For City Council Meeting October 14, 2025
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
Title
Request City Council/Rialto Utility Authority to Adopt Resolution No. 8417 and RUA Resolution No. 08-45 Approving and Accepting the Department of Water Resources Urban Community Drought Relief Grant Funds for $6,000,000 and the U.S. Department of Interior, Bureau of Reclamation Grant Funds for $2,000,000 for the Advanced Metering Infrastructure Project; Appropriating $350,00 From Water Rate Stabilization for the Advanced Metering Infrastructure Project; Amending the City’s 2025-2026 Fiscal Budget to Authorize the use of Such Funds for the Advanced Metering Infrastructure Project; Approving and Authorizing the Final Construction Work Authorization in the Amount of $7,998,719 to Rialto Water Services for the Purposes of the Advanced Metering Infrastructure Project; and Authorizing the City Manager or Their Designee to Execute all Related Documents.
POWERPOINT
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council/Rialto Utility Authority adopt resolutions:
1) Approving and accepting the Department of Water Resources Urban Community Drought Relief grant funds for $6,000,000 and the U.S. Department of Interior, Bureau of Reclamation grant funds for $2,000,000 for the Advanced Metering Infrastructure (AMI) Project;
2) Appropriating $350,00 from Water Rate Stabilization for the AMI Project;
3) Amending the City’s 2025-2026 Fiscal Budget to authorize the use of such funds for the AMI Project;
4) Approving and authorizing the Final Construction Work Authorization (FCWA) in the Amount of $7,998,719 to Rialto Water Services for the purposes of the AMI Project; and
5) Authorizing the City Manager or their designee to execute all related documents.
BACKGROUND
On March 27, 2012, the City Council and the Rialto Utility Authority (RUA) approved a Concession Agreement (CA) with Rialto Water Services, LP (RWS), operated by Veolia North America. The CA established a framework for capital project delivery, including both specific projects identified at the time of approval and future projects mutually initiated by RUA or RWS through the Final Construction Work Authorization (FCWA) process.
On March 15, 2024, RWS-Veolia issued a Request for Proposals (RFP) for the Advanced Metering Infrastructure (AMI) Project. The original RFP included a provision that all field installation work be performed by union labor. No proposals were received under these conditions. To ensure the project could proceed, RWS-Veolia issued Addendum No. 2 to the RFP, which required that prevailing wages be paid for all construction labor, but waived the union labor requirement and extended the bid period. Four responses were received under the revised RFP, and Utility Service Group Water Solutions (USG) was identified as the preferred bidder. In order to ensure full compliance with detailed grant requirements, the City reissued an RFP on July 10, 2025, consistent with all grant requirements and consistent with Veolia’s Addendum No. 2. Two responses were received, and USG was selected as the preferred bidder.
ANALYSIS/DISCUSSION
The City of Rialto (City) and Rialto Utility Authority (RUA) have secured $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, Attachment’s 2 and 3.
To align with state and federal grant requirements, the City’s Public Works Department issued a revised bid for the AMI Project under Request for Proposals (RFP) #25-047 on July 10, 2025. Bids closed on August 12, 2025, with two firms submitting responsive proposals: Thirkettle Corporation/Aqua-Metrics and Utility Service Co. Inc./USG Water Solutions (USG).
A panel of ten evaluators with expertise in AMI project implementation, engineering, capital improvement project delivery and inspection, and grant management from both RWS-Veolia and the City reviewed the proposals using three categories: Team Qualifications and References, Technical Requirements, and System Integration Experience. Cost proposals were submitted separately and were not included in the ranking criteria to ensure an objective and fair evaluation process.
Based on these criteria, the evaluation panel determined that USG ranked highest overall. Following the evaluation, City and RWS representatives began good-faith negotiations with USG to finalize the project scope, pricing, and deliverables, with the goal of establishing a contract that meets both technical and grant compliance requirements.
FCWA Cost Proposal
RWS-Veolia is committed to completing the project by December 31, 2026, in alignment with the grant timeline.
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 is included as Attachment 4.
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 3-8: Promote affordable and quality water service capable of adequately meeting normal and emergency water demands to all areas in Rialto.
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 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, City Project No. 26AMI.
The Veolia Recovery, 2017-24 Project Development fee of $350,000 (funded from the $8,000,000 grant appropriation cited above) will be paid from the Water Fund’s Rate Stabilization Account.
Licensing
This action does not require a business license.
ATTACHMENTS
1. Presentation of AMI Project
2. DWR Executed Agreement No. 4600015365 for $6M
3. BOR Executed Agreements Nos. R22AP00556-00, R22AP00556-01, & R22AP00556-02
4. AMI Notice of Exemption
5. FCWA with RWS for the AMI Project
6. Resolution Adopting the AMI Project
7. RUA Resolution Adopting the AMI Project