Indio City Council
March 18, 2026

Independent auditor's report and the City's Annual Comprehensive Financi... Page 289 of 596 To the Honorable Mayor and the Members of the City Council of the City of Indio
Indio, California

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

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

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

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

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the Budgetary Comparison Schedule, the Schedule of Changes in Net Pension Liability and Related Ratios – Miscellaneous Plan, the Schedule of the City’s Pr oportionate Share of the Net Pension Liability and Related Ratios – Safety Plan, the Schedules of Contributions – Pensions, the Schedule of Changes in Net Other Postemployment Benefits Liability and Related Ratios, a nd the Schedule of Contributions - Other Postemployment Benefits be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operationa l, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and compar ing the information for cons istency with management’s responses to our inquiries, the basic financial statements , and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Independent auditor's report and the City's Annual Comprehensive Financi... Page 290 of 596 To the Honorable Mayor and the Members of the City Council of the City of Indio
Indio, California

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

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

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our re port dated March 2, 2026 on our consideration of the City’s internal control over financia l reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreemen ts and other matters. The purpose of that report is solely to describe the scope of our testing of internal control ove r financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Ana, California
March 2, 2026

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Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2025

5 This discussion and analysis of the City of Indio’s (the “City”) financial statements provides a narrative overview of the City’s financial activities for the fiscal year that ended June 30, 2025. For the most comprehensive understanding, please read this analysis in conjunction with the accompanying transmittal letter, the financial statements, and the notes to those financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS

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

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

NOTES TO THE FINANCIAL STATEMENTS

The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 49-104. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s progress in funding its retiree health and pension obligations.

Required supplementary information can be found on pages 107-123. A budget to actual comparison schedule is provided for the City’s General Fund on pages 107-109, Capital Projects Fund on page 127, General Debt Service Fund on page 128 and Nonmajor Governmental Funds on pages 153-183.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

6 GOVERNMENT-WIDE FINANCIAL STATEMENTS

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

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As reflected in the Statement of Net Position, at the close of the 2024-25 fiscal year, the City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $735.3 million. The City’s net position increased by $68.6 million from the year befo re, an increase of 10.2% percent. Th is outcome was driven by increases in assets ($81 million) and liabilities ($17 million) and defe rred outflows ($0.8 million) and a decrease in deferred inflows ($3.9 million). The City’s net position is mainly tied to its net investment in capital assets (e.g., land, buildings, machinery, equipment and infrastructure in excess of any re lated outstanding debt incurred to purchase those assets).

The City uses these capital assets to provide services to its citizens; con sequently, most of these assets are not liquid, not immediately spendable resources. As mentioned, total assets increased ($81 million).

This outcome is driven primarily by increases in capital assets ($105 million) and current assets ($43 million), and a decrease in other non-current assets ($67 million). Current asset s are expected to be converted to cash or consumed within a fiscal year, while noncurrent assets are expected to be consumed over more than one fiscal year. A capital asset is a significant property or infrastructure that has a useful lif e longer than one year that is not intended to be sold, but does lose value over time, like a computer or a vehicle. The following table is a simplified summary of the City’s net position.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025
7 NET POSITION SUMMARY (in thousands)
2024
2024
2024
2025
(As Reclassified) 2025 2025 (As Reclassified)
Current and other assets 204,812$ 171,531$ 81,895$ 72,135$ 286,707$ 243,666$ Capital assets 634,355 553,989 175,144 150,426 809,499 704,415 Other noncurrent assets 45,714 87,123 28,857 54,524 74,571 141,647 Total assets 884,881 812,643 285,896 277,085 1,170,777 1,089,728 Pensions 20,729 27,900 1,890 2,669 22,619 30,569 OPEB 16,538 9,066 3,097 1,703 19,635 10,769 Deferred loss on refunding of debt 295 306 717 782 1,012 1,088 Total deferred outflows 37,562 37,272 5,704 5,154 43,266 42,426 Long-term liabilities 281,730 278,023 121,681 123,489 403,411 401,512 Other liabilities 49,285 37,862 13,501 9,238 62,786 47,100 Total liabilities 331,015 315,885 135,182 132,727 466,197 448,612 Pensions 1,132
1,580 9 99 1,141 1,679
OPEB 9,145 11,924 1,712 2,239 10,857 14,163 Leases 503 622 - - 503 622
Total deferred inflows 10,780 14,126 1,721 2,338 12,501 16,464 Net position:

Net investment in capital assets 518,817 476,806 91,103 90,720 609,920 567,526 Restricted 60,054 49,732 7,640 6,822 67,694 56,554 Unrestricted (deficit) 1,777 (6,634) 55,954 49,632 57,731 42,998 Total net position 580,648$ 519,904$ 154,697$ 147,174$ 735,345$ 667,078$ Governmental Activities Business-T ype Activities Total As reflected in the followi
ng Change in Net Position Summary Table, revenue from governmental activities is broken down into Program Revenue and General Revenue, where Program Revenue must be used for the purpose, it was collected, and General Revenue is spent at the discretion of the City Council. Program Revenue totaled $131.5 million, $36 million more than last fiscal year due to incr eases in Charges for Services ($3.9 million), Operating Contributions/Grants ($5.9 million), and Capital Contributions/Grants ($26 million). General Revenues totaled $108.6 million and was $5.8 million more than prior fiscal year revenue. The increase in General Revenue was primarily due to an increase in Property Taxes ($1.8 million) and Ot her Revenues ($4.2 million). Expenses for all governmental activities totaled $134.8 million, $21.1 million more than th e prior fiscal year expenses. Annual expenditures for governmental activities increased for all functions. Revenue for all business-type activities totaled $42.6 million, an annual increase of $6.8 million, driven by increases in use of money and property ($1.9 million), Charges for Services ($3.5 million), and a Capital Contributions/Grants ($1.3 million). Expenses for all business-type activities totaled $35.8 million, an annual increase of $0.288 million. The increase in expenditure was mostly due to increased IEFA milestone contributions in accordance with the ad opted project agreements with Imperial Irrigation District (IID) and Municipal Golf operations.

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8 CHANGE IN NET POSITION SUMMARY (in thousands)

2025 2024 2025 2024 2025 2024
Program Revenues:

Charges for Services 31,018$ 30,693$ 33,234$ 29,683$ 64,252$ 60,376$ Operating contributions/grants 25,869 19,989 - - 25,869 19,989 Capital Contributions/grants 37,942 13,046 3,470 2,136 41,412 15,182 General Revenues:

Property Taxes 27,966 26,169 - - 27,966 26,169 Other Taxes 65,847 66,103 - - 65,847 66,103 Other 8,922 6,599 5,895 3,994 14,817 10,593 Total revenues 197,564 162,599 42,599 35,813 240,163 198,412 Expenses:

Water - - 30,234 31,039 30,234 31,039 Electric - - 3,396 2,465 3,396 2,465 Golf - - 2,136 1,974 2,136 1,974 Solid Waste - - - - - - General Government 13,041 9,572 - - 13,041 9,572 Public Safety 68,865 64,322 - - 68,865 64,322 Community Development 6,055 5,128 - - 6,055 5,128 Community Services 5,219 4,124 - - 5,219 4,124 Public Works 34,895 29,693 - - 34,895 29,693 Interest expense/other charges 6,687 825 - - 6,687 825 Total Expenses 134,762 113,664 35,766 35,478 170,528 149,142 Change in Net Position 62,802 48,935 6,833 335 69,635 49,270 Net Position - beginning of fiscal year 519,904 472,307 147,174 146,839 667,078 619,146 Prior period adjustments (2,058) (1,338) 690 - (1,368) (1,338) Net Position - beginning of fiscal year, restated 517,846 470,969 147,864 146,839 665,710 617,808 Net Position - end of fiscal year 580,648 $ 519,904 $ 154,697 $ 147,174 $ 735,345 $ 667,078 $ Governmental Activities Business-Type Activities Total

FUND FINANCIAL STATEMENTS

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

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9 GOVERNMENTAL FUNDS

The cost of basic City services is reported in the governme ntal fund group. Governmental fund financial statements focus on near-term flows of spendable resources in and out of various funds and the balances left at year end that remain available for spending in the future. Such information is useful in evaluating the City’s near-term financing requirements. Governmental fund inform ation helps determine whether there ar e more or fewer financial resources available to be spent in the future to finance City programs. Differences be tween the governmental fund financial statements and the government-wide financial statements are explained in a reconciliation following the governmental fund financial statement on page 27. Because the focus of governmental funds is narrower than that of the government- wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the gove rnment-wide financial statements. By doing so, readers will better understand the long-term impact of the City’s near-term financing decisions. Both the governmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 43 individual governmental funds, which are broke n down into two groups for basic financial reporting:

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

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

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

Individual fund data for each of these non-major funds is provi ded in the form of combining statements elsewhere in this report. The governmental fund financial statements can be found of pages 133-152.

GOVERNMENTAL FUND FINANCIAL ANALYSIS

At the close of the fiscal year, governmental funds reported a combined ending fund balance of $189.4 million, a year- over-year decrease of $24.4 million. Approximately 53.6 percent of total fund balance ($101.5 million) was available for spending at the government’s discretion (assigned, unassigned, and committed). Fund balance in the City’s General Fund increased $13 million. Fund balance within the City’s Capital Projects Fund increased $0.5 million. Within the Non-Major fund group, fund balance increased $5.3 million.

General Fund Financial Highlights:

At the close of the fiscal year, the City’s General Fund reported an ending fund balance of $75.7 million, up $13 million from the prior year. Approximately 83 percent ($63.1 million) of the $75.7 million was available for spending at the government’s discretion (assigned, unassigned, and comm itted). Nonspendable fund ba lance, which represents resources that cannot be spent because they are not in a sp endable form, totaled $8.5 m illion, consisting of prepaid expenditures ($0.02 million), la nd held for resale ($5.3 million), and a note receivable ($3.1 million). Restricted fund balance, which represents amounts that can only be spent fo r a specific purpose, increased $1.3 million from the prior fiscal year, totaling $4.05 million. This $1.3 million City deposits into a Section 115 trust fund used to stabilize annual pension costs. Assigned fund balance, which represents resources that are earmarked by City administration for a particular governmental purpose, to taled $38.8 million, an increase of $15.2 million from the prior fiscal year.

Committed fund balance, which represents resources that are formally set aside by the City Council for emergencies or critical City priorities, totaled $18.5 million, an increase from the prior fiscal year of $.5 million. Unassigned fund balance, which represents resources that have not been categorized as nonspendable, restricted, committed, or assigned, totaled $5.8 million, a decrease of $3.9 million from the prior fiscal year.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

10 Capital Projects Fund Financial Highlights:

At the close of the fiscal year, the City’s Capital Projects Fund reported a positive ending fund balance of $40 million, a slight increase of $0.5 million from the prior year. The increase is a reflection of the ongoing funding commitments to the capital improvement plan combined of General Fund, Measure X funding and other grants and contributions.

General Debt Service Fund Financial Highlights:

At the close of the fiscal year, the C ity’s General Debt Service Fund reported an ending fund balance of $38 million, down $43.3 million from the prior year. The decrease is due to the drawdown of bonds proceeds for the funding of various eligible capital projects.

Non-Major Governmental Funds Financial Highlights:

Non-Major Governmental Funds accumulated $35.6 million in fund balance at the end of the fiscal year, an increase of $5.3 million from the previous year. Non-major special re venue fund balances increased by $5.3 million. Within the Non-Major Governmental Funds, revenues exceed expen ses by $9.1 million and interfund transfers-out exceeded interfund transfers-in by $3.7 million, resulting in a net increase of $5.3 million in fund balance.

PROPRIETARY FUNDS FINANCIAL ANALYSIS

When the City charges outside customers or other internal governmental units for services, those services are generally reported within the Proprietary Fund group. The City mainta ins two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are u sed to report the same function presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water services, golf course operations, and solid waste services including electric services of the Indio Electric Finance Authority (IEFA). Internal service funds are an accounting device used to accumulate and allocate costs among the City’s various departments and functions. The City uses internal service funds to account for and manage its fleet of vehicles, equipment replacements, insurance, build ing maintenance, and information-te chnology systems. Because these five services principally benefit the City unlike business-type f unctions, which predominantly be nefit the public, they are included as governmental activities in the government-wide fina ncial statements. Proprietary Fund statements provide the same type of information as the government-wide financia l statements, only in more detail. The proprietary fund financial statements provide separate information for wa ter services. Water services, managed by the Indio Water Authority, and electric services, managed by the IEFA are considered to be Major and thusly reported independent from other proprietary funds. Golf and Solid Waste services are aggregated and reported as Other Enterprise Funds and are reported individually elsewhere in this report. Internal Se rvice Funds are reported by fund into a single aggregated presentation in the internal service fund financial statements. Individual fund data for the internal service fund group is provided in the report on pages 196-203. At the close of the fiscal year, proprietary funds (including internal service funds) reported a combined ending net position of $166.7 million, a year-over- year decrease of $5.4 million. City enterprise funds accumulated a year ending net position of $1 54.7 million, a year-over-year increase of $7.5 million.

Internal service funds accumulated a net position of $112 million, a year-over-year decrease of $2.1 million. Within the enterprise fund group, net position in the City’s water fund increased $2.6 million. Net position within the City’s other enterprise funds, golf and solid waste, increased $.5 million.

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11 Fiduciary Funds Financial Analysis

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

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

The City also manages resources for the Successor Agency to the Indio Redevelopment Agency, which is reported under the private-purpose trust fund. At the close of the fiscal y ear, as is standard for fiduciary funds, agency assets equal liabilities plus net position. However, net position of the RDA Successor Agency was negative $34.3 million, due to its long-term debt on bonds, which is funded annually th rough the Recognized Obligation Payment Schedule (ROPS).

Year-over-year, the Successor Agency’s net position decreased $4.1 million.

Analysis of Long-Term Debt

Debt, which is considered a liability of governmental activities, totaled $290.2 million, an increase of $6.3 million from the prior fiscal year. The increase in debt was driven by the increases in post-employment benefits $10.3 million, and compensated absences $2.3 million. Comp ensated absences represent employees’ ea rned leave benefits that are attributable to services already rendered and that accumulate and are more likely than not to be used for time off or otherwise paid or settled in the future. These increases were offset by decreases in lease revenue bonds ($2.9) million, judgment obligation bond debt ($0.7) million, lease payable ($.1) million, s ubscription payable ($.6) million, and net pension liability ($2.0) million. Activity for outstanding debt is represented in the table below. Additional information on the City’s long-term debt can be found in notes 9 through 12 on pages 74-92.

OUTSTANDING DEBT SUMMARY (in thousands)

2025 2024 2025 2024 2025 2024
Claims Payable 15$ 15$ -$ -$ 15$ 15$ Lease Revenue Bonds 137,598 140,490 - - 137,598 140,490 Judgement Obligation Bonds 10,873 11,575 - - 10,873 11,575 Lease Payable 65 160 184 244 249 404 Subscription Payable 2,524 3,113 573 21 3,097 3,134 Water Bonds - - 40,565 43,116 40,565 43,116 Electric Revenue Bonds - - 64,609 64,809 64,609 Net Pension Liability 74,816 76,785 8,108 8,482 82,924 85,267 Post Employment Benefits 59,750 49,441 11,188 9,285 70,938 58,726 Compensated Absences 4,600 2,349 860 383 5,460 2,732 Total 290,241$ 283,928$ 126,087$ 126,340$ 416,328$ 345,459$ Governmental Activities Business-Type Activities Total

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12 ANALYSIS OF CAPITAL ASSETS

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

Capital assets, net of depreciation/amortization, for governmental activities totaled $634 million. Capital assets, net of depreciation/amortization, for business-type activities totaled $175.1 million. Overall, net capital asset value increased $54.6 million from the prior fiscal year. Fiscal-year activity is presented in the table below. Additional information on the City’s capital assets can be found in note 8 on pages 73-74.

