Indio City Council
February 21, 2024

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 263 of 328 38 Order shall be mailed to the responsible person or posted on the property in the manner prescribed in Division 3.
(d) The Administrative Citation or Compliance Order may also be served on any person, in anyway permitted under California Code of Civil Procedure § 416.60 through § 416.90, or any other method allowed under state law. (2) In the case of a business:
(a) If the responsible party is an entity operating in the City of Indio with a City of Indio business license, then provided in a manner prescribed by Division 3 to that responsible party’s agent for service of process listed with the City of Indio, or to the holder of the business license, or at the business address if the address is within the City of Indio.
(b) The enforcement official shall attempt to locate the business owner and issue the administrative citation or compliance order to the business owner when possible.
(c) If the enforcement official unable to locate the business owner and is only able to can only locate the person in apparent charge of the business, the administrative citation may be issued to such person, who may sign or receive the administrative citation as agent for the responsible person or owner of the business. A copy of the administrative citation shall also be served on the business owner or responsible person in the manner described in Division 3 if possible. (d) If a responsible party is an entity registered with the Secretary of State, then by certified mail to that responsible party’s agent for service of process at the address registered with the Secretary of State.
(e) The Administrative Citation or Compliance Order may also be served on any business, corporation or other entity in any way permitted by the California Corporations Code or by any way permitted under California Code of Civil Procedure § 416.10 through § 416.40, or any other method allowed under state law. (D) If the Administrative Citation or Compliance Order is properly served upon a responsible person in accordance with this Chapter, the failure of any person with an interest in the property to receive notice shall not affect the validity of any proceedings taken under this division.

Sec. 12.08.05. Hearing to Contest Administrative Citations. (A) Time to Appeal.
(1) Any person named as a responsible person in an administration citation or compliance order may contest the administrative citation or compliance order

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 264 of 328 39 by completing a Request For Hearing Form and serving it on the City Clerk in a manner described in Division 3 of this chapter within 30 calendar days from the date the administrative citation was served. A Request for Hearing Form may be obtained from the City of Indio as specified on the administrative citation or compliance order. (2) Upon the proper filing of a request for a hearing, the administrative fines associated with the contested administrative citation(s) shall be stayed pending the outcome of the hearing.
(3) The City Clerk shall forward any validly served Request for Hearing Form to the citing agency as soon as practicable after receipt. (B) Failing to Timely Appeal.
(1) Failure to timely and properly request a hearing, including the proper submission of a written declaration when a hearing by declaration is requested, shall constitute a waiver of all rights of appeal and a failure to exhaust administrative remedies. The administrative citation, along with any imposed fines, fees, and charges, shall be deemed final.
(C) Calculation of Time.
(1) The time in which any act described in this section is to be done is computed by excluding the first day, and including the last, unless the last day is a holiday, and then it is also excluded in accordance with California Code of Civil Procedure § 12.
(E) Types of Hearings and Burden of Proof.
(1) The recipient of the administrative citation may request an in- person hearing or hearing by written declaration.
(a) In-person hearings shall be open to the public.
(2) The city bears the burden of proof to establish a violation of this code by a preponderance of the evidence standard.
(F) Materials in Support of the Citation.
(1) All materials submitted to the hearing officer by the citing agency in support of the citation shall be known as the Agency File. (2) Within fifteen (15) Court Days of receiving the Request for Hearing Form from the City Clerk, the Citing agency shall send a copy of the Agency File to the hearing officer.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 265 of 328 40 (3) Within fifteen (15) Court Days of receiving the Request for Hearing Form from the City Clerk, the Citing Agency shall make a copy of the Agency File available to the person who requested the hearing.
(a) The person requesting the hearing may obtain a copy of the Agency File in following ways:
(i) Retrieving the Agency file from the Citing Agency in person, or (ii) By Electronic Service, or
(iii) Certified mail.
(G) Submission of Additional Materials to the Hearing Officer. (1) The Citing Agency and the Requester of the hearing may submit additional materials to the hearing officer under the following conditions:
(a) The party submitting the additional materials to the hearing officer shall serve the opposing party with the additional information at the same time the additional information is provided to the hearing officer; and (b) The materials are submitted at least ten (10) Court days before the scheduled in-person hearing date, or at any time before the hearing officer issues their ruling in a hearing by written declaration.
(H) In-Person Hearing Procedure;
(1) Setting of an Initial Hearing Date.
(a) The citing agency shall schedule the initial date and time for the hearing.
(b) The initial hearing date shall be set not less than thirty (30) Court Days and not more than ninety (90) calendar days from the date the citing agency received the Request For Hearing Form from the City Clerk. (c) The person requesting the in-person hearing shall be served in a manner described in Division 3 with written notice of the time and place of the hearing at least twenty (20) Court Days prior to the date of the hearing. (2) Requests for Accommodations.
(a) The person requesting the in-person hearing can submit a written request for reasonable modification or accommodation as described in the Americans with Disabilities Act (“ADA”).

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 266 of 328 41 (i) The request must be in writing;
(ii) The request must specify the type of accommodation being requested; and
(iii) The request must be served on the City Clerk in a manner described in Division 3 at least ten (10) Court Days prior to the hearing date. (3) Request to Continue the Hearing Date.
(a) The person requesting the in-person hearing shall be granted one continuance to reschedule the initial hearing date.
(b) The request for a continuance of the initial hearing date shall be made in writing and shall be served on the City Clerk at least ten (10) Court Days before the hearing in a manner described in Division 3. A failure to timely request a continuance of the initial hearing date is a waiver of the requesters one guaranteed continuance.
(c) Upon receiving a valid request to continue the initial hearing date, the request shall be granted and the citing agency shall serve the person requesting the hearing in a manner described in Division 3 with the next three (3) hearing dates compatible with the Citing agency and the hearing officer. The Citing agency shall serve the person requesting the hearing with the next available hearing dates within ten (10) Court Days of receiving the initial request for continuance. (d) The person requesting the hearing shall select one of the three hearing dates provided by the Citing Agency and shall serve their selection in writing on the City Clerk in a manner described in Division 3 within ten (10) Court Days of being served with the next available hearing dates. A failure to timely comply with requirements will constitute a waiver of the requesters one guaranteed continuance and the original hearing date shall be reinstated, no additional notice will be provided if the original hearing date is reinstated. If the original hearing date is no longer available, one of the three (3) hearing dates provided to the requester will be chosen by the Citing agency and notice of the new hearing date shall be provided to the person requesting the hearing in accordance with Division 3.
(e) Notwithstanding a timely request to continue the initial hearing date, any other requests to continue a hearing date may only be ruled upon by the hearing officer at the next scheduled hearing. If the person requesting the hearing is not able to attend the next hearing, a written request for continuance can be made at any time before the hearing by serving the written request on the City Clerk and the hearing officer in a manner described in Division 3. The written request shall include all of the days the requesting party will be available to attend the hearing within the 90 calendar days following hearing date to be continued. If the request for a continuance does not include the days the requesting party is available the request shall be denied.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 267 of 328 42 (f) If the hearing officer grants or denies a request to continue the hearing, the hearing officer will provided the basis for their ruling in writing. (g) If the hearing officer grants a request to continue the hearing, the hearing officer and the citing agency shall select a new hearing date from the dates provided by the requester. The Citing Agency shall provide notice of the new hearing date and the hearing officers ruling to the person requesting the hearing in a manner described in Division 3 within ten (10) Court Days of receiving the written ruling from the Hearing officer.
(h) If the hearing officer denies a request to continue the hearing, the hearing will proceed as scheduled even if the requesting party is not present. The hearing officer’s ruling on the request to continue will be contained in the written decision after completion of the hearing.
(4) Failure to Attend the In-Person Hearing.
(a) If a party is not present at the hearing on the date and time the hearing is scheduled, and there are no pending requests to continue the hearing date, the hearing will proceed as scheduled without the absent party. (5) Evidence and Case Presentation.
(a) The in-person hearing will be informal, and formal rules of evidence and discovery do not apply.
(b) Any disputes regarding witnesses or evidence in the case are to be resolved by the hearing officer.
(c) At any time during the hearing, the hearing officer may continue the hearing to a date agreeable to the parties and request additional information from the parties prior to issuing a written decision or deciding any dispute. (d) A copy of the document or instrument of the citing agency providing notice of the violation and imposition of the administrative fine or penalty shall be admitted into evidence as prima facie evidence of the facts stated therein. (e) The contents of the citing Agency's File in the case shall be received in evidence and the contents may be relied on by either party during the hearing.
(f) Each party shall have the opportunity to present evidence, call witnesses, in support of that party’s case and to cross examine witnesses called by the opposing party. The amount of time each side is given to present their case and the structure of the case presentation is in the sole discretion of the hearing officer.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 268 of 328 43 (6) Hearing Officer’s Decision for In-Person Hearings. (a) The Hearing Officer’s decision shall be titled “Administrative Order”. (b) No later than 30 calendar days after the date on which the administrative hearing concludes, the Hearing Officer shall issue a written decision to uphold or dismiss the contested administrative citation. (c) The decision shall set forth the reasons for the decision along with notice of the right to appeal pursuant to this chapter. (d) The decision shall be served in a manner described in Division 3 of this chapter. The failure to receive a decision properly served in accordance with a method described in Division 3 shall not invalidate the administrative hearing officer’s decision.
(e) If the hearing officer upholds an administrative citation, the administrative fines shall be due in the time set forth in the written decision but no later than ninety (90) calendar days from the date of the decision. (f) If the hearing officer dismisses the administrative citation, the city shall retain the authority to issue additional administrative citations for additional violations, or to take any other enforcement action authorized by law. (g) Rulings related to a responsible party’s compliance with the requirements of a compliance order.
(i) The Hearing Officer’s written decision shall include a section titled “Compliance Order Findings.” Under the “Compliance Order Findings” section the Hearing Officer shall make findings regarding the existence of the violation(s) specified in the compliance order, and regarding whether the responsible person took the required corrective action within the time period set forth in the compliance order. If the Hearing Officer concludes that the violation continues to exist, the administrative order shall set forth a schedule for correction. In addition, the administrative order shall impose administrative fines and costs as provided for in this chapter. The administrative order shall set a deadline for compliance with its terms in the event that the responsible person fails to file an appeal. If the Hearing Officer determines that the violation(s) set forth in the compliance order did not exist, or that the violation(s) was (were) timely corrected, all proceedings regarding the violation(s) shall immediately cease and the administrative citations shall be dismissed.
(I) Hearing by Written Declaration Procedure;
(1) Evidence and Case Presentation.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 269 of 328 44 (a) A copy of the document or instrument of the citing agency providing notice of the violation and imposition of the administrative fine or penalty shall be admitted into evidence as prima facie evidence of the facts stated therein. (b) The contents of the citing Agency's File in the case shall be received in evidence.
(c) The person requesting the hearing shall serve the City Clerk and the hearing officer with any materials they would like the hearing officer to consider within fifteen (15) Court Days of receiving the Agency File in a manner described in Division 3. The hearing officer shall not consider any materials that fail to comply with these requirements.
(2) Hearing Officer’s Decision for In-Person Hearings.
(a) The Hearing Officer’s decision shall be titled “Administrative Order”. (b) The Hearing Officer shall review the requestor's written declaration, the Agency File, and any materials provided by the requester submitted in compliance with this chapter.
(c) Within 60 Court days of receiving the Agency File, the hearing officer shall issue a written decision.
(d) The decision shall set forth the reasons for the decision along with notice of the right to appeal pursuant to this chapter. (e) The decision shall be served in a manner described in Division 3 of this chapter. The failure to receive a decision properly served in accordance with a method described in Division 3 shall not invalidate the administrative hearing officer’s decision.
(f) If the hearing officer upholds an administrative citation, the administrative fines shall be due in the time set forth in the written decision but no later than 60 calendar days from the date of the decision.
(g) If the hearing officer dismisses the administrative citation, the city shall retain the authority to issue additional administrative citations for additional violations, or to take any other enforcement action authorized by law. (h) With regard to rulings related to a responsible party’s compliance with the requirements of a compliance order. The Hearing Officer’s written decision shall include a section titled “Compliance Order Findings.” Under the “Compliance Order Findings” section the Hearing Officer shall make findings regarding the existence of the violation(s) specified in the compliance order, and regarding whether the responsible person took the required corrective action within the time period set forth in the

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 270 of 328 45 compliance order. If the Hearing Officer concludes that the violation continues to exist, the administrative order shall set forth a schedule for correction. In addition, the administrative order shall impose administrative fines and costs as provided for in this chapter. The administrative order shall set a deadline for compliance with its terms in the event that the responsible person fails to file an appeal. If the Hearing Officer determines that the violation(s) set forth in the compliance order did not exist, or that the violation(s) was (were) timely corrected, all proceedings regarding the violation(s) shall immediately cease and the administrative citations shall be dismissed.

Sec. 12.08.06. Right of Judicial Review of Hearing Officer Decision. (A) Right of Judicial Review of Hearing Officer Decision. (1) Within 20 days after service of the Hearing Officer’s decision upon the responsible person, the responsible person may seek review of the administrative decision by filing an appeal with the Superior Court of the State of California, in the County of Riverside, in accordance with California Government Code § 53069.4. (2) A copy of the notice of appeal shall be served in person or by first- class mail upon the local agency by the responsible person. (3) If no notice of appeal of the final administrative order or decision is filed within the period set forth in California Government Code § 53069.4, the order or decision shall be deemed confirmed.
(B) Hearing Officer.
(1) Selection of Hearing Officer.
(a) The city manager is authorized to develop and implement policies and procedures relating to the qualifications, appointment and compensation of hearing officers, hearing officer powers, hearing procedures, scope of the hearing, and other matters relating to administrative enforcement hearings. The city manager shall promulgate rules and procedures as are necessary to establish a list of qualified persons who are capable of acting on behalf of the city as hearing officers. The hearing officers shall be appointed by resolution of the city council. Any person designated to serve as an enforcement hearing officer is subject to disqualification for bias, prejudice, conflict of interest, or for any other reason for which a judge may be disqualified in a court of law.
(2) Disqualification of Hearing Officer
(a) The enforcement hearing officer may continue a hearing based on one of the parties showing good cause at the hearing, or if the hearing officer independently determines that due process has not been adequately afforded.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 271 of 328 46 (3) Power of Hearing Officer
(a) The enforcement hearing officer shall retain jurisdiction over the subject matter of an administrative enforcement hearing for the purposes of granting a continuance, ensuring compliance with an administrative enforcement order, modifying an administrative enforcement order, or where extraordinary circumstances exist, granting a new hearing.

