Indio City Council
February 4, 2026

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10 (q) The Authority is not presently and as a result of the execution of the Authority Documents and the sale of the Bonds will not be in violation of any debt limitation, appropriation limitation or any other provision of the California Constitution or statutes or any additional debt or similar provision of any bond, note, contract or other evidence of indebtedness to which the Authority is a party or to which the Authority is bound. (r) The Authority will not knowingly take or omit to take any action, which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner other than as provided in the Authority Documents, unless otherwise required by law.

8.The City represents, warrants and covenants to the Underwriter that:
(a) The City is a general law city duly organized under the laws of the State of California, and has all necessary power and authority to enter into and perform its duties under the Installment Purchase Agreement, the Continuing Disclosure Agreement, the Escrow Agreement, dated as of ___________ 1, 2026 (the “Escrow Agreement”), among the Indio Water Authority, the City and U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”), and this Purchase Agreement (collectively, the “City Documents”) and, when executed and delivered by the respective parties thereto, the City Documents will constitute the legal, valid and binding obligations of the City in accordance with their respective terms. (b) Neither the execution and delivery of the City Documents, or the approval and execution of the Official Statement, and compliance with the provisions on the City’s part contained therein, nor the consummation of any other of the transactions herein and therein contemplated, nor the fulfillment of the terms hereof and thereof, conflicts with or constitutes a breach of or default under nor contravenes any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, nor does any such execution, delivery, adoption or compliance result in the security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the City Documents.
(c) Except as may be required under blue sky or other securities laws of any state, there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory authority having jurisdiction over the City required for the execution and delivery of the Bonds or the consummation by the City of the other transactions contemplated by the Official Statement and this Purchase Agreement.
(d) To the best of the knowledge of the City, there is, and on the Closing there will be, no action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body pending or threatened against the City to restrain or enjoin the delivery of any of the Bonds, or the payments to be made pursuant to the Installment Purchase Agreement and Indenture, or in any way contesting or affecting the validity of the City Documents or of the City to approve or enter into the City Documents, or in any way questioning or challenging the tax status of the Bonds.
(e) As of the date thereof and at all times subsequent thereto up to and including the End Date, the information relating to the City, the Bonds and the Water System contained in the

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11 Official Statement will be complete and will not contain any untrue or misleading statement of a material fact or omit to state any material fact (unless an event occurs of the nature described in Section 8(j) below) necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of its date and as of the date hereof, the information relating to the City, the Bonds and the Water System contained in the Official Statement is true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (f) The City agrees to cooperate with the Underwriter in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the City will not be required to execute a special or general consent to service of process in any jurisdiction in which it is not now so subject or to qualify to do business as a foreign agency in any jurisdiction where it is not so qualified.
(g) By official action of the City prior to or concurrently with the execution hereof, the City has duly approved the distribution of the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in the City Documents and the consummation by it of all other transactions contemplated by the Official Statement and this Purchase Agreement. (h) The City is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument.
(i) The City is not in default, nor has been in default at any time, as to the payment of principal or interest with respect to an obligation issued by the City or successor of the City or with respect to an obligation guaranteed by the City as guarantor or successor of a guarantor. (j) If between the date of this Purchase Agreement and the End Date an event occurs, of which the City has knowledge, which might or would cause the information relating to the City, the Water System or the City’s functions, duties and responsibilities contained in the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading, the City will notify the Underwriter, and if, in the opinion of the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Underwriter in the preparation of an amendment or supplement to the Official Statement in a form and in a manner approved by the Underwriter, provided all expenses thereby incurred will be paid for by the City.
(k) If the information relating to the Water System, the City, its functions, duties and responsibilities contained in the Official Statement is amended or supplemented pursuant to the immediately preceding subsection, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subsection) at all times subsequent

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12 thereto up to and including the date of the Closing, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading.
(l) The City covenants that it will comply with all tax covenants relating to it in the City Documents and the Tax Certificate of the City. (m) The written information supplied by the City to the Underwriter with respect to the financial information relating to the Water System is true, correct and complete in all material respects for the purposes for which it was supplied.
(n) No consent, approval, authorization or other action by a governmental or regulatory agency that has not been obtained is or will be required of the City for the delivery and sale of the Bonds or the consummation of the other transactions contemplated by this Purchase Agreement and the Official Statement, except for such licenses, certificates, approvals, variances or permits which may be necessary for the construction or operation of the Water System which the City has applied for (or will apply for in the ordinary course of business) and expects to receive, and except as may be required under the state securities or blue sky laws in connection with the sale of the Bonds by the Underwriter.
(o) The City will not take or omit to take any action which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner contrary to that provided in the Indenture and as described in the Official Statement, unless otherwise required by law.
(p) The City will deliver all opinions, certificates, letters and other instruments and documents reasonably required by the Underwriter and this Purchase Agreement. (q) Any certificate of the City delivered to the Underwriter shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein. (r) Other than as described in the Official Statement, as of the time of acceptance hereof and as of the Closing, the City does not and will not have outstanding any indebtedness which is secured by a lien on the Net Revenues superior to or on a parity with the lien of the Bonds thereon. (s) Between the date of this Purchase Agreement and the date of Closing, the City will not, without the prior written consent of the Underwriter, and except as disclosed in the Official Statement, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent payable from the Net Revenues. (t) The City is not presently and as a result of the execution of the City Documents and the sale of the Bonds will not be in violation of any debt limitation, appropriation limitation or any other provision of the California Constitution or statutes or any additional debt or similar provision of any bond, note, contract or other evidence of indebtedness to which the City is a party or to which the City is bound.

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13 (u) Based on a review of its previous undertakings, the City has not, in the last five years, failed to comply in any material respect with its obligations under any continuing disclosure undertaking entered into pursuant to Rule 15c2-12 except as disclosed in the Official Statement. The City will undertake, pursuant to the Continuing Disclosure Agreement to provide annual reports and notices of certain events in accordance with the requirements of Rule 15c2-12.

9.The Underwriter has entered into this Purchase Agreement in reliance upon the representations, warranties and agreements of the Authority and the City contained herein, and the opinions of Bond Counsel, Counsel to the Trustee, City Attorney to the City and Counsel to the Authority required hereby. The Underwriter’s obligations under this Purchase Agreement are and shall be subject to the following further conditions:
(a) At the time of Closing, this Purchase Agreement, the Indenture, the Installment Purchase Agreement, the Escrow Agreement and the Continuing Disclosure Agreement (collectively the “Legal Documents”), all as described in the Official Statement, shall be in full force and effect as valid and binding agreements between or among the various parties thereto, and the Legal Documents and the Official Statement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter, and there shall be in full force and effect such resolutions as, in the opinion of Stradling Yocca Carlson & Rauth LLP (“Bond Counsel”), shall be necessary in connection with the transactions contemplated hereby. (b) At or prior to the Closing, the Underwriter shall receive the following documents, in each case satisfactory in form and substance to them:
(1) The unqualified approving opinion of Bond Counsel, dated the date of Closing, addressed to the Authority, the City, the Trustee and the Underwriter (or a reliance letter to the Underwriter and the Trustee), in substantially the form attached as Appendix C to the Official Statement.
(2) A supplemental opinion of Bond Counsel, dated as of the date of Closing addressed to the Underwriter, in form and substance to the effect that:
(a) The statements and information contained in the Official Statement on the cover page relating to tax exemption, the description of the Bonds and security for the Bonds, and statements under the captions “INTRODUCTION,” “THE BONDS,” “SECURITY FOR THE BONDS,” “TAX MATTERS” and APPENDICES B and C to the extent they purport to summarize information concerning the Bonds and certain provisions of the Legal Documents and the opinion of such counsel, present a fair and accurate summary of such information and such provisions;
(b) The Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification as an Indenture pursuant to the Indenture Act of 1939, as amended; and (c) The Purchase Agreement has been duly authorized, executed and delivered by the Authority and the City, and, assuming due authorization, execution and delivery by the other parties thereto, constitutes legal, valid and binding agreement of the Authority and the City enforceable against each in

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14 accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and equitable remedies if equitable remedies are sought, and except no opinion need be expressed as to the enforceability of the indemnification, waiver, choice of law or contributions provisions contained in the Purchase Agreement. (3) A defeasance opinion of Bond Counsel, dated as of the date of Closing addressed to the Underwriter, in form and substance acceptable to the Underwriter.
(4) The opinion of Stradling Yocca Carlson & Rauth LLP, Disclosure Counsel, dated the date of Closing and addressed to the Authority, the City and the Underwriter, to the effect that, based upon the information made available to them in the course of their participation in the preparation of the Official Statement and without passing on and without assuming any responsibility for the accuracy, completeness and fairness of the statements in the Official Statement, and having made no independent investigation or verification thereof, no facts have come to their attention that lead them to believe that the Preliminary Official Statement, as of its date and as of the date of pricing, and the Official Statement, as of its date and as of the date of Closing, (except for any CUSIP data, financial or statistical data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion, any appendices thereto, any information about DTC and its book-entry only system), as to which no opinion or view need be expressed) contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(5) An opinion of Counsel to the Authority, dated the date of Closing in form and substance satisfactory to the Underwriter and Bond Counsel, addressed to the City, the Trustee and the Underwriter, to the effect that:
(i) the Authority is a joint powers authority duly organized and validly existing under the laws of the State of California; (ii) the preparation and distribution of the Official Statement and the Authority Documents have been duly approved by the Authority; (iii) the resolutions of the Authority approving and authorizing the execution and delivery of the Official Statement and the Authority Documents have been duly adopted at meetings of the governing body of the Authority which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout and such resolutions have not been amended or modified and are in full force and effect;
(iv) to the best knowledge of such firm, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or, threatened against or affecting the Authority, which would adversely impact the Authority’s ability to complete the

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15 transactions described in and contemplated by the Official Statement, to restrain or enjoin the payments under, or in any way contesting or affecting the validity of the Authority Documents, or the transactions described and defined in the Official Statement wherein an unfavorable decision, ruling or finding would adversely affect the validity and enforceability of the Authority Documents;
(v) the execution and delivery of the Authority Documents and the approval of the Official Statement, and compliance with the provisions thereof and hereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Authority is subject; (vi) the Authority Documents and the Official Statement have been duly authorized, executed and delivered by the Authority, and, assuming due authorization, execution and delivery by the other parties thereto, the Authority Documents constitute legal, valid and binding agreements of the Authority enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles if sought and by the limitations on legal remedies imposed on actions against public agencies in the State of California;
(vii) no authorization, approval, consent, or other order of the State of California or any other governmental authority or agency within the State of California is required for the valid authorization, execution and delivery of the Authority Documents and the approval of the Official Statement. (6) An opinion of Counsel to the City, dated the date of Closing in form and substance satisfactory to the Underwriter and Bond Counsel, addressed to the Authority, the Trustee and the Underwriter, to the effect that:
(i) the City is a general law city created in accordance with the laws of the State of California;
(ii) the preparation and distribution of the Official Statement and the City Documents have been duly approved by the City; (iii) the resolutions of the City approving and authorizing the execution and delivery of the Official Statement and the City Documents have been duly adopted at meetings of the governing body of the City which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout and such resolutions have not been amended or modified and are in full force and effect;

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16 (iv) to the best knowledge of such firm, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or, threatened against or affecting the City, which would adversely impact the City’s ability to complete the transactions described in and contemplated by the Official Statement, to restrain or enjoin the payments under, or in any way contesting or affecting the validity of the City Documents, or the transactions described and defined in the Official Statement wherein an unfavorable decision, ruling or finding would adversely affect the validity and enforceability of the City Documents; (v) the execution and delivery of the City Documents and the approval of the Official Statement, and compliance with the provisions thereof and hereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject; (vi) the City Documents and the Official Statement have been duly authorized, executed and delivered by the City, and, assuming due authorization, execution and delivery by the other parties thereto, the City Documents constitute legal, valid and binding agreements of the City enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles if sought and by the limitations on legal remedies imposed on actions against public agencies in the State of California; (vii) no authorization, approval, consent, or other order of the State of California or any other governmental authority or agency within the State of California is required for the valid authorization, execution and delivery of the City Documents and the approval of the Official Statement; (viii) the City’s charges and fees with respect to the Water System were duly approved and adopted by the City, and are valid and enforceable at the current levels levied by the City.
(7) The opinion of counsel to the Trustee, dated the date of Closing in form and substance satisfactory to the Underwriter and Bond Counsel, and addressed to the Authority, the City and the Underwriter, to the effect that:
(i) the Trustee is a national banking association duly organized and validly existing under the laws of the United States; (ii) the Trustee has duly authorized the execution and delivery of the Indenture;
(iii) the Indenture has been duly entered into and delivered by the Trustee and assuming due, valid and binding authorization, execution and

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17 delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Trustee enforceable against the Trustee in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally, or by general principles of equity; (iv) the Trustee has duly authenticated and delivered the Bonds in its capacity as trustee under the Indenture; and
(v) all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the performance by the Trustee of its duties and obligations under the Indenture have been obtained and are in full force and effect.
(8) The opinion of counsel to the Escrow Agent, dated the date of Closing in form and substance satisfactory to the Underwriter and Bond Counsel, and addressed to the Authority, the City and the Underwriter, to the effect that:
(i) the Escrow Agent is a national banking association duly organized and validly existing under the laws of the United States; (ii) the Escrow Agent has duly authorized the execution and delivery of the Escrow Agreement;
(iii) the Escrow Agreement has been duly entered into and delivered by the Trustee and assuming due, valid and binding authorization, execution and delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Escrow Agent enforceable against the Trustee in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally, or by general principles of equity; and
(iv) all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the performance by the Escrow Agent of its duties and obligations under the Escrow Agreement have been obtained and are in full force and effect.
(9) An opinion, dated the date of the Closing and addressed to the Underwriter, of Best Best & Krieger LLP, counsel to the Underwriter (“Underwriter’s Counsel”), in such form as may be acceptable to the Underwriter. (10) A certificate, dated the date of Closing, signed by a duly authorized official of the Authority satisfactory in form and substance to the Underwriter and Bond Counsel, (a) confirming as of such date the representations and warranties of the Authority contained in this Purchase Agreement; (b) certifying that the Authority has complied with all agreements, covenants and conditions to be complied with by

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18 the Authority at or prior to the Closing under the Authority Documents; and (c) certifying that to the best of such official’s knowledge, no event affecting the Authority has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing the statements or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect. (11) A certificate or certificates, dated the date of Closing, signed by a duly authorized official of the City satisfactory in form and substance to the Underwriter and Bond Counsel, (a) confirming as of such date the representations and warranties of the City contained in this Purchase Agreement; (b) certifying that the City has complied with all agreements, covenants and conditions to be complied with by the City at or prior to the Closing under the City Documents; and (c) certifying that to the best of such official’s knowledge, no event affecting the City has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing the statements or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect.
(12) A certificate, dated the date of the Preliminary Official Statement, signed by a duly authorized official of the Authority deeming the Preliminary Official Statement “final” for purposes of Rule 15c2-12.
(13) A certificate, dated the date of the Preliminary Official Statement, signed by a duly authorized official of the City deeming the Preliminary Official Statement “final” for purposes of Rule 15c2-12.
(14) An executed or certified copy of each of the Legal Documents. (15) One counterpart original or copy certified by a duly authorized officer of the City of a complete transcript of all proceedings of the City relating to the approval of the City Documents and the authorization, issuance, sale and delivery of the Bonds, together with a certificate dated as of the date of Closing of a duly authorized officer of the City to the effect that each included resolution is a true, correct and complete copy of the one duly adopted by the Board of Directors of the City and that none have been amended, modified or rescinded since adoption (except as reflected in said transcript or as may have been agreed to in writing by the Underwriter) and is in full force and effect as of the date of Closing. (16) One counterpart original or copy certified by a duly authorized officer of the Authority of a complete transcript of all proceedings of the Authority relating to the approval of the Authority Documents and the authorization, issuance, sale and delivery of the Bonds, together with a certificate dated as of the date of Closing of a duly authorized officer of the Authority to the effect that each included resolution is a true, correct and complete copy of the one duly adopted by the Board of Directors of the Authority and that none have been amended, modified or rescinded since

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19 adoption (except as reflected in said transcript or as may have been agreed to in writing by the Underwriter) and is in full force and effect as of the date of Closing. (17) An executed copy of the Official Statement.
(18) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution and delivery of documents such as the Bonds and the Indenture.
(19) A Certificate of the City with respect to the Water System evidencing that the insurance required by the Installment Purchase Agreement has been procured and is in full force and effect.
(20) A Tax Certificate of the Authority and the City in form and substance acceptable to Bond Counsel.
(21) A Certificate of the Trustee, dated the Closing Date to the effect that:
(i) the Trustee is duly organized and existing as a national banking association in good standing under the laws of the United States, having the full power and authority to accept and perform its duties under the Indenture;
(ii) subject to the provisions of the Indenture, the Trustee will apply the proceeds from the Bonds to the purposes specified in the Indenture; (iii) the Trustee has duly authorized and executed the Indenture; and
(iv) the Trustee has duly authenticated and delivered the Bonds in its capacity as trustee under the Indenture.
(22) A Certificate of the Escrow Agent, dated the Closing Date to the effect that:
(i) the Escrow Agent is duly organized and existing as a national banking association in good standing under the laws of the United States, having the full power and authority to accept and perform its duties under the Escrow Agreement;
(ii) subject to the provisions of the Escrow Agreement, the Escrow Agent will apply the proceeds from the Bonds to the purposes specified in the Escrow Agreement; and
(iii) the Escrow Agent has duly authorized and executed the Escrow Agreement.
(23) Evidence that the Bonds have been given the rating set forth in the Official Statement and that such rating continues in effect as of the date of Closing.

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20 (24) Evidence that a federal tax information form 8038-G has been prepared for filing with respect to the Bonds.
(25) A copy of the Notice of Final Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 8855 of the California Government Code.
(26) A copy of the municipal bond insurance policy and debt service reserve surety of ________________, together with such certificates and opinions as required by Bond Counsel and the Underwriter, and insured rating letter. (27) Such additional legal opinions, certificates, proceedings, instruments and other documents as Bond Counsel, the Underwriter and Underwriter’s Counsel may reasonably request to evidence compliance with legal requirements, the truth and accuracy, as of the time of Closing, of the representations contained herein and in the Official Statement and the due performance or satisfaction by the Trustee and the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied.
(c) All matters relating to this Purchase Agreement, the Bonds and the sale thereof, the Legal Documents and the consummation of the transactions contemplated by this Purchase Agreement shall have been approved by the Underwriter, such approval not to be unreasonably withheld.

If the conditions to the Underwriter’s obligations contained in this Purchase Agreement are not satisfied or if the Underwriter’s obligations shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and none of the Underwriter, the City nor the Authority shall have any further obligation hereunder.

10.The Underwriter shall have the right to terminate this Purchase Agreement, without liability therefore, by written notification to the Authority and the City if at any time at or prior to the Closing:
(i) Any event shall occur which causes any statement contained in the Official Statement to be materially misleading or results in a failure of the Official Statement to state a material fact necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading; or
(ii) Legislation shall be enacted by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States, or the Treasury Department of the United States or the Internal Revenue Service or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, a decision by a court of the United States or of the State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental

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21 agency shall be made or proposed, the effect of any or all of which would be to alter, directly or indirectly, federal income taxation upon interest received on obligations of the general character of the Bonds, or the interest on the Bonds as described in the Official Statement, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences of any of the transactions contemplated herein; or
(iii) Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering, or sale of obligations of the general character of the Bonds, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; or (iv) A general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the Securities and Exchange Commission or any other governmental authority having jurisdiction, the establishment of material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, or any material increase of restrictions now in force (including, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter); or
(v) A general banking moratorium shall have been established by federal, New York or California authorities; or
(vi) Establishment of any new restrictions in securities materially affecting the free market for securities of the same nature as the Bonds (including the imposition of any limitations on interest rates) or the charge to the net capital requirements of the Underwriter established by the New York Stock Exchange, the Securities and Exchange Commission, any other Federal or state agency or the Congress of the United States, or by Executive Order; or
(vii) The occurrence of an adverse event in the affairs of the Authority or the City which, in the opinion of the Underwriter, materially impairs the investment quality of the Bonds; or

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22 (viii) Any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Authority or the City, its property, income or securities (or interest thereon), or the ability of the City to execute the Installment Purchase Agreement or the Authority to issue the Bonds and pledge the Authority Revenues as contemplated by the Indenture and the Official Statement; or (ix) There shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or (x) There shall have occurred any materially adverse change in the affairs or financial position, results of operations or condition, financial or otherwise, of the Authority or the City, other than changes in the ordinary course of business or activity or in the normal operation of the Authority or the City, except as described in the Official Statement; or (xi) Any event occurring, or information becoming known which, in the reasonable judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or
(xii) An event described in Section 7(j) or 8(j) hereof shall have occurred which, in the reasonable professional judgment of the Underwriter, requires the preparation and publication of a supplement or amendment to the Official Statement; or
(xiii) The marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets; or
(xiv) Any rating of the Bonds or other obligations of the Authority or the City by a national rating agency shall have been withdrawn, suspended or downgraded or placed on negative outlook or negative watch.

11.Performance by the Authority and the City of their respective obligations under this Purchase Agreement is conditioned upon (i) performance by the Underwriter of its obligations hereunder, and (ii) receipt by the Underwriter of all opinions and certificates to be delivered at Closing by persons and entities other than the Authority or the City.

12.After the Closing and until the End Date (a) neither the Authority nor the City will adopt any amendment of or supplement to the Official Statement to which the Underwriter shall

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23 object in writing or which shall be disapproved by the Underwriter, and (b) if any event relating to or affecting the Authority or the City shall occur as a result of which it is necessary, in the opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to an initial purchaser of the Bonds, and the Authority will forthwith prepare and furnish to the Underwriter a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to an initial purchaser of the Bonds, not misleading. The costs of preparing any necessary amendment or supplement to the Official Statement to be utilized until the End Date shall be borne by the Authority and any costs incurred thereafter incident to amending or supplementing the Official Statement shall be borne by the Underwriter. For the purposes of this Section, the Authority will furnish such information with respect to itself as the Underwriter may from time to time request.

13.(a) The Underwriter shall be under no obligation to pay, and the City or Authority shall pay or cause to be paid out of the proceeds of the Bonds, all expenses incident to the performance of the Authority’s and City’s obligations hereunder, including but not limited to: the cost of photocopying and delivering the Bonds to the Underwriter; the cost of preparing, printing (and/or word processing and reproducing), distributing and delivering the City Documents and the Authority Documents, and the cost of printing, distributing and delivering the Preliminary Official Statement and the Official Statement in such reasonable quantities as requested by the Underwriter; and the fees and disbursements of Bond Counsel, Disclosure Counsel, the Municipal Advisor, any accountants, financial advisors or other engineers or experts or consultants the Authority or the City have retained in connection with the Bonds and expenses (included in the expense component of the Underwriter’s spread) incurred on behalf of the Authority or City officers or employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, and lodging of those officers or employees. (b) Whether or not the Bonds are delivered to the Underwriter as set forth herein, neither the Authority nor the City shall be under any obligation to pay, and the Authority and City shall not pay, any expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in subsection (a) of this section), including any advertising expenses and the fees of the California Debt and Investment Advisory Commission, the cost of preparation of any “blue sky” or legal investment memoranda, and the fees and disbursements of Underwriter’s Counsel.

14.Any notice or other communication to be given to the Underwriter may be given by delivering the same to Piper Sandler & Co. 1777 Botelho Drive, Suite 345, Walnut Creek, California 94596; Attention: Ralph Holmes. Any notice or other communication to be given to the Authority or the City may be given by delivering the same to addresses initially provided herein, Attention:

Executive Director with respect to the Authority and Attention: City Manager with respect to the City. The approval of the Underwriter when required hereunder or the determination of satisfaction as to any document referred to herein shall be in writing signed by the Underwriter and delivered to you.

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24 15.This Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns thereof) and no other person shall acquire or have any right hereunder or by virtue hereof.

16.This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which such counterparts shall together constitute but one and the same instrument.

