Indio City Council
March 5, 2025

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BUDGETARY CONTROL
The City Council appropriates these funds annually during the formal budget process to ensure fiscal accountability and compliance with legal and policy guidelines. Budgetary control is retained at the fund level or at the budget unit level for General Fund departments. Department heads monitor their respective revenues and expenditures throughout the year-at least monthly-reporting issues, if any, to the city manager and finance director. The Finance Department preserves appropriate accounting practices and retains fiscal oversight responsibility. All supplemental appropriations that increase spending authority are submitted to the city council for approval.

RELEVANT FINANCIAL POLICIES
The City continues to act in accordance with the Financial and Budget Management Policy adopted in 2010, the Fund Balance Policy adopted in 2013, a Continuing Disclosure Compliance Policy adopted in 2016, and a Debt Management Policy adopted in 2017. These policies ensure consistent and professional conduct in all fiscal matters by requiring sound fiscal management through the establishment of strategies in the areas of accounting, financial planning, budgeting, revenue projection, fees, reserves (fund balance), debt, and cash flow.

LONG-TERM FINANCIAL PLANNING
The City’s long-term financial planning approach involves a comprehensive and balanced strategy that considers various aspects of public finance. This typically includes setting clear financial goals, creating a budget, building an emergency fund, investing in a diversi fied portfolio aligned with the City’s low-risk tolerance, managing debt wisely, and regularly reviewing and adjusting the financial plan. The City strives to be flexible, able to react to economic fluctuations and shifts in City Council spending priorities. The economic well-being of the City is in fluenced by various factors, re flecting the City’s diverse economic landscape; nonetheless, the City focuses on the following five economic drivers when drafting and evaluating long-term financial plans:

1. Property Taxes and Real Estate Values: Property taxes are a significant revenue source for the City . Fluctuations in real estate values directly impact property tax revenues, which in turn affects the City’s budgetary capabilities. Housing market trends, property assessments, and development activities contribute to this economic driver.

2. Sales Tax Revenue: The City relies on sales ta x revenue generated from retail transactions within its jurisdiction. Economic conditions, consumer spending patterns, and the success of local businesses influence sales tax revenues. When th e local commercial and business sector thrive, the City generally experiences positive economic impacts.

3. State Funding and Grants: The City receives a po rtion of its funding from the state and other local governments. Changes in state budget allocations, grant programs, and policies directly affect the financial health of the City. Economic downturns can lead to reductions in state funding, impacting local services and infrastructure projects.

4. Economic Development and Business Climate: The overall economic health of the City is closely tied to its business climate and the success of local industries. The City fosters economic development to attract new busine ss and create local job opportunities.

Economic growth within a community contributes to increased tax revenues and improved public services.

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5. Pension Liabilities and Employee Benefits: The financial obligations related to pensions and employee benefits have and continue to substantially impact the City’s budget. The City recognizes that managing pension liabilities, healthcare costs, and other employee-related expenses is critical for long-term fiscal sustainability.

6. It’s important to note that local economic impacts can also be influenced by factors such as population growth, infrastructure investme nts, education systems, and environmental considerations. The interconnected nature of these drivers underscores the complexity of managing the City’s economic health. Sound financial planning, strategic economic development initiatives, and adaptability to changing economic conditions are crucial for resilience and success.

ECONOMIC CONDITION AND OUTLOOK

Indio is a vibrant and economically thriving city that has experienced remarkable revenue growth in recent years despite the recent global pandemic. As the pandemic unfolded, the City took decisive measures to prioritize essential services, support local businesses, and protect public health. With a conservative spending strategy, the City carefully managed its budget, avoided unnecessary expenditures and maintained a financial buffer for unforeseen circumstances. As the City regained economic momentum, the pause on infrastructure projects was lifted, and the City found itself in a unique position to invest signi ficantly in its future. Conservative spending during the pandemic created the fiscal space necessary for a bold and transformative move. The City has now embarked on a strategic and well-funded infrastructure initiative to upgrade roads, revitalize public spaces, and modernize technology infrastructure. In the ad opted FY 2023-24 budget, the City committed $69 million in General Fund savings and $40 million in bond proceeds to fund a robust $154.5 million capital improvement plan. The City has become a beacon of progress, attracting new businesses and r e s i d e n t s a l i k e . H o w e v e r , t h e C i t y i s f a c i n g c h a l l e n g e s a s s o c i a t e d w i t h r i s i n g s a l a r y c o s t s , fire contract expenses, and an upward trajectory in pension costs.

The City is witnessing an increase in salary costs, primarily due to a competitive labor market and the need to attract and retain skilled professionals. A comprehensive analysis of the salary structure and benchmarking against similar cities will be crucial to ensure fair compensation while maintaining fiscal responsibility.

In addition, in flation is driving up the cost of living, prompting labor unions to seek wage increases that maintain employees’ purchasing power and retain their standar d of living in the f ace of rising prices.

All local staffed firefighters and paramedics are employees of the California Department of Forestry and Fire Protection, who have been hired by the City through a contract with the County of Riverside.

Fire contract costs, driven by state-level labor negotiations, are on the rise, straining the City’s budget. Exploring cost-sharing opportunities and opti mizing resource allocation will be essential to manage these expenses in the future.

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The City continues to grapple with escalating pens ion costs, a challenge faced by many California municipalities. In July, the California Public Employees’ Retirement System (CalPERS) announced an investment return rate of 9.3% for the 2023-24 fiscal year outpacing the forecasted return rate of

6.8%. Addressing rising pension costs requires a combination of strategies and collaboration with various employee unions. The City is mindful of the ne ed to balance its ability to fund cost of living allowances for its employees with its ability to fund the long-term financial impacts of the resulting pension liability.

While the current challenges pose financial hurdles, the City remains well-positioned for continued economic prosperity. The City’s diversi fied revenue streams, coupled with strategic financial management, will contribute to overcoming th e short-term challenges and ensure long-term fiscal resilience. Recognizing financial pressures in the form of rising salary, fire contract costs, and pension costs allows the City to take proactive measures such as budgetary revisions, collaborative union negotiations, and pension system reforms to pave the way for sustained economic growth.

City leadership understands that navigating these challenges will determine the City’s resilience and prosperity in the years to come.

MAJOR INITIATIVES FOR THE FUTURE

Safety for our residents is paramount, and after two years of construction, the ribbon cutting ceremony was held on November 20, 2024 for the opening of a cutting-edge Public Safety Campus.

The $50 million campus houses the latest technology and resources for our dedicated first responders, ensuring a swift and coordinated response to emergencies for our residents. The Public Safety Campus consists of three separate buildings totaling approximately 43,000 sq. ft.:
 Indio Fire Station Number 1, rebuild, totaling approximately 13,500 sq. ft.  New 9-1-1 dispatch center, totaling approximately 7,000 sq. ft.  New public safety service building totaling approximately 22,000 sq. ft.

Discussions and plans are underway to strategize for phase 2 of the Public Safety Campus for the construction of Police Administration building. During the 2024/25 budget process $5 million of Measure X funds have been set-aside.

Construction is well underway for the new Civic Center Campus that will utilize modern architectural designs, including a mid-century modern color palette that complements the City’s recently updated branding. This campus includes a brand new 38,000 sq. ft. 3-story City Hall and an 8,000 sq. ft. 1- story City Library. These buildings are stitched together with a paved public plaza and beautiful assortment of desert landscaping. Completion is anticipated for late 2025.

The City is active in construction throughout th e city beyond the campuses. Other major projects include the construction of the 38-acre sports park, various a ffordable housing developments, downtown drainage project, Jackson Street Shadowalk project, new clubhouse at The Lights and Indio Golf course. Branding and beauti fication e fforts continue along with complimenting community events that highlight the Indio downtown corridor which include Indio International T amale Festival, Movie Nights at Center Stage, Indio BBQ Festival, Food Truck Fridays, and Second Saturdays.

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Overall, City resources are stable yet trending to see a small decline leading into the 2024/2025 fiscal year. To mitigate any financial impacts on operations, the City plans to conduct a detailed budget analysis to identify areas for optimization and reallocation of resources; and prioritize essential services while identifying non-essential expenditures that can be trimmed without compromising public welfare. This e ffort is consistent with the City‘s two-year Strategic Plan, which provides the principal guidance for the preparation of the budget, program objectives and performance measures.

The plan also provides objectives that gu ide resource allocation, policy, and many a ffairs of the organization. Practically, the plan is a tool for the City Council and City Sta ff to effectively meet the needs of our growing community. Areas of focus and major initiatives within the plan include:
 Public Safety
 Business & Job Growth
 Citywide Physical Infrastructure
 Community Beautification
 Downtown & Hwy 111 Revitalization
 Outreach, Communication, & Participation
 Financial & Environmental Sustainability and Operational Excellence

AWARDS AND ACKNOWLEDGEMENTS
The Government Finance O fficers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Indio for its annual financial report for the fiscal year ended June 30, 2023. This was the sixteenth consecutive year that the City received this prestigious award. In order to receive a Certi ficate of Achievement, the City must publish an easily readable and e fficiently organized annual financial report. The report must satisfy both generally accepted accounting pr inciples and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. I am confident that our current annual comprehensive financial report continues to meet the Certi ficate of Achievement Program’s requirements.

I appreciate the high level of professionalism and dedication that all our sta ff members bring to the job. We also have outstanding City residents th at care about and care for their community. And finally, I thank the extraordinarily capable members of the Indio City Council for their leadership and selfless service to the residents of the City.

Respectfully submitted,

Bryan H. Montgomery
City Manager

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CITY OFFICIALS
as of June 30, 2024

LUPE RAMOS-AMITH
Mayor

GLENN MILLER
Mayor Pro Tempore

ELAINE HOLMES
Council Member

CYNTHIA HERNANDEZ
City Clerk

ROB ROCKWELL
Treasurer

Bryan Montgomery, City Manager
Rob Rockwell, Assistant City Manager
Ruby D. Walla, Director of Finance
Andrew Ansoorian, Director of Human Resources and Risk Management Ian Cozens, Director of Information Technology
Carl Morgan, Director of Economic Development
Sabdi Sanchez, Director of City Clerk Services
Kevin Snyder, Director of Community Development
Tim Wassil, Director of Public Works
Rey Trejo, Indio Water Authority General Manager
Brian Tully, Chief of Police
Bryan White, Fire Chief

CITY COUNCIL

OTHER ELECTED OFFICIALS

EXECUTIVE STAFF

OSCAR ORTIZ
Council Member

WAYMOND FERMON
Council Member

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CITY MANAGER

CITY ATTORNEY
PUBLIC
WORKS
RESIDENTS of
INDIO

CITY COUNCIL

COMMUNITY

DEVELOPMENT
POLICE

CITY CLERK

SERVICES
HUMAN

RESOURCES

ECONOMIC

DEVELOPMENT

INFORMATION

TECHNOLOGY

EMERGENCY

PREPAREDNESS

FINANCE
FIRE
(contract)
WATER

AUTHORITY

SUSTAINABILITY

COMMUNITY

SERVICES
Senior Center,
Teen Center,
Golf Course
(contract),
IPAC (contract)
PUBLIC

INFORMATION &

MARKETING

PUBLIC ART

COMMUNITY

EVENTS &

FESTIVALS

ENGINEERING
CODE

ENFORCEMENT
ANIMAL

SERVICES
(contract)
RISK

MANAGEMENT

ELECTRIC FINANCE

AUTHORITY (IEFA)

PAYROLL

RECORDS

BUSINESS

LICENSING

CAPITAL

PROJECTS

STREETS
FLEET

PARKS &

FACILITIES

ELECTIONS

AGENDAS &

MINUTES

LEGISLATIVE

ADVOCACY
GRANTS
(consultant)
CITY

PROPERTIES

COMMUNITY

GRANTS &

SPONSORSHIPS

SPECIAL

PROJECTS

ASSISTANT CITY MANAGER
PATROL

INVESTIGATIONS

PROPERTY &

EVIDENCE

RECORDS
x

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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Indio
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
xi

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Independent auditor's report and the City's Annual Comprehensive Financi... Page 142 of 420 200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707

INDEPENDENT AUDITORS’ REPORT

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

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activiti es, the business-type activities, each major fund, and the aggregate remaining fund information of City of I ndio, California (the “City”) as of and for the year ended June 30, 2024, and the related notes to the basic financia l statements, which collectivel y comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referre d to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2024, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accept ed in the United States of America (“GAAS”) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (“ Government Auditing Standards ”). Our responsibilities under those standards are further described in the Auditors’ Responsib ilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

Management is responsible for the prep aration and fair presentation of the fi nancial statements in accordance with accounting principles generally accepted in the United Stat es of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate wh ether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ab ility to continue as a going concern for twelve months beyond the financial st atement date, including any currently known information that may raise substantial doubt shortly thereafter.

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Indio, California

2 Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whet her the financial statements as a whole are free from material misstatement, whether due to fraud or error, a nd to issue an auditors’ report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, fo rgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

 exercise professional judgment and maintain professional skepticism throughout the audit.

 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

 obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpo se of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.

 evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

 conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal cont rol-related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the Budgetary Comparison Schedule, the Schedule of Changes in Net Pension Liability and Related Ratios – Miscellaneous Plan, the Schedule of the City’s Pr oportionate Share of the Net Pension Liability and Related Ratios – Safety Plan, the Schedules of Contributions – Pensions, the Schedule of Changes in Net Other Postemployment Benefits Liability and Related Ratios, a nd the Schedule of Contributions - Other Postemployment Benefits be presented to supplement the basic financia l statements. Such information is the responsibility of management and, although not a part of the basic financ ial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operationa l, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance w ith GAAS, which consisted of inquiries of management about the methods of preparing the information and compar ing the information for cons istency with management’s responses to our inquiries, the basic financial statements , and other knowledge we obtained during our audit of the basic financial statements. We do no t express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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Indio, California

3 Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Co mbining and Individual Fund Financial Statements are presented for purposes of additional analysis and are not a re quired part of the basic financial statements. Such information is the responsibility of management and w as derived from and relates directly to the underlying accounting and other records used to prepare the basic financ ial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financ ial statements and certain additional procedures, including comparing and reconciling such information directly to th e underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and ot her additional procedures in accordance with GAAS. In our opinion, the Combining and Individual Fund Financia l Statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information

Management is responsible for the othe r information included in the annual re port. The other information comprises the Introductory and Statistical Sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basi c financial statements, our responsibility is to read the other information and consider whether a material inconsistenc y exists between the other information and the basic financial statements, or the other information otherwise appears to be materially mi sstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards , we have also issued our repor t dated February 28, 2025 on our consideration of the City’s internal control over financia l reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreemen ts and other matters. The purpose of that report is solely to describe the scope of our testing of internal control ove r financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Ana, California
February 28, 2025

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Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024

5 This discussion and analysis of the City of Indio’s financ ial statements provides a narrative overview of the City’s financial activities for the fiscal year that ended June 30, 2024. For the most comprehensive understanding, please read this analysis in conjunction with the accompanying transmitta l letter, the financial statements, and the notes to those financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS

This section is intended to serve as an introduction to the City ’s basic financial statements. The City of Indio’s basic financial statements consist of summary-level reports reflecting the financial activities of the City followed by required note disclosures. The two types of summary-level reports are government-wide financial statements and fund financial statements. In addition, reconciliations of the fund financial statements to the government-wide financial statements are provided to help explain the differences created by the integrated reporting approach. This section contains supplementary information in addition to what can be found with the basic fina ncial statements. Financial statements separate governmental activities from business-like activities for the City and its component units. Component units are legally separate organizations from the C ity of Indio, but because their operations are closely tied to the City’s, their financial activities are included as part of the City’s financial report. The basic tests that qualify a separate legal entity as a component unit are: 1) the separate organization’s ultimate authority is significantly compliant to the City Council; 2) the separate organization is fiscally dependent on the City or 3) excluding the separate organization’s finances would result in misleading financial information. The following organizations are component units of the City of Indio:

● The Indio Water Authority
● The Indio Housing Authority
● The Indio Public Financing Authority
● The Indio Financing Authority
● The Indio Electric Finance Authority
● The Industrial Development Authority of the City of Indio

NOTES TO THE FINANCIAL STATEMENTS

The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 55-112. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s progress in funding its retiree health and pension obligations.

Required supplementary information ca n be found on pages 115-131. A budget to actual comparison schedule is provided for the City’s General Fund on pages 115-117, Ca pital Projects Funds on page 135, General Debt Service Fund on page 136, and Non-major Governmental Funds on pages 163-190.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

6 GOVERNMENT-WIDE FINANCIAL STATEMENTS

The government-wide financial statements present the fina ncial picture of the City from the economic resources- measurement focus using the accrual basis of accounting. Two statements are designed to provide the reader with a broad overview of the City’s finances. Both the Statement of Net Position and the Statement of Activities report information about the City in a manner similar to a priv ate-sector business. The Statement of Net Position presents information on all the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources with the difference among them reported as net position. Over tim e, increases or decreases in net position provide insight into whether the City’s financial health is improving, weakening, or holding steady. The Statement of Activities presents information showing how the City’s net position changed during the fiscal year. All changes in net position are reported regardless of when cash was received or disbursed. Thus, revenue and expenses are reported in this statement for some items that will result in cash flows in a future fiscal period (e.g., uncollected taxes and earned but unused employee vacation leave). Both government-wide financial statements di stinguish the functions of the City that are principally supported by taxes and intergovernmental revenue (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). Governmental activities of the City include general administration, p ublic safety, community deve lopment, community services (recreation), public works, and interest on long-term debt. Prope rty taxes, sales taxes, utility users’ taxes, service fees, interest income, as well as some state and federal grants typically finance these activities. The business-type activities of the City include water services, managed by the Indio Water Authority, and municipal golf operations, managed by Landmark Golf LP. The Indio Water Authority is significantly compliant to the Indio City Council and therefore has been included as an integral part of the primary governme nt. The government-wide financial statements can be found on pages 18-21.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As reflected in the Statement of Net Position, at the close of the 2023-24 fiscal year, the City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $667.1 million. The City’s net position increased $47.9 million from the year before, an increase of about eight percent. This outcome was driven by increases in assets ($106.5 million) and liabilities ($65.1 million) and deferred outflows ($3.5 million) and a decrease in deferred inflows ($3.0 million). The City’s net position is mainly tied to its net investment in capital assets (e.g., land, buildings, machinery, equipment and infrastructure in excess of any re lated outstanding debt incurred to purchase those assets).

The City uses these capital assets to provide services to its citizens; con sequently, most of these assets are not liquid, not immediately spendable resources. As mentioned, total assets increased ($106.5 million). This outcome is driven primarily by increases in non-current assets ($135.9 million), an increase in capital assets ($54.6 million), and decrease in current assets ($84 million). Current assets are expected to be converted to cash or consumed within a fiscal year, while noncurrent assets are expected to be consumed over more than one fiscal year.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

7 A capital asset is a significant property or infrastructure that h as a useful life longer than one year that is not intended to be sold, but does lose value over time, like a computer or a vehicle. The fo llowing table is a simplified summary of the City’s net position.

