For City Council Meeting September 22, 2026
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
AUTHOR: Yazdan Emrani, P.E., Director of Public Works
Title
Request City Council to Approve Assignment and Assumption Agreements Between the City of Rialto, Fountainhead Consulting Corporation, and Milestone CM Consulting, LLC Assigning Rights and Obligations Related to: (1) Assignment to Milestone, CM Consulting, LLC of the On-Call Professional Services Agreement Dated April 12, 2022; and (2) Assignment to Milestone CM Consulting, LLC of the Professional Services Agreement Dated December 16, 2025, as Amended May 12, 2026; and (3) Authorize the City Manager or Their Designee to Execute all Related Documents.
Body
RECOMMENDATION
Staff recommends that the City Council approve assignment and assumption agreements between the City of Rialto, Fountainhead Consulting Corporation, and Milestone CM Consulting, LLC assigning rights and obligations related to:
1) Assignment to Milestone CM Consulting, LLC of the on-call professional services agreement dated April 12, 2022;
2) Assignment to Milestone CM Consulting, LLC of the professional services agreement dated December 16, 2025, as amended May 12, 2026; and
3) Authorize the City Manager or their designee to execute all related documents.
BACKGROUND
The City currently has two separate agreements in place with Fountainhead Consulting Corporation (“Fountainhead”): an On-Call Professional Services Agreement (“On-Call PSA”) and a Professional Services Agreement (“PSA”).
On April 12, 2022, the City Council approved the On-Call PSA with Fountainhead for construction management, inspection, and materials testing services for an initial three-year term, with two one-year optional extensions.
On September 9, 2025, the City Council awarded a construction contract to C.P. Construction Co., Inc. in the amount of $29,107,522.20 for the Baseline Storm Drain Project, City Project No. 170700. As part of the same action, the City Council authorized a contract change order in the amount of $2,993,555.00 with Fountainhead pursuant to the City’s On-Call PSA for construction management, inspection, and materials testing services for the Project.
The Baseline Storm Drain Project consists of an approximately 2.0-mile-long storm drain system extending from the Tamarind Avenue/Baseline Road intersection to Cactus Basin No. 3. Fountainhead has been providing the authorized construction management, inspection, materials testing, and related construction-phase services for the Project.
Separately, in November 2025, the City’s full-time Capital Improvement Project (“CIP”) Engineering Manager left the City, creating a need for interim consultant support to maintain continuity in the delivery of the City’s Capital Improvement Program. The City initially entered into a PSA dated December 16, 2025, with Fountainhead in the amount of $95,000 under the authority of the City Manager for interim CIP Engineering Manager services.
On May 12, 2026, the City Council approved a First Amendment to the PSA with Fountainhead in the amount of $200,000, bringing the total not-to-exceed contract amount for interim CIP Engineering Manager services to $295,000 and extending the term of the PSA through June 30, 2027.
The City has since hired a full-time CIP Engineering Manager. However, given the number and complexity of active capital improvement projects currently being administered by the Public Works Department, a transition period is necessary to provide continuity and facilitate the orderly transfer of project knowledge, responsibilities, schedules, consultant and contractor coordination, funding requirements, and outstanding project issues to the new CIP Engineering Manager. The remaining interim CIP Engineering Manager services would be utilized to support this transition and assist the new City staff member in assuming responsibility for the active CIP portfolio.
The Baseline Storm Drain construction management and inspection services and the remaining transitional CIP Engineering Manager services are currently authorized under their respective agreements with Fountainhead. Fountainhead has requested assignment of its remaining contractual rights and obligations associated with both service areas to Milestone CM Consulting LLC (“Milestone”), and Milestone has agreed to assume the remaining authorized services, subject to City Council approval and execution of Assignment and Assumption Agreements among the parties.
