederalincometaxlaworunderanyBond,indentureorother?nancingdocumentoftheAuthorityrelatingtothe?nancingoftheProject.TheProjectCompletionScheduleshallbeagreedtoinwritingbytheParties.(b)TheProjectCompletionSchedulemaybemodifiedwiththewrittenapprovalofboththeParties.Section9.ProjectOperationalProvisionsandIIDRemedies.(a)IIDOperationandMaintenanceofProject.TheAuthorityshalldelegatetoIIDoperational,repairandmaintenancecontroloftheProjecttothePointofInterconnection.IIDshallmaintaintheProjectingoodconditionandrepairandinamannersufficienttosupporttheProject.Regardlessofwhethermaintenanceandrepairsaremadeintheordinarycourseorinanemergency,allmaintenanceandrepairsshallbecarriedoutinamannerthatminimizestheimpactontheProject.IIDshallpromptlynotifytheAuthorityofanymattersofwhichitisawarepertainingtoanydamagetoorlossofuseoftheProjectorthatcouldreasonablybeexpectedtoadverselyaffecttheProject.(b)IIDProtectionofIIDElectricSystem;Remedies.Notwithstandinganythingtothecontrarycontainedherein,atalltimesduringthetermofthisProjectAgreement,IIDshallhaveunilateralandunfetteredaccessandcontrolovertheProjectandtheoperationoftheProjectasIIDdeemsnecessaryorappropriatetoensuretheoverallintegrity,safety,efficiencyandreliabilityoftheProjectiftheProjectweresolelyfundedandownedbyIID.IID’sunilateral,unfetteredaccessandcontrolovertheProjectincludestheabilitytomakealldecisionsregardingthedesign,procurement,construction,operation,maintenance,andrepairoftheProjectswithoutconsultingorseekingtheapprovaloftheAuthority.IIDshallhavetherightinitssoleandabsolutediscretionandwithoutnoticetotheAuthoritytodo,amongotherthings,thefollowing:(1)alter,modify,orrepairtheProjectwhennecessarytopreventimminentriskofdamagetotheIIDElectricSystemorinterruptionofelectricalserviceand(2)disconnecttheInterconnectionatthePointofInterconnectionwhen4856-6242-2886]39l90l.0O0O1/6-14-23-5-4877-8791-74l6v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 471 of 968 necessarydueto(A)publicemergency,(B)protecttheoperationalintegrityoftheIIDElectricSystemor(C)complywithApplicableLaws(eacha“DisconnectionEvent,”togetherthe“DisconnectionEvents”).IIDshallpromptlyrestoretheInterconnectiontothePointofInterconnectionuponthepassageoftheDisconnectionEvent.Section10.InsuranceRequirements.(21)IIDInsuranceRequirements.ThroughouttheTerm,IIDshallmaintaintheinsurancecoveragesetforthbelow.(1)ComprehensiveorCommercialFormGeneralLiabilityInsurance(contractualliabilityincluded)asfollows:(A)EachOccurrence:$2,000,000(B)Products/CompletedOperationsAggregate:$4,000,000(C)PersonalandAdvertisingInjury:$2,000,000(D)GeneralAggregate:$4,000,000(2)ComprehensiveAutomobileLiabilityInsurancecoveringowned,non-owned,andhiredvehicles.Thelimitsofliabilityshallnotbelessthanacombinedsinglelimitof$2,000,000peroccurrence.(3)ExcessLiability,umbrellainsuranceform,applyingexcessofprimarytothecommercialgeneralliability,commercialautomobileliabilityandemployer’sliabilityinsuranceshallbeprovidedwithminimumlimitsof$5,000,000peroccurrence,$5,000,000generalaggregate,and$5,000,000products/completedoperations.(4)StatutorilyrequiredWorkers’CompensationInsurance.(5)Insurancerequiredunder9(c)(l),9(c)(2)and9(c)(3)shallbeissuedbycompaniesthatareCaliforniaadmittedinsurancecompanieswithaBestratingofA-orbetteranda?nancialclassi?cationofVIIIorbetter(oranequivalentratingbyStandard&Poor’sorMoody’s),orasotherwisereasonablyacceptabletotheAuthority.IIDmayalsomeetitsinsuranceobligationunderaself-insuranceprogramreasonablyacceptabletotheAuthority.Insurancerequiredunder9(c)(l),9(c)(2),and9(c)(3)shallbeendorsedtoincludetheAuthority,itsgoverningbody,members,officers,agents,asadditionalinsuredsandwaiverightsofsubrogation.toallrealandpersonalpropertylocatedonorin,orconstitutingapartof,theIndioProperties(includingbutnotlimitedtotheInfrastructureElectricalImprovements)inanamountequaltoatleastonehundredpercent(100%)ofreplacementvalueofallsuchproperty.Suchinsuranceshallaffordcoveragefordamagesresultingfrom(i)fire,(ii)perilscoveredbyextendedcoverageinsuranceasembracedintheStandardBureauformusedintheStateofCalifornia,(iii)explosion4856-6242-2886.139190100001/6-14-23-6-4877-8791-7416V3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 472 of 968 ofsteamandpressureboilersandsimilarapparatuslocatedintheInfrastructureElectricalImprovements,and(iv)?ooddamageifanIndioPropertyislocatedwithina?oodplain.Sectionll.Indemnity.(a)IIDshallindemnify,defendandholdharmlesstheAuthorityandeachofIID’sandtheAuthority’sof?cers,directors,employees,boardmembers,attorneysandagentsfromandagainstanyandalldemands,claimsorlawsuits(collectively,“Claims”)arisingoutofthedesign,construction,operation,maintenanceorrepairoftheProject,orthedeliveryofelectricityintooroutoftheProject.IIDshallful?llitsdefenseobligationswithcounselofitsoritsinsurancecarrier’schoice,subjecttotheAuthority’sapproval,whichapprovalshallnotbeunreasonablywithheld.Notwithstandingtheabove,IIDshallhavenodutytoindemnify,defendandholdharmlesstheAuthoritytotheextentaClaimarisesoutoftheAuthority’soranAuthorityindemni?edparty’sgrossnegligenceorintentionalact.(b)TheAuthorityshallindemnify,defendandholdharmlessIIDandeachofIID’sofficers,directors,employees,boardmembers,attorneysandagentsfromandagainstanyandallClaimsarisingoutofCEQAchallengestoaProject,challengestotheissuanceofanyBondsorthecollectionandexpenditureoftheSurcharge,ortheAuthority’sbreachofanyofitsobligationsunderthisProjectAgreement,includingbutnotlimitedtoitsobligationtopayProjectCostsandtoensureIID’saccesstotheProjectssetforthinSection9ofthisProjectAgreement.TheAuthorityshallfulfillitsdefenseobligationswithcounselofitsoritsinsurancecarrier’schoice,subjecttoIID’sapproval,whichapprovalshallnotbeunreasonablywithheld.Notwithstandingtheabove,theAuthorityshallhavenodutytoindemnify,defendandholdharmlessIIDtotheextentaClaimarisesoutofIID’soranIIDindemni?edparty’sgrossnegligenceorintentionalact.Section12.Payments.(a)TheAuthorityshallpaytheProjectCoststhroughadvancepaymentstoIIDintheamountsandatthemilestonedatessetforthinExhibit“E”hereto(the“DisbursementScheduleandMilestoneDates”).[Tobefurtherdiscussedandflushedout,includingreturnofunspentmoniestotheAuthority]Section13.DisputeResolution.(a)IntheeventeitherPartyhasadispute,orassertsaclaim,thatarisesoutoforinconnectionwiththisProjectAgreement,ortheirperformancethereunder,suchParty(the“DisputingParty”)shallprovidetheotherPartywithwrittennoticeofthedisputeorclaim(“NoticeofDispute”).TheNoticeofDisputeshall:(a)describewhatisdisputedorclaimedandincludeandisputingPartywhowillrepresentitininformalnegotiations.(b)SuchdisputeorclaimshallbereferredtoadesignatedseniorrepresentativeofeachPartyforresolutiononaninformalbasisaspromptlyaspracticableafterreceiptoftheNoticeofDisputebytheotherParty.Intheeventthedesignatedrepresentativesareunabletoresolvetheclaimor‘disputewithinthirty(30)calendardaysoftheotherParty’sreceiptoftheNoticeofDispute,theDisputingPartyshall,withinthirty-?ve(35)calendardaysoftheotherParty’s4856-6242-2886.1391901.0000]/6-14-23 -7-4877-8791-7416V3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 473 of 968 receiptoftheNoticeofDispute,notifytheotherPartywhetheriteither:(a)isnolongerpursuingitsdispute;or(b)electstoproceedtoassistednegotiationormediation.IftheDisputingPartyelectstoproceedtoassistednegotiationormediation,thedisputingPartyshallincludeinitsnoticethenamesandcontactinformationforatleastthree(3)possibleneutralmediatorsmeetingthequali?cationsdescribedinSectionl3(c)below,whichwouldbeacceptabletothedisputingParty.Within?ve(5)BusinessDaysofreceiptofthedisputingParty’selectiontoproceedtoassistednegotiationormediation,theotherPartyshall,inturn,notifytheDisputingPartyofthenamesandcontactinformationforatleastthreepossibleneutralmediators,meetingthequali?cationsdescribedinSectionl3(c)below,whichwouldbeacceptabletotheotherParty.(c)AnyassistednegotiationormediationinitiatedundertheseproceduresshallbeconductedbeforeasingleneutralmediatorappointedbytheParties.IfthePartiesfailtoagreeuponasinglemediatorwithin?fteen(15)calendardaysofthedisputingParty’snoticeofelectiontoproceedtoassistednegotiationormediation,eachPartyshallchooseasingleneutralpartywhoshallsitonathree-membermediationpanel.Thetwoneutralpartiessochosenshallwithintwenty(20)calendardaysselectathirdneutralpartytochairthemediationpanel.Ineithercase,themediatorsshallbeknowledgeableinelectricutilitymatters,includingelectrictransmissionandbulkpowerissues,andshallnothaveanycurrentorpastsubstantialbusinessor?nancialrelationshipswitheitherPartytothemediation.Themediator(s)shallprovideeachofthePartiesanopportunitytobeheard.IntheeventthePartiesareunablethrougheitherassistednegotiationormediationtoresolvethedisputewithinninety(90)calendardays,eachPartymayexercisewhateverrightsandremediesitmayhaveinequityoratlawconsistentwiththetermsofthisProjectAgreement.(d)EachPartyshallberesponsibleforitsownattorneys’feesandcostsincurredduringtheassistednegotiationormediationprocessandforonehalfofthecostofthemediator(s)chosentoassisttheParties.Section14.Miscellaneous.(a)ChoiceofLaw;Venue.ThisProjectAgreementwillbegovernedbythelawsoftheStateofCalifornia.AllactionsorproceedingsarisinginconnectionwiththisProjectAgreementshallbetriedandlitigatedexclusivelyinStatecourtlocatedintheCountyofSanDiego,StateofCalifornia.Theaforementionedchoiceofvenueismandatory,therebyprecludingthepossibilityoflitigationbetweenthePartieswithrespecttoorarisingoutofthisProjectAgreementinanyjurisdictionotherthanthatspeci?edinthisparagraph.ThePartiesherebystipulatethattheU.S.statecourtlocatedintheCountyofSanDiego,StateofCalifornia,shallhaveinpersonamjurisdictionandvenueovereachofthemforthepurposeoflitigatinganydisputeorproceedingarisingoutoforrelatedtothisProjectAgreement.EachpartyherebyauthorizesserviceofprocessgivingofnoticeassetforthinthisProjectAgreement.(b)Attorneys’FeesandCosts.Shouldeitherpartyheretoinstituteanyactionorproceedingincourtagainsttheotherparty,byreasonoforallegingthefailureoftheotherpartytocomplywithanyorallofitsobligationshereunder,whetherfordeclaratoryorotherrelief,thenthepartywhichprevailsinsuchactionorproceedingshallbeentitled,inadditiontoanyotherrecoveryor4856-6242-2886.139190100001/6-14-23-8-4877-8791-74]6V3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 474 of 968 relief,toitsreasonableattorneys’feesandexpensesrelatedthereto(whetherattheadministrative,trialorappellatelevels)(“LegalCosts”).(c)TimeofEssence.TimeisoftheessencewithrespecttoeachandeveryprovisionofthisAgreement.(d)Exhibits.TheExhibitsattachedheretoareherebyincorporatedhereinbythisreferenceforallpurposes.(e)ProhibitiononAssignment.NeitherPartymayassignanyright,matterorthing,referencedbythisProjectAgreement,inwholeorinpart,withoutthepriorwrittenconsentoftheotherpartyandanyattempttosoassignortransferwhichisnotinaccordanceherewithshallbenullandvoidandofnoforceoreffect.(f)SuccessorandAssigns:ThisProjectAgreementshallbebindingonbothPartiesandtheirsuccessorsandpermittedassigns.(g)Severability.IfanyprovisionofthisProjectAgreementshallbeheldvoid,voidable,invalidorinoperative,nootherprovisionofthisProjectAgreementshallbeaffectedasaresultthereof,andaccordingly,theremainingprovisionsofthisAgreementshallremaininfullforceandeffectasthoughsuchvoid,voidable,invalidorinoperativeprovisionshadnotbeencontainedherein.(h)Representation.BothpartiesacknowledgeandagreethateachwasrepresentedbylegalcounselduringthenegotiationandexecutionofthisProjectAgreement.Section15.AuthorizedRepresentativesandNotices A
(a)Representatives.PriortocommencementoftheworkundertheProjectAgreement,IIDandAuthorityshalleachdesignatearepresentativeauthorizedtoactonbehalfofeachPartyandshalladvisetheotherPartyinwritingofthename,addressandtelephonenumberofsuchdesignatedrepresentativeandshallinformtheotherPartyofanysubsequentchangeinsuchdesignation. 4856-6242-2886.139190100001/6-14-23-9-4877-8791—74l6v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 475 of 968 (b)NoticesandCommunications.(1)Day—to—DavNoticeandCommunications — Allcommunicationsrelatingtotheday-to-dayactivitiesunderthisProjectAgreementshallbeexchangedbetweenthefollowingrepresentativesofIIDandtheAuthority:T0:IID TO:AUTHORITYGeneYa1MaT1ageTExecutiveDirectorImperialIrrigationDistrictIndioE1ectrjcAuthorityPostOf?ceBox937 Telephone:(760)344-6434333EastBarioniBoulevardFacsim?e;(750)344-3419Imperial,CA92251Telephone:(760)339-9550Facsimile:(760)339-9063(2)LegalNoticesandCommunications.AlllegalnoticesandcommunicationsrequiredunderorrelatedtothisProjectAgreementshallbeinwriting,andshallbedeliveredpersonallyormailedbycerti?edmail,postageprepaid,returnreceiptrequested,totherepresentativesofIIDandAuthorityidenti?edbelow.Noticeshallbeeffectiveonthedateofdelivery.TO:IID TO:AUTHORITYGeneralManager ExecutiveDirectorImperialIrrigationDistrictIndioElectricAuthorityPostOf?ceBox937 100CivicCenterDrive333EastBarioniBoulevardIndio,California92201Imperial,CA92251Telephone:(760)339-9477TelepheneiFacsimile:(760)339-9392Facslmller(c)EitherPartymaychangeorsupplementtheinformationexchangedconcerningauthorizedrepresentativesandnoticesbygivingtheotherPartywrittennoticeofthenewinformationinthemannersetforthabove. 4856-6242-2886:}39190100001/6-14-23—l0—4877-8791-74l6v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 476 of 968