NET POSITION SUMMARY (in thousands)

As reflected in the following Change in Net Position Summary Table, revenue from governmental activities is broken down into Program Revenue and Genera l Revenue, where Program Revenue must be used for the purpose, it was collected, and General Revenue is spent at the discretion of the City Council. Program Revenue totaled $95.5 million, $11.6 million less than last fiscal year due to decreases in Charges for Services ($19.7 million) and increases in Capital Contributions/Grants ($10 million), and Operating Contributions/Grants ($1.9 million). General Revenue totaled $102.9 million and was $6.2 million more than prior fiscal year re venue. The increase in General Revenue was primarily due to an increase in Property Tax Revenue ($2.7 million). Expenses for all governmental activities totaled $113.7 million, $22.1 million less than the prior fiscal year revenue. Annua l expenditures for governmental activities were down for most functions except Public Works and Public Safety. Revenue for all business-type activities totaled $31.1 million, an annual increase of $4.7 million, driven by increases in use of money and property ($2.4 million), Charges for Services ($2.7 million) and a decrease in Capital Contributions/Gra nts ($0.4 million). Expenses fo r all business-type activities totaled $35.4 million, an annual increas e of $8.1 million. The increase in expe nditures was mostly due to increased water operations and the inclusion of the Indio Electric Water Authority (IEFA) activity for infrastructure improvements. 2024 2023 2024 2023 2024 2023
Current and other assets 171,531 $ 260,790 $ 72,135 $ 66,868 $ 243,666 $ 327,658 $ Capital assets 553,989 505,026 150,426 144,786 704,415 649,812 Other noncurrent assets 87,123 5,763 54,524 - 141,647 5,763 Total assets 812,643 771,579 277,085 211,654 1,089,728 983,233 Pensions 27,900 28,372 2,669 2,822 30,569 31,194 OPEB 9,066 5,405 1,703 1,065 10,769 6,470 Deferred loss on refunding of debt 306 317 782 848 1,088 1,165 Total deferred outflows 37,272 34,094 5,154 4,735 42,426 38,829 Long-term liabilities 278,023 271,865 123,489 59,951 401,512 331,816 Other liabilities 37,862 44,568 9,238 7,053 47,100 51,621 Total liabilities 315,885 316,433 132,727 67,004 448,612 383,437 Pensions 1,580 2,688 99 192 1,679 2,880 OPEB 11,924 11,966 2,239 2,358 14,163 14,324 Leases 622 2,279 - - 622 2,279 Total deferred inflows 14,126 16,933 2,338 2,550 16,464 19,483 Net position:

Net investment in capital assets 480,525 491,466 90,720 100,080 571,245 591,546 Restricted 84,894 121,940 6,822 340 91,716 122,280 Unrestricted (45,515) (141,099) 49,632 46,419 4,117 (94,680) Total net position 519,904 $ 472,307 $ 147,174 $ 146,839 $ 667,078 $ 619,146 $ Governmental Activities Business-Type Activities Total

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

8 CHANGE IN NET POSITION SUMMARY (in thousands)

FUND FINANCIAL STATEMENTS

A fund is a grouping of related accounts that is used to main tain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-rela ted legal requirements. All of the funds for the City are placed into one of three categories: governmental funds, proprietary funds, or fiduciary funds. Governmental activities within the governmental fund group are calculated using the current financial-resources-measurement focus and the modified accrual basis of accounting. Proprietary (business-like) activities are calculated using the economic-resources- measurement focus and the accrual basis of accounting. Fiduciary activities are calculated using the economic-resources measurement focus and the accrual basis of accounting. Fund financial statements provide detailed information about the most significant funds, not the City as a whole. Some funds are required to be established by state law or by bond covenant. The City does on occasion establish other funds to help segregate and manage resources collected for particular purposes. Additionally, funds are created to isolate certain taxes, grants, and other legally restricted resources from general-purpose resources.
2024 2023 2024 2023 2024 2023
Program Revenues:

Charges for Services 30,693 $ 53,144 $ 29,683 $ 26,954 $ 60,376 $ 80,098 $ Operating contributions/grants 19,989 21,938 - - 19,989 21,938 Capital Contributions/grants 13,046 2,548 2,136 2,563 15,182 5,111 General Revenues:

Property Taxes 26,169 23,435 - - 26,169 23,435 Other Taxes 66,103 65,940 - - 66,103 65,940 Other 6,599 5,657 3,994 1,609 10,593 7,266 Total revenues 162,599 172,662 35,813 31,126 198,412 203,788 Expenses:

Water - - 31,039 25,456 31,039 25,456 Electric - - 2,465 - 2,465 - Golf - - 1,974 1,873 1,974 1,873 Solid Waste - - - - - - General Government 9,572 21,057 - - 9,572 21,057 Public Safety 64,322 63,383 - - 64,322 63,383 Community Development 5,128 9,259 - - 5,128 9,259 Community Services 4,124 5,919 - - 4,124 5,919 Public Works 29,693 23,850 - - 29,693 23,850 Interest expense/other charges 825 12,251 - - 825 12,251 Total Expenses 113,664 135,719 35,478 27,329 149,142 163,048 Change in Net Position 48,935 36,943 335 3,797 49,270 40,740 Net Position - beginning of fiscal year 472,307 434,560 146,839 143,042 619,146 577,602 Prior period adjustments (1,338) 804 - - (1,338) 804 Net Position - beginning of fiscal year, restated 470,969 435,364 146,839 143,042 617,808 578,406 Net Position - end of fiscal year 519,904 $ 472,307 $ 147,174 $ 146,839 $ 667,078 $ 619,146 $ Governmental Activities Business-Type Activities Total

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

9 GOVERNMENTAL FUNDS

The cost of basic City services is reported in the governme ntal fund group. Governmental fund financial statements focus on near-term flows of spendable resources in and out of various funds and the balances left at year end that remain available for spending in the future. Such information is useful in evaluating the City’s near-term financing requirements. Governmental fund inform ation helps determine whether there ar e more or fewer financial resources available to be spent in the future to finance City programs. Differences be tween the governmental fund financial statements and the government-wide financial statements are explained in a reconciliation following the governmental fund financial statement on page 29. Because the focus of governmental funds is narrower than that of the government- wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the gove rnment-wide financial statements. By doing so, readers will better understand the long-term impact of the City’s near-term financing decisions. Both the governmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 42 individual governmental funds, which are broke n down into two groups for basic financial reporting:

Major Funds and Non-Major Funds. Major Funds consist of funds that are significant because of their purpose, size, or importance to the City. The City’s financial statements re port three Major Funds: the General Fund, the , the Capital Projects Fund, and the General Debt Service Fund. Unlike the Non-Major Funds group, where the financial information is aggregated, Major Funds are reported independent of other fund groups. The General Fund is the primary operating fund of the City and it accounts for all activity not required to be accounted for in another specialized or restricted fund.

The General Fund encompasses many of the commonly thought of activities occurring within a municipal government.

These activities include: police, fire, senior and teen services, building and safety, planning, public works, finance, and general administration. The Capital Projects Fund accounts fo r financial resources that are restricted, committed, or assigned to expenditures for capital outlays including the acquisition or construction of major capital items. Within the Non-Major Funds group, data from 40 governmental funds are combined into a single, aggregated presentation.

Individual fund data for each of these Non-Major funds is pr ovided in the form of combin ing statements elsewhere in this report. The governmental fund financial statements can be found of pages 141-162.

GOVERNMENTAL FUND FINANCIAL ANALYSIS

At the close of the fiscal year, governmental funds reported a combined ending fund balance of $213.9 million, a year- over-year decrease of $8.7 million. Approximately 42 percen t of total fund balance ($89.8 million) was available for spending at the government’s discretion (assigned, unassigne d, and committed). Fund bala nce in the City’s General Fund decreased $3.6 million. Fund balance within the City ’s Capital Projects Fund increased $1.5 million. Within the Non-Major fund group, fund balance increased $4.3 million.

General Fund Financial Highlights:

At the close of the fiscal year, the City’s General Fund reported an ending fund balan ce of $62.7 million, down $3.6 million from the prior year. Approximately 82 percent ($51.3 million) of the $62.7 million was available for spending at the government’s discretion (assigned, unassigned, and committed). Nonspendable fund balance, which represents resources that cannot be spent because they are not in a sp endable form, totaled $8.7 m illion, consisting of prepaid expenditures ($0.1 million), land held for resale ($5.3 milli on), and a note receivable ($3.3 million). Restricted fund balance, which represents amounts that can only be spent fo r a specific purpose, increased $1.1 million from the prior fiscal year, totaling $2.6 million. This $2.6 million City depos its into a Section 115 trust fund used to stabilize annual pension costs. Assigned fund balance, which represents resources that are ear marked by City administration for a particular governmental purpose, totaled $23.6 million, a increase of $1.0 million from the prior fiscal year. Committed fund balance, which represents resources that are formally set aside by the City Council for emergencies or critical City priorities, totaled $18.0 million, an increase from the prior fiscal year of $1.0 million. Unassigned fund balance, which represents resources that have not been categorized as nons pendable, restricted, committed, or assigned, totaled $9.7 million, a decrease of $6.3 million from the prior fiscal year.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

10 Capital Projects Fund Financial Highlights:

At the close of the fiscal year, the City’s Capital Projects Fund reported a positive ending fund balance of $39.5 million, up $1.5 million from the prior year. This increase is tied to the prefunding of capital projects from the General Fund.

General Debt Service Fund Financial Highlights:

At the close of the fiscal year, the City’s General Debt Service Fund reported an ending fund balance of $81.3 million, down $10.9 million from the prior year. The decrease is due to the drawdown of bonds proceeds for the funding of various eligible capital projects.

Non-Major Governmental Funds Financial Highlights:

Non-Major Governmental Funds accumulated $30.3 million in fund balance at the end of the fiscal year, an increase of $4.4 million from the previous year. Non-major special revenue fund balances increased by $4.2 million. Fund balance for non-major debt service funds decreased by $0.01 million. Within the Non-Major Governmental Funds, revenues exceed expenses by $7.4 million and interfund transfers-out ex ceeded interfund transfers-in by $3.2 million, resulting in a net increase of $4.2 million in fund balance.

PROPRIETARY FUNDS FINANCIAL ANALYSIS

When the City charges outside customers or other internal governmental units for services, those services are generally reported within the Proprietary Fund group. The City mainta ins two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are u sed to report the same function presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water services, electric services, golf course operations, and solid waste services. Internal service funds are an accounting device used to accumulate and allocate costs among the City’s various departments and functions. The City uses internal service funds to account for and manage its fleet of vehicles, e quipment replacements, insurance, building maintenance, and information-technology systems. Because these five services principally benefit the City unlike business-type functions, which predominantly benefit the public, they are included as governmental activities in the government-wide financial statements. Proprietary Fund statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund fina ncial statements provide separate information for water services and electric. Water services, managed by the Indio Wate r Authority, and Electric are considered to be Major and thusly reported independent from other proprietary funds. Golf and Solid Waste services are aggregated and reported as Other Enterprise Funds and are reported individually elsewhere in this report. Internal Service Funds are reported by fund into a single aggregated presentation in the internal service fund financial statements. Individual fund data for the internal service fund group is provided in th e report on pages 202-209. At the close of the fiscal year, proprietary funds (including internal service funds) reported a combined ending net position of $161.2 million, a year- over-year increase of $8.4 million. City enterprise funds accumulated a year ending net position of $147.2 million, a year-over-year increase of $.3 million. Internal service funds accumulated a net position of $14.1 million, a year-over- year increase of $8.1 million. Within the enterprise f und group, net position in the City’s water fund decreased $1.2 million. Net position within the City’s other enterprise funds, golf and solid waste, increased $1.9 million.

Fiduciary Funds Financial Analysis

Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for the fiduciary fund financial statements is much like that used for proprietary funds. The City’s fiduciary activities are reported in separate statements of fiduciary net position.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

11 The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes and are kept separate from City resources. The City uses fiducia ry funds to account and manage resources for: various community facilities districts, the East Valley Reclamati on Authority, the East Valley Coalition, and the Eastern Riverside County Interoperable Communication Authority. The finances for these entities are aggregated under the title Custodial Funds.

The City also manages resources for the Successor Agency to the Indio Redevelopment Agency, which is reported under the private-purpose trust fund. At the close of the fiscal y ear, as is standard for fiduciary funds, agency assets equal liabilities plus net position. However, net position of the RDA Successor Agency was negative $37.6 million, due to its long-term debt on bonds, which is funded annually th rough the Recognized Obligation Payment Schedule (ROPS).

Year-over-year, the Successor Agency’s net position decreased $4.0 million.

Analysis of Long-Term Debt

Debt, which is considered a liability of governmental activities, totaled $283.9 million, an increase of $6.5 million from the prior fiscal year. The increase in debt was driven by the increases in claims payable ($3.0) million, lease payable ($0.1) million, net pension liability ($5.0) million, post-employment benefits ($6.2) million, and compensated absences ($0.007) million. Compensated absences re fer to employees’ time off with pay for vacations and sick days that are obligated to be paid in the future . These increases were offset by decreases in lease revenue bonds ($2.6) million, judgment obligation bond debt ($0.9) m illion, subscription payable ($1.0) millio n, and financing agreements ($0.05) million. Activity for outstanding debt is represented in the table below. Additional information on the City’s long-term debt can be found in notes 9 through 12 on pages 81-88.

OUTSTANDING DEBT SUMMARY (in thousands)

2024 2023 2024 2023 2024 2023
Claims Payable 15 $ 12 $ - $ - $ 15 $ 12 $ Lease Revenue Bonds 140,490 143,088 - - 140,490 143,088 Judgement Obligation Bonds 11,575 12,440 - - 11,575 12,440 Lease Payable 160 44 244 9 404 53 Subscription Payable 3,113 4,138 21 - 3,134 4,138 Water Bonds - - 43,116 45,547 43,116 45,547 Electric Revenue Bonds - - 64,809 64,809 Financing Agreements - 52 - - - 52 Certificates of Participation - - - - - - Net Pension Liability 76,785 72,054 8,482 8,172 85,267 80,226 Post Employment Benefits 49,441 43,266 9,285 8,525 58,726 51,791 Compensated Absences 2,349 2,342 383 395 2,732 2,737 Total 283,928$ 277,436 $ 126,340 $ 62,648 $ 410,268 $ 340,084 $ Governmental Activities Business-Type Activities Total

ANALYSIS OF CAPITAL ASSETS

Capital assets of the City are those asset s used in the performance of municipa l functions, including infrastructure.

Capital assets, net of depreciation/amortization, for gove rnmental activities totaled $554.0 million. Capital assets, net of depreciation/amortization, for business-type activiti es totaled $150.4 million. Overall, net capital asset value increased $54.6 million from the prior fiscal year. Fiscal-year activity is presented in th e table below. Additional information on the City’s capital assets can be found in note 8 on pages 79-80.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

12 CAPITAL ASSETS SUMMARY (in thousands)

2024 2023 2024 2023 2024 2023
Land 43,380 $ 42,140 $ 3,139 $ 3,139 $ 46,519 $ 45,279 $ Right of way 54,700 54,700 - - 54,700 54,700 Structures and improvements 37,845 37,527 15,351 15,351 53,196 52,878 M achinery, equipment and vehicles 28,663 24,423 7,490 6,392 36,153 30,815 Infrastructure 632,542 616,538 296,460 295,527 929,002 912,065 Intang ible rig ht-to-use assets 6,106 6,000 311 122 6,417 6,122 Construction in progress 130,259 85,105 13,354 1,959 143,613 87,064 Capital Asssets 933,495 866,433 336,105 322,490 1,269,600 1,188,923 Accumulated depreciation/amortization 379,505 361,408 185,679 177,701 565,184 539,109 Net Capital Assets 553,990$ 505,025 $ 150,426 $ 144,789 $ 704,416 $ 649,814 $ Governmental Activities Business-Type Activities Total

ANALYSIS OF THE BUDGET AND SIGNIFICANT V ARIANCES

The annually adopted budget appropriates spending authority by functional unit and expenditure by category: salaries and benefits, purchased services, materials and supplies, fixed asset s, internal transfers, and transfers out to other City funds. Expenditure controls are set at these same levels. Actual year end expenditur es and revenues rarely match budgeted appropriation levels exactly, due to changes in policy, economic impact s, unexpected outlays, and naturally occurring operational variances. Schedules comparing budget e xpectations to actual outcomes can be found on pages 115-117 for the General Fund and on pages 163-190 for other non-major funds. For fiscal year 2023-24, General Fund revenue totaled $128.3 million, includi ng $4.5 million categorized as Transfers In, and $0.1 million categorized as Issuance of debt. In total, the City received $6.6 million (5 .4%) more than budgeted. Tax revenues were stronger than anticipated, exceeding budgeted expectations by $2.0 million. Overages primarily consisted of: utility users taxes ($0.6 million) and transaction occupancy tax ($1.3 million). Charges for Services was $2.1 million over budget, mainly supported by higher-than-expected demand for police, fire , and ambulance services. The original fiscal year 2023-24 General Fund budget authorized $123.3 m illion in expenditures. The budget as finally adjusted by the City Council authorized $141.5 million in expenditur es. At the end of the fiscal year, General Fund expenditures totaled $132.5 million, including transfers out of $43. 8 million. In total, expenditures were $9.0 million (6.3%) less than budgeted.

The budgetary savings occurred across all General Fund bu dget units: Public Safety (including Fire and Ambulance and Code Enforcement) $3.5 million, General Government (administrative budget units – City Council, City Manager, City Clerk, City Attorney, Human Resources & Finance) $2.0 million, Community Development (Building and Safety, Planning, Economic Development) $1 .4 million, Community Services (Yout h Service, Community Services, Promotions and Publicity, Senior Serv ices) $0.4 million, and Public Works (Street Maintenance, Engineering & Administration, Parks & Parkways) $0.2 million.

FACTS AND CONDITIONS OF FUTURE SIGNIFICANCE

For the coming 2024-25 fiscal year, the City Council adopted a Citywide budget (including Indio Water Authority) totaling $365 million in appr opriations, a $4 million (1%) increase from the prior-year’s adopted budget. The minor increase in appropriations is primarily attributable to the robust capital project schedule and the many projects underway that have rolled into the new fiscal year with a few new appropriations to a capital project set asides (Police Administration Building, Jefferson Interchange, and Monroe Interchange). About $57.9 million (15.8%) of the budget is appropriated to move resources across funds, in order to properly isolate, track, and capture specific expenditures and revenues in accordance with generally accepted accounting principles. Citywide (including Indio Water Authority), revenue is expected to total $319.6 million, an increase from the prior year of $51 million (19%) due to the increase in the Capital Projects Fund and addition of the Indio Water Authority.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024

13 Across all funds, the $40.3 million gap between appropriations and expected revenue will be funded from fund balance (fund equity) and assumed salary savings. About $142.8 million (39%) of the budget will be appropriated to cover the cost of new construction and pay debt incurred for infrastructure. Of all pla nned citywide expenditures, $65.8 million (24%) will cover the cost of hiring professionals and specialists in various roles such as firefighters, architects, auditors, and landscapers. Utilities are also included in Purchased Services. About $50.2 million (18%) of planned expenditures will cover the cost of employee salaries and benefits. Just over half of all planned salary and benefit expenses cover the cost of police department staff. About $8.4 million (3%) of the budget is dedicated for other operating costs, including materials and supplies such as tools, cleaning supplies, and automobile parts.

The budget supports 294 full-time positions, seven elected of ficials, 35 appointed commissioners, and 13 part-time positions. The recommended budget funds 73 sworn police positions and includ es funding for one new Management Analyst in the Economic Development department to advance the branding efforts of the City.

The General Fund is the primary operating fund of the city and it accounts for all activity not required to be accounted for in another specialized or restricted fund. The General Fund encompasses many of the commonly thought of activities occurring within a municipal government. These activities include : police, fire, senior and teen services, building and safety, planning, public works, parks, streets and general administration. The FY 2024-25 adopted General Fund budget establishes $123 million in spending authority, $17.4 million le ss than what was authori zed in the previous-year’s adopted budget. The decrease reflects reduction in the amount of Transfers out in Non-Departmental. Significant transfers from the General Fund had been completed in prior year for current year planned spending on capital projects as the city spends down discretionary General Fund savings . Police protection accounts for the largest portion ($43.1 million) of all planned General Fund expenditures. In add ition to typical policing operations, the police department budget also includes code enforcement operations, which acco unts for eight percent ($3.3 million) of the police department’s budget. About $22.1 million (18%) of the budget supports fire and ambulance services, which are contracted through the County of Riverside. Combined, these public safety operations represent 53 percent of all planned General Fund expenditures. The Public Works Department budget will provide funding for planning, designing, constructing, operating, and maintaining the city’s infrastructure: public roads, bridges, parks, storm drains, and all city owned properties and facilities. The Public Works budget totals $6.2 million.

CASH MANAGEMENT

To effectively manage cash, the City employs a pooled cash system (reference note 3 in the notes to the financial statements). Under the pooled cash concept, the City invests cash from all funds, with investment maturities planned to coincide with expenditure needs. Idle cash is invested in eligible securities, as allowable by law and limited by the City’s Investment Policy. The goals of the City’s Investment Policy, in priority order are, safety (preserving principal), liquidity (accessibility), and then yield (return on investment).

CONTACTING THE CITY’S FINANCE DEPARTMENT

This financial report is designed to provide citizens, taxpa yers, customers, investors, and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report, separate reports of the City’s component units, or need any additional fi nancial information, contact the Finance Department at 100 Civic Center Mall, Indio, California, 92201, phone (760) 391-4115, [email protected].

