For City Council Meeting May 26, 2026
TO: Honorable Mayor and City Council
APPROVAL: Tanya Williams, City Manager
FROM: Yazdan Emrani, P.E., Director of Public Works
Title
Request the City Council to: (1) Adopt Budget Resolution No. 8520 Amending the Fiscal Year 2025/2026 Budget to Appropriate $800,000 to Capital Projects Fund 3300; (2) Approve a Purchase and Installation Agreement with Mobile Modular Management Corp Inc., Substantially Similar to the Agreement Attached to the Staff Report and Approved as to Form by the City Attorney in the Amount of $2,859,987, for the Acquisition and Installation of a Mobile Modular Office for the Public Works Department; and (3) Authorize the City Manager or Their Designee to Execute all Related Documents.
(ACTION)
Body
RECOMMENDATION
Staff requests that City Council:
1) Adopt a budget resolution amending the Fiscal Year 2025/2026 budget to appropriate $800,000 to Capital Projects Fund 3300;
2) Approve a purchase and installation agreement with Mobile Modular Management Corp Inc., substantially similar to the agreement attached to the staff report and approved as to form by the City Attorney in the amount of $2,859,987, for the acquisition and installation of a mobile modular office for the Public Works Department; and
3) Authorize the City Manager or their designee to execute all related documents.
BACKGROUND
On Friday, August 20, 2021, staff were alerted to a fire at the Public Works Department building located at 335 W. Rialto Avenue. The fire incident caused extensive structural damage to the building, along with water and smoke damage. As a result, the building was boarded up and secured that evening. To ensure seamless delivery of essential services to the community and local businesses, staff transitioned operations to the Public Works breakroom.
Administrative recovery efforts began shortly after, on September 14, 2021, when the City Manager was granted authority to approve remediation services up to the initial claim of $250,000. This was followed on November 8, 2021, by the City Council’s approval of a Professional Services Agreement with Miller Architectural Corporation, in the amount of $134,250, to provide Architectural and Engineering Services for the Public Works Administration Building Restoration Project.
On December 14, 2021, the City Council Adopted Resolution No. 7818 amending its budget for the 2021-2022 Fiscal Year budget authorizing an appropriation to the General Fund Liability Fund in the amount of $1,150,000 for anticipated settlements and expenses related to the fire at the Public Works Administration Building. Subsequently, on January 11, 2022, the City Council Adopted Resolution No. 7826, Amending Resolution No. 7818, to fully appropriate an additional $2,100,000 for expenditures related to anticipated litigation and related costs, for a total of $3,250,000 appropriated to the project. Additionally, staff requested $2,000,000 in the Fiscal Year 2024/2025 budget in the Capital Projects Fund, which brought the total authorized project budget up to $5,250,000.
On April 12, 2022, the City Council approved an on-call agreement with Fountainhead Corporation for on-call construction management, inspection, and materials testing services.
On August 13, 2024, the City Council awarded a construction contract to Marcon Engineering, Inc. for the Public Works Administration Building Restoration Project, for a total amount of $3,179,019.25. Additionally, a contract change order with Fountainhead Corporation was authorized for $446,366, as part of the City’s “On-Call” Agreement for construction management, inspection, and materials testing services related to this project.
Because it was initially determined that staff would proceed with a reconstruction of the existing building, $1,500,000 of the $2,000,000 authorized in the 2024/2025 budget went back to the Capital Projects fund balance.
Construction on the facility officially began on April 17, 2025. As part of the initial phase, the interior finishes were demolished to make way for the new framing and eventual completion of the construction. During the demolition, multiple unforeseen issues came to light, including significant deficiencies in the framing, raising concerns about the integrity of the existing construction and foundations. Miller Architect was tasked with conducting a Structural Report. The report recommended that the existing building be demolished and replaced with a new structure, allowing the City to redesign it to meet the Department's needs. A copy of the assessment is included as Attachment 1.
Based on the recommendation to demolish the facility, staff engaged legal counsel on August 27, 2025, to initiate termination of the construction contract for the Public Works facility with Marcon Engineering. The Public Works Department proceeded with the demolition of the existing facility on December 8, 2025. This work was completed by in-house staff and included the removal of all framing, roofing, HVAC systems, plumbing, electrical components, and foundation. The site has been fully cleared of debris, and the foundation is prepared for the installation of a new modular facility.
ANALYSIS/DISCUSSION
Since June 16, 2022, staff have been relocated to a temporary modular building at 335 West Rialto Avenue (west parking lot) to continue City services. To ensure there was enough space for all existing staff displaced by the fire, a modular space measuring 60 feet by 72 feet was leased from Mobile Modular at a current cost of $6,301.23 per month.
Staff contacted Mobile Modular, a Sourcewell-approved vendor, to discuss the purchase and installation of a modular office facility. Sourcewell is a government cooperative purchasing organization that allows public agencies to procure goods and services through competitively solicited contracts that satisfy public bidding requirements. Sourcewell conducts nationwide solicitations on behalf of participating agencies using a transparent, competitive process consistent with public procurement standards.
By utilizing a Sourcewell contract, the City can “piggyback” on an existing competitively awarded contract rather than conducting its own separate formal bid process. This approach can reduce administrative time and costs, accelerate project delivery, and leverage nationally negotiated pricing and terms.
Staff reviewed the Sourcewell procurement process and determined that the cooperative purchasing method provides competitive pricing and is consistent with the City’s purchasing policies and applicable public contracting requirements. A copy of the Sourcewell Contract with Mobile Modular is included as Attachment 2.