IID AUTHORITYIMPERIALIRRIGATIONDISTRICTINDIOELECTRICAUTHORITY By: By:

President,BoardofDirectorsExecutiveDirector
Date: Date:
;‘S?3;?E3§a%‘i?§;}4.23-11-4877—8791—7416V3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 477 of 968 EXHIBITAPROJECTDESCRIPTION[ToBeInserted]
PROJECTNAME:[Insert]PROJECTLOCATION:[Insert]PROJECTDESCRIPTION:[Insert]PROJECTCEQAREVIEW:[Insert] 4856-6242-2886]391901,0O001/6-14-234877-8791-7416v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 478 of 968 EXHIBITBPOINTOFINTERCONNECTION[ToBeInserted]
4856-6242-2886.}39190100001/6-14-234877-8791-7416V3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 479 of 968 EXHIBITCFORMOFQUITCLAMDEEDS[ToBeInserted]
4856-6242-2886}39190100001/6«14—234877-8791—7416v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 480 of 968 EXHIBITDFORMOFGROUNDLEASE[ToBeInserted]
4856-6242-2886.1391901.0000]/6-14-234877-8791-7416v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 481 of 968 EXHIBITEDISBURSEMENTSCHEDULEANDMILESTONEDATES[ToBeInserted] 4856-6242-2886.139190100001/6~l4-234877-8791-74l6v3/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 482 of 968

EXHIBITBFORMOFSERVICINGAGREEMENT
4856-1616-1105v9/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 483 of 968 StradlingYoccaCarlson&RauthDraftof6/14/23SERVICINGAGREEMENTTHISSERVICINGAGREEMENTdatedasof 1,2023(the“Agreement”)byandbetweentheImperialIrrigationDistrict(“IID”),anirrigationdistrictthatisdulyorganizedandexistingunderandbyvirtueofthelawsoftheStateofCalifornia(the“State”),andtheIndioElectricFinancingAuthority(the“Authority”),ajointexerciseofpowersagencythatisdulyorganizedandexistingunderandbyvirtueofthelawsoftheState.TheAuthorityandIIDmayeachbereferredtohereinasa“Party”and,collectively,asthe“Parties.”TermsnototherwisedefinedhereinshallhavethemeaningassignedtosuchtermsintheJointExerciseofPowersAgreement,dated,2023(the“JointPowersAgreement”),byandbetweenIIDandtheCityofIndio(“Indio”).WHEREAS,pursuantto[Resolution][Ordinance]No.___,adoptedbytheBoardofDirectorsoftheAuthorityon,2023(the“SurchargeResolution”),theAuthorityauthorizedthechargeofasurchargefortheprovisionandenhancementbytheAuthorityofelectricalservicewithintheboundariesofIndio(the“Surcharge”);WHEREAS,IIDcurrentlyprovidesretailelectricservicewithintheboundariesofIndio;WHEREAS,IIDbillsIIDcustomerslocatedwithintheboundariesoftheCityofIndio(the“IndioCustomers”)forretailelectricalserviceandcollectspaymentfromtheIndioCustomersforsuchelectricalservice;WHEREAS,IIDalsobillsIndioCustomersaUtilityUserTax(“UUT”)assetoutintheUtilityUsers’TaxProcessMemorandumOfUnderstanding092310onbehalfoftheIndioandforwardstoIndiosuchtaxes,lesscollectionandrelatedexpenses;WHEREAStheAuthority,infurtheranceofitspurposessetforthintheJointPowersAgreement,requeststheassistanceofIIDinthebillingandcollectionoftheSurchargethroughtheplacementoftheSurchargeonthebillingstatementreceivedbyIndioCustomers(each,an“IIDBillingStatement”);WHEREAStheAuthorityhasprovidedIIDwithacopyoftheSurchargeResolution,whichsetsforth,amongotherthings,thecalculationoftheSurcharge;andNOW,THEREFORE,forgoodandvaluableconsideration,thereceiptandadequacyofwhichthePartiesherebyacknowledge,theParties,intendingtobelegallybound»,doherebycovenantandagreeasfollows:Section1.BillingandCollectionoftheSurcharge.StatementsdeliveredtoIndioCustomers.IIDwillincludetheSurchargeontheIIDBillingStatementofeachIndioCustomereligibletobechargedtheSurchargepursuanttothetermsoftheSurchargeResolutionandshallbecalculatedbyIII)inthemannersetforthintheSurchargeResolution.TheSurchargeshallappearasaseparatelineitemontheIIDBillingStatement,orasotherwiseprescribedbyIID’sthen-currentbillingprocedures,andIIDshallbilltheSurchargeinthesamemannerasIIDbillsIndioCustomersforelectricalserviceandtheUUT.4862-8963—6956vl0/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 484 of 968 TheSurchargeauthorizedbytheAuthorityundertheSurchargeResolutionisforthepurposeofimprovingthedeliveryofelectricalservicebyaddingAuthority?nancedorfundedimprovements,butisnotandshallnotbeconsideredaratechargedfortheconsumptionofelectricalserviceintheCoachellaValley.TheSurchargeshallhavenoimpacton,andshallbeentirelyindependentof,therateIIDchargestoIIDelectricalservicecustomersintheCoachellaandImperialValleys.IIDshallnotberesponsiblefor,norhaveanydutytoindependentlyinvestigateorinquirewithregardto,thevalidityoftheSurcharge.IIDshallnotberesponsiblefor,norhaveanydutytoindependentlyinvestigateorinquirewithregardto,IIDcustomersthatareexemptfromthecollectionoftheSurcharge.(b)BoundaryInformation.TheAuthorityshallassuretheaccuracyoflndio’sboundaryinformation(includingthere?ectionofthelatestannexationandmunicipalreorganizations)neededfortheSurchargebillingandcollectionpurposebyprovidingIIDwithwrittennoticewheneverboundarychangesaremadetotheboundariesoflndio.Suchnoticeshallincludeanupdatedboundarymapre?ectingsuchboundarychanges.FollowingreceiptofsuchnoticefromtheAuthority,iftheboundariesofIndiohaveexpanded,IIDshalluseitsbesteffortstoincludetheSurchargeonIIDbillsofelectriccustomersresidingintheadditionalterritoryofIndiowithinthenexttwoIIDbillingcycles.IfthechangeinboundariesresultsinacontractionoftheboundariesofIndio,IIDwilluseitsbesteffortstoremovetheSurchargefromthebillsofIIDcustomersresidingintheterritorythatisnolongerpartofIndiowithinthenexttwoIIDbillingcycles.IIDshallnotberesponsibleforthecollectionorpaymentofanySurchargesthatwerenotcollectedduetotheinaccuracyofinformationprovidedbytheAuthority.(c)SurchargeAppeals.TheAuthoritymayhearobjections,claimsandappealstodeterminewhetherIIDcustomersshouldbesubjecttothecollectionoftheSurcharge.ShouldanIIDcustomer’sstatuschangeasaresultoftheAuthority’sfinalandnonappealableresolutionofanyobjection,claim,orappeal,theAuthorityshallsoadviseIID.IftheAuthorityisrequiredbylawtorefundalloranypartoftheSurcharge,itshallbethesoleresponsibilityoftheAuthoritytorefundtheSurcharge.(d)CollectionoftheSurchargebyIID.IIDagreestocollecttheSurchargeonbehalfoftheAuthorityintheregularcourseofitsbusiness.IIDagreestoadheretoandcarryoutitsdisconnectionpoliciesinconnectionwithdelinquentpaymentsoftheSurcharge.IIDwilldeterminetheamountoftheuncollectableSurchargeowedbyIIDcustomersforeachyearconsistentwithitswriteoffpolicyasapprovedbyIID’sBoardofDirectorseachyear.UntilIIDremitstheSurchargeamountstotheAuthoritypursuanttoSection2ofthisAgreement,IIDshallholdtheSurchargeinanaccountestablishedbyIIDthatwillsegregatetheSurchargefromtheotherfundsandaccountsofIID.ThePartiesagreeandacknowledgethatatalltimestheSurchargecollectedbyIIDonbehalfoftheAuthorityshallbethepropertyoftheAuthority(e)ProvisionofServicesRelatedtotheSurchargebyIID.(i)IIDagreestoprovideallmeteringandmeterreadingservicesnecessaryforthecalculationoftheSurcharge.4862-8963-6956v10/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 485 of 968 (ii)InconnectionwiththebillingandcollectionoftheSurchargeonbehalfoftheAuthority,IIDshall(1)followitscustomarystandards,policiesandproceduresinperformingitsdutieshereunderand(2)performitsdutieshereunderusingthesamedegreeofcareanddiligencethatIIDexercisesforitsownaccount.Section2.RemittanceofSurchargetotheAuthority.IIDshallremittotheAuthorityallamountsrepresentingtheSurchargenotlaterthanthe15”‘(fifteenth)dayofthesecondcalendarmonthsucceedingthemonthinwhichsuchamountswerecollectedandreceivedbyIID(e.g.,amountsrepresentingtheSurchargecollectedinJanuaryshallberemittedbynolaterthanMarch15).SuchamountswillincludeanydelinquentpaymentsoftheSurchargereceivedbyIID.AmountsremittedbyIIDtotheAuthoritypursuanttothisSection4willbetransferredbywiretransferpursuanttowireinstructionssetforthinScheduleI.InconnectionwiththeissuanceofBondsbytheAuthority,theAuthoritymayprovideIIDwithaninstructiontoremittheproceedsoftheSurchargedirectlytothetrusteefortheBondsissuedbytheAuthority.Suchinstructionshallincludethewireinstructionsforsuchtrustee.Section3.OverorUnderCollectionofSurcharge.ToinsuretheappropriateSurchargehasbeencollectedandremittedbyIID,representativesoftheAuthorityandIIDshallmeetannuallytoreviewSurchargeaccountingandrecordsoftheAuthorityandIIDasnecessarytodetermineifsuchanoverorundercollectionoccurred:a.OverCollection.IntheeventofanovercollectionoftheSurcharge,theAuthorityshallberesponsibleforprocessinganyrefundstoIIDcustomers.b.UnderCollection.I.IfIIDdeterminesthattheAuthorityhaschangedthelistofelectricservicecategoriesdesignatedbytheAuthorityordinanceorresolutiontobechargedaspartofaSurcharge,IIDwillimplementthechangeatthenextbillingcycleaftertheIIDbillingrecordsareupdatedtore?ectthechange,andIIDwillnotberequiredtobackbill.2.IfnewIIDelectricservicecustomershavebeenaddedwithintheCityofIndio’sjurisdictionalboundarysubjecttotheSurcharge,IIDwillbeginchargingtheCityofIndio’sdesignatedcustomersatthenextbillingcycleaftertheIIDbillingrecordsareupdatedtoreflectthechange.3.ShouldIIDrecoverpreviouslyuncollectableandwrittenoffelectricservicerevenue,IIDshallproportionallyremitrecoveredSurchargerevenuetotheAuthority.4.AdministrationFee IntorecovercostscollectingtheSurcharge,IIDshallcharge,asagainstcollectedAuthoritySurchargerevenue,anadministrationfeeandabaddebtallowance.TheadministrationfeeisretainedbyIIDonamonthlybasisfromIID’smonthlyremittanceoftheSurchargeintheamountofonepointfivepercent(1.5%)oftheSurchargecollected.Thebaddebtallowanceispointfour?vepercent(.45%)oftheSurchargecollected. '
4862-8963-6956vl0/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 486 of 968 Section5.
‘
CustomerInquiries.ItistheAuthority’sresponsibilitytonotify[IDcustomerswithinlndio’sboundariesoftheSurcharge.IIDshallprovidetotheAuthorityarecordincludingnameandserviceaddressofallofitselectriccustomerspresentlybilledtheUUT.SolongasIIDiscollectingtheSurchargeonbehalfoftheAuthoritypursuanttothisAgreement,IIDshalladdressalllndioCustomerinquiriesregardingtheSurchargeasperlanguageprovidedbytheAuthority.TheAuthorityagreestoprovideallnecessaryinformationtoIIDinordertopermitHDtorespondtoalllndioCustomerinquiriesonatimelybasis.EscalatedinquiriesthatareoutsideoflID’scontrolwillbereferredtoanappointedstaffmemberoftheAuthoritywhosecontactshallbeprovidedtoIID.Section6.TermofAgreement.ThisAgreementshallbecomeeffectiveasofthedatehereofandshallcontinuetobeinfullforceandeffectuntiltheBusinessDaythatissix(6)monthsafterthelaterof(a)thedatethattheSurchargeisnolongerbeingchargedtolndioCustomersbytheAuthorityand(b)thedateonwhichallBondsarenolongeroutstandingpursuanttotheirterms;providedthatintheeventthatHDisnolongerprovidingelectricalserviceswithintheboundariesoflndioduringaperiodwhentheSurchargeisbeingchargedbytheAuthority,thisAgreementshallterminateonthedateonwhichIIDceasestoprovideelectricalserviceswithintheboundariesoflndio;providedfurtherthatIID’sobligations(i)tocollectamountsrepresentingSurchargebilledtolndioCustomerspriortotheterminationofthisAgreementand(ii)toremitsuchSurchargeamountstotheAuthority,shallsurvivetheterminationofthisAgreement.Section7.Records.ThePartiesshallmaintainaccuraterecordsandaccountsrelatingtotheSurchargeinsufficientdetailtopermitrecordationoftheSurchargebilledtolndioCustomersandtheamountsofSurchargeremittedbyIIDtotheAuthority(or,ifapplicable,thetrusteeforBondsissuedbytheAuthority).EachPartyshallprovideaccesstosuchrecordstotheotherParty.ThePartiesshallaffordaccesswithoutcharge,uponareasonablerequestmadepursuanttoSection10.ThePartiesshallretainallrecordsusedinthecollectionandremittanceoftheSurchargeforaminimumofthree(3)years.Section8.Audit.Upon30calendardays’priorwrittennotice,theAuthoritymayrequestanaudit,conductedbytheAuthorityoritsagents,attheexpenseoftheAuthority,ofllD’srecordsandprocedures,whichshallbelimitedtorecordsandprocedurescontaininginformationbearingupontheSurchargebeingbilledtolndioCustomersandthelndioCustomerpaymentsoftheSurcharge.TheauditshallbeconductedduringIlD’snormalbusinesshourswithoutinterferencewithllD’snormaloperationsandincompliancewithIID’ssecurityprocedures.Section9._ Indemnification.TheAuthorityshallindemnify,defendandholdharmlessHDandeachoflID’sofficers,directors,employees,attorneysandagentsfromandagainstanyandallcosts,expenses,losses,claims,damages,andliabilitiesdirectlyorindirectlyarisingoutoforinconnectionwiththebillingandcollectionoftheSurcharge.Notwithstandingtheforegoing,theprovisionsofthisSection7shallnotapplyanysuchcosts,expenses,losses,claims,damages,andtoextentthenegligence,recklessnessorwillfulmisconductofllD.Section10.Notices.Allnotices,consents,requests,instructions,approvalsandothercommunicationsprovidedforinthisAgreementmustbeinwriting,signed,withrespecttoAuthority,bythePresidentoftheBoardofDirectorsoftheAuthority,theVicePresidentoftheBoardofDirectorsoftheAuthority,theExecutiveDirectoroftheAuthorityoranydesigneethereof(eachan“AuthorityAuthorizedRepresentative”)and,withrespecttoIID,thePresidentoftheBoardofDirectorsofIID,theVicePresidentoftheBoardofDirectorsofHDandtheGeneralManagerofIIDoranydesigneethereof(eachan“HDAuthorizedRepresentative”):(i)personaldelivery,overnightdeliverybya4862-8963-6956v10/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 487 of 968 recognizedcourierordeliveryservice,(ii)mailedbyregisteredorcerti?edmail,returnreceiptrequested,postageprepaid,or(iii)electronictransmission,whichincludesemailwithanimagedorscannedattachment(suchasa.pdf)orothersimilarelectronictransmission,(receiptcon?rmed);andbecomeeffectivewhendeliveredtotheaddressesnotedbeloworsuchotheraddressasmaybesubstitutedthereforbywrittennoti?cationbytheAuthorityAuthorizedRepresentativeortheIIDAuthorizedRepresentative,asapplicable.IftoIID,to:ImperialIrrigationDistrict[333E.BarioniBoulevard][Imperial,California92251]Attention:[GeneralManager]Email:Phone:IftotheAuthority,to:IndioElectricFinancingAuthority100CivicCenterDriveIndio,California92201Attention:ExecutiveDirectorEmail:Phone:Section11.InconsistentProvisions.DepositoragreesthattotheextentthattheprovisionsofanyotheragreementrelatingtotheAccountPropertyareinconsistentwiththetermsofthisAgreement,thetermsofthisAgreementwillcontrol.Section12.Counterparts.ThisAgreementandanyamendmentsheretomaybeexecutedinanynumberofcounterpartseachofwhichwillbedeemedtobeanoriginal,andallofwhichtogetherwillconstitutebutoneandthesameinstrument.Section13.Severability.Theinvalidity,illegalityorunenforceabilityofanyprovisionofthisAgreementwillinnowayaffectthevalidity,legalityorenforceabilityofanyotherprovision;andifanyprovisionisheldtobeunenforceableasamatteroflaw,theotherprovisionswillnotbeaffectedtherebyandwillremaininfullforceandeffect.Section14.GoverningLaw.ThisagreementwillbegovernedbyandconstruedinaccordancewiththelawsoftheStateofCalifornia.\ Section15.DisputeResolution.event a orassertsaarisesoutoforinconnectionwiththisAgreement,ortheirperformancethereunder,suchParty(the“DisputingParty”)shallprovidetheotherPartywithwrittennoticeofthedisputeorclaim(“NoticeofDispute”).TheNoticeofDisputeshall:(a)describewhatisdisputedorclaimedandincludeanidenti?cationoftheallegedfactsandAgreementsectionsrelevanttosuchdisputeorclaim;and(b)providethenameandcontactinformationforthedesignatedrepresentativeofthedisputingPartywhowillrepresentitininformalnegotiations.4862-8963-6956v10/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 488 of 968 SuchdisputeorclaimshallbereferredtoadesignatedrepresentativeofeachPartyforresolutiononaninformalbasisaspromptlyaspracticableafterreceiptoftheNoticeofDisputebytheotherParty.Intheeventthedesignatedrepresentativesareunabletoresolvetheclaimordisputewithinthirty(30)calendardaysoftheotherParty’sreceiptoftheNoticeofDispute,theDisputingPartyshall,withinthirty-five(35)calendardaysoftheotherParty’sreceiptoftheNoticeofDispute,notifytheotherPartywhetheriteither:(a)isnolongerpursuingitsdispute;or(b)electstoproceedtoassistednegotiationormediation.IftheDisputingPartyelectstoproceedtoassistednegotiationormediation,theDisputingPartyshallincludeinitsnoticethenamesandcontactinformationforatleastthree(3)possibleneutralmediators,meetingthequalificationsdescribedinSectionl4(b)below,whichwouldbeacceptabletothedisputingParty.Withinfive(5)BusinessDaysofreceiptoftheDisputingParty’selectiontoproceedtoassistednegotiationormediation,theotherPartyshall,inturn,notifytheDisputingPartyofthenamesandcontactinformationforatleastthreepossibleneutralmediators,meetingthequalificationsdescribedinSectionl4(b)below,whichwouldbeacceptabletotheotherParty.(b)AssistedNegotiationorMeditation.AnyassistednegotiationormediationinitiatedundertheseproceduresshallbeconductedbeforeasingleneutralmediatorappointedbytheParties.IfthePartiesfailtoagreeuponasinglemediatorwithinfifteen(15)calendardaysofthedisputingParty’snoticeofelectiontoproceedtoassistednegotiationormediation,eachPartyshall p
chooseasingleneutralpartywhoshallsitonathree-membermediationpanel.Thetwoneutralpartiessochosenshallwithintwenty(20)calendardaysselectathirdneutralpartytochairthemediationpanel.Ineithercase,themediatorsshallbeknowledgeableinelectricutilitymatters,includingelectrictransmissionandbulkpowerissues,andshallnothaveanycurrentorpastsubstantialbusinessorfinancialrelationshipswitheitherPartytothemediation.Themediator(s)shallprovideeachofthePartiesanopportunitytobeheard.IntheeventthePartiesareunablethrougheitherassistednegotiationormediationtoresolvethedisputewithinninety(90)calendardays,eachPartymayexercisewhateverrightsandremediesitmayhaveinequityoratlawconsistentwiththetermsofthisAgreement.(c)Costs.EachPartyshallberesponsibleforitsowncostsincurredduringtheassistednegotiationormediationprocessandforonehalfofthecostofthemediator(s)chosentoassisttheParties.Section16.NoThirdPartyBene?ciary.ExceptforpermittedassigneespursuanttoSectionl6(l),thisAgreementshallnotbeconstruedtobeanagreementforthebenefitofanythirdpartyorpartiesandnothirdpartyorpartiesshallhaveanyclaimorrightofactionunderthisAgreementforanycausewhatsoever.Section17.Amendments.Exceptasotherwisepermittedherein,thisAgreementmaybemodifiedonlybyawrittenamendmentsignedbytheAuthorityAuthorizedRepresentativeandIIDAuthorizedRepresentative.(a)TherightsandremediesconferreduponthePartiesshallbecumulative,andtheexerciseorwaiverofanysuchrightorremedywillnotprecludeorinhibittheexerciseofanyadditionalrightsorremedies.Thewaiverofanyrightorremedyhereunderwillnotprecludethesubsequentexerciseofsuchrightorremedy.4862-8963-6956v10/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 489 of 968 (b)ThisAgreementisfortheexclusivebenefitofthePartiesandtheirrespectivesuccessorshereunder,andwillnotbedeemedtogive,eitherexpressorimplied,anylegalorequitableright,remedy,orclaimtoanyotherentityorpersonwhatsoever.(c)EachPartyherebyrepresentsandwarrants(i)thatthisAgreementhasbeendulyauthorized,executedanddeliveredonitsbehalfandconstitutesitslegal,validandbindingobligationand(ii)thattheexecution,deliveryandperformanceofthisAgreementbythePartiesheretodoesnotandwillnotviolateanyapplicablelaworregulation.(d)TheheadingscontainedinthisAgreementareforconvenienceofreferenceonlyandwillhavenoeffectontheinterpretationoroperationhereof.(e)NowaiverofanyprovisionhereofwillbeeffectiveunlessexpressedinawritingsignedbytheAuthorityAuthorizedRepresentativeortheIIDAuthorizedRepresentative,asapplicable.(f)NoPartymayassignanyofitsrightsorobligationsunderthisAgreementwithoutthewrittenconsentoftheotherParty.(g)ThisAgreementshallbebindinguponandshallinuretothebenefitofthesuccessorsofthePartieshereto. 4862-8963-6956v10/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 490 of 968 INWITNESSWHEREOF,thepartiesheretohaveexecutedthisAgreementasofthedayandyearfirstabovewritten.IMPERIALIRRIGATIONDISTRICT GeneralManager