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BASIC FINANCIAL STATEMENTS
15

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GOVERNMENT-WIDE FINANCIAL STATEMENTS
17

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Activities Activities Total
ASSETS
Current assets:

Cash and investments 141,225,029 $ 69,907,649 $ 211,132,678 $ Accounts receivable 2,510,589 4,826,976 7,337,565 Taxes receivable 10,642,150 - 10,642,150 Notes and loans 9,127,004 - 9,127,004 Interest receivable - - - Internal balances 3,891,942 (3,891,942) - Lease receivable - due within one year 202,610 - 202,610 Due from other governments 3,916,970 102,745 4,019,715 Inventories - 415,121 415,121 Prepaid items 14,382 774,372 788,754 Total current assets 171,530,676 72,134,921 243,665,597 Noncurrent assets:

Restricted cash and investments 2,760,234 - 2,760,234 Restricted cash and investments with escrow agent 1,354,122 - 1,354,122 Restricted cash and investments held by bond trustee 76,711,185 54,524,439 131,235,624 Lease receivable - due in more than one year 613,817 - 613,817 Property held for resale 5,683,242 - 5,683,242 Capital assets:

Capital assets, not being depreciated 228,338,951 16,492,717 244,831,668 Capital assets, being depreciated, net 321,502,375 133,667,380 455,169,755 Intangible capital assets, being amortized, net 4,148,470 265,883 4,414,353 Total capital assets 553,989,796 150,425,980 704,415,776 Total noncurrent assets 641,112,396 204,950,419 1,089,728,412 Total assets 812,643,072 277,085,340 1,089,728,412

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 306,330 782,469 1,088,799 Pension related 27,900,155 2,669,311 30,569,466 OPEB related 9,066,116 1,702,521 10,768,637 Total deferred outflows of resources 37,272,601 5,154,301 42,426,902 Primary Government
City of Indio
Statement of Net Position
June 30, 2024
See accompanying Notes to the Basic Financial Statements 18

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Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 21,245,982 2,165,532 23,411,514 Accrued liabilities 1,336,912 224,602 1,561,514 Accrued interest 1,164,378 416,105 1,580,483 Unearned revenue 2,139,083 - 2,139,083 Deposits payable 6,069,083 3,580,250 9,649,333 Compensated absences, due within one year 1,669,337 292,887 1,962,224 Bonds and notes payable, due within one year 3,240,000 2,495,000 5,735,000 Lease payable, due within one year 95,284 59,265 154,549 Subscription Payable, due within one year 902,620 4,847 907,467 Total current liabilities 37,862,679 9,238,488 47,101,167 Noncurrent liabilities:

Compensated absences, due in more than one year 680,491 90,257 770,748 Bonds and notes payable, due in more than on year 148,824,801 105,429,714 254,254,515 Lease payable, due in more than on year 64,895 184,993 249,888 Subscription payable, due in more than on year 2,211,072 16,618 2,227,690 Claims and judgments, due in more than one year 15,045 - 15,045 Net pension liability 76,784,643 8,482,340 85,266,983 Net other post-employment benefits liability 49,441,584 9,284,611 58,726,195 Total noncurrent liabilities 278,022,531 123,488,533 401,511,064 Total liabilities 315,885,210 132,727,021 448,612,231

DEFERRED INFLOWS OF RESOURCES
Leases 621,911 - 621,911 Pension related 1,580,627 99,028 1,679,655 OPEB related 11,924,042 2,239,211 14,163,253 Total deferred inflows of resources 14,126,580 2,338,239 16,464,819

NET POSITION
Net investment in capital assets 480,524,609 90,720,506 571,245,115 Restricted for:

Community development projects 8,781,249 - 8,781,249 Public safety 3,628,441 - 3,628,441 Public works 12,243,785 - 12,243,785 Capital projects 39,544,318 - 39,544,318 Debt service 11,329,087 6,821,945 18,151,032 Assessment districts 2,983,458 - 2,983,458 Public education government channel 1,526,335 - 1,526,335 Parks and recreation 1,017,930 - 1,017,930 Pension stabilization 2,658,232 - 2,658,232 American Rescue Plan Act funds 345,660 - 345,660 Pollution remediation 836,083 - 836,083 Total restricted 84,894,578 6,821,945 91,716,523 Unrestricted (deficit) (45,515,304) 49,631,930 4,116,626 Total net position 519,903,883$ 147,174,381 $ 667,078,264 $ City of Indio
Statement of Net Position (Continued)
June 30, 2024
Primary Government
See accompanying Notes to the Basic Financial Statements 19

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Charges for Contributions Contributions
Expenses Services and Grants and Grants
Functions/Programs
Governmental Activities:

General government 9,571,818 $ 4,136,489 $ 4,112,653 $ - $ Public safety 64,321,916 17,078,223 6,216,867 - Community development 5,127,828 5,919,830 1,977,873 - Community services 4,123,674 60,836 341,240 - Public works 29,693,225 3,497,313 7,340,292 13,045,574 Interest on long term debt 824,938 - - - Total Governmental Activities 113,663,399 30,692,691 19,988,925 13,045,574 Business-Type Activities:

Water 31,038,681 25,279,863 - 2,135,818 Electric 2,465,350 1,879,397 - - Golf 1,973,930 2,123,907 - - Solid Waste - 400,000 - - Total Business-Type Activities 35,477,961 29,683,167 - 2,135,818 Total Primary Government 149,141,360$ 60,375,858 $ 19,988,925 $ 15,181,392 $ City of Indio
Statement of Activities
For the Year Ended June 30, 2024
Program Revenues
See accompanying Notes to the Basic Financial Statements 20

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Activities Activities Total
Functions/Programs
Governmental Activities:

General government (1,322,676) $ - $ (1,322,676)$ Public safety (41,026,826) - (41,026,826) Community development 2,769,875 - 2,769,875 Community services (3,721,598) - (3,721,598) Public works (5,810,046) - (5,810,046) Interest on long term debt (824,938) - (824,938) Total Governmental Activities (49,936,209) - (49,936,209) Business-Type Activities:

Water - (3,623,000) (3,623,000) Electric - (585,953) (585,953) Golf - 149,977 149,977 Solid Waste - 400,000 400,000 Total Business-Type Activities - (3,658,976) (3,658,976) Total Primary Government (49,936,209) (3,658,976) (53,595,185) General Revenues:

Taxes:

Property taxes 26,169,360 - 26,169,360 Transient occupancy taxes 17,428,440 - 17,428,440 Sales taxes 36,525,276 - 36,525,276 Business licenses taxes 685,799 - 685,799 Utility users tax 10,929,249 - 10,929,249 Other taxes 534,123 - 534,123 Motor vehicle in lieu - unrestricted 112,203 - 112,203 Investment income 6,381,822 3,994,147 10,375,969 Other 105,122 - 105,122 Total General Revenues 98,871,394 3,994,147 102,865,541 Changes in Net Position 48,935,185 335,171 49,270,356 Net Position - Beginning of year, as restated (Note 16) 470,968,698 146,839,210 617,807,908 Net Position - End of Year 519,903,883$ 147,174,381 $ 667,078,264 $ Net (Expense) Revenue and Changes in Net Positions
City of Indio
Statement of Activities (Continued)
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 21

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FUND FINANCIAL STATEMENTS
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GOVERNMENTAL FUND FINANCIAL STATEMENTS
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Capital Debt Nonmajor
General Projects Service Governmental
Fund Fund Fund Funds
ASSETS
Cash and investments 30,413,018 $ 66,199,994 $ 6,552,453 $ 25,971,831 $ Accounts receivable 1,332,359 273,554 - 889,454 Taxes receivable 9,892,157 - - 749,993 Notes and loans receivable 3,342,431 - - 5,784,573 Lease receivable 816,427 - - - Prepaid items 12,500 - - 1,882 Due from other governments 1,126,700 1,377,012 - 1,413,258 Due from other funds 25,188,029 - - - Property held for resale 5,341,588 - - 341,654 Restricted assets:

Cash and investments 2,658,232 - - - Cash with escrow agent - 1,354,122 - - Cash and investments held by bond trustee - 1,912,692 74,774,203 24,290 Total assets 80,123,441 71,117,374 $ 81,326,656 $ 35,176,935 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 8,415,570 $ 9,888,394 $ 5,105 $ 1,775,381$ Accrued liabilities 1,336,912 - - - Unearned revenues - 1,523,248 - 615,835 Deposits payable 6,034,665 11,272 - 23,146 Due to other funds - 20,150,142 - 1,018,520 Total liabilities 15,787,147 31,573,056 5,105 3,432,882 Deferred inflows of resources:

Unavailable revenues 1,023,549 - - 1,445,845 Leases 621,911 - - - Total deferred inflows of resources 1,645,460 - - 1,445,845 Fund balances:

Nonspendable 8,696,519 - - 1,882 Restricted 2,658,232 - 81,321,551 31,406,855 Committed 18,000,000 - - 4,736 Assigned 23,602,082 39,544,318 - - Unassigned 9,734,001 - - (1,115,265) Total fund balances 62,690,834 39,544,318 81,321,551 30,298,208 Total liabilities, deferred inflows
of resources, and fund balances 80,123,441$ 71,117,374 $ 81,326,656 $ 35,176,935 $ (Continued)
City of Indio
Balance Sheet
Governmental Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements 26

Independent auditor's report and the City's Annual Comprehensive Financi... Page 168 of 420 Total
Governmental
Funds
ASSETS
Cash and investments 129,137,296$
Accounts receivable 2,495,367
Taxes receivable 10,642,150
Notes and loans receivable 9,127,004
Lease receivable 816,427
Prepaid items 14,382
Due from other governments 3,916,970
Due from other funds 25,188,029
Property held for resale 5,683,242
Restricted assets:

Cash and investments 2,658,232
Cash with escrow agent 1,354,122
Cash and investments held by bond trustee 76,711,185
Total assets 267,744,406$

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 20,084,450$
Accrued liabilities 1,336,912
Unearned revenues 2,139,083
Deposits payable 6,069,083
Due to other funds 21,168,662
Total liabilities 50,798,190
Deferred inflows of resources:

Unavailable revenues 2,469,394
Leases 621,911
Total deferred inflows of resources 3,091,305
Fund balances:

Nonspendable 8,698,401
Restricted 115,386,638
Committed 18,004,736
Assigned 63,146,400
Unassigned 8,618,736
Total fund balances 213,854,911
Total liabilities, deferred inflows
of resources, and fund balances 267,744,406$
(Concluded)
City of Indio
Balance Sheet (Continued)
Governmental Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements 27

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28

Independent auditor's report and the City's Annual Comprehensive Financi... Page 170 of 420 Total Fund Balances - Total Governmental Funds 213,854,911$ Amounts reported for governmental activities in the statement of net position are different because:
540,648,280
(1,154,625)
Loss on refunding of debt (net of accumulated amortization). 306,330 2,469,394
Bonds payable (152,064,801)$
Lease payable, net of $21,249 reported in Internal Service Fund (138,930) Subscription payable, net of $2,747,191 reported in Internal Serve Fund (366,501) Compensated absences, net of $81,854 reported in Internal Service Fund (2,267,974) (154,838,206) Deferred outflows of resources, net of $1,199,439 reported in Internal Service Fund 26,700,716 Net pension liability, net of $3,811,479 reported in Internal Service Fund (72,973,164) Deferred inflows of resources, net of $44,498 reported in Internal Service Fund (1,536,129) (47,808,577) Deferred outflows of resources, net of $807,649 reported in Internal Service Fund 8,258,467 Net OPEB liability, net of $4,404,465 reported in Internal Service Fund (45,037,119) Deferred inflows of resource, net of $1,062,243 reported in Internal Service Fund (10,861,799) (47,640,451) 14,066,827
Net position of governmental activities 519,903,883$
City of Indio
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
Capital assets used in governmental activities are not current financial resources and therefore are not reported in governmental funds, net of $13,341,516 reported in Internal Service Fund.

Internal service funds are used by management to charge the costs of certain activities, such as equipment and technology replacement, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position.

Long-term liabilities are not due and payable in the current period and therefore, are not reported in the governmental funds:

Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds, net of $9,753 reported in Internal Service Fund.

Net OPEB liability and related deferred outflows and inflows of resources are not due and payable in the current period; therefore, are not reported as government funds' liabilities. They are reported in the Statement of Net Position.

Net pension liability and related deferred outflows and inflows of resources are not due and payable in the current period; therefore, are not reported as government funds' liabilities. They are reported in the Statement of Net Position.

Governmental funds report the effect of premiums, discounts and gains or losses on debt refundings when the debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.

Unavailable revenues are not available to pay for current period expenditures and therefore are deferred in the funds but recognized as revenue in the Statement of Activities.

See accompanying Notes to the Basic Financial Statements 29

Independent auditor's report and the City's Annual Comprehensive Financi... Page 171 of 420 America Rescue General
Plan Act Special Capital Debt
General Revenue Fund Projects Service
Fund (Formerly Major Fund) Fund Fund
Revenues:

Taxes 92,272,247 $ - $ - $ Licenses and permits 9,260,832 - - Intergovernmental 634,728 5,171,971 - Charges for services 14,813,094 - - Use of money and property 6,383,480 586,172 3,535,896 Fines and forfeitures 809,788 - - Special assessments - - - Developer participation - 3,683,685 - Miscellaneous 133,349 100,022 - Total revenues 124,307,518 9,541,850 3,535,896 Expenditures:

Current:

General government 8,824,741 13,018 - Public safety 61,274,356 - - Community development 4,388,420 - - Community services 3,780,258 - - Public works 8,935,431 - - Capital outlay 1,283,673 55,628,038 - Debt service:

Principal retirement 181,912 10,990 2,415,000 Interest and fiscal charges 9,551 196 5,432,886 Total expenditures 88,678,342 55,652,242 7,847,886

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 35,629,176 (46,110,392) (4,311,990) Other financing sources (uses):

Transfers in 4,505,000 52,996,946 8,929,862 Transfers out (43,829,246) (5,393,956) (15,500,000) Issuance of debt 130,491 76,927 -
Total other financing sources (uses) (39,193,755) 47,679,917 (6,570,138) NET CHANGE IN FUND BALANCES (3,564,579) 1,569,525 (10,882,128) FUND BALANCES:

Beginning of year, as previously reported 65,769,098 40,343 37,974,793 92,203,679 Change in the financial reporting entity
(major to nonmajor) - (40,343) - - Error correction 486,315 - - - Beginning of year, as restated (Note 16) 66,255,413 - 37,974,793 92,203,679 End of year 62,690,834$ - $ 39,544,318$ 81,321,551 $ (Continued)
City of Indio
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 30

Independent auditor's report and the City's Annual Comprehensive Financi... Page 172 of 420 Nonmajor Total
Governmental Governmental
Funds Funds
Revenues:

Taxes -$ 92,272,247$
Licenses and permits - 9,260,832 Intergovernmental 15,595,085 21,401,784
Charges for services 503,428 15,316,522 Use of money and property 1,384,255 11,889,803 Fines and forfeitures 108,850 918,638 Special assessments 6,433,468 6,433,468
Developer participation 282,220 3,965,905 Miscellaneous 26,128 259,499
Total revenues 24,333,434 161,718,698
Expenditures:

Current:

General government 429,033 9,266,792
Public safety 642,486 61,916,842
Community development 410,590 4,799,010 Community services 380,514 4,160,772
Public works 5,743,565 14,678,996
Capital outlay 8,248,363 65,160,074
Debt service:

Principal retirement 695,000 3,302,902 Interest and fiscal charges 391,945 5,834,578 Total expenditures 16,941,496 169,119,966

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 7,391,938 (7,401,268) Other financing sources (uses):

Transfers in 1,296,394 67,728,202
Transfers out (4,505,000) (69,228,202)
Issuance of debt - 207,418 Total other financing sources (uses) (3,208,606) (1,292,582) NET CHANGE IN FUND BALANCES 4,183,332 (8,693,850) FUND BALANCES:

Beginning of year, as previously reported 26,074,533 222,062,446 Change in the financial reporting entity
(major to nonmajor) 40,343 -
Error correction - 486,315 Beginning of year, as restated (Note 16) 26,114,876 222,548,761 End of year 30,298,208$ 213,854,911 $
(Concluded)
City of Indio
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 31

Independent auditor's report and the City's Annual Comprehensive Financi... Page 173 of 420 Net change in fund balances - total governmental funds: (8,693,850)$ Amounts reported for governmental activities in the Statement of Activities are different because:

Capital outlay, net of functional expenses of $2,636 and $5,013,334 reported in Internal Service Fund 62,951,405 $
Depreciation/amortization expense net of $1,533,172 reported in Internal Service Fund (16,717,324) 46,234,081 881,546
(207,418)
3,110,000
Lease and subscription principal repayments, net of $1,489,713 reported in Internal Service Fund 192,902 3,095,484 Interest on long-term liabilities 4,720,996
Interest on leases (5,368)
Amortization of premium 366,817
Amortization of debt discount (13,101)
Amortization of deferred amount on refunding (10,780) 5,058,564 Pension expense, net of $9,933,963 contribution after measurement date (3,837,868) OPEB expense, net of $2,944,525 contribution after measurement date (1,972,564) Net change in compensated absences 74,117
8,095,675
Change in net position of governmental activities 48,935,185$ Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds:

Internal service funds are used by management to charge the costs of certain activities, such as equipment and technology replacement, to individual funds. The net revenues of the internal service funds are reported with governmental activities.

City of Indio
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the Year Ended June 30, 2024
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. This is the amount by which capital expenditures exceeded depreciation in the current period:

Revenues that are measurable but not available and are reported as unavailable revenue under the modified accrual basis of accounting in the governmental funds.

The issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds.

Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.

Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the Statement of Activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available:

Bond principal repayments
Issuance of debt, net of $567,087 reported in Internal Service Fund See accompanying Notes to the Basic Financial Statements 32

Independent auditor's report and the City's Annual Comprehensive Financi... Page 174 of 420

PROPRIETARY FUND FINANCIAL STATEMENTS
33

Independent auditor's report and the City's Annual Comprehensive Financi... Page 175 of 420 Nonmajor
Enterprise
Water Electric Funds Totals
ASSETS
Current assets:

Cash and investments 63,711,348 $ - $ 6,196,301$ 69,907,649 $ Accounts receivable 3,993,082 810,652 23,242 4,826,976 Due from other governments - - 102,745 102,745 Inventories 380,081 - 35,040 415,121 Prepaid items 624,372 - 150,000 774,372 Total current assets 68,708,883 810,652 6,507,328 76,026,863 Noncurrent assets:

Restricted investments held by bond trustee 358,007 54,166,432 - 54,524,439 Capital assets, not being depreciated 4,145,764 11,880,994 465,959 16,492,717 Capital assets, being depreciated, net 133,447,311 - 220,069 133,667,380 Intangible capital asset, being amortized, net 24,389 - 241,494 265,883 Total capital assets 137,617,464 11,880,994 927,522 150,425,980 Total noncurrent assets 137,975,471 66,047,426 927,522 204,950,419 Total assets 206,684,354 66,858,078 7,434,850 280,977,282

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 782,469 - - 782,469 Pension related 2,660,259 - 9,052 2,669,311 OPEB related 1,694,983 - 7,538 1,702,521 Total deferred outflows of resources 5,137,711 - 16,590 5,154,301 Business-Type Activities - Enterprise Funds
June 30, 2024
Proprietary Funds
Statement of Net Position
City of Indio
See accompanying Notes to the Basic Financial Statements 34

Independent auditor's report and the City's Annual Comprehensive Financi... Page 176 of 420 Governmental
Activities
Internal
Service Funds
ASSETS
Current assets:

Cash and investments 12,087,733$
Accounts receivable 15,222
Due from other governments -
Inventories -
Prepaid items -
Total current assets 12,102,955
Noncurrent assets:

Restricted investments held by bond trustee 102,002
Capital assets, not being depreciated -
Capital assets, being depreciated, net 9,766,220
Intangible capital asset, being amortized, net 3,575,296 Total capital assets 13,341,516
Total noncurrent assets 13,443,518
Total assets 25,546,473

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding -
Pension related 1,199,439
OPEB related 807,649
Total deferred outflows of resources 2,007,088
City of Indio
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements 35

Independent auditor's report and the City's Annual Comprehensive Financi... Page 177 of 420 Nonmajor
Enterprise
Water Electric Funds Totals

LIABILITIES
Current liabilities:

Accounts payable 2,087,502 $ - $ 78,030$ 2,165,532 $ Accrued liabilities 223,785 - 817 224,602 Accrued interest 415,403 - 702 416,105 Due to other funds 2,729,493 1,162,449 - 3,891,942 Deposits payable 411,364 - 3,168,886 3,580,250 Compensated absences - due within one year 292,887 - - 292,887 Bonds payable - due within one year 2,495,000 - - 2,495,000 Lease liability - due within one year - - 59,265 59,265 Subscription liability - due within one year 4,847 - - 4,847 Total current liabilities 8,660,281 1,162,449 3,307,700 13,130,430 Noncurrent liabilities:

Accrued claims and judgments
Compensated absences - due in more than one year 90,257 - - 90,257 Bonds payable - due in more than one year 40,621,181 64,808,533 - 105,429,714 Lease liability - due in more than one year - - 184,993 184,993 Subscription liability - due in more than one year 16,618 - - 16,618 Net pension liability 8,453,574 - 28,766 8,482,340 Net other post-employment benefits liability 9,243,503 - 41,108 9,284,611 Total noncurrent liabilities 58,425,133 64,808,533 254,867 123,488,533 Total liabilities 67,085,414 65,970,982 3,562,567 136,618,963

DEFERRED INFLOW OF RESOURCES
Pensions related 98,692 - 336 99,028 OPEB related 2,229,296 - 9,915 2,239,211 Total deferred inflows of resources 2,327,988 - 10,251 2,338,239

NET POSITION
Net investment in capital assets 95,620,294 (5,583,052) 683,264 90,720,506 Restricted for debt service - 6,821,945 - 6,821,945 Unrestricted (deficit) 46,788,369 (351,797) 3,195,358 49,631,930 Total net position 142,408,663$ 887,096 $ 3,878,622 $ 147,174,381 $ Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
Business-Type Activities - Enterprise Funds
City of Indio
See accompanying Notes to the Basic Financial Statements 36

Independent auditor's report and the City's Annual Comprehensive Financi... Page 178 of 420 Governmental
Activities
Internal
Service Funds

LIABILITIES
Current liabilities:

Accounts payable 1,161,532$
Accrued liabilities -
Accrued interest 9,753
Due to other funds 127,425
Deposits payable -
Compensated absences - due within one year 58,116
Bonds payable - due within one year -
Lease liability - due within one year 10,436
Subscription liability - due within one year 728,714
Total current liabilities 2,095,976
Noncurrent liabilities:

Accrued claims and judgments 15,045
Compensated absences - due in more than one year 23,738 Bonds payable - due in more than one year -
Lease liability - due in more than one year 10,813
Subscription liability - due in more than one year 2,018,477 Net pension liability 3,811,479
Net other post-employment benefits liability 4,404,465
Total noncurrent liabilities 10,284,017
Total liabilities 12,379,993

DEFERRED INFLOW OF RESOURCES
Pensions related 44,498
OPEB related 1,062,243
Total deferred inflows of resources 1,106,741

NET POSITION
Net investment in capital assets 10,573,076
Restricted for debt service -
Unrestricted 3,493,751
Total net position 14,066,827$
City of Indio
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements 37

Independent auditor's report and the City's Annual Comprehensive Financi... Page 179 of 420 Nonmajor
Enterprise
Water Electric Funds Totals
OPERATING REVENUES:

Sales and service charges 24,811,837 $ 1,879,397 $ 2,123,907 $ 28,815,141 $ Interdepartmental charges - - - - Other income 468,026 - 400,000 868,026 Total operating revenues 25,279,863 1,879,397 2,523,907 29,683,167 OPERATING EXPENSES:

Personnel services 7,233,614 - 51,587 7,285,201 Contractual services 3,274,167 925,941 873,367 5,073,475 Repairs and maintenance 6,267,274 - 454,397 6,721,671 Claims expense - - - - Depreciation and amortization expense 8,036,038 - 63,530 8,099,568 Materials and supplies 2,186,702 1,081,339 525,043 3,793,084 Rentals and leases 12,653 - - 12,653 Utilities 2,209,082 - - 2,209,082 Total operating expenses 29,219,530 2,007,280 1,967,924 33,194,734 OPERATING INCOME (LOSS) (3,939,667) (127,883) 555,983 (3,511,567) NONOPERATING REVENUE (EXPENSES):

Interest revenue 2,403,684 1,473,049 117,414 3,994,147 Interest expense (1,819,151) (458,070) (6,006) (2,283,227) Transfers in - - - - Total nonoperating revenue (expenses) 584,533 1,014,979 111,408 1,710,920 INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS (3,355,134) 887,096 667,391 (1,800,647) CAPITAL CONTRIBUTIONS:

Capital grants 529,339 - - 529,339 Capital impact fees 1,606,479 - - 1,606,479 Capital contribution - - - - Total capital contributions 2,135,818 - - 2,135,818 CHANGES IN NET POSITION (1,219,316) 887,096 667,391 335,171 NET POSITION:

Beginning of the year 143,627,979 - 3,211,231 146,839,210 End of the year 142,408,663 $ 887,096 $ 3,878,622 $ 147,174,381 $ Business-Type Activities - Enterprise Funds
For the Year Ended June 30, 2024
Statement of Revenues, Expenses, and Changes in Net Position City of Indio
See accompanying Notes to the Basic Financial Statements 38

Independent auditor's report and the City's Annual Comprehensive Financi... Page 180 of 420 Governmental
Activities
Internal
Service Funds
OPERATING REVENUES:

Sales and service charges -$
Interdepartmental charges 22,358,963
Other income 753,325
Total operating revenues 23,112,288
OPERATING EXPENSES:

Personnel services 9,943,177
Contractual services 1,052,346
Repairs and maintenance 2,520,905
Claims expense 2,803
Depreciation and amortization expense 1,533,172
Materials and supplies 3,590,447
Rentals and leases 34,484
Utilities -
Total operating expenses 18,677,334
OPERATING INCOME (LOSS) 4,434,954
NONOPERATING REVENUE (EXPENSES):

Interest revenue 3,708
Interest expense (54,292)
Transfers in 1,500,000
Total nonoperating revenue (expenses) 1,449,416
INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS 5,884,370
CAPITAL CONTRIBUTIONS:

Capital grants -
Capital impact fees -
Capital contribution 2,211,305
Total capital contributions 2,211,305
CHANGES IN NET POSITION 8,095,675
NET POSITION:

Beginning of the year 5,971,152
End of the year 14,066,827$
City of Indio
Statement of Revenues, Expenses, and Changes in Net Position (Continued) For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 39

Independent auditor's report and the City's Annual Comprehensive Financi... Page 181 of 420 Nonmajor
Enterprise
Water Electric Funds Totals
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users 25,063,718$ 1,068,745 $ 5,511,459 $ 31,643,922 $ Receipts from interfund services and charges - - - - Receipts from insurance settlements - - - - Payments to suppliers and service providers (14,254,554) (2,007,280) (1,897,562) (18,159,396) Payments to employees for salaries and benefits (7,490,989) - (46,885) (7,537,874) Net cash provided by operating activities 3,318,175 (938,535) 3,567,012 5,946,652

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Tranfers from other funds - - - - Receipt from short-term interfund borrowing 2,729,493 1,162,449 - 3,891,942 Net cash provided by noncapital
financing activities 2,729,493 1,162,449 - 3,891,942

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Capital impact fees 1,606,479 - - 1,606,479 Acquisition and construction of capital assets (1,545,530) (11,880,994) - (13,426,524) Capital contributions - - - - Receipt from issuance of debt - 64,808,533 - 64,808,533 Principal paid on capital debt (2,380,342) - (48,573) (2,428,915) Interest paid on capital debt (1,839,332) (458,070) (5,309) (2,302,711) Capital grants 529,339 - - 529,339

Net cash provided by (used in) capital and related
financing activities (3,629,386) 52,469,469 (53,882) 48,786,201 CASH FLOWS FROM INVESTING ACTIVITIES:

Interest on investments 2,414,332 1,473,049 117,414 4,004,795 Net cash provided by investing activities 2,414,332 1,473,049 117,414 4,004,795 Net change in cash and cash equivalents 4,832,614 54,166,432 3,630,544 62,629,590 CASH AND CASH EQUIVALENTS:

Beginning of year 59,236,741 - 2,565,757 61,802,498 End of year 64,069,355$ 54,166,432 $ 6,196,301 $ 124,432,088 $ CASH AND CASH EQUIVALENTS:

Cash and investments 63,711,348 - 6,196,301 69,907,649 Cash and investments with fiscal agent 358,007 54,166,432 - 54,524,439 Total cash and cash equivalents 64,069,355$ 54,166,432 $ 6,196,301 $ 124,432,088 $ City of Indio
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
Business-Type Activities - Enterprise Funds
See accompanying Notes to the Basic Financial Statements 40

Independent auditor's report and the City's Annual Comprehensive Financi... Page 182 of 420 Nonmajor
Enterprise
Water Electric Funds Totals
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (Used in) Operating Activities:

Operating income (loss) (3,939,667) (127,883) 555,983 (3,511,567) Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:

Depreciation/amortization expense 8,036,038 - 63,530 8,099,568 Changes in assets and liabilities:
(Increase) decrease in accounts receivable (180,384) (810,652) 32,713 (958,323) (Increase) decrease in due from other governments - - (102,745) (102,745) (Increase) decrease in inventories (26,590) - 3,644 (22,946) (Increase) decrease in prepaid items 19,899 - - 19,899 (Increase) decrease in deferred outflows or resources
related to pension 152,119 - 976 153,095 (Increase) decrease in deferred outflows or resources
related to OPEB (634,449) - (3,204) (637,653) Increase (decrease) in accounts payable (297,985) - (48,399) (346,384) Increase/(decrease) in accrued liabilities (616,830) - 817 (616,013) Increase/(decrease) in unearned revenue - - - - Increase (decrease) in deposits payable (35,761) - 3,057,584 3,021,823 Increase (decrease) in compensated absences (11,599) - - (11,599) Increase (decrease) in accrued claims and judgments - - - Increase (decrease) in pension obligations 310,965 - (268) 310,697 Increase (decrease) in OPEB obligations 753,477 - 6,408 759,885 Increase/(decrease) in deferred inflows of resources
related to pension (92,348) - (345) (92,693) Increase/(decrease) in deferred inflows of resources
related to OPEB (118,710) - 318 (118,392) Net cash provided by (used in) operating activities 3,318,175$ (938,535) $ 3,567,012 $ 5,946,652 $ Business-Type Activities - Enterprise Funds
City of Indio
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 41

Independent auditor's report and the City's Annual Comprehensive Financi... Page 183 of 420 Governmental
Activities
Internal
Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users -$
Receipts from interfund services and charges 23,313,290 Receipts from insurance settlements 2,795
Payments to suppliers and service providers (7,475,716) Payments to employees for salaries and benefits (9,103,577) Net cash provided by operating activities 6,736,792

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Tranfers from other funds 1,500,000
Receipt from short-term interfund borrowing 127,425
Net cash provided by noncapital
financing activities 1,627,425

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Capital impact fees -
Acquisition and construction of capital assets (4,446,242) Capital contributions 2,211,305
Receipt from issuance of debt -
Principal paid on capital debt (791,597)
Interest paid on capital debt (56,736)
Capital grants -
Net cash provided by (used in) capital and related
financing activities (3,083,270)
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest on investments 3,708
Net cash provided by investing activities 3,708
Net change in cash and cash equivalents 5,284,655
CASH AND CASH EQUIVALENTS:

Beginning of year 6,905,080
End of yea
r 12,189,735$
CASH AND CASH EQUIVALENTS:

Cash and investments 12,087,733
Cash and investments with fiscal agent 102,002
Total cash and cash equivalents 12,189,735$
City of Indio
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 42

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Activities
Internal
Service Funds
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (Used in) Operating Activities:

Operating income (loss) 4,434,954
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:

Depreciation/amortization expense 1,533,172
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 13,051
(Increase) decrease in due from other governments 429,211 (Increase) decrease in inventories -
(Increase) decrease in prepaid items 24,668
(Increase) decrease in deferred outflows or resources
related to pension 22,468
(Increase) decrease in deferred outflows or resources
related to OPEB (356,535)
Increase (decrease) in accounts payable (321,319)
Increase/(decrease) in accrued liabilities -
Increase/(decrease) in unearned revenue (241,260)
Increase (decrease) in deposits payable -
Increase (decrease) in compensated absences 81,854
Increase (decrease) in accrued claims and judgments 24,715 Increase (decrease) in pension obligations 273,724
Increase (decrease) in OPEB obligations 793,109
Increase/(decrease) in deferred inflows of resources
related to pension (38,504)
Increase/(decrease) in deferred inflows of resources
related to OPEB 63,484
Net cash provided by (used in) operating activities 6,736,792$ City of Indio
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 43

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44

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FIDUCIARY FUND FINANCIAL STATEMENTS
45

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46

Independent auditor's report and the City's Annual Comprehensive Financi... Page 188 of 420 Private
Purpose Trust
Fund
RDA Successor Custodial
Agency Fund Funds
ASSETS:

Cash and investments 3,995,201$ 10,564,041 $
Cash and investments with fiscal agent 1,694,300 4,762,677 Accounts receivable - 153,797 Property held for resale 769,500 -
Total assets 6,459,001 15,480,515
LIABILITIES:

Accounts payable - 468,388
Accrued liabilities 4,124 -
Accrued interest 793,917 -
Deposits payable 4,251 233,851
Long-term liabilities:

Due in one year 2,620,000 -
Due in more than one year 40,596,100 -
Total liabilities 44,018,392 702,239
NET POSITION:

Restricted for:

Individuals, organizations, and other governments (37,559,391) 14,778,276 Total net position (deficit) (37,559,391)$ 14,778,276 $ June 30, 2024
Statement of Fiduciary Net Position
City of Indio
Fiduciary Funds
See accompanying Notes to the Basic Financial Statements 47

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Purpose Trust
Fund
RDA Successor Custodial
Agency Fund Funds
ADDITIONS:

Investment Earnings:

Interest and net increase in fair value of investments 310,937 $ 718,230 $ Charges for services - 1,192,599 Taxes and assessments 4,746,071 5,566,265
Miscellaneous 250,000 -
Total additions 5,307,008 7,477,094
DEDUCTIONS:

Administrative expense - 310,267 Contractual services 216,767 1,538,283
Interest expense 1,081,168 2,120,070
Principal payments - 4,144,309 Total deductions 1,297,935 8,112,929
Change in net position 4,009,073 (635,835)
NET POSITION:

Beginning of year (41,568,464) 15,632,103
Error correction - (217,992)
Beginning of year, as restated (Note 16) (41,568,464) 15,414,111 End of year (37,559,391)$ 14,778,276 $
City of Indio
Statement of Change in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 48

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49 NOTES TO THE BASIC FINANCIAL STATEMENTS

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Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2024

51 Page

Note 1 – Summary of Significant Accounting Policies ............................................................................................ 55

A. Description of Reporting Entity ............................................................................................... ....................... 55 B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation ......................................... 57 C. Appropriations Limit ....................................................................................................................................... 61 D. Encumbrances .................................................................................................................................................. 61 E. Cash, Cash Equivalents, and Investments ....................................................................................................... 61 F. Fair Value Measurement ........................................................................................................ ......................... 61 G. Inventories and Prepaid Items ......................................................................................................................... 62 H. Property/Land Held for Resale ........................................................................................................................ 62 I. Capital Assets .................................................................................................................................................. 62 J. Leases .............................................................................................................................................................. 63 K. Subscription-Based Information Technology Arrangements .......................................................................... 64 L. Compensated Absences ................................................................................................................................... 64 M. Property Taxes ................................................................................................................................................. 65 N. Claims and Judgments ..................................................................................................................................... 65 O. Amortization of Bond Premiums and Discounts ............................................................................................. 65 P. Unamortized Gain/Loss on Refunding ............................................................................................................ 65 Q. Deferred Outflows/Inflows of Resources ........................................................................................................ 66 R. Pensions ........................................................................................................................................................... 66 S. Other Post-Employment Benefits .................................................................................................................... 67 T. Net Position ..................................................................................................................................................... 67 U. Fund Balance and Net Position ................................................................................................. ...................... 68 V. Estimates .......................................................................................................................................................... 68 W. Implementation of New GASB Pronouncements ............................................................................................ 69

Note 2 – Stewardship, Compliance, and Accountability ......................................................................................... 69

A. Deficit Fund Balances and Deficits in Internal Service Funds ........................................................................ 69 B. Compliance with Budgetary Limitations ......................................................................................................... 70

Note 3 – Cash and Investments .............................................................................................................................. ... 71

A. Demand Deposits ............................................................................................................................................. 72 B. Investments Authorized by the California Government Code and the City’s Investment Policy ................... 72 C. Investments Authorized by Debt Agreements ................................................................................................. 72 D. Disclosures Relating to Interest Rate Risk ...................................................................................................... 73 E. Disclosures Relating to Credit Risk ................................................................................................................. 73 F. Concentration of Credit Risk ........................................................................................................................... 74 G. Custodial Credit Risk ......................................................................................................... ............................. 74 H. Fair Value Measurement ........................................................................................................ ......................... 75 I. Investment in State Investment Pool ............................................................................................................... 75

Note 4 – Interfund Transactions .............................................................................................................................. . 75

A. Due to/From Other Funds ................................................................................................................................ 75 B. Transfers In/Transfers Out ............................................................................................................................... 76

Note 5 – Notes and Loans Receivable ....................................................................................................................... 76

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Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024

52 Page

Note 6 – Lease Receivable .......................................................................................................................................... 78

Note 7 – Property Held for Resale ............................................................................................................................. 78

Note 8 – Capital Assets ............................................................................................................................................... 79

Note 9 – Compensated Absences ............................................................................................................................... 81

Note 10 – Long-Term Debt ........................................................................................................................................ 81

A. Governmental Activities .................................................................................................................................. 81 B. Business-Type Activities ................................................................................................................................. 85

Note 11 – Pension Plans .............................................................................................................................................. 88

A. General Information about the Pension Plan ................................................................................................... 88 B. Net Pension Liability ....................................................................................................................................... 90 C. Changes in the Net Pension Liability .............................................................................................................. 92 D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions ............... 94

Note 12 – Other Postemployment Benefits (“OPEB”) ............................................................................................ 95

A. General Information about the OPEB Plan ..................................................................................................... 95 B. Net OPEB Liability ............................................................................................................ ............................. 96 C. Changes in Net OPEB Liability ....................................................................................................................... 97

Note 13 – Liability, Property and Workers Compensation Liabilities .................................................................. 99

A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement ...................................................... 99 B. Self-Insurance Programs of the Authority ....................................................................................................... 99 C. Purchased Insurance ........................................................................................................................................ 100 D. Adequacy of Protection ................................................................................................................................... 101

Note 14 – Net Investment in Capital Assets .............................................................................................................. 101

Note 15 – Fund Balance Classifications .................................................................................................................... 102

Note 16 – Change to or within the Financial Reporting Entity and Error Correction ........................................ 103

Note 17 – Debt Issued Without Government Commitment .................................................................................... 103

Note 18 – Contingencies and Commitments ............................................................................................................. 104

Note 19 – Joint Venture Agreements ........................................................................................................................ 105

Note 20 – Tax Abatement Agreements ..................................................................................................................... 106

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Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024

53 Page

Note 21 – Successor Agency Trust for Assets of Former Redevelopment Agency ............................................. 107

A. Cash and Investments .................................................................................................................................... 108 B. Land Held for Resale ..................................................................................................................................... 108 C. SERAF Advance ................................................................................................................. .......................... 108 D. Long-Term Liabilities.......................................................................................................... .......................... 108 E. Pledged Revenue ........................................................................................................................................... 111

Note 22 – Custodial Funds ....................................................................................................................................... 112

A. Long-Term Liabilities.......................................................................................................... .......................... 112

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

55 Note 1 – Summary of Significant Accounting Policies

The basic financial statements of the City of Indio, Califor nia (the “City”) have been pr epared in conformity with generally accepted accounting principles (“GAAP”) as app lied to government units. The Governmental Accounting Standards Board (“GASB”) is the accepted standard-se tting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.

A. Description of Reporting Entity

The City of Indio was incorporated on May 16, 1930 under the general laws of the State of California. The City operates under the Council-Administrator form of government.

As required by generally accepted accounting principles, the financial statements present the City and its component units, entities for which the City (the primary government) is considered to be financially accountable.

The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization’s governing body and the organization is able to provide specific financial benefits to or impose specific financial burdens on the City. The City is also c onsidered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, othe r organizations are included as component units if the nature and significance of their relationship with the C ity are such that their ex ecution would cause the City’s financial statements to be misleading or incomplete. A brief description of the City’s component units are as follows:

Blended Component Units:

Indio Public Financing Authority

The Indio Public Financing Authority (the “Public Financing Authority”) is a joint exercise of powers authority organized and existing under and by virtue of the Joint Exercise of Powers Act. The City and the Agency formed the Public Financing Authority by th e execution of a joint exercise of powers agreement dated as of April 1, 1992. Pursuant to the Joint Exerci se of Powers Act, the Public Financing Authority is authorized to issue revenue bonds to provide funds to make loans to public entities, such revenue bonds are to be repaid from the repayments of such loans. The P ublic Financing Authority is governed by a five-member Board which consists of all members of the City Council. The Mayor of th e City is the Chairperson of the Authority. The City Manager acts as the Executive Director, the City Clerk acts as the Secretary and the Finance Director of the City acts as the Treasurer of the Authority. Separate financial statements of the Public Financing Authority are not prepared.

Housing Authority of the City of Indio

The Housing Authority of the City of Indio (the “H ousing Authority”) was activated by the City Council of Indio in 1985. The purpose of the Housing Authority is to respond to the need for affordable housing in Indio by providing a financing mechanism to encourage such development in the City. Even though it is legally separate, it is reported as if it were part of the Ci ty because the City Council also serves as the governing board of the Authority and the management of the City has operational responsibility for the Housing Authority. Separate financial statements of the Housing Authority are not prepared.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

56 Note 1 – Summary of Significant Accounting Policies (Continued)

A. Description of Reporting Entity (Continued)

Blended Component Units: (Continued)

Industrial Development Authority of the City of Indio

The Industrial Development Authority of the City of Indio (the “Industrial Development Authority”) was activated by the City Council of the City of Indio on December 4, 1985. The purpose of the Industrial Development Authority is to assist the community in industry deve lopment by provi ding a financing mechanism to encourage such development in the City. The City Council serves as the governing board of the Industrial Development Authority a nd the management of the City h as operational responsibility for the Authority. No separate financial statements of the In dustrial Development Authority are prepared. There was no activity in the Industrial Development Authority in the current fiscal year.

Indio Water Authority

The Indio Water Authority (the “Water Authority”) was established on November 1, 2001 to issue revenue bonds and oversee water services on behalf of the City of Indio. Since the component unit’s governing body is the same as the governing body of the primary governme nt and there is a financial relationship between the primary government and the component unit it is reported as a blended co mponent unit. Separate financial statements of the Indio Water Authority are prepared and can be obtained at City Hall.

Indio Financing Authority

The Indio Financing Authority (the “Financing Authority ”) is a joint exercise of powers authority organized and existing under and by virtue of the Joint Exercise of Powers Act. The City and the Housing Authority formed the Authority by the execution of a joint exer cise of powers agreement dated as of April 18, 2012.

Pursuant to the Joint Exercise of Powers Act, the Aut hority is authorized to issue revenue bonds to provide funds to make loans to public entities, such revenue bonds are to be repaid from the repayments of such loans.

The Authority is governed by a five-member Board which consists of all members of the City Council. The Mayor of the City is the Chairperson of the Author ity. The City Manager acts as the Executive Director, the City Clerk acts as the Secretary and the Finance Direct or of the City acts as the Treasurer of the Authority.

Separate financial statements of the Authority are not prepared.

Since the component units primarily serve the City, the members of the City Council sit as the governing board or appoint the governing board of the component units, and the City Council has the ability to impose its will upon, and is financially accountable for its co mponent units, they are considered to be blended component units. Blended component un its, although legally separate entities, are in substance, part of the City’s operations and so data from these units are reported with the interfund data of the primary government.

Indio Electric Financing Authority

The Indio Electric Financing Authority (the “Electri c Authority”) is a Joint Powers Authority (“JPA”) established on June 21, 2023, between the City of Indio and the Imperial Irrigation District (“IID”) pursuant to Chapter 5 of Division 7 of Title 1 of the Californi a Government Code. The IEFA was established for the purposes of procuring, designing, financing, construc ting, owning, operating, and maintaining electric infrastructure projects, including system efficiency and reliability improvem ents and energy service enhancements, within the territorial boundaries of the City.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

57 Note 1 – Summary of Significant Accounting Policies (Continued)

A. Description of Reporting Entity (Continued)

Blended Component Units: (Continued)

Indio Electric Financing Authority (Continued)

Since the component unit’s primarily serve the City, the members of the City Council sit as the governing board or appoint the governing board of the component units, and the City Council has the ability to impose its will upon, and is financially accountable for its co mponent units, they are considered to be blended component units. Blended component un its, although legally separate entities, are in substance, part of the City’s operations and so data from these units are reported with the interfund data of the primary government.

Audited financial statements may be obtained from the City of Indio, 100 Civic Center Mall, Indio, California 92201.

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

Government-Wide Financial Statements

The government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business-type activities of the primary government, including its blended component units. Eliminations have been made in the Statement of Activities so that certain allocated expen ses are recorded only once (by the function to which they were allocated) except for interfund services provided between departments and funds. However, general government expenses have not been allocated as indirect expenses to the various functions of the City.

Government-wide financial stat ements are presented using the economic resources measurement focus and accrual basis of accounting. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government-wide financial statements. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and ex change-like transactions are recognized when the exchange takes place.

Revenues, expenses, gains, losses, assets, and liabilities resulting from non-exchange transactions are recognized in accordance with the requirements of GASB Statement No. 33.

Program revenues include charges for services and paymen ts made by parties outside the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are ne tted with program expenses in the statement of activities to present the net cost of each program.

Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as an expenditure. Proceeds of long- term debt are recorded as a liability in the government- wide financial statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a re duction of the related liability, rather than as an expenditure.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

58 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Fund Financial Statements

The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting ent ity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its asset s, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Fund financial statements for the primary government’s governmental, proprietary, and fiduciary funds are represented after the government-wide financial statements . These statements display information about major funds individually and nonmajor funds in the aggreg ate for governmental and enterprise funds. Fiduciary statements include financial informa tion for fiduciary funds and similar co mponent units. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations.

