For City Council Meeting November 25, 2025
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
Title
Request City Council/Rialto Utility Authority to: (1) Authorize a Revised Final Construction Work Authorization with Aquametrics, (2) Adopt Resolution No. 8437 and RUA Resolution No. 08-49 Amending Resolution No. 8417 and RUA Resolution No. 08-45, by Approving and (3) Authorize the City Manager or Their Designee to Execute all Related Documents.
Body
RECOMMENDATION
Staff recommends that the City Council/Rialto Utility Authority:
1) Approve and authorize a revised Final Construction Work Authorization to Rialto Water Services as operated by Veolia North Operating Services, Inc. for the Advanced Metering Infrastructure Project, City Project No. 26AMI that increases the total amount thereof to $8,000,000;
2) Amending Resolution No. 8417 and RUA Resolution No. 08-45 approved on October 14, 2025;and
3) Authorize the City Manager or their designee to execute all related documents.
BACKGROUND
On October 14, 2025, the City Council/RUA approved resolutions and a FCWA for the AMI Project with RWS in an amount not to exceed $7,998,719, identifying USG as the preferred vendor. Following this action, RWS continued contract negotiations with USG; however, despite multiple attempts, the parties were unable to reach an agreement on the final contract terms.
Given the urgency of meeting the AMI Project grant expenditure deadlines and following the conclusion of negotiations between RWS and USG without a finalized agreement, RWS initiated negotiations with the second responsive bidder from RFP #25-047, Aqua-Metrics. These negotiations resulted in a revised FCWA for City/RUA consideration and confirmation that Aqua-Metrics will complete all required work by December 31, 2026, thereby ensuring compliance with state and federal grant requirements.
As a result, the original FCWA must be amended to a total amount of $8,000,000 to reflect (1) the revised subcontractor costs from Aqua-Metrics, which are lower than the prior contractor’s pricing; (2) the recalculated RWS-Veolia fee (maintained at 12.2 percent of total third-party costs); (3) Veolia Development Cost Recovery and (4) the addition of a City-held contingency(allowances) based on contract negotiations with Aquametric for differing site conditions. The fully revised FCWA is included as Attachment 1. The Contract with Aqua-Metric and Veolia is included as Attachment 2.
ANALYSIS/DISCUSSION
On October 14, 2025, the City of Council/RUA approved via City Resolution 8417 and RUA Resolution 08-45 $8,000,000 in grant funding for the Advanced Metering Infrastructure (AMI) Project: $6,000,000 from the California Department of Water Resources’ Urban Community Drought Relief Grant (DWR) and $2,000,000 from the U.S. Department of Interior, Bureau of Reclamation (USBR). The DWR grant agreement requires funds to be expended by November 1, 2026, and the USBR funds by December 31, 2026 (Attachments 5 and 6).
The amended FCWA includes a Veolia Development Cost Recovery item ($350,000) represents eligible Project Development Costs. Veolia will receive an additional $350,000 in Project Implementation contingency (Veolia Contingency) to manage the project and ensure on-time, in-budget delivery. Veolia Contingency will be paid monthly on a prorated basis through the project completion date. Veolia will control this project contingency, and any unspent balance will remain with Veolia to manage project risk.
Veolia will not be entitled to recover any additional amount that is not already covered by allowance or Veolia Contingency to manage the contractor, schedule, or budget. This ensures the City’s total financial exposure remains capped at $8,000,000.
Table 1: Revised FCWA Cost Proposal
Given these updates to the project scope, cost structure, and funding allocations, the proposed amendments to the previously adopted resolutions are necessary to reflect the revised FCWA total of $8,000,000 and to authorize RWS-Veolia to proceed with the updated subcontractor and program management costs.
ENVIRONMENTAL IMPACT
Section 21084 of the California Public Resources Code requires Guidelines for the Implementation of the California Environmental Quality Act (CEQA). The Guidelines are required to include a list of classes of projects which have been determined not to have a significant effect on the environment and which are exempt from the provisions of CEQA. In response to that mandate, the Secretary for Resources identified classes of projects that do not have a significant effect on the environment and are declared categorically exempt from the requirement for the preparation of environmental documents. In accordance with Section 15301 “Existing Facilities”, of the CEQA Guidelines, a Class 1 project consists of the operation, repair, maintenance, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency’s determination. The replacement of existing water meters is considered a Class 1 project and is categorically exempt from CEQA. A copy of the Notice of Exemption filed with the San Bernardino County Clerk of the Board.
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.” Approval of this action also complies with the City of Rialto General Plan Goal and Policy:
Goal 3-6: Require that all developed areas within Rialto are adequately served with essential public services and infrastructure.
Policy 3-8.4: Advocate regular evaluation of the entire water supply and distribution system to ensure its continued adequacy, reliability, and safety.
LEGAL REVIEW
The City Attorney's Office has reviewed the resolutions and approved them as to form.
FINANCIAL IMPACTS
Operating Budget Impact
By implementing an AMI meter system, it is anticipated that there will be a reduction in Veolia’s field service staff due to reduced field visits. The exact reduction will be calculated during the 2024-2027 Labor Reset of the Concession Agreement for Water and Wastewater with Rialto Water Services.
Capital Improvement Budget Impact
The City of Rialto has been awarded $6,000,000 in reimbursable grant funds from the Department of Water Resources Urban Community Drought Relief and $2,000,000 in reimbursable grant funds from the U.S. Department of Interior, Bureau of Reclamation. These funds will require a new appropriation and increase revenue in account number 56707960-47536 and increase offsetting expenditures in the amount $8,000,000 in account number 56707960-53001 Project No. 26AMI.
The revised subcontractor and integration costs and project implementation costs allow the project to remain within the approved $8,000,000 FCWA amount with no impact on Water Fund reserves.
Licensing
This action does not require a business license.
ATTACHMENTS
1. FCWA with RWS for the AMI Project
2. Rialto AMI Project_Subcontractor Contract - Aqua-Metric
3. Resolution Amending FCWA for the AMI Project
4. RUA Resolution Amending FCWA for the AMI Project
5. RUA Resolution No. 08-45
6. Resolution 8417