For City Council Meeting May 12, 2026
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
AUTHOR: Nicole Hemmans, Senior Administrative Analyst
Title
Request City Council/Rialto Utility Authority to: (1) Adopt Resolution No. 8500 and RUA Resolution No. 26-03 Amending its 2025-2026 Wastewater Fiscal Year Budget For an Amount of $72,000; (2) Authorize Professional Service Agreement Amendment No. 4 With Rod LeMond in the Amount of $120,000 For a Total Not-To-Exceed Contract Amount of $220,000, For Continued Independent Financial Advisory and Accounting Services to Support the Rialto Utility Authority’s Financial Management, Reporting, and Compliance Obligations; and (3) Authorize the City Manager/Executive Director or Their Designee to Execute all Related Documents.
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council/Rialto Utility Authority:
1) Adopt a City Resolution and RUA Resolution Amending the 2025-2026 Wastewater Fiscal Year Budget for an amount of $72,000;
2) Authorize Professional Service Agreement Amendment No. 4 with Rod LeMond in the amount of $120,000 for a total not-to-exceed contract amount of $220,000, for continued independent financial advisory and accounting services to support the Rialto Utility Authority’s financial management, reporting, and compliance obligations; and
3) Authorize the City Manager/Executive Director or their designee to execute all related documents.
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:
• Original PSA (February 4, 2025): Not-to-exceed $25,000.
• 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.
• Second Amendment: Increase total compensation to $75,000.
• 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.
Rod Lemond will continue on an hourly basis for a total amount not to exceed $120,000 through June 30, 2027, for services provided under Amendment No. 4 (total contract amount, as amended by Amendment No. 4, is $220,000).
On April 30, 2026, the Water Subcommittee reviewed this item and provided feedback that the item be moved forward to the City Council/RUA Board for consideration.
ENVIRONMENTAL IMPACT
This 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 and approved the amendment as to form.
FINANCIAL IMPACTS
Operating Budget Impact
The original Professional Services Agreement (PSA) was $25,000 and has been amended three times. The proposed amendment will increase the contract by $120,000, resulting in a revised total not-to-exceed amount of $220,000.
Sufficient funds are available in the RUA Water Contract Services Account No. 56807960-52011 in the amount of $48,000.
A new appropriation of $72,000 is required in the RUA Wastewater Contract Services Account No. 56807860-52011.
Capital Improvement Budget Impact
There is no impact on the Capital Improvement Budget.
Licensing
Prior to execution of Amendment No. 4 to the original Professional Service Agreement, the vendor shall submit a business license application and pay a Business License tax, as well as Administration and State fees.
ATTACHMENTS
1. Resolution Authorizing a New Appropriation of $72,000
2. RUA Resolution Authorizing a New Appropriation of $72,000
3. Rod LeMond Proposed Amendment No. 4
4. Rod LeMond Executed Amendment No. 3
5. Rod LeMond Executed Amendment No. 2
6. Rod LeMond Executed Amendment No. 1
7. Rod LeMond Original PSA
8. Conflict of Interest Disclosure
9. Business License