INDIOELECTRICFINANCINGAUTHORITY
ExecutiveDirector
S-I4862—8963—6956v10/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 491 of 968 SCHEDULEIWireInstructions:IftoAuthority:ABANo.:BankName:AccountNo.:AccountName:Attention:
4862-8963-6956v10/200973-0003

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AGENDA ITEM #10.4
Approval of the Bylaws for the Indio Electric Finance Authority (IEFA) t...Page 492 of 968 City of Indio
City Council
July 19, 2023

STAFF REPORT

To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Bryan H. Montgomery, City Manager
Subject: Resolution No. 2023-01 of the Indio Electric Financing Authority establishing and authorizing the charge of a surcharge for electric service within the boundaries of the City of Indio, authorizing the execution and delivery of a servicing agreement and authorizing certain related actions.

RECOMMENDATION:

Adopt IEFA Resolution No. 2023-01.

SUMMARY:

The Indio Electric Financing Authority (the “IEFA”) was created pursuant to a Joint Exercise of Powers Agreement, dated June 21, 2023, by and between the City of Indio (“Indio”) and the Imperial Irrigation District (“IID” and, together with Indio, the “Mem bers”), for the express purpose of providing and enhancing electrical service within the territorial boundaries of Indio through the procurement, design, construction, system energy of maintenance ownership, operation leasing, financing, and improvements, system efficiency and reliability improvements and energy service enhancements.

IEFA has the power to exercise the common power of the Members and certain other powers authorized by law, including the power to provide electrical service and to establish th e provision of such electrical service. It has been determined that additional revenues are needed to address some key electric infrastructure needs and a surcharge is proposed to electrical power consumers receiving power from IID.

BACKGROUND INFORMATION:

The Members of the IEFA have been working collaboratively to identify key electric infrastructure needs impacting electric power consumers located within Indio. In analyzing the critical needs of the electric system, the Members looked not only at the current load within Indio, but also the expected impact that legislative and regulatory mandates that aim to reduce fossil fuel consumption will have on the current infrastructure and the ability to reliably provide electricity to power consumers within Indio. In addition, IEFA, in its evaluation of the infrastructure needs within Indio, considered the additional burden that non -energy specific policies and regulations, such as water treatment regulations and policy objectives to address housing access, will have on the current electric system.

With an emphasis on enhancing the reliability and resiliency of the existing IID electric system infrastructure located within Indio, IEFA has identified the construction of new substations or the upgrading of existing substations as the most the effective means to prepare the electric system for the expected increase in demand resulting from the transition to electrification and away from fossil fuels.

AGENDA ITEM #10.5
Resolution No. 2023-01 of the Indio Electric Financing Authority establi... Page 493 of 968 There has been delivered to IEFA a report titled “ Indio Electric Financing Authority Surcharge Addressing Adequate Substation Capacity to Meet Increasing Needs of Existing Indio Electric Customers – A Project Summary Repor t,” dated July 13, 2023 (the “Project Summary Report”) prepared for the City of Indio by B ill D. Carnahan, President, BD Carnahan Management Services Inc. The Project Summary Report is included as Attachment 2 to this Staff Report. The Project Summary Report details recent California legislative measures and regulations requiring increased electrification of vehicles and appliances and the impact that such electrification is expected to have on electric infrastructure. The Project Summary Report also highlights regulations and policies that, in the coming years, are expected to require electri city-intensive compliance measures within Indio, such as increased treatment of drinking water to remove Chromium 6 and the construction of high density housing units to improve housing access within the city’s boundaries. As to the current infrastructure needs within Indio, the Project Summary Report cites to IID’s City of Indio 10 Year Expansion Plan (2022 -2031) (the “10 Year Expansion Plan”), which identified the need for nine additional substations to be added to the electric system during that span. With these considerations in the backdrop, the Project Summary Report concludes that the “need for additional substations [in Indio] is considerable,” noting that the last substation constructed in Indio was in 2003.

In order to provide and enhance elec trical service within the boundaries of Indio, IEFA proposes to establish and charge a surcharge on electrical power consumers receiving power from IID. The proposed surcharge will be a per kilowatt hour (“kWh”) charge that applies to all electric sales w ithin the City. The proposed surcharge is a flat $0.0055 cents per kWh of electricity used by each class of customer. (The ultimate amount a customer will pay for the surcharge is tied to usage. Customers using less would pay less, and customers using mo re would pay more). The proposed surcharge is to be established at a rate to recover the costs of providing for the procurement and construction of substation projects that are expected to enhance reliability and prepare the electric infrastructure in Indio for the impacts on the system from governmental regulations and policies that are expected to result in increased electricity consumption. The surcharge is expected to take effect on or about November 1, 2023.

The surcharge is not expected to generat e sufficient revenue to fund the procurement and construction of all nine of the substations identified in the 10 Year Expansion Plan, which the Project Summary Report estimates would cost in excess of $150 million; however, as set forth in the Project Summary Report, the surcharge is expected to generate sufficient revenues to allow for the financing of approximately $60 million of substation projects.

The surcharge will be included on the bills of IID customers, collected by IID and remitted to IEFA pursuant to the terms of a Servicing Agreement by and between the IEFA and IID. The Servicing Agreement sets forth the terms of the collection and remittance of the surcharge and provides of the payment of certain administrative costs to IID from proceeds of the collected surcharge.