ANALYSIS/DISCUSSION
The proposed Assignment and Assumption Agreements would transfer to Milestone the remaining authorized services currently being provided by Fountainhead under two separate City agreements: (1) the On-Call PSA for construction management, inspection, materials testing, labor compliance, public outreach, and related services for the Baseline Storm Drain Project; and (2) the PSA for interim Capital Improvement Project Engineering Manager services. The proposed action does not expand the previously authorized scopes of work or increase the total amounts previously approved by the City Council.
Baseline Storm Drain Project
Construction of the Baseline Storm Drain Project is currently underway. To maintain continuity of construction management, inspection, materials testing, labor compliance, public outreach, documentation, contractor coordination, and related construction-phase services, Fountainhead has requested assignment of its remaining contractual rights and obligations for the Project to Milestone.
Under the proposed Assignment and Assumption Agreement, Milestone would assume responsibility for the remaining authorized Baseline Storm Drain services subject to the terms and conditions of the existing City agreement. The transition is intended to maintain uninterrupted field oversight and project administration while construction remains active.
Based on Fountainhead’s invoicing through July 31, 2026, together with estimated billings for services anticipated to be performed through September 22, 2026, Fountainhead is projected to have invoiced approximately $858,000 against the original authorization of $2,993,555, leaving approximately $2,135,555 in remaining authorized contract capacity as of the anticipated transition date. If approved by the City Council, Milestone would assume responsibility for the remaining authorized scope and contract balance. The proposed assignment would transfer the remaining authorized scope and contract balance to Milestone and would not increase the amount previously authorized by the City Council.
Interim CIP Engineering Manager Services
The City has recently hired a full-time CIP Engineering Manager. The remaining consultant services are not intended to replace or duplicate the duties of the newly hired City employee, but rather to provide a defined transition period for the orderly transfer of the City’s active capital improvement program.
The City currently has numerous capital projects in various stages of planning, design, procurement, construction, and closeout. The transition effort will include briefing the new CIP Engineering Manager on project status, budgets, schedules, consultant and contractor responsibilities, pending decisions, upcoming City Council actions, funding requirements, outside agency coordination, and other outstanding project matters. Continued transitional support will allow the new CIP Engineering Manager to assume responsibility for the active project portfolio while minimizing disruption to project delivery.
The May 12, 2026, staff report previously identified continuity and progress on critical projects as key reasons for maintaining interim CIP Engineering Manager support while the City completed its recruitment process. Staff also noted the consultant’s familiarity with City processes, protocols, and active CIP projects.
Based on Fountainhead’s invoicing through July 31, 2026, together with estimated billings for services anticipated to be performed through September 22, 2026, Fountainhead is projected to have invoiced approximately $222,000 against the authorized not-to-exceed amount of $295,000 for Interim CIP Engineering Manager services, leaving approximately $73,000 in remaining authorized contract capacity as of the anticipated transition date. If approved by the City Council, Milestone would assume responsibility for the remaining transitional services and contract balance. The proposed assignment would allow Milestone to provide the remaining transitional services through the end of the PSA’s term, which is June 30, 2027, or until the transition to the City’s full-time CIP Engineering Manager is substantially complete.
Assignment and Continuity of Services
Milestone has experience providing construction management and inspection services for public works projects and is familiar with City procedures, project delivery requirements, and the City’s active capital improvement program. The proposed assignments would allow the remaining services under both agreements to continue under Milestone without creating new scopes of work or increasing the previously authorized contract amounts.
The City has previously approved the continuation and assignment of professional services agreements where a successor consultant assumed ongoing project responsibilities. For example, the PSA originally awarded to J.L. Patterson & Associates, Inc. for the Riverside Avenue UPRR Bridge Widening Project was subsequently assigned by the City to Jacobs Engineering Group, Inc. following Jacobs’ acquisition of J.L. Patterson. The proposed Fountainhead Assignment and Assumption Agreements similarly provide a mechanism for the City to authorize the orderly transition and continued performance of previously authorized professional services.