Governmental Fund Financial Statements

In the fund financial statements, governmental funds are presented using the modified-accrual basis of accounting. Under this method, revenues are recognized wh en measurable and availa ble as net current assets.

Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses an availability period of 60 days.

Sales taxes, property taxes, franchise tax es, gas taxes, motor vehicle in lieu, transient occupancy taxes, grants and interest associated with the current fiscal period are all c onsidered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected with in the availability period.

Other revenue items are considered to be measurable and available when cash is received by the government.

Revenue recognition is subject to the measurable and av ailable criteria for the governmental funds in the fund financial statements. Exchange transactions are recogni zed as revenues in the period in which they are earned (i.e., the related goods or services are provided). Loca lly imposed derived tax revenues are recognized as revenues in the period in which the underlying excha nge transaction upon which they are based takes place.

Imposed nonexchange transactions are r ecognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as re venues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary nonexchange transactions are recognized as revenues when all applicable eligibility requirements have been met.

In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabiliti es are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of “available spendable resources.” Governmental fund operating statem ents present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

59 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Governmental Fund Financial Statements (Continued)

Non-current portions of long-term recei vables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporti ng treatments are used to indicate; however, that they should not be considered “availabl e spendable resources,” since they do not represent net current assets.

Recognition of governmental fund ty pe revenue represented by non-current receivables are deferred until they become current receivables. Non-current portions of long-term receivables are offset by fund balance reserve accounts.

Due to the nature of their spending measurement focus, expenditure rec ognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not a ffect current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long- term debt are recorded as another financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.

The City reports the following major governmental funds:

General Fund - The General Fund is used to account for res ources traditionally associated with governments, which are not legally required or by sound financial management to be accounted for in another fund.

Capital Projects Fund - This fund is used to account for capital pr ojects of the City with resources from bond financing, government grants, and investment income.

General Debt Service Fund - This fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principle and interest.

Proprietary Fund Financial Statements

The City’s enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting.

Revenues are recognized when they are earned, and expe nses are recognized when the related goods or services are delivered. In the fund financial statements, propr ietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Propr ietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position.

Proprietary fund operating revenues, such as charges for services, result from excha nge transactions associated with principal activity of the fund. Exchange transacti ons are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as s ubsidies, taxes, and investment earnings result from non-exchange transactions or ancillary activities. Amounts paid to acquire capital assets are capitalized as assets in the enterprise fund financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the enterprise fund financial statements, rather than as another financing source.

Amounts paid to reduce long-term indebtedness of the ente rprise fund are reported as a reduction of the related liability, rather than as an expenditure.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

60 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Proprietary Fund Financial Statements (Continued)

The City uses proprietary funds to report an activity for which a fee is charged to external users to recover the cost of operation. The City reports the following fund as a major fund.

Water Enterprise Fund – This fund is an enterprise fund used to acc ount for the activities associated with the transmission and distribution of potable water by the City and its users.

Electric Enterprise Fund – This fund is an enterprise fund used to account for surcharge revenue collections, debt service obligations for the infrastructure improve ments including energy system improvements, system efficiency and reliability improvements and energy service enhancements to the electrical service within the territorial boundaries of the City.

Additionally, the City reports the following proprietary fund types:

Internal Service Funds – These funds have been established to fi nance and account for goods and services provided by one City department to other City departments or agencies. Such goods and services include:
worker’s compensation, liability insu rance, retiree medical insurance, information technology, vehicle replacement and maintenance, maintenance of City owned buildings and grounds , and centralized operating services.

Fiduciary Fund Financial Statements

Fiduciary fund financial statements include a statement of fiduciary net position and a statement of changes in fiduciary net position. The City’s fi duciary fund represent private-purpose trust fund and custodial funds. The private-purpose trust fund and custodial funds use the economic resources measurement focus and the full accrual basis of accounting where the assets associated with th e activity are controlled by the City and the assets are not derived 1) solely from the government’s own-source revenues or 2) from government-mandated nonexchange transactions or voluntary nonexchange transactions.

The City reports the following fiduciary fund type:

Redevelopment Agency Successor Agency Private-purpose Trust – This fund is used to account for assets held by the City as trustee for the Redevelopment Agency Successor Agency. Trus t funds use the flow of economic resources measurement focus and the accrual basis of accounting, except for the recognition of certain liabilities of defined benefit pension plans.

Custodial Funds – To accounts for assets for the bene fit of individuals and the City does not have administrative involvement with the assets or direct fina ncial involvement with the assets or for the benefit of organizations or other governments th at are not part of the City. In a ddition, the assets are not derived from the City’s provision of goods or services to those i ndividuals, organizations, or other governments. The custodial funds account for the deposits for individuals , organizations, and other governments, and the debt service and related expenses for Eastern Riversid e County Interoperable Communications Authority, Assessment Districts, East Valley Reclamation Authority, and Waste Transfer Station Authority.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

61 Note 1 – Summary of Significant Accounting Policies (Continued)

C. Appropriations Limit

Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to th e State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements. For th e fiscal year ended June 30, 2024, proceeds of taxes did not exceed appropriations.

D. Encumbrances

Encumbrance accounting, under which purchase orders, contr acts and other commitments for the expenditure of funds are recorded in the governmental funds. Encumbran ces are reported as restrictions of fund balances since they do not constitute expenditures or liabilities.

E. Cash, Cash Equivalents, and Investments

For purposes of the statement of cash flows, cash equivale nts are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of cha nges in interest rates. Cash equivalent s have an original maturity date of three months or less from the date of purchase.

Investments are reported in the accompanying balance sheet at fair value, except for certain certificates of deposit and investment contracts that are reported at cost because they are not transferable, and they have terms that are not affected by changes in market interest rates.

Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments.

The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various f unds based on each fund’s average cash and investment balance.

F. Fair Value Measurement

Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

The three levels of the fair value measurement hierarchy are described below:

 Level 1 – Inputs are unadjusted, quoted prices for iden tical assets or liabilities in active markets at the measurement date.

 Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets or liabilities through corroboration with market data at the measurement date.

 Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use pricing the assets or liabilities at the measurement date.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

62 Note 1 – Summary of Significant Accounting Policies (Continued)

G. Inventories and Prepaid Items

Inventories are stated at weighted average cost. Physical counts of inventory are taken on a cyclical basis during each fiscal year with perpetual records adjusted to actual at that time. The City uses the consumption method of accounting for inventories.

Certain payments to vendor reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statem ents. The cost of prepai d items is recorded as expenditures/expenses when consumed rather than when purchased.

H. Property/Land Held for Resale

Homes purchased for the purpose of resale under the fede rally funded Neighborhood St abilization Program and land purchased for the purpose of resale (or contribution to a redevelopment project) are recorded at the City’s or Successor Agency’s cost to purchase the property or, upon enteri ng into a contract for sale, at the estimated net realizable value, if lower.

I. Capital Assets

Capital assets are recorded at cost wher e historical records are available and at an estimated historical cost where no historical records exist. Donated capital assets, dona ted works of art and similar items, and capital assets received in a service concession arrangement are recorded at acquisition value at the time of acquisition.

Generally, capital asset purchases in excess of $5,000 are capitali zed if they have an expected useful life of three years or more.

Capital assets include additions to public domain (infr astructure) general capital assets consisting of certain improvements including roads, streets, sidewalks, median s, storm drains, leases, and subscription assets. Public domain assets acquired prior to 1980 have been included in the accompanying financial statements.

The intangible right‐to‐use asset includes lease asset and subscription-based information technology arrangements (“SBITA”) asset (“subscription asset”). These intangibl e assets are recorded at the amount of the initial measurement of the lease liabilities or SBITA liabilities (“subscription liabilities”) and adjusted by any lease made to the lessor or subscription payments to the SBIT A vendor at or before the commencement of the lease or subscription term, less any incentives re ceived from the lessor or SBITA vendor at or before the commencement of the lease or subscription term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service or subscription implementation co sts. Lease assets are amortized using the straight-line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determ ined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset. Subscription assets are amortized over the shorter of the subscription term or the useful life of the underlying IT assets.

The following schedule summarizes capital asset useful lives:

Assets Years
Buildings 40
Equipment 3-20
Improvements 40
Infrastructure 40
Water Wells and pumps 70

Depreciation has been provided using the straight-line me thod over the estimated useful life of the asset in the government-wide financial statements and in the fund financial statements of the proprietary funds.

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J. Leases

Lessee: The City is a lessee for a non cancellable lease of equipment. The City recognizes a lease liability and an intangible right-to-use lease asset (lea se asset) in the government- wide financ ial statements. The City recognizes lease liabilities with an initial, individual value of $5,000 or more.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its u seful life. Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.

The City uses the interest rate charged by the lessor as th e discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estim ated incremental borrowing rate as the discount rate for leases.

The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and pur chase option price that the City is reasonably certain to exercise.

The City monitors changes in circum stances that would require a remeasureme nt of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with other capital assets and l ease liabilities are reported with long-term debt on the statement of net position.

Lessor: The City is a lessor for a noncancellable lease of a building. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements.

At the commencement of a lease, the City initially measures the lease receivabl e at the present value of payments expected to be received during the lease term. Subseque ntly, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or befo re the lease commencement date.

Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City dete rmines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.

The City uses its estimated incremental borrowing rate as the discount rate for leases.

The lease term includes the noncancellable period of the l ease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circum stances that would require a remeasureme nt of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that ar e expected to significantly affect the amount of the lease receivable.

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64 Note 1 – Summary of Significant Accounting Policies (Continued)

K. Subscription-Based Information Technology Arrangements

The City is a subscriber for a noncancellable subscr iption of information technology services. The City recognizes a subscription liability and an intangible ri ght-to-use subscription asset (subscription asset) in the government-wide financial statements. The City recognizes subscription liabilities with an initial, individual value of $5,000 or more.

At the commencement of a subscription, the City initially measures the subscr iption liability at the present value of payments expected to be made during the subscripti on term. Subsequently, the sub scription liability is reduced by the principal portion of subscripti on payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscr iption payments made at or before the subscription commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight‐line basis over its useful life. Key estimates and judgm ents related to subscriptions include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.

The City uses the interest rate charged by the vendor as th e discount rate. When the interest rate charged by the vendor is not provided, the City generally uses its estim ated incremental borrowing rate as the discount rate for subscriptions.

The subscription term includes the noncancellable period of the subscription. Subscription payments included in the measurement of the subscription liab ility are composed of fixed payments that the City is reasonably certain to exercise.

The City monitors changes in circum stances that would require a remeasurement of its subscriptions and will remeasure the subscription asset and liability if certain cha nges occur that are expected to significantly affect the amount of the subscription liability.

Subscription assets are reported with other capital assets a nd subscription liabilities are reported with long-term debt on the statement of net position.

L. Compensated Absences

Employees hired prior to 1991, carry forward for use in subsequent years, earned but unused vacation and sick leave benefits. Upon termination, the City is obligated to compensate those employees for all earned but unused vacation days and 50% to 100% of earned but unused sick leave benefits depending on their date of hire.

In accordance with GASB Statement No. 16, Accounting for Compensated Absences, a liability is recorded for unused vacation and similar compensat ory leave balances since the employ ees’ entitlement to these balances are attributable to services already rendered and it is probable that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement.

A liability is recorded for unused sick leave balances only to the extent that it is probable that the unused balances will result in termination payments. This is estimated by including in the liability the unused balances of employees currently entitled to receive termination payment, as well as those who are expected to become eligible to receive termination benefits as a result of continui ng their employment with the City. Other amounts of unused sick leave are excluded from the liab ility since their payment is contingent solely upon the occurrence of future event (illness), which is outside the control of the City and the employee.

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65 Note 1 – Summary of Significant Accounting Policies (Continued)

L. Compensated Absences (Continued)

If material, a proprietary fund liability is accrued for all leav e benefits relating to the operations of the proprietary funds. A current liability is accrued in the governmental funds for material leave benefits due on demand to governmental fund employees that have been terminated pr ior to year-end. All other amounts are recorded in the government-wide financial statements. These non-current am ounts will be recorded as fund expenditures in the fiscal year in which they are paid or become due.

M. Property Taxes

Under California law, property taxes are assessed and collect ed by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool and are then allocated to the cities based on complex formulas. Accordingly, the City of Indio accrue s only those taxes, which are received within 60 days after fiscal year-end.

The property tax calendar is as follows:

Lien Date: January 1
Levy Date: July 1
Due Date: First Installment - November 1
Second Installment - February 1
Delinquent Date: First Installment - December 11
Second Installment - April 11

Taxes are collected by Riverside County and are remitted to the City periodically. Dates and percentages are as follows:

December 10 30% Advance
January 16 Collection No. 1
April 10 10% Advance
May 15 Collection No. 2
July 31 Collection No. 3

N. Claims and Judgments

The City records a liability for litigati on, judgments, and claims when it is probable that an asset has been impaired, or a liability has been incurred prior to year-e nd and the probable amount of loss (net of any insurance coverage) can be reasonably estimated.

O. Amortization of Bond Premiums and Discounts

Bond premiums and discounts are deferre d and amortized over the term of the bonds using the straight-line method, which materially approximates the effective interest method. Bond premiums and discounts are presented as a reduction or addition to the face amount of the bonds payable.

P. Unamortized Gain/Loss on Refunding

Gain/Loss on refunding debt is deferred and amortized over the shorter of the term of the new debt or the refunded debt using the straight-line method, which materi ally approximates the effective interest method. These are now recorded, per GASB Statement No. 65, as deferred inflows or outflows of resources.

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66 Note 1 – Summary of Significant Accounting Policies (Continued)

Q. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has deferred outflows of resources on the deferred charge on refunding of debt, pensions, and OPEB in the statement of net position.

In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, de ferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The City has deferred inflow of resources leases, and unavailable revenue on the fund financial statements and leases, pensions, and OPEB in the statement of net position.

R. Pensions

For purposes of measuring the net pension liability a nd deferred outflows/inflows of resources related to pensions, and pension expense, info rmation about the fiduciary net positio n of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) a nd additions to/deductions from the Plans’ fiduciary net position have been determined on th e same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported as fair value.

The following timeframes are used for pension reporting:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023

Gains and losses related to changes in total pension liability and fiduciary ne t position are recogn ized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

Net pension liabilities recorded in governmental activities are generally liquidated through the City’s General Fund and Internal Service funds.

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67 Note 1 – Summary of Significant Accounting Policies (Continued)

S. Other Post-Employment Benefits

For purposes of measuring the net othe r postemployment benefits (“OPEB ”) liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expen se, information about the fiduciary net position of the City’s plan (OPEB Plan), the assets of which are held by CalPERS, and additions to/deductions from the OPEB Plan’s fiduciary net position have been de termined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in ac cordance with the benefit terms.

Investments are reported at fair value.

The following timeframes are used for OPEB reporting:

Valuation Date June 30, 2023
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023

Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

Net OPEB liability recorded in Governmental Activities are generally liquidated through the City’s General Fund and Internal Service funds.

T. Net Position

In the government-wide financial statements and proprietary fund financial statements, net position is classified as follows:

Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation, reduced by outstanding balances of retention payable and debt that are attributable to the acquisition, construction, or improvement of those assets, and rela ted deferred outflows and inflows of resources, net of unspent debt proceeds.

Restricted – This component of net positi on consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unrestricted – This component of net position is the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of res ources that are not included in the de termination of net investment in capital assets or the restricted component of net position.

When expenses are incurred for purposes for which both restricted and unrest ricted components of net position are available, the City’s practice is to apply the restricted component of net position first, then use the unrestricted component of net position as needed.

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68 Note 1 – Summary of Significant Accounting Policies (Continued)

U. Fund Balance

As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which th e City is bound to honor constrai nts on the specific purposes for which amounts in the funds can be spent. As of June 30, 2024 , fund balances for governmental funds are made up of the following:

Nonspendable – includes amounts that are (a) not in spendable fo rm, or (b) legally or contractually required to be maintained intact. The “not in spendable form ” criterion includes items that are not expected to be converted to cash.

Restricted – includes amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.

Committed – includes amounts that can only be used for the specific purposes determined by a formal action of the City’s highest level of decision-making authorit y, the City Council. Commitments may be changed or lifted only by the City Council taking the same formal ac tion that imposed the constraint originally (for example: resolution and ordinance). Ordinance is the highest level of the City Council’s approval.

Assigned – includes amounts that are constrained by the City’s intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. Th is policy hereby delegates the authority to assign amounts to be used for speci fic purposes to the City Manager for the purpose of reporting these amounts in the annual financial statements.

Unassigned – includes amounts include the residual amounts that have not been restricted, committed, or assigned to specific purposes. The General Fund is the onl y fund that should report this category of fund balance, unless a negative fund balance exists.

An individual governmental fund may include non-sp endable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or an y combination of those classi fications. Restricted or unrestricted amounts are to be considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is availa ble and committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used.

When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s practice is to apply restricted fund balances first, then use unrestricted fund balances as needed.

When expenditures are incurred for purposes where only unrest ricted fund balances are av ailable, the City uses the unrestricted resources in the following order, excep t for instances wherein an ordinance specifies the fund balance: committed, assigned, and unassigned.

V. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

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69 Note 1 – Summary of Significant Accounting Policies (Continued)

W. Implementation of New GASB Pronouncements

In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Co rrections – an Amendment of GASB Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understanda ble, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability.

Note 2 – Stewardship, Compliance, and Accountability

A. Deficit Fund Balances and Deficits in Internal Service Funds

The following funds had deficit balances and net positions as of June 30, 2024:

Funds Amount
Nonmajor Governmental Funds:

LLEBG Special Revenue Funds (7,001) $
HBRRP Special Revenue Funds (559,903)
Community Development Block Grant
Special Revenue Funds (563,427)
Cal Emergency Management Special Revenue Funds (7,454)
Internal S ervice Funds:

Information Technology (1,392,636)
Fleet Maitenance (2,072,030)

The deficits in the Special Revenue Funds were due to the timing of grant reimbursement requests and temporary receivables where the City must initially make the expenditure and subsequently seek reimbursement.

The deficits Internal Service Fund were caused by th e net pension liability and OPEB liability and will be eliminated through future revenue collections from Internal Service Fund rate allocation adjustments. The Internal Service Fund rate is evaluated and adjusted during the annual budget process.

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70 Note 2 – Stewardship, Compliance, and Accountability

B. Compliance with Budgetary Limitations

The following funds exceeded appropriation amounts for the year ended June 30, 2024:

Final
Funds Appropriation Expenditures Excess
Major Funds:

General Fund:

Public safety:

Police administration 3,201,828 $ 3,322,513 $ (120,685) $ Police field services 17,467,881 17,477,049 (9,168) Police traffic safety 1,502,230 1,518,919 (16,689) Public works:

Parks and parkways 3,408,329 3,611,013 (202,684) Debt service:

Principal retirement - 181,912 (181,912) Interest and fiscal charges - 9,551 (9,551) Transfers out 43,742,474 43,817,046 (74,572) Capital Projects Fund:

Debt service:

Principal retirement - 10,990 (10,990) Interest and fiscal charges - 196 (196) General Debt S ervice Fund:

Transfers out - 15,500,000 (15,500,000) Nonmajor Governmental Funds:

Gas Tax Special Rev enue Fund
Current:

Public works 951,431 1,092,267 (140,836) Capital outlay - 610,781 (610,781) L L E BG Special Rev enue Fund
Capital outlay 90,208 105,147 (14,939) Measure A Special Rev enue Fund
Current:

Public works 365,592 807,179 (441,587) Capital outlay - 1,852,822 (1,852,822) Air Quality Special Rev enue Fund
Current:

Public works 91,900 93,696 (1,796) HBRRP S pecial Revenue Fund
Current:

Public works - 34,430 (34,430) Waste Recycling AB939 Special Revenue Fund
Capital outlay 10,000 100,026 (90,026) Community Facilities District Special Rev enue Fund
Current:

Public safety 19,898 69,932 (50,034)

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

71 Note 2 – Stewardship, Compliance, and Accountability (Continued)

B. Compliance with Budgetary Limitations (Continued)

Final
Funds Appropriation Expenditures Excess
L ighting and L andscape Special Rev enue Fund
Current:

Public works 1,702,800 1,818,988 (116,188) Community Development Block Grant Special Revenue Fund Capital outlay 570,226 837,741 (267,515) SB-1 Transportation Special Revenue Fund
Current:

Public works - 49 (49) Capital outlay - 1,921,936 (1,921,936) American Rescue Plan Act S pecial Revenue Fund
Current:

Capital outlay 1,780,000 2,580,666 (800,666) Unclaimed Property Special Rev enue Fund
Current:

Public safety - 672 (672) NP DE S Sp ec ial R ev enue F und
Current:

Public works - 21,529 (21,529) L ocal Gov ernment Planning Support Grant Special Rev enue Fund Current:

Public works - 3,230 (3,230)

Note 3 – Cash and Investments

Cash and investments as of June 30, 2024, are classified in the accompanying financial statements as follows:

Fiduciary
Governmental Business-Type Fund Statement
Activities Activities of Net Position Total
Unrestricted assets:

Cash and investments 141,225,029 $ 69,907,649 $ 14,559,242 $ 225,691,920 $ Restricted assets:

Cash and investments 2,760,234 - 6,456,977 9,217,211 Cash with escrow agent 1,354,122 - - 1,354,122 Cash and investments held by bond trustee 76,711,185 54,524,439 - 131,235,624 Total cash and investments 222,050,570$ 124,432,088 $ 21,016,219 $ 367,498,877 $

Cash and investments as of June 30, 2024 consist of the following:

Cash on hand 8,600 $
Deposits with financial institutions 27,038,960
Investments 340,451,317
Total cash and inv estments 367,498,877$

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72 Note 3 – Cash and Investments (Continued)

A. Demand Deposits

The carrying amounts of the City’s de mand deposits were $27,038,960 at June 30, 2024. Bank balances at that date were $31,654,854, the total amount of which was insured or collateralized with accounts held by the pledging financial institutions in the City’s name as discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This C ode states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City’s name.