17.The representations and warranties of the Authority and the City set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and warranties of the Authority and the City and regardless of delivery of and payment for the Bonds.

18.The primary role of the Underwriter, as underwriter, is to purchase the Bonds for resale to investors in an arms-length commercial transaction among the City, the Authority and the Underwriter. The Underwriter, as underwriter, has financial and other interests that differ from those of the Authority and the City.

19.This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Authority, the City and the Underwriter, and shall be valid and enforceable as of the time of such acceptance.

20.This Purchase Agreement shall be governed by the laws of the State of California.

This Purchase Agreement shall not be assigned by either party hereto.

21.This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds by the Authority and the City and represents the entire agreement of the parties as to the subject matter herein.

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S-1

22.Any provision of this Purchase Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Purchase Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

PIPER SANDLER & CO.

By:

Managing Director
The foregoing is hereby agreed to and accepted as of the date first above written:

INDIO PUBLIC FINANCING AUTHORITY
By:

Authorized Officer
Time of Execution: _____________ p.m. California time

CITY OF INDIO
By:

Authorized Officer
Time of Execution: _____________ p.m. California time
.

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Exhibit A

EXHIBIT A
$__________

INDIO PUBLIC FINANCING AUTHORITY
WATER REVENUE REFUNDING BONDS, SERIES 2026A
Maturity
(April 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-The-
Offering-
Price Rule
_________________
(T) Term Bond.
(C) Priced to optional call at par on __________.
* At the time of execution of this Purchase Agreement and assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement.

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Exhibit B

EXHIBIT B
$__________

INDIO PUBLIC FINANCING AUTHORITY
WATER REVENUE REFUNDING BONDS, SERIES 2026A

FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Piper Sandler & Co. (“Piper”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”) based upon the information available to it.

1.Sale of the General Rule Maturities. As of the date of this certificate, for each General Rule Maturity of the Bonds, the first price at which at least 10% of such General Rule Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A.

2.Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Piper offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, Piper agreed in writing on or prior to the Sale Date that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering- price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail or other third-party distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail or other third-party distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.

3.Reserve Fund. The funding of the debt service reserve fund for the Bonds was reasonably required to sell the Bonds at the interest rates at which they were sold, and funding a reserve fund for a lesser amount would have resulted in a sale of the Bonds at materially higher interest rates or for a materially lower purchase price.

4.Credit Enhancement.
(a) the present value of the amounts paid to obtain the bond insurance policy (the “Insurance Policy”) guaranteeing the payment of the principal of and interest on the Bonds, issued by ______________ (the “Insurer”) and the reserve surety bond (the “Reserve Policy”) provided by the Insurer, respectively, are less than the present value of the interest reasonably expected to be saved as a result of having the Insurance Policy and the Reserve Policy, respectively, using the yield on the Bonds as the discount factor for this purpose;

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Exhibit B
(b) to the best knowledge of the undersigned, the amounts paid by the Issuer to the Insurer for the Insurance Policy and the Reserve Policy for the Bonds, respectively, are within a reasonable range of premiums charged for comparable credit enhancement for obligations comparable to the obligations evidenced and represented by the Bonds; (c) the fees paid and to be paid to obtain the Insurance Policy and the Reserve Policy with respect to the Bonds, respectively, were determined in arm's-length negotiations and were required as a condition to the issuance by the Insurer; and (d) to the best of knowledge of the undersigned, the fees paid and to be paid for the Insurance Policy and the Reserve Policy for the Bonds represent a commercially reasonable charge for the transfer of credit risk, such fees do not include any direct or indirect payment for a cost, risk or other element that is not customarily borne by guarantors of tax-exempt bonds in transactions in which the guarantor has no involvement other than as guarantor, and no non-guarantee services are being provided by the Insurer.

5.Defined Terms.
(a)General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b)Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c)Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Piper sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering- Price Maturity.
(d)Issuer means Indio Joint Powers Financing Authority. (e)Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(f)Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g)Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is __________, 2026. (h)Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail or other third- party distribution agreement participating in the initial sale of the Bonds to the Public).

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Exhibit B
The Issuer may rely on the statements made herein in connection with making the representations set forth in the Tax Certificate to which this Issue Price Certificate is attached and in its efforts to comply with the conditions imposed by the Internal Revenue Code of 1986, as amended (the “Code”). Stradling Yocca Carlson & Rauth LLP may also rely on this Issue Price Certificate for purposes of its opinion regarding the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. Except as expressly set forth above, the certifications set forth herein may not be relied upon or used by any third party or for any other purpose.

Notwithstanding anything set forth herein, Piper not engaged in the practice of law. Accordingly, Piper makes no representation as to the legal sufficiency of the factual matters set forth herein.

PIPER SANDLER & CO.

By:________________________________
Name:_____________________________
Dated: ________, 2026

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Exhibit B

SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES [AND INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES]
(Attached)

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Exhibit B

SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)

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Draft of 1/27/26
4934-9171-2645v2/200973-0010
ESCROW AGREEMENT (2015A BONDS)
THIS ESCROW AGREEMENT (2015A BONDS), dated as of March 1, 2026 (the “Agreement”), by and among the City of Indio (the “City”), the Indio Water Authority (the “Authority”) and U.S. Bank Trust Company, National Association as escrow agent (the “Escrow Agent”) and as 2015 Trustee (as such term is defined herein), is entered into in accordance with an Indenture, dated as of June 1, 2015 (the “2015 Indenture”), by and between the Authority and U.S.

Bank Trust Company, National Association, as successor trustee (the “2015 Trustee”). This Agreement is entered into to refund the outstanding Indio Water Authority Water Revenue Refunding Bonds, Series 2015A (the “2015A Bonds”).

RECITALS
A. Pursuant to the 2015 Indenture, the Authority has previously issued the 2015A Bonds in the initial aggregate principal amount of $51,0650,000, of which $39,725,000 is currently outstanding.

B. The 2015A Bonds are payable from net revenues of the City’s municipal water system.

C. The City and the Indio Public Financing Authority have determined to cause the issuance of the Indio Public Financing Authority Water Revenue Refunding Bonds, Series 2026A (the “2026A Bonds”), a portion of the proceeds of which, together with other moneys as described in Section 1, will be applied to pay: (i) the regularly scheduled debt service on the 2015A Bonds on April 1, 2026; and (ii) on _____, 2026 (the “Redemption Date”), the principal of the 2015A Bonds maturing after April 1, 2026, plus interest with respect thereto accrued through the Redemption Date, without premium.

D. The City will irrevocably deposit moneys with the Escrow Agent, which moneys will be used to purchase the securities that are described on Schedule A (the “Federal Securities”) (as permitted by, in the manner prescribed by and all in accordance with the 2015 Indenture). Such Federal Securities satisfy the criteria for “Defeasance Securities” set forth in Section 10.03(c) of the 2015 Indenture, and the principal of and interest on such Federal Securities when paid will provide money which will be fully sufficient to pay and discharge the 2015A Bonds.

AGREEMENT
SECTION 1. Deposit of Moneys. The City will cause U.S. Bank Trust Company, National Association, as trustee for the 2026A Bonds, to transfer a portion of the proceeds of the 2026A Bonds in the amount of $__________ on the date of issuance of the 2026A Bonds to the Escrow Agent for deposit in the Escrow Fund established hereunder. The 2015 Trustee is hereby directed to transfer $________ held in the funds and accounts established for the 2015A Bonds under the 2015 Indenture to the Escrow Agent for deposit in the Escrow Fund established hereunder.

The Escrow Agent will hold such amounts in an irrevocable escrow separate and apart from other moneys of the City, the Authority and the Escrow Agent in a fund hereby created and established to be known as the “Escrow Fund” and to be applied solely as provided in this Agreement. The City and the Authority represent that the sum of the amounts set forth above are at

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least equal to an amount that is sufficient to purchase the Federal Securities listed on Schedule A, and to hold $__________ uninvested as cash.

SECTION 2. Investment of Moneys. The Escrow Agent acknowledges receipt of the moneys described in Section 1 and agrees immediately to invest such moneys in the Federal Securities listed on Schedule A and to deposit such Federal Securities in the Escrow Fund. The Escrow Agent shall be entitled to rely upon the conclusion of Causey Public Finance LLC (the “Verification Agent”) that the Federal Securities listed on Schedule A mature and bear interest payable in such amounts and at such times as, together with cash on deposit in the Escrow Fund, will be sufficient to pay: (i) the regularly scheduled debt service on the 2015A Bonds on April 1, 2026; and (ii) on the Redemption Date, the principal of the 2015A Bonds maturing after April 1, 2026, plus interest with respect thereto accrued through the Redemption Date, without premium.

SECTION 3. Investment of Any Remaining Moneys. At the written direction of the City, together with an unqualified opinion of Stradling Yocca Carlson & Rauth LLP, to the effect that reinvestment is permitted under the legal documents in effect with respect to the 2015A Bonds and will not have an adverse effect on the tax status of the 2015A Bonds, the Escrow Agent shall reinvest any other amount of principal and interest, or any portion thereof, received from the Federal Securities prior to the date on which such payment is required for the purposes set forth herein, in noncallable Federal Securities maturing not later than the date on which such payment or portion thereof is required for the purposes set forth in Section 5, at the written direction of the City, as verified in a report prepared by an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions to the effect that the reinvestment described in said report will not adversely affect the sufficiency of the amounts of securities, investments and money in the Escrow Fund to pay: (i) the regularly scheduled debt service on the 2015A Bonds on April 1, 2026; and (ii) on the Redemption Date, the principal of the 2015A Bonds maturing after April 1, 2026, plus interest with respect thereto accrued through the Redemption Date, without premium. Any interest income resulting from investment or reinvestment of moneys pursuant to this Section which is not required for the purposes set forth in Section 5, as verified in the letter of the Verification Agent originally obtained by the City with respect to the refunding of the 2015A Bonds or in any other report prepared by an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions, shall be paid to the City promptly upon the receipt of such interest income by the Escrow Agent. The determination of the City as to whether an accountant qualifies under this Agreement shall be conclusive.

SECTION 4. Substitution of Securities. Upon the written request of the City, and subject to the conditions and limitations that are set forth herein and applicable governmental rules and regulations, the Escrow Agent shall sell, redeem or otherwise dispose of the Federal Securities, provided that there are substituted therefor from the proceeds of the Federal Securities other Federal Securities, but only after the Authority or the City has obtained and delivered to the Escrow Agent and Build America Mutual Assurance Company, as insurer of the 2015A Bonds: (i) an unqualified opinion of Stradling Yocca Carlson & Rauth LLP, to the effect that the substitution of securities is permitted under the legal documents in effect with respect to the 2015A Bonds and will not have an adverse effect on the tax status of the 2015A Bonds; and (ii) a report by a firm of independent certified public accountants to the effect that the reinvestment described in said report will not adversely affect the sufficiency of the amounts of securities, investments and money in the Escrow Fund to pay: (i) the regularly scheduled debt service on the 2015A Bonds on April 1, 2026; and (ii) on the Redemption Date, the principal of the 2015A Bonds maturing after April 1, 2026, plus interest

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with respect thereto accrued through the Redemption Date, without premium. The Escrow Agent shall not be liable or responsible for any loss resulting from any reinvestment made pursuant to this Agreement and in full compliance with the provisions hereof.

SECTION 5. Payment of 2015A Bonds.
(a) Payment. From the maturing principal of the Federal Securities and the investment income and other earnings thereon and other moneys on deposit in the Escrow Fund, the Escrow Agent shall transfer funds to the 2015 Trustee in an amount sufficient to enable the 2015 Trustee to pay: (i) the regularly scheduled debt service on the 2015A Bonds on April 1, 2026; and (ii) on the Redemption Date, the principal of the 2015A Bonds maturing after April 1, 2026, plus interest with respect thereto accrued through the Redemption Date, without premium, all as indicated on Schedule A.
(b) Irrevocable Instructions to Provide Notice. The notices required to be mailed pursuant to Sections 2.03 and 10.03 of the 2015 Indenture are substantially in the forms attached hereto as Exhibits A and B. The City and the Authority hereby irrevocably instruct the 2015 Trustee to mail: (i) a notice of redemption of the 2015A Bonds maturing after the Redemption Date substantially in the form attached hereto as Exhibit A at least 30 days prior to the Redemption Date to the parties described in and otherwise in accordance with Section 2.03 of the 2015 Indenture (including The Depository Trust Company and the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System, maintained on the Internet at http://emma.msrb.org/); and (ii) a notice of defeasance of the 2015A Bonds in the form attached hereto as Exhibit B on the date of issuance of the 2026A Bonds to the parties described in and otherwise in accordance with Article 10.03 of the 2015 Indenture (including The Depository Trust Company and the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System, maintained on the Internet at http://emma.msrb.org/), as required to provide for the payment and redemption of the 2015A Bonds in accordance with this Section.
(c) Unclaimed Moneys. Any moneys in the Escrow Fund which remain unclaimed after the Redemption Date shall be repaid by the Escrow Agent to the City. (d) Priority of Payments. The owners of the 2015A Bonds shall have a first and exclusive lien on all moneys and securities in the Escrow Fund until such moneys and such securities are used and applied as provided in this Agreement.
(e) Termination of Obligation. As provided in the 2015 Indenture and the Sublease Agreement, dated as of June 1, 2015 (the “2015 Sublease”), by and between the City and the Authority, upon the deposit of moneys with the Escrow Agent in the Escrow Fund as set forth in Section 1 and the purchase of the Federal Securities as provided in Section 2: (i) all agreements and covenants of the Authority and the City to the owners of the 2015A Bonds under the 2015 Indenture will cease, terminate and become void and be completely discharged and satisfied; (ii) the 2015A Bonds will be deemed to have been paid; and (iii) the right, title and interest of the Authority in and the obligations of the City under the 2015 Sublease will, with respect to the portion of the Base Rental payable under the 2015 Sublease which is attributable to the 2015A Bonds, cease, terminate, become void and be completely discharged and satisfied (except as set forth in the 2015 Sublease).

SECTION 6. Application of Certain Terms of the 2015 Indenture. All of the terms of the 2015 Indenture relating to the making of payments of principal of and interest on the 2015A Bonds

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and relating to the exchange or transfer of the 2015A Bonds are incorporated in this Agreement as if set forth in full herein. The procedures set forth in Article VI of the 2015 Indenture relating to the resignation and removal and merger of the 2015 Trustee are also incorporated in this Agreement as if set forth in full herein and shall be the procedures to be followed with respect to any resignation or removal of the Escrow Agent hereunder.

SECTION 7. Performance of Duties. The Escrow Agent agrees to perform only the duties that are set forth herein and shall have no responsibility to take any action or omit to take any action that is not set forth herein.

SECTION 8. Escrow Agent’s Authority to Make Investments. Except as provided in Section 2 hereof, the Escrow Agent shall have no power or duty to invest any funds that are held hereunder or to sell, transfer or otherwise dispose of the moneys or Federal Securities that are held hereunder.

SECTION 9. Indemnity. The City and the Authority hereby assume liability for, and hereby agree (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, directors, officers, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Escrow Agent at any time (whether or not also indemnified against the same by the City, the Authority or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the retention of the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Agreement; provided, however, that the City and the Authority shall not be required to indemnify the Escrow Agent against the Escrow Agent’s own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent’s respective employees. In no event shall the City, the Authority or the Escrow Agent be liable to any person by reason of the transactions that are contemplated hereby other than to each other as set forth in this Section. The indemnities that are contained in this Section shall survive the termination of this Agreement and the resignation or removal of the Escrow Agent.

SECTION 10. Responsibilities of Escrow Agent. The Escrow Agent and its agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys or securities deposited therein, the retention of the Federal Securities or the proceeds thereof, the sufficiency of the Federal Securities to pay the 2015A Bonds or any payment, transfer or other application of moneys or obligations by the Escrow Agent in accordance with the provisions of this Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of the Escrow Agent that is made in good faith in the conduct of its duties.

The recitals of fact that are contained herein shall be taken as the statements of the City and the Authority, and the Escrow Agent assumes no responsibility for the correctness thereof. The Escrow Agent makes no representation as to the sufficiency of the proceeds to accomplish the refunding of the 2015A Bonds or to the validity of this Agreement as to the City or the Authority and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Agreement

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except for its own negligence or willful misconduct, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the City or the Authority, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith.

Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an officer of the City or the Authority. The Escrow Agent shall incur no liability for losses arising from any investment made pursuant to this Agreement.

No provision of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers.

The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

The Escrow Agent shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Escrow Agent, or another method or system specified by the Escrow Agent as available for use in connection with its services hereunder); provided, however, that the City and the Authority shall provide to the Escrow Agent incumbency certificates listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City or the Authority whenever a person is to be added or deleted from the listing.

If the City or the Authority elects to give the Escrow Agent Instructions using Electronic Means and the Escrow Agent in its discretion elects to act upon such Instructions, the Escrow Agent’s understanding of such Instructions shall be deemed controlling. The City and the Authority understand and agree that the Escrow Agent cannot determine the identity of the actual sender of such Instructions and that the Escrow Agent shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Escrow Agent have been sent by such Authorized Officer. The City and the Authority shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Escrow Agent and that the City, the Authority and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City and the Authority. The Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Agent’s reliance upon and compliance with such Instructions notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The City and the Authority agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that they are fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Escrow Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City or

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the Authority; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Escrow Agent immediately upon learning of any compromise or unauthorized use of the security procedures.

The Escrow Agent shall furnish the City with periodic cash transaction statements which include detail for all investment transactions effected by the Escrow Agent or brokers selected by the City or the Authority, provided that the Escrow Agent is not obligated to provide an accounting for any fund or account that: (a) has a balance of $0.00; and (b) has not had any activity since the last reporting date. Upon the City’s election, such statements will be delivered via the Escrow Agent’s online service and upon electing such service, paper statements will be provided only upon request.

The City waives the right to receive brokerage confirmations of security transactions effected by the Escrow Agent as they occur, to the extent permitted by law. The City and the Authority further understand that trade confirmations for securities transactions effected by the Escrow Agent will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.

If the Escrow Bank learns that the Department of the Treasury or the Bureau of Public Debt will not, for any reason, accept a subscription of securities that is to be submitted pursuant to this Agreement, the Escrow Bank shall promptly request alternative written investment instructions from the City with respect to escrowed funds which were to be invested in securities. The Escrow Bank shall follow such instructions and, upon the maturity of any such alternative investment, the Escrow Bank shall hold funds uninvested and without liability for interest until receipt of further written instructions from the City. In the absence of investment instructions from the City, the Escrow Bank shall not be responsible for the investment of such funds or interest thereon. The Escrow Bank may conclusively rely upon the City’s selection of an alternative investment as a determination of the alternative investment's legality and suitability and shall not be liable for any losses related to the alternative investments or for compliance with any yield restriction applicable thereto.

SECTION 11. Amendments. This Agreement is made for the benefit of the City, the Authority and the owners from time to time of the 2015A Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such owners, the Escrow Agent, the Authority and the City; provided, however, that the City, the Authority and the Escrow Agent may, without the consent of, or notice to, such owners, amend this Agreement or enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of such owners and as shall not be inconsistent with the terms and provisions of this Agreement or the 2015 Indenture, for any one or more of the following purposes: (i) to cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon, the Escrow Agent for the benefit of the owners of the 2015A Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such owners or the Escrow Agent; and (iii) to include under this Agreement additional funds. The Escrow Agent shall be entitled to rely conclusively upon an unqualified opinion of Stradling Yocca Carlson & Rauth LLP, with respect to compliance with this Section, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the owners of the various 2015A Bonds or that any instrument that is executed hereunder complies with the conditions and provisions of this Section.

SECTION 12. Notice to Rating Agencies. In the event that this agreement or any provision thereof is severed, amended or revoked, the Escrow Agent, upon written instructions from the City,

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shall provide written notice in the form provided by the City of such severance, amendment or revocation to the rating agencies then rating the 2015A Bonds.

SECTION 13. Term. This Agreement shall commence upon its execution and delivery and shall terminate on the later to occur of either: (i) the date upon which the 2015A Bonds have been paid in accordance with this Agreement; or (ii) the date upon which no unclaimed moneys remain on deposit with the Escrow Agent pursuant to Section 5(c) of this Agreement. Funds remaining in the Escrow Fund after payment in full of the 2015A Bonds shall be transferred to the City.

SECTION 14. Compensation. The Escrow Agent shall receive its reasonable fees and expenses as previously agreed to by the Escrow Agent, the Authority and the City, and any other reasonable fees and expenses of the Escrow Agent; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien or assert any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services that are rendered or expenses incurred by the Escrow Agent under this Agreement.

SECTION 15. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City, the Authority or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void, shall be deemed separate from the remaining covenants and agreements contained herein and shall in no way affect the validity of the remaining provisions of this Agreement.

SECTION 16. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument.

SECTION 17. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF CALIFORNIA.

SECTION 18. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a day on which banking institutions in the city in which is located the office of the Escrow Agent are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day which is not a legal holiday or a day on which such banking institutions are authorized by law to remain closed, with the same force and effect as if done on the nominal date provided in this Agreement, and no interest shall accrue for the period from and after such nominal date.

SECTION 19. Assignment. This Agreement shall not be assigned by the Escrow Agent or any successor thereto without the prior written consent of the City and the Authority.

SECTION 20. Reorganization of Escrow Agent. Notwithstanding anything to the contrary contained in this Agreement, any company into which the Escrow Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which the Escrow Agent is a party, or any company to which the Escrow Agent may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Escrow Agent without execution or filing of any paper or any paper or further act, if such company is eligible to serve as Escrow Agent.

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SECTION 21. Insufficient Funds. If at any time the Escrow Agent has actual knowledge that the moneys and investments in the Escrow Fund, including the anticipated proceeds thereof and earnings thereon, will not be sufficient to make all payments required by this Agreement, the Escrow Agent shall notify the City in writing of the amount thereof and the reason therefor to the extent known to it. The Escrow Agent shall have no responsibility regarding any such deficiency.

SECTION 22. Notices. Any notice to or demand upon the Escrow Agent may be served or presented, and such demand may be made, at the principal corporate trust office of the Escrow Agent at 633 West Fifth Street, 24th Floor, Los Angeles, CA 90071. Any notice to or demand upon the City or the Authority shall be deemed to have been sufficiently given or served for all purposes by being sent by facsimile or other electronic transmission, overnight mail or courier or mailed by registered or certified mail, and deposited, postage prepaid, in a post office letter box, addressed to the City or the Authority at 100 Civic Center Mall, Indio, California 92201 (or such other address as may have been filed in writing by the City or the Authority with the Escrow Agent). [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written.

CITY OF INDIO
By:

City Manager

INDIO WATER AUTHORITY
By:

Executive Director
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Escrow Agent and 2015 Trustee
By:

Authorized Officer

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SCHEDULE A

FEDERAL SECURITIES
Moneys deposited in the Escrow Fund shall be invested as follows:

Security Maturity
Principal
Amount
Interest
Rate
The escrow requirements for the 2015A Bonds are as follows:

Period Ending Principal Paid
Principal
Redeemed Interest Total

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EXHIBIT A

NOTICE OF FULL OPTIONAL REDEMPTION

INDIO WATER AUTHORITY
WATER REVENUE REFUNDING BONDS, SERIES 2015A
BASE CUSIP 455749
NOTICE IS HEREBY GIVEN to the owners of the above-captioned obligations (the “2015A Bonds”), which were issued pursuant to the Indenture of Trust, dated as of June 1, 2015 (the “2015 Indenture”), by and between the Indio Water Authority (the “Authority”) and U.S. Bank Trust Company, as successor trustee (the “2015 Trustee”), that the 2015A Bonds maturing on and after April 1, 2026 (the “Refunded 2015A Bonds”) have been called for redemption on _____, 2026 (the “Redemption Date”). The Refunded 2015A Bonds were originally issued on June 2, 2015 and are described in the following table.