Sec. 12.08.07. Penalties Assessed .
(A) If the responsible person fails to correct the violation, subsequent administrative citations may be issued for the same violation. The amount of the penalty shall increase at a rate specified in this Division in accordance with California Government Code § 53069.4 and §36900.
(B) Penalties for General Violations.
(1) Every violation determined to be an infraction of the City of Indio Municipal Code that is not subject to another fine schedule is punishable by the following:
(a) A fine not exceeding one hundred dollars ($100) for a first violation. (b) A fine not exceeding two hundred dollars ($200) for a second violation of the same ordinance within one year.
(c) A fine not exceeding five hundred dollars ($500) for each additional violation of the same ordinance within one year.
(C) Penalties for Building and Safety Code Violations.
(1) Notwithstanding any other law, violations of the City of Indio building and safety codes are determined to be infractions and are punishable by the following:
(a) A fine not exceeding one hundred thirty dollars ($130) for a first violation.
(b) A fine not exceeding seven hundred dollars ($700) for a second violation of the same ordinance within one year.
(c) A fine not exceeding one thousand three hundred dollars ($1,300) for each additional violation of the same ordinance within one year of the first violation. (d) A fine not exceeding two thousand five hundred dollars ($2,500) for each additional violation of the same ordinance within two years of the first violation if

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 272 of 328 47 the property is a commercial property that has an existing building at the time of the violation and the violation is due to failure by the owner to remove visible refuse or failure to prohibit unauthorized use of the property.
(D) Penalties for Short-Term Rental Violations.
(1) Notwithstanding any other law, including subdivisions (2) and (3), a violation of the City of Indio short-term rental ordinance that is an infraction is punishable by the following:
(a) A fine not exceeding one thousand dollars ($1,000) for a first violation.
(b) A fine not exceeding two thousand dollars ($2,000) for a second violation of the same ordinance within one year.
(c) A fine not exceeding three thousand dollars ($3,000) for each additional violation of the same ordinance within one year of the first violation. (2) For purposes of this section, “short-term rental” means a residential dwelling, or any portion of a residential dwelling, that is rented to a person or persons for 30 consecutive days or less.
(3) For purposes of this section, “residential dwelling” means a private structure that is designed and available, pursuant to applicable law, for use and occupancy by one or more individuals. “Residential dwelling” does not include a commercially operated hotel, motel, bed and breakfast inn, or a time-share property as defined by subdivision (aa) of Section 11212 of the Business and Professions Code.

Sec. 12.08.08. Failure to pay penalties.

The failure of any person to pay the administrative fines assessed by an administrative citation within the time specified on the citation may result in the enforcement official referring the matter to the city finance director to file a claim with the small claims court. Alternatively, the enforcement official may pursue any other legal remedy to collect the administrative fines as provided in Division 16.

Sec. 12.08.09. Allocation of administrative fines.

Administrative fines collected pursuant to this division shall be deposited in the code enforcement civil penalties fund established pursuant to Division 16.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 273 of 328 48 DIVISION 9. SUMMARY ABATEMENT
Sec. 12.09.01. Declaration of purpose.

The city council finds that its purpose in adopting this division and Division 10 is to establish a procedure for the summary abatement of public nuisances and code violations. The procedures established herein are in addition to any other legal remedy, criminal or civil, established by law which may be pursued to address City of Indio Municipal Code or applicable state code violations.

Sec. 12.09.02. Summary abatement.

This division governs the procedures relating to summary abatement of public nuisances.

Sec. 12.09.03. Authority.
(A) Whenever an enforcement official determines that an imminent life safety hazard exists that requires immediate correction or elimination, the enforcement official may exercise the following powers without prior notice to the responsible person:
(1) Order the immediate vacation of any occupants and prohibit occupancy until all repairs are completed. Violation of the enforcement official's order of immediate vacation and prohibition of occupancy shall constitute a misdemeanor; (2) Post the premises as unsafe, substandard or dangerous; (3) Board, fence or secure the building or site;
(4) Raze and grade that portion of the building or site to prevent further collapse and remove any hazard to the general public;
(5) Make any minimal emergency repairs as necessary to eliminate any imminent life safety hazard; and
(6) Take any other action as appropriate under the circumstances.

Sec. 12.09.04. Procedures.
(A) An enforcement official shall pursue only the minimum level of correction or abatement as necessary to eliminate the immediacy of the hazard. Costs incurred by the city during the summary abatement process shall be assessed and

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 274 of 328 49 recovered against the responsible person or property owner through the procedures outlined in Section 12.10.04.
(B) The enforcement official may also pursue any administrative or judicial remedy to abate any remaining public nuisance.

DIVISION 10. ADMINISTRATIVE ABATEMENT
Sec. 12.10.01. Declaration of purpose.

The city council finds that its purpose in adopting this Division and Division 9 is to establish a procedure for the abatement of public nuisances and code violations. The procedures established in these sections are in addition to any other legal remedy, criminal or civil, established by law which may be pursued to address the City of Indio Municipal Code or applicable state code violations.

Sec. 12.10.02. Authority.

Any condition caused, maintained or permitted to exist in violation of any provisions of the City of Indio Municipal Code or applicable state codes which constitutes a public nuisance but which does not constitute an imminent life safety hazard may be abated by the city pursuant to the procedures set forth in this division.

Sec. 12.10.03. General Procedures and Appeals.
(A) Abatement notice.
(1) Whenever an enforcement official determines that public or private property or any portion of public or private property is a public nuisance as generally defined in Division 1 or as declared in a specific section of the City of Indio Municipal Code or applicable state codes, an abatement notice may be issued to the responsible person or property owner to abate the public nuisance.
(2) The abatement notice shall contain a description of the property in general terms reasonably sufficient to identify the location of the property. It shall refer to the City of Indio Municipal Code or applicable state code violations which render the property a public nuisance.
(3) The abatement notice shall describe the action required to abate the public nuisance which may include corrections, repairs, demolition, removal, obtaining the necessary permits, vacation of tenants or other appropriate action and shall establish deadlines by which each action must occur.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 275 of 328 50 (4) The abatement notice shall explain the consequences should the responsible person fail to comply with the terms of the notice. (5) The abatement notice shall identify all applicable hearing and appeal rights.
(B) Service of abatement notice. The abatement notice shall be served by any one of the methods of service listed in Division 3. (C) The enforcement official shall establish a reasonable time frame for compliance based on the nature and severity of the nuisance. The time frame shall normally be ten days for a nuisance that does not involve an imminent threat to public health and safety.
(D) Right to appeal.
(1) The responsible person may appeal the abatement notice within ten calendar days from the date of service of the abatement notice by filing a written request to appeal to an enforcement official.
(2) Upon receiving a written request to appeal an abatement notice, an enforcement official shall follow the procedures set forth in Divisions 11 and 12 and request the enforcement hearing officer to schedule a hearing to hear any objections why abatement should not be ordered and effected.
(3) Abatement shall not proceed until the enforcement hearing officer issues an order after an appeal by the responsible person or an appeal has not been timely filed, unless the enforcement hearing officer concludes that an imminent threat to the public's health and safety exists.
(4) If the enforcement hearing officer issues an order confirming the existence of a public nuisance, the city may immediately abate the public nuisance pursuant to the procedures set forth in Section 12.10.04. of this division. The hearing officer's decision is the final administrative decision and shall become effective upon the date of issuance by the enforcement hearing officer.

Sec. 12.10.04. Abatement of a Public Nuisance by the City. (A) Once an enforcement official follows the procedures set forth in Section 12.10.03 of this division and obtains authorization to abate a public nuisance, the public nuisance may be abated by city personnel or by a private contractor. (B) City personnel or a private contractor can enter upon private property in a reasonable manner to abate the public nuisance as specified in the abatement notice or abatement order. Interference with the city's abatement of the

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 276 of 328 51 public nuisance by a property owner or responsible person shall constitute a misdemeanor.
(C) When abatement is completed, a report describing the work performed and an itemized account of the total abatement costs shall be prepared by the enforcement official. The report shall contain the names and addresses of the responsible persons or property owners of each parcel, the tax assessor's parcel number and a legal description of the property.
(D) The enforcement official shall request the hearing officer to schedule a confirmation of costs hearing, unless waived in writing by all responsible persons.
(E) All administrative and actual costs incurred by the city in abating the public nuisance may be assessed and recovered against the responsible person.

DIVISION 11. ADMINISTRATIVE ENFORCEMENT APPEALS
Sec. 12.11.01. Appeal Procedures.
(A) A person served with one of the following documents, orders or notices may file an appeal within ten (10) calendar days from the date of service:
(1) Any administrative abatement or civil penalties notice and order; (2) A letter from an enforcement official indicating an intent to record a notice of violation.
(B) The appeal shall be made in writing and filed with the city clerk. (C) The appeal shall be accompanied by an appeal fee in an amount established by resolution of the city council.
(D) The receipt of a written appeal shall stay all actions, or put in abeyance all approvals or permits which may have been granted, pending the effective date of the decision of the body hearing the appeal. Upon the filing of a proper appeal fines shall cease to be imposed unless such cessation would result in the continuation of a life, health, or safety risk.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 277 of 328 52 (E) After receiving the written notice of appeal, the enforcement official shall request an administrative enforcement hearing officer to schedule a date, time, and place for the hearing.
(F) Written notice of the date, time and place of the hearing shall be served at least ten calendar days prior to the date of the hearing on the person appealing the notice by any one of the methods listed in Division 3.

Sec. 12.11.02. Appeal Hearing.
(A) The appeal hearing shall be conducted pursuant to the administrative enforcement hearing procedures set forth in Division 12.

Sec. 12.11.03. Failure to Attend an Administrative Enforcement Hearing. (A) Failure to attend the administrative enforcement hearing by the appellant shall constitute a waiver of their rights to an administrative enforcement hearing and administrative adjudication of the notice or any portion of the notice.

DIVISION 12. ADMINISTRATIVE ENFORCEMENT HEARING PROCEDURES Sec. 12.12.01. Declaration of Purpose.
(A) This division establishes the procedures for conducting administrative enforcement hearings.
(B) The city council finds that there is a need to establish a uniform procedure for administrative enforcement hearings conducted pursuant to the City of Indio Municipal Code. It is the purpose and intent of the city council to afford due process of law to any person who is directly affected by an administrative action. Due process of law includes: adequate notice, an opportunity to participate in the administrative hearing and an adequate explanation of the reasons justifying the administrative action. These procedures are also intended to establish a forum to efficiently, expeditiously and fairly resolve issues raised in any administrative enforcement action.
(C) The city manager is authorized to develop and implement policies and procedures relating to the qualifications, appointment and compensation of hearing officers, hearing officer powers, hearing procedures, scope of the hearing, and other matters relating to administrative enforcement hearings. The city manager shall promulgate rules and procedures as are necessary to establish a list of qualified

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 278 of 328 53 persons who are capable of acting on behalf of the city as hearing officers. The hearing officers shall be appointed by resolution of the city council.

Sec. 12.12.02. Procedures for Notification of Enforcement Hearing. (A) Where an administrative enforcement remedy or proceeding authorized by this title provides for an enforcement hearing, the enforcement official may request a hearing officer to schedule a day, time and place for the hearing. (B) Written notice of the time and place of the hearing shall be served at least ten calendar days prior to the date of the hearing to the responsible person or property owner.
(C) The format and contents of the hearing notice shall be in accordance with rules and policies promulgated by the city manager. (D) The notice of hearing shall be served by any of the methods of service listed in Division 3.

Sec. 12.12.03. Disqualification of Enforcement Hearing Officer.

Any person designated to serve as an enforcement hearing officer is subject to disqualification for bias, prejudice, conflict of interest, or for any other reason for which a judge may be disqualified in a court of law.

Sec. 12.12.04. Powers of Enforcement Hearing Officer.
(A) The enforcement hearing officer may continue a hearing based on good cause shown by one of the parties to the hearing or if the hearing officer independently determines that due process has not been adequately afforded. (B) The enforcement hearing officer shall retain jurisdiction over the subject matter of an administrative enforcement hearing for the purposes of granting a continuance, ensuring compliance with an administrative enforcement order, modifying an administrative enforcement order, or where extraordinary circumstances exist, granting a new hearing.
(C) The enforcement hearing officer has the authority to require a responsible person to post a code enforcement performance bond to ensure compliance with an administrative enforcement order. Procedures for the use of a code enforcement performance bond shall be promulgated by the city manager.

Sec. 12.12.05. Procedures at Administrative Enforcement Hearing.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 279 of 328 54 (A) Administrative enforcement hearings are intended to be informal in nature. Formal rules of evidence and discovery do not apply. The procedure and format of the administrative hearing shall be promulgated by the city manager. (B) The city bears the burden of proof at an administrative enforcement hearing or a nuisance abatement hearing to establish the existence of a violation of the City of Indio Municipal Code or applicable state code, or to establish the existence of a public nuisance.
(C) The standard of proof to be used by the enforcement hearing officer in deciding the issues at an administrative hearing is a preponderance of the evidence standard.
(D) Each party shall have the opportunity to cross-examine witnesses and present evidence in support of their case.

Sec. 12.12.06. Failure to Attend Administrative Enforcement Hearing.

Any party whose property or actions are the subject of an administrative enforcement hearing and who fails to appear at the hearing is deemed to waive the right to a hearing and to an adjudication of the issues related to the hearing, provided that proper notice of the hearing has been provided.

Sec. 12.12.07. Administrative Enforcement Order.
(A) The decision of the enforcement hearing officer shall be made within ten days of the hearing, entitled "Administrative Enforcement Order" and be issued in accordance with the rules and procedures promulgated by the city manager. (B) The Administrative Enforcement Order shall be served on all parties by any one of the methods listed in Division 3 of this Code. (C) The Administrative Enforcement Order shall become final on the date of service of the order.

Sec. 12.12.08. Judicial Review.

Judicial review of an Administrative Enforcement Order may be sought pursuant to a writ of administrative mandamus. Once an administrative enforcement order becomes final as provided in this division, the time in which judicial review of the order must be sought shall be governed by California Code of Civil Procedure § 1094.6 except as otherwise specifically provided elsewhere in this Code.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 280 of 328 55 Sec. 12.12.09. Failure to Comply with Administrative Enforcement Order.