CAPITAL ASSETS SUMMARY (in thousands)

2025 2024 2025 2024 2025 2024
Land 43,820$ 43,380 $ 3,138 $ 3,139 $ 46,958 $ 46,519 $ Right of way 54,700 54,700 - - 54,700 54,700 Structures and improvements 38,000 37,845 15,351 15,351 53,351 53,196 M achinery, equipment and vehicles 31,629 28,663 8,161 7,490 39,790 36,153 Infrastructure 648,236 632,542 297,096 296,460 945,332 929,002 Artwork 17 - - 17 Intang ible rig ht-to-use assets 6,104 6,106 996 311 7,100 6,417 Construction in progress 211,714 130,259 44,497 13,354 256,211 143,613 Total Capital Asssets 1,034,220 933,495 369,239 336,105 1,403,459 1,269,600 Accumulated depreciation/amortization 399,866 379,505 194,096 185,679 593,962 565,184 Net Capital Assets 634,354$ 553,990$ 175,143$ 150,426$ 809,497$ 704,416$ Governmental Activities Business-Type Activities Total

ANALYSIS OF THE BUDGET AND SIGNIFICANT V ARIANCES

The annually adopted budget appropriates spending authority by functional unit and expenditure by category: salaries and benefits, purchased services, materials and supplies, fixed asset s, internal transfers, and transfers out to other City funds. Expenditure controls are set at these same levels. Actual year end expenditur es and revenues rarely match budgeted appropriation levels exactly, due to changes in policy, economic impact s, unexpected outlays, and naturally occurring operational variances. Schedules comparing budget e xpectations to actual outcomes can be found on pages 107-109 for the General Fund and on pages 153-183 for other non-major funds. For fiscal year 2024-25, General Fund revenue totaled $135.1 million, including $5.1 million categorized as Transfers In. In total, the City received $15 million (12.5%) more than budgeted. Tax revenues were stronger than anticipated, exceeding budgeted expectations by $3.0 million. Overages primarily consisted of: property taxes ($0.8 million), utility users taxes ($0.6 million) and transaction occupancy tax ($1.7 million). Charges for Services was $3 million over budget, mainly supported by higher-than- expected demand for fire and ambulance services including plan check services and inspections. The original fiscal year 2024-25 General Fund budget authorized $123 million in expenditures. The budge t as finally adjusted by the City Council authorized $123.4 million in expenditures. At the e nd of the fiscal year, General Fund expenditures totaled $122.1 million, including transfers out of $28.8 million. In total, expenditures were $.96 million (4.8%) less than budgeted due to a combination of factors between increased transfers out for capital commitments offset by budgetary savings. The budgetary savings occurred across all General Fund budget units: Public Safety (including Fire and Ambulance and Code Enforcement) $4.0 million, General G overnment (administrative bud get units – City Council, City Manager, City Clerk, City Attorney, Human R esources & Finance) $1.2 million, Community Development (Building and Safety, Planning, Ec onomic Development) $0.9 million, Community Services (Youth Service, Community Services, Promotions and Publicity, Senior Services) $0.6 million, and Public Works (Street Maintenance, Engineering & Administration, Parks & Parkways) $0.5 million.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

13 FACTS AND CONDITIONS OF FUTURE SIGNIFICANCE

For the coming 2025-26 fiscal year, the City Council adopted a Citywide budget (including Indio Water Authority and internal transfers) totaling $459 million in appropriations, a $93.9 million (25%) increase from the prior-year’s adopted budget. The significant increase in appropriations is primarily to the active and robust capital project schedule and the many projects underway that have rolled into the new fiscal year with a few new appropriations to a capital project set asides (Police Administration Building, Jefferson Interchange, and Monroe Interchange). About $57.9 million (15.8%) of the budget is appropriated to move resources across funds, in order to properly isolate, track, and capture specific expenditures and revenues in accordance with generally accep ted accounting principles. Citywide (including Indio Water Authority), revenue is expected to total $367 million, an increase from the prior year of $47.3 million (14%) due to the increase in the Capital Projects Fund and addition of the Indio Water Authority.

Across all funds, the $103.1 million gap between appropriations and expected revenue will be funded from fund balance (fund equity) and assumed prior year operational savings a nd ongoing rollover projects. About $129.1 million (43%) of the budget will be appropriated to cover the cost of new construction and pay debt incurred for infrastructure. Of all planned citywide expenditures, $76.3 million (26%) will cover the cost of hiring professionals and specialists in various roles such as firefighters, architects, auditors, and landscapers. Utilities are also included in Purchased Services. About $54.3 million (18%) of planned expenditures will cover the cost of employee salaries and benefits. Just over half of all planned salary and benefit expenses cover the cost of poli ce department staff. About $12.3 million (3%) of the budget is dedicated for other operating costs, including materials and supplies such as tools, cleaning supplies, and automobile parts.

The adopted budget provides funding for 298 full-time positions, seven elected officials, 35 appointed commissioners, and 10 part-time positions. It also allocates resources for 85 sworn police officers and includes funding for three new full-time positions:

 Information Technology Support Technician
 Facilities Maintenance Worker II
 Associate Planner

Additionally, the budget supports two part-time Community Program Aides (Streets & Maintenance) and continues the City’s Intern and Fellow Program, which is designed to offer local youth and community members meaningful opportunities for hands-on training and professional development.

The General Fund is the primary operating fund of the city and it accounts for all activity not required to be accounted for in another specialized or restricted fund. The General Fund encompasses many of the commonly thought of activities occurring within a municipal government. These activities include police, fire, senior and teen services, building and safety, planning, public works, parks, streets and general administration.

The FY 2025–26 adopted General Fund bu dget provides $129.8 million in spending authority, an increase of $2.8 million compared to the prior year’s adopted budget. This increase is primarily driven by salary and benefit adjustments resulting from recently negotiated bargaining agreements, as well as anticipated operating costs associated with new City buildings and facilities, including the Civic Center Campus and expanded public safety infrastructure. These investments reflect the City’s commitment to maintaining competitive compen sation, supporting workforce stability, and ensuring the successful operation of newly completed capital projects.

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Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2025

14 Police protection accounts for the largest portion ($46.1 million) of all planned General Fund expenditures. In addition to typical policing operations, the police department budget also includes code enforcement operations, which accounts for 7.1 percent ($3.3 million) of the police department’s budget. About $23.1 million (18%) of the budget supports fire and ambulance services, which are contracted through the County of Riverside. Co mbined, these public safety operations represent 53 percent of all pl anned General Fund expenditures. Th e Public Works Department budget will provide funding for planning, designing, constructing, operating, and maintaining the city’s infrastructure: public roads, bridges, parks, storm drains, and all city owned properties and facilities. The Public Works budget totals $11.7 million.

CASH MANAGEMENT

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

CONTACTING THE CITY’S FINANCE DEPARTMENT

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

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BASIC FINANCIAL STATEMENTS
15

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16

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GOVERNMENT-WIDE FINANCIAL STATEMENTS
17

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Activities Activities Total
ASSETS
Current assets:

Cash and investments 157,112,714 $ 76,575,084 $ 233,687,798 $ Accounts receivable 6,461,137 5,439,907 11,901,044 Taxes receivable 11,004,325 - 11,004,325 Internal balances 2,930,079 (2,930,079) - Lease receivable - due within one year 277,351 - 277,351 Due from other governments 17,753,457 1,269,044 19,022,501 Inventories - 772,012 772,012 Prepaid items 255,007 769,201 1,024,208 Total current assets 195,794,070 81,895,169 277,689,239 Noncurrent assets:

Restricted cash and investments 4,151,373 - 4,151,373 Restricted cash and investments with escrow agent 2,334,828 - 2,334,828 Restricted cash and investments held by bond trustee 33,312,072 28,857,304 62,169,376 Notes and loans receivable 9,017,807 - 9,017,807 Lease receivable - due in more than one year 410,278 - 410,278 Property held for resale 5,505,588 - 5,505,588 Capital assets:

Capital assets, not being depreciated 310,234,707 47,636,410 357,871,117 Capital assets, being depreciated, net 320,836,015 126,690,539 447,526,554 Intangible capital assets, being amortized, net 3,284,004 816,891 4,100,895 Total capital assets 634,354,726 175,143,840 809,498,566 Total noncurrent assets 689,086,672 204,001,144 1,170,777,055 Total assets 884,880,742 285,896,313 1,170,777,055

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 295,550 717,263 1,012,813 Pension related 20,729,199 1,890,095 22,619,294 OPEB related 16,538,247 3,096,845 19,635,092 Total deferred outflows of resources 37,562,996 5,704,203 43,267,199 Primary Government
City of Indio
Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements 18

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Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 30,271,665 4,614,355 34,886,020 Accrued liabilities 1,642,943 994 1,643,937 Accrued interest 1,125,790 391,307 1,517,097 Unearned revenue 1,801,574 - 1,801,574 Deposits payable 5,929,826 4,085,634 10,015,460 Compensated absences, due within one year 3,220,573 602,511 3,823,084 Bonds and notes payable, due within one year 4,405,000 3,615,000 8,020,000 Lease payable, due within one year 30,212 61,343 91,555 Subscription payable, due within one year 857,361 130,020 987,381 Total current liabilities 49,284,944 13,501,164 62,786,108 Noncurrent liabilities:

Compensated absences, due in more than one year 1,380,245 258,219 1,638,464 Bonds and notes payable, due in more than on year 144,066,085 101,558,752 245,624,837 Lease payable, due in more than on year 35,457 123,650 159,107 Subscription payable, due in more than on year 1,667,090 443,551 2,110,641 Claims and judgments, due in more than one year 14,910 - 14,910 Net pension liability 74,816,164 8,108,531 82,924,695 Net other postemployment benefits liability 59,750,006 11,188,407 70,938,413 Total noncurrent liabilities 281,729,957 121,681,110 403,411,067 Total liabilities 331,014,901 135,182,274 466,197,175

DEFERRED INFLOWS OF RESOURCES
Leases 503,169 - 503,169 Pension related 1,132,636 8,911 1,141,547 OPEB related 9,144,836 1,712,404 10,857,240 Total deferred inflows of resources 10,780,641 1,721,315 12,501,956

NET POSITION
Net investment in capital assets
518,817,153 91,103,535 609,920,688 Restricted for:

Community development projects 9,073,694 - 9,073,694 Public safety 4,777,163 - 4,777,163 Public works 25,984,377 - 25,984,377 Capital projects 1,936,056 - 1,936,056 Debt service 7,413,759 7,639,745 15,053,504 Assessment districts 3,360,278 - 3,360,278 Public education government channel 1,379,280 - 1,379,280 Parks and recreation 839,626 - 839,626 Pension stabilization 4,045,939 - 4,045,939 American Rescue Plan Act funds 409,387 - 409,387 Pollution remediation 834,124 - 834,124 Total restricted 60,053,683 7,639,745 67,693,428 Unrestricted 1,777,360 55,953,647 57,731,007 Total net position 580,648,196$ 154,696,927$ 735,345,123$ City of Indio
Statement of Net Position (Continued)
June 30, 2025
Primary Government
See accompanying Notes to the Basic Financial Statements 19

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

General government 13,040,805 $ 3,941,423 $ 4,823,629 $ - $ Public safety 68,864,875 17,607,003 2,223,960 - Community development 6,055,427 5,696,218 22,862 - Community services 5,218,573 72,566 301,019 - Public works 34,894,501 3,701,045 18,497,486 37,941,586 Interest on long term debt 6,687,156 - - - Total Governmental Activities 134,761,337 31,018,255 25,868,956 37,941,586 Business-Type Activities:

Water 30,234,092 26,494,955 - 3,469,796 Electric 3,396,344 4,319,273 - - Golf 2,136,319 2,069,830 - - Solid Waste - 350,000 - - Total Business-Type Activities 35,766,755 33,234,058 - 3,469,796 Total Primary Government 170,528,092$ 64,252,313 $ 25,868,956 $ 41,411,382 $ City of Indio
Statement of Activities
For the Year Ended June 30, 2025
Program Revenues
See accompanying Notes to the Basic Financial Statements 20

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Activities Activities Total
Functions/Programs
Governmental Activities:

General government (4,275,753) $ - $ (4,275,753)$ Public safety (49,033,912) - (49,033,912) Community development (336,347) - (336,347) Community services (4,844,988) - (4,844,988) Public works 25,245,616 - 25,245,616 Interest on long term debt (6,687,156) - (6,687,156) Total Governmental Activities (39,932,540) - (39,932,540) Business-Type Activities:

Water - (269,341) (269,341) Electric - 922,929 922,929 Golf - (66,489) (66,489) Solid Waste - 350,000 350,000 Total Business-Type Activities - 937,099 937,099 Total Primary Government (39,932,540) 937,099 (38,995,441) General Revenues:

Taxes:

Property taxes 27,965,803 - 27,965,803 Transient occupancy taxes 16,976,993 - 16,976,993 Sales taxes 36,398,308 - 36,398,308 Business licenses taxes 812,829 - 812,829 Utility users tax 11,191,548 - 11,191,548 Other taxes 465,854 - 465,854 Motor vehicle in lieu - unrestricted 281,614 - 281,614 Investment income 8,250,256 5,895,041 14,145,297 Other 392,113 - 392,113 Total General Revenues 102,735,318 5,895,041 108,630,359 Changes in Net Position 62,802,778 6,832,140 69,634,918 Net Position - Beginning of Year, as restated (Note 16) 517,845,418 147,864,787 665,710,205 Net Position - End of Year 580,648,196$ 154,696,927$ 735,345,123$ Net (Expense) Revenue and Changes in Net Positions
City of Indio
Statement of Activities (Continued)
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 21

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22

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FUND FINANCIAL STATEMENTS
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GOVERNMENTAL FUND FINANCIAL STATEMENTS
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Capital Debt Nonmajor Total
General Projects Service Governmental Governmental
Fund Fund Fund Funds Funds
ASSETS
Cash and investments 54,211,109 $ 54,137,938 $ 6,677,758 $ 30,622,254 $ 145,649,059 $ Accounts receivable 3,859,331 2,389,452 - 211,178 6,459,961 Taxes receivable 10,266,312 - - 738,013 11,004,325 Notes and loans receivable 3,168,234 - - 5,849,573 9,017,807 Lease receivable 687,629 - - - 687,629 Prepaid items 23,562 50,000 - - 73,562 Due from other governments 1,548,217 15,103,741 - 1,101,499 17,753,457 Due from other funds 10,214,815 - - - 10,214,815 Property held for resale 5,341,588 - - 164,000 5,505,588 Restricted assets:

Cash and investments 4,045,939 - - - 4,045,939 Cash with escrow agent - 2,334,828 - - 2,334,828 Cash and investments held by bond trustee - 1,936,056 31,360,997 15,019 33,312,072 Total assets 93,366,736 75,952,015 $ 38,038,755 $ 38,701,536 $ 246,059,042 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 8,950,556 $ 17,559,138 $ 1,188 $ 1,886,961$ 28,397,843 $ Accrued liabilities 1,642,943 - - - 1,642,943 Unearned revenues - 1,523,248 - 278,326 1,801,574 Deposits payable 5,558,714 11,272 - 359,840 5,929,826 Due to other funds - 7,041,038 - 228,253 7,269,291 Total liabilities 16,152,213 26,134,696 1,188 2,753,380 45,041,477 Deferred inflows of resources:

Unavailable revenues 1,017,173 9,770,087 - 321,343 11,108,603 Leases 503,169 - - - 503,169 Total deferred inflows of resources 1,520,342 9,770,087 - 321,343 11,611,772 Fund balances:

Nonspendable 8,533,384 50,000 - - 8,583,384 Restricted 4,045,939 1,936,056 38,037,567 35,256,181 79,275,743 Committed 18,500,000 - - 404,165 18,904,165 Assigned 38,821,012 38,061,176 - - 76,882,188 Unassigned (deficit) 5,793,846 - - (33,533) 5,760,313 Total fund balances 75,694,181 40,047,232 38,037,567 35,626,813 189,405,793 Total liabilities, deferred inflows
of resources, and fund balances 93,366,736$ 75,952,015$ 38,038,755$ 38,701,536$ 246,059,042$ City of Indio
Balance Sheet
Governmental Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 27

Independent auditor's report and the City's Annual Comprehensive Financi... Page 315 of 596 Total Fund Balances - Total Governmental Funds 189,405,793$ Amounts reported for governmental activities in the statement of net position are different because:
621,252,429
(1,114,802)
Loss on refunding of debt (net of accumulated amortization). 295,550 11,108,603
Bonds payable (148,471,085)$
Lease payable, net of $10,813 reported in Internal Service Fund (54,856) Subscription payable, net of $2,302,970 reported in Internal Serve Fund (221,481) Compensated absences, net of $335,919 reported in Internal Service Fund (4,264,899) (153,012,321) Deferred outflows of resources, net of $994,020 reported in Internal Service Fund 19,735,179$ Net pension liability, net of $4,264,359 reported in Internal Service Fund (70,551,805) Deferred inflows of resources, net of $4,686 reported in Internal Service Fund (1,127,950) (51,944,576) Deferred outflows of resources, net of $1,593,582 reported in Internal Service Fund 14,944,665$ Net OPEB liability, net of $5,757,361 reported in Internal Service Fund (53,992,645) Deferred inflows of resource, net of $881,174 reported in Internal Service Fund (8,263,662) (47,311,642) 11,969,162
Net position of governmental activities 580,648,196$
City of Indio
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2025
Capital assets used in governmental activities are not current financial resources and therefore are not reported in governmental funds, net of $13,102,297 reported in Internal Service Fund.

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

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

Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds, net of $10,988 reported in Internal Service Fund.