Maturity Date
(April 1)
CUSIP®†
(455749) Principal Amount Interest Rate Redemption Price 2027 BB6 $ 2,750,000 3.000% 100%
2028 BC4 2,835,000 3.250 100
2029 BD2 2,925,000 3.500 100
2030 BE0 3,030,000 3.625 100
2031 BF7 3,135,000 3.625 100
2032 BG5 3,250,000 3.750 100
2036 BH3 14,320,000 4.000 100
2040 BK6 1,025,000 5.000 100
2040 BJ9 3,835,000 4.125 100
TOTAL $37,105,000
On the Redemption Date, the principal amount of the Refunded 2015A Bonds, at a redemption price of 100% of the principal amount plus accrued interest thereon to such date (the “Redemption Price”), will become due and payable at the principal office of the 2015 Trustee. The Redemption Price of the Refunded 2015A Bonds will become due and payable on the Redemption Date. Interest on the Refunded 2015A Bonds will cease to accrue and be payable from and after the Redemption Date, and such Refunded 2015A Bonds will be surrendered to the 2015 Trustee.

Redemption of the Refunded 2015A Bonds is conditioned upon the receipt by the Trustee of sufficient funds on or before the Redemption Date to pay the Redemption Price. In the event that such funds are not received, the redemption of the Refunded 2015A Bonds will be cancelled and the Trustee will give written notice of such cancelation to the owners of the Refunded 2015A Bonds and this notice will be deemed to be canceled and rescinded.

To receive payment on the Redemption Date, owners of the Refunded 2015A Bonds should present and to surrender said Refunded 2015A Bonds on the Redemption Date at the address of the 2015 Trustee set forth below:
† CUSIP ® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc Copyright(c) 2025 CUSIP Global Services. All rights reserved. CUSIP ® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP ® numbers are provided for convenience of reference only. None of the Authority, the City or the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.

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Delivery Instructions
U.S. Bank Trust Company, National Association
Global Corporate Trust
111 Fillmore Avenue E
St. Paul, Minnesota 55107

REQUIREMENT INFORMATION
For a list of redemption requirements please visit our website at www.usbank.com/corporatetrust and click on the “Bondholder Information” link for Redemption instructions. You may also contact our Bondholder Communications team at 1-800-934-6802 Monday through Friday from 8 AM to 6 PM CST.

IMPORTANT NOTICE
Federal law requires the 2015 Trustee to withhold taxes at the applicable rate from the payment if an IRS Form W-9 or applicable IRS Form W-8 is not provided. Please visit www.irs.gov for additional information on the tax forms and instructions.

If the owner of any Refunded 2015A Bond fails to deliver such Refunded 2015A Bond to the 2015 Trustee on the Redemption Date, such Refunded 2015A Bond shall nevertheless be deemed redeemed on the Redemption Date and the owner of such Refunded 2015A Bond shall have no rights in respect thereof except to receive payment of the Redemption Price from funds held by the 2015 Trustee for such payment.

Note: The Authority and the 2015 Trustee shall not be responsible for the selection or use of the CUSIP numbers selected, nor is any representation made as to their correctness in the notice or as printed on any Refunded 2015A Bond. They are included solely for the convenience of the holders.

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as 2015 Trustee
Dated this _____, 2026.

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EXHIBIT B

NOTICE OF DEFEASANCE

INDIO WATER AUTHORITY
WATER REVENUE REFUNDING BONDS, SERIES 2015A
BASE CUSIP 455749
NOTICE IS HEREBY GIVEN to the owners of the above-captioned obligations (the “2015A Bonds”), which were issued pursuant the Indenture of Trust, dated as of June 1, 2015 (the “2015 Indenture”), by and between the Indio Water Authority (the “Authority”) and U.S. Bank Trust Company, as successor trustee (the “2015 Trustee”), that the City of Indio (the “City”) has caused to be deposited with U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”), cash and federal securities, the principal of and interest on which when paid will provide an amount sufficient to pay: (i) the regularly scheduled debt service on the 2015A Bonds on April 1, 2026; and (ii) on _____, 2026 (the “Redemption Date”), the principal of the 2015A Bonds maturing after April 1, 2026, plus interest with respect thereto accrued through the Redemption Date, without premium. The 2015A Bonds were originally issued on June 2, 2015 and are described in the following table.

Maturity Date
(April 1)
CUSIP®†
(455749) Principal Amount Interest Rate
2026 BA8 $ 2,620,000 5.000%
2027 BB6 2,750,000 3.000
2028 BC4 2,835,000 3.250
2029 BD2 2,925,000 3.500
2030 BE0 3,030,000 3.625
2031 BF7 3,135,000 3.625
2032 BG5 3,250,000 3.750
2036 BH3 14,320,000 4.000
2040 BK6 1,025,000 5.000
2040 BJ9 3,835,000 4.125
TOTAL $39,725,000
In accordance with the 2015 Indenture and the Sublease Agreement, dated as of June 1, 2015 (the “2015 Sublease”), by and between the City and the Authority, upon the deposit of moneys with the Escrow Agent as described above: (i) all agreements and covenants of the Authority and the City to the owners of the 2015A Bonds under the 2015 Indenture will cease, terminate and become void and be completely discharged and satisfied; (ii) the 2015A Bonds will be deemed to have been paid; and (iii) the right, title and interest of the Authority in and the obligations of the City under the 2015 Sublease will, with respect to the portion of the Base Rental payable under the 2015 Sublease which is attributable to the 2015A Bonds, cease, terminate, become void and be completely discharged and satisfied (except as set forth in the 2015 Sublease).
† CUSIP ® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc Copyright(c) 2025 CUSIP Global Services. All rights reserved. CUSIP ® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP ® numbers are provided for convenience of reference only. None of the Authority, the City or the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.

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No representation is made as to the correctness of the CUSIP number either as printed on any 2015A Bond or as contained herein and any error in the CUSIP number shall not affect the validity of the proceedings for defeasance or redemption of the 2015A Bonds.

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as 2015 Trustee
_____, 2026

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TERMINATION AGREEMENT
This TERMINATION AGREEMENT, dated as of March 1, 2026, is entered into by and between CITY OF INDIO, a municipal corporation that is duly organized and existing under and by virtue of the general laws of the State of California (the “City”), and INDIO WATER AUTHORITY, a joint exercise of powers agency that is duly organized and existing under and by virtue of the laws of the State of California (the “Authority”).

RECITALS
WHEREAS, the Authority has previously issued its Indio Water Authority Water Revenue Refunding Bonds, Series 2015A (the “2015A Bonds”) and Series 2015B (Taxable) (the “2015B Bonds” and, together with the 2015A Bonds, the “2015 Bonds”) pursuant to an Indenture, dated as of June 1, 2015, by and between the Authority and U.S. Bank Trust Company, National Association, as successor trustee, for the purpose of assisting the City in the financing and refinancing of certain public capital improvements to the water system of the City (the “Water System”); WHEREAS, in connection with the issuance of the 2015 Bonds, the City and the Authority entered into an Amended and Restated Lease Agreement, dated as of June 1, 2015 (the “Lease Agreement”), pursuant to which the City leased the Water System to the Authority, and a Sublease Agreement, dated as of June 1, 2025 (the “Sublease”), pursuant to which the Authority subleased the Water System to the City in exchange for payments of Base Rental, which provided funds to the Authority to pay debt service on the 2015 Bonds;
WHEREAS, the 2015B Bonds have matured and the City and the Indio Public Financing Authority have determined to issue the Indio Public Financing Authority Water Revenue Refunding Bonds, Series 2026A (the “2026 Bonds”) to provide funds to refund the outstanding 2015A Bonds; and
WHEREAS, in connection with the issuance of the 2026 Bonds and the defeasance of the outstanding 2015A Bonds, the City and the Authority desire to terminate the Lease Agreement and the Sublease and to return the Water System and its operations to the City; NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Termination of Lease Agreement and Sublease. The Authority and the City hereby agree that the Lease Agreement and the Sublease are terminated as of the issuance of the 2026 Bonds and the defeasance of the 2015A Bonds and the Authority has no further interest in the Water System under the Lease Agreement or the Sublease.

2. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall constitute one agreement. The signature and acknowledgment pages from each counterpart may be removed and attached to a single document in order to create one original instrument.

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IN WITNESS WHEREOF, the parties hereto have executed and attested this Termination Agreement by their officers thereunto duly authorized as of the day and year first written above.

CITY OF INDIO
By:

City Manager
ATTEST:

City Clerk

INDIO WATER AUTHORITY
By:

Executive Director
ATTEST:

Secretary

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This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

PRELIMINARY OFFICIAL STATEMENT DATED _____, 2026
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals.

In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. See “TAX MATTERS” with respect to tax consequences relating to the Bonds, including with respect to the alternative minimum tax imposed on certain large corporations.

NEW ISSUE – BOOK-ENTRY ONLY INSURED BONDS RATING: S&P: “__” UNDERLYING RATING: S&P: “__”
See the caption “RATINGS.”

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$__________

INDIO PUBLIC FINANCING AUTHORITY
WATER REVENUE REFUNDING BONDS, SERIES 2026A
Dated: Date of Delivery Due: April 1, as shown on inside front cover page The Bonds are being issued in fully registered form and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York. Individual purchases will be made in denominations of $5,000 and integral multiples thereof and will be in book-entry form only. Purchasers of the Bonds will not receive certificates representing their beneficial ownership in the Bonds but will receive credit balances on the books of their respective nominees. Interest on the Bonds is payable on April 1 and October 1 of each year, commencing October 1, 2026. Payment of the principal of and interest on the Bonds is to be made to Cede & Co., which is to disburse said payments to the Beneficial Owners of the Bonds through their nominees.

The Bonds are subject to optional redemption prior to maturity, all as more fully described herein.

The Bonds are being issued to provide funds to: (i) refund the outstanding Indio Water Authority Water Revenue Refunding Bonds, Series 2015A; (ii) purchase a municipal bond insurance policy guaranteeing the payment of principal of and interest on the Bonds maturing on April 1 of the years 20__ through 20__, inclusive; (iii) purchase a municipal bond debt service reserve insurance policy for deposit in the Reserve Fund; and (iv) pay costs incurred in connection with the issuance of the Bonds.

The Bonds are being issued pursuant to the Indenture of Trust, dated as of March 1, 2026, by and between the Indio Public Financing Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). THE BONDS ARE A SPECIAL

LIMITED OBLIGATION OF THE AUTHORITY PAYABLE SOLELY FROM AUTHORITY REVENUES, WHICH CONSIST OF SERIES 2026 INSTALLMENT PAYMENTS TO BE MADE BY THE CITY TO THE AUTHORITY PURSUANT TO THE INSTALLMENT PURCHASE AGREEMENT, DATED AS OF MARCH 1, 2026, BY AND BETWEEN THE CITY AND THE

AUTHORITY, AND FROM CERTAIN OTHER FUNDS AND ACCOUNTS HELD BY THE TRUSTEE PURSUANT TO THE INDENTURE. NEITHER THE FULL FAITH AND CREDIT NOR ANY OTHER REVENUES OR FUNDS OF THE AUTHORITY ARE PLEDGED TO OR AVAILABLE FOR THE PAYMENT OF DEBT SERVICE ON THE BONDS. THE OBLIGATION OF THE

AUTHORITY TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON THE BONDS DOES NOT CONSTITUTE AN

OBLIGATION FOR WHICH THE AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE AUTHORITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE AUTHORITY HAS NO TAXING POWER.

The obligation of the City to make the Series 2026 Installment Payments is a special limited obligation of the City payable solely from Net Revenues of the City’s Water System. The City may incur additional obligations payable from Net Revenues on a parity with the obligation to pay Series 2026 Installment Payments, subject to the terms and conditions of the Installment Purchase Agreement, as more fully described herein.

THE OBLIGATION OF THE CITY TO MAKE SERIES 2026 INSTALLMENT PAYMENTS PURSUANT TO THE

INSTALLMENT PURCHASE AGREEMENT DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY IS

OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE CITY TO MAKE THE SERIES 2026 INSTALLMENT PAYMENTS IS A SPECIAL LIMITED OBLIGATION OF THE CITY PAYABLE SOLELY FROM NET REVENUES OF THE CITY’S WATER

SYSTEM AND DOES NOT CONSTITUTE A DEBT OF THE CITY OR OF THE STATE OF CALIFORNIA OR OF ANY

POLITICAL SUBDIVISION THEREOF IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
[The scheduled payment of principal of and interest on the Bonds maturing on April 1 of the years 20__ through 20__, inclusive, when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by ___________.] [INSURER LOGO]
____________________________________
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

MATURITY SCHEDULE
(See inside front cover page)
The Bonds are offered when, as and if issued and received by the Underwriter, subject to the approval of the valid, legal and binding nature of the Bonds by Stradling Yocca Carlson & Rauth LLP, Bond Counsel, and certain other conditions. Certain matters will be passed upon for the City and the Authority by the City Attorney of the City, and by Stradling Yocca Carlson & Rauth LLP, as Disclosure Counsel, for the Underwriter by its counsel, Best Best & Krieger LLP, Los Angeles, California, for the Insurer by its counsel and for the Trustee by its counsel. It is anticipated that the Bonds will be available for delivery through the facilities of The Depository Trust Company on or about _____, 2026.
[PIPER LOGO]
Dated: _____, 2026
 Preliminary, subject to change.

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$__________

INDIO PUBLIC FINANCING AUTHORITY
WATER REVENUE REFUNDING BONDS, SERIES 2026A

MATURITY SCHEDULE
BASE CUSIP†* _____
Maturity
(April 1)
Principal
Amount Interest Rate Yield Price CUSIP†
 Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc Copyright(c) 2026 CUSIP Global Services. All rights reserved. CUSIP ® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP ® numbers are provided for convenience of reference only. None of the Authority, the City or the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.

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CITY OF INDIO

COUNTY OF RIVERSIDE, CALIFORNIA

CITY COUNCIL/AUTHORITY BOARD OF DIRECTORS
Elaine Holmes, Mayor/ Chair of the Authority
Waymond Fermon, Mayor Pro Tem/Vice Chair of the Authority Oscar Ortiz, Councilmember/Director
Benjamin Guitron IV, Councilmember/Director
Glenn Miller , Councilmember/Director
_____________

CITY OFFICIALS
Bryan H. Montgomery, City Manager/Executive Director
Jonathan Nicks, Assistant City Manager
Ruby D. Walla, Director of Finance
Miguel Pena, Water Operations Manager
Stephen Graham Pacifico, City Attorney/General Counsel
Cynthia Hernandez, City Clerk/Secretary
_____________

BOND COUNSEL AND DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
_____________

MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc.

Irvine, California
_________________

TRUSTEE AND ESCROW AGENT
U.S. Bank Trust Company, National Association
Los Angeles, California
_________________

VERIFICATION AGENT
Causey Public Finance LLC
Denver, Colorado

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No dealer, broker, salesperson or other person has been authorized by the City or the Authority to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Authority. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

The Underwriter has provided the following sentence for inclusion in this Official Statement:

The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

This Official Statement and the information that is contained herein are subject to completion or amendment without notice, and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or the Authority or any other parties that are described herein since the date hereof. These securities may not be sold, nor may an offer to buy be accepted, prior to the time that the Official Statement is delivered in final form.

This Official Statement is being submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the City.

All summaries of documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions.

Certain statements which are included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used, such as “plan,” “expect,” “estimate,” “project,” “budget,” “intend” or similar words. Such forward-looking statements include, but are not limited to, certain statements contained under the captions “THE CITY” and “THE WATER SYSTEM OF THE CITY.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS

CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND

UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL

RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY

DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES

NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. IN EVALUATING SUCH

STATEMENTS, POTENTIAL INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS

FACTORS WHICH COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET

PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN

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THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE BONDS TO CERTAIN

DEALERS, DEALER BANKS, BANKS ACTING AS AGENT AND OTHERS AT PRICES LOWER

THAN THE PUBLIC OFFERING PRICE STATED ON THE COVER PAGE HEREOF, AND SAID

PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,

AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT, AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

The City maintains a website; however, information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds. [__________ (the “Insurer”) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, the Insurer has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Insurer supplied by the Insurer and presented under the caption “BOND INSURANCE” and in Appendix F—“SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”]

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TABLE OF CONTENTS
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INTRODUCTION..................................................................................................................................................1 THE FINANCING PLAN......................................................................................................................................2 Refunding Plan................................................................................................................................................2 Prior Water System Lease ...............................................................................................................................2 ESTIMATED SOURCES AND USES OF FUNDS .............................................................................................3 THE BONDS .........................................................................................................................................................3 General Provisions ..........................................................................................................................................3 Book-Entry Only System ................................................................................................................................3 Transfers and Exchanges Upon Termination of Book-Entry Only System ....................................................4 Redemption .....................................................................................................................................................4 Selection of Bonds for Redemption ................................................................................................................4 Notice of Redemption .....................................................................................................................................5 Effect of Redemption ......................................................................................................................................5 DEBT SERVICE SCHEDULE..............................................................................................................................6 SECURITY FOR THE BONDS ............................................................................................................................6 General ............................................................................................................................................................6 Series 2026 Installment Payments Payable From Net Revenues....................................................................6 Rate Covenant .................................................................................................................................................8 Reserve Fund...................................................................................................................................................8 Additional Parity Bonds and Contracts...........................................................................................................8 Rate Stabilization Fund ...................................................................................................................................9 BOND INSURANCE.............................................................................................................................................9 THE CITY..............................................................................................................................................................9 General ............................................................................................................................................................9 Land Use and Service Area...........................................................................................................................10 Governance and Management.......................................................................................................................10 Employees .....................................................................................................................................................13 Budget Process ..............................................................................................................................................13 Water System Insurance................................................................................................................................13 Other Obligations ..........................................................................................................................................14 Financial Statements .....................................................................................................................................14 THE WATER SYSTEM ......................................................................................................................................15 General ..........................................................................................................................................................15 Water Supply.................................................................................................................................................16 Water Quality ................................................................................................................................................19 Drought Declarations ....................................................................................................................................20 Historical Water System Deliveries ..............................................................................................................22 Historical Water System Connections...........................................................................................................23 Historical Water System Sales Revenues......................................................................................................23 Largest Water System Customers .................................................................................................................24 Water System Rates and Charges..................................................................................................................24 Water System Collection Procedures............................................................................................................28 Future Water System Improvements.............................................................................................................29 Projected Water System Deliveries...............................................................................................................31 Projected Water System Connections ...........................................................................................................31

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Projected Water System Sales Revenues ......................................................................................................32 WATER SYSTEM FINANCIAL INFORMATION ...........................................................................................32 Available Cash ..............................................................................................................................................32 Historical Operating Results and Debt Service Coverage.............................................................................33 Projected Operating Results and Debt Service Coverage .............................................................................34 Employee Benefits ........................................................................................................................................35 CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES .........................................41 Article XIIIB .................................................................................................................................................41 Proposition 218 .............................................................................................................................................42 Proposition 26 ...............................................................................................................................................43 Future Initiatives ...........................................................................................................................................44 CERTAIN RISKS TO BONDHOLDERS ...........................................................................................................44 Limited Obligations.......................................................................................................................................44 Accuracy of Assumptions .............................................................................................................................44 System Demand.............................................................................................................................................45 System Expenses ...........................................................................................................................................45 Limited Recourse on Default ........................................................................................................................45 Rate-Setting Process under Proposition 218 .................................................................................................45 Statutory and Regulatory Compliance ..........................................................................................................45 Climate Change .............................................................................................................................................46 Cybersecurity ................................................................................................................................................46 Natural Disasters ...........................................................................................................................................46 Limitations on Remedies...............................................................................................................................47 Loss of Tax Exemption .................................................................................................................................48 Secondary Market .........................................................................................................................................48 Parity Obligations..........................................................................................................................................49 Risks Associated with Bond Insurance .........................................................................................................49 THE AUTHORITY..............................................................................................................................................49 APPROVAL OF LEGAL PROCEEDINGS........................................................................................................50 LITIGATION.......................................................................................................................................................50 City ................................................................................................................................................................50 Authority .......................................................................................................................................................50 TAX MATTERS..................................................................................................................................................50 CONTINUING DISCLOSURE ...........................................................................................................................52 RATINGS ............................................................................................................................................................52 MUNICIPAL ADVISOR.....................................................................................................................................53 UNDERWRITING...............................................................................................................................................53 MISCELLANEOUS ............................................................................................................................................54

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APPENDIX A - CITY FINANCIAL STATEMENTS.............................................................................................A-1

APPENDIX B - DEFINITIONS AND SUMMARY OF CERTAIN PROVISIONS OF THE INSTALLMENT PURCHASE AGREEMENT AND THE INDENTURE ..................................B-1 APPENDIX C - FORM OF OPINION OF BOND COUNSEL ...............................................................................C-1 APPENDIX D - BOOK-ENTRY ONLY SYSTEM.................................................................................................D-1 APPENDIX E - FORM OF CONTINUING DISCLOSURE AGREEMENT .........................................................E-1 APPENDIX F - SPECIMEN MUNICIPAL BOND INSURANCE POLICY..........................................................F-1

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$__________

INDIO PUBLIC FINANCING AUTHORITY
WATER REVENUE REFUNDING BONDS, SERIES 2026A

INTRODUCTION
This Official Statement, including the front cover page, the inside front cover page and the appendices, provides certain information concerning the sale and delivery of the Indio Public Financing Authority Water Revenue Refunding Bonds, Series 2026A (the “Bonds”). Descriptions and summaries of various documents that are set forth in this Official Statement do not purport to be comprehensive or definitive, and reference is made to each document for complete details of all terms and conditions. All statements herein are qualified in their entirety by reference to each such document. Capitalized terms that are used and not otherwise defined in this Official Statement have the meanings ascribed thereto in Appendix B.

The Bonds are being issued pursuant to an Indenture of Trust, dated as of March 1, 2026 (the “Indenture”), by and between the Indio Public Financing Authority (the “Authority”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Bonds are limited obligations of the Authority payable solely from Authority Revenues, which consist of payments (the “Series 2026 Installment Payments”) to be made by the City of Indio (the “City”) to the Authority pursuant to an Installment Purchase Agreement (the “Installment Purchase Agreement”), dated as of March 1, 2026, by and between the City and the Authority, and amounts on deposit in certain funds and accounts established by the Indenture.

The obligation of the City to make Series 2026 Installment Payments is a special limited obligation of the City payable solely from Net Revenues of the City’s Water System, which consist of Revenues of the City’s Water System remaining after payment of Operation and Maintenance Costs. See the caption “SECURITY FOR THE BONDS.”
The Bonds are being issued to provide funds to: (i) refund the outstanding Indio Water Authority Water Revenue Refunding Bonds, Series 2015A (the “2015A Bonds”); (ii) purchase a municipal bond insurance policy guaranteeing the payment of principal of and interest on the Bonds maturing on April 1 of the years 20__ through 20__, inclusive (the “Insured Bonds”); (iii) purchase a municipal bond debt service reserve insurance policy for deposit in the Reserve Fund (the “Reserve Policy”; and (iv) pay costs incurred in connection with the issuance of the Bonds. See the captions “ESTIMATED SOURCES AND USES OF FUNDS” and “BOND INSURANCE.”
The City regularly prepares a variety of reports, including audits, budgets and related documents. Any Bond Owner may obtain a copy of such report, as available, from the City. The City has also undertaken to provide annual reports to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System (“EMMA”) pursuant to a continuing disclosure agreement. See the caption “CONTINUING DISCLOSURE” and Appendix E.
[The scheduled payment of principal of and interest on the Insured Bonds when due will be guaranteed under an insurance policy (the “Policy”) to be issued concurrently with the delivery of the Bonds by the ___________ (the “Insurer”) concurrently with the issuance of the Bonds. See the caption “BOND INSURANCE.”]
 Preliminary, subject to change.

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THE FINANCING PLAN
Refunding Plan
Pursuant to the Indenture, the Authority will deliver a portion of the proceeds of the Bonds to the Trustee to transfer to U.S. Bank Trust Company, National Association, acting as escrow agent (the “Escrow Agent”), for deposit in an escrow fund (the “Escrow Fund”) established under the Escrow Agreement, dated as of March 1, 2026, by and among the Indio Water Authority, the City and the Escrow Agent (the “Escrow Agreement”). Proceeds of the Bonds and other moneys held in the Escrow Fund will be used to redeem the outstanding 2015A Bonds on _____, 2026 (the “Redemption Date”). Amounts in the Escrow Fund will be irrevocably pledged to secure, when due, the payment of the principal of and interest due with respect to the 2015A Bonds and will not be available to pay debt service on the Bonds.