It is unlawful for any party to an administrative enforcement hearing who has been served with a copy of the final Administrative Enforcement Order to fail to comply with the order. Failure to comply with a final administrative enforcement order may be prosecuted as an infraction or a misdemeanor.

DIVISION 13. RECOVERY OF CIVIL PENALTIES, ADMINISTRATIVE COSTS

AND ABATEMENT COSTS
Sec. 12.13.01. Declaration of Purpose.

The city council finds that, in addition to the filing of civil collection actions by the city attorney, the use of nuisance abatement liens collected as personal obligations against property owners and the use of special assessments on real property will assist in the collection of civil penalties, abatement costs, administrative costs, re-inspection fees and late fees assessed pursuant to administrative citations, administrative hearings, judicial orders and other appropriate code enforcement actions. The city council further finds that collection of civil penalties, costs and fees assessed for code enforcement violations is important in deterring future violations and maintaining the integrity of the city's code enforcement system. The city has the authority to make the expense of enforcement actions and abatement of any nuisance a lien against the property on which it is maintained and a personal obligation against the property owner, in accordance with California Government Code § 38773.1; or, in the alternative, the city has the authority to make the cost of abatement of a nuisance upon a parcel of land a special assessment against that parcel, in accordance with California Government Code § 38773.5. The procedures established in this division shall be used to complement existing administrative or judicial remedies which may be pursued to address violations of the City of Indio Municipal Code or applicable state codes.

Sec. 12.13.02. Procedures for Recovering Costs.

This division governs the procedures for recovery of all administrative and actual costs incurred by the city in the recovery of civil penalties, in the abatement of a public nuisance, and for recordation and recovery of costs of enforcing nuisance abatement liens pursuant to the procedures and authority found in the California Government Code. The provisions of Government Code §§ 38771—38773.5 and any amendments to those sections are hereby incorporated by reference and made a part of this division.

Sec. 12.13.03. Recovery of Civil Penalties.

The enforcement official may collect all civil penalties and related administrative costs by the use of all appropriate legal means, including referral to the finance director or city attorney.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 281 of 328 56 Sec. 12.13.04. Authority to Impose Lien/Special Assessment.

Whenever the amount of any nuisance abatement charge, administrative penalty, administrative cost, or other debt incurred by the city in connection with real property has not been satisfied in full within 90 days and/or has not been successfully challenged by a timely writ of mandate, this obligation may constitute a lien or, in the alternative, a special assessment against the real property on which the violation occurred.

Sec. 12.13.05. Recovery as a Lien on Property.
(A) In addition to constituting a personal financial obligation of the person or persons responsible therefor, any nuisance abatement charge, administrative penalty, administrative cost, administrative citation or other debt imposed by the city in connection with real property may be recovered by recordation of a lien against the subject real property.
(B) Upon determination by the city manager or his designee that the nuisance abatement charge, administrative penalty, administrative cost, or other debt imposed by the city has not been satisfied in full within 90 days of the date it was imposed, the city manager or his designee shall recommend that the city council adopt a resolution confirming imposition of the debt and approving the filing of a lien against the subject real property. Before taking these actions, however, the city manager or his designee shall wait until any timely filed writ of mandate challenging the penalty/cost/charge/debt is disposed of by a court of law. (C) The resolution shall state the amounts due and owing, the name of the agency imposing the lien City of Indio, the date of the order or other notice describing the property violation or nuisance in question, the street address and assessor's parcel number of the subject property, and the name and address of the recorded owner of the property.
(D) A copy of the resolution shall be served on the property owner, along with notice to the property owner that a lien in the amounts stated in the resolution will be filed against the subject property in the Riverside County recorder's office. (E) The notice set forth in subsection (d) shall be served in the same manner as a summons in a civil action in accordance with the Code of Civil Procedure § 415.10 et seq. If the owner of record cannot be found after diligent search, then the notice shall be served by posting a copy thereof in a conspicuous place upon the property for a period of ten days and publication thereof in a newspaper of general circulation published in Riverside County.
(F) Following proper notice to the owner of record as provided in subsection (e), the resolution and notice shall be recorded as a lien with the county recorder. Once recorded, the resolution and notice shall have the force and effect and priority of a judgment lien governed by the provisions of Code of Civil Procedure §

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 282 of 328 57 697.340 and may be extended as provided in Code of Civil Procedure §§ 683.110— 683.220, inclusive.
(G) The interest rate set for money judgments in Code of Civil Procedure § 685.010 shall accrue on the principal amount of the lien until satisfied pursuant to law.
(H) A lien pursuant to this section may be foreclosed by an action brought by the city for a money judgment.

Sec. 12.13.06. Recovery of Costs by Special Assessment. (A) As an alternative to the procedure above in this division, there is hereby established a procedure for making any nuisance abatement charge, administrative penalty, administrative cost or other debt imposed by the city in connection with real property a special assessment against the subject real property. (B) Upon determination by the city manager or his designee that the nuisance abatement charge, administrative penalty, administrative cost, or other debt incurred by the city has not been satisfied in full within 90 days of the date it was imposed and/or has not been successfully challenged by a timely writ of mandate, the city manager or his designee shall recommend that the city council adopt a resolution confirming imposition of the debt and approving the filing of a special assessment against the subject real property. Before taking these actions, however, the city manager or his designee shall wait until any timely filed writ of mandate challenging the penalty/cost/charge/debt is disposed of by a court of law. (C) The resolution shall state the amounts due and owing, the name of the agency imposing the special assessment City of Indio, the date of the order or other notice describing the property violation or nuisance in question, the street address and assessor's parcel number of the subject property, and the name and address of the recorded owner of the property.
(D) A copy of the resolution shall be served on the property owner, along with notice that the property may be sold after five years by the tax collector for unpaid delinquent assessments. If the owner of record cannot be found after diligent search, then the notice shall be served by posting a copy thereof in a conspicuous place upon the property for a period of ten days and publication thereof in a newspaper of general circulation published in Riverside County. The tax collector's power of sale shall not be affected by the failure of the property owner to receive notice. (E) The assessment may be collected at the same time and in the same manner as ordinary municipal taxes are collected, and shall be subject to the same penalties and the same procedure and sale in case of delinquency as provided for ordinary municipal taxes. All laws applicable to the levy, collection, and enforcement of municipal taxes shall be applicable to the special assessment. However, if any real

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 283 of 328 58 property to which the assessment relates has been transferred or conveyed to a bona fide purchaser for value, or if a lien of a bona fide encumbrance for value has been created and attaches thereon, prior to the date on which the first installment of the taxes would become delinquent, then the assessment shall not result in a lien against the real property but instead shall be transferred to the unsecured roll for collection. (F) The interest rate set for money judgments in Code of Civil Procedure § 685.010 shall accrue on the principal amount of the lien until satisfied pursuant to law.
(G) The city may, subject to the requirements applicable to the sale of property pursuant to Revenue and Taxation Code § 3691, conduct a sale of vacant residential developed property for which the payment of the assessment is delinquent. (H) The resolution adopted by the city council under this section shall be entitled to recordation.

Sec. 12.13.07. Repayment to Code Enforcement Civil Penalties Fund.

All monies recovered by payment of the charge or assessment or from the sale or transfer of the property shall be remitted to the city finance director who shall credit the appropriate amount to the code enforcement civil penalties fund provided for in 16, or alternatively use the monies to reimburse the department responsible for the subject code enforcement action where appropriate.

Sec. 12.13.08. Satisfaction of Lien/Special Assessment. (A) Once payment in full is received by the city for the outstanding debt, the finance director or his designee shall:
(1) With respect to a lien, either record a notice of satisfaction or provide the property owner or financial institution with a notice of satisfaction so they may record this notice with the county recorder. Such notice of satisfaction shall cancel the city's lien; and
(2) With respect to a special assessment, provide written notice to the tax collector that the special assessment amount has been paid in full and should no longer be imposed against the subject property. Such written notice shall cancel the city's special assessment.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 284 of 328 59 DIVISION 14. ATTORNEYS' FEES AND COSTS
Sec. 12.14.01. Declaration of Purpose.

The city council hereby finds that there is a need to recover costs and fees incurred by the city to abate public nuisances. The city council further finds that the recovery of attorneys' fees in nuisance abatement actions and proceedings will further the strong public policy of encouraging the abatement of public nuisances in the city, will facilitate the city's efforts to maintain effective and efficient nuisance abatement programs within the city and will, accordingly, serve as an effective deterrent to the maintenance of public nuisances.

Sec. 12.14.02. Recovery of Costs.

Pursuant to California Government Code § 38773.5, or its successor statutes, in any action, administrative proceeding or special proceeding to abate a public nuisance wherein the city elects at the initiation of the action or proceeding to seek recovery of its attorneys' fees, the prevailing party shall be entitled to recover the amount of its reasonable attorneys' fees incurred in the action or proceeding.

DIVISION 15. CODE ENFORCEMENT COST RECOVERY
Sec. 12.15.01. Code Enforcement Costs.

This division governs the general procedures for recovering code compliance costs incurred by the city unless other provisions of this Code establish another specific procedure for a particular type of code compliance cost recovery.

Sec. 12.15.02. Declaration of Purpose.

The city council finds there is a need to recover costs, including legal costs, incurred by enforcement officials and other city personnel, who spend considerable time and resources in an effort to ensure that compliance with the City of Indio Municipal Code or applicable state codes has been obtained.

Sec. 12.15.03. Authorization.

Whenever an enforcement official determines a property to be in violation of provisions of the City of Indio Municipal Code or applicable state codes and those violations have been listed in a notice of violation, the enforcement official shall assess code enforcement costs against the responsible person or property owner.

Sec. 12.15.04. Assessment of Code Enforcement Costs.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 285 of 328 60 A code compliance cost fee schedule shall be established and revised as necessary by the city council to reflect current actual costs. The fee schedule shall be filed in, and available for public review at, the city clerk's office.

Sec. 12.15.05. Notice of Assessment of Code Enforcement Costs. (A) Where the assessment of code enforcement costs is authorized under this division, the appropriate city enforcement official shall provide the responsible person with a written notice of the amount of costs assessed. The written notice shall contain the following information:
(1) An itemized list of the amounts charged;
(2) The corresponding dates when code enforcement costs were incurred;
(3) A deadline by which the costs must be paid; and
(4) Notice that additional fees may be charged for late payment. (B) Service of notice of the code enforcement cost assessment shall be provided to the responsible person or property owner by any of the means outlined in Division 3.
(C) Code enforcement costs may be assessed as part of any judicial or administrative enforcement action as provided for in this division. (D) The failure of any responsible person or property owner to receive notice of the code enforcement cost assessment shall not affect the validity of any costs imposed under this division.

Sec. 12.15.06. Failure to Pay Code Enforcement Costs.

The failure of any person to pay code enforcement cost assessment by the deadline specified in the written notice shall result in the assessment of an additional late fee. The amount of the late fee shall be established by the city council.

Sec. 12.15.07. Collection of Code Enforcement Costs.

The enforcement official shall collect the assessed code enforcement costs and late fees by the use of all appropriate legal means, including but not limited to referral to the city finance department or city attorney for collection or by lien or special assessment pursuant to Division 13.

Sec. 12.15.08. Payment to Code Enforcement Civil Penalties and Cost Recovery Fund.

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 286 of 328 61 All code enforcement costs and late fees recovered shall be remitted to the city finance director who shall credit the appropriate amount to the code enforcement civil penalties fund provided for in Division 16, or alternatively use the monies to reimburse the department responsible for the subject code enforcement action where appropriate.

DIVISION 16. CODE ENFORCEMENT CIVIL PENALTIES AND COST

RECOVERY FUND
Sec. 12.16.01. Declaration of Purpose.

The city council finds that there is a need to create and maintain a funding source for the administration and operation of code enforcement activities in the city. In order to effectively administer such activities as nuisance abatement, inspections and re- inspections, imposition of liens and special assessments on real property, administrative hearings related thereto, departmental code enforcement cost reimbursement, and other activities to enhance and improve code enforcement for the public safety and welfare, the establishment of a code enforcement civil penalties and cost recovery fund is essential.

Sec. 12.16.02. Establishment of Code Enforcement Civil penalties and Cost Recovery Fund.

There shall be established a code enforcement civil penalties and cost recovery fund which shall be administered by the finance director and shall consist of all monies collected by the imposition of fines, civil penalties, nuisance abatement recovery monies and all other costs and reimbursements recovered by code enforcement actions.

Sec. 12.16.03. Use of Funds.

All funds collected from code enforcement actions shall be deposited into a separate fund and used for the supplemental financing of code enforcement programs or, where appropriate, to reimburse the department responsible for the subject code enforcement action.

DIVISION 17. PRIVATE NUISANCE ABATEMENT
Sec. 12.17.01. Private Nuisance.

No person on private property shall engage in any activity or create any condition which unreasonably disturbs, or would tend to unreasonably disturb, a person of

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 287 of 328 62 reasonable sensibilities on private property in the same vicinity, or which is so harsh, prolonged, unnatural or unusual in use, time or place as to cause physical discomfort to such person on private property in the same vicinity, if the disturbing activity or condition can be eliminated or ameliorated with reasonable accommodation on the part of the disturbing party. As used in this division, an unreasonably disturbing activity or condition shall include the emission of harsh, prolonged or unusual lighting from privately owned property, the emission of unreasonably loud, prolonged or unusual noise from privately owned property, or the emission of noxious, foul or nauseating odors, vapors, smoke or fumes from privately owned property.

Sec. 12.17.02. Private Nuisance Abatement.
(A) Subject to the requirement of subsection (b), any person who is unreasonably disturbed, or whose property is damaged, by private nuisance activity or a private nuisance condition existing on private property as defined in Section 12.17.01(A) may bring a private nuisance cause of action for damages and/or injunctive relief to abate that private nuisance.
(B) Any person who intends to institute a private nuisance lawsuit pursuant to subsection (a) shall first attempt to informally resolve the dispute with the person or persons allegedly responsible for the nuisance including, if agreed to by the person allegedly responsible for the nuisance, submitting the dispute to mediation. If mediation is not successful or if the person allegedly responsible for the nuisance does not agree to mediation, a private nuisance lawsuit pursuant to subsection (a) may be initiated.”
Section 2. Severability
If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such determination shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.

Section 3. Publication
The City Clerk is authorized and directed to cause this Ordinance to be published as required by law.