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

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

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

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

See accompanying Notes to the Basic Financial Statements 28

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Capital Debt Nonmajor Total
General Projects Service Governmental Governmental
Fund Fund Fund Funds Funds
Revenues:

Taxes 93,811,335 $ - $ - $ - $ 93,811,335$ Licenses and permits 8,897,281 - - - 8,897,281 Intergovernmental 2,594,770 30,427,611 - 12,225,224 45,247,605 Charges for services 15,237,627 - - 429,509 15,667,136 Use of money and property 8,085,693 679,629 2,763,349 1,468,169 12,996,840 Fines and forfeitures 947,485 - - 172,082 1,119,567 Special assessments - - - 7,009,845 7,009,845 Developer participation - 3,026,877 - 222,694 3,249,571 Miscellaneous 392,115 445,029 - 85,147 922,291 Total revenues 129,966,306 34,579,146 2,763,349 21,612,670 188,921,471 Expenditures:

Current:

General government 10,922,467 83,956 - 585,049 11,591,472 Public safety 62,641,994 - - 1,310,885 63,952,879 Community development 4,910,438 - - 553,233 5,463,671 Community services 4,618,258 - - 479,322 5,097,580 Public works 9,296,735 - - 4,583,273 13,880,008 Capital outlay 580,150 98,462,810 - 3,862,418 102,905,378 Debt service:

Principal retirement 209,067 65,936 2,525,000 715,000 3,515,003 Interest and fiscal charges 9,994 1,183 6,548,508 450,822 7,010,507 Total expenditures 93,189,103 98,613,885 9,073,508 12,540,002 213,416,498

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 36,777,203 (64,034,739) (6,310,159) 9,072,668 (24,495,027) Other financing sources (uses):

Transfers in 5,065,546 71,066,504 5,898,551 1,440,586 83,471,187 Transfers out (28,885,311) (6,528,851) (42,872,376) (5,184,649) (83,471,187) Issuance of debt 45,909 - - - 45,909 Total other financing sources (uses) (23,773,856) 64,537,653 (36,973,825) (3,744,063) 45,909 NET CHANGE IN FUND BALANCES 13,003,347 502,914 (43,283,984) 5,328,605 (24,449,118) FUND BALANCES:

Beginning of year 62,690,834 39,544,318 81,321,551 30,298,208 213,854,911 End of year 75,694,181$ 40,047,232 $ 38,037,567 $ 35,626,813 $ 189,405,793 $ City of Indio
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 29

Independent auditor's report and the City's Annual Comprehensive Financi... Page 317 of 596 Net change in fund balances - total governmental funds: (24,449,118)$ Amounts reported for governmental activities in the Statement of Activities are different because:

Capital outlay, net of functional expenses of $4,267,315 and $3,641,165 reported in Internal Service Fund 98,567,689$
Depreciation/amortization expense net of $3,544,880 reported in Internal Service Fund (17,204,212) Loss on disposal of capital assets, net of $(335,504) reported in Internal Service Fund (759,328) 80,604,149 8,639,209
(45,909)$
3,240,000
Lease and subscription principal repayments, net of $1,070,188 reported in Internal Service Fund 275,003 3,469,094 Interest on long-term liabilities 39,823$
Amortization of premium 366,817
Amortization of debt discount (13,101)
Amortization of deferred amount on refunding (10,780) 382,759 Pension expense, net of $5,029,009 contribution after measurement date (4,135,999) OPEB expense, net of $3,364,707 contribution after measurement date 328,809 Net change in compensated absences, net of $(178,720) reported in Internal Service Funds (13,805) (2,022,320)
Change in net position of governmental activities 62,802,778$ Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds:

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

City of Indio
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the Year Ended June 30, 2025
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. This is the amount by which capital expenditures exceeded depreciation in the current period:

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

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

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

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

Bond principal repayments
Issuance of debt, net of $615,531 reported in Internal Service Fund See accompanying Notes to the Basic Financial Statements 30

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PROPRIETARY FUND FINANCIAL STATEMENTS
31

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Nonmajor Activities
Enterprise Internal
Water Electric Funds Total Service Funds
ASSETS
Current assets:

Cash and investments 69,447,289 $ - $ 7,127,795$ 76,575,084 $ 11,463,655 $ Accounts receivable 4,190,618 1,246,178 3,111 5,439,907 1,176 Due from other governments 992,929 - 276,115 1,269,044 - Inventories 746,201 - 25,811 772,012 - Prepaid items 619,201 - 150,000 769,201 181,445 Total current assets 75,996,238 1,246,178 7,582,832 84,825,248 11,646,276 Noncurrent assets:

Restricted investments held by bond trustee 12,130 28,845,174 - 28,857,304 105,434 Capital assets, not being depreciated 4,402,018 42,768,433 465,959 47,636,410 - Capital assets, being depreciated, net 126,480,152 - 210,387 126,690,539 10,169,032 Intangible capital asset, being amortized, net 638,350 - 178,541 816,891 2,933,265 Total capital assets 131,520,520 42,768,433 854,887 175,143,840 13,102,297 Total noncurrent assets 131,532,650 71,613,607 854,887 204,001,144 13,207,731 Total assets 207,528,888 72,859,785 8,437,719 288,826,392 24,854,007

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 717,263 - - 717,263 - Pension related 1,883,619 - 6,476 1,890,095 994,020 OPEB related 3,085,261 - 11,584 3,096,845 1,593,582 Total deferred outflows of resources 5,686,143 - 18,060 5,704,203 2,587,602 City of Indio
Statement of Net Position
Proprietary Funds
June 30, 2025
Business-Type Activities - Enterprise Funds
See accompanying Notes to the Basic Financial Statements 32

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Nonmajor Activities
Enterprise Internal
Water Electric Funds Total Service Funds

LIABILITIES
Current liabilities:

Accounts payable 4,466,433 $ 12,737 $ 135,185 $ 4,614,355 $ 1,873,822 $ Accrued liabilities - - 994 994 - Accrued interest 390,775 - 532 391,307 10,988 Due to other funds - 2,930,079 - 2,930,079 15,445 Deposits payable 387,585 - 3,698,049 4,085,634 - Compensated absences - due within one year 602,511 - - 602,511 235,144 Bonds payable - due within one year 2,620,000 995,000 - 3,615,000 - Lease liability - due within one year - - 61,343 61,343 10,813 Subscription liability - due within one year 130,020 - - 130,020 672,530 Total current liabilities 8,597,324 3,937,816 3,896,103 16,431,243 2,818,742 Noncurrent liabilities:

Accrued claims and judgments - - - - 14,910 Compensated absences - due in more than one year 258,219 - - 258,219 100,775 Bonds payable - due in more than one year 37,945,169 63,613,583 - 101,558,752 - Lease liability - due in more than one year - - 123,650 123,650 - Subscription liability - due in more than one year 443,551 - - 443,551 1,630,440 Net pension liability 8,080,750 - 27,781 8,108,531 4,264,359 Net other postemployment benefits liability 11,146,553 - 41,854 11,188,407 5,757,361 Total noncurrent liabilities 57,874,242 63,613,583 193,285 121,681,110 11,767,845 Total liabilities 66,471,566 67,551,399 4,089,388 138,112,353 14,586,587

DEFERRED INFLOW OF RESOURCES
Pension related 8,880 - 31 8,911 4,686 OPEB related 1,705,998 - 6,406 1,712,404 881,174 Total deferred inflows of resources 1,714,878 - 6,437 1,721,315 885,860

NET POSITION
Net investment in capital assets 91,056,232 (622,591) 669,894 91,103,535 10,788,514 Restricted for debt service 12,130 7,627,615 - 7,639,745 - Unrestricted (deficit) 53,960,225 (1,696,638) 3,690,060 55,953,647 1,180,648 Total net position 145,028,587$ 5,308,386$ 4,359,954$ 154,696,927$ 11,969,162$ Business-Type Activities - Enterprise Funds
City of Indio
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements 33

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Nonmajor Activities
Enterprise Internal
Water Electric Funds Total Service Funds
OPERATING REVENUES:

Sales and service charges 26,334,838 $ 4,319,273 $ 2,069,830 $ 32,723,941 $ - $ Interdepartmental charges - - - - 21,697,074 Other income 160,117 - 350,000 510,117 216,120 Total operating revenues 26,494,955 4,319,273 2,419,830 33,234,058 21,913,194 OPERATING EXPENSES:

Personnel services 7,358,597 - 46,280 7,404,877 11,637,233 Contractual services 3,777,481 61,131 910,753 4,749,365 1,814,014 Repairs and maintenance 6,303,323 - 565,916 6,869,239 2,923,093 Depreciation and amortization expense 8,348,334 - 72,635 8,420,969 3,544,880 Materials and supplies 682,950 - 533,408 1,216,358 3,695,191 Rentals and leases 22,196 - - 22,196 - Utilities 2,009,472 - - 2,009,472 - Total operating expenses 28,502,353 61,131 2,128,992 30,692,476 23,614,411 OPERATING INCOME (LOSS) (2,007,398) 4,258,142 290,838 2,541,582 (1,701,217) NONOPERATING REVENUE (EXPENSES):

Interest revenue 3,280,198 2,417,022 197,821 5,895,041 3,435 Interest expense (1,707,350) (3,335,213) (7,327) (5,049,890) (59,408) Loss on disposal of asset (24,389) - - (24,389) (335,504) Total nonoperating revenue (expenses) 1,548,459 (918,191) 190,494 820,762 (391,477)

INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS (458,939) 3,339,951 481,332 3,362,344 (2,092,694) CAPITAL CONTRIBUTIONS:

Capital grants 1,673,904 - - 1,673,904 - Capital impact fees 1,795,892 - - 1,795,892 - Capital contributions - - - - 70,374 Total capital contributions 3,469,796 - - 3,469,796 70,374 CHANGES IN NET POSITION 3,010,857 3,339,951 481,332 6,832,140 (2,022,320) NET POSITION:

Beginning of year, as previously reported 142,408,663 887,096 3,878,622 147,174,381 14,066,827 Change in accounting principle (390,933) - - (390,933) (75,345) Correction of error - 1,081,339 - 1,081,339 - Beginning of year, as restated (Note 16) 142,017,730 1,968,435 3,878,622 147,864,787 13,991,482 End of the year 145,028,587$ 5,308,386 $ 4,359,954$ 154,696,927$ 11,969,162$ Business-Type Activities - Enterprise Funds
City of Indio
Statement of Revenues, Expenses, and Changes in Net Position For the Year Ended June 30, 2025
Proprietary Funds
See accompanying Notes to the Basic Financial Statements 35

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Nonmajor Activities
Enterprise Internal
Water Electric Funds Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users 25,280,711$ 3,883,747 $ 2,795,754 $ 31,960,212$ -$ Receipts from interfund services and charges - - - - 21,927,240 Payments to suppliers and service providers (10,777,440) (48,394) (1,943,693) (12,769,527) (7,901,588) Payments to employees for salaries and benefits (7,192,251) - (51,626) (7,243,877) (10,454,132) Net cash provided by operating activities 7,311,020 3,835,353 800,435 11,946,808 3,571,520

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Receipt from short-term interfund borrowing - 1,767,630 - 1,767,630 - Payment to short-term interfund borrowing (2,729,493) - - (2,729,493) (111,980) Net cash provided by noncapital
financing activities (2,729,493) 1,767,630 - (961,863) (111,980)

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Capital impact fees 1,795,892 - - 1,795,892 - Acquisition and construction of capital assets (1,563,577) (29,806,100) - (31,369,677) (2,895,368) Principal paid on capital debt (2,655,096) - (59,265) (2,714,361) (1,130,080) Interest paid on capital debt (1,722,784) (3,535,163) (7,497) (5,265,444) (58,173) Capital grants 1,673,904 - - 1,673,904 - Net cash provided by (used in) capital and
related financing activities (2,471,661) (33,341,263) (66,762) (35,879,686) (4,083,621) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest on investments 3,280,198 2,417,022 197,821 5,895,041 3,435 Net cash provided by investing activities 3,280,198 2,417,022 197,821 5,895,041 3,435 Net change in cash and cash equivalents 5,390,064 (25,321,258) 931,494 (18,999,700) (620,646) CASH AND CASH EQUIVALENTS:

Beginning of year 64,069,355 54,166,432 6,196,301 124,432,088 12,189,735 End of year 69,459,419$ 28,845,174 $ 7,127,795 $ 105,432,388 $ 11,569,089 $ CASH AND CASH EQUIVALENTS:

Cash and investments 69,447,289 - 7,127,795 76,575,084 11,463,655 Cash and investments with fiscal agent 12,130 28,845,174 - 28,857,304 105,434 Total cash and cash equivalents 69,459,419$ 28,845,174 $ 7,127,795 $ 105,432,388 $ 11,569,089 $ NONCASH ITEMS:

Subscription asset addition (712,202)$ -$ -$ (712,202)$ (675,423)$ Subscription liability addition 712,202$ -$ -$ 712,202$ 615,531$ Capital contributions -$ -$ -$ -$ 70,374$ Business-Type Activities - Enterprise Funds
City of Indio
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements 36

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Nonmajor Activities
Enterprise Internal
Water Electric Funds Total Service Funds
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (Used in) Operating Activities:

Operating income (loss) (2,007,398) 4,258,142 290,838 2,541,582 (1,701,217) Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:

Depreciation/amortization expense 8,348,334 - 72,635 8,420,969 3,544,880 Changes in assets and liabilities:
(Increase) decrease in accounts receivable (197,536) (435,526) 20,131 (612,931) 14,046 (Increase) decrease in due from other governmen (992,929) - (173,370) (1,166,299) - (Increase) decrease in inventories (366,120) - 9,229 (356,891) - (Increase) decrease in prepaid items 5,171 - - 5,171 (181,445) (Increase) decrease in deferred outflows or resources
related to pension 776,640 - 2,576 779,216 205,419 (Increase) decrease in deferred outflows or resources
related to OPEB (1,390,278) - (4,046) (1,394,324) (785,933) Increase (decrease) in accounts payable 2,378,931 12,737 57,155 2,448,823 (136,746) Increase/(decrease) in accrued liabilities (223,785) - 177 (223,608) - Increase (decrease) in deposits payable (23,779) - 529,163 505,384 - Increase (decrease) in compensated absences 86,653 - - 86,653 178,720 Increase (decrease) in accrued claims and judgments - - - 848,901 Increase (decrease) in net pension liabilities (372,824) - (985) (373,809) 452,880 Increase (decrease) in net OPEB liabilities 1,903,050 - 746 1,903,796 1,352,896 Increase/(decrease) in deferred inflows of resources
related to pension (89,812) - (305) (90,117) (39,812) Increase/(decrease) in deferred inflows of resources
related to OPEB (523,298) - (3,509) (526,807) (181,069) Net cash provided by (used in)
operating activities 7,311,020$ 3,835,353 $ 800,435 $ 11,946,808$ 3,571,520$ Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2025
Business-Type Activities - Enterprise Funds
City of Indio
See accompanying Notes to the Basic Financial Statements 37

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38

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FIDUCIARY FUND FINANCIAL STATEMENTS
39

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40

Independent auditor's report and the City's Annual Comprehensive Financi... Page 328 of 596 Private
Purpose Trust
Fund
RDA Successor Custodial
Agency Fund Funds
ASSETS:

Cash and investments 4,318,979$ 11,146,490 $
Cash and investments held by bond trustee 1,685,248 4,769,152 Accounts receivable - 164,176 Property held for resale 769,500 -
Total assets 6,773,727 16,079,818
LIABILITIES:

Accounts payable - 369,487
Accrued liabilities 6,099 -
Accrued interest 743,524 -
Deposits payable 4,251 296,251
Long-term liabilities:

Due in one year 2,745,000 -
Due in more than one year 37,639,636 -
Total liabilities 41,138,510 665,738
NET POSITION (DEFICIT):

Restricted for:

Individuals, organizations, and other governments (34,364,783) 15,414,080 Total net position (deficit) (34,364,783)$ 15,414,080 $ June 30, 2025
Statement of Fiduciary Net Position
City of Indio
Fiduciary Funds
See accompanying Notes to the Basic Financial Statements 41

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Purpose Trust
Fund
RDA Successor Custodial
Agency Fund Funds
ADDITIONS:

Investment Earnings:

Interest and net increase in fair value of investments 201,196 $ 747,855 $ Charges for services - 1,146,705 Taxes and assessments 4,850,159 5,438,086
Miscellaneous 125,000 200
Total additions 5,176,355 7,332,846
DEDUCTIONS:

Administrative expense - 53,163 Contractual services 193,682 752,620
Interest expense 1,788,065 1,960,178
Principal payments - 3,931,081 Total deductions 1,981,747 6,697,042
Change in net position 3,194,608 635,804
NET POSITION (DEFICIT):

Beginning of year (37,559,391) 14,778,276
End of year (34,364,783)$ 15,414,080 $
City of Indio
Statement of Change in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 42

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43 NOTES TO THE BASIC FINANCIAL STATEMENTS

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Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

45 Page

Note 1 – Summary of Significant Accounting Policies ............................................................................................ 49