Upon issuance of the Bonds, Causey Public Finance LLC, Denver, Colorado, as verification agent, will deliver a report on the mathematical accuracy of certain computations based upon certain information to redeem the outstanding 2015A Bonds on the Redemption Date; and (b) the computations of yield of the Bonds which support Bond Counsel’s opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes.

Prior Water System Lease
In May 2001, the City leased substantially all of the assets of the Water System to the Indio Water Authority under a Lease Agreement dated as of May 22, 2001, which was subsequently amended five different times. In connection with the issuance of the 2015A Bonds, the Indio Water Authority and the City entered into an Amended and Restated Lease Agreement, dated as of June 1, 2015 (the “Amended and Restated Lease”), which amended, restated and superseded the prior Water System lease in its entirety. Pursuant to the Amended and Restated Lease, and the prior Water System lease, the City delegated certain administrative, engineering, and other operational functions of the Water System to the Authority, which were performed by the Authority on behalf of the City and subject to the oversight and general supervision of the City Manager of the City. Such services were provided by City employees provided by the City to the Authority.

In connection with the refunding of the 2015A Bonds and the issuance of the Bonds, the City and the Indio Water Authority are terminating the Amended and Restated Lease. Following the termination of the Amended and Restated Lease, the Water System will be managed directly by a department of the City and that the Water Revenue Fund previously maintained by the Authority on behalf of the City will be maintained directly by the City as a separate enterprise fund.

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ESTIMATED SOURCES AND USES OF FUNDS
The following table sets forth the estimated sources and uses of funds in connection with the issuance of the Bonds:

Sources
Principal Amount of Bonds
[Plus/Less] [Net] Original Issue [Premium/Discount]
Plus Amounts Related to the 2015A Bonds(1)
Total Sources
Uses
Deposit to Escrow Fund
Costs of Issuance(2)
Total Uses
(1) Represents amounts held in the reserve fund for the 2015A Bonds as well as other moneys held in the funds and accounts with respect to the 2015A Bonds.
(2) Includes certain legal, municipal advisory, financing, rating agency, Trustee fees, Underwriter’s discount, premium for the Policy, printing, and other costs.

THE BONDS
General Provisions
The Bonds will be issued in the aggregate principal amount of $___________ . The Bonds will bear interest from and be dated the date of initial issuance, and will be payable upon maturity on the dates set forth on the inside front cover page hereof. Interest on the Bonds will be payable on April 1 and October 1 of each year, commencing October 1, 2026. Interest will be calculated at the rates set forth on the inside front cover page hereof on the basis of a year of 360 days comprised of twelve 30 day months.

The Bonds will be delivered only in fully registered form and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Ownership interests in the Bonds may be purchased in book-entry form only in denominations of $5,000 or any integral multiple thereof. See the caption “— Book-Entry Only System” and Appendix D.

In the event that the book-entry only system that is described below is discontinued, the principal of and interest on any Bond will be payable by check or draft of the Trustee upon presentation and surrender thereof at maturity or upon prior redemption at the Office of the Trustee in Los Angeles, California. Such principal and interest will be payable in lawful money of the United States of America.

Book-Entry Only System
One fully-registered Bond will be issued for each maturity of the Bonds in the principal amount of the Bonds of such maturity. Each such Bond will be registered in the name of Cede & Co. and will be deposited with DTC. As long as the ownership of the Bonds is registered in the name of Cede & Co., the term “Owner” as used in this Official Statement will refer to Cede & Co. and not to the actual purchasers of the Bonds (the “Beneficial Owners”).

The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the Bonds will be printed and delivered and will be governed  Preliminary, subject to change.

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by the provisions of the Indenture with respect to payment of principal and interest and rights of exchange and transfer.

The Authority cannot and does not give any assurances that DTC participants or others will distribute payments with respect to the Bonds received by DTC or its nominee as the registered Owner, or any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or that DTC will service and act in the manner described in this Official Statement. See Appendix D — “BOOK-ENTRY ONLY SYSTEM.”
Transfers and Exchanges Upon Termination of Book-Entry Only System In the event that the book-entry system that is described above is discontinued, the Bonds will be printed and delivered as provided in the Indenture. Thereafter, any Bond may, in accordance with its terms, be transferred on the Registration Books by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond at the Office of the Trustee for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee.

The Trustee is not required to register the transfer of any Bond during the period in which the Trustee is selecting Bonds for redemption and any Bond that has been selected for redemption.

Whenever any Bond is surrendered for transfer, the Authority will execute and the Trustee will authenticate and deliver a new Bond or Bonds of authorized denomination or denominations for a like series and aggregate principal amount of the same maturity. The Trustee will require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

Following any transfer of Bonds, the Trustee will cancel and destroy the Bonds that it has received.

Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of other authorized denominations of the same series and maturity. The Trustee is not required to exchange any Bond during the period in which the Trustee is selecting Bonds for redemption or any Bond that has been selected for redemption. The Trustee will require the Bond Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange. Following any exchange of Bonds, the Trustee will cancel and destroy the Bonds that it has received.

Redemption
Optional Redemption. The Bonds with stated maturities on or before April 1, 20__, are not subject to redemption prior to their respective stated maturities. The Bonds with stated maturities on or after April 1, 20__, are subject to redemption prior to their respective stated maturities, as a whole or in part, as directed by the Authority in a request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee) and by lot within each maturity in integral multiples of $5,000, on April 1, 20__ or any date thereafter at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium.

Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the Authority will execute and the Trustee will authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered and of the same series, interest rate and maturity.

Selection of Bonds for Redemption
Whenever provision is made in the Indenture for the redemption of less than all of the Bonds, the Trustee will select the Bonds for redemption as a whole or in part on any date as directed by the Authority and by lot within each maturity in integral multiples of $5,000 in accordance with the provisions set forth above

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under the caption “—Redemption,” the Trustee’s selection of Insured Bonds for redemption is subject to the approval of the Insurer, so long as the Policy is in full force and effect and the Insurer is not in default of its obligations thereunder. The Trustee will promptly notify the Authority in writing of the numbers of the Bonds or portions thereof so selected for redemption.

Notice of Redemption
Notice of redemption will be mailed by first class mail not less than 20 days or more than 60 days before any Redemption Date, to the respective Owners of any Bonds that are designated for redemption at their addresses appearing on the Registration Books, to the Securities Depositories and the Information Services.

Each notice of redemption will state the date of notice, the redemption date, the place or places of redemption and the Redemption Price, and will designate the maturities, CUSIP numbers, if any, and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice will also state that on the redemption date there will become due and payable on each of said Bonds or parts thereof that are designated for redemption the Redemption Price thereof or of said specified portion of the principal thereof in the case of a Bond to be redeemed in part only, together with, interest accrued thereon to the redemption date, and that (provided that moneys for redemption have been deposited with the Trustee) from and after such redemption date interest thereon will cease to accrue, and will require that such Bonds be then surrendered to the Trustee. Neither the failure to receive such notice nor any defect in the notice or the mailing thereof will affect the validity of the redemption of any Bond. Notice of redemption of Bonds will be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.

With respect to any notice of optional redemption of Bonds, such notice may state that such redemption will be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such Bonds to be redeemed and that, if such moneys have not been so received, said notice will be of no force and effect and the Trustee will not be required to redeem such Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption will not be made, and the Trustee will within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.

Effect of Redemption
Notice of redemption having been duly given as described above under the caption “—Notice of Redemption,” and moneys for payment of the redemption price of, together with interest accrued to the date fixed for redemption on, the Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Bonds (or portions thereof) so called for redemption will become due and payable, interest on the Bonds so called for redemption will cease to accrue, said Bonds (or portions thereof) will cease to be entitled to any benefit or security under the Indenture, and the Owners of said Bonds will have no rights in respect thereof except to receive payment of the redemption price thereof. The Trustee will, upon surrender for payment of any of the Bonds to be redeemed on their Redemption Dates, pay such Bonds at the Redemption Price. All Bonds redeemed pursuant to the provisions of the Indenture will be canceled upon surrender thereof.

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DEBT SERVICE SCHEDULE
Set forth below is a schedule of Series 2026 Installment Payments for each annual period ending on June 30 in the years indicated.

Period Ending
June 30 Principal Interest Total
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
TOTAL
Source: Underwriter.

SECURITY FOR THE BONDS
General
Each Bond is a special limited obligation of the Authority payable solely from Authority Revenues, which consist of Series 2026 Installment Payments to be made by the City under the Installment Purchase Agreement and certain other funds and accounts established pursuant to the Indenture. NEITHER THE FULL

FAITH AND CREDIT NOR ANY OTHER REVENUES OR FUNDS OF THE AUTHORITY ARE PLEDGED TO OR AVAILABLE FOR THE PAYMENT OF DEBT SERVICE ON THE BONDS. THE

OBLIGATION OF THE AUTHORITY TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON

THE BONDS DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE AUTHORITY IS

OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE AUTHORITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE AUTHORITY HAS NO TAXING POWER.

The Authority has assigned substantially all of its right, title and interest in the Installment Purchase Agreement to the Trustee pursuant to the Indenture, for the benefit of the Owners of the Bonds, including its right to receive Series 2026 Installment Payments and its rights as may be necessary to enforce payment of the Series 2026 Installment Payments when due.

Series 2026 Installment Payments Payable From Net Revenues All of the Authority Revenues and any other amounts (including proceeds of the sale of the Bonds) held in any fund or account established pursuant to the Indenture (except the Rebate Fund) have been irrevocably pledged to secure the payment of the principal of and interest, and the premium, if any, on the Bonds in accordance with their terms and the provisions of the Indenture. Such pledge constitutes a lien on and security interest in such amounts and will attach, be perfected and be valid and binding from and after the

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Closing Date, without any physical delivery thereof or further act and will be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the Authority, irrespective of whether such parties have notice hereof.

The obligation of the City to make the Series 2026 Installment Payments is payable solely from Net Revenues of the City’s Water System, which consist of Revenues of the City’s Water System remaining after the payment of Operation and Maintenance Costs. All Revenues of the City’s Water System and all amounts on deposit in the Revenue Fund have been irrevocably pledged to the payment of the Series 2026 Installment Payments as provided in the Installment Purchase Agreement. The Revenues will not be used for any other purpose while any of the Series 2026 Installment Payments remain unpaid; provided that out of the Revenues there may be apportioned such sums for such purposes as are expressly permitted in the Installment Purchase Agreement, including but not limited to the payment of Operation and Maintenance Costs of the Water System. Such pledge, together with the pledge created by all other Bonds and Contracts (as such terms are defined in Appendix B under the caption “INSTALLMENT PURCHASE AGREEMENT—Definitions” and referred to in the forepart of this Official Statement as “Parity Bonds and Contracts” or “Parity Bonds or Contracts,” as applicable), constitutes a first lien on Revenues and, subject to application of Revenues and all amounts on deposit in the Revenue Fund as permitted in the Installment Purchase Agreement, the Revenue Fund and other funds and accounts created thereunder for the payment of the Series 2026 Installment Payments and all other Parity Bonds and Contracts in accordance with the terms thereof and of the Indenture.

Under the Installment Purchase Agreement, the term “Revenues” means all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of the Water System, including, without limiting the generality of the foregoing: (1) all income, rents, rates, fees, charges or other moneys derived by the City from the sale, furnishing and supplying of the water or other services, facilities and commodities sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the Water System; (2) the proceeds of any facility capacity charges, connection fees or similar charges related to the Water System; (3) the earnings on and income derived from the investment of amounts described in clauses (1) and (2) above, and from amounts in the Rate Stabilization Fund and from the Reserve Fund and Water System reserves; but excluding: (x) customers’ deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City; (y) any proceeds of taxes or assessments restricted by law to be used by the City to pay bonds or other obligations heretofore or hereafter issued; and (z) revenues of any water system acquired through merger, consolidation or similar action to the extent the exclusion of such acquired water system is required pursuant to the terms of such merger, consolidation or similar action.

Revenues also include all amounts transferred from the Rate Stabilization Fund to the Revenue Fund during any Fiscal Year as described under the caption “—Rate Stabilization Fund.” “Revenues” do not include any amounts transferred from the Revenue Fund to the Rate Stabilization Fund during any Fiscal Year as described under the caption “—Rate Stabilization Fund.”
The term “Operation and Maintenance Costs” means costs spent or incurred for maintenance and operation of the Water System calculated in accordance with generally accepted accounting principles, including (among other things) the reasonable expenses of management and repair and other expenses that are necessary to maintain and preserve the Water System in good repair and working order, and including administrative costs of the City that are charged directly or apportioned to the Water System, including but not limited to salaries and wages of employees, payments to the Public Employees Retirement System, overhead, insurance, taxes (if any), fees of auditors, accountants, attorneys or engineers and insurance premiums, and including all other reasonable and necessary costs of the City or charges (other than debt service payments) required to be paid by it to comply with the terms of the Installment Purchase Agreement or of the Indenture or any Contract or of any resolution or indenture authorizing the issuance of any Bonds or of such Bonds; but excluding in all cases depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature and all capital charges and any amounts that are transferred to the Rate Stabilization Fund.

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Notwithstanding anything contained in the Installment Purchase Agreement, the City is not required to advance any moneys derived from any source of income other than the Revenues and the Revenue Fund for the payment of amounts due under the Installment Purchase Agreement or for the performance of any agreements or covenants that are required to be performed by it contained therein. The City may, however, advance moneys for any such purpose so long as such moneys are derived from a source legally available for such purpose and may be legally used by the City for such purpose.

THE OBLIGATION OF THE CITY TO MAKE SERIES 2026 INSTALLMENT PAYMENTS

PURSUANT TO THE INSTALLMENT PURCHASE AGREEMENT DOES NOT CONSTITUTE AN

OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.

THE OBLIGATION OF THE CITY TO MAKE THE SERIES 2026 INSTALLMENT PAYMENTS IS A

SPECIAL LIMITED OBLIGATION OF THE CITY PAYABLE SOLELY FROM NET REVENUES OF THE CITY’S WATER SYSTEM AND DOES NOT CONSTITUTE A DEBT OF THE CITY OR OF THE STATE

OR OF ANY POLITICAL SUBDIVISION THEREOF IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.

Rate Covenant
To the fullest extent permitted by law, the City will fix and prescribe, at the commencement of each Fiscal Year, rates and charges for the Water Service which are reasonably expected, at the commencement of such Fiscal Year, to be at least sufficient to yield during such Fiscal Year Net Revenues equal to 120% of Debt Service for such Fiscal Year. The City may make, or permit to be made, adjustments from time to time in such rates, fees and charges and may make, or permit to be made, such classification thereof as it deems necessary, but may not reduce or permit to be reduced such rates, fees and charges below those then in effect, unless the Net Revenues from such reduced rates, fees and charges will at all times be sufficient to meet the foregoing requirements.

So long as the City has complied with its obligations set forth in the first two paragraphs of this subcaption, as applicable, the failure of Net Revenues to meet the thresholds set forth in such paragraphs, as applicable, does not constitute a default or an Event of Default under the Installment Purchase Agreement or the Indenture.

Reserve Fund
[The Insurer has made a commitment to issue, simultaneously with the initial execution and delivery of the Bonds, the Reserve Policy in the amount of $__________ for deposit in the Reserve Fund, effective as of the date of issuance of the Bonds. Under the terms of the Reserve Policy, the Insurer will unconditionally and irrevocably guarantee to pay that portion of the scheduled payments of principal of and interest on the Bonds that becomes due for payment but shall be unpaid by reason of nonpayment by the Authority.

See Appendix B under the caption “THE INDENTURE—REVENUES, FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST—Reserve Fund.”]
Additional Parity Bonds and Contracts
The City may at any time issue or execute any Parity Bonds or Contracts, as the case may be, payable from Net Revenues on a parity with the Series 2026 Installment Payments and secured by a pledge of and lien on Revenues as described in the Installment Purchase Agreement, provided that:
(a) The Net Revenues for any consecutive twelve calendar month period during the eighteen calendar month period preceding the date of adoption by the City Council of the City of the resolution authorizing the issuance of, or the date of the execution of, such Parity Bonds or Contract, as the case may be,

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as evidenced by a special report prepared by an Independent Certified Public Accountant or Independent Financial Consultant on file with the City, produce a sum equal to at least 120% of the Debt Service for such twelve month period; and
(b) The Net Revenues for any consecutive twelve calendar month period during the eighteen calendar month period preceding the date of adoption by the City Council of the City of the resolution authorizing the issuance of, or the date of the execution of, such Parity Bonds or Contract, as the case may be, including adjustments to give effect as of the first day of such twelve month period to increases or decreases in rates and charges for the Water Service approved and in effect as of the date of calculation, as evidenced by a special report prepared by an Independent Certified Public Accountant or Independent Financial Consultant on file with the City, produce a sum equal to at least 120% of the Debt Service for such twelve month period, plus the Debt Service which would have accrued on any Parity Bonds and Contracts issued or executed since the end of such twelve month period assuming that such Parity Bonds and Contracts had been issued at the beginning of such twelve month period, plus the Debt Service which would have accrued had such proposed additional Parity Bonds or Contract been issued or executed at the beginning of such twelve month period.

Notwithstanding the foregoing, Parity Bonds or Contracts issued or executed to refund Parity Bonds or Contracts may be delivered without satisfying the conditions set forth above if Debt Service in each Fiscal Year after the Fiscal Year in which such Parity Bonds or Contracts are issued or executed, as applicable, is not greater than Debt Service would have been in each such Fiscal Year prior to the issuance or execution of such Parity Bonds or Contracts.

Rate Stabilization Fund
The Installment Purchase Agreement creates a special fund designated as the “Rate Stabilization Fund” which will be held by the City in trust under the Installment Purchase Agreement. The City has agreed and covenanted to maintain and to hold such fund separate and apart from other funds so long as any Parity Bonds or Contracts remain unpaid. Money transferred by the City from the Revenue Fund to the Rate Stabilization Fund in accordance with the Installment Purchase Agreement will be held in the Rate Stabilization Fund and applied in accordance with the Installment Purchase Agreement.

The City may withdraw all or any portion of the amounts on deposit in the Rate Stabilization Fund and transfer such amounts to the Revenue Fund for application in accordance with the Installment Purchase Agreement or, in the event that all or a portion of the Series 2026 Installment Payments are discharged in accordance with the Installment Purchase Agreement, transfer all or any portion of such amounts for application in accordance with the Installment Purchase Agreement. Any such amounts transferred from the Rate Stabilization Fund to the Revenue Fund in accordance with the Installment Purchase Agreement constitute pledged Revenues.

BOND INSURANCE
[TO COME]

THE CITY
General
The City was incorporated in 1930 and encompasses approximately 33 square miles. The City is the geographic mid-point of Riverside County (the “County”), located approximately 125 miles east of the center of the Los Angeles region, 75 miles north of the California-Baja California Mexican border and 30 miles southeast of Palm Springs. The City’s neighboring communities include Indian Wells, La Quinta and Palm Desert to the west and Coachella and Mecca to the east. Known as the “City of Festivals,” the City hosts multiple annual festivals, such as the Coachella Valley Music and Arts Festival (known as the Coachella fest),

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

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

For Fiscal Year 2024-25, the City of Indio’s water system (the “Water System”) served approximately 23,996 residential water accounts and approximately 1,973 commercial and other water accounts. The facilities of the Water System include approximately 347 miles of transmission pipelines, 20 wells, 3,766 fire hydrants, seven storage tanks, six booster pumps and four water treatment plants. The average daily demand on the Water System is approximately 18.0 million gallons and consumption is approximately 211 gallons per capita per day. See the captions “THE WATER SYSTEM —Historical Water System Deliveries” and “— Historical Water System Connections.”
The Water System’s sole source of water is groundwater pumped from the Indio Subbasin, which is a part of the larger Coachella Valley Ground Water Basin. Recharge of the Indio Subbasin is managed by the Coachella Valley Water District (“CVWD”), and CVWD imposes a Replenishment Assessment Charge for the City’s share of the costs to replenish the Indio Subbasin, including the cost of importing water for such purpose. See the caption “THE WATER SYSTEM—Water Supply.” As described above under the caption “THE FINANCING PLAN—Prior Water System Lease,” the City previously leased the Water System to the Indio Water Authority, which operated the Water System on behalf of the City. Effective with the defeasance of the 2015A Bonds, the City and the Indio Water Authority will terminate the Amended and Restated Lease. Following the termination of the Amended and Restated Lease, the City expects that the Water System will be managed directly by a department of the City and that the Water Revenue Fund previously maintained by the Indio Water Authority on behalf of the City will be maintained directly by the City as a separate enterprise fund.

Land Use and Service Area
The Water System provides water to a population of approximately 82,400 within its approximately 38 square mile service area, which encompasses the majority of the City and a portion of the unincorporated area of the County known as Indio Hills. As of January 2025, approximately 91% of the connections to the Water System are residential and consume approximately 72% of the water produced by the Water System.

The remaining Water System customers represent commercial, irrigation and other users.

Governance and Management
General. The City is a general law city with a Council-City Manager form of municipal government.

The City Council appoints the City Manager who is responsible for the day-to-day administration of City business and the coordination of all departments of the City. The City Council is composed of five members elected bi-annually by district to four-year alternating terms. Each year, the City Council selects the mayor on

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a rotational basis. As of June 30, 2025 the City employed a staff of approximately 298 full-time and 10 part- time employees.

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

Name and Office District Term Expires
Elaine Holmes, Mayor 3 November 2026
Waymond Fermon Mayor Pro Tem 2 November 2026
Oscar Ortiz, Council Member 4 November 2026
Benjamin Guitron IV, Council Member 5 November 2028
Glenn Miller, Council Member 1 November 2028
Bryan H. Montgomery is the City Manager of the City and the Executive Director of the Authority.

Mr. Montgomery is responsible for the efficient administration of all municipal affairs including implementation of City Council policy, state laws, and city ordinances, and he has over 30 years of local government experience. Mr. Montgomery has been the City Manager of the City since May of 2021. Prior to his service in the City, Mr. Montgomery served as the City of Manager of Oakley, California where he served for nearly 16 years. Prior to his time in Oakley, he served as City Manager of Mesquite, Nevada and Rupert, Idaho. He also served as the Assistant City Manager in Alamogordo, New Mexico and as a Management Aide in Provo, Utah. Mr. Montgomery has a Bachelor’s degree in International Government Relations and a Master’s degree in Public Administration, both from Brigham Young University. In addition to his local government service, Mr. Montgomery was an Adjunct Professor at San Francisco State University and Los Medanos College, speaks Spanish and periodically lectures in Latin America for the ICMA, the leading organization of local government professionals. In 2015, he was honored with the Volunteer of the Year Award by the Volunteers for Economic Growth Alliance for his decades of pro-bono assistance to ICMA’s Mexico office. In Mexico he conducted field visits to provide technical assistance to multiple cities and participated in workshops and other events to promote professional local government management.

Jonathan Nicks is the Assistant City Manager of the City. The Assistant City Manager is appointed by the City Manager. Mr. Nicks has served as the Assistant City Manager of the City since September 2024 and has nearly 25 years of local government experience. Prior to joining the City, Mr. Nicks served in multiple roles at the City of Menifee, California, including most recently as the Deputy City Manager, and also served as the Deputy Director for Orange County Parks and Community Services. Mr. Nicks holds a Bachelor’s degree from California State University, Fullerton, a Master’s degree in Public Administration from California State University, Long Beach, a Leadership Certification from Chapman University, and the Smart City Certification from Pepperdine University. He is a member of the National Parks & Recreation Association, American Public Works Association, California Parks & Recreation Society, the Municipal Management Association of Southern California, and the International City Management Association.