Section 4. Adoption and Effective Date

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 288 of 328 63 This Ordinance shall be introduced at a regular meeting and adopted at a regular meeting at least seven days after introduction. The Ordinance shall be effective upon the thirty-first day following adoption.

Section 5. CEQA.

The City Council finds that there is no possibility the adoption and implementation of this Ordinance may have a significant effect on the environment. The Ordinance is therefore exempt from the environmental review requirements of the California Environmental Quality Act ("CEQA") pursuant to Section § 15061 (b)(3) of Title 14 of the California Code of Regulations.

PASSED, APPROVED and ADOPTED this 21st day of February 2024. ___________________________

LUPE RAMOS AMITH
MAYOR
ATTEST:
__________________________

SABDI SANCHEZ, CMC

CITY CLERK ADMINISTRATOR

Second Reading of Ordinance No. 1809 - An Ordinance of the City Council ... Page 289 of 328 City of Indio
City Council
February 21, 2024

STAFF REPORT

To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Rob Rockwell, Asst. City Manager & Dir. Of Finance Subject: Independent auditor's report and the City's Annual Comprehensive Financial report for fiscal year 2022-23.

RECOMMENDATION:

Receive and file the City of Indio Annual Comprehensive Financial Report for the year ended June 30, 2023.

SUMMARY:

The City is required to have an independent auditor conduct a financial audit each year. For the fiscal year ended June 30, 2023, the firm of Lance, Soll & Lunghard LLP conducted the audit. It is the opinion of Lance, Soll & Lunghard LLP that the City’s annual financial reports present fairly, in all material respects, the financial position of the City; and that the reports are in conformity with accounting principles generally accepted in the United States.

BACKGROUND INFORMATION:

The Annual Comprehensive Financial Report (ACFR) is a set of government financial statements prepared Board Standards Accounting Governmental with staff that (GASB) City by comply regulations and standards. The financial statements have been audited and validated by the accounting firm Lance, Soll & Lunghard LLP (LSL) to be in compliance with GASB requirements.

Unlike the City’s budget, which shows where resources are to be spent in the future, the ACFR contains financial results as of the end of the fiscal year. In order to provide a wide range of facts and figures, the ACFR is composed of three sections: Introductory, Financial, and Statistical.

Overall, the ACFR provides a comprehensive picture of the City’s financial condition, contains a comparison of the annual budget plan to actual expenditures, and includes information on municipal operating activities. Incorporated into the ACFR is information on all City funds on the accrual basis of accounting, which recognizes amounts owed by the City but not paid at the end of the fiscal year as well as amounts due to the City but not received by the end of the fiscal year. The ACFR provides information which is used by credit rating companies such as Fitch Ratings Inc. and Standard and Poor’s to determine the City’s fiscal integrity and bond (credit) rating.

Within the Financial Section of the ACFR, beginning on page four, Management’s Discussion and Analysis (MD&A) provides and overview of the City’s financial activities. As reported in the financial section of the ACFR, the City’s net position totaled $619.1 million on June 30, 2023, a year-over- year increase of $41.5 million, an increase of about seven percent. Fund balance for the General AGENDA ITEM #9.1
Independent auditor's report and the City's Annual Comprehensive Financi... Page 290 of 328 Fund totaled $65.8 million, down $17.5 million from the year before. From that total, $17 million represents the City’s set aside in case of emergency.

Annually, each ACFR is presented to the Government Finance Officers Association (GFOA), which conducts a review of local government ACFRs and upon review, awards their Certificate of Achievement Award for Excellence in Financial Reporting to those local governments that are in compliance with their ACFR accounting standards of preparation. Last year, the City earned the GFOA award for “Outstanding Financial Reporting” for the fifteenth successive year. The Fiscal Year 2022-23 ACFR has been submitted to the GFOA and staff anticipates earning the award for the sevententh consecutive year.

The ACFR can be reviewed on the City's website. Attached are three documents prepared by LSL:

Auditor’s Communication Letter (Attachment 1), Auditor’s Report on Internal Controls (Attachment 2), and the Appropriation Limit Report (Attachment 3).

The Auditor’s Communication Letter (Attachment 1) reflects auditor conclusions concerning the City’s the all that Letter Communication confirms procedures. and policies accounting The information enclosed within the City’s financial statements is true and accurate and that all the required information has been disclosed. The letter is also used to communicate concerns and suggestions noted during the audit.

The expresses the opinion LSL’s 2) on Controls Internal on Report Auditor’s (Attachment effectiveness of City internal controls over financial reporting. In order to form a basis for expressing an opinion, the auditor must plan and perform the audit to obtain appropriate evidence that is sufficient to obtain reasonable assurance about whether material weaknesses exist.

The Appropriations Limit Report (Attachment 3) confirms that the City met state regulations limiting the City’s the reviewed LSL Specifically, revenue. from sourced appropriations of level tax worksheet used to determine the state required annual appropriations limit, as required by Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative) and determined that City tax revenue did not exceed the appropriations limit set by statute. Financial limitations can be placed on a City when the amount of tax revenue exceeds the calculated appropriation limit.

ATTACHMENTS:

Attachment 1 - City of Indio Audit Communication Letter Attachment 2 - City of Indio Report on IC
Attachment 3 - City of Indio AUP

APPROVAL(S):

Rob Rockwell, Asst. City Manager & Dir. Of Finance Approved - 13 Feb 2024 Steven Graham, City Attorney Approved - 15 Feb 2024
Bryan H. Montgomery, City Manager Approved - 15 Feb 2024

Independent auditor's report and the City's Annual Comprehensive Financi... Page 291 of 328 1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N. Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
21 Waterway Avenue, Suite 30089
The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
24422 Avenida de la Carlota, Suite 275
Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
January 5, 2024

To the Honorable Mayor and Members of the City Council
City of Indio, California

We have audited the financial statements of the governmental ac tivities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Indio, California (the City) for the year ended June 30, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 21, 2023. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters

Qualitative Aspects of Significant Accounting Practices

Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 1 to the financial statements, the City changed accounting policies related to sub scription-based information technology arrangements by adopting Statement of Governmental Accounting S tandards (GASB Statement) No. 96 in fiscal year 2022-2023. Accordingly, the cumulative effect of the accou nting change as of the beginning of the year is reported in the Statement of Activities. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All sig nificant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial stat ements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events.

Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:

Management’s estimates of its net pension liability, net other post-employment benefits (OPEB) liability, are based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liability, net OPEB liability, in determining that they are reasonable in relation to the financial statements taken as a whole.

The financial statement disclosures are neutral, consistent, and clear.

Significant or Unusual Transactions

Management is responsible for the policies and practices used t o account for significant or unusual transactions.

No significant unusual transactions have occurred during fiscal year 2022-2023.

Difficulties Encountered in Performing the Audit

We encountered no significant difficulties in dealing with management in performing and completing our audit.

Independent auditor's report and the City's Annual Comprehensive Financi... Page 292 of 328

To the Honorable Mayor and Members of the City Council
City of Indio, California

Corrected and Uncorrected Misstatements

Professional standards require u s to accumulate all known and l ikely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, we detected miss tatements as a result of audit procedures which were material and were subsequently corrected by management. The details of these misstatements are described in a separate letter dated January 5, 2024.

Disagreements with Management

For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our s atisfaction, that could be sign ificant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations

We have requested certain representations from management that are included in the management representation letter dated January 5, 2024.

Management Consultations with Other Independent Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professi onal standards require the con sulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledg e, there were no such consultations with other accountants.

Other Audit Findings or Issues

We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the City and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and aud iting standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters

We applied certain limited procedures to the management’s discu ssion and analysis, the budgetary comparison schedules for the General Fund and major special revenue funds, and the required pension and other post- employment benefits schedules, as listed in the Annual Comprehensive Financial Report’s table of contents, which are required supplementary info rmation (RSI) that supplements t he basic financial statements. Our procedures consisted of inquiries of management regarding the methods of p reparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial s tatements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on combining and individual fund stat ements and schedules, which accompany the financial statements but are not RSI. With respect to this supp lementary information, we made certain inquiries of management and evaluated the form, content, and methods of prep aring the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the inf ormation is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Independent auditor's report and the City's Annual Comprehensive Financi... Page 293 of 328

To the Honorable Mayor and Members of the City Council
City of Indio, California

We were not engaged to report on the introduction or statistical section, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

The following Government Accounting Standards Board (GASB) pronouncements will be effective for the following fiscal years’ audits and should be reviewed for proper implementation by management:

Fiscal Year 2023-2024

GASB Statement No. 99, Omnibus 2022

Fiscal Year 2024-2025

GASB Statement No. 101, Compensated Absences

Future Projects

Comprehensive Project, Financial Reporting Model

Comprehensive Project, Revenue and Expense Recognition

Major Project, Going Concern Uncertainties and Severe Financial Stress

Major Project, Infrastructure Assets

Practice Issue, Classification of Nonfinancial Assets

Practice Issue, Risks and Uncertainties Disclosures

Pre-Agenda Research Activities, Subsequent Events

Restriction on Use

This information is intended solely for the use of City Council and management of the City of Indio, California and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Brea, California

Independent auditor's report and the City's Annual Comprehensive Financi... Page 294 of 328 1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N. Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
21 Waterway Avenue, Suite 30089
The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
24422 Avenida de la Carlota, Suite 275
Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS

To the Honorable Mayor and Members of the City Council
City of Indio, California

We have audited, in accordance with the auditing standards gene rally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Indio, California (the “City”), as of and for the year ended June 30, 2023, and the related not es to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated January 5, 2024.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statement s, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allo w management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely b asis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less s evere than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified a certain deficiency in internal control, described in the accompanying schedule of findings and responses as item 2023-001 that we consider to be a material weaknesses.

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the covenants of the Merged Indio Redevel opment Project Area 2004 Subordinate Tax Allocation Bonds, Series A indenture, and the Merged Indio Rede velopment Project Area 2008 Subordinate Tax Allocation Bonds, Series A indenture, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on complian ce with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests did not disclose instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Independent auditor's report and the City's Annual Comprehensive Financi... Page 295 of 328

To the Honorable Mayor and Members of the City Council
City of Indio, California

City of Indio, California’s Response to Findings

Government Auditing Standards requires the auditor to perform limited procedures on the City ’s response to the findings identified in our audit and described in the accompany ing schedule of findings and responses. The City’s response was not subjected to the other auditing procedures app lied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the e ffectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Acco rdingly, this communication is not suitable for any other purpose.

Brea, California
January 5, 2024

Independent auditor's report and the City's Annual Comprehensive Financi... Page 296 of 328

To the Honorable Mayor and Members of the City Council
City of Indio, California

SCHEDULE OF FINDINGS AND RESPONSES

Reference No.: 2023-001 – Final Reconciliation Process

Evaluation of Finding:

Material weakness.

Criteria:

Management is responsible for the preparation and fair presenta tion, as well as the accuracy of its financial statements, including disclosures in accordance with accounting principles generally accepted in the United States of America. This includes the design, implementation, and maint enance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud.

Condition:

During the audit, we found the following conditions that result ed in significant audit adjustments to the financial statements:

Accuracy in External Financial Reporting
The year-end closing process did not ensure that account balances were reconciled and accurate in advance of the audit, requiring adjusting journal entries to correct the final financial statements. It appears these errors were primarily caused by the trial balance being prepared from data that was not always complete. The more significant entries identified include:

 Adjustments to record assets not properly capitalized.  Adjustments to record cash appropriately.
 Adjustments to appropriately re cord revenue and receivables related to taxes and grants.

Effect or Potential Effect of Condition:

Cash would have been understated as of June 30, 2023.

Capital Assets would have been understated for fiscal year 2023 and expenses would have been overstated.

Revenues and receivables would have been understated as of June 30, 2023.

Recommendation:

The City should include in their year-end close process a revie w of capital assets to ensure they have not been placed in service. The City should also consider using a software solution for the tracking of all capital assets. The City should perform regular bank reconciliations to ensure prop er accounting of cash. The City should implement and adhere to a cutoff policy for revenues and expenditures related to the fiscal year that are identified in subsequent months.

Client Response:

Accuracy in its financial statements is a high priority for the City of Indio. The City’s goal is to avoid final financial statement adjustments as much as possible. In order to mitigate the risk of late adjustments in the future, finance staff will actively coordinate with Public Works and other departments, who oversee infrastructure projects. To better identify potential assets, finance staff will conduct thorough reviews of expenditure accounts, specifically: Repair and Maintenance, Small Tools and Minor Equipment, and Capital Improvements.

This past year, staff turnover exacerbated late recordings. To facilitate better processing and a more accurate trial balance, the City will conduct a review of internal control processes and its financial statement closing process. The City will also integrate new proc edures into the department's daily, monthly, and end-of-year workflow processes.

To prevent any cash recording delays, the finance staff will pr ioritize bank reconciliations and reconcile cash with fiscal agents accounts semiannually.

Independent auditor's report and the City's Annual Comprehensive Financi... Page 297 of 328 1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N. Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
21 Waterway Avenue, Suite 30089
The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
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Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
INDEPENDENT ACCOUNTANTS’ REPORT ON AGREED-UPON

PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS

To the Honorable Mayor and Members of the City Council
City of Indio, California

We have performed the procedures enumerated below on the accomp anying Appropriations Limit Worksheet No. 6 (or other alternative computation) of the City of Indio, California, for the year ended June 30, 2024. These procedures are the responsibility of the City, which were agreed to by the City of Indio and the League of California Cities (as prese nted in the publication entitled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution), were performed solely to assist the City of Indi o in meeting the requirements of Section

1.5 of Article XIII-B of the California Constitution. The City of Indio's management is responsible for the Appropriations Limit Worksheet No. 6 (or other alternative computation).

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of recomputing th e Appropriations Limit Worksh eet No. 6 (or other alternative computation). This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whet her the procedures performed are appropriate for their purposes.

The procedures performed and our findings were as follows:

1. We obtained the completed Worksheets No. 1 through No. 7 (or other alternative computations) and compared the limit and annual adjustment factors included in th ose worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriations Limit Worksheet No. 6, w e multiplied line A, last year's limit, by line D, ratio of change and compared the resulting amount to line E, this year's limit.

Finding: No exceptions were noted as a result of our procedures.

3. We compared the current year information presented in the ac companying Appropriations Limit Worksheet No. 6 to the other worksheets described in No. 1 above.