A. Description of Reporting Entity ............................................................................................... ....................... 49 B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation ......................................... 51 C. Appropriations Limit ....................................................................................................................................... 55 D. Encumbrances .................................................................................................................................................. 55 E. Cash, Cash Equivalents, and Investments ....................................................................................................... 55 F. Fair Value Measurement ........................................................................................................ ......................... 55 G. Inventories and Prepaid Items ......................................................................................................................... 56 H. Property/Land Held for Resale ........................................................................................................................ 56 I. Capital Assets .................................................................................................................................................. 56 J. Leases .............................................................................................................................................................. 57 K. Subscription-Based Information Technology Arrangements .......................................................................... 58 L. Compensated Absences ................................................................................................................................... 58 M. Property Taxes ................................................................................................................................................. 59 N. Claims and Judgments ..................................................................................................................................... 59 O. Amortization of Bond Premiums and Discounts ............................................................................................. 59 P. Unamortized Gain/Loss on Refunding ............................................................................................................ 59 Q. Deferred Outflows/Inflows of Resources ........................................................................................................ 60 R. Pensions ........................................................................................................................................................... 60 S. Other Post-Employment Benefits .................................................................................................................... 60 T. Net Position ..................................................................................................................................................... 61 U. Fund Balance ................................................................................................................................................... 61 V. Estimates .......................................................................................................................................................... 62 W. Implementation of New GASB Pronouncements ............................................................................................ 62

Note 2 – Stewardship, Compliance, and Accountability ......................................................................................... 63

A. Deficit Fund Balances and Deficits in Internal Service Funds ........................................................................ 63 B. Compliance with Budgetary Limitations ......................................................................................................... 64

Note 3 – Cash and Investments .............................................................................................................................. ... 64

A. Demand Deposits ............................................................................................................................................. 65 B. Investments Authorized by the California Government Code and the City’s Investment Policy ................... 65 C. Investments Authorized by Debt Agreements ................................................................................................. 66 D. Disclosures Relating to Interest Rate Risk ...................................................................................................... 66 E. Disclosures Relating to Credit Risk ................................................................................................................. 67 F. Concentration of Credit Risk ........................................................................................................................... 67 G. Custodial Credit Risk ......................................................................................................... ............................. 67 H. Fair Value Measurement ........................................................................................................ ......................... 68 I. Investment in State Investment Pool ............................................................................................................... 68

Note 4 – Interfund Transactions .............................................................................................................................. . 69

A. Due to/From Other Funds ................................................................................................................................ 69 B. Transfers In/Transfers Out ............................................................................................................................... 69

Note 5 – Notes and Loans Receivable ....................................................................................................................... 70

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Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2025

46 Page

Note 6 – Lease Receivable .......................................................................................................................................... 71

Note 7 – Property Held for Resale ............................................................................................................................. 71

Note 8 – Capital Assets ............................................................................................................................................... 72

Note 9 – Compensated Absences ............................................................................................................................... 74

Note 10 – Long-Term Debt ........................................................................................................................................ 74

A. Governmental Activities .................................................................................................................................. 74 B. Business-Type Activities ................................................................................................................................. 78

Note 11 – Pension Plans .............................................................................................................................................. 81

A. General Information about the Pension Plan ................................................................................................... 81 B. Net Pension Liability ....................................................................................................................................... 83 C. Changes in the Net Pension Liability .............................................................................................................. 85 D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions ............... 87

Note 12 – Other Postemployment Benefits (“OPEB”) ............................................................................................ 88

A. General Information about the OPEB Plan ..................................................................................................... 88 B. Net OPEB Liability ............................................................................................................ ............................. 89 C. Changes in Net OPEB Liability ....................................................................................................................... 90

Note 13 – Liability, Property and Workers Compensation Liabilities .................................................................. 92

A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement ...................................................... 92 B. Self-Insurance Programs of the Authority ....................................................................................................... 92 C. Purchased Insurance ........................................................................................................................................ 93 D. Adequacy of Protection ................................................................................................................................... 94

Note 14 – Net Investment in Capital Assets .............................................................................................................. 94

Note 15 – Fund Balance Classifications .................................................................................................................... 95

Note 16 – Restatement of Beginning Net Position .................................................................................................... 96

Note 17 – Debt Issued Without Government Commitment .................................................................................... 96

Note 18 – Co
ntingencies and Commitments ............................................................................................................. 97

Note 19 – Joint Venture Agreements ........................................................................................................................ 98

Note 20 – Tax Abatement Agreements ..................................................................................................................... 99

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Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2025

47 Page

Note 21 – Successor Agency Trust for Assets of Former Redevelopment Agency ............................................. 100

A. Cash and Investments .................................................................................................................................... 101 B. Land Held for Resale ..................................................................................................................................... 101 C. Long-Term Liabilities.......................................................................................................... .......................... 101 D. Pledged Revenue ........................................................................................................................................... 104

Note 22 – Subsequent Events ................................................................................................................................... 104

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Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

49 Note 1 – Summary of Significant Accounting Policies

The basic financial statements of the City of Indio, Califor nia (the “City”) have been pr epared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as applied to government units.

The Governmental Accounting Standards Board (“GASB”) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.

A. Description of Reporting Entity

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

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

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

Blended Component Units:

Indio Public Financing Authority

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

Housing Authority of the City of Indio

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

A. Description of Reporting Entity (Continued)

Blended Component Units (Continued):

Industrial Development Authority of the City of Indio

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

Indio Water Authority

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

Indio Financing Authority

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

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

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

Separate financial statements of the Authority are not prepared.

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

Indio Electric Financing Authority

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

A. Description of Reporting Entity (Continued)

Blended Component Units: (Continued)

Indio Electric Financing Authority (Continued)

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

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

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

Government-Wide Financial Statements

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

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

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

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

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

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

Fund Financial Statements

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

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

Governmental Fund Financial Statements

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

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

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

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

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

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

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

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

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

Governmental Fund Financial Statements (Continued)

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

Recognition of governmental fund ty pe revenue represented by non-current receivables are deferred until they become current receivables. Noncurrent portions of General Fund’s long-term receivables are offset by nonspendable fund balance.

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

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

The City reports the following major governmental funds:

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

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

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

Proprietary Fund Financial Statements

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

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

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

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

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

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

Proprietary Fund Financial Statements (Continued)

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

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

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

Additionally, the City reports the following proprietary fund types:

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

Fiduciary Fund Financial Statements

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

The City reports the following fiduciary fund types:

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

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

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

C. Appropriations Limit

Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements. For th e fiscal year ended June 30, 2025, proceeds of taxes did not exceed appropriations.

D. Encumbrances

Encumbrance accounting is used in the governmental f unds to record commitments for the expenditure of resources, such as purchase orders and contracts. A lthough encumbrances represent commitments, they do not constitute expenditures or liabilities. Encumbrances are supported by resources that have already been classified as committed or assigned fund balance, as applicable, rather than being reported as a separate restriction of fund balance.

E. Cash, Cash Equivalents, and Investments

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

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

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

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

F. Fair Value Measurement

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

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

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

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

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

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

G. Inventories and Prepaid Items

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

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

H. Property/Land Held for Resale

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

I. Capital Assets

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

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

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

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

The following schedule summarizes capital asset useful lives:

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

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

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J. Leases

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

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

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

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

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

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

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

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

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

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

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

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

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

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

K. Subscription-Based Information Technology Arrangements

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

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

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

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

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

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

L. Compensated Absences

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

A liability is recorded for unused vacation and sim ilar compensatory leave balances since the employees’ entitlement to these balances are attributable to services alre ady rendered and it is proba ble that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement.

A liability is recorded for unused sick l eave to the extent that the leave is attributable to services already rendered and it is more likely than not that the leave will be used for paid time off. The liability includes unused balances of employees who are currently eligible to receive termination payments, as well as those employees who are expected to become eligible based on continued employmen t. Amounts that are not expected to be used or settled are not recognized as a liability.

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

L. Compensated Absences (Continued)

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

M. Property Taxes

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

The property tax calendar is as follows:

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

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

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

N. Claims and Judgments

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

O. Amortization of Bond Premiums and Discounts

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

P. Unamortized Gain/Loss on Refunding

Gain/Loss on refunding debt is deferred and amortized over the shorter of the term of the new debt or the refunded debt using the straight-line method, which materi ally approximates the effective interest method. These are reported as deferred inflows or outflows of resources.

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Q. Deferred Outflows/Inflows of Resources

The statement of financial position and balance sheet – governmental funds re ports separate sections for deferred outflows of resources and deferred inflows of resources, when applicable.

Deferred Outflows of Resources represent consumption of net assets that applies to future periods. The City reports pension and other benefits (“ OPEB”) contribution after measuremen t date and deferred loss related to pension, OPEB, and debt refunding in this category.

Deferred Inflows of Resources represent acquisition of net assets that apply to future periods. The City reports unavailable revenues, deferred gain related to pension, OPEB, debt refunding, and leases in this category.

R. Pensions

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

The following timeframes are used for pension reporting:

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024

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

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

S. Other Post-Employment Benefits

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

Investments are reported at fair value.

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S. Other Post-Employment Benefits (Continued)

The following timeframes are used for OPEB reporting:

Valuation Date June 30, 2024
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024

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

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

T. Net Position

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

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

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

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

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

U. Fund Balance

Governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. As of June 30, 2025, fund balances for governmental funds are made up of the following:

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

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U. Fund Balance (Continued)

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

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

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

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

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

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

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

V. Estimates

The preparation of financial statemen ts in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and discl osures. Accordingly, actual results could differ from those estimates.

W. Implementation of New GASB Pronouncements

GASB Statement No. 101 – In June 2022, GASB issued Statement No. 101, Compensated Absences . The objective of this Statement is to better meet the inform ation needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Implementation of this Statement resulted in restatement of beginning net position at July 1, 2024 presented in Note 16.

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W. Implementation of New GASB Pronouncements (Continued)

GASB Statement No. 102 – In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government's vulnerabilities due to cer tain concentrations or constraints which may limit a government's ability to acquire resources or control spe nding. Application of this statement did not have a significant effect on the City’s financial statements for the fiscal year ended June 30, 2025.

Note 2 – Stewardship, Compliance, and Accountability

A. Deficit Fund Balances and Deficits in Internal Service Funds

The following funds had deficit balances and net positions as of June 30, 2025:

Funds Amount
Nonmajor Governmental Funds:

Homeland Security Special Revenue Funds (22,858)$
Community Development Block Grant
Special Revenue Funds (10,675)
Internal S ervice Funds:

Fleet Maintenance (2,191,589)

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

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

B. Compliance with Budgetary Limitations

The following funds exceeded appropriation amounts for the year ended June 30, 2025:

Final
Funds Appropriation Expenditures Excess
Major Funds:

General Fund:

Public safety:

Police investigations 9,935,617 $ 10,031,680 $ (96,063) $ Public works:

Parks and parkways 4,105,554 4,171,844 (66,290) Debt service:

Principal retirement - 209,067 (209,067) Interest and fiscal charges - 9,994 (9,994) Nonmajor Governmental Funds:

Public Safety Special Rev enue Fund
Capital outlay - 521,258 (521,258) LLEBG S pe ci al Re ve nue Fund
Public safety 15,421 26,402 (10,981) Air Quality Special Rev enue Fund
Capital outlay - 1,882 (1,882) HBRRP S pecial Re venue Fund
Public works - 152,703 (152,703) Communities Facilities District Special Revenue Fund
Public safety 19,898 63,125 (43,227) Neighborhood Stabilization Grant 2
Special Revenue Fund
Public works - 5,540 (5,540) Lighting and Landscape Special Revenue Fund
Current:

Public works 1,797,013 1,802,095 (5,082) SB-1 Transportation Special Revenue Fund
Capital outlay - 1,547,274 (1,547,274)

Note 3 – Cash and Investments

Cash and investments as of June 30, 2025, are classified in the accompanying financial statements as follows:

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

Cash and investments 157,112,714$ 76,575,084$ 15,465,469$ 249,153,267$ Restricted assets:

Cash and investments 4,151,373 - - 4,151,373 Cash with escrow agent 2,334,828 - - 2,334,828 Cash and investments held by bond trustee 33,312,072 28,857,304 6,454,400 68,623,776 Total cash and investments 196,910,987$ 105,432,388$ 21,919,869$ 324,263,244$

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

65 Note 3 – Cash and Investments (Continued)

Cash and investments as of June 30, 2025 consist of the following:

Cash on hand 9,200$
Deposits with financial institutions 30,004,759
Investments 294,249,285
Total cash and inv estments 324,263,244$

A. Demand Deposits

The carrying amounts of the City’s de mand deposits were $30,004,759 at June 30, 2025. Bank balances at that date were $36,509,773, the total amount of which was insured or collateralized with accounts held by the pledging financial institutions in the City’s name as discussed below.

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

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

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

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

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

66 Note 3 – Cash and Investments (Continued)

C. Investments Authorized by Debt Agreements

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

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

D. Disclosures Relating to Interest Rate Risk

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

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

12 Months 13 to 36 37 to 60
Investment Type Total or Less Months Months
U.S. Treasury Issues 47,019,190 $ 4,948,564 $ 17,491,391$ 24,579,235$ U.S. Government Sponsored
Enterprise Securities 20,701,831 3,105,295 7,010,934 10,585,602 Supranationals 5,233,808 4,081,106 - 1,152,702 Municipal Securities 1,180,590 - - 1,180,590 Corporate Medium Term Notes 31,259,832 1,473,320 10,649,189 19,137,323 Asset-Backed Securities 10,021,092 23,504 2,621,111 7,376,477 Money Market Mutual Funds 6,926,598 6,926,598 - - Local Agency Investment Fund 105,095,821 105,095,821 - - Held with Bond Trustees:

Money Market Mutual Funds 66,810,523 66,810,523 - - Total investments 294,249,285$ 192,464,731 $ 37,772,625 $ 64,011,929$ Remaining Maturity (in Months)

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

67 Note 3 – Cash and Investments (Continued)

E. Disclosures Relating to Credit Risk

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

Mi ni m um
Legal Exempt or
Investment Type Total Rating Aaa Aa A Not Rated
U.S. Treasury Issues 47,019,190 $ N/A 47,019,190 $ - $ - $ - $ U.S. Government Sponsored
Enterprise Securities 20,701,831 N/A 20,701,831 - - - Supranationals 5,233,808 AA 5,233,808 - - - Municipal Securities 1,180,590 N/A - 1,180,590 - - Corporate Medium Term Notes 31,259,832 A 3,652,650 5,753,270 21,853,912 - Asset-Backed Securities 10,021,092 Aa 10,021,092 - - - Money Market Mutual Funds 6,926,598 Aaa 6,926,598 - - - Local Agency Investment Fund 105,095,821 N/A - - - 105,095,821 Held with Bond Trustees:

Money Market Mutual Funds 66,810,523 Aaa 66,810,523 - - - Total inv estments 294,249,285$ 160,365,692 $ 6,933,860 $ 21,853,912$ 105,095,821$ Moody`s Rating as of Fiscal Year End

F. Concentration of Credit Risk

The City diversifies its investments by security type and institution. The investment polic y of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code, with the exceptions of United States Treasury Obligations, mu tual funds, and external investment pools. As of June 30, 2025, investments in an y one issuer that represents 5% or more of total City investments are as follows:

Reported
Issuer Investment Type Amount
Federal Home Loan Mortgage Co. U.S. Government Sponsored Enterprise Securities 14,111,497$

G. Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for i nvestments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another part y. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivide d collateral pool held by a depository regulated under state law (unless so waived by the governmental unit).

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

68 Note 3 – Cash and Investments (Continued)

G. Custodial Credit Risk (Continued)

The fair value of the pledged securities in the collater al pool must equal at least 110% of the total amount deposited by the public agencies. California law also a llows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

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

As of June 30, 2025, the City’s deposits with financial institutions in excess of federal depository insurance limits were held in collateralized accounts.

H. Fair Value Measurement

The City has the following recurring fair value measurements as of June 30, 2025:

Quoted Process Significant Other
in Active Markets Observable
for Identical Assets Inputs
Investment Type (Level 1) (Level 2) Uncategorized Total U.S. Treasury Issues 47,019,190$ -$ -$ 47,019,190$ U.S. Government Sponsored
Enterprise Securities - 20,701,831 - 20,701,831 Supranationals - 5,233,808 - 5,233,808 M unicipal Securities - 1,180,590 - 1,180,590 Corporate Medium Term Notes - 31,259,832 - 31,259,832 Asset-Backed Securities - 10,021,092 - 10,021,092 Money Market Mutual Funds - - 6,926,598 6,926,598 Local Agency Investment Fund - - 105,095,821 105,095,821 Held with Bond Trustees:

Money Market Mutual Funds - - 66,810,523 66,810,523 Total investments 47,019,190$ 68,397,153$ 178,832,942$ 294,249,285 $ Fair Value M easurement

Level 2 investments are valued based on institutional bond quotes or matrix pricing.