Various options for a replacement facility were thoroughly evaluated, and this solution was selected for its cost-effectiveness, expedited installation timeline, and ability to support future departmental growth and restructuring. The new modular building facility will measure 144 feet by 60 feet, offering approximately 8,640 square feet of space. The cost proposal for the building is included as Attachment 3.
The proposed layout includes:
• 17 offices
• Two conference rooms
• Two restrooms, one primarily for staff use and the other designated for residents and customers
• Two large open areas designed for cubicle workstations
This configuration will use a pit installation method, eliminating the need for stairs or ramps and providing a level, walk-up entry for all users. The facility will feature a stucco exterior finish and a premium roofing system. Interior enhancements will include laminate flooring, drywall, and a tile drop ceiling to enhance durability and aesthetics.
The total cost for this project includes the following features and services:
• Pit set installation
• Exterior stucco finish
• Storefront double door entry
• Fire sprinkler system within the building (144 or 120)
• Electrical connections
• Complete interior build-out with drywall walls and T-grid ceiling
• Network cabling readiness
• Custom interior build
• HCD State approvals
These comprehensive features ensure the facility will be fully functional, accessible, and compliant with all applicable codes and standards.
Construction & Durability
Built with steel framing, weather-resistant materials, and manufactured in controlled environments to ensure consistent quality and long-term performance.
Key Advantages
• Long-term durability (20-60+ years)
• Fast deployment and immediate occupancy
• Flexible and scalable workspace solutions
• Reusable across multiple projects
The Mobile Modular, Modular Office Unit Longevity & Performance Overview is included as Attachment 4.
The Public Works Department currently operates out of two separate facilities and is currently integrating the Utilities Department. The proposed modular building would consolidate departmental operations into a single centralized location, enhancing interdepartmental coordination, streamlining workflows, and improving overall operational efficiency and service delivery to the community.
Currently, only one unit with the configuration desired by the Department is available in stock. If this unit is not secured, procurement of a replacement would require approximately one year for manufacturing and an additional four months for installation. This would delay completion of the project by approximately sixteen months at a time when the Department’s operational needs and responsibilities continue to expand.
Staff recommends that the City Council authorize the City Manager to enter into and execute a Purchase and Installation Agreement with Mobile Modular Management Corp Inc., in a form and content approved by the City Attorney, for the acquisition and installation of a mobile modular office for the Public Works Department.
ENVIRONMENTAL IMPACT
The repair of the fire-damaged Public Works Department administrative building is considered statutorily exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15269 Emergency Projects, (b) defined as “Emergency repairs to publicly or privately owned service facilities necessary to maintain service essential to the public health, safety, and welfare.
GENERAL PLAN CONSISTENCY
The City of Rialto General Plan establishes various guiding principles, goals, and objectives through which the City looks to improve the community and protect the quality of life for our residents. This action is consistent with Guiding Principle 3 in the General Plan:
“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.”
This action is also consistent with the following goal and policy:
Goal 3-6: Require that all developed areas within Rialto are adequately served with essential public services and infrastructure.
LEGAL REVIEW
The City Attorney’s Office has reviewed the draft of the purchase and installation agreement and will approve it as to form.
FINANCIAL IMPACT
Operating Budget Impact
This action does not impact the Operating Budget.
Capital Improvement Budget Impact
As noted above, through the actions on December 14, 2021, January 11, 2022, and with the 2024/2025 budget process, Council approved a budget totaling $5.25 million towards the Public Works Admin Building Restoration Project. However, at that time, the project had an estimated cost of $3,750,000. This resulted in a remaining balance of $1,500,000 in Capital Account 33007302-53001 for Fiscal Year 2024/2025.
During the carry-forward process, the project scope had not changed and did not require carrying over the $1.5 million from Fiscal Year 2024/2025 from this account.
Due to the recent scope change, after it was determined that the prior building could not be restored and a new building would need to be constructed, staff is requesting an appropriation of $800,000 from the General Fund balance to the Capital Projects Fund, Account No. 33007302-53001. Additionally, there is an estimated remaining balance of $266,000 in the Capital Account 33007302-53001 for Fiscal Year 2025/2026 budget. Staff recommends appropriating $220,000 from these existing funds towards the project. The portion from the Capital Account would not need a budget resolution, as Council had previously authorized the use of up to $2,000,000 for this project.
The current project budget is $3,750,000, which was established for the initial restoration efforts. Following the termination of the construction contract with Marcon Engineering and the existing design and project management contracts, the current remaining project balance is estimated to be $2,288,460.09.
Staff proposes redirecting the remaining balance to fund the costs associated with the purchase and installation of the new modular facility. However, to fully fund the project, staff is requesting an additional appropriation from the General Fund balance in the amount of $800,000 to the Capital Projects Fund, Account No. 33007302-53001-220201-22, as included in the Resolution Attachment 5. This allocation, combined with available funding of $220,000 in the Capital Project fund, will result in a total estimated project budget of $3,308,460.09, which is necessary to fully fund the purchase and installation, and anticipated permitting and utility costs.
Licensing
Mobile Modular Management will pay a Business License tax prior to commencing services for this project.
ATTACHMENTS
1. Miller Architect Assessment
2. Sourcewell Contract with Mobile Modular
3. Mobile Modular Cost Proposal
4. Mobile Modular Performance Overview
5. Resolution