A copy of the proposed Assignment and Assumption Agreement for the Baseline Storm Drain Project is included as Attachment 1 (Assignment of On-Call PSA). A copy of the proposed Assignment and Assumption Agreement for the Interim CIP Engineering Manager Services is included as Attachment 2 (Assignment of PSA). A copy of Milestone’s proposal for the remaining Baseline Storm Drain construction management, inspection, materials testing, labor compliance, public outreach, and related services is included as Attachment 3. A copy of Milestone’s proposal for the remaining interim CIP Engineering Manager transition services is included as Attachment 4. Milestone’s Disclosure Statement is included as Attachment 5. The September 9, 2025, City Council staff report authorizing the Baseline Storm Drain construction contract and Fountainhead construction management, inspection, and materials testing services is included as Attachment 6. The May 12, 2026, City Council staff report and First Amendment for interim CIP Engineering Manager services is included as Attachment 7.
ENVIRONMENTAL IMPACT
The proposed action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to CEQA Guidelines Section 15378(b)(5), organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment are not considered projects subject to CEQA.
Approval of the Assignment and Assumption Agreements between the City of Rialto, Fountainhead, and Milestone is an administrative action associated with the continued performance of previously authorized construction management, inspection, materials testing, labor compliance, public outreach, related construction support services, and interim CIP Engineering Manager transition services, and will not result in any new direct or indirect physical change to the environment.
The environmental impacts associated with construction of the Baseline Storm Drain Project were previously evaluated by the City. On April 27, 2021, the City Council adopted a Mitigated Negative Declaration for the Project pursuant to CEQA.
GENERAL PLAN CONSISTENCY
The proposed action, including the continued delivery of capital improvement program management services and construction support services for the Baseline Storm Drain Project, is consistent with Guiding Principle 3 of the City of Rialto 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.
Approval of the proposed Assignment and Assumption Agreement also complies with the following City of Rialto General Plan Goals and Policies:
Goal 3-6: Require that all developed areas within Rialto are adequately served with essential public services and infrastructure.
Policy 3-6.3: Require an increasing level of public safety infrastructure and service capability tied to population increase and increasing service demand.
Policy 3-6.4: Complete infrastructure master plans for sewer, water, and drainage.
Goal 3-7: Upgrade public infrastructure as an inducement to promote private investment.
Goal 5-2: Minimize the risk and damage from flood hazards.
Policy 5-2.5: Require that any structure proposed within an officially designated 100-year floodplain, or other floodplain as determined through geotechnical investigation, be designed in a manner that does not negatively impede or redirect floodwaters or raise anticipated flood heights.
LEGAL REVIEW
The City Attorney has reviewed the agreements and approved them as to form.
FINANCIAL IMPACT
Operating Budget Impact
The proposed Assignment and Assumption Agreements will have no additional impact on the Operating Budget. The scope of services and total authorized compensation for the interim CIP Engineering Manager services will remain unchanged. Milestone will assume the remaining authorized scope of services and available contract balance under the existing agreements, Contract No. 26000053, as shown in Table 1 below. No additional appropriation is requested.
Table 1
Capital Improvement Budget Impact
The proposed Assignment and Assumption Agreements will have no additional impact on the Capital Improvement Budget. The scope of services and total authorized compensation for the Baseline Storm Drain Project, City Project No. 170700, will remain unchanged. Milestone will assume the remaining authorized scope of services and available contract balance under the existing agreement, Contract No. 26000034, as shown in Table 2 below. No additional appropriation is requested.
Table 2
Licensing
Prior to execution of the Assignment and Assumption Agreement and commencement of services, Milestone shall maintain a valid City of Rialto Business License and pay all applicable Business License taxes, administrative, and State fees.
ATTACHMENTS:
1. Assignment and Assumption Agreement - On-Call PSA
2. Assignment and Assumption Agreement - PSA
3. Milestone Proposal - Baseline Storm Drain CM&I Services
4. Milestone Proposal - Interim CIP Engineering Manager Transition Services
5. Milestone Disclosure Statement
6. September 9, 2025, City Council Staff Report
7. May 12, 2026, City Council Staff Report