I. Investment in State Investment Pool

The City is a voluntary participant in the Local Agency Investment Fund (“LAIF”) that is regulated by the California Government Code under the oversight of the Treasu rer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based on the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF does not impose limits or restrictions on participant withdrawals, and the entire balance of the City’s investment in the portfolio is available for withdrawal at any time. LAIF is not registered with the Securities and Exch ange Commission and is not rated. LAIF is reported at amortized cost, which approximates fair value. As of June 30, 2025, the City had $105,095,821 invested in LAIF.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

69 Note 4 – Interfund Transactions

A. Due to/From Other Funds

At June 30, 2025, the City had the following interfund receivables and payables:

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

General Fund 7,041,038 $ 228,253 $ 2,930,079 $ 15,445 $ 10,214,815$ Governmental Funds
Due to Other Funds
Proprietary Funds

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

B. Transfers In/Transfers Out

The following schedule summarizes the City’s transfer activity for the year ended June 30, 2025:

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

General Fund - $ 28,194,128$ - $ 691,183$ 28,885,311$ Capital Improvements Fund - - 5,898,551 630,300 6,528,851 General Debt Service Fund - 42,872,376 - - 42,872,376 Nonmajor Governmental Funds 5,065,546 - - 119,103 5,184,649 Total 5,065,546$ 71,066,504 $ 5,898,551 $ 1,440,586 $ 83,471,187$ Governmental Funds
Transfers In

a) The General Fund transferred $28,194,128 to Capital Pr oject Fund to fund capital improvement projects, $691,183 to Nonmajor Governmental Funds for the annual maintenance contributions to the various Landscape & Lighting Districts (LLDs), for interest earni ng due to the Opioid Special Revenue fund, and for the City’s annual maintenance contribution.
b) The Capital Improvements Fund transferred $5,898,551 to General Debt Service Fund to fund annual debt service obligations, and $630,300 to Nonmajor Governmental Funds to fund street related project expenditures.
c) The General Debt Service Fund transferred $42,872, 376 to Capital Project Fund bond funded capital activities.
d) The Nonmajor Governmental Funds transferred $5,065,546 to the General Fund for police and fire services and $119,103 to Nonmajor Governmental Funds for Homeland Security costs.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

70 Note 5 – Notes and Loans Receivable

The following is a summary of notes and loans receivable as of June 30, 2025:

First time home buyer notes issued homebuyers $ 46,100 Neighborhood Stabilization deferred loan 1,215,892 Horizons at Indio senior housing project 3,846,889 Geovel, Inc. secured promissory note 2,994,804 Tenant improvement loans 173,430
Pacific West Communities acquisition loan 2,602,083 10,879,198
Allowance for loan forgiveness (1,861,391)
Total notes and loans receivable $ 9,017,807

First Time Home Buyer Program

The City administered a First Time Home Buyer Program . The program is designed to encourage construction or improvement in low-to-moderate income housing or other projects. Under these programs, loans are provided under favorable terms to homeowners or developers who agree to spend these funds in accordance w ith the City’s terms. As of June 30, 2025, notes receivable of $46,100 reported under the Indio Housing Authority.

Neighborhood Stabilization Program

The Neighborhood Stabilization Program is funded by the U.S. Department of Housing and Urban Development (HUD) to help very low-to-moderate-income first-time home buyers purchase completely renovated foreclosed and/or abandoned homes. Three targeted areas in the City of Indi o (“City”) were selected to create the greatest impact by stabilizing and bringing new families into older established neighborhoods. The program will be available to anyone that is a first-time home buyer and has not owned a home in th e last three years, has an annual income that is not greater than 120% of the area median income as publis hed by the U.S. Department of Housing and Urban Development (HUD). The amount of loans outstanding as of June 30, 2025, was $1,215,892.

Horizon at Indio Housing Project

The Horizons at Indio Senior Housing Project note w as issued on December 1, 2005 and is due in full on December 1, 2060 or at an earlier time if the acceleration cl ause of the agreement becomes effective as defined in the agreement. The note accrues interest at 1% annually. The amount of the not e outstanding as of June 30, 2025, was $3,846,889.

Geovel, Inc. Promissory Note

The Geovel, Inc. promissory note was provided to a major auto dealer so that the dealer could purchase 18 acres located on the north side of Varner Road between Adams Street and Jefferson Street in an area known as the I-10 Auto Mall. The auto dealership generat es sales tax for the City. The site also fills the gap between the I-10 Auto Mall and other proposed dealership, making the site area more attractive for future development. The note was issued December 22, 2014 and is due in full on February 19, 2030 or at an earlier time if the Note is prepaid in whole or in part at any time, without charge, fee or premium, based on the prepayment clause defined in the agreement. The note accrues interest at 4% annually, provided, however, that after the outstanding principa l becomes due and payable, interest shall commence accruing at the lesser of 8% annually or the highest ra te permitted by law. The amount of the note outstanding as of June 30, 2025, was $2,994,804.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

71 Note 5 – Notes and Loans Receivable (Continued)

Tenant Improvement Loan

The City has entered into various commercial lease agreem ents, which require the City to cover tenant improvement costs. The terms vary from 4 to 7 years. Repayments are made monthly commencing upon the rent commencement date and the first of each month thereafter through the lease term as an additional rent. The amount of tenant improvement loan outstanding as of June 30, 2025 was $173,430.

Pacific West Communities Acquisition Loan

On September 2023, the City’s Housing Authority has entered into an acquisition loan agreements with Pacific West Communities for the development of affordable housing multifamily rental hous ing in the amount of $2,470,310. The loan accrues interest at a simple rate of 3% annually, co mmencing from the date of the initial disbursement. The loan has a term of 55 years from the issuance date of the Certif icate of Occupancy for the project. The amount of the loan outstanding as of June 30, 2025 was $2,602,083.

Note 6 – Lease Receivable

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

0.5770% to 3.5863%. Some leases have extension options ranging from 12 months to 2 years. At June 30, 2025, the value of the lease receivable was $687,629 and the value of the deferred inflow of resources was $503,169. The City recognized lease revenue of $175,642 during the fiscal year.

The principal and interest to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2026 277,351$ 19,033 $ 296,384 $
2027 154,548 13,403 167,951
2028 140,832 9,194 150,026
2029 68,426 5,301 73,727
2030 41,247 2,446 43,693
2031 5,225 839 6,064
Total 687,629$ 50,216 $ 737,845 $

Note 7 – Property Held for Resale

At June 30, 2025, the property held for resale is recorded as follows:

Major Governmental Fund:

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

Indio Housing Authority 164,000
Total $ 5,505,588

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

72 Note 8 – Capital Assets

The summary of changes in governmental activities capital assets for the year ended June 30, 2025 is as follows:

Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Capital assets, not being de preciated:

Construction in process 130,258,671$ 96,627,009 $ (759,328)$ (14,412,115)$ 211,714,237$ Land 43,380,561 440,190 - - 43,820,751 Rights of way 54,699,719 - - - 54,699,719 Total capital assets, not being depreciate d 228,338,951 97,067,199 (759,328) (14,412,115) 310,234,707 Capital assets, being depreciate d:

Structure and improvements 37,845,348 154,985 - - 38,000,333 Machinery and equipment 12,560,970 1,280,118 - - 13,841,088 Vehicles 16,102,290 1,685,624 - - 17,787,914 Infrastructure: street network 632,541,954 1,282,596 - 14,412,115 648,236,665 Artwork - 17,000 - - 17,000 Total capital assets, be ing depreciated 699,050,562 4,420,323 - 14,412,115 717,883,000 Less accumulate d depreciation for:

Structures and improvements (15,165,201) (947,507) - - (16,112,708) Machinery and equipment (8,754,205) (1,378,624) - - (10,132,829) Vehicles (10,779,621) (1,162,720) - - (11,942,341) Infrastructure: street network (342,849,160) (16,009,734) - - (358,858,894) Artwork - (213) - - (213) Total accumulated depreciation (377,548,187) (19,498,798) - - (397,046,985) Total capital assets, be ing
depreciate d, net 321,502,375 (15,078,475) - 14,412,115 320,836,015 Intangible capital assets, being amortized:

Right-to-use lease assets - equipment 221,136 9,272 (104,835) - 125,573 Rig ht-to-use lease assets - infrastructure 60,336 - - - 60,336 Right-to-use subscription assets 5,824,343 712,060 (617,586) - 5,918,817 Total intangible capital assets, net 6,105,815 721,332 (722,421) - 6,104,726 Less accumulated amortization for:

Right-to-use lease assets - equipment (58,775) (117,772) 104,835 - (71,712) Right-to-use lease assets - infrastructure (36,201) (12,067) - - (48,268) Right-to-use subscription assets (1,862,369) (1,120,455) 282,082 - (2,700,742) Total accumulated amortization (1,957,345) (1,250,294) 386,917 - (2,820,722) Total intangible capital assets, being amortized, net 4,148,470 (528,962) (335,504) - 3,284,004 Total capital assets, net 553,989,796$ 81,459,762 $ (1,094,832)$ -$ 634,354,726$

Depreciation and amortization expense was charged to functions/programs of governmental activities for the year ended June 30, 2025 as follows:

General government 413,210$
Public safety 227,456
Public works 16,098,170
Community development 465,376
Internal service funds 3,544,880
Total 20,749,092$

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

73 Note 8 – Capital Assets (Continued)

The summary of changes in business-type activities capital assets for the year ended June 30, 2025 is as follows:

Balance
July 1, 2024 Balance
(As Restated) Additions Deletions Transfers June 30, 2025 Capital assets, not being depre ciated:

Land 3,138,674 $ - $ - $ - $ 3,138,674$ Construction in progress 14,435,382 30,682,148 - (619,794) 44,497,736 Total capital assets, not being depreciated 17,574,056 30,682,148 - (619,794) 47,636,410 Capital assets, being depre ciated:

Structures and improvements 15,351,445 - - - 15,351,445 Machinery and equipment 3,529,782 153,701 - - 3,683,483 Vehicles 3,959,992 518,104 - - 4,478,096 Utility distribution system 296,460,507 15,724 - 619,794 297,096,025 Total capital assets, being depreciated 319,301,726 687,529 - 619,794 320,609,049 Less accumulated depreciation for:

Structures and improvements (5,197,826) (382,799) - - (5,580,625) Machinery and equipment (3,184,614) (74,715) - - (3,259,329) Vehicles (2,109,911) (407,194) - - (2,517,105) Utility distribution system (175,141,995) (7,419,456) - - (182,561,451) Total accumulated depreciation (185,634,346) (8,284,164) - - (193,918,510) Total capital assets, being
depreciated, net 133,667,380 (7,596,635) - 619,794 126,690,539 Intangible capital assets, being amortized:

Right-to-use lease assets - vehicles 283,461 - - - 283,461 Ri
ght-to-use subscription assets 27,132 712,202 - (27,132) 712,202 Total intangible capital assets, net 310,593 712,202 - (27,132) 995,663 Less accumulated amortization for:

Right-to-use lease assets - vehicles (41,967) (62,953) - - (104,920) Right-to-use subscription assets (2,743) (73,852) - 2,743 (73,852) Total accumulated amortization (44,710) (136,805) - 2,743 (178,772) Total intangible capital assets, being amortized, net 265,883 575,397 - (24,389) 816,891 Total capital assets, net 151,507,319$ 23,660,910 $ -$ (24,389)$ 175,143,840$

Depreciation/amortization expense was charged in the follo wing function in the Statement of Activities for the year ended June 30, 2025:

Water Enterprise 8,348,334$
Golf Enterprise 72,635
Total 8,420,969$

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

74 Note 9 – Compensated Absences

Changes in compensated absences for the year ended June 30, 2025, are as follows:

Balance
July 1, 2024 Additions/ Balance Due within Due in More
(As R estated) (Deletions) June 30, 2025 One Year Than One Year Governmental Activities 4,408,293$ 192,525 $ 4,600,818 $ 3,220,573 $ 1,380,245 $ Business-Type Activities 774,077 86,653 860,730 602,511 258,219 Total 5,182,370$ 279,178 $ 5,461,548 $ 3,823,084 $ 1,638,464 $

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

Note 10 – Long-Term Debt

A. Governmental Activities

Changes in long-term obligations for the year ended June 30, 2025 for the governmental activities are as follows:

Balance Balance Due within Due in More
July 1, 2024 Additions Deletions June 30, 2025 One Year Than One Year Gove rnme ntal Acti vi ti e s:

Bonds Payable:

Lease Revenue Refunding Bonds, Series 2016A 11,435,000$ -$ (620,000)$ 10,815,000$ 655,000$ 10,160,000$ Taxable Lease Revenue Refunding Bonds, Series 2016B 1,690,000 - (550,000) 1,140,000 570,000 570,000 Judgment Obligation Bonds, Series 2017 11,745,000 - (715,000) 11,030,000 735,000 10,295,000 Lease Revenue Refunding Bonds, Series 2022A 117,355,000 - (1,355,000) 116,000,000 2,445,000 113,555,000 Unamortized Bond Premiums/(Discounts):

Lease Revenue Refunding Bonds, Series 2016A 584,841 - (41,808) 543,033 - 543,033 Judgment Obligation Bonds, Series 2017 (170,309) - 13,101 (157,208) - (157,208) Lease Revenue Refunding Bonds, Series 2022A 9,425,269 - (325,009) 9,100,260 - 9,100,260 Financing Agreement:

Lease Payable 160,179 9,272 (103,782) 65,669 30,212 35,457 Subscription Payable 3,113,692 652,168 (1,241,409) 2,524,451 857,361 1,667,090 Total Gove rnme ntal Acti vi ti e s 155,338,672$ 661,440 $ (4,938,907)$ 151,061,205$ 5,292,573 $ 145,768,632$

Lease Revenue Refunding Bonds, Series 2016A

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

The Series 2016A bonds consist of $11,720,000 of ser ial bonds and $2,430,000 of term bonds. The serial bonds accrue interest at rates between 3.00% and 5.00% and the principal amounts mature be tween November 1, 2019 and November 1, 2037 in amounts ra nging from $500,000 to $1,005,000. Term bonds of $2,430,000 accrue interest at 3.00% and mature on November 1, 2031. At June 30, 2025, the outstanding balance was $10,815,000.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

75 Note 10 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Lease Revenue Refunding Bonds, Series 2016A (Continued)

The future debt service requirements as of June 30, 2025 are as follows:

Year Ending
June 30, Principal Interest Total
2026 655,000$ 378,588$ 1,033,588$
2027 685,000 345,088 1,030,088
2028 720,000 309,963 1,029,963
2029 755,000 273,088 1,028,088
2030 785,000 242,438 1,027,438
2031-2035 4,300,000 832,828 5,132,828
2036-2038 2,915,000 149,178 3,064,178
Total 10,815,000$ 2,531,169$ 13,346,169$

Taxable Lease Revenue Refunding Bonds, Series 2016B

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

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

1.520% and 3.650% and the principal amounts mature between November 1, 2016 and November 1, 2026 in amounts ranging from $445,000 to $570,000. At June 30, 2025, the outstanding balance was $1,140,000.

The future debt service requirements as of June 30, 2025 are as follows:

Year Ending
June 30, Principal Interest Total
2026 570,000$ 30,780 $ 600,780 $
2027 570,000 10,403 580,403
Total 1,140,000$ 41,183 $ 1,181,183$

Judgment Obligation Bonds, Series 2017

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

76 Note 10 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Judgment Obligation Bonds, Series 2017 (Continued)

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

1.250% and 4.250% and the principal amounts mature between November 1, 2017 and November 1, 2036 in amounts ranging from $650,000 to $1,140,000. At June 30, 2025, the outstanding balance was $11,030,000.

The future debt service requirements as of June 30, 2025 are as follows:

Year Ending
June 30, Principal Interest Total
2026 735,000$ 427,706$ 1,162,706$
2027 760,000 402,463 1,162,463
2028 790,000 374,844 1,164,844
2029 820,000 344,125 1,164,125
2030 855,000 310,625 1,165,625
2031-2035 4,835,000 995,044 5,830,044
2036-2037 2,235,000 95,944 2,330,944
Total 11,030,000$ 2,950,750$ 13,980,750$

Lease Revenue Refunding Bonds, Series 2022A

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

The Series 2022A Bonds include seria l and term bonds maturing November 1, 2042, November 1, 2047, and November 1, 2052, with interest rates ranging from 4.500% to 5.250%.

In the event of default under the Lease Agreement there is no right under any circumstances to accelerate the Base Rental Payments or otherwise declare by any Base Rental Payments not then in default to be immediately due and payable. There is no right under the indenture to accelerate debt service payments on the Bonds in the event of a default under the Indenture of the Lease Agreement. Reserve requirements for the Series 2022A bonds are disclosed in the bond documents. At June 30, 2025, the outstanding balance was $116,000,000.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

77 Note 10 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Lease Revenue Refunding Bonds, Series 2022A (Continued)

The future debt service requirements as of June 30, 2025 are as follows:

Year Ending
June 30, Principal Interest Total
2026 2,445,000$ 5,839,375 $ 8,284,375 $
2027 2,565,000 5,714,125 8,279,125
2028 2,695,000 5,582,625 8,277,625
2029 2,830,000 5,444,500 8,274,500
2030 2,975,000 5,299,375 8,274,375
2031-2035 17,290,000 24,048,750 41,338,750
2036-2040 19,455,000 19,146,131 38,601,131
2041-2045 20,350,000 14,133,825 34,483,825
2046-2050 26,275,000 8,084,325 34,359,325
2051-2053 19,120,000 1,427,606 20,547,606
Total 116,000,000$ 94,720,638 $ 210,720,638$

Lease Payable

The City entered into leases for canopy wireless internet 2 and equipment including an automated external defibrillator, postage meter, mobile office & restroom, and TicketPRO ticket writers. The leases have payments that range from $774 to $9,663 and interest rates that range from 0.3150% to 3.2950%. As of June 30, 2025, the total combined value of the lease liability is $65,669 and the current portio n of lease liability is $30,212. The combined value of the right to u se asset, as of June 30, 2025 of $185,909 with accumulated amortization of $119,980 is included within the right-to-use lease asset s in the governmental activities capital assets table in Note 8.