ALTERNATIVES:

Not adopt the Resolution

ATTACHMENTS:

Attachment 1 - Indio Electric FA Resolution 2023-01 (Surcharge) Attachment 2 - Servicing Agreement (Indio Electric FA Surcharge) Attachment 3 - Indio IID impact study Indio Electric Financing Authority

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AGENDA ITEM #10.5
Resolution No. 2023-01 of the Indio Electric Financing Authority establi... Page 494 of 968 1 RESOLUTION NO. 2023-01

RESOLUTION OF THE INDIO ELECTRIC FINANCING AUTHORITY

ESTABLISHING AND AUTHORIZING THE CHARGE OF A

SURCHARGE FOR ELECTRIC SERVICE WITHIN THE BOUNDARIES

OF THE CITY OF INDIO, AUTHORIZING THE EXECUTION AND

DELIVERY OF A SERVICING AGREEMENT AND AUTHORIZING

CERTAIN RELATED ACTIONS
WHEREAS, the Indio Electric Financing Authority (the “Authority”), a public entity duly organized and existing under a Joint Exercise of Powers Agreement, dated June 21, 2023 (the “JPA”), between the City of Indio (“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 (“State”), and the Imperial Irrigation District, an irrigation district that is duly organized and existing under and by virtue of the laws of the State (“IID” and, together with Indio, the “Members”), was formed for the express purpose of providing and enhancing electrical service within the territorial boundaries of Indio through the acquisition, design, construction, financing, leasing, ownership, operation and maintenance of energy system improvements, system efficiency and reliability improvements and energy service enhancements; and
WHEREAS, the Authority has the power to exercise the common powers of the Members and certain other powers authorized by law and consistent with the JPA, including the power to provide electrical service and to establish charges for the provision of such electrical service; and
WHEREAS, IID currently provides retail electric service within the boundaries of Indio; and
WHEREAS, the Authority has identified certain improvements that can be incorporated into the current IID electric system infrastructure located in Indio that the Authority has determined would enhance the reliability and resiliency of city-wide electric power service for electric power consumers within Indio; and WHEREAS, at its regular meeting held on July 19, 2023, the Board of Directors of the Authority (the “Board”) received and reviewed a report titled “Indio Electric Financing Authority Surcharge Addressing Adequate Substation Capacity to Meet Increasing Needs of Existing Indio Electric Customers – A Project Summary Report” prepared by Bill D. Carnahan, President, BD Carnahan Management Services Inc., dated July 13, 2023 (the “Report”), which such report identifies the current need for additional substations in Indio, the potential impact on the electric system within Indio that governmental regulations and legislation are expected to have on electricity consumption and the system, the enhancement to the reliability and resiliency of the electric system in Indio that the procurement and construction of additional substations would have, the electrical services to be provided by the Authority and the estimated costs of providing such services, the findings of which are hereby incorporated by reference; and

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AGENDA ITEM #10.5
Resolution No. 2023-01 of the Indio Electric Financing Authority establi... Page 495 of 968 2 WHEREAS, as set forth in the Report, the burden on electric infrastructure is expected to increase in the coming years with the implementation of legislative and regulatory mandates requiring greater electrification, including the electrification of vehicles and appliances, promotion of policies to reduce the consumption of fossil fuels (in favor of electricity) and compliance with other applicable regulations and policies that require electricity intensive compliance measures, such as water treatment and increasing access to housing; and
WHEREAS, based on the foregoing, the Authority has determined to establish a surcharge for electrical service provided by the Authority that will be charged to electric power consumers located within the territorial boundaries of Indio; and WHEREAS, in establishing the surcharge in the amount specified herein, the Authority has considered the findings of the Report, including the costs of procuring and constructing the substations that would provide and enhance electrical service to energy consumers within Indio; and
WHEREAS, pursuant to the terms of a servicing agreement (the “Servicing Agreement”) by and between the Authority and IID, IID will include the surcharge on the bills provided to IID electric customers located within the territorial boundaries of Indio and will collect the surcharge and remit the surcharge to the Authority; and WHEREAS, capital improvements funded with the proceeds of such surcharge or proceeds of bonds issued by the Authority (collectively the “Projects,” each, a “Project”) will be designed, developed, constructed, procured, acquired, operated and maintained pursuant to the terms of individual project agreements for each Project (each, a “Project Agreement”), which such Project Agreement will be approved by IID and the Authority on a future date or dates, prior to the commencement of the respective Projects; and WHEREAS, the Authority considered the requirements of the California Environmental Quality Act (Public Utilities Code sections 21000, et seq.) and State CEQA Guidelines (Title 14 of the California Code of Regulations, et. seq., collectively “CEQA”) and found that the proposed surcharge, as set forth in the Report, is established to obtain funds for capital project(s) necessary to maintain service levels within an existing service area is exempt from CEQA regulations pursuant to Public Resources Code section 21080(b)(8) and California Code of Regulations Title 14, section 15273(a)(4).

NOW, THEREFORE, THE INDIO ELECTRIC FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1.All of the recitals herein contained are true and correct.

Section 2.The Board has reviewed and considered the Report, the staff report, the Servicing Agreement and the comments at the Regular Meeting, and based on such review and consideration, finds that establishment of the surcharge, approval of the Servicing Agreement and actions related thereto are statutorily exempt from CEQA pursuant to Public Resources Code section 21080(b)(8)(D) and California Code of

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AGENDA ITEM #10.5
Resolution No. 2023-01 of the Indio Electric Financing Authority establi... Page 496 of 968 3 Regulations Title 14, section 15273(a)(4). The Board adopts the findings in the Report that show the surcharge is for the purpose of obtaining funds for Projects that are necessary to continue providing electric power at current levels to consumers located within the territorial boundaries of Indio.

Section 3.The Board hereby establishes the surcharge and authorizes the charge of such surcharge on electric power consumers receiving power from IID, or any successor thereto, within the territorial boundaries of Indio. The surcharge shall be a flat charge of $0.0055 cents per kilowatt hour used by each class of customer and shall apply to all electric sales within the territorial boundaries of Indio.

Section 4.The surcharge shall take effect on or about November 1, 2023.

Section 5.The form of the Servicing Agreement, on file with the Secretary of the Authority, is hereby approved, and the Chair and the Executive Director of the Authority, and any designee thereof (the “Authorized Officers”), are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Servicing Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 6.The officers and agents of the Authority are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to effect the actions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including but not limited to taking any actions necessary to allow IID to place the surcharge on bills provided by IID to IID electric customers in accordance with the terms of the Servicing Agreement, and filing a Notice of Exemption under CEQA, if necessary. All actions heretofore taken by the officers and agents of the Authority with respect to the transactions set forth above are included in the permissions included in this resolution and are thereby approved, confirmed and ratified upon its adoption.

Section 7. If any section, subsection, sentence, clause, or phrase of this resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the resolution. The Authority hereby declares that it would have adopted this resolution and each section, subsection, sentence, clause, and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared invalid or unconstitutional.

Section 8.This resolution shall take effect immediately upon its passage.

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AGENDA ITEM #10.5
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PASSED, APPROVED AND ADOPTED this 19th day of July, 2023. _______________________________

OSCAR ORTIZ
CHAIR
ATTEST:
________________________________

SABDI SANCHEZ, CMC

SECRETARY

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AGENDA ITEM #10.5
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Draft of 7/13/23
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SERVICING AGREEMENT
THIS SERVICING AGREEMENT dated as of _____ 1, 2023 (the “Agreement”) by and between the Imperial Irrigation District (“IID”), an irrigation district that is duly organized and existing under and by virtue of the laws of the State of California (the “State”), and the Indio Electric Financing Authority (the “Authority”), a joint exercise of powers agency that is duly organized and existing under and by virtue of the laws of the State. The Authority and IID may each be referred to herein as a “Party” and, collectively, as the “Parties.” Terms not otherwise defined herein shall have the meaning assigned to such terms in the Joint Exercise of Powers Agreement, dated Jun 21, 2023 (the “Joint Powers Agreement”), by and between IID and the City of Indio (“Indio”).

WHEREAS, pursuant to Resolution No. ___, adopted by the Board of Directors of the Authority on July 19, 2023 (the “Surcharge Resolution”), the Authority authorized the charge of a surcharge for the provision and enhancement by the Authority of electrical service within the boundaries of Indio (the “Surcharge”);
WHEREAS, IID currently provides retail electric service within the boundaries of Indio; WHEREAS, IID bills IID customers located within the boundaries of the City of Indio (the “Indio Customers”) for retail electrical service and collects payment from the Indio Customers for such electrical service;
WHEREAS, IID also bills Indio Customers a Utility User Tax (“UUT”) as set out in the Utility Users’ Tax Process Memorandum Of Understanding 092310 on behalf of the Indio and forwards to Indio such taxes, less collection and related expenses; WHEREAS the Authority, in furtherance of its purposes set forth in the Joint Powers Agreement, requests the assistance of IID in the billing and collection of the Surcharge through the placement of the Surcharge on the billing statement received by Indio Customers (each, an “IID Billing Statement”);
WHEREAS the Authority has provided IID with a copy of the Surcharge Resolution, which sets forth, among other things, the calculation of the Surcharge; and NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which the Parties hereby acknowledge, the Parties, intending to be legally bound, do hereby covenant and agree as follows:

Section 1. Billing and Collection of the Surcharge.
(a)IID Billing of Surcharge. IID agrees to include the Surcharge on the IID Billing Statements delivered to Indio Customers. IID will include the Surcharge on the IID Billing Statement of each Indio Customer eligible to be charged the Surcharge pursuant to the terms of the Surcharge Resolution and shall be calculated by IID in the manner set forth in the Surcharge Resolution. The Surcharge shall appear as a separate line item on the IID Billing Statement, or as otherwise prescribed by IID’s then-current billing procedures, and IID shall bill the Surcharge in the same manner as IID bills Indio Customers for electrical service and the UUT.

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The Surcharge authorized by the Authority under the Surcharge Resolution is for the purpose of improving the delivery of electrical service by adding Authority financed or funded improvements, but is not and shall not be considered a rate charged for the consumption of electrical service in the Coachella Valley. The Surcharge shall have no impact on, and shall be entirely independent of, the rate IID charges to IID electrical service customers in the Coachella and Imperial Valleys.

IID shall not be responsible for, nor have any duty to independently investigate or inquire with regard to, the validity of the Surcharge. IID shall not be responsible for, nor have any duty to independently investigate or inquire with regard to, IID customers that are exempt from the collection of the Surcharge.
(b)Boundary Information. The Authority shall assure the accuracy of Indio’s boundary information (including the reflection of the latest annexation and municipal reorganizations) needed for the Surcharge billing and collection purpose by providing IID with written notice whenever boundary changes are made to the boundaries of Indio. Such notice shall include an updated boundary map reflecting such boundary changes. Following receipt of such notice from the Authority, if the boundaries of Indio have expanded, IID shall use its best efforts to include the Surcharge on IID bills of electric customers residing in the additional territory of Indio within the next two IID billing cycles. If the change in boundaries results in a contraction of the boundaries of Indio, IID will use its best efforts to remove the Surcharge from the bills of IID customers residing in the territory that is no longer part of Indio within the next two IID billing cycles. IID shall not be responsible for the collection or payment of any Surcharges that were not collected due to the inaccuracy of information provided by the Authority. (c)Surcharge Appeals. The Authority may hear objections, claims and appeals to determine whether IID customers should be subject to the collection of the Surcharge. Should an IID customer’s status change as a result of the Authority’s final and nonappealable resolution of any objection, claim, or appeal, the Authority shall so advise IID. If the Authority is required by law to refund all or any part of the Surcharge, it shall be the sole responsibility of the Authority to refund the Surcharge.
(d)Collection of the Surcharge by IID. IID agrees to collect the Surcharge on behalf of the Authority in the regular course of its business. IID agrees to adhere to and carry out its disconnection policies in connection with delinquent payments of the Surcharge. IID will determine the amount of the uncollectable Surcharge owed by IID customers for each year consistent with its write off policy as approved by IID’s Board of Directors each year.

Until IID remits the Surcharge amounts to the Authority pursuant to Section 2 of this Agreement, IID shall hold the Surcharge in an account established by IID that will segregate the Surcharge from the other funds and accounts of IID. The Parties agree and acknowledge that at all times the Surcharge collected by IID on behalf of the Authority shall be the property of the Authority and that the Surcharge is not revenue of IID.
(e)Provision of Services Related to the Surcharge by IID. (i) IID agrees to provide all metering and meter reading services necessary for the calculation of the Surcharge.

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(ii) In connection with the billing and collection of the Surcharge on behalf of the Authority, IID shall (1) follow its customary standards, policies and procedures in performing its duties hereunder and (2) perform its duties hereunder using the same degree of care and diligence that IID exercises for its own account.

Section 2. Remittance of Surcharge to the Authority. IID shall remit to the Authority all amounts representing the Surcharge not later than the 15 th (fifteenth) day of the second calendar month succeeding the month in which such amounts were collected and received by IID (e.g., amounts representing the Surcharge collected in January shall be remitted by no later than March 15). Such amounts will include any delinquent payments of the Surcharge received by IID.

Amounts remitted by IID to the Authority pursuant to this Section 4 will be transferred by wire transfer pursuant to wire instructions set forth in Schedule I. In connection with the issuance of Bonds by the Authority, the Authority may provide IID with an instruction to remit the proceeds of the Surcharge directly to the trustee for the Bonds issued by the Authority. Such instruction shall include the wire instructions for such trustee.

Section 3. Over or Under Collection of Surcharge. To insure the appropriate Surcharge has been collected and remitted by IID, representatives of the Authority and IID shall meet annually to review Surcharge accounting and records of the Authority and IID as necessary to determine if such an over or under collection occurred:
a. Over Collection. In the event of an over collection of the Surcharge, the Authority shall be responsible for processing any refunds to IID customers. b. Under Collection.

1. If IID determines that the Authority has changed the list of electric service categories designated by the Authority ordinance or resolution to be charged as part of a Surcharge, IID will implement the change at the next billing cycle after the IID billing records are updated to reflect the change, and IID will not be required to back bill.

2. If new IID electric service customers have been added within the City of Indio’s jurisdictional boundary subject to the Surcharge, IID will begin charging the City of Indio’s designated customers at the next billing cycle after the IID billing records are updated to reflect the change.

3. Should IID recover previously uncollectable and written off electric service revenue, IID shall proportionally remit recovered Surcharge revenue to the Authority.

Section 4. Administration Fee and Bad Debt Allowance. In order to recover the costs of collecting the Surcharge, IID shall charge, as against collected Authority Surcharge revenue, an administration fee and a bad debt allowance. The administration fee is retained by IID on a monthly basis from IID’s monthly remittance of the Surcharge in the amount of one point five percent (1.5%) of the Surcharge collected. The bad debt allowance is point four five percent (.45%) of the Surcharge collected.