Finding: No exceptions were noted as a result of our procedures.

4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year.

Finding: No exceptions were noted as a result of our procedures.

Independent auditor's report and the City's Annual Comprehensive Financi... Page 298 of 328

To the Honorable Mayor and Members of the City Council
City of Indio, California

We were engaged by the City to perform this agreed-upon procedu res engagement and conducted our engagement in accordance with attestation standards established by the AICPA. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the ac companying Appropriations Limit Worksheet No. 6 (or other alternative computation). Accordingly , we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our o ther ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information of the City Council and management of the City of Indio and is not intended to be, and should not be, use d by anyone other than these specified parties.

Brea, California
July 27, 2023

Independent auditor's report and the City's Annual Comprehensive Financi... Page 299 of 328

CITY OF INDIO
FISCAL YEAR 2023-2024

APPROPRIATIONS LIMIT CALCULATION

A. 2022-2023 APPROPRIATIONS LIMIT: $ 146,630,617

B. 2023-2024 CHANGE IN PER CAPITA
PERSONAL INCOME: 4.44%

C. 2023-2024 CHANGE IN POPULATION: 1.17%

D. RATIO OF CHANGE (1.04 44 X 1.0117): X 1.0566

E. 2023-2024 APPROPRIATIONS LIMIT: $ 154,929,910
($146,630,617 x 1.0566)

Independent auditor's report and the City's Annual Comprehensive Financi... Page 300 of 328 City of Indio
City Council/Indio Water Authority
February 21, 2024

STAFF REPORT

To: City Council/Indio Water Authority
From: Bryan H. Montgomery, City Manager
Prepared by: Rob Rockwell, Asst. City Manager & Dir. Of Finance Subject: Fiscal Year 2023-24 Mid-year Budget Report

RECOMMENDATION:
the approve and file, Board Authority Water receive, the and Indio Council City the That recommendations and associated budget adjustments reflected in the Fiscal Year 2023-24 Mid-Year Budget Report (Attachment A).

SUMMARY:

Attached is the City's Fiscal Year 2023-24 Mid-Year Budget Report. For the most part, City revenue and expenses are tracking within budgeted expectations and there are no current-year financial concerns cited. In regard to the General Fund, the report provides a detailed analysis on revenue, an update on funds held in the contingency account, an updated future-year financial outlook, and various department justifications for recommended budget adjustments. Preceding the budget report, a cover letter from the city manager summarizes the city’s financial and operational status.

BACKGROUND INFORMATION:

Please refer to Attachment A.

FINANCIAL SUMMARY:

Current FY Financial
Impact:
$10,008,332 In current year budget: No
Current FY General
Fund Impact:
$6,957,675 Budget adjustment: Yes
Next FY Financial
Impact:
$0 Strategic Objective:

Source of funds: various Fund-Org-Object
Reference:
various

Additional Financial Details:

Please refer to Attachment A.

ATTACHMENTS:

Attachment 1 - FY24 Midyear Budget Report

AGENDA ITEM #9.2
Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 301 of 328

APPROVAL(S):

Bryan H. Montgomery, City Manager Approved - 14 Feb 2024

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 302 of 328 Attachment A

February 21, 2024

Honorable Mayor and City Council
100 Civic Center Mall
Indio, CA 92201

SUBJECT: Fiscal Year 23/24 Mid-Year Budget Report
I am pleased to present the attached Mid -Year Budget Report for fiscal year 2023 -2024. The report provides details of current year revenue and expenditure trends, and a multi -year outlook that is based on updated economic and operational trends.

City finances remain in good standing, bolstered by a better-than expected U.S. economy. The risks of the most aggressive rate -hiking cycle in four decades by the Fed, two wars and rising geopolitical tensions, banking sector woes, and worries about an impending recession continue to threaten, but the local and national economy continues to remain resilient. In fact, the national economy has picked up speed instead of slowing down: third quarter growth was far higher than normal levels, the pace of job formation has accelerated over the past three months, and the stock market is buoyant. All this has happened while inflation has significantly receded.

The year 2023 will likely be remembered as a year where the economy exceeded expectations , not just nationally, but locally as well.

The year 2024 will not likely be as vigorous. Some revenue sources, like property taxes, will likely continue some growth, but other sources are already leveling off. In fact, sales tax revenue is not expected to exceed last year’s total. As detailed in the attached report, I recommend mid - year budget adjustments that recognize $6.32 million in additional General Fund revenue, bringing the fiscal-year’s expected total up to $1 21.7 million. The additional revenue is driven by increases in transient occupancy tax ($950,000) , property tax and property tax in -lieu ($2.6 million), utility users’ tax ($500,000), ambulance services ($850,000), franchise fees ($420,000), and permit revenue ($1 million). Outside of a handful of departmental budget adjustments, detailed in the report, my recommendation is to dedicate most of the new revenue toward road maintenance ($4 million) and art center renovations ($1 million).

Looking ahead at the coming years, the updated multi -year projection displays a subtle change in the City’s financial outlook. The City has recently experienced several prominent years of growth and the City Council has assertively put one-time savings to work improving parks, roads, and public buildings. But with one -time funding lessening and revenue growth cooling, the model reminds us of how important it is to regulate on -going cost increases. The model does not forecast a swift pecuniary change, but it does highpoint the need for a more conservative spending style in the coming years . Pension funding, significant fire and paramedic service increases, and employee cost of living allowances are priorities that will inevitably assume most, if not all, of the City’s revenue growth. As directed, Measure X resources have been carved out

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 303 of 328 Attachment A

in the outlook, resulting in what could be a modest budget deficit in fiscal year 2025-26. Next fiscal year, I expect to present to you a balanced budget with no operational decreases , with some prior-year funds to spend on one-time projects.

On the topic of projects, the City’s staff is effectively following the City Council’s direction to “G.S.D.” (get stuff done). Not only does it describe the persistent efforts of staff fulfilling the City Council’s vision, it also captures the gravity of an ambitious multi-year capital improvement plan. The Public Safety Campus is nearing completion, and the construction for the new Civic Center Campus, including the City Hall and Library, has commenced. Also under design is a new golf course clubhouse, and the development of the Indio Sports Park will begin soon. Significant improvements have been made to the City ’s parks, with pickleball courts added to Patton Park and to Miles Ave nue Park. New basketball courts have also been built at Miles Ave nue Park, along with a large dog park. The Downtown concer t venue, “Center Stage ,” will be complete within the next 45-60 days. The list continues, and significant efforts are underway to continue to enhance the City of Indio and foster an even stronger sense of community.

Regarding new construction, the number of building permits issued this past year was down 26 percent and the building valuation total was down 23 percent. Specifically, the number of single-family dwelling permits declined 42 percent and the number of multi -family dwelling permits was down 93 percent. Like many other communities in California and the nation, new single-family residential construction slowed last year as mortgage rates rose, but concerns have since moderated and builders are starting to regain capacity to build . Nonetheless, external factors beyond the City’s control , including but not limited mortgage rate fluctuations and the availability of electrical service, continue to hinder residential construction. On a positive note, during 2023, the City did entitle a 1,500 unit 55+ community, a 1,200 unit build to rent community, a 345 unit market rate owner occupied and rental community, and 180 units of affordable hou sing. By the numbers, th is past year, staff issued 3,370 building permits, representing $ 184 million in new construction. That total includes 308 new single -family dwelling permits, one multi-family dwelling permit, and 21 new commercial permits.

In summary, the City of Indio is taking center stage, ever growing, and improving the quality of life for its residents and guests. The work is always challenging, but the progress is undeniable— and our residents and visitors are taking notice. Through diligent planning, budgetary discipline, and an eye on the future, I am confident that the City is heading in the right direction. I am truly honored to be a part of Indio’s progress.

Respectfully submitted,

Bryan H. Montgomery
City Manager

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 304 of 328 Attachment A

CITY OF INDIO
FY 23/24

MID-YEAR BUDGET REPORT

TABLE OF CONTENTS

A. GENERAL FUND - REVENUE SUMMARY ......................................................... 1 B. GENERAL FUND - REVENUE DETAIL ............................................................... 2 C. APPROPRIATIONS FOR CONTINGENCY .......................................................... 8 D. GENERAL FUND - MULTIPLE-YEAR PROJECTION ......................................... 9 E. GENERAL FUND - FUND BALANCE SUMMARY ............................................ 14 F. FY 23/24 MID-YEAR DEPARTMENT BUDGET REPORTS ............................... 15

1. ADMINISTRATION ..................................................................................... 15

2. ECONOMIC DEVELOPMENT .................................................................... 15

3. POLICE DEPARTMENT ............................................................................. 16

4. FIRE DEPARTMENT .................................................................................. 17

5. COMMUNITY DEVELOPMENT .................................................................. 17

6. PUBLIC WORKS ........................................................................................ 18

7. INFORMATION TECHNOLOGY ................................................................. 21

8. INDIO WATER AUTHORITY (IWA) ............................................................ 21

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 305 of 328 Attachment A

1 A. GENERAL FUND - REVENUE SUMMARY
The City’s General Fund budget is built on the assumption that revenue from all sources will total $115.34 million by the end of the fiscal year. Those revenue assumptions were shaped in May. Now, a t the fiscal year midpoint, staff recommends increasing the City’s revenue expectation by $6.32 million based on better -than-expected revenue trends for: transient occupancy tax ($950,000), property tax and property tax in lieu ($2.6 million), utility users’ tax ($500,000), ambulance fees ($850,000), waste disposal franchise fees ($420,000), and short- term residential rental permits ($1 million). General Fund revenue is summarized in the following table and more details on General Fund revenue follow in the next section of this report. In total, General Fund revenue is expected to total $121.66 million at the end of the fiscal year.

The following chart reflects General Fund revenue by source and incorporates changes to the budget as recommended in this report.

General Fund
Revenue Summary (in millions)
FY 22/23
Actual
Revenue
FY 23/24
Adopted
Budget
Mid-
Year
Update
Adjusted
Revenue
Totals
Taxes Transaction Tax (Measure X) 18.55 18.50 - 18.50 Sales Tax 18.23 18.00 - 18.00
Transient Occupancy Tax 14.74 15.15 0.95 16.10
Property Tax In Lieu of VLF 11.88 12.50 0.75 13.25
Property Tax 11.56 11.10 1.85 12.95
Utility Users’ Tax 10.20 9.80 0.50 10.30
Business License Tax 0.75 0.65 - 0.65
Property Transfer Tax 0.63 0.45 - 0.45
Charges for Services Music Festivals Services 5.57 6.46 - 6.46 Ambulance Services 2.39 2.50 0.85 3.35
Other Services 4.46 3.52 - 3.52
Other Financing Sources Public Safety CFD 4.94 4.51 - 4.51 Use of Assets Interest/Rents/Concessions 7.06 7.12 0.42 7.54 Licenses & Permits Licenses & Permits 5.74 4.17 1.0 5.17 Fines & Forfeitures Fines & Forfeitures 1.40 0.60 - 0.60 Other Miscellaneous Revenue 1.53 0.15 - 0.15
Intergovernmental Grants/Reimbursements 1.21 0.16 - 0.16 Totals 120.84 115.34 6.32 121.66

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations and estimated revenue as follows:

Increase estimated revenue:
101-401605 Transient Occupancy Tax - Hotels $250,000
101-401615 Transient Occupancy Tax – STRs 700,000
101-401125 Property Tax In-Lieu of VLF 750,000
101-401105 Property Tax 1,850,000
101-401505 Utilities Users’ Tax 500,000
101406610 Ambulance Service Fees 850,000
101-403805 Waste Disposal Franchise Fees 420,000

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 306 of 328 Attachment A
2 101-403210 Short-Term Rental Permits 1,000,000
Total $6,320,000
Increase appropriations:
1011199-591003 Appropriations for Contingency $6,320,000

As a matter of procedure, when new revenue is budget ed, a budget -expenditure account called Appropriations for Contingency is increased an equal amount. Funds that are budgeted in the contingency account represent current -year resources that are available to cover unanticipated expenditures or other City priorities. Expenditures are never charged to the contingency account. Instead, spending authority is moved from the contingency account to the budget unit that best represents the nature and cause of the expense. Per City policy, the City Manager has authority to reallocate funds from the contingency account to other budget units. For transparency, past and recommended withdrawals from the contingency account are summarized in Section C of this report.

B. GENERAL FUND - REVENUE DETAIL
a) Transaction and Use Tax (Measure X)
Sales tax revenue is the City’s largest source of general-purpose revenue, representing about 32 percent of all General Fund revenue. The City receives typical sales tax revenue, known as Bradley Burns sales tax, and it receives transaction and use tax, locally known as Measure X sales tax. Measure X was a ballot measure approved by residents in 2016. Both sales tax rates are one percent of the price of goods sold and are reported separately below for better accountability.

Measure X, transaction and use tax, is applied similar ly to regular sales tax, but levied on where the goods are used rather than where the goods are purchased. Transaction and use tax receipts generally mirror regular sales tax receipts but began to surpass regular sales tax receipts in FY 22.

$11.5
$11.2
$14.0
$17.3
$18.5 $18.5 $18.5 $18.9 $19.3 $19.7
FY19 20 21 22 23 24 25 26 27 FY28
Measure X Transaction and Use Tax
(in millions)
$-
$2
$4
$6
FY23 FY24
Midyear
Comparison

As illustrated in the graph above, by the solid line, Measure X sales tax receipts dipped in FY 20 due to the onset of the Coronavirus and state -granted tax-payment deferrals. In FY 21, revenue began to rebound, growing year -over-year for three fiscal years . This year, tax receipts have leveled off. As reflected in the Midyear Comparison section of the graph,

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 307 of 328 Attachment A
3 current-year receipts are slightly less ( -2.8%) than revenue received by this time last year.

Nonetheless, staff recommends deferring a budget adjustment that would lower the budget expectation until later in the fiscal year, when more performance data is available. Consumer confidence in the economy , stabilizing inflation rates, and favorable changes in federal monetary policy are indicators that sales activity might pick up the second half of the fiscal year. The dashed line in the graph represents revenue projections through FY 28. Measure X sales tax revenue is expected to reach $18.5 million this year and next fiscal year, before growing at a modest two percent a year from FY 26 through FY 28.

a) Sales and Use Tax
This fiscal year, sales tax revenue is not expected to reach last fiscal-year’s total, yielding $18.0 million. Last year, sales tax revenue totaled $18.2 million. As reflected in the Midyear Comparison section of the graph , below , sales tax receipts are slightly less ( -2%) than revenue received by this time last year. Sales tax activity is expected to pick up in the second half of the year , but not enough to exceed the current budget target ( $18 million). The solid line in the graph represents actual reve nue receipts from FY 19 through FY 23. The dashed line in the graph represents revenue projections through FY 2 8. Next fiscal year, sales tax revenue is expected to total $18 million, the same as this year . Looking ahead at FY’s 26, 27, and 28, sales tax revenue is expected to grow moderately at two percent a year.