Ruby D. Walla is the Director of Finance of the City and the Treasurer of the Authority. Ms. Walla has served as the Director of Finance of the City since March 2024 and has more than two decades of local government finance experience. Prior to joining the City, Ms. Walla served in a variety of roles at the City of Brawley, Imperial Irrigation District and most recently served as the Assistant Finance Director of the City of Indian Wells. Ms. Walla holds a Bachelor’s degree in Administration, with a concentration in Accounting, and a Master’s degree in Public Administration, with a concentration in Financial Management, both from California State University, San Bernardino. She is a member of California Society of Municipal Finance Officers (CSMFO) and Government Finance Officers Association (GFOA).

Miguel Peña, is the Water Operations Manager. Mr. Peña has served IWA since 1999, for a total of 26 years. Prior to becoming the Water Operations Manager, Mr. Peña held several different positions at IWA.

He holds a Bachelor’s degree in Public Administration from University of La Verne. He is certified as a Distribution Grade-5 and Treatment Grade-3 from the California Water Resources Control Board. He plays a key role in utility management for the organization.

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Steven P. Graham is the City Attorney for the City but also serves as City Attorney for Cities of Canyon Lake, Hemet, and Yucaipa. He also serves as General Counsel to Idyllwild Fire Protection District.

He has dedicated his entire career to serving local governments beginning with his tenure as a Deputy City Attorney for the City of San Bernardino during a period of dramatic transformation. Joining shortly after the city declared bankruptcy in 2012, Steven worked for over six years on some of the most challenging and complex legal issues encountered by local government, including franchising their solid waste services, annexing into the County of San Bernardino fire protection district, and environmental litigation involving water and wastewater services. When Steven joined Cole Huber, he was assigned as the Assistant City Attorney for the cities of Ontario and Oakley where he continued working on complex development and environmental matters.

Management Policies. The City has adopted several policies which are designed to ensure the prudent and effective management of City operations, including a Debt Management Policy. Further information about these policies is set forth below.

Debt Management Policy. The City has adopted a Debt Management Policy in accordance with California Government Code Section 8855 to establish guidelines and parameters for the effective governance, management and administration of debt issued by the City and its related entities and to ensure compliance with legislation, statutes and laws that place regulations on local agency debt. The Bonds are consistent with the Debt Management Policy. The following elements have been incorporated into this policy. •The purposes for which debt may be incurred;
•The types of debt that may be issued;
•The relationship of the debt to, and integration with, the City’s capital improvement program or budget;
•Policy goals related to the City’s planning goals and objectives; •Debt management practices, including the investment of proceeds and post-issuance compliance; and •Policies governing initial and continuing disclosure to investors.

Operating Reserve: The reserve target is 120 days of operating expenses. The operating reserve provides cash funding for the utility’s daily operations and expenses. The reserve target is a function of the utility’s operating expenses and billing frequency.

Emergency Reserve: The reserve target is 5% of system assets. The emergency reserve covers any unanticipated system failures due to a natural disaster and/or other unforeseen emergencies. The reserve target is a function of the utility’s net depreciated assets. The City plans to adjust the minimum reserve target with an ideal funding target of 10% of system assets.

Rate Stabilization Fund: The Rate Stabilization Fund currently has a fund balance of approximately $5.2 million. However, prior to the end of Fiscal Year 2026, the City will withdraw approximately $2.8 million from the Rate Stabilization Fund in accordance with the rate plan adopted by the City in May 2025. The City’s adopted minimum reserve requirement for the Rate Stabilization Fund is 5% of annual rate revenues, with an ideal funding target of 10% of rate revenues. Rate Stabilization reserves are commonly established to cover any unforeseen cost increase and mitigate rate increases. For more information regarding the Rate Stabilization Fund and the City’s planned withdrawal of approximately $2.8 million in Fiscal Year 2026, see the captions “SECURITY FOR THE BONDS—Rate Stabilization Fund” and “WATER SYSTEM FINANCIAL INFORMATION—Projected Operating Results and Debt Service Coverage.”
Water Capital Program: The City has adopted reserve targets based on the five-year average of planned capital, with the minimum requirement equal to 1 year of the 5-year average and the ideal funding target equal to 2 years. This reserve operates as a reserve for funding annual system repairs

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and replacements. These reserve levels will provide an adequate amount of funding to ensure projects are not delayed and provide matching funds for securing any potential grants.

Employees
As of June 30, 2025, the City had 298 full-time equivalent employees (“FTEs”), of which 46 were responsible for operating and maintaining the Water System. City employees who work on behalf of the Water System are represented by the Indio Water Authority Teamsters, which represents approximately 34 employees. Relations between the City and these employee associations are governed by a memorandum of understanding that expires on June 30, 2027. A total of approximately 49 management and confidential employees are exempt from collective bargaining. Salaries for exempt employees are set by the City Council.

The City has never experienced a strike, slowdown or work stoppage.

Budget Process
The fiscal year of the City begins on July 1 of each year and ends on June 30 of the following year.

The City Manager and key staff members review revenues and expenditures for each department for the ensuing fiscal year. Prior to the beginning of each fiscal year, the City Manager submits to the City Council a budget proposal. In at least one public meeting (but more commonly three to four), the City Council considers the proposed budget and makes any revision that it deems appropriate. On or before June 30 it adopts the budget with revisions, if any, by the affirmative vote of at least three of the five members of the City Council.

Upon approval of the budget by the City Council, the expenditure levels and revenue assumptions stated in the proposed budget become adopted and are appropriated to the various agencies, departments and units for the objects and purposes authorized. During the fiscal year the City Manager may transfer appropriations from one object or purpose to another within a divisional budget unit, without seeking City Council approval. All appropriations lapse at the end of the fiscal year to the extent that they have not been expended or lawfully encumbered.

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

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

The City also participates in the workers compensation pool administered by the Insurance Authority and the all-risk property protection program of the Insurance Authority, which is underwritten by several insurance companies. Total all-risk property insurance coverage is approximately $181.8 million, with a $10,000 deductible per occurrence except for non-emergency vehicle insurance, which as a $2,500 deductible.

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

The fidelity coverage is provided through the Insurance Authority.

The City participates in the pollution legal liability insurance program which is available through the Insurance Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm

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drains owned by the City. Coverage is on a claims-made basis with a $250,000 deductible. The Insurance Authority has an aggregate limit of $20 million.

See Note 13 to City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2024 set forth in Appendix C for more information regarding the City’s insurance coverage.

No assurance can be given as to the adequacy of the insurance maintained now or in the future by the City to fund necessary repairs or replacement of any portion of the Water System, and the City does not have any obligation under the Indenture to maintain earthquake or flood coverage or to maintain any insurance in the current coverage amounts. Significant damage to the Water System could affect the City’s ability to generate sufficient Net Revenues to pay the Bonds.

Other Obligations
No Senior Obligations. The City has no obligations that are payable from Net Revenues on a senior basis to the City’s obligations to make the Series 2026 Installment Payments under the Installment Purchase Agreement.

Parity Obligations. After the refunding of the 2015 Bonds, as discussed under the caption “FINANCING”, the City will have no obligations payable from Net Revenues on a parity with the City’s obligations to make the Series 2026 Installment Payments under the Installment Purchase Agreement.

Financial Statements
A copy of the most recent audited financial statements of the City prepared by the Pun Group, Santa Ana, California (the “Auditor”) is set forth in Appendix A. The Auditor’s letter dated February 28, 2025 is located at the beginning of the Financial Section therein.

The summary operating results that are contained under the caption “WATER SYSTEM FINANCIAL INFORMATION—Historical Operating Results and Debt Service Coverage” are derived from these financial statements and audited financial statements for prior Fiscal Years (excluding certain non-cash items and after certain other adjustments), and are qualified in their entirety by reference to such statements, including the notes thereto.

The City accounts for moneys received and expenses paid in accordance with Generally Accepted Accounting Principles applicable to governmental agencies (“GAAP”). Generally, the City recognizes revenues and expenses on the full accrual basis of accounting, meaning that revenues are recognized in the accounting period in which they are earned and expenses are recognized in the period in which they are incurred, regardless of when the related cash flows take place. In certain cases, however, GAAP requires or permits moneys that are collected in one Fiscal Year to be recognized as revenue in a subsequent Fiscal Year and requires or permits expenses that are paid or incurred in one Fiscal Year to be recognized as expenses in a subsequent Fiscal Year. See Note 1.B to the financial statements that are set forth in Appendix A. Except as otherwise expressly noted herein, all financial information that has been derived from the City’s audited financial statements reflects the application of GAAP.

The Water System Fund of the City has a separate set of self-balancing accounts and is accounted for as a proprietary fund type (enterprise fund) using the economic resources measurement focus. In governmental accounting, enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis are to be financed or recovered primarily through user charges, or where periodic determination of revenues earned, expenses incurred and/or net income is deemed appropriate for capital maintenance, public policy, management control, accountability or other purposes.

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THE WATER SYSTEM
General
For Fiscal Year 2024-25, the Water System served approximately 23,996 residential water accounts and approximately 1,973 commercial and other water accounts. The facilities of the Water System include approximately 347 miles of transmission pipelines, 20 wells, 3,766 fire hydrants, seven storage tanks, six booster pumps and four water treatment plants. The average daily demand on the Water System is approximately 18.0 million gallons and consumption is approximately 211 gallons per capita per day. See the captions “—Historical Water System Deliveries” and “—Historical Water System Connections.” The Water System’s sole source of water is groundwater pumped from the Indio Subbasin, which is a part of the larger Coachella Valley Ground Water Basin. Recharge of the Indio Subbasin is managed by CVWD, which imposes a Replenishment Assessment Charge for the City’s share of the costs to replenish the Indio Subbasin, including the cost of importing water for such purpose. See the caption “—Water Supply.” The Water System also has emergency intertie connections with CVWD.

Groundwater Wells. The Water System currently includes 20 active well sites with a total capacity of approximately 65 million gallons a day. The wells have pumping capacities from 1,200 gallons per minute (“gpm”) to 3,500 gpm. Eleven of these groundwater wells pump water to above ground storage reservoirs at the Water System’s four production plants. See the subcaption “—Water Treatment Plants.” Further information with respect to extraction of groundwater from the City’s wells is set forth under the caption “— Water Supply.”
Water System Distribution Plants. The Water System operates four water treatment plants. Plant 1 was originally constructed in the 1950s and has a five million gallon reservoir capacity. Plant 1 was originally equipped with a submersible pump application but was replaced with a vertical line shaft turbine in the 1990s.

Plant 1 is equipped with automatic chlorine injection facilities and a chlorine residual analyzer, and also contains a reservoir which was constructed in 2008 and includes solar panels for electrical generation. Plant 2 was constructed in 1957 and has a steel welded two million gallon tank capacity. Plant 2 is also equipped with chlorine injection facilities and contains a booster station with motors that can pump up to 4,250 gpm. Plant 3 was originally constructed in the 1970s and has one (1) two million gallon reservoir and one (1) 2.5 million gallon reservoir for a total 4.5 million gallon capacity and current booster station motors capable of producing 9,600 gpm. Plant 4 was constructed in the 1990s and has a two million gallon reservoir capacity and a booster station with four electronic pumps and a total pumping capacity of 6,750 gpm.

Reservoirs. There are seven storage reservoirs with a total existing storage capacity of approximately

18.76 million gallons. Five of the reservoirs are located at production plants and are supplied by groundwater wells. The other two reservoirs are connected to the Water System’s distribution system and are filled using Water System water and have their own booster stations.

Booster Pumps. The potable water delivery system consists of booster pumps at wells, which supply directly into the distribution system at the production plans and at the two reservoirs that are connected to the distribution system The total pumping capacity in the Water System is approximately 47.2 million gallons per day (“mgd”) and the firm capacity is approximately 31.2 mgd. The firm capacity is the capacity of the pumping facility with the largest pump put of service to ensure adequate capacity is available to meet all expected supply/demand conditions.

Transmission and Distribution. The transmission and distribution network consists of approximately 347 miles of transmission and distribution pipelines ranging from two inches to 24 inches in size. Most of the pipes in the Water System are made of ductile iron or polyvinyl chloride materials; however, there are some pipes made of asbestos concrete, cast iron or steel materials.

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Water Supply
General. The Water System’s sole source of water is groundwater pumped from the Indio Subbasin, which is a part of the larger Coachella Valley Ground Water Basin. Recharge of the Indio Subbasin is managed by CVWD, which imposes a Replenishment Assessment Charge for the City’s share of the costs to replenish the Indio Subbasin, including the cost of importing water for such purpose. The Indio Subbasin has also historically been referred to as the Whitewater River Subbasin. The Water System maintains emergency intertie connections with Coachella Valley Water District. See the captions “—Historical Water System Supply” and “—Projected Water System Demand” for historical and projected information with respect to the City’s sources of water supply.

The Indio Subbasin lies within the northwestern portion of California’s Colorado Desert. The San Bernardino, San Jacinto, and Santa Rosa Mountains impede the eastward movement of storms and create a rain shadow, which results in an arid climate and greatly reduces the contribution of direct precipitation as a source of recharge to groundwater. Sediments in the northwestern Indio Subbasin are predominantly coarse-grained.

From about the City southeasterly to the Salton Sea, the Indio Subbasin is characterized by increasingly thick layers of silt and clay, especially in the shallower portions. These silt and clay layers are remnants of ancient lakebed deposits and impede the percolation of water applied for irrigation.

In 1964, the California Department of Water Resources (the “DWR”) estimated that the Groundwater Subbasin contained approximately 29,800,000 acre-feet (“AF”) of water in the first 1,000 feet below the ground surface, or approximately 76 percent of the total groundwater in the Coachella Valley Indio Subbasin.

According to the 2023-2024 Indio Subbasin Annual Report, since 2009 the Indio Subbasin has recovered approximately 1,051,000 AF of groundwater in storage, or about 56 percent of the cumulative depletion observed from 1970 to 2009. The Indio Subbasin was at its minimum storage in 2009 (with a calculated storage loss of 1,890,000 AF from 1970 to 2009, which represents six percent of the estimated storage capacity of the Indio Subbasin). Since 2009, groundwater pumping has decreased by approximately 20 percent and replenishment activities have increased leading to the observed recovery of groundwater in storage. According to the 2023-2024 Indio Subbasin Annual Report, the Indio Subbasin gained 184,670 AF in storage during Water Year 2023-2024. The annual change in groundwater storage represents the annual difference between inflows and outflows in the Indio Subbasin. During wet years or periods of high artificial recharge, the change in storage is positive (water in storage increases). In dry years, periods of low artificial recharge, or periods of high pumping, the change in storage is often negative (storage decreases). According to the 2023-2024 Water Audit, the Water System costs for pumping and treatment of groundwater are currently approximately $246 per acre foot.

The Coachella Valley Indio Subbasin is primarily managed by the CVWD but also works with the Coachella Water Authority, the Desert Water Agency (“DWA”) and the City. The CVWD manages the Indio Subbasin including the replenishment of the well sites. The Water System pumps groundwater from 20 active well sites which are located in the Indio Subbasin underlying a major portion of the Coachella Valley floor and encompasses approximately 525 square miles. The City pays a fee and assessment for the replenishment of the ground water to CVWD. For Fiscal Year 2026 the CVWD replenishment assessment charges are $72.27 per acre foot, which the City collects and passes through to Water System customers through its water rates. See the caption “—Water System Rates and Charges.”
Total maximum daily production from the City’s wells is approximately 17,917 gallons per minute, which is sufficient to supply approximately 100% of the average daily demand within the Water System service area. In previous years, groundwater was not replenished after rainfalls because of a highly efficient stormwater management system that prevented stormwater runoff from seeping into the ground. As an unadjudicated basin, the City does not currently hold specific pumping rights or entitlements to the water held in the Indio Subbasin but rather pumps supplies from the Indio Subbasin as needed to meet demands within the Water System’s service area.

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Coachella Valley Water District. CVWD water supply comes from various sources, including its own local surface water, the Colorado River and the State Water Project (“SWP”). Local surface water is sourced by the DWA through its stream diversion facilities on the Snow, Falls, and Chino Canyon creeks.

This water is captured through subsurface flow from the Whitewater River Canyon and a portion is diverted to the Whitewater River Groundwater Replenishment Facility (“WWR-GRF”) for groundwater replenishment.

There are 15 locations in the Indio Subbasin where streamflow is measured. Additionally, Colorado River Water has been major water supply source for the Indio Subbasin area since the completion of the Coachella Canal in 1949. In 2024, CVWD was entitled to 414,000 AF (“acre-feet”), an increase of 5,000 AF from the 2023 entitlement. The SWP also supplies CVWD with water through a partnership with the DWR. DWR manages the SWP and determines the available amount of SWP water for delivery based on multiple factors.

Because there are no physical facilities to deliver this water to the Indio Subbasin, the SWP water purchased by CVWD is exchanged for Colorado River water. Since 1973, this exchange water has been delivered for groundwater replenishment to the Indio Subbasin at the WWR-GRF and other related facilities. The Advance Delivery Agreement allows Metropolitan Water District (“MWD”) to pre-deliver SWP water to CVWD and DWA, exchanged for Colorado River water, at the WWR-GRF or the Mission Creek Groundwater Replenishment Facility (“MC-GRF”). As such, CVWD and DWA account for annual deliveries of SWP exchange water from the Colorado River and water previously delivered to the Coachella Valley and credited to the Advance Delivery Account.

CVWD faces various challenges in the continued management of the Indio Subbasin, including reductions in water deliveries from the Colorado River or through the SWP. In April 2025, the State of California Department of Water Resources (“DWR”), which operates the SWP, announced that allocations for water year 2025 would be equal to 50% of requested supplies. Allocations represent the amount of State Water Project water that DWR will deliver for the year. Allocations are reviewed monthly based on several factors, including water in storage, environmental requirements and rain and snow runoff projections. Such allocation increases or decreases by DWR have historically varied dramatically from a 5% allocation as recently as 2022 to a 100% allocation in 2023. There can be no assurance that MWD or CVWD will not announce supply cutbacks in future years, or that the City will not consider imposing restrictions on water use by Water System customers, based on hydrological conditions.

A description of the supply challenges faced by MWD and CVWD, as well as a variety of other operating information with respect to MWD and CVWD, is included in certain disclosure documents prepared by MWD and CVWD, respectively. MWD and CVWD periodically prepare official statements and other disclosure documents in connection with their respective bonds and other obligations. MWD and CVWD have also entered into certain continuing disclosure agreements pursuant to which they are contractually obligated for the benefit of owners of certain of their outstanding obligations to file certain annual reports, including audited financial statements and notice of certain events, pursuant to Rule 15c2-12. Such official statements, other disclosure documents, annual reports and notices are filed with EMMA. Such information is not incorporated herein by reference thereto, and the Authority makes no representation as to the accuracy or completeness of such information. NEITHER MWD NOR CVWD HAVE ENTERED INTO ANY

CONTRACTUAL COMMITMENT WITH THE CITY, THE AUTHORITY, THE TRUSTEE OR THE

OWNERS OF THE BONDS TO PROVIDE INFORMATION TO THE CITY, THE AUTHORITY OR THE OWNERS OF THE BONDS.

MWD AND CVWD HAVE NOT REVIEWED THIS OFFICIAL STATEMENT AND HAVE NOT

MADE REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR

COMPLETENESS OF THE INFORMATION THAT IS CONTAINED OR INCORPORATED HEREIN, INCLUDING INFORMATION WITH REGARD TO MWD OR CVWD. MWD AND CVWD ARE NOT

CONTRACTUALLY OBLIGATED, AND HAVE NOT UNDERTAKEN, TO UPDATE SUCH

INFORMATION FOR THE BENEFIT OF THE CITY, THE AUTHORITY OR THE OWNERS OF THE BONDS UNDER RULE 15c2-12.

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Sustainable Groundwater Management Act. As an unadjudicated groundwater basins, the Indio Subbasin is subject to the provisions of Assembly Bill No. 1739 and Senate Bill Nos. 1168 and 1319 (collectively, the Sustainable Groundwater Management Act, or “SGMA”), which was enacted on September 16, 2014. SGMA constitutes a Statewide legislative structure for local agencies to manage groundwater with the potential for State intervention if local efforts fail to meet prescribed requirements.

DWR has designated the Indio Subbasin as a medium priority basin for purposes of groundwater management.

The Indio Subbasin Groundwater Sustainability Agencies (the “GSAs”), which includes the CVWD and the Indio Water Authority, published the 2022 Indio Subbasin Water Management Plan Update: SGMA Alternative Plan (the “2022 Alternative Plan”) which was approved by DWR in 2024. The 2022 Alternative Plan addressed ground water sustainability criteria, which included undesirable results of chronic lowering of groundwater levels, reduction of groundwater storage, seawater intrusion, land subsidence, degraded water quality, and depletion of interconnected surface water. The 2022 Alternative Plan also set out Minimum Thresholds (“MT”) and a Measurable Objective (“MO”) to help identify quantifiable goals to track the performance of sustainable management. In Water Year 2023-2024, the water levels of all the wells in Indio Subbasin remained above their respective MTs, which signified that the undesirable results of chronic lowering of groundwater levels, depletion of groundwater storage, and potential subsidence are not occurring across the basin. Water Year 2023- 24, the Coachella Valley Water Basin has received natural inflow from mountain and streamflow recharge of 43,633 AF, similar to the long term average (45,953 AF per year (“AFY”) average from 1930-2020).

As a result of previous wet conditions and increased State Water Project deliveries, managed aquifer recharge in the WWR-GRF was increased in Water Year 2023-2024, relative to the prior water year.

Approximately 281,207 AF was recharged at this facility, which is about 113,000 AF more than in Water Year 2022-2023 and 260,000 AF more than Water Year 2021-2022. Replenishment at Thomas E. Levy Groundwater Replenishment Facility (“TEL-GRF”) continued to be reduce this water year due to voluntary reductions in Colorado River water use, similar to the operations in Water Year 2022-2023. While groundwater replenishment was reduced at this facility, the long history of consistent recharge at TEL-GRF has resulted in increased long term water levels and has helped maintain basin groundwater levels in the East Valley. Palm Desert Groundwater Replenishment Facility (PD-GRF) continued without reductions in Water Year 2023-2024. Recharge increased slightly to about 12,000 AF in Water Year 2023-2024 from a four-year average of 10,400 AF.

A total of 267,495 AF of groundwater was extracted from the Indio Subbasin in Water Year 2023- 2024. The total groundwater extracted represents an increase of 8,631 AF (3.3 percent) compared to the volume extracted in Water Year 2022-2023 (258,864 AF). The agricultural sector (including fish farms) produced less volume than in Water Year 2022-2023, with a 3,170 AF or 7.4 percent decrease. The industrial sector experienced a volumetric increase in groundwater use of 239 AF compared to Water Year 2022-2023, or

15.2 percent. The urban usage experienced a volumetric increase in water use of 11,562 AF compared to Water Year 2022-2023, or 5.4 percent. The groundwater use by golf courses and other recreational users is included in the urban sector.

In the Indio Subbasin, after an extended period of decline, the twenty-year running average change in storage has shown upward trends since 2009 and became positive in Water Year 2022-2023, while the ten-year running average has been positive since 2017. While the goal of the 2022 Alternative Plan is to eliminate groundwater overdraft, not to restore the Indio Subbasin to historical conditions, it is worth noting that since 2009 the Subbasin has recovered approximately 1,051,000 AF of groundwater in storage, or about 56 percent of the cumulative depletion observed from 1970 to 2009 (approximately 1,890,000 AF). The GSAs are working collaboratively to implement the goal and programs of the 2022 Alternative Plan and plan to implement a variety of projects and management action which will be implemented over 20 years (to 2045) to achieve sustainability in the Groundwater Subbasin. Further information regarding the implementation of the projects can be find in the Indio Subbasin Annual Report for Water Year 2023-2024.

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East Valley Reclamation Authority. On December 2013, the Indio Water Authority and Valley Sanitary District entered into a joint exercise of powers agreement to form the East Valley Reclamation Authority (the “EVRA”). The purpose of the EVRA is to develop and implement planning, programming, funding, construction and operation strategy for a recycled water project or portfolio of projects. Current projects in development by the EVRA include a one mgd recycled water system to deliver recycled water to the Fantasy Springs golf course or another golf course. The project is expandable so, if and when successful, the project can be increased as needed.

Primary funding for the EVRA is through contributions from the City and Valley Sanitary District.