The fair value of pledged securities must equal at least 110% of the City’s cash deposits. California law also allows institutions to secure City deposits by pledging fi rst trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive co llateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The City, however, has not waived the collateralization requirements.

B. Investments Authorized by the California Government Code and the City’s Investment Policy

The table below identifies the investment types that ar e authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restri ctive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the C ity, rather than the general provisions of the California Government Code or the City’s investment policy.

Authorized by Maximum Maximum
Authorized Investment Type Investment Maximum Percentage Investment Authorized by State Law Yes 5 years 100% None
U.S. Treasury Obligations Yes 5 years 15% 5%
U.S. Agency Securities Yes 5 years 60% None
Banker s Acceptances Yes 180 days 20% 5%
Commercial Paper Yes 270 days 15% 5%
Certificates of Deposit (Nonnegotiable) Yes 5 years 30% 5% Certificates of Deposit (Negotiable) Yes 5 years 30% 5% Repurchase Agreements Yes 90 days** 20% None
Medium-Term Notes Yes n/a 10% 25% or 50%***
Municipal Investments Yes 1 year 10% $500,000 per Issuer Money Market Mutual Funds
Mortgage Pass-Through Securities
Local Agency Investment Funds Yes n/a 100% None
*Based on state law requirements or City investment policy requirements, whichever is more restrictive.

C. Investments Authorized by Debt Agreements

Investments of debt proceeds held by bond trustee are govern ed by provisions of the debt agreements, rather than general provisions of the California Gove rnment Code or the City’s investment policy. The table below identifies the investment types that are authorized for investment s held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

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73 Note 3 – Cash and Investments (Continued)

C. Investments Authorized by Debt Agreements (Continued)

Maximum Maximum
Maximum Percentage Investment
Authorized Inv estment Type Maturity Allowed In One Issuer U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker s Acceptances 180 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Repurchase Agreements 270 days None None
Investment Contracts 30 years None None

D. Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an inv estment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-ter m investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of th e City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provide d by the following table that shows the distribution of the City’s investments by maturity:

12 Months 13 to 36 37 to 60
Investment Type Total or Less Months Months
U.S. Treasury Issues 36,887,195 $ 1,269,132 $ 7,314,527 $ 28,303,536 $ U.S. Government Sponsored
Enterprise Securities 27,261,627 6,129,287 5,951,586 15,180,754 Supranationals 6,277,470 - 6,277,470 - Municipal Securities 540,613 540,613 - - Corporate Medium Term Notes 28,852,441 2,047,022 12,358,831 14,446,588 Asset-Backed Securities 8,921,433 148,845 5,065,785 3,706,803 Money Market Mutual Funds 4,978,072 4,978,072 - - Local Agency Investment Fund 90,936,635 90,936,635 - - Held with Bond Trustees:

Money Market Mutual Funds 135,795,831 135,795,831 - - Total inv estments 340,451,317$ 241,845,437 $ 36,968,199 $ 61,637,681 $ Remaining Maturity (in Months)

E. Disclosures Relating to Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fu lfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating requi red by (where applicable) the California Government Code, the City’s investment policy, or debt agreemen ts, and the actual rating as of fiscal year end for each investment type.

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74 Note 3 – Cash and Investments (Continued)

E. Disclosures Relating to Credit Risk (Continued)

Mi ni m um
Legal Exempt or
Investment Type Total Rating Aaa Aa A Not Rated
U.S. Treasury Issues 36,887,195 $ N/A 36,887,195 $ - $ - $ - $ U.S. Government Sponsored
Enterprise Securities 27,261,627 N/A 27,261,627 - - - Supranationals 6,277,470 AA 6,277,470 - - - M unicipal Securities 540,613 N/A - 540,613 - - Corporate Medium Term Notes 28,852,441 A 2,706,427 5,172,369 20,973,645 - Asset-Backed Securities 8,921,433 Aa 8,921,433 - - - Mone y Ma rke t Mutua l Funds 4,978,072 Aaa 4,978,072 - - - Local Agency Investment Fund 90,936,635 N/A - - - 90,936,635 Held with Bond Trustees:

Mone y Ma rke t Mutua l Funds 135,795,831 Aaa 135,795,831 - - - Total inv estments 340,451,317$ 222,828,055 $ 5,712,982 $ 20,973,645 $ 90,936,635 $ M oody`s Rating as of Fiscal Year End

F. Concentration of Credit Risk

The City diversifies its investments by security type and institution. The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code, with the exceptions of United Stat es Treasury Obligations, mu tual funds, and external investment pools. As of June 30, 2024, investments in an y one issuer that represents 5% or more of total City investments are as follows:

Reported
Issuer Investment Type Amount
Federal Home Loan Mortgage Co. U.S. Government Sponsored Enterprise Securities 15,732,063 $

G. Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for i nvestments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another part y. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secu re deposits made by state or local governmental units by pledging securities in an undivide d collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agen cies. California law also allows financial institutions to secure City deposits by pledging fi rst trust deed mortgage notes having a value of 150% of the secured public deposits.

For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investme nt, and holds the investment on behalf of the reporting government.

As of June 30, 2024, the City’s deposits with financial institutions in excess of federal depository insurance limits were held in collateralized accounts.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

75 Note 3 – Cash and Investments (Continued)

H. Fair Value Measurement

The City has the following recurring fair value measurements as of June 30, 2024:

Quoted Process i Significant Other
Active Markets Observable
for Identical Inputs
Investment Type Assets (Level 2) Uncategorized Total
U.S. Treasury Issues 36,887,195 $ - $ 36,887,195 $ U.S. Government Sponsored
Enterprise Securities - 27,261,627 27,261,627 Supranationals - 6,277,470 6,277,470 M unicipal Securities - 540,613 540,613 Corporate Medium Term Notes - 28,852,441 28,852,441 Asset-Backed Securities - 8,921,433 8,921,433 Money Market Mutual Funds - - 4,978,072 4,978,072 Local Agency Investment Fund - - 90,936,635 90,936,635 Held with Bond Trustees:

Money Market Mutual Funds - - 135,795,831 135,795,831 Total inv estments 36,887,195$ 71,853,584 $ 231,710,538 $ 340,451,317 $ Fair Value M easurement

I. Investment in State Investment Pool

The City is a voluntary participant in the Local Agency Investment Fund (“LAIF”) that is regulated by the California Government Code under the oversight of the Treasu rer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based on the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF does not impose limits or restrictions on participant withdrawals, and the entire balance of the City’s investme nt in the portfolio is available for withdrawal at any time. LAIF is not registered with the Securities and Exch ange Commission and is not rated. LAIF is reported at amortized cost, which approximates fair value. As of June 30, 2024, the City had $90,936,635 invested in LAIF.

Note 4 – Interfund Transactions

A. Due to/From Other Funds

At June 30, 2024, the City had the following interfund receivables and payables:

Nonmajor Water Electric Internal
Capital Projects Governmental Enterprise Enterprise Service Due from Other Funds Fund Funds Fund Fund Funds Total
Governmental Fund:

General Fund 20,150,142 $ 1,018,520 $ 2,729,493 $ 1,162,449 $ 127,425 $ 25,188,029$ Governmental Funds Proprietary Funds
Due to Other Funds

Interfund balances are resulting from short-term borrowings to manage cash flows.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

76 Note 4 – Interfund Transactions (Continued)

B. Transfers In/Transfers Out

The following schedule summarizes the City’s transfer activity:

Proprietary
Fund
Capital General Nonmajor Internal
General Projects Debt Servie Governmental Service
Transfers Out Fund Fund Fund Funds Funds Total
Governmental Fund:

General Fund - $ 37,496,946$ 3,545,633 $ 1,286,667 $ 1,500,000 $ 43,829,246 $ Capital Improvements Fund - - 5,384,229 9,727 - 5,393,956 General Debt Service Fund - 15,500,000 - - - 15,500,000 Nonmajor Governmental Funds 4,505,000 - - - - 4,505,000 Total 4,505,000$ 52,996,946 $ 8,929,862 $ 1,296,394 $ 1,500,000 $ 69,228,202 $ Transfers In
Governmental Funds

a) The General Fund transferred $37,496,946 to Capital Pr oject Fund to fund capital improvement projects, $3,545,633 to General Debt Service Fund to fund annual debt service, $1,286,667 to Nonmajor Governmental Funds for the annual maintenance c ontributions to the various Landscape & Lighting Districts (LLDs), for interest earning due to the Opioid Special Revenue f und, and to close Cannabis Tax Grant Internal Service Fund to General Fund and $1,500,000 to Internal Service fund to fund various one-time capital expenditures. b) The Capital Improvements Fund transferred $5,384,229 to General Debt Service Fund to fund annual debt service obligations, and $9,727 to Non major Governmental Funds to fund street related project expenditures c) The General Debt Service Fund tran sferred $15,500,000 to Capital Project Fund for bond activity and bond draw to reconcile account activity and proceeds.
d) The Nonmajor Governmental Funds transferred $4,505,000 to the General Fund for police and fire services.

Note 5 – Notes and Loans Receivable

The following is a summary of notes and loans receivable as of June 30, 2024:

First time home buyer notes issued homebuyers $ 46,100 Neighborhood Stabilization deferred loan 1,311,392 Horizons at Indio senior housing project 3,814,208 Geovel, Inc. secured promissory note 3,131,765 Tenant improvement loans 210,665
Pacific West Communities acquisition loan 2,527,974 11,042,104
Allowance for loan forgiveness (1,915,100)

First Time Home Buyer Program

The City administered a First Time Home Buyer Program . The program is designed to encourage construction or improvement in low-to-moderate income housing or other projects. Under these programs, loans are provided under favorable terms to homeowners or developers who agree to spend these funds in accordance with the City’s terms. As of June 30, 2024, notes receivable of $46,100 reported under the Indio Housing Authority.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

77 Note 5 – Notes and Loans Receivable (Continued)

Neighborhood Stabilization Program

The Neighborhood Stabilization Program is funded by the U.S. Department of Housing and Urban Development (HUD) to help very low-to-moderate-income first-time home buyers purchase completely renovated foreclosed and/or abandoned homes. Three targeted areas in the City of Indi o (“City”) were selected to create the greatest impact by stabilizing and bringing new families into older established neighborhoods. The program will be available to anyone that is a first-time home buyer and has not owned a home in th e last three years, has an annual income that is not greater than 120% of the area median income as publis hed by the U.S. Department of Housing and Urban Development (HUD). The amount of loans outstanding as of June 30, 2024, was $1,311,392.

Horizon at Indio Housing Project

The Horizons at Indio Senior Housing Project note w as issued on December 1, 2005 and is due in full on December 1, 2060 or at an earlier time if the acceleration cl ause of the agreement becomes effective as defined in the agreement. The note accrues interest at 1% annually. The amount of the not e outstanding as of June 30, 2024, was $3,814,208.

Geovel, Inc. Promissory Note

The Geovel, Inc. promissory note was provided to a major auto dealer so that the dealer could purchase 18 acres located on the north side of Varner Road between Adams Street and Jefferson Street in an area known as the I-10 Auto Mall. The auto dealership generat es sales tax for the City. The site also fills the gap between the I-10 Auto Mall and other proposed dealership, making the site area more attractive for future development. The note was issued December 22, 2014 and is due in full on February 19, 2030 or at an earlier time if the Note is prepaid in whole or in part at any time, without charge, fee or premium, based on the prepayment clause defined in the agreement. The note accrues interest at 4% annually, provided, however, that after the outstanding principa l becomes due and payable, interest shall commence accruing at the lesser of 8% annually or the highest ra te permitted by law. The amount of the note outstanding as of June 30, 2024, was $3,131,765.

Tenant Improvement Loan

The City has entered into various commercial lease agreem ents, which require the City to cover tenant improvement costs. The terms vary from 4 to 7 years. Repayments are made monthly commencing upon the rent commencement date and the first of each month thereafter through the lease term as an additional rent. The amount of tenant improvement loan outstanding as of June 30, 2024 was $210,665.

Pacific West Communities Acquisition Loan

On September 2023, the City’s Housing Authority has entered into an acquisition loan agreements with Pacific West Communities for the development of affo rdable housing multifamily rental housing in the amount of $2,470,310. The loan accrues interest at a simple rate of 3% annually, co mmencing from the date of the initial disbursement. The loan has a term of 55 years from the issuance date of the Certif icate of Occupancy for the project. The amount of the loan outstanding as of June 30, 2024 was $2,527,973.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

78 Note 6 – Lease Receivable

The City leases land to various companies for installation of cellular towers and fibe r optic communications. The terms ranges from 35 months to 95 months as of the contract commencement date and the interest rates ranges from

0.5770% to 3.5863%. Some leases have extension options rangi ng from 12 months to 2 years. At June 30, 2024, the value of the lease receivable was $816,427 and the value of the deferred inflow of resources was $621,911. The City recognized lease revenue of $150,817 during the fiscal year.

The principal and interest to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2025 202,610$ 19,033 $ 221,643 $
2026 235,368 13,403 248,771
2027 143,417 9,194 152,611
2028 131,973 5,301 137,274
2029 59,501 2,446 61,947
2030-2031 43,558 839 44,397
Total 816,427$ 50,216 $ 866,643 $

Note 7 – Property Held for Resale

At June 30, 2024, the property held for resale is recorded as follows:

Major Governmental Fund:

General Fund $ 5,341,588
Nonmajor Governmental Fund:

Indio Housing Authority 164,000
Neighborhood Stabilization Grant 2 177,654
Total $ 5,683,242

The property held for resale is recorded in the general f und with the intention to be sold to local businesses or developers. Land purchased for the purpose of resale (or cont ribution to a redevelopment project) is recorded at the City’s cost to purchase the property or, upon entering into a c ontract for sale, the estimated net realizable value, if lower.

The City received federal funding in Neighborhood St abilization Program (NSP2 and NSP3) from the U.S.

Department of Housing and Urban De velopment (HUD) pursuant to Section 1497 of the Wall Street Reform and Consumer Protection Act of 2010 (aka Dodd-Frank Act) for the purpose of addressing the growing inventory of abandoned, foreclosed residential properties.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

79 Note 8 – Capital Assets

The summary of changes in governmental activities capital assets for the year ended June 30, 2024 is as follows:

Balance Balance
July 1, 2023 Additions Deletions Transfers June 30, 2024 Capital assets, not being depreciated:

Construction in process 85,104,696 $ 58,544,739 $ - $ (13,390,764)$ 130,258,671 $ Land 42,140,063 1,240,498 - - 43,380,561 Rights of way 54,699,719 - - - 54,699,719 Total capital assets, not being depreciated 181,944,478 59,785,237 - (13,390,764) 228,338,951 Capital assets, being depreciated:

Structure and improvements 37,527,298 318,050 - - 37,845,348 Machinery and equipment 11,198,554 1,362,416 - - 12,560,970 Vehicles 13,224,374 2,942,203 (64,287) - 16,102,290 Infrastructure: street network 616,538,398 2,612,792 - 13,390,764 632,541,954 Total capital assets, being de preciated 678,488,624 7,235,461 (64,287) 13,390,764 699,050,562 Less accumulated depreciation for:

Structures and improvements (14,215,303) (949,898) - - (15,165,201) Machinery and equipment (8,744,112) (10,093) - - (8,754,205) Vehicles (10,233,352) (610,556) 64,287 - (10,779,621) Infrastructure: street network (327,235,654) (15,613,506) - - (342,849,160) Total accumulated de preciation (360,428,421) (17,184,053) 64,287 - (377,548,187) Total capital assets, being
depreciated, net 318,060,203 (9,948,592) - 13,390,764 321,502,375 Intangible capital assets, being amortized:

Right-to-use lease assets - Equipment 38,412 193,400 (10,676) - 221,136 Right-to-use lease assets - Infrastructure 60,336 - - - 60,336 Right-to-use subscription assets 5,901,281 750,641 (827,579) - 5,824,343 Total intangible capital assets, net 6,000,029 944,041 (838,255) - 6,105,815 Less accumulated amortization for:

Right-to-use lease assets - equipment (24,654) (44,797) 10,676 - (58,775) Right-to-use lease assets - infrastructure (24,135) (12,066) - - (36,201) Right-to-use subscription assets (930,406) (1,009,580) 77,617 - (1,862,369) Total accumulated amortization (979,195) (1,066,443) 88,293 - (1,957,345) Total intangible capital assets, being amortized, net 5,020,834 (122,402) (749,962) - 4,148,470 Total capital assets, net 505,025,515$ 49,714,243 $ (749,962) $ - $ 553,989,796$

Depreciation and amortization expense was charged to f unctions/programs of governmental activities for the year ended June 30, 2024 as follows:

General government 134,459 $
Public safety 953,313
Public works 15,628,482
Community development 1,070
Internal service funds 1,533,172
Total 18,250,496$

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

80 Note 8 – Capital Assets (Continued)

The summary of changes in business-type activities capital assets for the year ended June 30, 2024 is as follows:

Balance Balance
July 1, 2023 Additions Deletions Transfers June 30, 2024 Capital assets, not being depreciated:

Land 3,138,674 $ - $ - $ - $ 3,138,674$ Construction in progress 1,959,068 12,003,342 - (608,367) 13,354,043 Total capital assets, not being depreciated 5,097,742 12,003,342 - (608,367) 16,492,717 Capital assets, being depreciated:

Structures and improvements 15,351,445 - - - 15,351,445 M achinery and equipment 3,415,239 114,543 - - 3,529,782 Vehicles 2,976,821 983,171 - - 3,959,992 Utility distribution system 295,526,998 325,142 - 608,367 296,460,507 Total capital assets, being depreciated 317,270,503 1,422,856 - 608,367 319,301,726 Less accumulated depreciation for:

Structures and improvements (4,815,027) (382,799) - - (5,197,826) Machinery and equipment (3,129,059) (55,555) - - (3,184,614) Vehicles (1,905,131) (204,780) - - (2,109,911) Utility distribution system (167,742,151) (7,399,844) - - (175,141,995) Total accumulated depreciation (177,591,368) (8,042,978) - - (185,634,346) Total capital assets, being
depreciated, net 139,679,135 (6,620,122) - 608,367 133,667,380 Intangible capital assets, being amortized:

Right-to-use subscription assets - vehicles 121,546 283,462 (121,547) - 283,461 Rig ht-to-use subscription assets - 27,132 - - 27,132 Total intangible capital assets, net 121,546 310,594 (121,547) - 310,593 Less accumulated amortization for:

Right-to-use subscription assets - vehicles (109,667) (53,847) 121,547 - (41,967) Rig ht-to-use subscription assets - (2,743) - - (2,743) Total accumulated amortization (109,667) (56,590) 121,547 - (44,710) Total intangible capital assets, being amortized, net 11,879 254,004 - - 265,883 Total capital assets, net 144,788,756$ 5,637,224 $ - $ - $ 150,425,980$

Depreciation/amortization expense was charged in the following function in the Statement of Activities:

Water 8,036,038 $
Golf 63,530
Total 8,099,568$

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

81 Note 9 – Compensated Absences

Changes in compensated absences for the year ended June 30, 2024, are as follows:

Balance Balance Due within Due in M ore
July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Year Governmental Activities 2,342,091$ 1,671,578 $ (1,663,841) $ 2,349,828 $ 1,669,337 $ 680,491 $ Business-Type Activities 394,743 290,155 (301,754) 383,144 292,887 90,257 Total 2,736,834 $ 1,961,733 $ (1,965,595) $ 2,732,972 $ 1,962,224 $ 770,748 $

Compensated absences have no repayment schedule and are payable as employees utilize earned leave time.

Compensated absences recorded in governm ental activities are generally liquidate d through the City’s General Fund, and compensated absences recorded in business-type activities are liquidated through the Water Enterprise Fund.

Note 10 – Long-Term Debt

A. Governmental Activities

Changes in long-term obligations for the year ended June 30, 2024 for the governmental activities are as follows:

Balance Balance Due within Due in M ore
July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Year Gove rnme ntal Acti vi ti e s:

Bonds Payable:

Lease Revenue Refunding Bonds, Series 2016A 12,030,000$ - $ (595,000)$ 11,435,000 $ 620,000 $ 10,815,000$ Taxable Lease Revenue Refunding Bonds, Series 2016B 2,225,000 - (535,000) 1,690,000 550,000 1,140,000 Judgment Obligation Bonds, Series 2017 12,440,000 - (695,000) 11,745,000 715,000 11,030,000 Lease Revenue Refunding Bonds, Series 2022A 118,640,000 - (1,285,000) 117,355,000 1,355,000 116,000,000 Unamortized Bond Premiums/(Discounts):

Lease Revenue Refunding Bonds, Series 2016A 626,649 - (41,808) 584,841 - 584,841 Judgment Obligation Bonds, Series 2017 (183,410) - 13,101 (170,309) - (170,309) Lease Revenue Refunding Bonds, Series 2022A 9,750,278 - (325,009) 9,425,269 - 9,425,269 Financing Agreement:

Facilities Energy Efficient Equipment 51,842 - (51,842) - - - Lease Payable 44,286 165,492 (49,599) 160,179 95,284 64,895 Subscription Payable 4,137,694 609,013 (1,633,015) 3,113,692 902,620 2,211,072 Total Governmental Activities 159,762,339$ 774,505 $ (5,198,172)$ 155,338,672 $ 4,237,904 $ 151,100,768 $

Lease Revenue Refunding Bonds, Series 2016A

In April 2016, the City of Indio Public Financing Au thority issued the $14,150,000 Lease Revenue Refunding Bonds Series 2016A. The proceeds were used to refund the remaining outstanding balance of Series 2007A. The bonds are secured by leased properties, and in the event of default, no acceleration of payments is allowed, but legal action may be taken against the City to fulfill its obligations under the indenture agreement.

