For Water Subcommittee Meeting, March 26, 2026
TO: Water Subcommittee Members
APPROVAL: Sachin Chawla, Director of Utilities
FROM: Toyasha Sebbag, Assistant to the City Manager
Title
Staff Request Water Subcommittee Provide Feedback on the Proposed 2024 - 2027 Labor Component Reset and Associated Staffing Adjustments under the Rialto Water Services Operations and Maintenance Subcontract. (ACTION)
body
RECOMMENDATION
Staff recommends that the Water Subcommittee provide feedback on the proposed 2024 - 2027 Labor Component Reset and associated staffing adjustments under the Rialto Water Services Operations and Maintenance Subcontract.
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 (Veolia). Articles VIII and XIV of the Concession Agreement establish the compensation framework for wastewater and water services, including the Labor Component. Sections 8.11 and 14.11 of the Agreement require that the Labor Component be recalculated every fourth (4th) Contract Year using the methodology defined in the Operations and Maintenance Subcontract.
Under the CA and Operations and Maintenance Subcontract (OMS), the Periodic Reset recalculates the Labor Component using a formula-based methodology that includes:
1. The average annual Labor Expense for the immediately preceding four (4) Contract Years, adjusted as provided in the CA;
2. An Additional Labor Adjustment reflecting reasonably anticipated changes in Labor Expense during the succeeding four (4) Contract Years due to operational needs, regulatory requirements, or system changes;
3. Application of the Contractor Charge to the adjusted Labor Expense to determine the updated Labor Component; and
4. Execution of a Contract Administrative Memorandum (CAM) showing all the scope and staffing changes and calculations to capture retroactive adjustments and labor compen...
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