Any revenues or expenses of the EVRA are not Revenues or Operations and Maintenance Costs of the Water System and any recycled water system developed in the future would not be a part of the Water System.

Water Quality
General. The City’s water supplies are treated to applicable regulatory standards prior to delivery to potable water customers. See the caption “—General.” The City uses state certified laboratories for bacteriological, physical, chemical, and radiological water analysis. Samples from throughout the system are collected weekly and submitted for testing to ensure the safety of the water and California Department of Health Services standards. Sodium hypochlorite is used and a minimum chlorine residual of 0.2 parts per million is maintained through the distribution system.

Chromium-6. Hexavalent chromium (“Chromium-6”) is a naturally occurring metallic element found in the groundwater aquifers beneath the Indio Subbasin. Chromium 6 can form through the erosion of certain rocks and minerals through stormwater runoff, or as a byproduct of some industrial activities. While Chromium-6 levels in the Indio Subbasin remain below the Maximum Contaminant Levels (“MCL”) set by for total chromium (which includes chromium-3 as well and has been regulated since 1977) of 50 parts per billion, the State Water Resources Control Board (the “SWRCB”) adopted a stricter standard in October 2024 for Chromium-6 of 10 parts per billon. The SWRCB’s 2024 MCL for Chromium-6 requires all water systems to install treatment solutions or secure alternative water sources before the compliance deadline of October 1, 2026.

Water sample results received in September 2025 showed Chromium-6 levels of 11-18.7 parts per billion in certain but not all wells, which is above the standard or maximum MCL and the City is now working with the SWRCB to address the exceedance and comply with the MCL within a compliance timeline. In 2022, the Indio Water Authority completed the Hexavalent Chromium (Cr6) Treatment Roadmap. In early 2023, the Indio Water Authority completed the Compliance Strategy for the proposed MCL. By late 2023, the Indio Water Authority completed the Conceptual Design Report for the Cr6 Removal using Reduction Coagulation Filtration (“RCF”). In 2024, the Indio Water Authority completed the RCF Pilot Testing at one of the wells to demonstrate effluent water quality parameters. The City has submitted a 10-year compliance plan to the SWRCB to address Chromium-6 levels and the 2024 MCL. Based on the State’s cost model, the estimated cost to treat all affected City wells will be approximately $130 million based on the 2024 MCL for Chromium-

6. If required to expend some or all of such amount for Chromium-6 treatment improvements, the City expects to utilize a combination of grant funding, Water System Revenues and, if necessary, will consider water rate adjustments and the issuance of additional Parity Bonds and Contracts.

According to the Health and Safety Code section 116341 a public water system shall not be determined, held, considered, or otherwise deemed in violation of the primary drinking water standard for hexavalent chromium while implementing a state board approved compliance plan. A public water system that has submitted a compliance plan for approval shall not be determined, held, considered, or otherwise deemed in violation of the primary drinking water standard for hexavalent chromium while state board action on the proposed and submitted compliance plan is pending. Accordingly, the City believes that it will not be required to abide by the higher MCL standard while it is pursuing its compliance plan. Even if required to comply with the higher MCL standard, the City has identified which wells within the Water System are compliant with the

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Chromium-6 MCL and which are not compliant, and does not believe that the inability to use the non- compliant wells while additional treatment solutions are implemented will impact the ability of the City to provide sufficient water to Water System customers.

In November 2024, the City, along with several other water agencies impacted by the 2024 Chromium-6 MCL, filed a lawsuit against the SWRCB challenging the Chromium-6 MCL and asking that it be set aside. The SWRCB has authority to set MCLs for Chromium-6 and other contaminants pursuant to a two-step risk assessment/risk management process: first, the Office of Environmental Health Hazard Assessment (“OEHHA”) publishes as Public Health Goal for the contaminant, and, second, the SWRCB adopts an MCL. Among other things, the lawsuit alleges that the SWRCB did not comply with the Safe Water Drinking Act by failing to properly coordinate with the OEHHA to propose the Chromium-6 MCL at the same time as the completion of the Chromium-6 Public Health Goal update, failing to exercise its independent judgment in evaluating statutory requirements for MCLs and failing to analyze the economic feasibility of compliance with the Chromium-6 MCL as required. The lawsuit also argues that in enacting the Chromium-6 MCL, the SWRCB failed to satisfy its duties under the Human Right to Water Act which generally established a State policy that every human being has the right to safe, clean, affordable and accessible water adequate for human consumption, cooking and sanitary purposes. The lawsuit is ongoing and a hearing on the merits of the case is expected to be scheduled in February 2026.

Drought Declarations
State and Federal Orders. In 2018, the California Governor signed Senate Bill 606 and Assembly Bill 1668 into law. These bills relate to water conservation and drought planning and empower DWR and the SWRCB to adopt long-term standards for the following: (i) indoor residential water use; (ii) outdoor residential water use; (iii) commercial, industrial and institutional water use for landscape irrigation; and (iv) water loss. The indoor water use standard has been defined as 47 gallons per person per day (“GPCD”) beginning January 2025; the standard will decrease over time to 42 GPCD in January 2030. Standards for outdoor residential water use and commercial, industrial and institutional water use for landscape irrigation are still being developed. Urban water suppliers will be required to stay within annual water budgets, based on these standards, for their service areas.

The City is unable to predict the effect on the Water System of the implementation of Senate Bill 606 and Assembly Bill 1668 or any future legislation with respect to water conservation. The City, however, is meeting and believes that it will be continue to be able to meet the 47 GPCD standard for indoor water use, along with annual State-mandated water use efficiency standards, based on the City’s current water demands and ongoing efforts to encourage conservation, as described below under the subcaption “—City Response to Drought.” The City also has a tiered rate structure for residential customers that further promotes water use efficiency by charging a higher rate for water use in excess of maximum amounts within each tier. As described under the caption “—Water System Rates and Charges—Current Rates and Charges” the Tier 1 indoor water budgets for residential customers now reflect 47 GPCD.

Hydrological conditions in California can vary widely, both in location and from year to year. The water years 2020 through 2022 combined ranked as the three driest years in California’s statewide precipitation record. Beginning in April 2021, the Governor issued a series of drought emergency proclamations affecting various counties throughout the State, culminating in an October 19, 2021 proclamation declaring a drought state of emergency to be in effect statewide and directing local water suppliers to implement water shortage contingency plans at a level appropriate to local conditions. On March 28, 2022, the Governor issued an executive order directing the SWRCB to consider adopting regulations by May 25, 2022 that require urban water suppliers with water shortage contingency plans to implement, at a minimum, shortage response actions for a shortage level of up to 20 percent (a “Level 2” shortage). On May 24, 2022, in response to the executive order, the SWRCB adopted a new emergency water conservation regulation. The new regulation bans irrigating turf at commercial, industrial, and institutional properties, such as grass in front of or next to large industrial or commercial buildings. The ban does not

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include watering turf that is used for recreation or other community purposes, water used on residential lawns, or water used to maintain trees. The regulation also requires all urban water suppliers to implement conservation actions under Level 2 of their water shortage contingency.

The dry hydrology turned wet in winter 2022-23 as precipitation fell throughout the State replenishing reservoirs and causing flooding and requiring state of emergency declarations. Snowfall also covered many mountain ranges at unexpected levels adding water supply for later in the year. On May 24, 2023, the Governor issued an executive order easing water restrictions that were no longer necessary following a series of storms that ended the drought. The final SWP allocation for 2023 was 100%, which had not been seen in 17 years.

In alignment with the SWRCB’s 2022 adoption of long-term water use efficiency standards pursuant to AB 1668 and SB 606, the City is currently implementing Stage 2 of its Water Shortage Contingency Plan to proactively reduce demand, enhance drought resilience, and support compliance with California’s urban water use objectives. The City believes that it has significant water supplies and storage and is well positioned to respond to both drought and regulatory requirements. At this time, the City does not foresee a water supply shortage. See the subcaption “—Water Shortage Contingency Plan.” Water Shortage Contingency Plan Levels. The City’s water shortage contingency plan, which meets State guidelines for such plans, calls for the City to respond to a water shortage in stages as follows:
•Level 1 occurs when the percentage shortage range is up to 10% and indicates a normal water supply.

The City will respond by keeping mandatory prohibitions required by the state and implement the ongoing rebate program.
•Level 2 occurs when the percentage shortage range is 11% - 20%. Under Level 2, outdoor water use restriction on time of day and there will be increased water waste patrols. •Level 3 occurs when the percentage shortage range is 21% - 30%. Under Level 3, outdoor water use restrictions on days per week and restriction on filling pools. •Level 4 occurs when the percentage shortage range is 31% - 40%. Under Level 4,there were will further limits on new landscaping and an increase on public information campaign. •Level 5 occurs when the percentage shortage range is 41% - 50%. Under Level 5, there will be limits on watering of parks and school grounds.
•Level 6 occurs when the percentage shortage range is over 50%. Under Level 6, no potable water use for outdoor purposes will be allowed.

The City is empowered to enforce its water shortage contingency plan with successively increasing fines and, eventually, the termination of water service.

The City will monitor financial conditions during a water shortage and take appropriate actions as needed. The City maintains financial reserves that can be used to continue operations during a period of reduced water sales. The City has the ability to increase water rates or implement surcharges or penalties to increase revenues from water sales. See the caption “—Water System Rates and Charges—Adopted Rates and Charges.”
The projected Water System operating results that are set forth under the caption “WATER SYSTEM FINANCIAL INFORMATION—Projected Operating Results and Debt Service Coverage” reflect the continued implementation of Stage 1 of the City’s water shortage contingency plan. The City does not currently expect that the implementation of the water shortage contingency plan in the future will have a

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material adverse effect on its ability to pay the Series 2026 Installment Payments from Net Revenues. As discussed under the caption “—Water System Rates and Charges,” the City’s rate structure consists of variable and fixed rate components. Decreased water consumption is partially offset by a decrease in related variable costs, while fixed water charges largely cover the Water System’s fixed operating and maintenance costs. In addition, the City has covenanted to set Water System rates and charges in amounts that it expects to be sufficient to pay the Series 2026 Installment Payments from Net Revenues. See the caption “SECURITY FOR THE BONDS—Rate Covenant.”
If a water shortage should arise again in the future, legal issues exist as to whether different California Water Code provisions or State regulations will be invoked to manage the allocation of water. Any curtailment pursuant to State orders could necessitate an increase in the City’s water rates to Water System customers. See the caption “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES—Proposition 218” for a discussion of certain restrictions on the City’s ability to raise water rates.

Historical Water System Deliveries
The following table shows potable and reclaimed water deliveries to Water System customers for Fiscal Years 2021 through 2025.

Table 1
City of Indio
Historical Water System Deliveries in Acre Feet(1)
Fiscal Year
Ended
June 30
Residential
Customers
Non-
Residential
Customers
Other
Customers(2) Total
Percentage
Increase/
(Decrease)
2021 14,163 2,611 2,566 19,340 N/A
2022 14,041 2,916 2,455 19,412 0.37%
2023(3) 13,445 2,818 2,398 18,661 (3.87)
2024(3) 13,210 2,562 2,394 18,166 (2.65)
2025 14,411 2,857 2,685 19,953 9.84
(1) Differences between water deliveries and water supplies set forth under the caption “—Historical Water System Supply” reflect unaccounted-for water, including water losses and inaccuracies in water meter readings. (2) Reflects water deliveries to irrigation and dedicated fire line customers other customers. (3) Decreases in Fiscal Years 2023 and 2024 due to wet hydrological conditions.

Source: City.

Historical water deliveries reflect connections to the Water System as well as water demand, which can be affected by weather conditions, State mandates and other factors.

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Historical Water System Connections
The following table shows the number of water meters served by the Water System for Fiscal Years 2021 through 2025.

Table 2
City of Indio
Historical Water System Connections
Connection Type
Fiscal Year
2021
Fiscal Year
2022
Fiscal Year
2023
Fiscal Year
2024
Fiscal Year
2025
Residential 22,075 22,553 22,972 23,650 23,996
Non-Residential 1,167 1,185 1,200 1,205 1,222
Other Customers(1) 675 691 694 713 751 TOTAL 23,917 24,429 24,866 25,568 25,969
Percentage Increase/(Decrease) ___N/A 2.14% 1.79% 2.82% 1.57% (1) Other Customers include irrigation and dedicated fire line customers.

Source: City.

Historical Water System Sales Revenues
The following table shows the sales revenues of the Water System for Fiscal Years 2021 through 2025.

Table 3
City of Indio
Historical Water System Rate Revenues
Fiscal Year
Ended
June 30
Residential
Customers
Non-Residential
Customers
Other
Customers(1) Total
Percentage
Increase/
(Decrease)
2021 $16,001,016 $3,633,878 $2,576,731 $22,211,625 N/A
2022 15,968,459 3,935,001 2,499,657 22,403,117 0.86%
2023(2) 15,694,657 3,922,209 2,474,939 22,091,805 (1.39) 2024(2) 15,643,707 3,683,928 2,495,386 21,823,021 (1.22) 2025 16,570,362 3,936,651 2,758,755 23,265,768 6.61
(1) Other Water System Customers include irrigation and dedicated fire line customers. (2) Decreases in Fiscal Years 2023 and 2024 due to wet hydrological conditions.

Source: City.

Water System sales revenues reflect water deliveries as well as adopted rates and charges. See the captions “—Historical Water System Deliveries” and “—Water System Rates and Charges.”

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Largest Water System Customers
The following table shows the largest Water System customers for Fiscal Year 2025, as determined by annual payments.

Table 4
City of Indio
Ten Largest Water System Customers
Customer Customer Type Annual
Payment
Percentage of
Total Water
System Sales
Revenues
FANTASY SPRINGS CASINO Commercial/Institutional $ 207,938 0.89% SUMMER FIELD APARTMENTS Multi-family Residential 132,321 0.57 RIVERSIDE COUNTY Commercial/Institutional 124,108 0.53
CAPITAL FORESIGHT COMM, LP Multi-family Residential 118,495 0.51 THE CLUB WORLDMARK Commercial/Institutional 115,640 0.50 SMOKETREE APTS 288 LP Multi-family Residential 113,928 0.49 PICKERING EVENTS LLC Commercial/Institutional 100,990 0.43 CITY OF INDIO-PW Landscape Irrigation 87,578 0.38
POLO ESTATES VENTURES LLC Commercial/Institutional 83,545 0.36 DSUSD IHS Commercial/Institutional 77,824 0.33
Total $ 1,162,367 4.99%
Source: City.

These customers accounted for approximately 4.99% of total Water System sales revenues and service charges in Fiscal Year 2025.

Water System Rates and Charges
General. The Water System’s rates and charges are set by the City and are not subject to the jurisdiction of, or regulation by, the California Public Utilities Commission or any other regulatory body. The City is, however, required to comply with the notice, hearing and majority protest provisions of Article XIIID of the State Constitution, which is popularly known as Proposition 218, as to Water System rates and charges.

See the caption “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES— Proposition 218” for further information with respect to Proposition 218. The City sets water rates and charges at a level that it determines is sufficient to pay all Operation and Maintenance Costs of the Water System, to make debt service payments and to maintain appropriate reserves for the Water System.

On May 7, 2025, the City adopted potable water rates effective July 1, 2025 and each January 1 thereafter through January 1, 2029 (the “Adopted Rate Plan”) in accordance with the provisions of Proposition 218. The projected operating results which are set forth under the caption “WATER SYSTEM FINANCIAL INFORMATION—Projected Operating Results and Debt Service Coverage” assume Water System rate increases in accordance with the Adopted Rate Plan through January 1, 2029. There can be no assurance, however, that the City will not repeal or modify the rates that are set forth in the Adopted Rate Plan in the future or that the Water System’s ratepayers will not approve an initiative to repeal or modify any increase in water rates and charges approved by the City.

The City is subject to certain covenants with respect to the Bonds which require the City to fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water System during each Fiscal Year which are sufficient to yield Net Revenues at least equal to 120% of debt service of the Water System in such Fiscal Year. See the caption “SECURITY FOR THE BONDS—Rate Covenant.”

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Adopted Rates and Charges. The Adopted Rate Plan’s water rate structure depends on classification of residential customers, nonresidential customers and irrigation customers. Residential customers each pay a different fixed monthly charge based on customer classifications, as well as a variable rates on a tiered basis per hundred cubic feet of water (“CCF”) used in each billing cycle. Non-residential and irrigation customers pay different variable rates per CCF of water used in each billing cycle. The City also charges a dedicated fire line charge.

Residential Customers. The Adopted Rate Plan calculates fees for residential customers using budget- based rates that account for each household’s water needs and consists of three tiers. Tier 1 is the indoor water budget which allocates 47 gallons per person per day. Tier 2 is the outdoor water budget and is calculated individually, considering the following factors: landscape area, daily weather data, local plant water needs, watering efficiency rates, and evapotranspiration. The two tiers are added together to calculate the Total Water Budget. Water usage within the Tier 1 budget and the Tier 2 budget is charged at the applicable Tier 1 and Tier 2 rate, respectively. Any water usage over the Total Water Budget is charged at the Tier 3 rate per CCF.

Non-residential Customers. The Adopted Rate Plan calculates fees for non-residential customers’ variable water rates based on a uniform rate, applied equally to all customers based on usage.

Irrigation Customers. The Adopted Rate Plan calculates fees for irrigation customers based two tiers.

Tier 1 reflects the outdoor water budget. The Tier 2 rate is applied to any water usage that exceeds Tier 1 allocations.

The tables below set forth the Adopted Rate Plan’s monthly fixed and variable rates.

Table 5
City of Indio
Monthly Fixed Charges
Meter Size
Effective
July 1, 2025
Effective
January 1,
2026
Effective
January 1,
2027
Effective
January 1,
2028
Effective
January 1,
2029
5/8” $ 16.14 $ 16.95 $ 17.80 $ 18.69 $ 19.63
3/4” 23.11 24.27 25.49 26.77 28.11
1” 37.08 38.94 40.89 42.94 45.09
1 1/2” 71.99 75.59 79.37 83.34 87.51
2” 113.87 119.57 125.55 131.83 138.43
3” 316.27 332.09 348.70 366.14 384.45
4” 700.19 735.20 771.96 810.56 851.09
6” 1,398.18 1,468.09 1,541.50 1,618.58 1,699.51
8” 2,794.19 2,933.90 3,080.60 3,234.63 3,396.37
10” 4,539.18 4,766.14 5,004.45 5,254.68 5,517.42
Source: City.

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Table 6
City of Indio
Variable Rates
Rate ($/CCF)
Customer
Class & Tier
Effective
July 1, 2025
Effective
January 1,
2026
Effective
January 1,
2027
Effective
January 1,
2028
Effective
January 1,
2029
Residential
Tier 1 $1.01 $1.07 $1.13 $1.19 $1.25
Tier 2 1.39 1.46 1.54 1.62 1.71
Tier 3 2.33 2.45 2.58 2.71 2.85
Non-Residential
Tier 1 $1.38 $1.45 $1.53 $1.61 $1.70
Irrigation
Tier 1 $1.30 $1.37 $1.44 $1.52 $1.60
Tier 2 2.04 2.15 2.26 2.38 2.50
Source: City.

Dedicated Fire Line Fixed Charges. Fixed monthly charges for Dedicated Fire Line Fixed Charges are shown below.

Table 7
City of Indio
Dedicated Fire Line Fixed Charges
Connection
Size
Effective
July 1, 2025
Effective
January 1,
2026
Effective
January 1,
2027
Effective
January 1,
2028
Effective
January 1,
2029
5/8” $ 3.19 $ 3.35 $ 3.52 $ 3.70 $ 3.89
3/4” 3.39 3.56 3.74 3.93 4.13
1” 3.79 3.98 4.18 4.39 4.61
1 1/2” 4.60 4.83 5.08 5.34 5.61
2” 5.41 5.69 5.98 6.28 6.60
3” 7.03 7.39 7.76 8.15 8.56
4” 8.65 9.09 9.55 10.03 10.54
6” 11.89 12.49 13.12 13.78 14.47
8” 15.13 15.89 16.69 17.53 18.41
10” 18.37 19.29 20.26 21.28 22.35
Source: City.

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Development Impact Fee. The City charges development impact fees to customers for connecting to the Water System, which are currently as follows:

Table 8
City of Indio
Water System Development Impact Fees
Meter Size Capacity Fee
3/4” $4,030
1” 6,717
1½” 13,342
2” 21,495
3” 46,914
4” 74,695
6” 154,694
8” 180,123
5’8” Bypass Meter for
DCDA
No DIF applied
Source: City.

Supplemental Water Supply Fee. The City also charges new development a Supplemental Water Supply Fee which is determined by the type of development. The current rates of the Supplement Water Supply Fee are shown in the table below:

Table 9
City of Indio
Supplemental Water Supply Fee
Development Type
Supplemental Water Supply Fee
(per acre)
Commercial/Institutional $3,533
Hotel/Motel 7,718
Industrial 5,055
Commercial Irrigation/Common Areas 8,370
Multi-Family Residential 6,685
Single Family Residential 12,120
City Parks/Irrigation and Landscape
Lighting Districts 7,392
Source: City.

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Comparison to Nearby Service Providers. The table below sets forth a comparison of the City’s typical water bill (monthly equivalent) for a single family residential user to those of certain nearby water purveyors.

Table 10
City of Indio
Comparison of Average Monthly Residential Bills
Rates Effective for Fiscal Year 2026
Monthly Consumption Rate by Cubic Feet (1)
Base and Commodity 1,000 2,000 3,000 5,400
City of Indio(2) $23.11 plus $1.01 (0-10 CCF) $ 33.21 $ 33.21 $ 33.21 $ 33.21

1.39 (11-20 CCF) -- 13.90 13.90 13.90

2.33 (over 21 CCF) -- -- 23.30 79.22
$ 33.21 $ 47.11 $ 70.41 $126.33
Coachella Valley Water District(3) $14.71 plus $1.09 (0-8 CCF) $ 23.43 $ 23.43 $ 23.43 $ 23.43

1.36 (9-16 CCF) 2.72 10.88 10.88 10.88

4.18 (16-28 CCF) -- 16.72 50.16 50.16

4.90 (28-48 CCF) -- -- 9.80 98.00

7.49 (over 48 CCF) -- -- -- 44.94
$ 26.15 $ 51.03 $ 94.27 $227.41
City of Coachella Water Agency(4) $13.80 plus $1.50 (0-41 CCF) $ 28.80 $ 43.80 $ 58.80 $ 75.30

1.65 (over 41 CCF) -- -- -- 21.45
$ 28.80 $ 43.80 $ 58.80 $ 96.75
Mission Springs Water Agency(4) $13.63 plus $2.29 (0-13 CCF) $ 36.53 $ 43.40 $ 43.40 $ 43.40

3.11 (13+ CCF) -- 21.77 52.87 127.51
$ 36.53 $ 65.17 $ 96.27 $170.91
Desert Water Agency(5) $40.72 plus $2.59 per CCF $ 66.62 $ 92.52 $ 118.42 $180.58 (1) Comparisons use the Base Rate of Residential Meters (5/8” and 3/4”) and a four (4) person household. (2) Water budget based on 10 CCF for tier 1 use and 10 CCF for tier 2 use. (3) This water utility agency has a customized five-tiered rate structure and most closely resembles that of the City. Zone 2 includes Sky Valley and Indio Hills. Water budget based on 10 CCF for tier 1 use and 8 CCF for tier 2 use. (4) Water rates are on a fixed block rate structure with two tiers. (5) Zone A includes Janis-Tuscany, Terrance, Andreas Hills, Valley Vista, and Palm Oasis.

Source: City.

CVWD Replenishment Assessment Charge. CVWD imposes a Replenishment Assessment Charge for the City’s share of the costs to replenish the Indio Subbasin, including the cost of importing water for such purpose. The Replenishment Assessment Charge is currently $72.27 per acre foot of water pumped by the City from the Indio Subbasin. The City passes the Replenishment Assessment Charge to Water System Customers by way of a charge of $0.20 per ccf of water used. Which charge pursuant to the Adopted Rate Plan is increased without future City Council approval to match future increases by CVWD.