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Section 5. Customer Inquiries. It is the Authority’s responsibility to notify IID customers within Indio’s boundaries of the Surcharge. IID shall provide to the Authority a record including name and service address of all of its electric customers presently billed the UUT. So long as IID is collecting the Surcharge on behalf of the Authority pursuant to this Agreement, IID shall address all Indio Customer inquiries regarding the Surcharge as per language provided by the Authority. The Authority agrees to provide all necessary information to IID in order to permit IID to respond to all Indio Customer inquiries on a timely basis. Escalated inquiries that are outside of IID’s control will be referred to an appointed staff member of the Authority whose contact shall be provided to IID.

Section 6. Term of Agreement. This Agreement shall become effective as of the date hereof and shall continue to be in full force and effect until the Business Day that is six (6) months after the later of (a) the date that the Surcharge is no longer being charged to Indio Customers by the Authority and (b) the date on which all Bonds are no longer outstanding pursuant to their terms; provided that in the event that IID is no longer providing electrical services within the boundaries of Indio during a period when the Surcharge is being charged by the Authority, this Agreement shall terminate on the date on which IID ceases to provide electrical services within the boundaries of Indio; provided further that IID’s obligations (i) to collect amounts representing Surcharge billed to Indio Customers prior to the termination of this Agreement and (ii) to remit such Surcharge amounts to the Authority, shall survive the termination of this Agreement.

Section 7. Records. The Parties shall maintain accurate records and accounts relating to the Surcharge in sufficient detail to permit recordation of the Surcharge billed to Indio Customers and the amounts of Surcharge remitted by IID to the Authority (or, if applicable, the trustee for Bonds issued by the Authority). Each Party shall provide access to such records to the other Party.

The Parties shall afford access without charge, upon a reasonable request made pursuant to Section

10. The Parties shall retain all records used in the collection and remittance of the Surcharge for a minimum of three (3) years.

Section 8. Audit. Upon 30 calendar days’ prior written notice, the Authority may request an audit, conducted by the Authority or its agents, at the expense of the Authority, of IID’s records and procedures, which shall be limited to records and procedures containing information bearing upon the Surcharge being billed to Indio Customers and the Indio Customer payments of the Surcharge. The audit shall be conducted during IID’s normal business hours without interference with IID’s normal operations and in compliance with IID’s security procedures.

Section 9. Indemnification. The Authority shall indemnify, defend and hold harmless IID and each of IID’s officers, directors, employees, attorneys and agents from and against any and all costs, expenses, losses, claims, damages, and liabilities directly or indirectly arising out of or in connection with the billing and collection of the Surcharge. Notwithstanding the foregoing, the provisions of this Section 7 shall not apply any such costs, expenses, losses, claims, damages, and liabilities to the extent they involve the negligence, recklessness or willful misconduct of IID.

Section 10. Notices. All notices, consents, requests, instructions, approvals and other communications provided for in this Agreement must be in writing, signed, with respect to Authority, by the President of the Board of Directors of the Authority, the Vice President of the Board of Directors of the Authority, the Executive Director of the Authority or any designee thereof (each an “Authority Authorized Representative”) and, with respect to IID, the President of the Board of Directors of IID, the Vice President of the Board of Directors of IID and the General Manager of IID

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or any designee thereof (each an “IID Authorized Representative”): (i) personal delivery, overnight delivery by a recognized courier or delivery service, (ii) mailed by registered or certified mail, return receipt requested, postage prepaid, or (iii) electronic transmission, which includes email with an imaged or scanned attachment (such as a .pdf) or other similar electronic transmission, (receipt confirmed); and become effective when delivered to the addresses noted below or such other address as may be substituted therefor by written notification by the Authority Authorized Representative or the IID Authorized Representative, as applicable.

If to IID, to:

Imperial Irrigation District
Post Office Box 937
333 E. Barioni Boulevard
Imperial, California 92251
Attention: General Manager
Email: __________
Phone: (760) 339-9550
If to the Authority, to:

Indio Electric Financing Authority
100 Civic Center Drive
Indio, California 92201
Attention: Executive Director
Email: __________
Phone: __________
Section 11. Inconsistent Provisions. Depositor agrees that to the extent that the provisions of any other agreement relating to the Account Property are inconsistent with the terms of this Agreement, the terms of this Agreement will control.

Section 12. Counterparts. This Agreement and any amendments hereto may be executed in any number of counterparts each of which will be deemed to be an original, and all of which together will constitute but one and the same instrument.

Section 13. Severability. The invalidity, illegality or unenforceability of any provision of this Agreement will in no way affect the validity, legality or enforceability of any other provision; and if any provision is held to be unenforceable as a matter of law, the other provisions will not be affected thereby and will remain in full force and effect.

Section 14. Governing Law. This agreement will be governed by and construed in accordance with the laws of the State of California.

Section 15. Dispute Resolution.
(a)Submission. In the event either Party has a dispute, or asserts a claim, which arises out of or in connection with this Agreement, or their performance thereunder, such Party (the “Disputing Party”) shall provide the other Party with written notice of the dispute or claim (“Notice of Dispute”). The Notice of Dispute shall: (a) describe what is disputed or claimed and include an identification of the alleged facts and Agreement sections relevant to such dispute or claim; and (b)

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provide the name and contact information for the designated representative of the disputing Party who will represent it in informal negotiations.

Such dispute or claim shall be referred to a designated representative of each Party for resolution on an informal basis as promptly as practicable after receipt of the Notice of Dispute by the other Party. In the event the designated representatives are unable to resolve the claim or dispute within thirty (30) calendar days of the other Party’s receipt of the Notice of Dispute, the Disputing Party shall, within thirty-five (35) calendar days of the other Party’s receipt of the Notice of Dispute, notify the other Party whether it either: (a) is no longer pursuing its dispute; or (b) elects to proceed to assisted negotiation or mediation. If the Disputing Party elects to proceed to assisted negotiation or mediation, the Disputing Party shall include in its notice the names and contact information for at least three (3) possible neutral mediators, meeting the qualifications described in Section 14(b) below, which would be acceptable to the disputing Party. Within five (5) Business Days of receipt of the Disputing Party’s election to proceed to assisted negotiation or mediation, the other Party shall, in turn, notify the Disputing Party of the names and contact information for at least three possible neutral mediators, meeting the qualifications described in Section 14(b) below, which would be acceptable to the other Party.
(b)Assisted Negotiation or Meditation. Any assisted negotiation or mediation initiated under these procedures shall be conducted before a single neutral mediator appointed by the Parties. If the Parties fail to agree upon a single mediator within fifteen (15) calendar days of the disputing Party’s notice of election to proceed to assisted negotiation or mediation, each Party shall choose a single neutral party who shall sit on a three-member mediation panel. The two neutral parties so chosen shall within twenty (20) calendar days select a third neutral party to chair the mediation panel. In either case, the mediators shall be knowledgeable in electric utility matters, including electric transmission and bulk power issues, and shall not have any current or past substantial business or financial relationships with either Party to the mediation. The mediator(s) shall provide each of the Parties an opportunity to be heard. In the event the Parties are unable through either assisted negotiation or mediation to resolve the dispute within ninety (90) calendar days, each Party may exercise whatever rights and remedies it may have in equity or at law consistent with the terms of this Agreement.
(c)Costs. Each Party shall be responsible for its own costs incurred during the assisted negotiation or mediation process and for one half of the cost of the mediator(s) chosen to assist the Parties.

Section 16. No Third Party Beneficiary. Except for permitted assignees pursuant to Section 16(f), this Agreement shall not be construed to be an agreement for the benefit of any third party or parties and no third party or parties shall have any claim or right of action under this Agreement for any cause whatsoever.

Section 17. Amendments. Except as otherwise permitted herein, this Agreement may be modified only by a written amendment signed by the Authority Authorized Representative and IID Authorized Representative.

Section 18. Miscellaneous.
(a) The rights and remedies conferred upon the Parties shall be cumulative, and the exercise or waiver of any such right or remedy will not preclude or inhibit the exercise of any

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additional rights or remedies. The waiver of any right or remedy hereunder will not preclude the subsequent exercise of such right or remedy.
(b) This Agreement is for the exclusive benefit of the Parties and their respective successors hereunder, and will not be deemed to give, either express or implied, any legal or equitable right, remedy, or claim to any other entity or person whatsoever. (c) Each Party hereby represents and warrants (i) that this Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (ii) that the execution, delivery and performance of this Agreement by the Parties hereto does not and will not violate any applicable law or regulation. (d) The headings contained in this Agreement are for convenience of reference only and will have no effect on the interpretation or operation hereof. (e) No waiver of any provision hereof will be effective unless expressed in a writing signed by the Authority Authorized Representative or the IID Authorized Representative, as applicable.
(f) No Party may assign any of its rights or obligations under this Agreement without the written consent of the other Party.
(g) This Agreement shall be binding upon and shall inure to the benefit of the successors of the Parties hereto.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

IMPERIAL IRRIGATION DISTRICT
By:

General Manager

INDIO ELECTRIC FINANCING AUTHORITY
By:

Executive Director

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SCHEDULE I
Wire Instructions:

If to Authority:

ABA No.:

Bank Name:

Account No.:

Account Name:

Attention:

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AGENDA ITEM #10.5
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Surcharge Addressing Adequate Substation Capacity
to Meet Increasing Needs of Existing
Indio Electric Customers

July 12, 2023

A Project Summary Report

Prepared for
the City of Indio, CA
By
Bill D. Carnahan, President, BD Carnahan Management

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TABLE OF CONTENTS
EXECUTIVE SUMMARY............................................................................................................. 1 ISSUES AND CHALLENGES ........................................................................................................ 3 State Climate Change Policy Impacts ................................................................................. 3 State Mandates for Electric Vehicles and Natural Gas Prohibition ................................... 5 State Water Quality Regulation and Increase in Local Demands ...................................... 7 State Chronic Housing Shortage ......................................................................................... 8 Statewide Need for Reliability, Redundancy and Security of the Electrical Infrastructure ...................................................................................................... 9 Local Business Creation and Job Opportunities ............................................................... 11 Goals of the Indio Electric Finance Authority (IEFA) ........................................................ 11 Dr. Carreon Substation Addition ...................................................................................... 12 SUBSTATION COST ESTIMATES .............................................................................................12 SURCHARGE ...........................................................................................................................15

APPENDIX 1 - The Cri�cal Role of Electric Substa�ons........................................................ 1-1 APPENDIX 2– CARB Scoping Plan Rate Impact Es�mates ................................................... 2-1 APPENDIX 3 – Governor Execu�ve Order N-79-20 Zero Emissions Vehicles by 2035 ........ 3-1 APPENDIX 4 - 2018 Execu�ve Summary of the IID Integrated Resource Plan .................... 4-1 APPENDIX 5 - Resume for Bill D Carnahan .......................................................................... 5-1

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1 EXECUTIVE SUMMARY
The City of Indio is located in the eastern part of Riverside County. The City, has a population of nearly 100,000 residents, is the largest and oldest City in the Coachella Valley. Indio is the largest and fas test-growing City in the Coachella Valley and eastern Riverside County.

Indio is a "year -round" City. However, another 30,000 people reside in the City during the winter months. Indio is known as the "City of Festivals" - the festivals and special events within the City collectively attract over 1.4 million visitors annually. The average age is just over the age of 37, with a diversity of demographics.

The City’s water is served locally by the Indio Water Authority. The City’s wastewater is served locally by Valley Sanitary District. The City’s electricity is provided by the Imperial Irriga�on District (IID). IID services the Imperial County and the eastern part of the Coachella Valley, including the City’s of Indio, La Quinta, Coachella, and parts of unincorporated Riverside County.

Throughout California, communi�es are facing signiﬁcant challenges regarding electric infrastructure. One only needs to look at the headlines to see the growing pressure throughout the State. Energy facili�es are reaching, and aging infrastructure is reaching the end of its useful life. The growth of electriﬁca�on in homes, appliances, and vehicles only creates additional pressure on reliability, emphasizing the importance of capacity and redundancy. These challenges are par�cularly acute in the desert environment, where electricity is a core safety issue. It is prudent and cri�cal to plan for the long-term needs of the City in ensuring reliability in the provision of this essen�al service for our community.

These challenges are only ampliﬁed by the growing crisis evident in California, such as:

State Climate Change Policy Impacts – To address Climate Change, the State of California has implemented a number of policy changes and is planning others, most of which place more pressure on the already-strained electrical infrastructure.

State Mandates for Transporta�on Electriﬁca�on and Natural Gas Prohibi�on– California bans the sale of new gas-powered cars by 2035, increasing EV by 2035.

State Water Quality/Treatm ent Regula�on - Water Treatment requirements are increasing due to changing regula�ons crea�ng a signiﬁcant reliance on exis�ng electric infrastructure.

State Chronic Housing Shortage – It is widely agreed that there is a housing crisis in California and the California Legislative Analyst's Office has indicated that California would have needed to add approximately 210,000 new housing units each year over the past three decades rather than the 120,000 / year which were built creating and

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2 an estimated shortage of over 3 million housing units. The electrical infrastructure will need to be expanded to address the additional housing units that are needed and expected to be built.

Statewide need for Reliability, Redundancy and Security of the Electrical Infrastructure – Substations and other key electrical infrastructure help ensure a reliable supply of electricity to residents. A reliable infrastructure is essential for powering homes, businesses, hospitals, schools, and other critical infrastructure within the community. Redundant systems minimize outages, maximize response in times of emergencies, and protect the safety and security of electric customers.

Local Business Crea�on and Job Opportuni�es – Without investments in local electric infrastructure, the City will struggle to atract businesses and investors necessary for our young community resident’s career success. A lack of commercial growth and ameni�es hampers local job crea�on, resul�ng in the workforce leaving the City for neighboring ci�es in the West.

The City and IID have been working collaboratively to address these critical infrastr ucture requirements through the formation of a new joint powers agency called the Indio Electric Financing Authority (IEFA). The IEFA was formed pursuant to a Joint Exercise of Powers Agreement between the City and IID.

The Joint Exercise of Powers Agreem ent does not authorize the IEFA to sell electricity to customers; however, it does provide for the provision of electric service through constructing, financing, and owning electric infrastructure. The City Council sits as the governing board of the Indio Electric Financing Authority, and City staff serves as its officers.

The newly formed authority plans to create a dedicated revenue stream that will be reinvested specifically within the City to fund electric infrastructure to be owned by the City but operated and maintained by IID. It will provide for some necessary and essential, but not all, infrastructure improvements to help ensure that safe and reliable electric service continues within the City.

The projects will be funded through a surcharge to b e imposed by the Indio Electric Financing Authority that would be collected on IID bills within the City. The final level of the surcharge will be known once the capital, construction, and financing costs are finalized.

