IWA Re-Formation Following Redevelopment Agency Dissolution

1. IWA Re-Formation Following Redevelopment Agency Dissolution

2. IWA was formed in 2000 • Joint Powers Authority between the City of Indio and the Redevelopment Agency • Separate legal entity with Independent Commission • Nine Member Commission - 5 City Council and 4 Appointed by City Council • Lease agreement between the IWA and the City for water system assets • System Valuation performed in 2000 as basis of setting annual lease payment • Employee Lease agreement History of the Indio Water Authority

3. Water System assets increased 10 fold in size and value between 2000 and 2012 • $60 Million Water Revenue Bonds issued in 2006 • Water System Valuation completed in January 2012 • Asset-Based Valuation • Contributions to Water System defined as IWA, Developer and City • Began negotiations of a new lease payment schedule • Looked at value of system in 2000 and subtracted the lease payments to date • Commission gave direction to move forward with a hybrid lease payment requiring 2 lump sum payments • IWA staff began research of funding options for new lease agreement Lease Agreement Changes

4. February 1, 2012 – State announced Dissolution of all Redevelopment Agencies • City of Indio decides to serve as the Successor Agency to wrap up the business of the Redevelopment Agency • Uncertainty about how the IWA could continue functioning with RDA as a JPA partners, particularly when it came to contracts and financing AB X1 26 - State of California Takes Away RDA’s

5. New JPA partners • Mutual Water Company, Contiguous City/District, Non-Contiguous Agency, Indian Tribe, Agency similar to RDA • Special Act Legislation • Drafted language and had preliminary discussions with legislators • Traditional Water District • LAFCO process • City Department • Financial and policy focus shift New Agency Formation Options

6. April 2012, IWA Commission directed staff to form a new JPA with the City of Indio Housing Authority and the City of Indio • The Housing Authority was formed by resolution in 1966 but had not been active until the recent dissolution of the RDA New JPA

7. May 1, 2012 Study Session • Review of System Valuation Report • Discussion of complete separation from the City • Employee benefit options • Property and Liability options • City/IWA shared functions (Internal Service Funds) • May 16, 2012 – Amendment to the IWA JPA through resolution • Removed the Redevelopment Agency • Added the Housing Authority • Changed the make up of the Board – Five City Council Members • Direction given to completely separate the IWA from the City • June 2012 – Lease Agreement Amendment • Lump sum payment of $2M for FY 2011-12 • Annual lease payment for next 8 years – system will be “paid off” And we are off….

8. Financial • Currently share financial system with the City • Authorization to purchase separate modules • Accounts payable, purchasing, CIS Customer data, Payroll, Budget, etc. • Internal Service Funds • Risk • Fleet • Buildings & grounds • Centralized services • Employees • Existing lease agreement for employees • Many options being considered by the Board • Pension reform The Separation Process

9. Political Courage • Complete focus on water issues • Transparency • Efficiencies • Employee morale • Customer Satisfaction New Paradigm?