$13.0
$11.5
$14.2
$16.9
$18.2 $18.0 $18.0 $18.4 $18.7 $19.1
FY19 20 21 22 23 24 25 26 27 FY28
Sales and Use Tax Revenue
(in millions)
$-
$2
$4
$6
FY23 FY24
Midyear
Comparison

b) Transient Occupancy Tax (TOT)
Transient Occupancy Tax (TOT) is imposed on individuals lodging in the City for up to 30 days, such as hotel patrons, campers during music -festival events, and guests renting local residences. Ten years ago, annual TOT revenue totaled a modest $3.1 million, but in FY 17, short-term lodging stays picked up as residential vacation rentals became popular. The pandemic severely impacted lodging operations citywide and consequently, local tax revenue dropped in FY 20. As the pandemic subsided, lodging actively flourished. Today, residential vacation rentals produce about 60 percent of all local TOT, generating about $10 million of the expected $16.1 million total. Through midyear, TOT is up over last year’s total, primarily bolstered by residential rentals linked with the Power Trip concert in October . Staff recommends increasing revenue expectation from both hotels ($ 250,000) and residential rentals ($700,000). A budget adjustment is reflected in the preceding General Fund Revenue

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 308 of 328 Attachment A
4 Summary of this report, raising the City’s TOT budget by $950,000 and bringing the overall TOT revenue expectation up to $16.1 million.

The following graph depicts TOT revenue received between FY 19 and FY 23 and revenue projections through FY 28. This year’s TOT receipts are expected to be more than next year’s due to Power Trip concert guest s, who came and stayed in October 2023. Future-year TOT revenue is expected to modestly grow around one percent a year as hotel and residential rental maintain their popularity.

$7.8
$5.0
$8.7
$14.8 $14.7
$16.1 $15.3 $15.4 $15.6 $15.8
FY19 20 21 22 23 24 25 26 27 FY28
Transient Occupancy Tax
(in millions)
$-
$2
$4
$6
FY23 FY24
Midyear
Comparison

c) Property Tax In-Lieu of Vehicle License Fees (VLF)
VLF revenue is the City’s fourth largest source of general -purpose revenue. In FY 05, the state legislature opted to replace local Vehicle License Fee (VLF) revenue with an equal amount of property tax revenue. Since that time, VLF revenue allotted to the City has been based on changes in both local property values and population. In recent years, the City has benefited from both increases in population and local property values . As a result, VLF revenue has correspondingly increased.

FY23 FY24
Midyear
Comparison
$9.4 $9.9 $10.3 $10.9
$11.9
$13.3 $13.9 $14.6 $15.3 $16.1
FY19 20 21 22 23 24 25 26 27 FY28
Property Tax Revenue In Lieu of VLF
(in millions)
First allocation
in February

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 309 of 328 Attachment A
5 The County of Riverside calculates the City’s VLF allocation and typically sends half in February. This year, the City’s allocation totals $13.25 million, about $750,000 more than what was expected when the budget was adopted. A budget adjustment increasing VLF revenue by $750,000 is reflected in the General Fund Revenue Section of this report. The preceding graph depicts actual receipts since FY 19 and includes revenue projections through FY 28. Future-year receipts are assumed to grow five percent a year based on the historical average, backed by expected steady increases in property values and population.

d) Property Tax
Property tax revenue is the City’s fifth largest general-purpose revenue source. Since FY 17, property tax revenue has grown, on average, six percent a year . Notwithstanding the shortage of homes for sale and the high costs of borrowing in FY 23, property tax revenue grew 13 percent last year. Tax gains experienced in FY 23 are tied to FY 22 property values, so current-year receipts are not expected to grow as much as they did last year. Nonetheless, with mortgage rates expected to decline over the next 12 months, home sales are expected to bounce back , ensuring consistent growth in future fiscal-year revenue. A budget adjustment increasing property tax revenue by $1.85 million is reflected in the General Fund Revenue Section of this report. Upon approval of that budget increase, the property tax expectation will total $12.95 million.

$8.4 $8.7 $9.4 $10.1
$11.6
$13.0 $13.6 $14.3 $15.0
$15.7
FY19 20 21 22 23 24 25 26 27 FY28
Property Tax Revenue
(in millions)
$-
$2
$4
FY23 FY24
Midyear
Comparison

The preceding graph depicts property tax revenue received since FY 19 and includes revenue projections through FY 28. Future year revenue is projected to grow five percent a year as residential and commercial construction continues to occur.

e) Utility Users’ Tax (UUT)
The local Utility Users’ Tax (UUT) rate is six percent, assessed on telephone, gas, electric, and water usage; and three percent assessed on cable television usage. UUT revenue is remitted to the City by each utility company. Between FY 16 and FY 20, UUT receipts were lethargic, slightly declining in three of those five years. In FY 21, UUT began to grow, driven by increased utility rates, new household accounts, and a resurgence of business activity following the pandemic. Gains are offset by tax exemptions offered to local primary homeowners over the age of 61.

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 310 of 328 Attachment A
6 The City’s UUT revenue expectation is currently set at $9.8 million, but UUT receipts— specifically for electricity —are trending better than anticipated. A budget adjustment increasing UUT revenue by $500,000 is reflected in the General Fund Revenue Section of this report. Upon approval, the budget for Utility Users’ Tax revenue will total $10.3 million.

The following UUT graph illustrates actual receipts through FY 23 and includes revenue projections through FY 28. Future -year UUT revenue is presumed to stabilize , generating about $10.5 million per year.

$8.0 $7.9 $8.4
$9.5 $10.2 $10.3 $10.4 $10.5 $10.6 $10.7
FY19 20 21 22 23 24 25 26 27 FY28
Utility Users' Tax
(in millions)
$1
$3
$5
FY23 FY24
Midyear
Comparison

f) Business License Tax
Business License Tax revenue is a tax imposed on all businesses transacting or advertising in the City. The tax is based on the amount of gross revenue a business generates within the City’s jurisdiction. The tax obligation is not terribly high. Most businesses remit about $100 a year, based on annual gross receipts o f $2 25,000-$250,000. Staff expects to receive $650,000 in business tax revenue this fiscal year and r eceipts through December are indicative of that outcome.

g) Property Transfer Tax
Property Transfer Tax is imposed when property is sold, assigned, transferred, or otherwise conveyed to a purchaser within the City’s jurisdiction. The tax rate is $0.275 for each $500 or fractional part thereof. Local Property Transfer Tax spiked in FY 22, totaling $979,009 due to significant post-pandemic activity and concerns over future interest rates hikes. Last year, the City received $632,877 in transfer tax revenue. This year, transfer tax is expected to total $450,000.

h) Charges for Services
Services for which the City is compensated include ambulance services, engineering services, fire inspections, school resource officers, false alarm responses, and the administration of local assessment districts. The City also expects to be reimbursed $6.5 million for services rendered in support of the Coachella Music and Art Festival, the Stagecoach Country Music F estival, and the Power Trip concert. The City contracts with

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7 several law enforcement agencies to protect local festivalgoers and is reimbursed accordingly by festival promoters.

Within this revenue category, t he City collects fees for local ambulance services . Due to federal and state reimbursement limits for Medi-Cal and Medicare patients, ambulance fees only cover a small portion of actual operational costs. Recognizing the financial burden on local ambulance providers, in 2017 the state adopted SB 523. The bill directed the California Department of Health Care Services ( DHCS) to implement a program that p rovided supplemental Medi -Cal payments to local emergency transport providers . Soon after, in 2019, AB 1705 provide d add-on increases to the associated Medi -Cal fee -for-service fee schedule. Financial benefits to Indio have been modest, but several payments from the state are still pending. This fiscal year, the Centers for Medicare and Medicaid Services approved SPA 23-0020 to continue the supplemental payment program s adopted by the state and to bolster reimbursement rates on a trial basis. Instead of receiving $339 (base rate) per claim, public providers like the City of Indio are now being reimbursed at $1,065.12 (base rate) per claim. The rate increase has generated $763,686 in new revenue for the City, but income has not yet covered program participation cost ($799,069) . The expectation is that gains will outpace costs as the program matures and becomes permanent . A budget adjustment increasing ambulance revenue by $850,000 is reflected in the General Fund Revenue Section of this report. Ambulance fees are expected to total $3.35 million at yearend and overall, Charges for Services is expected to total $12.5 million this year.

i) Other Financing Sources
This category of revenue represents funds that are collected in non -General Fund accounts and transferred into the General Fund to cover specific services. Revenue from Other Financing Sources is expected to total $4.5 million this fiscal year , due to the transfer of assessment revenue from two public-safety community facilities districts (CFD’s 2004-1 and 2004-2) that partially fund police and fire /paramedic operations. Indications are that this revenue source is on target.

j) Use of Assets
Use of Assets, also called Use of Money and Property, is a category for City revenue representing income generated through the rental, lease, sale, and investment of City resources. Within this category, the City recognize s revenue attributed to exclusive arrangements for waste disposal ($ 1.75 million), festival activities ($3.2 million), interest earning ($500,000), various facility rentals and leases ($390,896), and other utility and towing right-of-way concessions ($1.28 million). Staff recommends increa sing the revenue expectation for waste franchise fees by $420,000 in accordance with recent increases in local waste disposal fees. A budget adjustment has been included in the General Fund Revenue Summary Section of this report. Upon approval of the recommended budget adjustment, revenue within this category will total $7.54 million.

k) Licenses and Permits
License and permit revenue is collected to cover the costs of regulating various City activities such as local business activity, short-term residential rentals, building and construction, and alarm-system usage. The majority of the revenue collected in this category is associated with building and planning services. The current year’s revenue projection totals $4.17 million, but

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8 short-term rental permit revenue is outpacing expectations . The City recently adopted new residential rental standards and when the budget was established, the impact on local residential activity was uncertain. Despite tighter regulations and steeper permit fees, residential rental activity remains strong. Staff recommends increasing short-term residential rental permit revenue by $1 million, bring the total estimate up to $2 million. A budget adjustment has been included in the General Fund Revenue Summary Section of this report.

l) Fines and Forfeitures
Revenue within this category is predominantly generated from vehicle, parking, and other code enforcement fines. The current budget assumes Fine and Forfeiture revenue will total $600,000. Through mid-year, Fine and Forfeiture revenue is trending on target.

m) Miscellaneous Revenue and Reimbursements
Miscellaneous revenue encompasses funding that does not fit into any other major revenue category. The current budget assumes miscellaneous revenue will total $150,000. As of mid- year, staff does not recommend changes to this revenue budget.

n) Federal and State Reimbursements
Miscellaneous state and federal reimbursement s consist of revenue collected for peace officer standards and training (POST), various state mandates, and ground emergency medical transports (GEMT). The current budget assumes federal and state reimbursements will total $155,000. Indications are that this revenue source is on target.

C. APPROPRIATIONS FOR CONTINGENCY
Funds held in the contingency account represent current year resources that are available to cover future expenditures, potential shortfall in discretionary revenue, or other City priorities.

Spending authority is added to the contingency account by the City Council. The City Manager is granted authority to reallocate spending authority from the contingency account to other City functions as long as those reallocations line up with the policy direction given by the City Council. Funds remaining within the contingency account at yearend typically become available to bolster City reserves or fund future year projects.

When the budget was adopted, the City Council appropriated $500,000 in the City’s contingency account. As of midyear , $281,938 remain s. The City Manager reallocated $218,062 to cover various expenditure needs as indicated in the contingency table below.

Upon approval of staff’s recommendations within this report, all newly identified General Fund Revenue ($ 6.32 million) will be appropriated within the contingency account and made available to cover various operational needs described in the Department Reports Section of this report (Section F) and listed in the table. Specifically, staff recommends reallocating $6.45 million from the contingency account for various priorities: emergency preparedness grant match ($16,414), to staff and produce an on-site activation at the Stagecoach Festival ($150,000), police bullet -proof vests ($11,500), fire department appliances and gym equipment ($65,000), Building and Safety inspection services ($20,000), refuse disposal ($180,000), additional road maintenance ($4 million), Downtown stage restroom ($360,000), arts center renovations ($1 million), and internet fiber-optic improvements for disadvantaged communities ($650,000). More information on each of these recommended drawdowns can

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9 be found in the FY 23/24 Department Reports section of this report, on the pages referenced in the table below.

Appropriations for Contingency Increase Decrease Balance Beginning balance as of 07/01/23: $500,000
Non-Departmental—storage container ($4,548) $495,452
Human Resources—intern funding ($30,000) $465,452
Community Services—farmer’s market ($5,000) $460,452
Economic Development—downtown bldg. renovations ($150,000) $310,452 Communications & Marketing—Hurricane Hilary ($13,514) $296,938 Non-Departmental—Hwy 111 bldg. demolition ($15,000) $281,938 Remaining balance $281,938
Recommended Midyear Adjustments:

New General Fund revenue (page 1) $6,320,000 $6,601,938 Emergency Preparedness—grant match (page 15) ($16,414) $6,585,524 Communications & Marketing—Stagecoach (page 15) ($150,000) $6,435,524 Police Department—bullet-proof vests (page 16) ($11,500) $6,424,024 Fire Department—new station appliances (page 17) ($70,000) $6,354,024 Building & Safety—inspection services (page 18) ($20,000) $6,334,024 Public Works—refuse disposal services (page 18) ($180,000) $6,154,024 Public Works—road repair and maintenance (page 19) ($4,000,000) $2,154,024 Public Works –Downtown stage restroom (page 19) ($360,000) $1,794,024 Buildings & Grounds—arts center renovations (page 20) ($1,000,000) $794,024 Buildings & Grounds—CV Sync fiber optics (page 20) ($650,000) $144,024 Unobligated Balance $144,024

D. GENERAL FUND - MULTIPLE-YEAR PROJECTION
The multi-year budget projection is a planning tool that forecasts General Fund revenue as well as future -year expenses for five years . At best, the multi -year projection infers that spending will not exceed revenue. At worst, the model suggests that not all long -term priorities can be funded. The model reflects po ssible budget surpluses as well as po tential budget deficits, allowing for advance planning. The model incorporates revenue assumptions consistent with revenue projections provided in the General Fund Revenue Section in this report (Section A) . The model also presumes that appropriations approved by the City Council in any one year roll forward into the next unless appropriated for a one-time purpose.