The Series 2016A bonds consist of $11,720,000 of ser ial bonds and $2,430,000 of term bonds. The serial bonds accrue interest at rates between 3.00% and 5.00% and th e principal amounts mature be tween November 1, 2019 and November 1, 2037 in amounts ra nging from $500,000 to $1,005,000. Term bonds of $2,430,000 accrue interest at 3.00% and mature on November 1, 2031. At June 30, 2024, the outstanding balance was $11,435,000.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

82 Note 10 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Lease Revenue Refunding Bonds, Series 2016A (Continued)

The future debt service requirements as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 620,000$ 410,463 $ 1,030,463 $
2026 655,000 378,588 1,033,588
2027 685,000 345,088 1,030,088
2028 720,000 309,963 1,029,963
2029 755,000 273,088 1,028,088
2030-2035 5,085,000 1,075,266 6,160,266
2036-2038 2,915,000 149,178 3,064,178
Total 11,435,000$ 2,941,634 $ 14,376,634 $

Taxable Lease Revenue Refunding Bonds, Series 2016B

In April 2016, the City of Indio Public Financing Authority issued the $5,580,000 Lease Revenue Refunding Bonds Series 2016B. The proceeds were used to repay the remaining outstanding balance of the H.N. and Frances C. Berger Foundation note payable. The bonds are secured by leased properties, and in the event of default, no acceleration of payments is allowed, bu t legal action may be taken against the City to fulfill its obligations under the indenture agreement.

The Series 2016B bonds consist of $5, 580,000 of serial bonds. The serial bonds accrue interest at rates between

1.520% and 3.650% and the principal amounts mature between November 1, 2016 and November 1, 2026 in amounts ranging from $445,000 to $570,000. At June 30, 2024, the outstanding balance was $1,690,000.

The future debt service requirements as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 550,000$ 49,968 $ 599,968 $
2026 570,000 30,780 600,780
2027 570,000 10,403 580,403
Total 1,690,000$ 91,151 $ 1,781,151$

Judgment Obligation Bonds, Series 2017

In May 2017, the City of Indio issued the $16,300 ,000 Judgment Obligation Bonds , Series 2017. The proceeds were used to pay the judgment ordered against the City in the case of Jefferson Street Ventures, LLC v. City of Indio on December 6, 2016. If in the event of default, the principal of all outstanding bonds may be declared due and payable. The City is obligated to deposit with the bond trustee each year the amount of payment obligations coming due in the fiscal year. Additionally, the city has c ovenanted to include in its budget in each fiscal year, a provision for funds in an amount sufficient to pay the pr incipal and interest on the bonds coming due in such fiscal year.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

83 Note 10 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Judgment Obligation Bonds, Series 2017 (Continued)

The Series 2017 bonds consist of $16, 300,000 of serial bonds. The serial bond s accrue interest at rates between

1.250% and 4.250% and the principal amounts mature between November 1, 2017 and November 1, 2036 in amounts ranging from $650,000 to $1,140,000. At June 30, 2024, the outstanding balance was $11,745,000.

The future debt service requirements as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 715,000$ 450,822 $ 1,165,822 $
2026 735,000 427,706 1,162,706
2027 760,000 402,463 1,162,463
2028 790,000 374,844 1,164,844
2029 820,000 344,125 1,164,125
2030-2035 5,690,000 1,305,669 6,995,669
2036-2037 2,235,000 95,944 2,330,944
Total 11,745,000$ 3,401,573 $ 15,146,573 $

Lease Revenue Refunding Bonds, Series 2022A

In August 2022, the City of Indio Pu blic Financing Authority issued th e $119,450,000 Lease Revenue Refunding Bonds Series 2022A. The proceeds were used to refund the outstanding Indio Public Financing Authority Lease Revenue Refunding Bonds, Series 2012 (Public Capita l Improvements), finance the cost of acquisition, construction, and installation of certa in capital improvements of the City, fu nd capitalize interest on a portion of the Series 2022A Bonds through June 1, 2025, and purchase a municipal bo nd insurance policy to guarantee payment of the principal and interest on the Insures Series 2022A Bonds when due.

The Series 2022A bonds consist of $119, 450,000 of term bonds. Th e term bonds accrue interest at rates between

4.500% to 5.250% and the principal amounts mature between November 1, 2042, November 1, 2047, and November 1, 2052.

In the event of default under the Lease Agreement there is no right under any circumstances to accelerate the Base Rental Payments or otherwise declare by any Base Rental Payments not then in default to be immediately due and payable. There is no right under the indenture to accelerate debt service payments on the Bonds in the event of a default under the Indenture of the Lease Agreement. Reserve requirements for the Series 2022A bonds are disclosed in the bond documents. At June 30, 2024, the outstanding balance was $117,355,000.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

84 Note 10 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Lease Revenue Refunding Bonds, Series 2022A (Continued)

The future debt service requirements as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 1,355,000$ 5,934,375 $ 7,289,375 $
2026 2,445,000 5,839,375 8,284,375
2027 2,565,000 5,714,125 8,279,125
2028 2,695,000 5,582,625 8,277,625
2029 2,830,000 5,444,500 8,274,500
2030-2035 20,265,000 20,265,000 40,530,000
2036-2040 19,455,000 19,146,131 38,601,131
2041-2045 20,350,000 14,133,825 34,483,825
2046-2050 26,275,000 8,084,325 34,359,325
2051-2053 19,120,000 1,427,606 20,547,606
Total 117,355,000$ 91,571,887 $ 208,926,887 $

Facilities Energy Efficient Equipment

The City entered into a ten-year contract for the purchase of energy efficient equipment to be installed in various City facilities. The gross cost of the equipment, at lo an inception, was $866,896. At June 30, 2024, outstanding balance of the loan was fully paid.

Lease Payable

The City entered into leases for canopy wireless internet 2 and equipment including an automated external defibrillator, postage meter, mobile office & restroom, and TicketPRO ticket writers. The leases have payments that range from $774 to $9,663 and interest rates that range from 0.3150% to 3.2950%. As of 06/30/2024, the total combined value of the lease liab ility is $160,179 the total combined valu e of the short-term lease liability is $95,284. The combined value of the right to use ass et, as of 06/30/2024 of $281,472 with accumulated amortization of $94,976 is included w ithin the right-to-use lease assets in the governmental activities capital assets table in Note 9.

Future lease payments under the lease payable are as follows:

Year Ending
June 30, Principal Interest Total
2025 95,284 $ 3,004 $ 98,288 $
2026 29,438 1,273 30,711
2027 19,126 710 19,836
2028 16,331 199 16,530
Total 160,179$ 5,186 $ 165,365 $

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

85 Note 10 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Subscription Payable

The City has entered into various s ubscription agreements with various ve ndors for software. The terms of these subscriptions range from 13 months to 10 years. The s ubscriptions have interest rates ranging from 1.85% to

3.7643%. As of June 30, 2024, the outstanding subscription liability was $3,113,692.

The future subscription payments are as follows:

Year Ending
June 30, Principal Interest Total
2025 902,620$ 72,739 $ 975,359 $
2026 741,931 50,919 792,850
2027 536,931 31,605 568,536
2028 530,353 18,161 548,514
2029 401,857 4,948 406,805
Total 3,113,692$ 178,372 $ 3,292,064 $

B. Business-Type Activities

Summary of changes in long-term debts for the year e nded June 30, 2024 for the bus iness-type activities are as follows:

Balance Balance Due within Due in M ore
July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Year Business-type Activities:

Bonds Payable:

Water Revenue Refunding Bonds, Series 2015A and B 44,595,000$ - $ (2,375,000)$ 42,220,000 $ 2,495,000 $ 39,725,000 $ Electic Revenue Bonds, Series 2023A - 59,010,000 - 59,010,000 - 59,010,000 Unamortized Bond Premium:

Water Revenue Refunding Bonds, Series 2015A and B 952,193 - (56,012) 896,181 - 896,181 Electic Revenue Bonds, Series 2023A - 5,798,533 - 5,798,533 - 5,798,533 Lease payable 9,369 283,461 (48,572) 244,258 59,265 184,993 Subscription payable - 26,807 (5,342) 21,465 4,847 16,618 Total business-type activities 45,556,562$ 65,118,801 $ (2,484,926) $ 108,190,437 $ 2,559,112 $ 105,631,325 $

Water Revenue Refunding Bonds, Series 2015 A and B

In June 2015, the Indio Water Authority issued $51, 065,000 of Water Revenue Re funding Bonds Series 2015A, and $9,150,000 of Water Revenue Refunding Bonds Series 2015B (Taxab le). The proceeds we re used to cause the refunding of the Authority’s 2006 Water Revenue Bonds, finance certain capital improvements to the Authority’s water system (only proceeds of the Series 2015A bonds), and to pay costs of issuance of the bonds. In the event of default, there is no acceleration of payments of unpaid principal or interest amounts. The bonds are secured by revenues pledged for the payment of debt service on the bonds.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

86 Note 10 – Long-Term Debt (Continued)

B. Business-Type Activities

Water Revenue Refunding Bonds, Series 2015 A and B (Continued)

The 2015A bonds consist of $32,910,0 00 of serial bonds and $18,155,000 of term bonds. The serial bonds accrue interest at rates between 3.250% and 5.000% and th e principal amounts mature between April 1, 2021 and April 1, 2040 in amounts ranging from $1,025,000 to $3,2 50,000. Term bonds of $14,320,000 accrue interest at

4.000% and mature on April 1, 2036, and bonds of $3,835,000 accrue in terest at 4.125% and mature on April 1, 2040. The 2015B bonds consist of $9,150,000 of serial bonds and accrue interest at rates between 1.033% and 2.820%.

The Series 2015A term bonds maturing in the years 2036 and 2040 are subject to mandatory sinking account redemption on each April 1, commencing on April 1, 2033 and April 1, 2037, respectively, at a redemption price equal to the principal amount thereof together with accrued interest, without premium.

At June 30, 2024, the outstanding balance of the Series 2015A bonds and Series 2015B bonds was $42,220,000 and the Series 2015B bonds were fully matured with no balance outstanding.

The annual debt service requirements to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2025 2,495,000$ 1,719,738 $ 4,214,738 $
2026 2,620,000 1,597,988 4,217,988
2027 2,750,000 1,470,113 4,220,113
2028 2,835,000 1,363,363 4,198,363
2029 2,925,000 1,276,044 4,201,044
2030-2035 19,940,000 5,781,622 25,721,622
2036-2040 8,655,000 1,162,141 9,817,141
Total 42,220,000$ 14,371,009 $ 56,591,009 $

Debt Covenants for Enterprise Refunding Revenue Bonds, Series 2015A and B

As per the Bond Indenture, the City shall fix, prescribe, revise and coll ect rates, fees and charges for the services and facilities furnished by the Water System during each fiscal year:

a) which shall be at least sufficient to yield gross water revenues for the Water Authority which are sufficient to pay the following amounts in the following order of priority:
i. All operation and maintenance costs estimated by the C ity, in consultation with the Authority and based on information provided by the Authority, to become due and payable in such fiscal year; ii. The base rental payments and the principal of and inte rest on any outstanding parity water obligations as they become due and payable during such fiscal year, without preference or priority; iii. The amount, if any, required to restore the balance in the reserve subaccounts to the full amount of the respective reserve requirements and, with respect to any other outstanding parity water obligations, to restore the balance in the related debt service reserv e fund to the full amount of the applicable reserve requirement; and
iv. All other additional rental and othe r payments required to meet any ot her obligations of the City which are charges, liens, encumbrances upon gross water revenues during such fiscal year. b) So that gross water revenues less operation and maintenance costs will be at least equal to 120% of the annual parity obligation payments for such fiscal year.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

87 Note 10 – Long-Term Debt (Continued)

B. Business-Type Activities (Continued)

Electric Revenue Refunding Bonds, Series 2023A

On December 31, 2023, the Indio Electric Financing Au thority (“IEFA”) issued Revenue Bonds for $59,010,000 to finance the cost of electric substation and related improvements to be located within the boundaries of the City, owned by IEFA and maintained and op erated by Imperial Irrigation District (“IID”) as part of IID’s electric system. The bonds are secured by pledged revenues, which includes surcharge revenues collected by IID. Interest on the bonds will be payable semiannually on January 1 and July 1, commencing July 1, 2024. The interest rates ranges from 5.00% to 5.25% and net original issue prem ium is $5,798,533. The principal balance outstanding and unamortized premium as of June 30, 2024 are $59,010,000 and $5,798,533, respectively.

Future debt service payment for the Electric Revenue Refunding Bonds are as follows:

Year Ending
June 30, Principal Interest Total
2025 - $ 3,257,467$ 3,257,467 $
2026 995,000 3,053,875 4,048,875
2027 1,045,000 3,004,125 4,049,125
2028 1,100,000 2,951,875 4,051,875
2029 1,155,000 2,896,875 4,051,875
2030-2034 6,700,000 13,558,625 20,258,625
2035-2039 8,545,000 11,707,875 20,252,875
2040-2044 11,000,000 9,264,938 20,264,938
2045-2049 14,190,000 6,059,550 20,249,550
2050-2053 14,280,000 1,922,288 16,202,288
Total 59,010,000$ 57,677,492 $ 116,687,492 $

Lease Payable

The City entered into 26-month to 54-month lease agreements for the use of golf carts. As of June 30, 2024, the value of the lease liability is $244,258. The City is require d to make monthly fixed payments of $4,686 to $5,564.

The lease has interest rates ranges from 0.218% to 3.4510%. The value of the right to use asset as of June 30, 2024 of $283,460 with accumulated amortization of $41,968 is included in the right-to-use lease assets – vehicle in the business-type activities capital assets table in Note 9.

Future lease payments under the lease payable are as follows:

Year Ending
June 30, Principal Interest Total
2025 59,265 $ 7,498 $ 66,763 $
2026 61,343 5,420 66,763
2027 63,494 3,269 66,763
2028 60,156 1,043 61,199
Total 244,258$ 17,230 $ 261,488 $

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

88 Note 10 – Long-Term Debt (Continued)

B. Business-Type Activities (Continued)

Subscription Payable

The City has entered into a 60-month su bscription agreement for the use of Pl anet Bid. The subscriptions has an interest rate of 3.4510%. As of June 30, 2024, the outstanding subscription liability was $21,465.

The future subscription payments are as follows:

Year Ending
June 30, Principal Interest Total
2025 4,847 $ 741 $ 5,588 $
2026 5,182 573 5,755
2027 5,533 395 5,928
2028 5,903 204 6,107
Total 21,465 $ 1,913 $ 23,378 $

Note 11 – Pension Plans

A. General Information about the Pension Plan

Plan Descriptions

The City contributes to the California Public Employ ees Retirement System (PERS); to both a miscellaneous agent multiple-employer and safety cost-sharing multiple employer defined benefit pe nsion plans. PERS provides retirement and disability benefits, annual cost-of-living ad justments and death benefits to plan members and beneficiaries. PERS acts as a common investment and admi nistrative agent for participating public entities within the State of California. Benefit provisions and all othe r requirements are established by state statute and City ordinance. Copies of PERS’ annual financial report ma y be obtained from its executive office: 400 P Street, Sacramento, California 95814.

Benefits Provided

CalPERS provides service retirement and disability benefits, a nnual cost of living adjustments and death benefits to plan members, who must be public employees and benefici aries. Benefits are based on years of credited service, equal to one year of full-time empl oyment. Members with five years of total service are eligible for non-duty disability benefits after 10 statutorily reduced benefits.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

89 Note 11 – Pension Plans (Continued)

A. General Information about the Pension Plan (Continued)

Benefits Provided (Continued)

The Plans’ provisions and benefits in effect at the measurement date, are summarized as follows:

Classic* PEPRA
Hire date
Prior to
January 1, 2013
Prior to
January 1, 2013
Benefit formula 2.7% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50 50
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 2.0% to 2.7% Required employee contribution rates 8.000% 7.000%
Required contribution during measurement period 10.880% 10.880% Miscellaneous Plans

Classic I* Classic II* PEPRA
Hire date
Prior to
July 1, 2012
July 1, 2012 -
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50 50 52
Monthly benefits, as a % of eligible compensation 3%, 50+ yrs 2.4%-3%, 50 yrs - 55+ yrs, respectively
2%-2.7%, 50 yrs -
57+ yrs, respectively
Required employee contribution rates 9.000% 9.000% 13.750% Required contribution during measurement period 25.640% 22.480% 13.660% Safety Plans

Employees Covered by Benefit Terms

At the June 30, 2022, valuation date, the following employees were covered by the benefit terms:

Miscellaneous Safety
Plans Plans
Active employees 179 61
Transferred and terminated employees 216 56
Retired Employees and Beneficiaries 276 233
Total 671 350

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

90 Note 11 – Pension Plans (Continued)

A. General Information about the Pension Plan (Continued)

Contribution Description

Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determ ined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year , with an additional amount to finance any unfunded accrued liability. The employer is required to contribute th e difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended.

Payments made by the employer to satisfy contribution requ irements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

For the year ended June 30, 2024, the contributions made were in the amount of $4,781,801 and $5,152,162 for the miscellaneous and safety plans, respectively.

B. Net Pension Liability

Actuarial Methods and Assumptions Used to Determine Total Pension Liability.

The June 30, 2022 valua tions were rolled forward to determine the J une 30, 2023 total pension liabilities, based on the following actuarial methods and assumptions:

Actuarial Cost M ethod
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Morta l i ty Rate Table1
Post Retirement Benefit Increase
Entry Age Actuarial Cost Method

6.90%

2.30%
Varies by Entry Age and Service
Derived using CalPERS’ M embership Data for all Funds.

The lesser of contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 23 0 % h f
(1)The mortality table used was developed based on Cal PERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement usi ng 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 e xperience study report that can be found on the CalPERS website.

Change of Assumptions

There were no assumption changes in 2023.

Long-term Expected Rate of Return

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

91 Note 11 – Pension Plans (Continued)

B. Net Pension Liability (Continued)

Long-term Expected Rate of Return (Continued)

In determining the long-term expected rate of return , CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 year s using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:

Assumed
Asset Class1 Asset Allocation Real Return 1,2
Global equity - Cap-weighted 30.00% 4.54%
Global equity - Non-Cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private equity 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage -5.00% -0.59%
100.00%
2 Figures are based on the 2021 Asset Liability Management Study. 1 An expected inflation of 2.30% used for this period.

Discount Rate

The discount rate used to measure the total pension lia bility was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers w ill be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan memb ers. Therefore, the long- term expected rate of return on plan investments was applied to all periods of proj ected benefit payments to determine the total pension liability.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

92 Note 11 – Pension Plans (Continued)

C. Changes in the Net Pension Liability

The following table shows the changes in net pension liability recognized over the measurement period for the miscellaneous agent multiple-employer plan.

Total Pension Plan Fiduciary Net Net Pension
L iability Position L iability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 (Valuation Date) 117,736,411 $ 83,578,305 $ 34,158,106 $ Changes Recognized for the M easurement Period:

Service Cost 2,541,857 - 2,541,857 Interest on the total pension liability 8,130,641 - 8,130,641 Changes of Benefit Terms 171,861 - 171,861 Changes of Assumptions - - - Differences between Expected and Actual Experience 1,534,274 - 1,534,274 Contributions - Employer - 4,436,599 (4,436,599) Contributions - Employees - 1,030,309 (1,030,309) Net Investment Income - 5,173,936 (5,173,936) Benefit Payments, including Refunds of -
Employee Contributions (5,756,168) (5,756,168) - Administrative Expense - (61,460) 61,460 Other Miscellaneous Income/(Expense) - - - Net Changes during July 1, 2022 to June 30, 2023 6,622,465 4,823,216 1,799,249 Balance at June 30, 2023 (Measurement Date) 124,358,876 $ 88,401,521 $ 35,957,355 $ Increase (Decrease)
Miscellaneous Plan

Proportionate Share of the Net Pension Liability and Pension Expense

The following table shows the City’s safety plan’s propor tionate share of the risk pool collective net pension liability over the measure period.

Total Pension Plan Fiduciary Net Net Pension
L iability Position L iability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 (Valuation Date) 147,736,316 $ 101,669,211 $ 46,067,105 $ Balance at June 30, 2023 (Measurement Date) 156,608,910 107,299,282 49,309,628 Net Changes during 2022-2023 8,872,594 5,630,071 3,242,523 Safety Plan
Increase (Decrease)

The following is the approach establis hed by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool.

(1) In determining a cost-sharing plan’s proportionate share, total amount s of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2022). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

93 Note 11 – Pension Plans (Continued)

C. Changes in the Net Pension Liability (Continued)

Proportionate Share of the Net Pension Liability and Pension Expense (Continued)

(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2023). Risk pool FNP at the measureme nt date is then subtracted from this number to compute the NPL for the risk pool at the measuremen t date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at th e measurement date denotes the aggregate risk pool’s FNP at June 30, 2023 less the sum of all additional side fund (or unfunded lia bility) contributions made by all employers during the measurement period (2022-2023).

(3) The individual plan’s TPL, FNP and NPL are also calculated at the valuation date. TPL is allocated based on the rate plan’s share of the actuarial accrued liab ility. FNP is allocated based on the rate plan’s share of the fair value assets.

(4) Two ratios are created by dividing the plan’s individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pool’s total TPL and FNP, respectively.

(5) The plan’s TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan’s FNP as of the Measurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period.

(6) The plan’s NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).

Deferred outflows of resources, deferred inflows of resources, and pension expense is allocate based on the City’s share of contributions during measurement period.