Future lease payments under the lease payable are as follows:

Year Ending
June 30, Principal Interest Total
2026 30,212 $ 1,273 $ 31,485 $
2027 19,126 710 19,836
2028 16,331 199 16,530
Total 65,669 $ 2,182 $ 67,851 $

Subscription Payable

The City has entered into various s ubscription agreements with various ve ndors for software. The terms of these subscriptions range from 13 months to 8 years. The subscriptions have interest rates ranging from 1.85% to

3.7643%. As of June 30, 2025, the outstanding subscription liability was $2,524,451.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

78 Note 10 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Subscription Payable (Continued)

The future subscription payments are as follows:

Year Ending
June 30, Principal Interest Total
2026 857,361$ 54,929 $ 912,290 $
2027 659,582 36,600 696,182
2028 556,431 20,392 576,823
2029 438,767 6,598 445,365
2030 12,310 290 12,600
Total 2,524,451$ 118,809 $ 2,643,260 $

B. Business-Type Activities

Summary of changes in long-term debts for the year e nded June 30, 2025 for the bus iness-type activities are as follows:

Balance Balance Due within Due in M ore
July 1, 2024 Additions Deletions June 30, 2025 One Year Than One Year Business-type Activities:

Bonds Payable:

Water Revenue Refunding Bonds, Series 2015A 42,220,000$ -$ (2,495,000)$ 39,725,000$ 2,620,000$ 37,105,000$ Electric Revenue Bonds, Series 2023A 59,010,000 - - 59,010,000 995,000 58,015,000 Unamortized Bond Premium:

Water Revenue Refunding Bonds, Series 2015A 896,181 - (56,012) 840,169 - 840,169 Electric Revenue Bonds, Series 2023A 5,798,533 - (199,950) 5,598,583 - 5,598,583 Lease payable 244,258 - (59,265) 184,993 61,343 123,650 Subscription payable 21,465 712,202 (160,096) 573,571 130,020 443,551 Total business-t ype activities 108,190,437$ 712,202 $ (2,970,323)$ 105,932,316 $ 3,806,363 $ 102,125,953 $

Water Revenue Refunding Bonds, Series 2015 A and B

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

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

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

79 Note 10 – Long-Term Debt (Continued)

B. Business-Type Activities (Continued)

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

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

At June 30, 2025, the outstanding balance of the Series 2015A bonds and Series 2015B bonds was $39,725,000 and the Series 2015B bonds were fully matured with no balance outstanding.

The annual debt service requirements to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2026 2,620,000$ 1,719,738$ 4,339,738$
2027 2,750,000 1,597,988 4,347,988
2028 2,835,000 1,470,113 4,305,113
2029 2,925,000 1,363,363 4,288,363
2030 3,030,000 1,276,044 4,306,044
2031-2035 16,910,000 4,478,969 21,388,969
2036-2040 8,655,000 1,415,663 10,070,663
Total 39,725,000$ 13,321,875$ 53,046,875$

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

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

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

80 Note 10 – Long-Term Debt (Continued)

B. Business-Type Activities (Continued)

Electric Revenue Refunding Bonds, Series 2023A

On December 2023, the Indio Electric Financing Aut hority (“IEFA”) issued $59,010,000 Electric Revenue Bonds, Series 2023 to finance the cost of electric substati on and related improvements to be located within the boundaries of the City, owned by IEFA and maintained a nd operated by Imperial Irrigation District (“IID”) as part of IID’s electric system. The bonds are secured by pledged revenues, which includes surcharge revenues collected by IID. Interest on the bonds is payable semiannually on January 1 and July 1, commencing July 1, 2024. The interest rates ranges from 5.00% to 5.25% and net original issue premium is $5,798,533.

Principal amounts are due beginning January 1, 2026 thro ugh January 1, 2053. The principal balance outstanding and unamortized premium as of June 30, 2025 are $59,010,000 and $5,598,583, respectively.

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

Year Ending
June 30, Principal Interest Total
2026 995,000$ 3,053,875 $ 3,257,467 $
2027 1,045,000 3,004,125 4,048,875
2028 1,100,000 2,951,875 4,049,125
2029 1,155,000 2,896,875 4,051,875
2030 1,210,000 2,839,125 4,051,875
2031-2035 7,035,000 13,223,625 20,258,625
2036-2040 8,980,000 11,275,925 20,252,875
2041-2045 11,575,000 8,687,438 20,264,938
2046-2050 14,935,000 5,314,575 20,249,550
2051-2053 10,980,000 1,172,588 16,202,288
Total 59,010,000$ 54,420,025 $ 116,687,492 $

Lease Payable

The City entered into 26-month to 54-month lease agreements for the use of golf carts. As of June 30, 2025, the value of the lease liability is $184,993. The City is require d to make monthly fixed payments of $4,686 to $5,564.

The lease has interest rates ranges from 0.218% to 3.4510%. The value of the right to use asset as of June 30, 2025 of $283,461 with accumulated amortization of $104,920 is included in the right-to-use lease assets – vehicle in the business-type activities capital assets table in Note 8.

Future lease payments under the lease payable are as follows:

Year Ending
June 30, Principal Interest Total
2026 61,343$ 5,420$ 66,763$
2027 63,494 3,269 66,763
2028 60,156 1,043 61,199
Total 184,993$ 9,732$ 194,725$

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

81 Note 10 – Long-Term Debt (Continued)

B. Business-Type Activities (Continued)

Subscription Payable

The City has entered into a 60-month su bscription agreement for the use of Planet Bid. The subscriptions has an interest rate of 3.4510%. As of June 30, 2025, the outstanding subscription liability was $573,571.

The future subscription payments are as follows:

Year Ending
June 30, Principal Interest Total
2026 130,020$ 14,123 $ 144,143 $
2027 138,615 10,912 149,527
2028 147,684 7,495 155,179
2029 157,252 3,862 161,114
Total 573,571$ 36,392 $ 609,963 $

Note 11 – Pension Plans

A. General Information about the Pension Plan

Plan Descriptions

The City contributes to the California Public Employ ees Retirement System (PERS); to both a miscellaneous agent multiple-employer and safety cost-sharing multiple employer defined benefit pension plans. PERS provides retirement and disability benefits, annual cost-of-living ad justments and death benefits to plan members and beneficiaries. PERS acts as a common investment and admi nistrative agent for participating public entities within the State of California. Benefit provisions and all othe r requirements are established by state statute and City ordinance. CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Forms and Publications.

Benefits Provided

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

82 Note 11 – Pension Plans (Continued)

A. General Information about the Pension Plan (Continued)

Benefits Provided (Continued)

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

Classic* PEPRA
Hire date
Prior to
January 1, 2013
Prior to
January 1, 2013
Benefit formula 2.7% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50 50
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 2.0% to 2.7% Required employee contribution rates 8.000% 7.750%
Required contribution during measurement period 12.010% 12.010% Miscellaneous Plans

Classic I* Classic II* PEPRA
Hire date
Prior to
July 1, 2012
July 1, 2012 -
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50 50 52
Monthly benefits, as a % of eligible compensation 3%, 50+ yrs 2.4%-3%, 50 yrs - 55+ yrs, respectively
2%-2.7%, 50 yrs -
57+ yrs, respectively
Required employee contribution rates 9.000% 9.000% 14.500% Required contribution during measurement period 29.090% 24.790% 14.500% Safety Plans

Employees Covered by Benefit Terms

At the June 30, 2023, valuation date, the following employees were covered by the benefit terms:

Miscellaneous Safety
Plans Plans
Active employees 193 64
Transferred and terminated employees 241 55
Retired employees and beneficiaries 282 239
Total 716 358

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

83 Note 11 – Pension Plans (Continued)

B. Net Pension Liability

Contribution Description

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

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

For the year ended June 30, 2025, the contributions made were in the amount of $5,029,009 and $5,956,285 for the miscellaneous and safety plans, respectively.

Actuarial Methods and Assumptions Used to Determine Total Pension Liability

The June 30, 2023 valua tions were rolled forward to determine the June 30, 2024 total pension liabilities, based on the following actuarial methods and assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Morta l i t
y Rate Table1
Post Retirement Benefit Increase
Entry Ag e Actuarial Cost Method

6.90%

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

The lesser of contract COLA up to 2.30%
until Purchasing Power Protection
Allowance Floor on Purchasing Power
applies, 2.30% thereafter

(1)The mortality table used was developed based on Cal PERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvements using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Change of Assumptions

There were no assumption changes in 2024.

Long-term Expected Rate of Return

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

84 Note 11 – Pension Plans (Continued)

B. Net Pension Liability (Continued)

Long-term Expected Rate of Return (Continued)

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

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

Discount Rate

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

85 Note 11 – Pension Plans (Continued)

C. Changes in the Net Pension Liability

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

Total Pension Plan Fiduciary Net Net Pension
L iability Position L iability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 (Valuation Date) 124,358,876$ 88,401,521$ 35,957,355$ Changes Recognized for the M easurement Period:

Service Cost 2,837,360 - 2,837,360 Interest on the total pension liability 8,591,957 - 8,591,957 Changes of Benefit Terms - - - Changes of Assumptions - - - Differences between Expected and Actual Experience 1,708,948 - 1,708,948 Contributions - Employer - 4,637,325 (4,637,325) Contributions - Employees - 1,218,499 (1,218,499) Net Investment Income - 8,585,685 (8,585,685) Benefit Payments, including Refunds of -
Employee Contributions (5,930,749) (5,930,749) - Administrative Expense - (71,933) 71,933 Other Miscellaneous Income/(Expense) - - - Net Changes during July 1, 2023 to June 30, 2024 7,207,516 8,438,827 (1,231,311) Balance at June 30, 2024 (Measurement Date) 131,566,392$ 96,840,348$ 34,726,044$ Increase (Decrease)
Miscellaneous Plan

Proportionate Share of the Net Pension Liability and Pension Expense

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

Total Pension Plan Fiduciary Net Net Pension
L iability Position L iability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 (Valuation Date) 156,608,910 $ 107,299,282 $ 49,309,628$ Balance at June 30, 2024 (Measurement Date) 164,819,704 116,621,053 48,198,651 Net Changes during 2023-2024 8,210,794 9,321,771 (1,110,977) Safety Plan
Increase (Decrease)

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

(1) In determining a cost-sharing plan’s proportionate share, total amount s of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2023). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

86 Note 11 – Pension Plans (Continued)

C. Changes in the Net Pension Liability (Continued)

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

(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2024). Risk pool FNP at the measureme nt date is then subtracted from this number to compute the NPL for the risk pool at the measuremen t date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at th e measurement date denotes the aggregate risk pool’s FNP at June 30, 2024 less the sum of all additional side fund (or unfunded lia bility) contributions made by all employers during the measurement period (2023-2024).

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

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

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

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

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

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

Safety Plan
Proportion - June 30, 2025 0.39743%
Proportion - June 30, 2024 0.39526%
Change - Increase (Decrease) 0.00217%

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

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

Discount Rate Current Discount Discount Rate
- 1% (5.90%) Rate (6.90%) + 1% (7.90%)
Miscellaneous Plan 53,011,222$ 34,726,044 $ 19,722,491 $ Safet y Plan 70,712,865$ 48,198,651 $ 29,785,190 $ Plan's Net Pension L iability/(Asset)

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

87 Note 11 – Pension Plans (Continued)

C. Changes in the Net Pension Liability (Continued)

Pension Plan Fiduciary Net Position

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

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

For the year ended June 30, 2025, the City recogni zed pension expense in the amounts of $6,492,411 and $9,418,188 for the miscellaneous plan and safety plan, respectively.

As of measurement date of June 30, 2024, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred Outflows Deferred Inflows
of Resources of Resources
Miscellaneous Plan:

Employer contributions subsequent to measurement date 5,029,009$ - $ Changes of assumptions 136,241 -
Difference between expected and actual experience 1,650,723 (38,162) Net difference between projected and actual earning
on pension plan investments 1,278,653 -
Total Miscellaneous Plan 8,094,626$ (38,162) $
Deferred Outflows Deferred Inflows
of Resources of Resources
Safety Plan:

Employer contributions subsequent to measurement date 5,956,285$ - $ Changes of assumptions 1,187,516 -
Difference between expected and actual experience 3,933,438 (127,894) Net difference between projected and actual earnings
on pension plan investments 2,329,703 -
Adjustments due to differences in proportions 123,357 (720,267) Difference in proportionate share 994,369 (255,224) Total Miscellaneous Plan 14,524,668$ (1,103,385) $ Miscellaneous Plan
Safety Plan

The amounts above are net of outflows and inflows recognized in the 2023-24 measurement period expense.

The expected average remaining service lifetime (“EARSL” ) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired). The EARSL for the Miscellaneous Plan and the Safety Plan risk pool for the 2023-24 measurement period is 3 and 3.8 years, respectively, which was obtained by dividing the total service years of 2,175 and 630,177 (the sum of remaining service lifetimes of the active employees) by 716 and 166,163 (the total number of participants: active, inactive, and retired), respectively.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

88 Note 11 – Pension Plans (Continued)

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

$5,029,009 and $5,956,285 reported as deferred outflows of resources rela ted to pensions for miscellaneous plan and safety plan, respectively, resulting fr om the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2026.

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

Deferred Outflows/ Deferred Outflows/
(Inflows) (Inflows)
Measurement of Resources of Resources
Period Miscellaneous Safety
Ending June 30 Plan Plan
2025 1,103,209$ 2,844,635 $
2026 2,809,213 5,466,796
2027 (385,420) (49,316)
2028 (499,547) (797,117)
2029 - -
Thereafter - -
3,027,455$ 7,464,998$

Note 12 – Other Postemployment Benefits (“OPEB”)

A. General Information about the OPEB Plan

Plan Description and Administration

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

Benefits Provided

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

Employees first hired on or after August 1, 2009 are 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 2021 “100/90” monthly dollar amounts are $883 single, $1,699 two-party, and $2,124 family. In addition, the City pays a 0.24%-of-premium administrative fee to PEMHCA for each retiree.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

A. General Information about the OPEB Plan (Continued)

Plan Membership

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

Inactive members, spouse, or beneficiaries currently receiving benefit pay 200 benefit payments 23
Active employees 256
Total 479
Inactive members or beneficiaries entitled to but not yet receiving

Contributions

The contribution requirements of plan members and th e City are established and may be amended by the City Council. The City currently pays pay-as-you-go costs outside its irrevocable OPEB trust. The City contributes the excess, if any, of budgeted pay-go costs over the actual pay-go to the trust on an annual basis. For fiscal year 2024-25, the City recognized contributions in reduction to the net OPEB liability of $2,944,525.

B. Net OPEB Liability

The City’s net OPEB liability was measured as of June 30, 2024 and the total OPEB Liability used to calculate the net OPEB liability was determined by an actuarial va luation as of July 1, 2024. Standard actuarial update procedures were used to project/discount from valuation to measurement dates.

Significant Actuarial Assumptions Used for Total OPEB Liability

The total OPEB liability, measured as of June 30, 2 024, was determined using the following actuarial assumptions:

Actuarial Assumptions:

Discount Rate
Investment Rate of Return
Inflation 2.50% per annum
Salary Increases
Morta l i ty
Healthcare Cost Trend Rates
Based on CalPERS Tables

6.25% per annum as of June 30, 2024

4.20% per annum as of June 30, 2023

2.75% per annum. Additional merit-based increases based on CalPERS merit salary increase tables.

Pre-Medicare - 7.40% in 2025 tiered down to 4.14% to 4% in all future years.

Post-Medicare - 4.20% in 2025 tiered down to 4.12% to 4% in all future years.

4.04% per annum as of June 30, 2024

3.88% per annum as of June 30, 2023

Changes in Assumptions

Discount rate changed to 4.04% at June 30, 2024 from 3. 88% at June 30, 2023. The investment rate of return increased to 6.25% at June 30, 2024 from 4.20% at June 30, 2023. Healthcare trend rate assumption was updated.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

B. Net OPEB Liability (Continued)

Discount Rate

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

Based on this requirement, and with the approval of the plan sponsor, the discount rate used to measure the total OPEB liability is 4.04%.