The model has been updated with expenditure projections consistent with the assumptions outlined below. Understanding the model’s assumptions is key to understanding the model’s outcomes, particularly relating to the Measure X set aside. The Measure X set aside represents funds earmarked for projects that have not yet been determined by the City Council.

In general, the model indicates that the City should have sufficient resources next year to cover expected costs. Revenue is expected to exceed expenses by $ 8.7 million, taking into consideration $7.88 million in available Measure X sales tax revenue (Measure X set aside), $500,000 appropriated for contingencies, and a $330,000 budget surplus. Looking ahead, expenditures begin to outpace revenue by $1.62 million in FY 25/26, $3.46 million in FY 26/27, and $4.44 million in FY 27/28. Given the number of budg et-balancing options available, the

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10 City Council’s proactive approach to keeping costs within budget, the potential for better-than- expected revenue growth, and the relatively small size of the deficit, balancing the budget is not expected to be arduous. However, balancing the budget could prove challenging if the City Council remains steadfast in its resolve to not use Measure X resources for ongoing operations. As budget challenges near, it is staff’s responsibility to suggest reduc tions in spendings, identify operational efficiencies, and pinpoint new revenue streams before recommending budget cuts or drawing down reserves.

General Fund
Multi-year Projection
(in millions)
Original
Budget
23/24
Adjusted
Budget
23/24

24/25

25/26

26/27

27/28

RESOURCES
a) Revenue 115.34 121.66 122.71 125.26 127.81 130.56

USES
b) Salary & Benefits 34.25 34.25 37.00 39.22 41.18 42.42 c) General Operations 37.93 37.93 38.69 39.46 40.25 41.06 d) Fire & Ambulance Services 21.12 21.19 22.67 23.80 24.99 26.24 e) One-time Projects 26.00 32.39 0 0 0 0 f) General Fund Contingency 0.50 0.14 0.50 0.50 0.50 0.50 g) Vehicles & Equipment 1.75 1.75 0.60 0.60 0.65 0.65 h) General Park Maint. & Ops 3.41 3.41 4.01 4.02 4.02 4.03 i) Emergency Reserve (Policy) 0 0 0.41 0.38 0.38 0.41 j) Measure X Retiree Health Care 0 0 1.50 1.50 1.50 1.50 k) Measure X Road Rehabilitation 5.80 5.80 5.00 5.00 5.00 5.00 l) Measure X Debt Service 4.12 4.12 4.12 7.88 8.13 8.13 m) Measure X Project Set Aside 0 0 7.88 4.52 4.67 5.06 Subtotal Uses 134.88 140.98 122.38 126.88 131.27 135.00 Fund Balance Increase/(Decrease) (19.54) (19.32) 0.33 ( 1.62) ( 3.46) ( 4.44)

a) Revenue
General Fund revenue is expected to grow about $2.5 million a year (2-3%) as detailed in the revenue section of this report (Section A). FY 23/24 revenue was uniquely bolstered by the October Power Trip concert that generated an extra $800,000. City revenue is heavily reliant on the economy and consumer -spending trends, which can change abruptly, generating unexpected gains, as well as unplanned losses. Based on today’s economic indicators and the political climate, the City’s five-year revenue forecast is conservatively optimistic.

b) Salary and Benefits
Salary and benefit costs include wages, healthcare, and overtime costs for 293 full -time employees, including 81 sworn police officers. Annual merit increases and retirement costs— passed to the City from CalPERS—typically raise costs about $1 million a year. This year, the City agreed to various wage enhancements for police officers, including a four percent cost of living adjustment (COLA). The three-year agreement includes a three percent COLA next year for officers and a four percent COLA for police supervisors , followed by a four percent COLA for police supervisors and a more modest COLA for front line officers. The model incorporates similar wage increases for other labor groups.

Projected Figures
x x

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11 c) General Operations
General Operations embodies operational budgets for all General Fund departments .

General Operations is assumed to increase two percent a year to cover the growing cost of various professional services, insurance, and materials and supplies.

d) Fire and Ambulance Services
The City contracts with the County of Riverside for fire and ambulance services. The County in turn contracts with the state (CalFire). Changes to the labor agreement between CalFire staff and the state are expected to raise City-service costs significantly over the coming years.

Retroactive cost of living allowances, changes in the number of normal weekly working hours, and longevity and education pay incentives are the main drivers. As County Fire transitions from a 72-hour workweek to 66 hours and eventually to 56 hours, more staff will be needed to properly staff local fire engines and ambulances. Future-year contract costs are expected to increase annually between $1-1.5 million a year.

e) One-time Projects
This fiscal year, the City Council committed $ 26 million to fund various infrastructure improvements and one-time priority projects. Those funds supplement an ambitious $114.5 million capital improvement plan. In addition, as recommended in this report, various budgets will be increased ( $6.39 million ) for needs described in the Department Reports section (Section F) of this report. The $26 million was budgeted this year for the following projects:

• Jackson St. Freeway Interchange ($10 million)
• Golf Course Clubhouse & Post Office ($4.5 million)
• Downtown Property Acquisitions ($2.9 million)
• Downtown Stage, partial funding ($1.8 million)
• Ave. 44 Bridge at the wash ($1.05 million)
• Indio Sports Park Phases 1&2, partial funding ($1.3 million) • Miles Ave. Skate Park ($1 million)
• Pickleball Courts ($750,000)
• Annexation ($700,000)
• PD Headquarters Renovations ($675,000)
• John Nobles Park ($600,000)
• Downtown Stage, partial funding ($369,923)
• Housing Element Implementation ($100,000)
• Appraisals and Architect Services ($80,000)
• Ambulance Gurneys ($76,000)
• Sphere of Influence ($50,000)
• Library/City Hall Fixtures, partial funding ($9,919)
• Flock Cameras ($9,250)

Looking ahead, the use of one-time General Fund resources will be limited to annual budget savings from the year before, if any. Therefore, no future funding is reflected in the model for future one-time projects.

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12 f) General Fund Contingency
Funds held in the General Fund contingency account represent the availability of current-year resources that have not been programed for a particular City priority. Funds held in the account are at the City Council’s, as well as the City Manager’s, discretion to use on any unforeseen City priority. Unused contingency funds at the end if the fiscal year become available for future-year use. In the model, $500,000 is appropriated annually for contingency.

g) Vehicles and Equipment
The City traditionally appropriates $500,000 a year to replace dilapidated vehicles and equipment, including old street sweepers, utility trucks, ambulances, and police cars. In addition to the $500,000 this fiscal year, the City Council appropriated funds to cover the City’s share of a new fire ladder truck ($750,000) and an additional $500,000 for a new street sweeper. Next year, staff recommends increasing the budget for vehicles and equipment to $600,000 to keep up with the cost of inflation.

h) General Park Maintenance
The City appropriate d $3.41 million this year to cover the cost of park and parkway maintenance. Park appropriations cover the cost of landscape, water, and equipment repairs.

This year, $250,000 was added to the park budget to cover maintenance cost for the City’s newest park, the Indio Sports Park. However, the Indio Sports Park project has been delayed, temporarily deferring the cost of maintenance. Additionally, the City recently entered into a use and activation agreement with the Desert Recreation District to manage park spaces citywide. Next year’s Park budget has been increased $660,000 to cover the cost of this activation agreement with the Desert Recreation District.

i) Emergency Reserve
The Emergency Reserve, also known as the reserve for economic uncertainty, represent s resources that are officially set aside by the City Council for emergencies. The funds can be spent to cover the cost of an urgent City priority, but generally remain untouched. City policy stipulates that for financial stability, the emergency reserve balance should equal or exceed fifteen percent of all ongoing General Fund revenue. Considering policy guidelines and expected revenue increases over the projected five-year period, the model assumes funding will be allocated to the emergency reserve to maintain the minimum fifteen-percent threshold.

j) Measure X Retiree Health Care Set Aside
The City offers varying levels of lifetime health care benefits to employees that retire from the City. Bi-annually, the City is obligated to quantify the cost of that benefit for both existing and future retirees. The latest valuation sets the net liability at $51.8 million. To mitigate the growing financial impact, the City is working with its labor unions to sunset this benefit.

Whether the benefit ends for future employees or not, the City needs to set aside funds to cover the cost of this obligation. To date, only a small amount ($2.2 million) has been set aside specifically for retiree health care. Starting next year, staff recommends committing $1.5 million a year from Measure X sales tax resources into the retiree health care trust account , until such time that the liability is at least 50 percent funded.

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13 k) Measure X Road Rehabilitation
The City Council is very mindful of how Measure X sales tax resources are spent. Measure X expenditures a re vetted by a citizens financial committee to make sure they line with the approved ballot measure. Nothing in the measure precludes the Council from spending the funds on ongoing costs. Nonetheless, besides covering bond debt, the majority of the funds have been used to cover expenses that do obligate or encumber future -year resources.

Besides debt, the City Council has directed staff to dedicate $4-5 million annually to local road maintenance. In accordance with the direction, the multi-year model earmarks $5 million for annual road rehabilitation.

l) Measure X Debt Service
The City Council acutely oversees the use of Measure X sales tax resources, sparingly dedicating the funds to ongoing obligations. The one exception is the use of Measure X resources to cover bond debt. Measure X resources are used to cover annual debt payments for bonds issued in 2017 to cover Jefferson Interchange obligations ($1.2 million) and annual debt payments for bonds issued in 2022 to cover public facility construction costs for six new public facilities ($2.9 million): city hall, public safety b uilding, library, fire station, and a 911 dispatch facility. Jefferson bond payments are relatively steady and will end in 2037. Public facility bond payments are ramping up as construction commences and will level off at about $7 million a year through 2038, before dropping to about $5.7 million through 2053.

m) Measure X Set Aside
The Measure X set aside represents the balance of Measure X funds available for any City Council priority after reducing the available balance to cover a limited list City Council approved uses: retiree health care ($1.5 million), road maintenance ($5 million), and annual debt payments ($4.12 mi llion). The beginning Measure X balance is based on projected transaction and use tax revenue built into that year’s revenue budget. The budget takes into consideration historical revenue trends, present resident spending patterns, and future factors that could positively or negatively affect the local economy. The City Council has directed staff to identify and segregate Measure X funds from other expenditures.

At the beginning of each fiscal year, when the City Council sets and adopts the future -year budget, funds in the Measure X Set Aside are utilized, typically to cover a capital project or another one-time operational need. If the funds are not used in the year they are received, the remaining balance rolls forward to be used the following year.

Fund Balance Increase/(Decrease)
Changes in fund balance represent the projected difference between budgeted expenditures and estimated revenue. A decrease in fund balance is sometimes expected because the City is using resources received in a prior year to cover the cost of current-year projects, which is the case in FY 2 3/24. Future-year increases in fund balance represent more revenue than planned expenditures, while decreases in fund balance foreshadow expenses that are more than projected revenue.

The multi-year projection indicates the likelihood of modest budget surplus next fiscal year, followed by the need to reduce expenditures in fiscal year’s 25/26 through 27/28 if the use of reserves—funds set aside for emergencies—is not the City Council’s preference. Projected

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14 shortfalls are small and revenue growth could be better than predicted. In addition, the model administratively recognizes a Measure X set aside, which could be used to cover any temporary budget shortfalls.

E. GENERAL FUND - FUND BALANCE SUMMARY
Fund balance represents City assets in excess of its liabilities. Fund balance effectively reflects the City’s net financial position in its most significant operating fund, the General Fund.

Fund balance changes each year based on gains (under-spending and revenue surpluses) and losses (overspending and revenue shortfalls). For consistent government -financial reporting across the United States, fund balance is categorized into five categories, as defined and utilized below.

General Fund
Fund Balance
(in millions)
Ending
Fund
Balance
FY 20/21
Ending
Fund
Balance
FY 21/22
Ending
Fund
Balance
FY 22/23
Ending*
Fund
Balance
FY 23/24
NON-SPENDABLE 8.65 8.62 8.79 8.68
RESTRICTED 1.21 1.24 2.39 2.42
COMMITTED (by Council) 12.00 15.00 17.00 18.00
ASSIGNED (by City Mgr) 12.08 44.18 22.69 1.70
UNASSIGNED 19.80 14.27 14.90 12.00
Total 53.74 83.31 65.77 42.80
*Based on FY 23/24 budget projections

Non-spendable fund balance represents resources that cannot be spent because they are not in a spendable form. At the end of FY 22/23, the City had $8.71 million in non-spendable fund balance , representing prepaid expenditures ($ 182,095), land held for resale ($5 .34 million), and a note receivable ($3. 26 million). Non -spendable fund balance is expected to decrease by the end of the fiscal year mostly due to payments on the outstanding note.

Restricted fund balance represents resources that are subject to external enforceable legal constraints. The funds captured in this category are only expendable on City pension obligations and are held in an IRS Section 115 trust account.

Committed fund balance represents resources that are officially set aside by the City Council for a “rainy day” emergency. The portion of fund balance categorized as “committed” represents funds put aside to mitigate the financial effects of a severe economic downturn, a natural disaster, or other unforeseeable calamity. The funds can also be spent to cover the cost of an urgent City priority as directed by the City Council . At the end of FY 22/23, the City’s emergency reserve totaled $17 million. City policy stipulates that for financial stability the emergency reserve should equal or exceed 15 percent of ongoing General Fund revenue.

Assigned fund balance represents resources that are earmarked by City administration for a justifiable operational purpose. At the end of FY 22/23, $22.69 million was assigned by the City Manager to cover various future-year projects and known Council priorities. The funding for these priorities is sourced from prior-year savings. Most of the funds assigned in FY 22/23 have been appropriated for use in FY 23/24 and will be spent by the end of the fiscal year.

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15 Unassigned fund balance represents resources that have not been categorized as non - spendable, restricted, committed, or assigned.

