FOR: Water Subcommittee Meeting March 26, 2026
TO: Honorable Water Subcommittee Members
APPROVAL: Sachin Chawla, Director of Utilities
FROM: Nicole Hemmans, Senior Administrative Analyst
Title
Staff requests that the Water Subcommittee provide feedback on Amendment No. 4 to the Professional Services Agreement with Rod LeMond, CPA, in the amount of $120,000, for continued independent financial advisory and accounting services to support the Rialto Utility Authority’s financial management, reporting, and compliance obligations. (ACTION).
Body
RECOMMENDATION
Staff recommends that the Water Subcommittee provide feedback on Amendment No. 4 to the Professional Services Agreement with Rod LeMond, CPA, in the amount of $120,000, for continued independent financial advisory and accounting services to support the Rialto Utility Authority’s financial management, reporting, and compliance obligations.
BACKGROUND:
On February 4, 2025, the Rialto Utility Authority (RUA) entered into a Professional Services Agreement (PSA) with Rod LeMond, CPA, to provide specialized financial advisory services related to the Authority’s agreement with Rialto Water Services RWS) for the provision of contract water and wastewater services.
The Consultant was initially engaged through sole-source procurement due to his expertise in water and wastewater financial management and concession-style utility agreements. His original assessment focused on reviewing the terms and arrangements associated with the Concession Agreement and related Trust Agreements, including evaluation of the financial structure and flow of funds between the Authority and RWS.
Following the initial engagement, the Authority approved several amendments to the agreement to expand the scope of services and continue advisory support as additional financial management needs were identified:
v Original PSA (February 4, 2025): Not-to-exceed $25,000.
v First Amendment (May 22, 2025): Increased total contract amount to $50,000 and expanded services to include review and documentation of Concession Agreement financial structures, internal reporting processes, and accounting matters associated with Combined Remedy.
v Second Amendment: Increase total compensation to $75,000
v Third Amendment: Increase total compensation to $100,000
During the course of this engagement, Mr. LeMond has assisted staff in evaluating accounting practices, refining financial reporting processes, supporting budget integration efforts, and providing advisory services related to the financial provisions of the Concession Agreement and associated trust account requirements. Mr. LeMond’s involvement also included assisting the team in recovering approximately $1 million in unpaid invoices related to the Combined Remedy efforts and is currently engaged in addressing outstanding issues among the four parties to the agreement.
Because Mr. LeMond was initially retained to analyze the financial terms and operational structure of the Concession Agreement, he has developed a strong understanding of the Authority’s contractual arrangements and financial reporting structure. This institutional knowledge has allowed him to provide effective guidance to staff on complex financial matters associated with the Concession Agreement and related trust accounts.
ANALYSIS/DISCUSSION:
The Utilities Department continues to manage a number of complex financial reporting, budgeting, and compliance responsibilities related to the Authority’s water and wastewater operations and its contractual relationship with Rialto Water Services. Based on the staff’s experience working with Mr. LeMond and the evolving financial management needs of the Utility, staff is proposing Amendment No. 4 to continue these advisory services.
Under the proposed Scope of Work, Mr. LeMond would continue to provide independent financial management and accounting advisory services, including:
Scope of Work:
These services will help support staff improve financial reporting processes, ensure compliance with contractual and financial obligations, and strengthen financial oversight of utility operations.
ENVIRONMENTAL IMPACT
The requested action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a Project means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
Approval of the proposed action also complies with the following City of Rialto Guiding Principles, General Plan Goals and Policies:
Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
LEGAL REVIEW
The City Attorney’s Office has reviewed the staff report.
FINANCIAL IMPACT
Operating Budget Impact
The proposed amendment will increase the contract amount by $120,000 for a total not-to-exceed contract amount of $220,000. Sufficient funding of $48,000 is available in Fund 5680 Account No. 56807960-52011. A new appropriation is needed in the amount of $72,000 in Fund 5680 Account No. 56807860-52011.
Capital Improvement Budget Impact
There is no impact on the capital improvement budget with this action.