Importantly, the revenues generated by the Indio Electric Financing Authority will remain in Indio. These revenues will fund projects for the benefit of the City and its ratepayers as a whole and help ensure that the City is proactively taking steps to both protect existing assets and provide new, critical electric infrastructure for future generations.

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3 ISSUES AND CHALLENGES
State Climate Change Policy Impacts
Climate change and its impacts have been much debated for more than a decade in California. Studies were done, elected officials debated, regulations adopted as well as legislation to attempt to curb what we used to call Global Warming but now call Climate Change. As the preceding page illustrates, the current solutions (i.e., regulations in most cases) will have some very important impacts on existing electric customers in California.

According to the California Air Resources Board, as presented in the Listening Sessions for the Draft 2022 Scoping Plan increase in electricity consumption could be as 68% by 2045; (See PowerPoint Slid e Presented by ( CARB) at the Listening Sessions, APPENDIX 2). This large increase would put an immense strain on the power grid unless hefty private and public investments are made …”
Against this backdrop, the City of Indio City Manager and a team of consultants have been discussing the impacts of these developments with the City Council and management, staff and Board of the Imperial Irrigation District (IID). IID has provided retail electric service to the citizens and businesses within the City of Indio since the early 1930s. Some of the proposed solutions for Climate change involve regulations and legislation which impact existing IID electric customers, including those inside the City Limits of Indio. Over the past several months, the Indio City Council has encouraged staff to come up with a plan to build additional substations and related electrical system enhancements within the City of Indio to provide better resiliency, redundancy, and reliability to existing customers within the City of Indio. The need for additional substations is considerable.

Additionally, the City has identified a lack of capacity in current IID rates to fund the substation capacity the City believes is required to ensure the resilient, reliable, and safe electric system the City’s residents and ratepayers deserve. IID prepared the 2018 Integrated Resource Plan to identify challenges and provide recommendations to meet the growing needs of its customers. The City believes that the current IID rates are not sufficient to achieve the recommendations of the plan and therefore require assistance from IEFA.

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4 Recent approvals by both the Indio City Council and the Board of the Imperial Irrigation District allow the following:
• Creation of the Indio Electric Financing Authority (I EFA) to finance and own substations within the City of Indio.
• The City and IID have worked cooperatively to identify a potential list of substation capital improvements needed within the City and the scope and timing of the improvements (i.e., which new su bstation should be built and which should be upgraded within the City of Indio).
• IEFA would place a surcharge on each kilowatt/hour of energy used by ratepayers within the City, which would be collected by IID on its monthly electric bills and be remitted to IEFA to pay to make bond principal and interest payments needed to retire bonds issued by IEFA to finance the construction of substation improvements.
• IID would agree to construct and operate the substation improvements on behalf of IEFA.

Substations are integral to the long-term reliability and integrity of the electric system and enable large blocks of energy to be moved from the generators through the transmission system to various substations to reduce distribution voltage levels for ultimate custom er delivery. Think of the transmission/distribution system like the interstate highways (transmission), and the substations are the interchanges leading to local streets.

It is anticipated that this is the first step in a collaborative process between the City, IEFA, and IID to provide options to most effectively meet the challenges impacting the IID electric system within the City created by the multitude of activities, including the impact of growing electrification and legislation adopted by the State of California to combat Climate Change.

The proposed State strategy to combat Climate Change is expected to transform the State, scaling back the use of fossil fuels by 91% by 2045 and scaling up electric cars and the use of renewable energy, such as wind an d solar. The plan aims to fulfill state mandates to reduce planet -warming emissions 40% below 1990 levels by 2030 and achieve carbon neutrality by 2045. To achieve the plan’s goals, air board officials project that California will need about 30 times more electric vehicles on the road, six times more electric appliances in homes to replace gas appliances, 60 times more hydrogen supply, and four times more wind and solar generation capacity.

The plan “is very, very aggressive in terms of the deployment of clean technology,” said Rajinder Sahota, the Air Resources Board’s deputy executive officer for climate change and

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5 research. All of it hinges on implementation and successful deployment of th e energy infrastructure and technology.”
In a CalMatters Article on June 25, 2002 , by Nadia Lopez , she quoted Alice Reynolds, president of the California Public Utilities Commission; “We need to think about how the energy sector can continue to grow — double or triple — to meet decarbonization goals.” State Mandates for Electric Vehicles and Natural Gas Prohibition On September 23, 2020, Governor Newsom signed Executive Order N-79-20, which establishes that by 2035, 100% of new cars and light cars sold in C alifornia will be zero - emission vehicles, including plug -in hybrid electric vehicles. This is part of the Governor’s efforts to promote cleaner air and massive reductions in climate-warming pollution. A copy of the order is included in Appendix 3 of this report. Below is a summary of the key highlights of the order.
a) 35 percent ZEV sales by 2026,
b) 68 percent by 2030, and
c) 100 percent by 2035,
This is expected to increase solar installations on existing structures within the City, as well as battery chargers and storage.

The State’s proposed plan would effectively ban the sale of natural gas appliances, with the State and require the installation of all- electrical appliances in new homes by 2026 and in new businesses by 2029. Regulators also are attem pting to ensure that 100% of new appliances sold in the state are all-electric by 2030. This means existing homes will need to replace gas appliances with electric. Also, last year the California Air Resources Board voted on an overall climate change and p ollution-fighting strategy that included a plan to start prohibiting sales of new gas furnaces and water heaters in 2030. The rules are expected to be finalized in 2025.

The overall global warming trend results in an extended drought and elevated temperatures in the summer, which are expected to worsen in areas such as the Coachella Valley. This will put more pressure on the electric system serving the City of Indio and the existing customers.

According to the Reform California website, on February 9, 2023 , a “proposed statewide banning gas appliances and retrofitting mandates to remove natural gas appliances will cost the typical homeowner over $30,000. In addition to direct impacts on homes, Carl DeMaio, Chairman of Reform California, states these mandates “also raise concerns about the state’s electricity grid’s ability to handle all-electric appliances in every building and home.” It

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6 should be noted that, according to USA Today, the number of homes using gas in any form is 50% in the western U.S.

Utility Dive Newsletter, “Rethinking California Distributed System Operations and Grid Services Markets for a High-DER Future”, by Herman K. Trabish, Contributing Editor, June 7, 2022, raises the question that installation of increased distributed solar photovoltaic capacity is expected to increase from 14,048 MW in 2022 to 24,721 in 2030, distributed energy storage will go from 740 MW in 2022 to 2,587 MW in 2030, and Gov. Gavin Newsome’s Executive Order N-79-20 targets 100% zero-emission vehicle sales by 2035. The impact of the integration of all these technologies at the same time is that the need for management of this integration into the distribution system will become increasingly important. Utilidata, a distribution circuit technology provider, at a recent CPUC workshop, found significant spending will be necessary for hardware and software to manage distribution systems of the future. Southern California Edison Senior Manager Grid Modernization Policy, David Castle, reported that California utilities are rapidly investing in grid modernization to support reliability, customer needs, state policy, and Distributed Energy Resource (DER) growth. ( See Utility Dive , Published June 7, 2022, by Herman K.

Trabish).
“In order to meet State goals, 15 times more public chargers will need to be built: About 1.2 million chargers will be needed for the 8 million electric cars expected in California by 2030.

Currently, about 80,000 public chargers operate statewide, with another 17,000 on the way, according to state data, and increase electricity production by up to 42% in 2035 and, under a current scenario, as much as 85% in 2045.” ( See Cal Matters, January 17, 2003, “Race to Zero: Can California’s Power Grid Handle a 15-fold Increase in Electric Cars”).

The Climate Action Center Advisor Lorenzo Kristov states; The existing distribution model is not adequate for a high DER future, and the utility revenue model … “requires rethinking.” (See Utility Dive, June 7, 2022, by Herman Trabish).

Given the supply chain interru ptions already experienced during Covid, delays have been experienced in not only the delivery of finished products but delays to factories and assembly plants of parts needed to complete the products. One example reported on discussions between the City and IID staffs is that lead times for substation transformers before covid were approximately one year. Currently, those times have stretched to approximately two years or more.

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7 A report issued by the Energy Institute at Hass School of Business at the Univ ersity of California, Berkley, entitled: Can Distribution Grid Infrastructure Accommodate Residential Electrification and Electric Vehicle Adoption in Northern California, Rev. 12/2022” funded by the California Energy Commission focuses on Pacific Gas and Electric (PG&E) and Northern California, but we think there are significant findings for Southern California as well. For example:
• “Residential electrification and EV adoption, both necessary measures for climate change mitigation, require additional electricity usage.” • “Distribution grid upgrades, then, may pose a bottleneck to electrification goals, necessitating workforce expansion or investment non -wires alternatives …”
• “Distribution grid structure is subject to pre-existing trends of lack of equipment availability and a shrinking workforce that could contribute to bottlenecks in electrification, particularly considering that we find that many circuit upgrade needs are relatively near-term.”
State Water Quality Regulation and Increase in Local Demands The State of California continues to expand regulations relating to water quality which has had and will continue to have a significant impact on electrical infrastructure. Water utilities are required to meet stricter regulations by implementing treatment facilities that necessitate additional electric requirements to operate pumps, filters, and backwash systems. In June 2023, the California State Water Resources Control Board announced the most recent change in regulation that proposes a much stricter Ch romium 6 maximum contaminant level. This regulation will require that local water utilities construct treatment facilities throughout the eastern part of the Coachella Valley, posing a higher demand load to the existing electric system managed by IID. Several additional treatment plants are proposed throughout the City, requiring a reliable electric grid to operate and meet the state regulatory requirements.

As the City continues to grow, peak water demands continue to increase. The local water demands are magnified in the summer due to extreme weather temperatures caused by climate change. This all leads to an increase in operations of the City’s water production and treatment facilities to meet peak hour and fire- fighting water demands. This peak demand increase continues to strain existing electric infrastructure. Several planning studies confirm that more and more water production facilities will be necessary to meet increasing demands and State mandates in the foreseeable future. Below are several charts and forecasts confirming the increase in local demands. Most of the City’s existing water

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8 facilities are tied to existing substations already reaching their useful life or are near useful capacity.

Figure 3-7 from the Indio Water Authority 2019 Master Plan Update The following graph shows the projected population growth from Years 2008 through 2038, placing greater stress on the existing substations and grid.

State Chronic Housing Shortage
According to a study conducted by the California Legislative Analyst’s Office, California has been experiencing an extended and increasing housing shortage, such that by 2018, California ranked 49th among the states of the U.S. in terms of housing units per resident.[2]: 1 [3] This shortage has been estimated to be 3-4 million housing units ( California Legislative Analyst's Office, October 26, 2017).

Simply put, California’s already tenuous electrical infrastructure is not in a position to meet the demand caused by these additional housing units. Aggressive action is necessary to prepare for this increasing demand, especially as the St ate adopts laws and other regulations that provide significant incentives to housing developers. As reported below by the Governor’s Office, these sorely-needed housing units are coming:
“The Governor also announced that the Department of Housing and Commu nity Development is awarding $1.02 billion in funding for the second round of the California
Housing Accelerator , providing funding to 30 shovel- ready projects whose financing has been stalled because they have been unable to obtain tax credits. These new awards will help get construction underway quickly for 2,755 new housing units throughout the state.

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9 To date, $1.9 billion in funding for the California Housing Accelerator has been awarded, supporting a total of 57 projects to produce a total of 5,071 units. The vast majority of these units will be for extremely low to very low-income households and unhoused residents and will provide affordable homes for seniors, families, transitional-age youth, veterans, people with disabilities, essential workers, and unhoused individuals. “Last year’s California Comeback Plan invested a historic $10.3 billion – by far the most ever invested in housing – into a comprehensive housing affordability strategy while also implementing new laws and accountability measures. Building on these unprecedented efforts, this year’s budget invests an additional $3.3 billion f or affordable housing production and homeownership opportunities” (“California to Build More Housing, Faster,” Office of the Governor, September 28, 2022).

Every eight years, the State sets a target for the number of homes needed for each income level to m eet the housing needs in California. Local governments must plan for enough housing to meet the housing needs in their own community, which is the Regional Housing Needs Assessment (RHNA). The California Department of Housing and Community Development found that by the year 2030, nearly 3 million new homes need to be built, of which 1 million must be affordable. Since that time, various legislation has been passed to streamline processes and approvals to encourage housing development. This crisis will require the construction of new homes. The City of Indio is best situated to accommodate this crisis by investing in the local City infrastructure including public roads, water infrastructure, and our local electric facilities.

How this affects Indio: The lack of readily available substations in growth areas of the City has hampered development opportunities within the City of Indio that include residential, commercial, and amenities to our residents. The City has a RHNA requirement of 7,812 housing units, of which 2,963 are for lower-income households – all to be built by 2029. To address this need, high -density housing projects in various infill locations will have to be built. The City’s existing substations lack the capacity to adequately serve all of the infill projects. Currently, the electrical infrastructure is not adequate to provide for even a fraction of the RHNA required housing units.

Statewide Need for Reliability, Redundancy and Security of the Electrical Infrastructure
Substations and other key electrical infrastructure help ensure a reliable supply of electricity to residents. A reliable infrastructure is essential for powering homes, businesses, hospitals, schools, and other critical infrastructure within the community . Redundant systems minimize outages, maximize response in times of emergencies, and protect the safety and security of electric customers.

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10 Specific to electric substations, there are several benefits that help address the aforementioned issues and challen ges and provide the following to all residents of a community:

1. Reliable Power Supply: Substations ensure a reliable supply of electricity to residents. By transforming and distributing electricity at appropriate voltage levels, substations help maintain a steady and stable power supply. This reliability is essential for powering homes, businesses, hospitals, schools, and other critical infrastructure within the community.

2. Enhanced Safety: Substations incorporate protection systems that detect and isolate faults in the power system. This ensures the safety of residents by minimizing the risk of electrical accidents, such as electrical fires or electrocution. Substations help prevent the spread of faults and maintain a safe electrical environment for the community.

3. Improved Energy Efficiency: Substations play a role in optimizing energy efficiency within the power system. By regulating voltage levels, they reduce transmission losses and improve overall system efficiency. This translates into cost savings and more sustainable use of resources. Efficient energy distribution also helps keep electricity prices stable and affordable for residents.

4. Support for Economic Development: Reliable and high -quality power supply is essential for economic growth and development. Substations enable the delivery of electricity to businesses and industries, supporting their operations and facilitating job creation. A reliable power supply also attracts investment and encourages businesses to establish and expand their operations within the community.

5. Integration of Renewable Energy: Substations support the integration of renewable energy sources into the power grid. As communities increasingly adopt clean energy solutions like solar panels or wind turbines, substations enable the ef ficient connection of these renewable sources to the electrical system. This promotes sustainable energy generation and reduces dependence on fossil fuels, contributing to a cleaner environment and a more sustainable community.