The City’s proportionate share of the net pension liability was as follows:

Safety Plan
Proportion - June 30, 2023 0.39526%
Proportion - June 30, 2022 0.39882%
Change - Increase (Decrease) -0.00356%

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pensio n liability of the Plans as of the m easurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percen t) or 1 percentage-point higher (7.9 percent) than the current rate:

Discount Rate Current Discount Discount Rate
- 1% (5.90%) Rate (6.90%) + 1% (7.90%)
Miscellaneous Plan 53,293,621$ 35,957,355 $ 21,743,573 $ Safety Plan 70,793,584$ 49,309,628 $ 31,744,966 $ Plan's Net Pension L iability/(Asset)

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

94 Note 11 – Pension Plans (Continued)

C. Changes in the Net Pension Liability (Continued)

Pension Plan Fiduciary Net Position

Detailed information about the plan’s fiduciary net position is available in the separately issued CalPERS financial report.

D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions

For the year ended June 30, 2024, the City recogni zed pension expense in the amounts of $6,473,610 and $7,691,530 for the miscellaneous plan and safety plan, respectively.

As of measurement date of June 30, 2023, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred outflows Deferred inflows
of Resources of Resources
Miscellaneous Plan:

Employer contributions subsequent to measurement date 4,781,801$ - $ Changes of assumptions 1,498,636 -
Difference between expected and actual experience 1,035,546 (419,786) Net difference between projected and actual earning
on pension plan investments 3,999,456 -
Total Miscellaneous Plan 11,315,439$ (419,786) $
Deferred outflows Deferred inflows
of Resources of Resources
Safety Plan:

Employer contributions subsequent to measurement date 5,152,162$ - $ Changes of assumptions 2,877,776 -
Difference between expected and actual experience 3,620,236 (309,930) Net difference between projected and actual earnings
on pension plan investments 6,748,009 -
Adjustments due to differences in proportions 277,553 (150,801) Difference in proportionate share 578,291 (799,138) Total Miscellaneous Plan 19,254,027$ (1,259,869) $ Miscellaneous Plan
Safety Plan

The amounts above are net of outflows and inflows recognized in the 2022-23 measurement period expense.

The expected average remaining service lifetime (“EARSL” ) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired). The EARSL for the Miscellaneous Plan and the Safety Plan risk pool for the 2022-23 measure ment period is 3 and 3.8 y ears, which was obtained by dividing the total service years of 2,028 and 600,538 (the sum of remaining service lifetimes of the active employees) by 671 and 160,073 (the total number of participants: active, inactive, and retired), respectively.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

95 Note 11 – Pension Plans (Continued)

D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions (Continued)

$4,871,801 and $5,152,162 reported as deferred outflows of resources rela ted to pensions for miscellaneous plan and safety plan, respectively, resulting fr om the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability and collectively net pension liability, respectively, in the year ending June 30, 2025.

Other amounts reported as deferred outf lows and deferred inflows of reso urces related to pensions will be recognized in the future pension expense as follows:

Deferred Outflows/ Deferred Outflows/
(Inflows) (Inflows)
Measurement of Resources of Resources
Period Miscellaneous Safety
Ending June 30 Plan Plan
2024 2,227,508$ 4,163,550 $
2025 1,033,107 2,936,675
2026 2,739,110 5,553,422
2027 114,127 188,349
2028 - -
Thereafter - -
6,113,852$ 12,841,996 $

Note 12 – Other Postemployment Benefits (“OPEB”)

A. General Information about the OPEB Plan

Plan Description and Administration

Integrated medical/prescription drug coverage is provided through CalPERS under the Public Employees Medical and Hospital Care Act (PEMHCA). Employees can choo se from a number of HMO and PPO options. The City sponsors a single-employer defined benefit plan that offers the same medical plans to its retirees as to its active employees, with the exception that on ce a retiree becomes eligible for Medicar e (that is, reaches age 65), he or she must join a Medicare HMO or a Medicare Supplement plan under PEMHCA.

Benefits Provided

Employees become eligible to retire and receive City-paid healthcare benefits upon attainment of age 50 and five years of covered PERS service, or by qualifying disability re tirement status. Benefits are paid for the lifetime of the retiree, spouse or survivin g spouse, and adult children to the age of 26. The City contribution is limited to $1,800/ month for retirees for employees hired prior to August 1, 2009.

Employees first hired on or after August 1, 2009 are subj ect to the “100/90” State contribution formula and the 10-year vesting schedule set forth in Government Code section 22893. The vesting schedule provides for a City contribution of 50% of the “100/90” dollar amounts after 10 years of credited PERS service (5 of which must be with the City), with an additional 5% per year of service until fully vested after 20 years.

The 2021 “100/90” monthly dollar amounts are $883 single, $1,699 two-party, and $2,124 family. In addition, the City pays a 0.24%-of-premium administrative fee to PEMHCA for each retiree.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

96 Note 12 – Other Postemployment Benefits (“OPEB”) (Continued)

A. General Information about the OPEB Plan (Continued)

Plan Membership

At June 30, 2024, membership consisted of the following:

Inactive members, spouse, or beneficiaries currently receiving benefit payments 197 benefit payments 24
Active employees 259
Total 480
Inactive members or beneficiaries entitled to but not yet receiving

Contributions

The contribution requirements of plan members and th e City are established and may be amended by the City Council. The City currently pays pay-as-you-go costs outside its irrevocable OPEB trust. The City contributes the excess, if any, of budgeted pay-go costs over the actual pa y-go to the trust on an annual basis. For fiscal year 2023-24, the City recognized contributions in reduction to the net OPEB liability of $2,378,016.

B. Net OPEB Liability

The City’s net OPEB liability was measured as of June 30, 2023 and the total OPEB Liability used to calculate the net OPEB liability was determined by an actuarial va luation as of July 1, 2023. Standard actuarial update procedures were used to project/discount from valuation to measurement dates.

Significant Actuarial Assumptions Used for Total OPEB Liability

The total OPEB liability, measured as of June 30, 2 023, was determined using the following actuarial assumptions:

Actuarial Assumptions:

Discount Rate
Investment Rate of Return
Inflation 2.30% per annum
Salary Increases
Morta l i ty
Healthcare Cost Trend Rates
Based on CalPERS Tables

4.20% per annum as of June 30, 2023

5.50% per annum as of June 30, 2022

2.8% per annum. Additional merit-based increases based on CalPERS merit salary increase tables.

Pre-Medicare - 6.95% in 2024, Trending down to 4.14% over 52 years. Applies to calendar years.

Post-Medicare - 4.99% in 2024, Trending down to 4.14% over 52 years. Applies to calendar years.

3.88% per annum as of June 30, 2023

3.69% per annum as of June 30, 2022

Changes in Assumptions

Discount rate changed to $3.88% at June 30, 2023 from 3.69% at June 30, 2022. Healthcare trend rate assumption was updated.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

97 Note 12 – Other Postemployment Benefits (“OPEB”) (Continued)

B. Net OPEB Liability (Continued)

Discount Rate

GASB 75 allows the use of a discount rate that is up to th e expected long-term rate of return on the assets in the Trust set aside to pay benefits, if the plan sponsor makes regular contributions to the Trust such that the assets are not depleted at any point in the future. If the Plans' actua ry determines that contributions are not sufficient to keep the Trust funded, a blend of the long-term rate of retu rn and the yield or index rate for 20-year, tax-exempt municipal bonds will be used for the periods when the tr ust funds are not sufficient to cover benefit payments.

Based on this requirement, and with the approval of the pl an sponsor, the discount rate used to measure the total OPEB liability is 3.88%.

Expected Long-Term Rates of Return

The long-term expected rate of return is determined using the long-term rates of return developed by the CalPERS Investment Office for financial reporting after September 30, 2022.

Assumed Asset Real Rate of
Asset Class Allocation Return
Global ex-U.S. Equity 34% 6.80%
U.S. Fixed 41% 3.70%
TIPS 17% 6.00%
Real Estate 5% 2.80%
Commodities 3% 3.40%
Total 100%

C. Changes in Net OPEB Liability

The changes in the net OPEB liability for the plan are as follows:

Total OPEB Plan Fiduciary Net Net OPEB
L iability Position L iability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 53,777,212 $ 1,986,653 $ 51,790,559 $ Changes recognized for the measurement period:

Service cost 1,666,100 - 1,666,100 Interest 2,001,983 - 2,001,983 Changes of Assumptions (3,175,394) - (3,175,394) Differences between Expected and Actual Experience 8,891,165 - 8,891,165 Contributions - Employer - City's Contribution - 2,063,786 (2,063,786) Contributions - Employer - Implicit Subsidy - 314,230 (314,230) Net Investment Income - 70,771 (70,771) Benefit Payments (2,063,786) (2,063,786) - Implicit Subsidy Credit (314,230) (314,230) - Administrative Expense - (569) 569 Other Misellaneous Income/(Expense) - - - Net Changes during July 1, 2022 to June 30, 2023 7,005,838 70,202 6,935,636 Balance at June 30, 2023 (Measurement Date) 60,783,050$ 2,056,855 $ 58,726,195 $ Increase (Decrease)

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

98 Note 12 – Other Postemployment Benefits (“OPEB”) (Continued)

C. Changes in Net OPEB Liability (Continued)

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate

The following presents the net OPEB liability, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage- point higher than the current discount rate, for the measurement period June 30, 2023:

Discount Rate Current Discount Discount Rate
- 1% (2.88%) Rate (3.88%) + 1% (4.88%)
67,708,067$ 58,726,195 $ 51,471,366 $ Plan's Net OPEB Liability/(Asset)

Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates

The following presents the net OPEB liability, as well as what the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-pe rcentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

1% Decrease
(4.5% decreasing
to 6.40%)
Healthcare Cost
Trend Rate (5.5%
decreasing to

7.40%)
1% Increase
(6.5% decreasing to 8.40%)
50,881,007$ 58,726,195 $ 68,577,480 $ Plan's Net OPE B L iability/(Asset)

Plan Fiduciary Net Position

CalPERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from CalPERS’ website at www.calpers.ca.gov.

OPEB Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to OPEB

For the year ended June 30, 2024, the City recognized $5,420,987 in OPEB expenses. The City reported deferred outflows or resources and deferred inflows of resources related to OPEB from the following sources:

Deferred outflows Deferred inflows
of Resources of Resources
City contributions after the measurement date 2,944,525 $ - $ Changes in assumptions - (12,753,948) Differences between expected and actual experience 7,638,888 (1,409,305) Differences between projected and actual return
on plan investments 185,224 -
Total 10,768,637 $ (14,163,253) $
OPE B Plan

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024

99 Note 12 – Other Postemployment Benefits (“OPEB”) (Continued)

C. OPEB Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to OPEB (Continued)

The $2,944,525 reported as City contributions after the measurement date will be recognized as a reduction of the Net OPEB Liability in the year ending June 30, 2025. Other amounts reported as deferred outflows and inflows of resources will be recognized in OPEB expense as follows:

Deferred Outflows
M easurement Period /(Inflows)
Ending June 30 of Resources
2024 (2,009,954)$
2025 (2,012,146)
2026 (1,961,579)
2027 (2,046,043)
2028 805,038
Thereafter 885,543
(6,339,141)$

Note 13 – Liability, Property, and Workers Compensation Liabilities

A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement

The City is a member of the California Joint Powers Insurance Authority (the “Authority”). The Authority is composed of 124 California public entities and is or ganized under a joint power s agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess in surance or reinsurance, and to arrange for group purchased insurance for property and othe r lines of coverage. The California JP IA began covering claims of its members in 1978. Each member government has an elect ed official as its repres entative on the Board of Directors. The Board operates through a nine-member Executive Committee.

B. Self-Insurance Programs of the Authority

Each member pays an annual contribution at the beginning of the coverage period. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.

Primary Liability Program

Claims are pooled separately between police and genera l government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to lo sses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3 ) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurren ce and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers.

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100
Note 13 – Liability, Property and Workers Compensation Liabilities (Continued)

B. Self-Insurance Programs of the Authority (Continued)

Primary Liability Program (Continued)

The overall coverage limit for each member, including all layers of coverage, is $5 0 million per occurrence.

Subsidence losses also have a $50 million per occurrence li mit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risk-sharing-pools/.

Workers’ Compensation Program

Claims are pooled separately between public safety (poli ce and fire) and general gove rnment exposures. (1) The payroll of each member is evaluated relative to the payr oll of other members. A vari able credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includ es incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred co sts within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.

For 2023-24 the California JPIA’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Em ployer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through re insurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members.

C. Purchased Insurance

Pollution Legal Liability Insurance

The City of Indio participates in the pollution legal lia bility insurance program whic h is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Indio. Coverage is on a claims-made basi s. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.

Property Insurance

The City participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City prope rty is currently insured according to a schedule of covered property submitted by th e City to the Authority. City property currently has all-risk property insurance protection in the amount of $181,807,259. There is a $10,000 deductible per occurrence except for non- emergency vehicle insurance which has a $2,500 deductible.

Crime Insurance

The City of Indio purchases crime insurance coverage in the amount of $3,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.

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101
Note 13 – Liability, Property and Workers Compensation Liabilities (Continued)

D. Adequacy of Protection

During the past three fiscal years, none of the above pr ograms of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were al so no significant reductions in pooled or insured liability coverage in 2023-24.

Changes in the claims payable amounts for the past three fiscal years were as follows:

Fiscal Year
Claims and
Beginning of Prior Fiscal Balance at
Fiscal Year Year Changes Claims Fiscal
Fiscal Year Liability in Estimates Payments Year End
2021-2022 71,005$ 33,774 $ (91,059) $ 13,720 $ 2022-2023 13,720 91,012 (92,482) 12,250 2023-2024 12,250 152,225 (149,430) 15,045

Note 14 – Net Investment in Capital Assets

The calculation of net investment in capital assets is calculated as follows:

Governmental Business-Type Golf
Activities Activities Water Electric (Nonmajor)
Total capital assets, net 553,989,796 $ 150,425,980 $ 137,617,464 $ 11,880,994 $ 927,522 $ Unspent capital debt proceed 69,992,464 54,524,439 358,007 54,166,432 - Deferred loss on refunding debt 306,330 782,469 782,469 - - Capital related debt (143,763,981) (108,190,437) (43,137,646) (64,808,533) (244,258) Net investment in capital assets 480,524,609$ 97,542,451 $ 95,620,294 $ 1,238,893 $ 683,264 $ Ente rpri se Funds

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102
Note 15 – Fund Balance Classifications

Fund balances are presented in the following categories: nonspendable, restricted, committed, assigned, and unassigned (see Note 1 for a description of these categories). A detailed schedule of fund balances at June 30, 2024, is as follows:

Capital General Non-Major Total
General Projects Debt Governmental Governmental
Fund Fund Service Funds Funds
Nonspendable:

Prepaid items 12,500 $ - $ - $ 1,882$ 14,382 $ Notes and loans receivable 3,342,431 - - - 3,342,431 Property held for resale 5,341,588 - - - 5,341,588 Subtotal 8,696,519 - - 1,882 8,698,401 Restricted:

Community development projects - - - 8,781,249 8,781,249 Public safety - - - 2,966,956 2,966,956 Traffic safety - - - 250,045 250,045 Public works - - - 9,320,669 9,320,669 Asset forfeiture - - - 97,442 97,442 Abandoned vehicle - - - 289,979 289,979 Unclaimed property - - - 24,019 24,019 M easure A - - - 5,160,805 5,160,805 NPDES - - - 113,522 113,522 Air quality - - - 268,237 268,237 Pension stabilization 2,658,232 - - - 2,658,232 American Rescue Plan - - - 345,660 345,660 Debt service - - 81,321,551 - 81,321,551 Other Purposes - - - 3,788,272 3,788,272 Subtotal 2,658,232 - 81,321,551 31,406,855 115,386,638 Committed:

Ordinance No. 1779 - - - 4,736 4,736 Economic uncertainty 18,000,000 - - - 18,000,000 Subtotal 18,000,000 - - 4,736 18,004,736 Assigned:

Capital projects - 39,544,318 - - 39,544,318 FY24/25 Operations 22,420,248 - - - 22,420,248 Public Safety Radios 681,834 - - - 681,834 FY24/25 Reserves Trust Deposits 500,000 - - - 500,000 Subtotal 23,602,082 39,544,318 - - 63,146,400 Unassigned 9,734,001 - - (1,115,265) 8,618,736 Total 62,690,834 $ 39,544,318 $ 81,321,551 $ 30,298,208 $ 213,854,911 $

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For the Year Ended June 30, 2024

103
Note 16 – Change to or within the Financial Reporting Entity and Error Correction

During the fiscal year ended June 30, 2024, changes to or within the financial reporting entity and error correction resulted in adjustments to and restatements of beginning fund balances and net positions, as follows:

June 30, 2023 Change to or
As Prev iously within the Financia l Error June 30, 2023 Reported Reporting Entity (a) Correction (b) As Restated Governmental-Wide
Governmental Activities 472,307,139 $ - $ (1,338,441)$ 470,968,698 $ Total Primary Government 472,307,139$ - $ (1,338,441)$ 470,968,698 $ Governmental Funds:

Major Funds:

General Fund 65,769,098 $ - $ 486,315$ 66,255,413$ American Rescue Plan Act Special Revenue Fun 40,343 (40,343) - - Capital Projects Fund 37,974,793 - - 37,974,793 General Debt Service 92,203,679 - - 92,203,679 Nonmajor funds 26,074,533 40,343 - 26,114,876 Total Governmental Funds 222,062,446$ - $ 486,315$ 222,548,761$ Fiduciary Fund:

Custodial Fund:

ERICA 1,162,102 $ - $ (217,992)$ 944,110 $ Total Fiduciary Fund 1,162,102$ - $ (217,992)$ 944,110 $

(a) The American Rescue Plan Act Special Revenue Fund w as previously reported as a major fund. The fund did not meet the quantitative threshold to be reported as a major fund for the fiscal year ended June 30, 2024. (b) The beginning net position of the Governmental Acti vities was restated to recognize General Fund accounts receivable of $1,016,151, accounts pa yable of $4,836, and depos its payable of $525,000 related to the Indio Water Authority operation and to report allowance for loan forgiveness of $1,824,756. (c) The ERICA Custodial Fund beginning net position was rest ated to correct the classification of capital assets, net of depreciation, and long-term debt which were incorrectly included in the Custodial Fund.

Note 17 – Debt Issued Without Government Commitment

Assessment District Limited Obligation Bonds

The City issued the following Limited Obligation Improvement Bonds to finance the costs of acquisition of certain public improvements serving property within the prosp ective Assessment Districts. The bonds are payable from annual installments collected on regular property tax b ills sent to owners of prope rty having unpaid assessments levied against land benefited by the projects. Neither the faith , credit nor taxing power of the City is pledged to the repayment of the bonds. Accordingly, no liability has been recorded in the financial statements.

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Note 17 – Debt Issued Without Government Commitment (Continued)

Assessment District Limited Obligation Bonds (Continued)

At June 30, 2024, the outstanding balances of the Assessment District Limited Obligation Bonds are as follows:

Issuance Maturity Balance Principal Balance
Date Face Value Interest Rate Date June 30, 2023 Payments June 30, 2024 7/26/2012 3,295,000$ 4.69% 9/2/2026 1,080,000 $ 256,891 $ 823,109 $ 7/26/2012 3,410,000 4.69% 9/2/2026 1,302,919 238,703 1,064,216 7/26/2012 2,162,900 4.69% 9/2/2027 842,949 151,349 691,600 7/26/2012 4,119,800 4.71% 9/2/2027 1,580,892 290,849 1,290,043 7/23/2014 1,752,000 3.55% 9/2/2029 922,000 121,000 801,000 7/23/2014 1,402,000 3.55% 9/2/2029 743,000 96,000 647,000 7/23/2014 4,038,000 3.55% 9/2/2029 2,145,000 280,000 1,865,000 7/23/2014 1,343,000 3.55% 9/2/2029 715,000 93,000 622,000 7/23/2014 1,627,000 3.55% 9/2/2029 855,000 111,000 744,000 7/23/2014 1,465,000 2.80% to 6.00% 9/2/2030 955,000 110,000 845,000 7/19/2017 2,320,000 1.67% to 3.86% 9/2/2030 1,530,000 170,000 1,360,000 8/4/2015 3,920,000 2.90% to 5.50% 9/2/2030 2,585,000 290,000 2,295,000 8/4/2015 15,530,000 2.00% to 4.00% 9/1/2035 10,410,000 595,000 9,815,000 7/23/2014 8,337,000 4.03% 9/1/2036 6,123,000 334,000 5,789,000 7/23/2014 7,554,000 4.03% 9/1/2036 6,205,000 304,000 5,901,000 7/23/2014 8,499,000 4.03% 9/1/2036 5,566,000 340,000 5,226,000 43,560,760$ 3,781,792 $ 39,778,968 $

Note 18 – Contingencies and Commitments

Normal Course of Operations

The City is a defendant in certain legal actions arisi ng in the normal course of operations. In the opinion of management and legal counsel, any liability resulting from ac tions will not have a material adverse effect on the City’s financial position.

Revenue Tax Sharing Agreement Commitment

In March 1997, the City entered into an agreement with the Riverside County in order to obtain the County’s cooperation to annex property in the unincorporated County ar ea with the intention of developing a relocation site for the new and used auto dealers of the City. The development of the Desert Citi es Auto Center and its annexation into the City is expected to generate significant sales and u se taxes as well as property taxes from the improved site. In return, the City agrees to provide maintenance of certain County facilities. In return for the County’s cooperation in approving the Desert Cities Auto Center site plan and its annexation into the City of Indio, this agreement provides that the City of Indio will dedicate 25% of sales and use taxes derived from the annexed property to the County for the remainder of a thirty-year period ending in the year 2027 . Upon expiration of the term of the agreement and upon payment by the City to the County of the sum of $1, th e County shall convey fee title to the County improvements.

During fiscal year ended June 30, 2024, payment in the amount of $583,342 was made to the County.