Water System Collection Procedures
All Water System customers are billed monthly. Payments are due and payable on the date rendered and become delinquent 25 days thereafter. The late charge assessed is 10% of the delinquent charges.

Delinquent Water System receivables totaled approximately $290,503, as of June 30, 2025, as of such date approximately 1.69 % of Water System accounts were more than 60 days delinquent. There were 935, 881, 490 and 719 water shut offs for non-payment in Fiscal Year 2022, 2023, 2024 and 2025, respectively.

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Future Water System Improvements
The City maintains a Water Capital Program Fund (Fund 812), which operates as a reserve for funding annual system reports and replacements. The City’s most recent rate study in May 2025 projects approximately $25.9 million in capital spending through Fiscal Year 2029, which includes Water System reinvestment and new capital improvements such as the Plant 2 BPS Replacement, water facility building replacement, well rehabilitation, emergency intertie connections, reservoir coating, hydrant replacements, pipeline and meter replacements, and other necessary improvements. The City also maintains separate capital funds (Funds 310 and 321) which are funded from capacity fees and maintain separate reserves.

The capital improvement plan used during the City’s most recent rate study does not include costs associated with any Chromium 6 treatment improvements. See the caption “—Water Quality.”

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Table 11
City of Indio
Capital Improvement Plan
(Fiscal Year 2025 - Fiscal Year 2029)
Key Assumptions
Inflation
Fiscal Year
2025
Fiscal Year
2026
Fiscal Year
2027
Fiscal Year
2028
Fiscal Year
2029
Capital Inflation 4.3% 4.3% 4.3% 4.3% 4.3%
Cumulative Inflationary Factor 104.3% 108.9% 113.6% 118.5% 123.6% Capital Improvement Plan (Fund 812)
Project Description
Fiscal Year
2025
Fiscal Year
2026
Fiscal Year
2027
Fiscal Year
2028
Fiscal Year
2029
Plant 2 BPS Replacement $ 250,000 $ 1,000,000 $ 4,000,000 $ 1,000,000 $ 0 Water Facility Building Replacement 200,000 200,000 200,000 200,000 200,000 Well Rehabilitation Program 600,000 400,000 0 0 0
Plant 1 Interior Aluminum Stairway 500,000 0 0 0 0
Meter Changeout Program 300,000 300,000 300,000 300,000 300,000 Bridge Seismic Connections 100,000 100,000 0 0 0
Bridge and Canal Pipeline Coatings 50,000 50,000 50,000 50,000 50,000 Reservoir Exterior Coatings 50,000 200,000 200,000 200,000 200,000 Reservoir Safety Rails/Outside Stairway 0 100,000 0 0 0 Reservoir 4 Flush Cleanout/Manway 25,000 25,000 0 0 0
Emergency Intertie Connections 225,000 675,000 0 0 0
Pipeline Replacement Program 3,000,000 2,550,000 1,500,000 1,500,000 350,000 Hydrant Replacement Program 150,000 150,000 150,000 150,000 150,000 Chromium 6 Design 500,000 500,000 0 0 0
Subtotal Capital Improvement Plan $ 5,950,000 $ 6,250,000 $ 6,400,000 $ 3,400,000 $ 1,250,000 CIP Total Costs with Inflation $ 6,208,024 $ 6,803,821 $ 7,269,244 $ 4,029,254 $ 1,545,582 Capital Improvement Plan (Fund 310)
Project Description
Fiscal Year
2025
Fiscal Year
2026
Fiscal Year
2027
Fiscal Year
2028
Fiscal Year
2029
Ave 50 and Madison St Pipe Installation $ 2,900,000 $ 0 $ 0 $ 0 $ 0 Subtotal Capital Improvement Plan $ 2,900,000 $ 0 $ 0 $ 0 $ 0 CIP Total Costs with Inflation $ 3,025,760 $ 0 $ 0 $ 0 $ 0 Capital Improvement Plan (Fund 321)
Project Description
Fiscal Year
2025
Fiscal Year
2026
Fiscal Year
2027
Fiscal Year
2028
Fiscal Year
2029
EVRA Injection Project GW Model $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 Subtotal Capital Improvement Plan $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 CIP Total Costs with Inflation $ 208,673 $ 217,722 $ 227,164 $ 237,015 $ 247,293 Source: City.

Such capital improvements are expected to be financed by a combination of the proceeds of Water System reserves, State and federal grants and Net Revenues remaining after the payment of the Series 2026 Installment Payments and debt service on Parity Obligations. In particular, the City has secured grant funds of approximately $1.9 million for such capital improvements.

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Projected Water System Deliveries
The following table shows Water System deliveries projected by the City for Fiscal Years 2026 through 2029.

Table 12
City of Indio
Projected Water System Deliveries in Acre Feet
Fiscal Year
Ending
June 30
Residential
Customers
Commercial
Customers
Other
Customers Total
Percentage
Increase/
(Decrease)
2026 13,374 2,798 1,980 18,152 (9.03)%
2027 13,456 2,815 1,992 18,263 0.61
2028 13,538 2,832 2,004 18,374 0.61
2029 13,582 2,841 2,011 18,434 0.33
2030 13,627 2,851 2,017 18,495 0.33
Source: City.

Water System deliveries can be affected by a number of factors, including connections to the Water System, State mandates and weather conditions. See the caption “—Projected Water System Connections” below.

Projected Water System Connections
The following table shows the number of retail connections to the Water System projected by the City for Fiscal Years 2026 through 2030.

Table 13
City of Indio
Projected Water System Connections
Connection Type
Fiscal Year
2026
Fiscal Year
2027
Fiscal Year
2028
Fiscal Year
2029
Fiscal Year
2030
Residential 24,055 24,296 24,539 24,723 24,908
Non-Residential 1,375 1,416 1,459 1,488 1,518
Other(1) 1,230 1,243 1,255 1,268 1,280
TOTAL 26,660 26,955 27,253 27,479 27,706
Percentage Increase/(Decrease) 0.60% 1.11% 1.11% 0.83% 0.83% (1) Other Water System Customers include irrigation and dedicated fire line customers.

Source: City.

Projected increases in connections reflect expectations of development within the Water System service area.

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Projected Water System Sales Revenues
The following table shows the sales revenues of the Water System projected by the City for Fiscal Years 2026 through 2030. The projections: (i) assume Water System rate increases in accordance with the Adopted Rate Plan “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES— Proposition 218.” and (ii) do not include any assumed increases in pass-through revenues.

Table 14
City of Indio
Projected Water System Sales Revenues
Fiscal Year
Ending
June 30
Residential
Customers
Non-
Residential
Customers
Other
Customers(1) Total
Percentage
Increase/
(Decrease)
2026 $16,651,969 $5,160,725 $2,265,896 $24,078,590 3.50% 2027 16,603,773 4,221,325 2,444,933 23,270,031 (3.36)
2028 17,559,112 4,513,408 2,663,009 24,735,529 6.30
2029 18,540,004 4,801,221 2,908,852 26,250,077 6.12
2030 19,564,928 5,107,959 3,183,805 27,856,692 6.12
(1) Other Water System Customers include irrigation and dedicated fire line customers.

Source: City.

WATER SYSTEM FINANCIAL INFORMATION
Available Cash
As of June 30, 2025, the Water System maintained approximately $69,555,586 in cash on hand, capital replacement reserves, operating reserves and other available moneys, which is equivalent to approximately 1,215 days’ operating expenses of the Water System. See Notes 1.C and 3 to the financial statements set forth in Appendix A for further information with respect to the City’s reserves and investment policies. See the caption “THE CITY—Governance and Management—Management Policies—Water Utility Fund Reserve Policy” for a discussion of the Water Utility Fund reserve policy. As of June 30, 2025, $9,628,847 was held in the Water Utility Fund reserve. Such amount is included in the $69,555,586 cash on hand amount that is discussed above.

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Historical Operating Results and Debt Service Coverage
The following table is a summary of operating results of the Water System for Fiscal Years 2021 through 2025, which are the five most recent audited Fiscal Years. These results have been derived from the audited financial statements of the City but exclude certain receipts which are not included as Gross Revenues under the Indenture and certain non-cash items and include certain other adjustments. Projections for Fiscal Year 2026 are provided in Table 15 and are based on budgeted amounts for Fiscal Year 2026.

Table 15
City of Indio
Historical Water System Operating Results and Debt Service Coverage Fiscal Year Ended June 30
Fiscal Years Ended June 30,
2021 2022 2023 2024 2025
Revenues:

Water Sales Revenues(1) $ 22,211,625 $ 22,403,117 $ 22,091,805 $ 21,823,021 $ 23,299,850 Other Water Service Charges(2) 465,299 349,138 603,603 1,062,562 1,098,060 Capital Impact Fees/Grants 2,056,480 1,980,786 2,563,393 2,135,818 3,469,796 Investment Income(3) (15,357) (935,118) 341,603 2,403,684 3,280,198 Other Revenue(4) 2,186,227 2,677,891 2,590,378 2,394,281 2,907,045 Transfers (to)/from Rate Stabilization Fund(5) -- -- -- -- -- Total Revenues $ 26,904,274 $ 26,475,814 $ 28,190,782 $ 29,819,366 $ 33,244,949 Operation and Maintenance Costs
Personnel Services $ 6,297,152 $ 7,807,072 $ 5,907,958 $ 7,233,614 $ 7,271,942 Contractual Services(6) 3,023,225 3,004,916 3,389,094 3,274,167 3,777,481 Repairs and Maintenance 1,806,923 2,510,791 2,880,092 4,409,275 6,303,323 Materials and Supplies 862,884 1,089,452 1,405,240 2,186,702 682,950 Rentals and Leases 96,037 108,283 100,160 12,653 22,196 Utilities 1,347,039 1,991,326 1,832,481 2,209,082 2,009,472 Total Operation and Maintenance Costs $ 13,433,260 $ 16,511,840 $ 15,515,025 $ 19,325,493 $ 20,067,364 Net Revenues $ 13,471,014 $ 9,963,974 $ 12,675,757 $ 10,493,873 $ 13,177,585 Debt Service:
2015 Bonds $ 4,157,613 $ 4,154,863 $ 4,152,113 $ 4,154,113 $ 4,155,363 Total Debt Service $ 4,157,613 $ 4,154,863 $ 4,152,113 $ 4,154,113 $ 4,155,363 Debt Service Coverage 3.24 2.40 3.05 2.53 3.17
Net Income After Debt Service $ 9,313,402 $ 5,809,112 $ 8,523,645 $ 6,339,761 $ 9,022,223 (1) Represents water rate revenues. See the captions “THE WATER SYSTEM—Historical Water System Sales Revenues” and “—Water System Rates and Charges.”
(2) Includes water service charges such as connection fees, water meter charges, backflow charges, water fire protection charges, water service area fees, water establishment fees and other service fees. Increases in Fiscal Years 2024 and 2025 due to __________. (3) Includes changes in fair market value of investments. (4) Other revenues include the Replenishment Assessment Charge imposed by CVWD for the City’s share of costs to replenish the Indio Subbasin, including the cost of importing water for such purpose, which the City passes on to Water System customers. See the captions “THE WATER SYSTEM—Water Supply” and “—Water System Rates and Charges.” Also includes other miscellaneous revenues of the Water System.
(5) See the caption “SECURITY FOR THE BONDS—Rate Stabilization Fund.” (6) Includes the Replenishment Assessment Charge imposed by CVWD for the City’s share of costs to replenish the Indio Subbasin, including the cost of importing water for such purpose, which the City passes on to Water System customers. See the captions “THE WATER SYSTEM—Water Supply” and “—Water System Rates and Charges.” Source: City.

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Projected Operating Results and Debt Service Coverage
Projected operating results for the Water System for Fiscal Years 2026 through 2030, reflecting certain significant assumptions concerning future events and circumstances (including those set forth in the footnotes to the table), are set forth below. All of such assumptions are material in the development of the City’s financial projections, and deviations from the assumptions may produce substantially different financial results. Actual operating results achieved during the projection period may vary from those presented in the forecast and such variations may be material.

Table 16
City of Indio
Projected Water System Operating Results and Debt Service Coverage Fiscal Year Ending June 30
Fiscal Years Ended June 30,
2026(1) 2027 2028 2029 2030
Revenues:

Water Sales Revenues(2) $ 24,078,590 $ 23,270,031 $ 24,735,529 $ 26,250,077 $ 27,856,692 Other Water Service Charges(3) 853,562 855,507 857,550 859,690 861,937 Capital Impact Fees/Grants(4) 1,940,000 1,640,000 1,640,000 1,640,000 1,640,000 Investment Income(5) 2,562,000 2,100,000 2,100,000 2,100,000 2,100,000 Other Revenue(6) 1,941,000 1,897,000 1,897,000 1,897,000 1,897,000 Transfers (to)/from Rate Stabilization Fund(7) 2,800,000 -- -- -- -- Total Revenues $ 34,175,152 $ 29,762,538 $ 31,230,079 $ 32,746,767 $ 34,355,629 Operation and Maintenance Costs:

Personnel Services(8) $ 8,624,090 $ 8,882,813 $ 9,149,297 $ 9,423,776 $ 9,706,489 Contractual Services(9) 4,801,400 2,541,000 2,626,000 2,714,000 2,806,000 Repairs and Maintenance(10) 3,389,188 3,521,366 3,658,700 3,801,389 3,949,643 Materials and Supplies(10) 1,303,250 1,354,077 1,406,886 1,461,754 1,518,763 Rentals and Leases(10) 18,000 18,702 19,431 20,189 20,977 Utilities(10) 2,305,000 2,394,895 2,488,296 2,585,339 2,686,168 Total Operation and Maintenance Costs $ 20,440,928 $ 18,712,853 $ 19,348,610 $ 20,006,447 $ 20,688,040 Net Revenues $ 13,734,224 $ 11,049,685 $ 11,881,469 $ 12,740,320 $ 13,667,589 Debt Service:
2015 Bonds(11) $ 4,155,613 -- -- -- --
2026 Installment Payments(12) -- $ 4,024,175 $ 4,024,000 $ 4,021,750 $ 4,023,500 Total Debt Service $ 4,155,613 $ 4,024,175 $ 4,024,000 $ 4,021,750 $ 4,023,500 Debt Service Coverage 3.30 2.75 2.95 3.17 3.40
Net Income After Debt Service $ 9,578,611 $ 7,025,510 $ 7,857,469 $ 8,718,570 $ 9,644,089 (1) Represents budgeted amounts for Fiscal Year 2026 with certain adjustments. (2) Represents projected water rate revenues. Projected to increase based on rate increases approved in the Adopted Rate Plan through January 1, 2029 and projected growth in Water System connections. See the captions “THE WATER SYSTEM—Water System Rates and Charges,” “—Projected Water System Connections” and “—Projected Water System Sales Revenues.” (3) Includes water service charges such as connection fees, water meter charges, backflow charges, water fire protection charges, water service area fees, water establishment fees and other service fees. Projected to increase based on rate increases approved in the Adopted Rate Plan through January 1, 2029 and projected growth in Water System connections. See the captions “THE WATER SYSTEM—Water System Rates and Charges” and “—Projected Water System Connections” (4) Does not include any projected grant revenues. Capital Impact Fee revenues projected to remain constant from Fiscal Years 2027 through 2030 based on ___________.
(5) Investment income projected to remain constant in Fiscal Years 2027 through 2030 based on _________. (6) Other revenues include the Replenishment Assessment Charge imposed by CVWD for the City’s share of costs to replenish the Indio Subbasin, including the cost of importing water for such purpose, which the City passes on to Water System customers. Also includes other miscellaneous revenues of the Water System. Does not include any projected increases in CVWD’s Replenishment Assessment Charges, which would be passed on to Water System customers. See the captions “THE WATER SYSTEM—Water Supply” and “—Water System Rates and Charges.”
[FOOTNOTES CONTINUE ON FOLLOWING PAGE.]

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[FOOTNOTES CONTINUED FROM PREVIOUS PAGE.]
(7) The City expects to withdraw approximately $2.8 million from the Rate Stabilization Fund for deposit into the Revenue Fund in Fiscal Year 2026 in accordance with the City’s Adopted Rate Plan from May 2025. Without such withdrawal from the Rate Stabilization Fund, debt service coverage from Net Revenues is projected to be approximately 2.63 in Fiscal Year 2026. See the caption “SECURITY FOR THE BONDS—Rate Stabilization Fund.” The City does not project making any additional deposits or withdrawals from the Rate Stabilization Fund in Fiscal Years 2027 through 2030.
(8) Projected to increase approximately 3.0% annually in Fiscal Years 2027 through 2030. (9) [Includes the Replenishment Assessment Charge imposed by CVWD for the City’s share of costs to replenish the Indio Subbasin, including the cost of importing water for such purpose, which the City passes on to Water System customers. See the captions “THE WATER SYSTEM—Water Supply” and “—Water System Rates and Charges.” Projected to increase approximately 3.4% annually in Fiscal Years 2027 through 2030, but does not assume any increases in CVWD’s Replenishment Assessment Charge.] (10) Projected to increase approximately 3.9% annually in Fiscal Years 2027 through 2030. (11) As described under the caption “THE FINANCING PLAN—Refunding Plan,” (12) Represents the projected Series 2026 Installment Payments. Preliminary, subject to change.

Source: City.

Employee Benefits
Pension Obligations. Accounting and financial reporting by state and local government employers for defined benefit pension plans is governed by GASB Statement No. 68 (“GASB 68”). GASB 68 includes the following components: (i) unfunded pension liabilities are included on the employer’s balance sheet; (ii) pension expense incorporates rapid recognition of actuarial experience and investment returns and is not based on the employer’s actual contribution amounts; (iii) lower actuarial discount rates are required to be used for underfunded plans in certain cases for purposes of the financial statements; (iv) closed amortization periods for unfunded liabilities are required to be used for certain purposes of the financial statements; and (v) the difference between expected and actual investment returns will be recognized over a closed five-year smoothing period. GASB 68 affects the City’s accounting and reporting requirements, but it does not change the City’s pension plan funding obligations.

The City participates in a Miscellaneous Plan consisting of a Classic Safety Plan and an Employee’s Pension Reform Act (“PEPRA”) Plan. Prior to June 30, 2003, all PERS retirement plans were non-pooled, and each had its own unfunded liability or surplus. As each participating agency plan joined the Safety Risk Sharing Pool, it continued to carry its respective prior unfunded liability or surplus in a “side fund” specific to such agency.

The provisions and benefits in effect at June 30, 2024 for each of the plans, are summarized in the table below:

Table 18
City of Indio
CalPERS Miscellaneous Plan – Summary of Benefit Provisions City Miscellaneous Plans
Classic PEPRA
Hire Date Prior to 7/1/2013 After 7/1/2013
Benefit formula 2.7% @ 55 2.7% @ 62
Benefit vesting schedule 5 yr. of service 5 yr. of service Benefit payments monthly for life monthly for life
Retirement age 50 50
Monthly benefits,
as a % of eligible compensation

2.0% - 2.7% 1.0% - 2.5%
Required employee contribution rate 8.000% 7.000%
Required employer contribution rate 10.880% 10.880%
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

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be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. For the year ended June 30, 2024, the contributions made were in the amount of $4,781,801 for the miscellaneous, of which approximately $1,124,201 was attributable to the Water System.

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

The tables below set forth the schedule of contributions for the City’s Miscellaneous Plan.

Miscellaneous Plan(1)
Fiscal Year
Ending
June 30,
Actuarially
Determined
Contribution
Actual
Employer
Contribution
Contribution
Deficiency
(Excess)
Covered
Payroll
Contribution
as a % of
Covered Payroll
2024 $4,781,801 $4,781,801 $-- $13,623,717 35.10%
2023 4,436,599 4,436,599 -- 13,252,643 33.48
2022 4,309,575 4,309,575 -- 13,455,507 32.03
2021 4,007,469 4,007,469 -- 13,437,045 29.82
2020 3,775,732 3,775,732 -- 12,330,786 30.62
2019 3,330,987 3,330,987 -- 12,185,810 27.33
2018 3,032,168 3,032,168 -- 11,882,620 25.5
2017 2,858,434 2,858,434 -- 12,075,341 23.7
2016 2,619,245 2,619,245 -- 12,067,635 21.7
2015 2,446,688 2,446,688 -- 11,307,076 21.6
2014 2,331,161 2,331,161 -- 10,908,447 21.4
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2014-15 was the first year of implementation for GASB 68, however information for the year prior to implementation was available, therefore only eleven years are shown.

PARS Section 115 Trust. The City adopted the Public Agency Retirement Services (“PARS”) Public Agencies Post-Employment Benefits Trust for the purpose of pre-funding pension obligations and/or OPEB obligations in 2019. Currently, the City is only pre-funding pension obligations in the PARS Section 115 Trust. As of May 2025, the trust balance is $3,919,738.65, which includes a $1 million contribution for Fiscal Year 2024-25. The Fiscal Year 2025-26 budget includes an additional contribution of $1 million.

The information above is derived from the City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2024 set forth in Appendix C. Please refer to the Note 11 to the basic financial

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statements portion and the various related schedules in the required supplementary information section for further details.

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

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

Miscellaneous Plan
Valuation Date
Accrued
Liability
Market Value
of Assets
Unfunded
Accrued
Liability Funded Ratio
Annual
Covered Payroll
6/30/2015 $ 80,796,732 $55,093,727 $25,703,005 68.2% $11,716,150 6/30/2016 85,198,733 55,216,829 29,981,904 64.8 11,723,632 6/30/2017 90,340,387 61,493,517 28,846,870 68.1 11,564,594 6/30/2018 97,559,153 66,517,652 31,041,501 68.2 11,859,669 6/30/2019 102,127,204 70,415,644 31,711,560 68.9 12,000,765 6/30/2020 106,964,352 73,573,878 33,390,474 68.8 13,077,416 6/30/2021 114,206,894 90,454,917 23,751,977 79.2 13,089,015 6/30/2022 120,961,133 83,576,294 37,384,839 69.1 12,891,677 6/30/2023 127,666,607 88,378,466 39,288,141 69.2 14,879,126 6/30/2024 133,810,876 96,795,416 37,015,460 72.3 14,689,905 Source: CalPERS Annual Valuation Report as of June 30, 2024.

Beginning in Fiscal Year 2018, CalPERS began collecting employer contributions toward a pension plan’s unfunded liability as dollar amounts instead of the prior method of a percentage of payroll. According to CalPERS, this change was intended to address potential funding issues that could arise from a declining payroll or a reduction in the number of active members in the plan. Funding the unfunded liability as a percentage of payroll could lead to underfunding of pension plans. Due to stakeholder feedback regarding internal needs for total contributions expressed as an estimated percentage of payroll, the CalPERS reports include such results in the contribution projection for informational purposes only. Contributions toward a pension plan’s unfunded liability will continue to be collected as set dollar amounts.

The City’s required contributions to CalPERS fluctuate each year and include a normal cost component and a component that is equal to an amortized amount of the unfunded liability. Many assumptions are used to estimate the ultimate liability of pensions and the contributions that will be required to meet those obligations. The CalPERS Board of Administration has adjusted and may in the future further adjust certain assumptions used in the CalPERS actuarial valuations, which adjustments may increase the City’s required contributions to CalPERS in future years. Accordingly, the City cannot provide any assurances that the City’s required contributions to CalPERS in future years will not significantly increase (or otherwise vary) from any past or current projected levels of contributions. CalPERS earnings reports for Fiscal Years 2013 through 2024 report investment gains (and losses) of approximately 13.2%, 18.4%, 2.4%, 0.6%, 11.2%, 8.6%, 6.7%,

4.7%, 21.3%, (6.1%), 5.8% and 9.3%, respectively. CalPERS preliminary earnings report for Fiscal Year

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2024-25 reported investment gains of approximately 11.6%. Future earnings performance may increase or decrease future contribution rates for plan participants, including the City.