6. Smart Grid Capabilities: Modern substations are equipped with advanced monitoring, control, and communication systems, enabling the implementation of smart grid technologies. Smart grids enhance the efficiency and reliability of the power system by enabling real-time monitoring, load management, and demand response capabilities. These technologies can optimize power consumption, reduce outages, and empower residents to make informed decisions about their energy usage.

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11 In summary, key electrical infrastructure, such as substations, ben efit all residents of a community by ensuring reliable power supply, enhancing safety, improving energy efficiency, supporting economic development, enabling renewable energy integration, and enabling smart grid capabilities. These benefits contribute to the overall well-being, quality of life, and sustainability of the community.

Local Business Creation and Job Opportunities
Without investments in local electric infrastructure, the City will struggle to attract business and investors necessary for our youn g community resident’s career success . A lack of commercial growth and amenities hampers local job creation, resulting in the workforce leaving the City for neighboring cities to the west.

The City of Indio is suitable for new business growth opportunitie s given the vast local resources such as available land and a young workforce. However, the lack of readily available electric infrastructure challenges the City from attracting new business, new job creation, and new tax revenues from growth and developm ent. Improvements to the electrical infrastructure are needed, or Indio will miss out on job creation and opportunities to attract new businesses, hotels, etc., to neighboring cities, as well as cities in the high desert where electric infrastructure is available for development.

Goals of the Indio Electric Finance Authority (IEFA)
IEFA expects the primary focus for capital project financing by IEFA will be upgrades to some existing substations and the construction of new substations and related required infrastructure improvements. Additional substation capacity will help alleviate some of the burden on the existing, stretched electrical distribution system. The proposed substations are all within the City limits of Indio and intended to serve only residents and businesses in the City.

Bringing distribution substations closer to the needed customer connection points would decrease Line-Loss and increase Power Efficiency. Increased Power -Efficiency contributes to maintaining a safe, balanced system, which, in turn, helps reduce the impacts of future rate increases by IID.

It is important to note that the last substation constructed in the City was in 2003 when the City’s population was 50,000 people – currently, the population is over 90,000. This represents an increase of 80%. So, these new customers are now in the “existing customer base,” which the California Air Resources Board has estimated will have an average state - wide increase in electricity use due to the state Climate Change Policy of 68%. (See Appendix 2) This is “equivalent” to adding another 54,000 people but represents growth estimated for the existing customers.

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12 To support these accelerated growth predictions, in its 2025 General Rate Case, Southern California Edison states: “From 2023 to 2035, the annual rate of system load growth is expected to experience a tenfold increase and a total absolute increase of approximately 30% (SCE/ CPUC Application No. A.22-02-020, page 2).

Dr. Carreon Substation Addition
An example of the importance of these new substations and additions is the Carreon Substation addition of a second Transformer Bank and associated equipment. This proposed addition was first mentioned in IID’s 2018 Integrated Resource Plan (IRP) and was scheduled for 2021 but has not yet been built. The IRP states ( Page 305), “This substation is located in the Central part of the City of Indio, serving a large diversity of load, including Hospitals, medical buildings, schools, retail buildings as well as residential. Neighboring substations are equally loaded and require firm backup support during emergency conditions. The existing transformer is already at 60 percent of capacity.

Additionally, the additional transformer will support increasing pumping requirements of the Indio Water Authority (IWA) water production facilities co -located next to the Carreon substation. Reymundo Trejo, IWA General Manager, says, “This is a critical expansion providing reliability and resiliency for the health and safety of Indio residents.”

SUBSTATION COST ESTIMATES
The exact substation locations and designs are not known, except for the IID 10 year (2022- 2032) map below for the proposed substations and the table below showing the plans for nearer term substations and existing substation additions for the proposed substations not been completed to date. IEFA does not have detailed cost estimates for the substation improvements. However, based on the information and preliminary estimates provided by IID engineering staff, IEFA estimates that new two-bank substations will range in cost from $20 million to $23 million and that an additional substation bank at an existing site would range in cost from $12 million to $15 million. Accordingly, the cost of funding all Substations identified in the IID Capital Improvement Plan for Indio would likely be in excess of $150 million
.

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13 IID 10 YEAR SUBSTATION EXPANSION PLAN (2022-2031)
INDIO
Substation Name New or Add Year Size

Downtown Sub New 2023-24 2-25 MVA

Northgate Majestic New 2023 2-25 MVA

Carreon Sub Bank Add 2023 1-25 MVA

New Jackson Sub Bank 4 Add 2024 4–25 MVA

Ave 44 Sub TBD

Ave 40 Sub 2024

Francis Way Sub Bank Add 2026 2-25 MVA

North Indio Sub 2029

Source: Imperial Irrigation District

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14 Source: Imperial Irrigation District

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15 SURCHARGE
In order to pay the costs of the substation improvements, IEFA proposes to charge a surcharge of $0.0055 on each kilowatt/hour(kWh) of electricity used by each class of customer so that all customers are charged equally for the benefits of system reliability, safety and redundancy resulting from the substation improvements. In 2021, ratepayers within the City consumed approximately 890 million kWh. Assuming a surcharge of approximately $0.0055 per kWh, this would generate approximately $4.9 million in annual revenues to provide for the p ayment of debt service on the bonds and to support the development and financing of the proposed substation projects.

Based on tax- exempt interest rates of approximately 4.50%, the surcharge is expected to support debt service on approximately $60 million in bond financing, inclusive of any credit requirements to support the credit ratings of the bonds. IEFA plans to use the bond proceeds will be used to finance the highest priority and or/most cost -effective substation improvements.

Additional funding for future substation improvements is expected from surcharge revenues available after the payment of debt service on bonds and from developer contributions. The total amount of any surcharge in excess of debt service to the bonds will be based on the final debt service schedule once the bonds are priced. Excess revenue, if any, will be used for continued investment in electric infrastructure within the City or the payment of debt service on the bonds. The City is considering the imposition of a development imp act fee on certain developments to pay the cost of substation improvements associated with new development. There is no guarantee that such a development impact fee will be assessed or the amount of proceeds derived therefrom, and any such fee is not pledg ed to the bonds. The current surcharge rate is not expected to generate sufficient revenue to address all of the substation and electric system improvements identified as needed by IID.

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APPENDIX 1
The Critical Role of Electric Substations
What do Electric Substations Do?

1. Voltage Transformation: Substations facilitate the transformation of electrical voltage levels. Electricity generated at power plants is typically produced at high voltages to minimize transmission losses. Substations step down this high voltage to lower levels suitable for distribution to homes, businesses, and industries.

2. Distribution of Electricity: Substations play a vital role in distributing electricity to consumers. They receive power from high -voltage transmission lines and distribute it through lower -voltage distribution lines. Substations ensure that electricity is delivered efficiently and reliably to various end-users within a specific geographical area.

3. Fault Detection and Protection: Substations incorporate protection systems that detect faults, such as short circuits or overloads, within the power system. When a fault occurs, these systems isolate the faulty section to prevent further damage and ensure the continuity of power supply to unaffected areas. Substations also contain various protective devices, such as circuit breakers and fuses, which help safeguard equipment and prevent damage from electrical faults.

HOW THE SYSTEM WORKS
New and Addi�ons to Substa�on in the City of Indio are
Poten�al Projects for Financing by
Indio Electric Financing Authority (IEFA)

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4. Voltage Regulation: Substations help regulate voltage levels within the electrical grid. They employ transformers and voltage control equipment to maintain voltage stability and compensate for voltage drops that occur during transmission and distribution. This ensures that the voltage supplied to consumers remains within acceptable limits, preventing equipment damage and ensuring optimal performance of electrical devices.

5. Grid Integration of Renewable Energy: With the increasing integration of renewable energy sources, such as wind and solar, into the power grid, substations play a vital role in connecting these sources to the existing transmission and distribution infrastructure.

Substations enable the efficient integration of renewable energy by stepping up or stepping down the voltage as required and facilitating the smooth flow of electricity.

6. Monitoring and Control: Modern substations incorporate advanced monitoring, control, and communication systems. These systems provide real-time information about the status, performance, and load characteristics of the power system. Operators can remotely monitor and control substations, enabling them to optimize power flow, troubleshoot issues, and improve overall system reliability.

Overall, electric substations are essential for the reliable and efficient functioning of electrical power systems. They enable voltage transformation, distribution, fault detection and protection, voltage regulation, integration of re newable energy, and effective monitoring and control of the power grid.

Who pays for electric substations?
The cost of electric substations is typically borne by the utility companies that own and operate the electrical power infrastructure. These utility companies are responsible for providing electricity to consumers and maintaining the power system's reliability and functionality.

The expenses associated with building, upgrading, and maintaining substations are included in the overall operating costs of the utility company. These costs are then recovered through the rates charged to consumers for the electricity they consume. The revenue generated from electricity sales helps cover the investment and operational expenses, including those related to substations.

Utility companies often plan and budget for the construction and maintenance of substations as part of their long -term infrastructure planning. They consider factors such as population growth, energy demand projections, regulatory requirements, and system reliability needs when deciding to invest in new substations or upgrade existing ones.

It's important to note that the costs associated with substations, as well as other components of the power system, are ultimately passed on to consumers through their electricity bills. The specific rate structure and how the costs are allocated among different consumer groups can vary depending on local regulations, utility company policies, and the specific characteristics of the electricity market.

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Are electric rates raised to pay for electric substations? Electric rates can be adjusted to cover the costs of electric substations, among other infrastructure investments and operational expenses incurred by utility companies. However, the process and extent of rate adjustments can vary depending on factors such as local regulations, utility company policies, and the specific circumstances of the electricity market.

Utility companies are responsible for setting electric rates within the framework of regulatory oversight. These rates are typically approved by regulatory bodies, such as public utility commissions or energy regulatory authorities, to ensure that they are fair and reasonable for consumers while allowing the utility to recover its costs and earn a reasonab le return on investment.

When utility companies make significant investments in constructing new substations or upgrading existing ones, the costs associated with these projects are considered in the rate -setting process.

The utility may file a rate case o r a similar regulatory proceeding to seek approval for rate adjustments that reflect the necessary recovery of costs, including those related to substations.

The regulatory process involves a thorough review of the utility's investment plans, cost projections, and other relevant factors. Regulatory bodies consider the reasonableness of the costs, the prudency of the investments, and the impact on consumers' rates before approving any rate adjustments. Public hearings and opportunities for consumer input are often part of the process to ensure transparency and public participation.

It's important to note that rate adjustments are typically not solely driven by the costs of substations but also include various other factors such as generation costs, transmissi on costs, distribution costs, and regulatory requirements. The specific allocation of costs among different components and the rate structure can vary depending on the jurisdiction and the utility's specific circumstances.

Overall, electric rates can be ad justed to cover the costs of electric substations, but the process is subject to regulatory oversight and aims to strike a balance between the utility's financial viability and ensuring reasonable and affordable rates for consumer.

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APPENDIX 2
CARB Scoping Plan Rate Impact Estates

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APPENDIX 3
Governor Executive Order N-79-20 Zero Emissions Vehicles by 2035

EXECUTIVE DEPARTMENT STATE OF CALIFORNIA
EXECUTIVE ORDER N-79-20
WHEREAS the climate change crisis is happening now, impacting California in unprecedented ways, and affecting the health and safety of too many Californians; and
WHEREAS we must accelerate our actions to mitigate and adapt to climate change, and more quickly move toward our low-carbon, sustainable and resilient future; and
WHEREAS the COVID-19 pandemic has disrupted the entire transportation sector, bringing a sharp decline in demand for fuels and adversely impacting public transportation; and
WHEREAS as our economy recovers, we must accelerate the transition to a carbon neutral future that supports the retention and creation of high-road, high- quality jobs; and
WHEREAS California's long -term economic resilience requires bold action to eliminate emissions from transportation, which is the largest source of emissions in the State; and
WHEREAS the State must prioritize clean transportation solutions that are accessible to all Californians, particularly those who are low-income or experience a disproportionate share of pollution; and
WHEREAS zero emissions technologies, especially trucks and equipment, reduce both greenhouse gas emissions and toxic air pollutants that disproportionately burden our disadvantaged communities of color; and WHEREAS California is a world leader in manufacturing and deploying zero - emission vehicles and chargers and fueling stations for cars, trucks, buses and freight-related equipment; and

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WHEREAS passenger rail, transit, bicycle and pedestrian infrastructure, and micro-mobility options are critical components to the State achieving carbon neutrality and connecting communities, requiring coordination of investments and work with all levels of governments including rail and transit agencies to support these mobility options; and
WHEREAS California's policies have contributed to an on-going reduction in in- state oil extraction, which has declined by over 60 percent since 1985, but deman d for oil has not correspondingly declined over the same period of time; and WHEREAS California is already working to decarbonize the transportation fuel sector through the Low Carbon Fuel Standard, which recognizes the full life cycle of carbon in transportation emissions including transport into the State; and WHEREAS clean renewable fuels play a role as California transitions to a decarbonized transportation sector; and
WHEREAS to protect the health and safety of our communities and workers the State must focus on the impacts of oil extraction as it transitions away from fossil fuel by working to end the issuance of new hydraulic fracturing permits by 2024; and
WHEREAS a sustainable and inclusive economic future for California will require retaining and creating high -road, high-quality jobs through sustained engagement with communities, workers and industries in changing and growing industries.

NOW THEREFORE, I, GAVIN NEWSOM, Governor of the State of California by virtue of the power and authority vested in me by the Constitution and the statutes of the State of California, do hereby issue the following Order to pursue actions necessary to combat the climate crisis.

IT IS HEREBY ORDERED THAT:

1. It shall be a goal of the State that 100 percent of in-state sales of new passenger cars and trucks will be zero -emission by 2035. It shall be a further goal of the State that 100 percent of medium- and heavy-duty vehicles in the State be zero- emission by 2045 for all operations where feasible an d by 2035 for drayage trucks. It shall be further a goal of the State to transition to 100 percent zero - emission off-road vehicles and equipment by 2035 where feasible.

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2. The State Air Resources Board, to the extent consistent with State and federal law, shall develop and propose:
a)
Passenger vehicle and truck regulations requiring increasing volumes of new zero -emission vehicles sold in the State towards the target of 100 percent of in -state sales by 2035.
b) Medium- and heavy -duty vehicle regulations requiring i ncreasing volumes of new zero- emission trucks and buses sold and operated in the State towards the target of 100 percent of the fleet transitioning to zero -emission vehicles by 2045 everywhere feasible and for all drayage trucks to be zero - emission by 2035. c) Strategies, in coordination with other State agencies, U.S.

Environmental Protection Agency and local air districts, to achieve 100 percent zero-emission from off -road vehicles and equipment operations in the State by 2035.