F. FY 23/24 MID-YEAR DEPARTMENT BUDGET REPORTS
This section of the report is used to communicate departmental points of interest that have the potential to impact City finances. Narratives in this section convey prospective variances from the budget and, in significant cases, include requests to modify the budget. Department operations that are predominantly consistent with the budget are not necessarily referenced.

1. ADMINISTRATION
a) Emergency Preparedness
Emergency Preparedness staff are working on a comprehensive emergency plan to ensure that critical C ity functions continue during an unforeseen emergenc y. Jacob Green & Associates was hired to analyze the City’s readiness status and to prepare an operations procedure to be used during an emergency. The project is estimated to cost $37,600. The City received a $21,186 grant from Riverside County to offset some of the cost. Staff requests a budget adjustment to account for this project and requests $16,414 from contingency to cover the balance not covered by the grant.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations and estimated revenue as follows:

Increase appropriations:
1011185-521064 Other Professional & Tech Fees $37,600

Increase estimated revenue:
101-402220 Misc. Gov’t Agencies $21,186

Decrease appropriations:
1011199-591003 Appropriations for Contingency $16,414

2. ECONOMIC DEVELOPMENT
a) Communication & Marketing
To enhance City brand visibility, disseminate exclusive merchandise, and offer a unique experience, staff endeavors to establish a strong promotional presence at the 2024 Stagecoach Music Festival. The City has the distinctive opportunity to have an on -site activation merchandise marquee at the 2024 Stagecoach Music Festival. The goal is to actively engage as a participant in the festival, ensuring that attendees are well -informed about the City's role as the vibrant home to these major music events. The festival promoter (Goldenvoice) has granted the City the opportunity to join other merchandise vendors and interact with guest who are visiting from around the world. This pop -up also provides an opportunity to promote the City’s brand.

In order to ensure the highest quality presentation and quality of goods, staff recommends contracting with the current professional festival production company, Revolution Marketing, to ensure the City’s exhibition meets quality standard and is consistent

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16 with the festival motif. Staff requests $150,000 from the City’s contingency account to cover costs of hiring an event production agency.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
1011174-521064 Professional & Technical Services $150,000

Decrease appropriations:
1011199-591003 Appropriations for Contingency $150,000

3. POLICE DEPARTMENT
Ballistic Vests
The City provides ballistic vests to its police officers. The useful life of a ballistic vest is about five years, after which the vest’s protective properties begin to diminish. A large number of ballistic vest s need replacing this fiscal year . Anticipating the need to replace vest s, the department sought and received a grant that will cover half of the purchase cost. Staff requests budget adjustments, authorizing the purchase of $23,000 worth of new vests and recognizing $11,500 in grant funding to cover half of the expense.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations and estimated revenue as follows:

Increase appropriations:
1014211-531060 Small Tools & Minor Equipment $23,000

Increase estimated revenue:
101-402315 Misc. Federal Grant $11,500

Decrease appropriations:
1011199-591003 Appropriations for Contingency $11,500

Radio Installation Services
Last year, the Police Department entered into a $186,289 agreement with Dailey and Wells Communications, Inc. for the purchase and installation of new handheld and fixed -vehicle radios. Installation was unexpectedly delayed and not performed last year. Staff requests a budget adjustment accounting for the purchase and the installation of new public safety radios this fiscal year.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
1014215-555005 Machinery & Equipment $186,289

Expected offset:
101-304010 Prior Year Reserve for Encumbrance $186,289

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17 Police Service Animals
Donations are regularly made to the City’s K9 program . The program aids in the acquisition and upkeep of police service animals. Staff requests approval to use K9 donations to appropriate two new service animals and cover the costs of various support-animal supplies.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
214-531006 Animal Care Supplies $25,000

Expected offset:
214-305005 Restricted Fund Balance $25,000

4. FIRE DEPARTMENT
The City’s newest replacement fire station is almost ready for move i n. City and Fire Department staff evaluated equipment and appliances in the old station to determine what should be moved over to the new station and what should be replaced. Staff recommend s purchasing a new industrial washer-extractor ($16,300), a new industrial dryer ($7,900), two front load washers ($2,500), two front-load electric driers ($2,500), twelve new living room chairs ($8,300), four new mattresses ($3,300), and new gym equipment ($29,200) for a total of $70,000. Specialized washing and drying appliances remove toxins from firefighter clothing and new gym equipment ensures that each firefighter fulfills their required on -duty daily physical training requirements. Staff requests a budget adjustment providing $70,000 in additional spending authority to purchase appliances and new gym equipment for fire department personnel.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
1015131-555007 Furniture and Fixtures $70,000

Decrease appropriations:
1011199-591003 Appropriations for Contingency $70,000

5. COMMUNITY DEVELOPMENT
a) Planning
As of midyear, the Planning Department's expenditure patterns are generally on track ; however, a $407,500 budget adjustment is needed to cover previously approved contractual obligations. Funds for these contractual obligations were appropriated last year, but d ue to service delays, expenditure authority needs to be incorporated into this year’s budget. Staff requests a budget adjust accounting for these previously approved planning service agreements.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

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18 Increase appropriations:
1012182-521064 Professional and Technical Services $407,500

Expected Offset:
101-304010 Prior Year Reserve for Encumbrance $407,500

b) Building and Safety
As of midyear, the Building and Safety Department's expenditure pattern is predominantly on course; however, the need for external building and safety inspection services is trending higher than expected. If the current demand for inspection services continues through fiscal year end , it could produce a $30,000 budget overrun . The department anticipates that $10,000 of th e expected overrun can be absorbed into the existing budget and covered by other operations savings. To accommodate the overrun, staff requests a budget adjustment providing an additional $20,000 for contracted inspection services.

In addition, the department is seeking a budget increase of $11,200 to cover previously approved contract obligations. Funds for this obligation were appropriated last year, but the project was not finished during the year. To account for the current year expenditure impact, staff requests a budget adjust to cover the costs of contract-rollover building and safety projects.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
1012130-521076 Plan Check Services $31,200

Decrease appropriations:
1011199-591003 Appropriations for Contingency $20,000

Expected Offset:
101-304010 Prior Year Reserve for Encumbrance $11,200

6. PUBLIC WORKS
Refuse Services
Public Works design, construct, improve and maintain public infrastructure. The department includes budgets for Engineering, Street Maintenance, and Parks and Parkways. Overall, the Public Works Department budget is on track. However, due to an increase in refuse disposal fees, staff requests a $180,000 budget increase utilizing funds held in the City’s contingency account to cover the extra cost.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
1013141-523039 Refuse Disposal $180,000

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 323 of 328 Attachment A
19 Decrease appropriations:
1011190-591003 Appropriations for Contingency $180,000

Road Maintenance
In June 2023, the City embarked on a robust p avement management road rehabilitation project, by inviting bids for grind and overlay work. In August, the City awarded a contract to ATP General Engineering Contractors, totaling $9,034,730, to upgrade approximately 4.3 million square feet of roadway surface. Project work is going well, but the scope does not cover work at a few essential road sections. Staff requests funding and approval to increase the contract with ATP General Engineering Contractors, by $4 million to compete additional grind and overlay improvements at:

• Golf Center Parkway (from I-10 Freeway to Avenue 42)
• Avenue 42 (from Monroe Street to Golf Center Parkway) • Monroe Street (0.25 mile North of Avenue 42)
• Shields Road (from Avenue 48 to Highway 111)
• Avenue 49 (from Madison Street to Monroe Street)

This additional work will rehabilitate approximately 1.9 million square feet of roadway surface.

Recommended Motion: That the City Council approve a $4 million contract increase with ATP General Engineering Contractors for local road upgrades and direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
1013141-523035 Repair & Maintenance Streets and Roads $4,000,000

Decrease appropriations:
1011190-591003 Appropriations for Contingency $4,000,000

Downtown Stage – “Center Stage”
In November 2022, the City entered into a $1.75 million construction contract to build an amphitheater downtown. The project has come to be known as ”Center Stage”. When the project was bid, cost estimates for an adjoining restroom and a secure storage space seemed unreasonably high. Staff decided to remove the restroom and storage unit from the project and seek better independent pricing options. After reviewing available options, staff recommends awarding the restroom and storage project to the contrac tor who is currently constructing the greater stage project, at a cost of $616,629. Some of the costs can be absorbed into the existing construction project budget. Staff request a $ 360,000 budget adjustment, authorizing and accounting for the construction of a restroom and storage space at ”Center Stage.”

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations and estimated revenue as follows:

Increase appropriations:
1011190-581003 Operating Transfers Out $360,000

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 324 of 328 Attachment A
20 Decrease appropriations:
1011190-591003 Appropriations for Contingency $360,000

Increase appropriations:
300-554002 Improvements Non-Building $360,000

Increase estimated revenue:
300-408305 Operating Transfers In $360,000

Buildings & Grounds
In order to activate, enliven, and promote the public arts center, significant interior and exterior improvements need to be made to the arts center building. In order to entice a broader variety of artists and to bring the facility up to new downtown music, art, and cultural standards, staff requests $1 million in funding for renovations. On the exterior, enhancements will include new signage, roofing, and paint. On the interior, updated fire-protection equipment and various structural repairs will be completed. Staff requests a budget adjustment utilizing funds in the City’s contingency account to cover the costs of various arts center building improvements.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
1011190-581003 Operating Transfers Out $1,000,000

Decrease appropriations:
1011190-591003 Appropriations for Contingency $1,000,000

Increase appropriations:
604-553005 Buildings $1,000,000

Increase estimated revenue:
604-408305 Operating Transfer In $1,000,000

CV Sync
In October, the City entered into a $900,000 reimbursement agreement with the Coachella Valley Association of Governments (CVAG) to install innerduct as part of the CV Sync project taking place in Indio. Innerduct facilitates the placement of fiber optic cables in underground conduit. The plan was to install the conduit now and seek other funding sources to purchase and run the fiber optic cable later, but because CVAG is already working with a vendor to install cable, it is more cost effective to piggyback on CVAG’s contract and have the City’s cable installed simultaneously. Staff requests an additional $650,000 to purchase and run the fiber optic cable as part of the master project.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations and estimated revenue as follows:

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 325 of 328 Attachment A
21 Increase appropriations:
1011190-581003 Operating Transfers Out $650,000

Decrease appropriations:
1011190-591003 Appropriations for Contingency $650,000

Increase appropriations:
300-523006 Construction Services $650,000

Increase estimated revenue:
300-408305 Operating Transfers In $650,000

7. INFORMATION TECHNOLOGY
Last year, t he City entered into an agreement with CDW Government to purchase network switches for the new public safety campus. The switches were delayed and received this fiscal year. Staff requests a budget adjustment to account for the expense in the current fiscal year.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
602-555011 Computer Equipment $145,983

Expected offset:
602-305005 Unrestricted Fund Balance $145,983

The IT Department is working on a server replacement project , which includes computer upgrades for the Indio Water Authority (IWA). A fter further review , staff estimates that upgrades for IWA will cost an additional $100,000. Staff requests a budget adjustment to account for the additional expenditure and the subsequent reimbursement from the IWA for this project.

Recommended Motion: That the City Council direct the Finance Department to adjust appropriations and estimated revenue as follows:

Increase appropriations:
602-555011 Computer Equipment $100,000

Increase estimated revenue:
602-406805 Internal Service Charges $100,000

8. INDIO WATER AUTHORITY (IWA)
The IWA has been awarded approximately $3.4 million through various regional grant applications and has until FY 25/26 to spend the funds. This fiscal year, staff suggest spending $920,000 to replace old water meters and to complete drought tolerant turf replacements. Unutilized grant funds will be spent in a future fiscal year. Staff requests a budget adjustment recognizing $920,000 in grant funds and increasing current -year

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 326 of 328 Attachment A
22 expenditure authority by $800,000.

Recommended Motion: That the City Council/IWA Board direct the Finance Department to adjust appropriations and estimated revenue as follows:

Increase appropriations:
8106713-531075 Water Meters $800,000

Increase revenue:
810-402135 Miscellaneous State Grants $920,000

Expected Offset:
810-305005 Unassigned Unrestricted Retained Earnings $120,000

IWA is collaborating with the Coachella Valley Water District (CVWD) and the Valley Sanitary District (VSD) to complete emergency infrastructure repairs due to Storm Hilary. Repair costs will eventually be reimbursed by the Federal Emergency Management Agency (FEMA) but in the interim, most of the cost will be paid from the Authority’s emergency reserve. IWA will receive approximately $150,000 from VSD to cover some of the repair cost. A budget adjustment is requested to account for emergency repair expenses, funding from VSD, and the use of reserve funds.

Additionally, IWA recently obtained bids for the Westward Ho Drive storm water channel crossing repairs. Borden Excavating, Inc. was the most responsive cost-effective bidder for that project . IWA request s approval to enter into a $ 1.38 million contract with Borden Excavating to accommodate emergency repairs discussed above.

Recommended Motion: That the City Council/IWA Board approve a $ 1,379,674 million contract with Borden Excavating, Inc. and direct the Finance Department to adjust appropriations and estimated revenue as follows:

Increase appropriations:
812-552003 Improvements - Infrastructure $1,379,674

Increase estimated revenue:
812-408305 Operating Transfers In $1,379,674

Increase in appropriations:
810-581003 Operating Transfers Out $1,379,674

Expected Offset:
810-305030 Emergency Repair Reserve $1,229,674

Increase estimated revenue:
810-407325 Miscellaneous Reimbursements $150,000

The IWA forecasts expenditure overruns in three divisions totaling $480,000. The IT division is working on a n unanticipated $100,000 server replacement project. The Water Production Division anticipates a $290,000 budget overrun to cover unanticipated well repair, well

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 327 of 328 Attachment A
23 maintenance, and lab testing. The Engineering division anticipates a $90,000 budget overrun to cover the cost of an unplanned permit payment to the California Water Board’s Division of Drinking Water. Staff requests a budget adjustment utilizing retaining earning s to cover the cost of these necessary projects.

Recommended Motion: That the City Council/IWA Board direct the Finance Department to adjust appropriations as follows:

Increase appropriations:
8106715-571007 ISF – Information Technology (IT) $100,000 8106712-523015 Repairs and Maintenance Services 250,000 8106712-531009 Chemical Lab Services and Supplies 40,000 8106716-521068 Other Government Agency Services 90,000
Total $480,000
Expected Offset:
810-305005 Unrestricted Retained Earnings $480,000

Fiscal Year 2023-24 Mid-year Budget Report (Rob Rockwell, Assistant City... Page 328 of 328