Expected Long-Term Rates of Return

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

Assumed Asset Real Rate of
Asset Class Allocation Return
All Equities 34% 7.25%
All Fixed Income 41% 4.25%
Real Estate Investment Trusts 17% 7.25%
All Commodities 3% 7.25%
Treasury Inflation Protected Securities (TIPS) 5% 3.00% Total 100%
Assumed Long-term rate of inflation is 2.50%.

Long-term expected rate of return is 4.04%.

C. Changes in Net OPEB Liability

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

Total OPEB Plan Fiduciary Net Net OPEB
L iability Position L iability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 60,783,050 $ 2,056,855 $ 58,726,195 $ Changes recognized for the measurement period:

Service cost 1,712,751 - 1,712,751 Interest 2,339,970 - 2,339,970 Changes of Assumptions 3,580,339 - 3,580,339 Differences between Expected and Actual Experience 7,692,286 - 7,692,286 Contributions - Employer - City's Contribution - 2,944,525 (2,944,525) Net Investment Income - 86,374 (86,374) Benefit Payments (2,944,525) (2,944,525) - Administrative Expense - (662) 662 Other Miscellaneous Income/(Expense) - 82,891 (82,891) Net Changes during July 1, 2023 to June 30, 2024 12,380,821 168,603 12,212,218 Balance at June 30, 2024 (Measurement Date) 73,163,871$ 2,225,458 $ 70,938,413 $ Increase (Decrease)

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

C. Changes in Net OPEB Liability (Continued)

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

The following presents the net OPEB liability, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage- point higher than the current discount rate, for the measurement period June 30, 2024:

Discount Rate Current Discount Discount Rate
- 1% (3.04%) Rate (4.04%) + 1% (5.04%)
81,730,979$ 70,938,413 $ 62,216,885 $ Plan's Net OPE B L iability/(Asset)

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

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

Healthcare Cost
Trend - 1%
Healthcare Cost
Trend Rate
Healthcare Cost
Trend + 1%
61,003,481$ 70,938,413 $ 83,535,252 $ Plan's Net OPEB Liability/(Asset)

Plan Fiduciary Net Position

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

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

For the year ended June 30, 2025, the City recognized $3,404,456 in OPEB expenses. The City reported deferred outflows or resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
City contributions after the measurement date 3,364,707 $ - $ Changes in assumptions 3,115,359 (9,800,261) Differences between expected and actual experience 13,079,898 (1,056,979) Differences between projected and actual return
on plan investments 75,128 -
Total 19,635,092 $ (10,857,240) $
OPE B Plan

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

C. Changes in Net OPEB Liability (Continued)

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

The $3,364,707 reported as City contributions after the measurement date will be recognized as a reduction of the Net OPEB Liability in the year ending June 30, 2026. Other amounts reported as deferred outflows and inflows of resources will be recognized in OPEB expense as follows:

Deferred Outflows
M easurement Period /(Inflows)
Ending June 30 of Resources
2025 (564,745) $
2026 (514,182)
2027 (598,639)
2028 2,252,438
2029 2,252,438
Thereafter 2,585,835
5,413,145$

Note 13 – Liability, Property, and Workers Compensation Liabilities

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

The City is a member of the California Joint Powers Insurance Authority (the “Authority”). The Authority is composed of 126 California public entities and is or ganized under a joint power s agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess in surance or reinsurance, and to arrange for group purchased insurance for property and othe r lines of coverage. The California JP IA began covering claims of its members in 1978. Each member government has an elect ed official as its repres entative on the Board of Directors. The Board operates through a nine-member Executive Committee.

B. Self-Insurance Programs of the Authority

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

Primary Liability Program

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

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

Primary Liability Program (Continued)

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

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

Workers’ Compensation Program

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

For 2024-25 the California JPIA’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Em ployer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through re insurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members.

C. Purchased Insurance

Pollution Legal Liability Insurance

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

Property Insurance

The City participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City prope rty is currently insured according to a schedule of covered property submitted by th e City to the Authority. City property currently has all-risk property insurance protection in the amount of $203,262,940. There is a $10,000 deductible per occurrence except for non- emergency vehicle insurance which has a $2,500 deductible.

Earthquake and Flood Insurance

The City purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Au thority. City of Indio property currently has earthquake protection in the amount of $1,021,519. There is a deduc tible of 5% per unit of value with a minimum deductible of $100,000.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

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

C. Purchased Insurance (Continued)

Crime Insurance

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

Special Event Tenant User Liability Insurance

The City further protects against liab ility damages by requiring tenant users of certain property to purchase low- cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City according to a schedule. The City then pays for the insurance. The insurance is facilitated by the Authority.

D. Adequacy of Protection

During the past three fiscal years, none of the above pr ograms of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were al so no significant reductions in pooled or insured liability coverage in 2024-25.

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

Fiscal Year
Claims and
Beginning of Prior Fiscal Balance at
Fiscal Year Year Changes Claims Fiscal
Fiscal Year Liability in Estimates Payments Year End
2022-2023 13,720$ 91,012 $ (92,482) $ 12,250 $ 2023-2024 12,250 152,225 (149,430) 15,045 2024-2025 15,045 95,197 (95,333) 14,910

Note 14 – Net Investment in Capital Assets

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

Governmental Business-Type Golf
Activities Activities Water Electric (Nonmajor)
Total capital assets, net 634,354,726$ 175,143,840$ 131,520,520$ 42,768,433$ 854,887$ Unspent capital debt proceeds 30,623,808 21,217,559 - 21,217,559 - Deferred loss on refunding debt 295,550 717,263 717,263 - - Capital related debt (140,188,413) (105,932,315) (41,138,739) (64,608,583) (184,993) Retention payable (6,268,518) (42,812) (42,812) - - Net investment in capital assets 518,817,153$ 91,103,535$ 91,056,232$ (622,591)$ 669,894$ Enterprise Funds

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

95 Note 15 – Fund Balance Classifications

Fund balances are presented in the following categories: nonspendable, restricted, committed, assigned, and unassigned (see Note 1 for a description of these categories). A detailed schedule of fund balances at June 30, 2025, is as follows:

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

Prepaid items 23,562 $ 50,000 $ - $ - $ 73,562$ Notes and loans receivable 3,168,234 - - - 3,168,234 Property held for resale 5,341,588 - - - 5,341,588 Subtotal 8,533,384 50,000 - - 8,583,384 Restricted:

Community development projects - - - 8,948,566 8,948,566 Public safety - - - 2,920,993 2,920,993 Public works - - - 12,461,009 12,461,009 Asset forfeiture - - - 109,200 109,200 Abandoned vehicle - - - 322,311 322,311 Unclaimed property - - - 37,630 37,630 Me a sure A - - - 6,146,155 6,146,155 NPDES - - - 119,397 119,397 Air quality - - - 309,703 309,703 Pension stabilization 4,045,939 - - - 4,045,939 American Rescue Plan - - - 409,387 409,387 Debt service - - 7,413,759 37,750 7,451,509 Capital projects - 1,936,056 30,623,808 - 32,559,864 Other Purposes - - - 3,434,080 3,434,080 Subtotal 4,045,939 1,936,056 38,037,567 35,256,181 79,275,743 Committed:

Traffic safety - - - 370,335 370,335 Ordinance No. 1779 - - - 33,830 33,830 Economic uncertainty 18,500,000 - - - 18,500,000 Subtotal 18,500,000 - - 404,165 18,904,165 Assigned:

Capital projects - 38,061,176 - - 38,061,176 FY24/25 Operations 35,821,012 - - - 35,821,012 FY24/25 Reserves Trust Deposits 3,000,000 - - - 3,000,000 Subtotal 38,821,012 38,061,176 - - 76,882,188 Unassigned (deficit) 5,793,846 - - (33,533) 5,760,313 Total 75,694,181$ 40,047,232 $ 38,037,567 $ 35,626,813 $ 189,405,793 $

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

96 Note 16 – Restatement of Beginning Net Position

The beginning net positions were restated as follows:

Governmental Business-type
Activities Activities
Beginning net position, as previously reported 519,903,883$ 147,174,381 $ Change in accounting principle:

GASB 101 - Compensated Absences (2,058,465) (390,933) Correction of error (a):

Capital asset - 1,081,339
Beginning net position, as restated 517,845,418$ 147,864,787 $ Governmental-Wide

Governmental
Activities Interna
Water Electric Total Service Fund
Beginning net position, as previously reported 142,408,663$ 887,096 $ 143,295,759$ 14,066,827 $ Change in accounting principle:

GASB 101 - Compensated Absences (390,933) - (390,933) (75,345) Correction of error (a):

Capital asset - 1,081,339 1,081,339 - Beginning net position, as restated 142,017,730$ 1,968,435 $ 143,986,165$ 13,991,482 $ Business-Type Activities - Enterprise Funds
Proprietary Funds

a. The increase of the net position for business-type activities was related to the capital expenses of Electric Enterprise Fund that were expensed in prior year but met the criteria of capitalization.

Note 17 – Debt Issued Without Government Commitment

Assessment District Limited Obligation Bonds

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

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

97 Note 17 – Debt Issued Without Government Commitment (Continued)

Assessment District Limited Obligation Bonds (Continued)

At June 30, 2025, the outstanding balances of the Assessment District Limited Obligation Bonds are as follows:

Issuance M aturity Balance Principal Balance
Description Date Face Value Interest Rate Date June 30, 2024 Payments June 30, 2025 AD2001-1/R 7/26/2012 3,295,000$ 4.69% 9/2/2026 823,109 $ 264,392 $ 558,717 $ AD2002-1/R 7/26/2012 3,410,000 4.69% 9/2/2026 1,064,216 248,649 815,567 AD2002-2/R 7/26/2012 2,162,900 4.69% 9/2/2027 691,600 159,615 531,985 AD2002-3/R 7/26/2012 4,119,800 4.71% 9/2/2027 1,290,043 300,425 989,618 AD2003-1/R 7/23/2014 1,752,000 3.55% 9/2/2029 801,000 123,000 678,000 AD2003-2/R 7/23/2014 1,402,000 3.55% 9/2/2029 647,000 99,000 548,000 AD2003-3/R 7/23/2014 4,038,000 3.55% 9/2/2029 1,865,000 290,000 1,575,000 AD2003-5/R 7/23/2014 1,343,000 3.55% 9/2/2029 622,000 99,000 523,000 AD2003-6/R 7/23/2014 1,627,000 3.55% 9/2/2029 744,000 113,000 631,000 AD2004-1/R 7/23/2014 1,465,000 2.80% to 6.00% 9/2/2030 845,000 115,000 730,000 AD2004-2/R 7/19/2017 2,320,000 1.67% to 3.86% 9/2/2030 1,360,000 180,000 1,180,000 AD2004-3/R 8/4/2015 3,920,000 2.90% to 5.50% 9/2/2030 2,295,000 300,000 1,995,000 CFD2004-3 8/4/2015 15,530,000 2.00% to 4.00% 9/1/2035 9,815,000 625,000 9,190,000 CFD2005-1 A1/R 7/23/2014 8,337,000 4.03% 9/1/2036 5,789,000 346,000 5,443,000 CFD2006-1/R 7/23/2014 7,554,000 4.03% 9/1/2036 5,901,000 352,000 5,549,000 CFD2005-1 A2/R 7/23/2014 8,499,000 4.03% 9/1/2036 5,226,000 316,000 4,910,000 39,778,968$ 3,931,081$ 35,847,887$

Note 18 – Contingencies and Commitments

Normal Course of Operations

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

Revenue Tax Sharing Agreement Commitment

In March 1997, the City entered into an agreement with the Riverside County (“County’) in order to obtain the County’s cooperation to annex property in the unincorporated County area with the intention of developing a relocation site for the new and used auto dealers of the City. The development of the Desert Cities Auto Center and its annexation into the City is expected to generate si gnificant sales and use taxes as well as property taxes from the improved site. In return, the City agrees to provide maintenance of certain County facilities. In return for the County’s cooperation in approving the Desert Cities Auto Center site plan and its annexation into the City of Indio, this agreement provides that the City of Indio will dedicate 25% of sales and use taxes derived from the annexed property to the County for the remainder of a thirty-year period ending in the year 2027. Upon expiration of the term of the agreement and upon payment by the City to the County of the sum of $1, the County shall convey fee title to the County improvements. During fiscal year ended June 30, 2025, paym ent in the amount of $575,342 was made to the County.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

98 Note 18 – Contingencies and Commitments (Continued)

Interim Housing Facilities for Indio High School

In April 2010, the City entered into an agreement with the Desert Sands Unified School District (District) to equally share the actual interim housing costs during the course of construction on rebuilding the Indio High School campus.

The City recently constructed a new “Teen Center” directly across from the High School. The City envisions an inter- generational campus for this area and believes the original design is not consistent with the City’s vision. Pursuant to the City’s request, the District prepared a revised design. The revised design will require an interim campus during the construction and the City and District agreed to share th e interim housing cost. The total cost is $5,890,420, which 50% of the cost is committed by the City. Starting August 2018, the annual City’s payment to the Indio High School will be $147,260, until July 2037.

Purchase Commitments

The City had outstanding purchase commitments in the amount of $58,078,709 for governmental activities and $35,209,988 for business-type activities at June 30, 2025 as follows:

Governmental Activities
General Fund 1,897,003 $
Capital Projects Fund 53,745,783
Nonmajor Governmental Funds 1,259,555
Internal Service Funds 1,176,368
Total governmental activities 58,078,709 $
Business-Type Activities
Water Enterprise Fund 7,621,442 $
Electric Enterprise Fund 27,588,546
Total business-type activities 35,209,988 $

Note 19 – Joint Venture Agreements

Eastern Riverside County Interoperable Communications Authority (“ERICA”)

The Eastern Riverside Interoperable Communications Aut hority (“ERICA”) was created in July 2008 by a Joint Exercise of Powers Agreement between public agency par ties located in Riverside County, California. ERICA was formed to enable the Members to acquire real, personal and intangible property and to plan, design, finance, construct, operate, and maintain public safety ra dio communication systems, facilities and related structures to assist the Members in meeting public safety communication needs. Th e goal and intent of the ERICA is one of voluntary cooperation among cities for the collective benefit of cities in Riverside County. No member contributions were made during the fiscal year 2025, as ERICA is in the process wra pping up its operation. The City is a member of the ERICA and is responsible for the accounting records of the joint venture.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

99 Note 19 – Joint Venture Agreements (Continued)

East Valley Reclamation Authority (“EVRA”)

The East Valley Reclamation Authority (“EVRA”) was created on December 18, 2013 under a joint powers agreement between The City through the Indio Water Authority (“IWA”) and the Valley Sanitary District (“VSD”) to plan, implement and operate a recycled water program includi ng the tertiary or enhanced treatment of water, as well as the lease, ownership, operation and maintenance of facilities and the financing costs related to public capital improvements. Primary funding for the EVRA is through contributions from the IWA and the VSD. The EVRA is governed by a Board appointed by the IWA and VSD and administered by either the IWA or VSD based on a rotation determined by the Board. Contribution was not required during the fiscal year 2025. For the fiscal year ended June 30, 2025, the IWA was the admini strator of the EVRA and therefore ma intains the books and records of the EVRA. Audited financial statements may be obtained from the City of Indio, 100 Civic Center Mall, Indio, California 92201.

Note 20 – Tax Abatement Agreements

On September 16, 2020, the City entered into a tax abat ement agreement of transient occupancy tax revenues with local developer under the authority of the City Council of th e City of Indio. This agreement allows for fifty percent abatement of transient occupancy taxes and will expire six years after the first incentive payment by the City. For the fiscal year ended June 30, 2025, the City abated tax increments totaling $248,285 under this agreement.

On May 3, 2017, the City entered into a tax abatement agreement of sales and use tax re venues with a local developer under the authority of the City Council of the City of Indio. This agreement allows for a 50 percent abatement of sales taxes, with a maximum ceiling of $3,94 2,238, and will expire upo n the later of the reaching the maximum ceiling or May 3, 2032. For the fiscal year ended June 30, 2025, the City abated tax increments totaling $151,274 under this agreement. As of June 30, 2025, the total accumulated tax abatement is $1,351,965.

On March 20, 2019, the City entered into a tax abatement ag reement of transient occupancy tax revenues with a local developer under the authority of the City Council of the City of Indio. This agreement allows for a 50 percent abatement of transient occupancy taxes and will expire six years after the first incentive payment by the City. For the fiscal year ended June 30, 2025, the city abated tax increments totaling $254,717 under this agreement.

On January 6, 2021, the City entered into a sales tax shar ing and operating covenant agreement with I10K, Inc. under the authority of the City Council of the City of Indio. Th is agreement allows for a 50 percent abatement of sales tax generated by the business after it opens it the public, up to a total of $3,500,000 and will expire upon the later of (i) the completion of the payments, or (ii) the date that is fi fteen (15) years after the Opening. For the fiscal year ended June 30, 2025, the city abated tax increments totaling $157,746 under this agreement.