In implementing this Paragrap h, the State Air Resources Board shall act consistently with technological feasibility and cost-effectiveness.

3. The Governor's Office of Business and Economic Development, in consultation with the State Air Resources Board, Energy Commission, Public Utilities Commission, State Transportation Agency, the Department of Finance and other State agencies, local agencies and the private sector, shall develop a Zero- Emissions Vehicle Market Development Strategy by January 31, 2021, and update every three years thereafter, that:

Ensures coordinated and expeditious implementation of the system of policies, programs and regulations necessary to achieve the goals and orders established by this Order.
a) Outlines State agencies' actions to support new and used zero - emission vehicle markets for broad accessibility for all Californians.

4. The State Air Resources Board, the Energy Commission, Public Utilities Commission, and other relevant State agencies shall use existing authorities to accelerate deployment of affordable fueling and charging options for zero - emission vehicles, in ways that serve all communities and in particular low - income and disadvantaged communities, consistent with State and federal law.

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5. The Energy Commission, in consultation with the State Air Resources Board and the Public Utilities Commission, shall update the biennial statewide assessment of zero-emission vehicle infrastructure required by Assembly Bill 2127 (Chapter 365, Statues of 2018) to support the levels of electric vehicle adoption required by this Order.

6. The State Transportation Agency, the Department of Transportation and the California Transportation Commission, in consultation with the Department of Finance and other State agencies, shall by July 15, 2021 identify near term actions, and investment strategies, to improve clean transportation, sustainable freight and transit options, while continuing a "fix-it-first" approach to our transportation system, including where feasible:
a) Building towards an integrated, statewide rail and transit network, consistent with the California State Rail Plan, to provide seamless, affordable multimodal travel options for all.
b) Supporting bicycle, pedestrian, and micro -mobility options, particularly in low -income and disadvantaged communities in the State, by incorporating safe and accessible infrastructure into projects where appropriate.
c)
Supporting light, medium, and heavy duty zero -emission vehicles and infrastructure as part of larger transportati on projects, where appropriate.

7. The Labor and Workforce Development Agency and the Office of Planning and Research, in consultation with the Department of Finance and other State agencies, shall develop by July 15, 2021 and expeditiously implement a Just Transition Roadmap, consistent with the recommendations in the "Putting California on the High Road: A Jobs and Climate Action Plan for 2030" report pursuant to Assembly Bill 398 (Chapter 135, Statutes of 2017).

8. To support the transition away from fossil fu els consistent with the goals established in this Order and California's goal to achieve carbon neutrality by no later than 2045, the California Environmental Protection Agency and the California Natural Resources Agency, in consultation with other State, local and federal agencies, shall expedite regulatory processes to repurpose and transition upstream and downstream oil production facilities, while supporting community participation, labor standards, and protection of public health, safety and the environment. The agencies shall report on progress and provide

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an action plan, including necessary changes in regulations, laws or resources, by July 15, 2021.

9. The State Air Resources Board, in consultation with other State agencies, shall develop and propose st rategies to continue the State's current efforts to reduce the carbon intensity of fuels beyond 2030 with consideration of the full life cycle of carbon.

10. The California Environmental Protection Agency and the California Natural Resources Agency, in consultation with the Office of Planning and Research, the Department of Finance, the Governor's Office of Business and Economic Development and other local and federal agencies, shall develop strategies, recommendations and actions by July 15, 2021 to manage and expedite the responsible closure and remediation of former oil extraction sites as the State transitions to a carbon-neutral economy.

11. The Department of Conservation's Geologic Energy Management Division and other relevant State agencies shall strictly enf orce bonding requirements and other regulations to ensure oil extraction operators are responsible for the proper closure and remediation of their sites.

12. The Department of Conservation's Geologic Energy Management Division shall:
a) Propose a significantly st rengthened, stringent, science- based health and safety draft rule that protects communities and workers from the impacts of oil extraction activities by December 31, 2020. b) Post on its website for public review and consultation a draft rule at least 60 days before submitting to the Office of Administrative Law .

IT IS FURTHER ORDERED that as soon as hereafter possible, the Order be filed in the Office of the Secretary of State and that widespread publicity and notice be given of this Order.

This Order is not intended to, and does not, create any rights or benefits, substantive or procedural, enforceable at law or in equi ty, against the State of California, its agencies, departments, entities, officers, employees, or any other person.

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IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 23rd day of September 2020

ATTEST:

ALEX PADILLA
Secretary of State

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APPENDIX 4
2018 Executive Summary of the
Imperial Irrigation District - Integrated Resource Plan Imperial Irrigation District’s Energy Department faces a number of challenges in the coming years. This document provides an integrated strategic approach to overcome those ch allenges. The effective integration of all IID resources is critical to the organizational efficiency and productivity of the district moving forward.

The IID Integrated Resource Plan aims to effectively point IID’s Energy Department in one direction, thus allowing the gears that turn the department to cohesively work together toward the same goals.

IRPs are commonplace in the utility world of energy planning, and many states and regulatory agencies require IRPs prior to statewide and regional planning and prior to significant and important capital investments. The intention of this IRP is to refresh the most recent 2016 Integrated Resource Plan with an up -to-date resource portfolio plan that covers, at least through 2030, beginning in 2018.

Furthermore, t his document addresses the requirements of the IRP Guidelines under Senate Bill 350. IID needs to address various issues that directly affect the efficient integration of energy resources, such as:
• The security of the IID Balancing Authority.
• The best mix of resources.
• Compliance with Renewable Portfolio Standards and emissions laws included the renewable portfolio changes of Senate Bill 350. • Operational flexibility and effectiveness in renewables integration. • An aging generation fleet, and many others.

Simultaneously, IID must meet these challenges while maintaining affordable energy rates for retail, commercial and industrial customers. As a result, IID has assessed many combinations of integrated resource portfolios to discern an approach to the numerous uncertainties that face the district.

IID has the unique opportunity to innovatively transform into an industry -leading public utility, while simultan eously conforming to the changing environment of new laws and

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regulations as well as the latest electric utility standards developing upon the horizon. IID is uniquely located in an area where renewable resources such as solar, geothermal and others can place IID in a leading role as a renewable resource generation hub in the state of California and the nation.

This will require IID to work quickly to collaborate with neighboring utilities and other entities to provide a situation where the IID can maintain its reasonable customer rates, improve its Balancing Authority infrastructure and be a primary source for reliably delivered renewable power to Southern California and to the West, all while effectively adapting to its own obligations as a load -serving energy utility. IID issued a Request for Proposal for an IRP consultant to validate IID’s internal studies and the IRP process, as well as provide industry -leading expertise. Black and Veatch was selected, and IID coordinated with them as well as with the C alifornia Energy Commission throughout the entire process of the IRP development.

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APPENDIX 5
Resume for Bill D. Carnahan
BD CARNAHAN MANAGEMENT SERVICES, INC.
1775 Paseo Verano San Dimas, CA 91773 Tel: (626)487-5356 [email protected]
[email protected]
BILL D. CARNAHAN
_______________________________________________________________

SUMMARY

Over the last 50 years, Mr. Carnahan directed award-winning accomplishments for public power systems, small and large, in both Colorado and California. He also was actively involved for 16 years in guiding the development of the Southern California Public Power Authority (SCPPA, a California Joint Powers Agency) as Executive Director as well as served as Interim Executive Director of Clean Power Alliance (formerly Los Angeles Community Choice Energy), as well as San Diego Community Power, both California Joint Powers Agency/Community Choice Aggregators, the two largest in the State.

After retirement from SCPPA on December 31, 2016, he has served as President of BD Carnahan Management Services, providing assistance to government, utility, and corporate entities in strategic planning, staff mentoring, special projects, training, and education. As well as serving as an advisor to select renewable energy project developers regarding California energy markets and policy.

Some of Mr. Carnahan’s accomplishments include:

National
• Served as President of the American Public Power Association (APPA) in 1986 and received its highest individual achievement award, the Alex Radin Distinguished Service Award in 1998 and the second highest, the James D. Donovan Individual Achievement Award in 2016. • Became a Life Member of APPA in 1987.
• Received the highest APPA award presented to a utility system, the Scattergood System Achievement Award as Director of Utilities for the City of Fort Collins, Colorado. • Served on the APPA Board of Directors for eight years. • Toured extensively in Europe for innovative energy projects with the German Marshal Fund. • Has been a presenter at numerous national conventions and conferences • At SCPPA, the Bond Buyer magazine recognized the Milford Wind Project as its “Bond Deal of the Year” national competition
• McGraw Hill’s Power magazine recognized the SCPPA Magnolia Generating Project as its “Power Plant of the Year”

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Regional
• Served as a board member and President of state public power associations in both California (California Municipal Utilities Association) and Colorado (Colorado Association of Municipal Utilities). • Served as a board member of three joint action agencies and President, two of them; in California (Southern California Public Power Authority) and in Colorado (Platte River Power Authority and Arkansas River Power Authority).
• Successfully served as CEO of three public power systems managing electric, water, and wastewater utilities ranging in size from about 50 employees to over 400 employees. • Served as CEO of California joint action agency (SCPPA), responsible for several hundred megawatts of renewable energy projects (wind, solar, geothermal, small hydro, and land-fill gas).

Provision of numerous and varied energy efficiency programs and training for the POU members. • At SCPPA, also developed several conventional (hydroelectric, nuclear, coal, and natural gas-fired) generating projects and several interstate high voltage transmission lines. • Served as Governor-appointed member of the first California ISO Board of Governors • Former member of the San Onofre Nuclear Generating Station Board of Review • Former member of the Intermountain Power Project (Delta, Utah) Coordinating Committee • Member of the Steering Committee for the development of the Lower Colorado River Multi-Species Conservation Program

Local
• Successfully served with hundreds of city council and utility governing board members and numerous city managers.
• Board member on local chamber of commerce and served as President

CURRENT WORK EXPERIENCE

BD Carnahan Management Services, Inc – President 01/2017 to Present

BD Carnahan Management Services, Inc., is a consulting firm specializing in electric utility issues, including strategic planning, management, and legislative and regulatory issues.

Also, providing strategic and operational management services for community choice aggregation joint powers agencies.

Current Clients include:

Power Agency of Wyoming (what will become the largest wind farm in the United States and a several hundred- mile high-voltage transmission line to bring the project to the grid.

The Anschutz Energy Corp is developing it.

The City of Indio – working on long-term options between the City and the Imperial Irrigation District on future options for the provision of continued electric service to the citizens and businesses of the City.

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PREVIOUS WORK EXPERIENCE

San Diego Community Power (SDCP)– Interim CEO 10/1/2020 to 4/1/2022 Consulting Contract 4/4/22 to 6/1/22

Hired by SDCP to become its first Interim CEO for the startup, CCA would become the second largest in California. Members included Encinitas, Chula Vista, the City of San Diego, and Le Mesa as original members, and the County of San Diego and National City as members joining later.

Clean Power Alliance (formerly LACCE)
Special Advisor to Executive Director 03/2018 to 6/1/18

Los Angeles Community Choice Energy (LACCE)
Interim Executive Director 02/2017 to 03/2018

Hired by what would become the largest Community Choice Aggregator (CCA) in California to become its first Executive Director. What began as the four -member LACCE grew to a 27-city and 2-county fully functional CCA.

Southern California Public Power Authority (SCPPA) 03/2000 to 01/2017

Southern California Public Power Authority is a joint powers agency comprised of eleven municipal utilities and one irrigation district. SCPPA's members consist of the municipal utilities of Anaheim, Azusa, Banning, Burbank, Cerritos, Colton, Glendale, Los Angeles, Pasadena, Riverside, Vernon, and the Imperial Irrigation District. Together they deliver electricity to over 2 million customers in the southern California basin, spanning an area of 7,000 square miles and with a total population that exceeds 5 million. Formed in 1980, SCPPA was created for the purpose of providing joint financing, construction, and operation of transmission and generation projects. Today, SCPPA fulfills a broad range of services for its members by providing effective forums of collaboration through committees such as Customer Servic e, Finance, Public Benefits, Resource Planning, Transmission and Distribution, Engineering and Operations, Natural Gas, and Renewable Energy Resources.

SCPPA currently has more than twenty-five projects and transmission projects in operation, generating and bringing power from Arizona, New Mexico, Utah, Washington, Oregon, California, and Nevada. In addition, SCPPA owns natural gas reserves in Wyoming and Texas.

SCPPA projects have been financed through the issuance of taxable and tax-exempt bonds backed by the combined credit of the SCPPA members participating in each project. As of June 30, 2015, SCPPA had issued $14.7 billion in bonds, notes, and refunding bonds, of which $3.36 billion was outstanding.

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Executive Director 03/2000 to 12/ 2016

Executive Director of one of the most successful joint action agencies in the United States, reporting to a Board of Directors composed of the General Managers of the member electric systems.

• Developed and administered annual budgets exceeding $750 Million per year. • Maintained bond ratings of AA- by Standard and Poors and Aa2 by Moodys. • Assisted members in increasing their power supplies through conventional gas-fired peaking and base- load power plants as well as increasing renewable generation from virtually zero to over 20% of total needs.
• Developed and administered numerous “Public Benefit Programs” totaling more than one billion dollars for the members in such areas as energy efficient lighting, thermostat controls, and refrigerator recycling.
• Provided vital legislative and regulatory services for the members in both Sacramento (where SCPPA has an office) and Washington DC • Developed a very successful training program for member staff in 2016, totaling over 700 participants, saving the members in excess of $750,000.

Prior to becoming the SCPPA Executive Director, served on the SCPPA Board of Directors representing the City of Riverside from 1986 to 2000.

City of Riverside, California 1986 To 2000

The City of Riverside Public Utilities serves approximately 106,000 customers within the City and electric operating revenues of $275 million, and over 300 employees. Reported to the City Manager, who reported to the elected City Council as well as a City Council-appointed semi-autonomous Board of Public Utilities.

Also served as a member of the SCPPA Board of Directors and President in 1995 and 1996.

Public Utilities Director 1986 to 2000

Responsible for overall day-to-day operations as well as strategic direction for the electric and water utilities, including generation, transmission, and distribution and customer services for electric and water production and distribution to retail customers.

• In 1986, directed a major st rategic planning effort leading to a major reorganization of the Utilities.
• Directed the design and construction of the Utilities’ first stand- alone Service Center, housing the water and electric construction and maintenance crews, dispatching, meter repair, and satellite customer services operations.
• Played a major role in the “industry restructuring” effort as the publicly -owned utility (POU) representative on the AB1890 implementation efforts, which focused on competition, public benefits charges, and programs as well and the creation of the California Independent

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Indio City CouncilJuly 19, 2023

Indio City Council
July 19, 2023