On December 21, 2016, the CalPERS Board of Administration voted to lower its discount rate from

7.50% to 7.00% over a three period. For public agencies such as the City, the new discount rate took effect July 1, 2017. Lowering the discount rate means that employers which contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities. Active members hired after January 1, 2013 will also see their contribution rates rise under PEPRA. The reduction of the discount rate will result in average employer rate increases of approximately 1% to 3% of normal cost as a percentage of payroll for most retirement plans such as the City’s plans. Additionally, many employers will see a 30% to 40% increase in their current unfunded accrued liability payments (relative to the unfunded accrued liability payments projected in the June 30, 2015 valuation report) for pension plans. These payments are made to amortize unfunded liabilities over 20 years to bring pension funds to a fully funded status over the long-term.

The announcement on July 12, 2021 that CalPERS achieved investment returns of 21.3% in Fiscal Year 2021 caused the CalPERS Board of Administration to lower CalPERS’ discount rate from 7.00% to

6.80% in fall 2021 in accordance with a risk mitigation policy that was adopted in 2015, which calls for the discount rate to be lowered if returns exceed the then-current discount rate by two or more percentage points.

Lowering the discount rate means that employers that contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities. Active members hired after January 1, 2013 who were not previously CalPERS members will also see their contribution rates rise under PEPRA.

The tables below are derived from CalPERS’ annual valuation reports as of June 30, 2024 for each of the City’s CalPERs plans, which were completed in July 2025, and show the required and projected employer contributions (before cost sharing) for the next six fiscal years. Projected results reflect the adopted changes to the discount rate described in the CalPERS annual valuation reports. Such projections also assume that all actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur during the projection period. The projected normal cost percentages in the projections below does not reflect that the normal cost will decline over the time as new employees are hired into lower cost benefit tiers after the passage of PEPRA.

The following projections assumed the investment return for Fiscal Year 2024-25 would be 6.8%.

However, CalPERS announced preliminary investment returns of 11.6% for Fiscal Year 2024-25. As a result, the actual contribution requirements for the Fiscal Years 2026-27 and the following years shown below can be expected to differ from such projections.

Miscellaneous Plan
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2024-25 and Beyond) Fiscal Year 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 Normal Cost % 11.01% 10.8% 10.5% 10.3% 10.0% 9.8%
UAL Payment $3,682,421 $3,832,000 $4,200,000 $4,246,000 $4,278,000 $4,013,000 Total as a % of Payroll 34.08% 34.1% 35.4% 34.8% 34.0% 31.7% Projected Payroll $15,958,730 $16,405,575 $16,864,931 $17,337,149 $17,822,589 $18,321,622 Source: CalPERS Annual Valuation Report as of June 30, 2024.

Information regarding CalPERS’ administration of the plans, actuarial methods assumptions and asset valuation can be obtained from CalPERS at Lincoln Plaza North, 400 Q Street Sacramento, California 95811 or (888) 225-7377. The annual comprehensive financial reports of CalPERS are available on CalPERS’

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website at www.calpers.ca.gov. The website reference is for informational purposes only. None of the content of the website is any way incorporated into this Official Statement. The City and the Authority make no representation concerning, and do not take any responsibility for, the accuracy or timeliness of information posted on such website or the continued maintenance of such website.

Other Post-Employment Benefits (Other Than Pensions). In addition to providing pension benefits, the City provides integrated medical/prescription drug coverage through CalPERS under the Public Employees’ Medical and Hospital Care Act (“PEMHCA”). Employees can choose from a number of HMO and PPO options. The City offers the same medical plans to its retirees as to its active employees, with the exception that once a retiree becomes eligible for Medicare (that is, reaches age 65), he or she must join a Medicare HMO or a Medicare Supplement plan under PEMHCA.

Employees become eligible to retire and receive City-paid healthcare benefits upon attainment of age 50 and five years of covered PERS service, or by qualifying disability retirement status. Benefits are paid for the lifetime of the retiree, spouse or surviving spouse, and adult children to the age of 26. The City contribution is limited to $2,100/month for retirees for employees hired prior to August 1, 2009. Employees first hired on or after August 1, 2009 are subject to the “100/90” State contribution formula and the 10-year vesting schedule set forth in Government Code section 22893. The vesting schedule provides for a City contribution of 50% of the “100/90” dollar amounts after 10 years of credited PERS service (5 of which must be with the City), with an additional 5% per year of service until fully vested after 20 years. The 2025 “100/90” monthly dollar amounts are $1,060 single, $2,039 two-party, and $2,551 family. In addition, the City pays a 0.24%-of-premium administrative fee to PEMHCA for each retiree. Employees hired on or after January 1, 2025, for all members who qualify as an annuitant under PEMHCA, the City will contribute directly to CalPERS on behalf of each annuitant the PEMHCA statutory minimum.

At June 30, 2024 membership consisted of the following:

Inactive members or beneficiaries currently receiving benefit payments 197 Inactive members or beneficiaries entitled to but not yet receiving benefit payments 24 Active employees 259
Total 480
Source: City of Indio Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2024.

The City has been a participant of the California Employers’ Retiree Benefit Trust (“CERBT”) Fund since 2014. The CERBT is a multiple employer tax exempt trust organized under Section 115 of the Internal Revenue Code dedicated to prefunding OPEB costs for all eligible California public agencies. As of July 15, 2025, the City’s balance in the trust is $4,011,117.77, which includes a $1.5 million contribution for Fiscal Year 2024-25. The Fiscal Year 2025-26 Budget also includes an additional contribution of $1.5 million.

The contribution requirements of OPEB plan members and the City are established and may be amended by the City Council. The City currently pays pay-as-you-go costs outside the CERBT trust. The City contributes the excess, if any, of budgeted pay-go costs over the actual pay-go to the CERBT trust on an annual basis. For Fiscal Year 2023-24, the City recognized contributions in reduction to the net other post- employment benefit (“OPEB”) liability of $2,944,525, of which approximately $463,468 was attributable to the Water System. The table below sets forth a schedule of recent contributions by the City to its OPEB plan.

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Fiscal Year
Ending
June 30,(1)
Actuarially
Determined
Contribution
Actual
Employer
Contribution
Contribution
Deficiency
(Excess)
Covered-Employee
Payroll
Contribution
as a % of
Covered-Employee
Payroll
2023 $3,748,603 $2,378,016 $1,370,587 $26,876,063 8.85% 2022 3,613,353 2,117,231 1,496,122 28,840,521 7.34
2021 2,548,493 2,030,042 518,451 27,980,084 7.26
2020 2,474,265 1,978,822 495,443 27,980,084 7.07
2019 2,701,432 1,799,999 901,433 26,345,041 6.83
2018 2,706,641 1,975,214 731,427 31,815,516 6.21
(1) Historical information is required only for measurement for which GASB 75 is applicable. Fiscal Year 2017-18 was the first year of implementation for GASB 75, therefore only seven years are shown.

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

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

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2023 2022 2021 2020
Measurement Date(1) June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 Total OPEB Liability:

Service cost $ 1,666,100 $ 2,581,334 $ 1,396,868 $ 1,170,693 Interest on the total OPEB liability 2,001,983 1,453,544 1,485,408 1,681,183 Difference between expected and actual experience 8,891,165 (2,113,957) 1,418,375 - Changes in assumptions (3,175,394) (15,038,689) 6,516,788 5,809,571 Benefit payments (2,378,016) (2,157,147) (1,982,654) (1,955,604) Net change in total OPEB liability 7,005,838 (15,274,915) 8,834,785 6,705,843 Total OPEB liability - beginning 53,777,212 69,052,127 60,217,342 53,511,499 Total OPEB liability - ending (a) $ 60,783,050 $ 53,777,212 $ 69,052,127 $ 60,217,342 Plan Fiduciary Net Position:

Contribution - employer (2) $2,378,016 $2,157,147 $2,030,041 $1,980,041 Net investment income 70,771 (285,925) 365,842 94,472
Benefit payments (2,378,013) (2,157,147) (1,982,654) (1,955,604) Administrative expense (569) (575) (678) (860)
Net change in plan fiduciary net position 70,202 (286,500) 412,551 118,049 Plan fiduciary net position - beginning 1,986,653 2,273,153 1,860,602 1,742,553 Plan fiduciary net position - ending (b) 2,056,855 1,986,653 2,273,153 1,860,602 Net OPEB Liability/(Assets) - ending (a) - (b) $ 58,726,195 $ 51,790,559 $ 66,778,974 $ 58,356,740 Plan fiduciary net position as a percentage of the total OPEB liability 3.4% 3.7% 3.3% 3.1% Covered-employee payroll $ 28,876,063 $ 28,840,521 $ 27,664,394 $ 27,980,084 Net OPEB liability as a percentage of covered-employee payroll 218.5% 179.6 241.4% 208.6% (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years’ information will be displayed up to 10 years as information becomes available. (2) Includes cash pay-as-you-go contributions made from sources outside of trust, plus an implicit subsidy amount on benefit payments from sources outside of trust.

See Note 12 to the basic financial statements portion of the City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2024 set forth in Appendix C for more information with respect to the City’s OPEB plan.

CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES Article XIIIB
Article XIIIB of the State Constitution limits the annual appropriations of the State and of any city, county, school district, authority, special district or other political subdivision of the State to the level of appropriations of the particular governmental entity for the prior fiscal year, as adjusted for changes in the cost of living and population. The “base year” for establishing such appropriation limit is the 1978-79 State fiscal year and the limit is to be adjusted annually to reflect changes in population and consumer prices. Adjustments in the appropriations limit of an entity may also be made if: (a) the financial responsibility for a service is transferred to another public entity or to a private entity; (b) the financial source for the provision of services is transferred from taxes to other revenues; or (c) the voters of the entity approve a change in the limit for a period of time not to exceed four years.

Appropriations that are subject to Article XIIIB generally include the proceeds of taxes levied by or for the State or other entity of local government, exclusive of certain State subventions, refunds of taxes and benefit payments from retirement, unemployment, insurance and disability insurance funds. “Proceeds of taxes” include, but are not limited to, all tax revenues and the proceeds to an entity of government from:
(i) regulatory licenses, user charges, and user fees (but only to the extent that such proceeds exceed the cost reasonably borne by the entity in providing the service or regulation); and (ii) the investment of tax revenues.

Article XIIIB includes a requirement that if an entity’s revenues in any year exceed the amounts that are permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.

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Certain expenditures are excluded from the appropriations limit, including payments of indebtedness that were existing or legally authorized as of January 1, 1979, or of bonded indebtedness thereafter approved by the voters, and payments that are required to comply with court or federal mandates which without discretion require an expenditure for additional services or which unavoidably make the provision of existing services more costly.

The City is of the opinion that its charges for Water Service do not exceed the costs that it reasonably bears in providing such services and therefore are not subject to the limits of Article XIIIB. The City has covenanted in the Installment Purchase Agreement, to the fullest extent permitted by law, to fix and prescribe, at the commencement of each Fiscal Year, rates and charges for the Water Service which are reasonably expected, at the commencement of each Fiscal Year, to be at least sufficient to yield during each Fiscal Year Net Revenues equal to 120% of Debt Service on the Bonds and other Parity Bonds and Contracts for such Fiscal Year. See the caption “SECURITY FOR THE BONDS—Rate Covenant.” Proposition 218
General. An initiative measure entitled the “Right to Vote on Taxes Act” (the “Initiative”) was approved by the voters of the State at the November 5, 1996 general election. The Initiative added Articles XIIIC and XIIID to the State Constitution. According to the “Title and Summary” of the Initiative prepared by the State Attorney General, the Initiative limits “the authority of local governments to impose taxes and property-related assessments, fees and charges.”
Article XIIID. Article XIIID defines the terms “fee” and “charge” to mean “any levy other than an ad valorem tax, a special tax or an assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property-related service.” A “property-related service” is defined as “a public service having a direct relationship to property ownership.” Article XIIID further provides that reliance by an agency on any parcel map (including an assessor’s parcel map) may be considered a significant factor in determining whether a fee or charge is imposed as an incident of property ownership.

Article XIIID requires that any agency which imposes or increases any property-related fee or charge must provide written notice thereof to the record owner of each identified parcel upon which such fee or charge is to be imposed and must conduct a public hearing with respect thereto. The proposed fee or charge may not be imposed or increased if a majority of owners of the identified parcels file written protests against it.

As a result, because fees for Water service are a “fee” or “charge” as defined in Article XIIID, the local government’s ability to increase such fee or charge may be limited by a majority protest.

In addition, Article XIIID includes a number of limitations that are applicable to existing fees and charges, including provisions to the effect that: (a) revenues that are derived from the fee or charge may not exceed the funds which are required to provide the property-related service; (b) such revenues may not be used for any purpose other than that for which the fee or charge was imposed; (c) the amount of a fee or charge that is imposed upon any parcel or person as an incident of property ownership may not exceed the proportional cost of the service attributable to the parcel; and (d) no such fee or charge may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question.

Property-related fees or charges based on potential or future use of a service are not permitted.

Based upon the California Court of Appeal decision in Howard Jarvis Taxpayers Association v. City of Los Angeles, 85 Cal. App. 4th 79 (2000), which was denied review by the State Supreme Court, it was generally believed that Article XIIID did not apply to charges for water and Water services that are “primarily based on the amount consumed” (i.e., metered water or Water rates), which had been held to be commodity charges related to consumption of the service, not property ownership. The State Supreme Court ruled in Bighorn-Desert View Water Agency v. Verjil, 39 Cal. 4th 205 (2006) (the “Bighorn Case”), however, that fees for ongoing water service through an existing connection were property-related fees and charges. The Court

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specifically disapproved the holding in Howard Jarvis Taxpayers Association v. City of Los Angeles that metered water rates are not subject to Proposition 218. The City complied with the notice, hearing and protest procedures in Article XIIID, as further explained by the State Supreme Court in the Bighorn Case, with respect to the rate increases that were approved on May 7, 2025. See the caption “THE WATER SYSTEM OF THE CITY—Water System Rates and Charges—Adopted Rates.”
On April 20, 2015, the California Court of Appeal, Fourth District, issued an opinion in Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano, 235 Cal. App. 4th 1493 (2015) (the “SJC Case”), upholding tiered water rates under Proposition 218 provided that the tiers correspond to the actual cost of furnishing service at a given level of usage. The opinion was specific to the facts of the case, including a finding that the City of San Juan Capistrano did not attempt to calculate the actual costs of providing water at various tier levels. The City’s Water rates, which are described under the caption “THE WATER SYSTEM OF THE CITY—Water System Rates and Charges,” do not currently include tiered rates based on usage.

Article XIIIC. Article XIIIC provides that the initiative power may not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge and that the power of initiative to affect local taxes, assessments, fees and charges is applicable to all local governments. Article XIIIC does not define the terms “local tax,” “assessment,” “fee” or “charge,” so it was unclear whether the definitions set forth in Article XIIID referred to above are applicable to Article XIIIC. Moreover, the provisions of Article XIIIC are not expressly limited to local taxes, assessments, fees and charges imposed after November 6, 1996. On July 24, 2006, the State Supreme Court held in the Bighorn Case that the provisions of Article XIIIC applied to rates and fees charged for domestic water use. In the decision, the Court noted that the decision did not address whether an initiative to reduce fees and charges could override statutory rate setting obligations.

On August 3, 2020, the State Supreme Court issued an opinion in Wilde v. City of Dunsmuir (Cal. S.

Ct. S252915) holding that taxpayers do not have the right under Proposition 218 to challenge water rates by referendum, and the City does not believe that Article XIIIC grants to the voters within the City the power (whether by initiative under Article XIIIC or otherwise, or by referendum, which is not authorized under Article XIIIC) to repeal or reduce rates and charges for the Water Services in a manner that would interfere with the contractual obligations of the City or the obligation of the City to maintain and operate the Water System. However, there can be no assurance as to the availability of particular remedies adequate to protect the Beneficial Owners of the Bonds. Remedies that are available to Beneficial Owners of the Bonds in the event of a default by the City are dependent upon judicial actions which are often subject to discretion and delay and could prove both expensive and time-consuming to obtain. So long as the Bonds are held in book- entry form, DTC (or its nominee) will be the sole registered owner of the Bonds and the rights and remedies of the Bond Owners will be exercised through the procedures of DTC.

In addition to the specific limitations on remedies which are contained in the applicable documents themselves, the rights and obligations with respect to the Bonds, the Indenture and the Installment Purchase Agreement are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought and to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State. The various opinions of counsel to be delivered with respect to such documents, including the opinion of Bond Counsel (the form of which is attached as Appendix C), will be similarly qualified.

Proposition 26
On November 2, 2010, voters in the State approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” except the following: (a) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which

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does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (b) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (c) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (d) a charge imposed for entrance to or use of local government property, or the purchase, rental or lease of local government property; (e) a fine, penalty or other monetary charge imposed by the judicial branch of government or a local government as a result of a violation of law; (f) a charge imposed as a condition of property development; and (g) assessments and property-related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 applies to charges imposed or increased after November 2, 2010 and provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity. The City believes that its Water System rates and charges meet the exception that is described in clause (g) above and are not taxes under Proposition 26.

Future Initiatives
Articles XIIIB, XIIIC and XIIID were adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiatives could be proposed and adopted affecting the City’s revenues or ability to increase revenues.

CERTAIN RISKS TO BONDHOLDERS
The following information, in addition to the other matters that are described in this Official Statement, should be considered by prospective investors in evaluating the Bonds. However, the following does not purport to be comprehensive, definitive or an exhaustive listing of risks and other considerations that may be relevant to making an investment decision with respect to the Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks. If any risk factor materializes to a sufficient degree, it alone could delay or preclude payment of principal of or interest on the Bonds.

Limited Obligations
The obligation of the City to pay the Series 2026 Installment Payments is a limited obligation of the City and is not secured by a legal or equitable pledge or charge or lien upon any property of the City or any of its income or receipts, except the Net Revenues. The obligation of the City to pay the Series 2026 Installment Payments does not constitute an obligation of the City to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

Accuracy of Assumptions
To estimate the Net Revenues available to pay the Series 2026 Installment Payments, the City has made certain assumptions with regard to various matters, including but not limited to future development within the City and increases in revenues resulting therefrom, the rates and charges to be imposed in future years, the expenses associated with operating the Water System and the interest rate at which funds will be invested. The City believes these assumptions to be reasonable, but to the extent that any of such assumptions fail to materialize, the Net Revenues available to pay the Series 2026 Installment Payments will, in all likelihood, be less than those projected herein. See the caption “THE WATER SYSTEM OF THE CITY— Projected Water System Operating Results and Debt Service Coverage.” The City may choose, however, to maintain compliance with the rate covenant set forth in the Installment Purchase Agreement in part by means

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of contributions from available reserves or resources, including the Rate Stabilization Fund. In such event, Net Revenues may generate amounts which are less than 120% of Debt Service in any given Fiscal Year. See the captions “SECURITY FOR THE BONDS—Rate Covenant” and “SECURITY FOR THE BONDS—Rate Stabilization Fund.”
System Demand
There can be no assurance that the demand for Water services will occur as described in this Official Statement. Reduction in levels of demand could require an increase in rates or charges in order to comply with the rate covenant. See the caption “SECURITY FOR THE BONDS—Rate Covenant.” Demand for Water services could be reduced or may not occur as projected by the City as a result of reduced levels of development in the City’s service area, hydrological conditions, conservation efforts, an economic downturn, mandatory State conservation orders and other factors.

System Expenses
There can be no assurance that the City’s expenses will be consistent with the descriptions in this Official Statement. Water System Operation and Maintenance Costs may vary with treatment costs, regulatory compliance costs, labor costs (including costs related to pension and other post-employment benefits) and other factors. Increases in Operation and Maintenance Costs could require an increase in rates or charges in order to comply with the rate covenant. There can be no assurance that actual Operation and Maintenance Costs associated with operation of the Water System will not differ materially from the projections that are set forth herein. If the actual cost of operating the Water System directly exceeds the City’s current projections, the amount of Net Revenues, which secure the Bonds, could be reduced, which could require the City to increase Water System rates and charges in order to comply with the rate covenant. See the caption “SECURITY FOR THE BONDS—Rate Covenant.”
Limited Recourse on Default
If the City defaults on its obligation to pay the Series 2026 Installment Payments, the Trustee, as assignee of the Authority, has the right to declare the total unpaid principal amount of the Series 2026 Installment Payments, together with the accrued interest thereon, to be immediately due and payable.

However, in the event of a default and such acceleration, there can be no assurance that the City will have sufficient funds to pay such accelerated amounts from Net Revenues.

Rate-Setting Process under Proposition 218
Proposition 218, which added Articles XIIIC and XIIID to the State Constitution, affects the City’s ability to maintain existing Water System rates and impose rate increases, and no assurance can be given that future Water System rate increases will not encounter majority protest opposition or be challenged by initiative action authorized under Proposition 218. In the event that future proposed Water System rate increases cannot be imposed as a result of majority protest or initiative, the City might thereafter be unable to generate Net Water System Revenues in the amounts required by the Installment Purchase Agreement to pay the Series 2026 Installment Payments. The City believes that its current Water System rates approved by the City Council were effected in accordance with the public hearing and majority protest provisions of Proposition 218. See the caption “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES— Proposition 218.”
Statutory and Regulatory Compliance
Laws and regulations governing treatment and delivery of Water are enacted and promulgated by federal, State and local government agencies. Compliance with these laws and regulations is and will continue to be costly, and, as more stringent standards are developed, such costs will likely increase.

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Claims against the Water System for failure to comply with applicable laws and regulations could be significant. Such claims may be payable from assets of the Water System and constitute Operation and Maintenance Costs or from other legally available sources. In addition to claims by private parties, changes in the scope and standards for public agency Water Systems such as that operated by the City may also lead to administrative orders issued by federal or State regulators. Future compliance with such orders can also impose substantial additional costs on the City. No assurance can be given that the cost of compliance with such laws, regulations and orders would not adversely affect the ability of the City to generate Net Revenues in amounts that are sufficient to pay the Bonds.

Climate Change
One of the factors that may pose a risk to the operations of the Water System is climate change.

Climate change caused by human activities may have adverse effects on the City. Climate change can also result in more variable weather patterns, which can lead to longer and more severe droughts as well as increased risk of flooding. Projections of the impacts of global climate change on the City are complex and depend on many factors that are outside the City’s control. The various scientific studies that forecast the amount and timing of adverse impacts of climate change are based on assumptions contained in such studies, but actual events may vary materially. Also, the scientific understanding of climate change and its effects continues to evolve. Accordingly, the City is unable to forecast with certainty when adverse impacts of climate change will occur or the extent of such impacts. The City expects to continue to consider the effects of climate change in its own planning and to participate in regional planning initiatives. While the impacts of climate change may be mitigated by the City’s past and future investment in adaptation strategies, the City can give no assurance about the net effects of those strategies and whether the City will be required to take additional adaptive mitigation measures. Particular potential impacts of climate change on the City include worsening air quality, increased flooding, and heatwaves.

Cybersecurity
The City, like many other public and private entities, relies on a large and complex technology environment to conduct its operations. As a recipient and provider of personal, private, or sensitive information, the City is subject to multiple cyber threats including, but not limited to, hacking, viruses, malware and other attacks on computer and other sensitive digital networks and systems. Entities or individuals may attempt to gain unauthorized access to the City’s digital systems for the purposes of misappropriating assets or information or causing operational disruption and damage. The City has adopted various policies regarding cybersecurity, including policies with respect to appropriate use and of email and technology, as well as the handling of sensitive personally identifiable information. To date, the City has not experienced an attack on its computer operating systems which resulted in a breach of its cybersecurity systems that are in place. However, no assurances can be given that the City’s efforts to manage cyber threats and attacks will be successful or that any such attack will not materially impact the operations or finances of the City. See “THE CITY—Water System Insurance” for more information with respect to the City’s cybersecurity insurance coverage.

Natural Disasters
General. The occurrence of any natural disaster in the City, including, without limitation, earthquake, wildfire, drought, high winds, landslide or flood, could have an adverse material impact on the economy within the City and the revenues available for the payment of the Bonds and result in substantial damage to and interference with the operations of the Water System.

Seismic Activity. Portions of the City’s service area may be subject to unpredictable seismic activity.

According to the Safety Element of the City’s General Plan, there are three major, known faults located in the County: the San Andreas, San Jacinto, and Elsinore faults. The San Andreas and San Jacinto are two of California’s most active faults. Several properties within the City and its sphere of influence are directly