On April 25, 2024, the City entered into a sales tax shari ng and operating covenant agre ement with Unicars, Inc. under the authority of the City Council of the City of Indio. This agreement allows for a 50 percent abatement of sales tax generated by the business after it ope ns it the public, up to a total of $3,5 00,000 and will expire upon the later of (i) the completion of the payments, or (ii) the date that is fifteen (15) years after the Opening. For the fiscal year ended June 30, 2025, the city abated tax increments totaling $95,717 under this agreement.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

100
Note 21 – Successor Agency Trust for Assets of Former Redevelopment Agency

On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of Ca lifornia. This action impacted the reporting entity of the City of Indio that previously had repor ted a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment ag ency, either the city or other unit of local government will agree to serve as the “successor agency” to hold the assets units they are di stributed to other units of state and local government. On January 10, 2012, the City Council elected to become the Successo r Agency for the former redevelopment agency in accordance with the Bill as part of the City resolution number 12-001.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments . Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable ob ligations in existence as of the date of the dissolution (including the completion of any unfinished projects th at were subject to legally enforceable contractual commitments).

In future fiscal years, succ essor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

The Bill directs that State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditu re or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill.

The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determina tion may be made at a later da te by an appropriate judicial authority that would resolve this issue unfavorably to the City.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.

Prior to that date, the final seven months of activity of the redevelopment agency continued to be reported in the governmental funds of the City. After the date of dissolutio n, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.

The transfer of the assets and liabilities of the form er redevelopment agency as of January 31, 2012 from governmental funds of the City to fiduciary funds was repor ted in the governmental funds as an extraordinary loss (or gain) in the governmental fund financ ial statements. The receipt of these assets and liabilities as of January 31, 2012 was reported in the private-purpose trust fund as an extraordinary gain (or loss).

Because of the different measurement focus of the govern mental funds (current financial resources measurement focus) and the measurement fo cus of the trust funds (economic resources me asurement focus), the extraordinary gain (loss) recognized in the governmental funds was not the same amount as the extraordinar y gain (loss) that was recognized in the fiduciary fund financial statements.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

101
Note 21 – Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)

A. Cash and Investments

Cash and investments reported in the accompanying financial statements consisted of the following:

Cash and investments pooled with the City 4,318,979$
Cash and investments with fiscal agent 1,685,248
Total 6,004,227$

B. Land Held for Resale

Land held for resale consists of 13 properties purchased as early as 1950. The purchases of these properties are spread over a longer period and recorded at cost. As of June 30, 2025, land held for resale totaled $769,500.

C. Long-Term Liabilities

Long-term debt of the Successor Agency as of June 30, 2025, consisted of the following:

Balance Balance Due within Due in M ore
July 1, 2024 Additions Deletions June 30, 2025 One Year Than One Year Public Offerings:
2004 Tax Allocation Bonds, Series A 7,210,000$ -$ (260,000)$ 6,950,000$ 280,000$ 6,670,000$ 2008 Tax Allocation Bonds, Series A and B 11,525,000 - (845,000) 10,680,000 880,000 9,800,000 2018 Subordinate Tax Allocation Bonds, Series 22,155,000 - (1,515,000) 20,640,000 1,585,000 19,055,000 Unamortized Bond Premiums:
2018 Subordinate Tax Allocation Bonds, Series 2,326,100 - (211,464) 2,114,636 - 2,114,636 Public Offerings, net 43,216,100 - (2,831,464) 40,384,636 2,745,000 37,639,636 Total 43,216,100$ -$ (2,831,464)$ 40,384,636$ 2,745,000$ 37,639,636$

Tax Allocation Bonds, Series 2004A

In July 2004, the City of Indio Redevelopment Ag ency issued $9,760,000 Tax Allocation Bonds Series 2004A.

The proceeds were used to finance re development activities of the Agency and to advance refund Tax Increment Revenue Refunding Bonds 1997 Series C.

The 2004A bonds consist of $500,0 00 of serial bonds and $9,260,000 of term bonds. The serial bonds accrue interest at rates between 4.125% and 5.00% and the principal amounts mature be tween August 15, 2005 and August 15, 2009 in amounts ranging from $95,000 to $110,000. Term bonds of $645,000 accrue interest at 5.60% and mature on August 15, 2014, a nd bonds of $8,615,000 accrue interest at 6.30% and mature on August 15, 2033.

The Series 2004A term bonds maturing in the years 2014 and 2033 are subject to mandatory sinking account redemption on each August 15, commencing on August 15 , 2010 and August 15, 2015, respectively, at a redemption price equal to the principal amount thereof together with accrued interest, without premium.

Per the terms of the bond indenture, the Series 2004A are required to maintain a reserve in the amount of 10% of the original proceeds, 125% of the average annual debt service for that every subsequent bond year, or 10% of the issue price of the bonds held in the Special Escrow Fund. At June 30, 2025, the reserve was fully funded and the outstanding balance of the Series 2004A was $6,950,000.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

102
Note 21 – Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)

C. Long-Term Liabilities (Continued)

Tax Allocation Bonds, Series 2004A (Continued)

The annual debt service requirements to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2026 280,000$ 218,925 $ 498,925 $
2027 295,000 210,105 505,105
2028 315,000 200,813 515,813
2029 865,000 190,890 1,055,890
2030 915,000 163,643 1,078,643
2031-2033 4,280,000 559,755 4,839,755
Total 6,950,000$ 1,544,130 $ 8,494,130 $

Tax Allocation Bonds, Series 2008A and B

In April 2008, the City of Indio Redevelopment Agen cy issued $60,600,000 Tax Allocation Bonds Series 2008A and $6,640,000 Subordinate Tax Allocation Bonds Series 2008B. The proceeds were used to finance redevelopment activities of the Agency and to advance refund the outstanding Tax Increment Revenue Refunding Bonds, 1997 Series B, and Tax Allocation Bonds, 2004 Series B.

The 2008A bonds consist of $35,655,000 of serial bonds and $24,945,000 of term bonds. The serial bonds accrue interest at rates between 4.00% and 5.25% and the principal amounts mature between August 15, 2009 and August 15, 2028 in amounts ranging fr om $770,000 to $2,925,000 . Term bonds of $9,685,000 accrue interest at

5.250% and mature on August 15, 2031 , bonds of $7,630,000 accr ue interest at 5.625% and mature on August 15, 2035, and bonds of $7,630,000 accrue interest at 5.250% and mature on August 15, 2035.

The 2008B bonds consist of $6,640,000 of term bonds. Term bonds of $3,140 ,000 accrue interest at 5.500% and mature on August 15, 2013, and term bonds of $3,500,000 accrue interest at 6.750% and mature on August 15, 2018.

The Series 2008A term bonds maturing in the years 2031, 2035 (accruing interest at 5.625%), and 2035 (accruing interest at 5.250%) are subject to mandatory sinking account redemption on each August 15, commencing on August 15, 2029, August 15, 2032, and August 15, 2032, resp ectively, at redemption price equal to the principal amount thereof together with accrued interest, without premium.

The Series 2008B term bonds maturing in the years 2013 and 2018 are subject to mandatory sinking account redemption on each August 15, commencing on August 15, 20 09 at a redemption price equal to the principal amount thereof together with accrued interest, without premium.

The bonds are payable and secured, by the pledged tax re venues to be derived from the project area. Upon the occurrence of an Event of Default, there is no acceleration of payments, and bond owners are limited to obtaining monies in the reserve account and enforcing the oblig ation of the Successor Agency to pay the pledged tax revenues.

On December 4, 2018, the Successor Agency issued the 2018 Subordinate Tax Allocation Refunding Bonds, Series A and B, to refund and defease on a current basis, a portion of the 2008 Series A Bonds.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

103
Note 21 – Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)

C. Long-Term Liabilities (Continued)

Tax Allocation Bonds, Series 2008A and B (Continued)

Reserve requirements for the Series 2008A bonds are disclo sed in the bond documents. At June 30, 2025, the reserves were fully funded and the outstanding balance of the Series 2008A was $10,680,000 and the Series 2008B bonds were fully matured.

The annual debt service requirements to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2026 880,000$ 293,544 $ 1,173,544 $
2027 925,000 270,994 1,195,994
2028 1,000,000 246,713 1,246,713
2029 925,000 220,463 1,145,463
2030 970,000 196,181 1,166,181
2031-2035 5,980,000 734,588 6,714,588
Total 10,680,000$ 1,962,481 $ 12,642,481 $

2018 Subordinate Tax Allocation Refunding Bonds, Series A and B

In December 2018, the City of Indio Successor Agency to the Former Redevelopment Agency issued $29,060,000 Subordinate Tax Allocation Refunding Bonds, Series A and $1,605,000 Subordinate Tax Allocation Refunding Bonds, Series B (taxable). The bonds were issued primarily to refund and defease all of the Successor Agency’s previously issued Housing Set-Aside Re venue Refunding Bonds, Series 1999, and a portion of the Successor Agency’s Indio Merged Redevelopment Project Area 2008 Subordinate Tax Allocation Bonds, Series A.

The bonds are payable and secured, by the pledged tax re venues to be derived from the project area. Upon the occurrence of an Event of Default, the bond trustee may declare the principal of the bonds to be immediately due and payable, whereupon that portion of the principal of the bonds thereby coming due and the interest thereon accrued to the date of payment will, without further action, become and be immediately due and payable.

The 2018A bonds consist of $29,060,000 of serial bonds accruing interest at rates between 3% and 5% and the principal amounts mature between August 15, 2019 and August 15, 2035 in amounts ranging from $655,000 to $2,200,000. The 2018B bonds c onsist of $1,605,000 of serial bonds accruing interest at a rate of 3% and will mature on August 15, 2020.

Per the terms of the bond indenture, the bonds are required to maintain a reserve in the amount of the maximum annual debt service on the outstanding bonds, 125% of the average annual debt service for that every subsequent bond year, or 10% of the original issue price of the bonds held in a special escrow fund. At June 30, 2025, the reserve was fully funded and the outstanding balance of the bonds was $20,640,000.

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Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

104
Note 21 – Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)

C. Long-Term Liabilities (Continued)

2018 Subordinate Tax Allocation Refunding Bonds, Series A and B (Continued)

The annual debt service requirements to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2026 1,585,000$ 978,925 $ 2,563,925 $
2027 1,660,000 899,675 2,559,675
2028 1,790,000 816,675 2,606,675
2029 1,605,000 727,175 2,332,175
2030 1,685,000 646,925 2,331,925
2031-2035 10,045,000 1,868,875 11,913,875
2035 2,270,000 96,175 2,366,175
Total 20,640,000$ 6,034,425 $ 26,674,425 $

D. Pledged Revenue

The City pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue (including Low- a nd Moderate-Income Housing set-aside and pass-through allocations) that it receives. The bonds issued were to provide financing for various capital projects, accomplish Low- and Moderate-Income Housing projects and to defease previ ously issued bonds. Assembly Bill 1X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed tax increment but rather property tax revenues and will be allocated first to su ccessor agencies to make payments on the indebtedness incurred by the dissolve d redevelopment agency. Tota l principal and interest remaining on the debt is $47,811,036 with annual debt service requirements as indicated above. For the current year, the total property tax revenue recognized by the Successor Agency for the paymen t of indebtedness incurred by the dissolved redevelopment agency was $4,850,159 and the debt service paid was $4,216,459.

Note 22 – Subsequent Events

In September 2025, the Indio Public Financing Authority issued $29,165, 000 in Lease Revenue Bonds, Series 2025A to finance a portion of the City’s new approximately 28,000‑square ‑foot Police Headquarters Project, with bond proceeds funding design, construction, furnishing, capitalized interest th rough May 1, 2026, municipal bond insurance, a reserve surety, and issuan ce costs. Total project costs are estimated at $45 million, of which about $30 million will be funded with bond proceed s and the remainder from the City’s General Fund. The bonds are special obligations secured solely by base rental payments made under a lease agreement for designated City facilities and do not constitute a debt of the City nor pledge any taxing power. Bonds maturing on or after November 1, 2030 are insured by Build America Mutual, which also provides the reserve surety satisfying the $1,934,087.50 reserve fund requirement, and repayment occurs through annual maturities extending through November 1, 2055.

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REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
105

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106

Independent auditor's report and the City's Annual Comprehensive Financi... Page 394 of 596 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes:

Sales taxes 36,700,000 $ 36,700,000 $ 36,398,308 $ (301,692) $ Property taxes 27,113,000 27,113,000 27,965,803 852,803 Utility users taxes 10,593,115 10,593,115 11,191,548 598,433 Transient occupancy taxes 15,274,106 15,274,106 16,976,993 1,702,887 Business license taxes 650,000 650,000 812,829 162,829 Other 450,000 450,000 465,854 15,854 Total taxes 90,780,221 90,780,221 93,811,335 3,031,114 Licenses and permits:

Building permits 2,811,000 2,811,000 2,991,068 180,068 Other permits 2,610,000 2,610,000 2,379,945 (230,055) Business license and other 420,000 420,000 317,377 (102,623) Franchises 3,445,600 3,445,600 3,208,891 (236,709) Total licenses and permits 9,286,600 9,286,600 8,897,281 (389,319) Intergovernmental:

Grants 320,000 320,000 2,313,156 1,993,156 Motor vehicle license fees 65,000 65,000 281,614 216,614 Total intergovernmental 385,000 385,000 2,594,770 2,209,770 Charges for services:

Police 5,809,500 5,833,500 6,304,613 471,113 Plan checks and inspections 1,530,000 1,680,000 3,349,191 1,669,191 Fire and ambulance 3,718,168 3,718,168 4,983,401 1,265,233 Other 684,500 684,500 600,422 (84,078) Total charges for services 11,742,168 11,916,168 15,237,627 3,321,459 Fines and forfeitures:

Other 600,000 600,000 947,485 347,485 Use of money and property 3,490,896 3,490,896 8,085,693 4,594,797 Miscellaneous 100,000 149,784 392,115 242,331 Total revenues 116,384,885 116,608,669 129,966,306 13,357,637 OTHER FINANCING SOURCES:

Transfers in 4,505,000 4,505,000 5,065,546 560,546 Issuance of debt - - 45,909 45,909 Total other financing sources 4,505,000 4,505,000 5,111,455 606,455 Amounts available for appropriations 120,889,885$ 121,113,669 $ 135,077,761 $ 13,964,092 $ City of Indio
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule - General Fund
For the Year Ended June 30, 2025
Budgeted Amounts
107

Independent auditor's report and the City's Annual Comprehensive Financi... Page 395 of 596 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Expenditures:

Current:

General government:

City council 415,710 415,710 395,054 20,656 City manager 1,350,511 1,408,792 1,261,921 146,871 City clerk 578,482 686,482 683,107 3,375 City attorney 800,000 800,000 564,115 235,885 Human resources 1,390,615 1,390,615 1,126,972 263,643 Finance 2,505,098 2,596,908 2,191,027 405,881 Other - nondepartmental 5,900,934 5,900,934 4,700,271 1,200,663 Total general government 12,941,350 13,199,441 10,922,467 2,276,974 Public safety:

Police administration 2,985,721 2,998,468 2,535,255 463,213 Police field services 19,362,420 19,349,673 18,153,026 1,196,647 Police investigations 9,935,617 9,935,617 10,031,680 (96,063) Police traffic safety 1,486,865 1,486,865 1,397,977 88,888 Police support services 6,123,363 6,147,363 5,557,617 589,746 Animal control 1,280,000 1,299,828 1,297,496 2,332 Code enforcement 3,254,572 3,254,572 2,409,390 845,182 Fire and ambulance 22,128,324 22,128,324 21,041,799 1,086,525 Emergency management 265,959 265,959 217,754 48,205 Total public safety 66,822,841 66,866,669 62,641,994 4,224,675 Community development:

Building and safety 2,315,160 2,315,160 2,150,671 164,489 Planning 1,889,557 1,889,557 1,410,524 479,033 Economic development 1,526,724 1,645,401 1,349,243 296,158 Total community development 5,731,441 5,850,118 4,910,438 939,680 Community services:

Youth service 1,294,034 1,294,034 1,204,040 89,994 Community services 1,702,035 1,811,819 1,593,594 218,225 Promotions and publicity 1,099,596 1,039,596 755,187 284,409 Senior services 1,085,278 1,085,278 1,065,437 19,841 Total community services 5,180,943 5,230,727 4,618,258 612,469 Public works:

Street maintenance and operations 3,413,053 3,439,053 3,135,418 303,635 Engineering and administration 2,135,352 2,285,352 1,989,473 295,879 Parks and parkways 4,094,654 4,105,554 4,171,844 (66,290) Total public works 9,643,059 9,829,959 9,296,735 533,224 Capital outlay 2,400,000 1,818,684 580,150 1,238,534 Debt service:

Principal retirement - - 209,067 (209,067) Interest and fiscal charges - - 9,994 (9,994) Total expenditures 102,719,634 102,795,598 93,189,103 9,606,495 City of Indio
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule - General Fund (Continued) For the Year Ended June 30, 2025
Budgeted Amounts
108