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HomeMy WebLinkAboutItem 6h - Authorize Change Order for Contract Water Treatment Plant Supervisor Support Item 6h Department: Utilities Cost Center: 6003 For Agenda of: 10/20/2026 Placement: Consent Estimated Time: N/A FROM: Aaron Floyd, Public Works & Utilities Director Prepared By: Shawna Scott, Assistant Director of Utilities SUBJECT: AUTHORIZE A CHANGE ORDER FOR CONTINUED CONTRACT WATER TREATMENT PLANT SUPERVISOR/OPERATOR SUPPORT RECOMMENDATION 1. Authorize a $50,001 amendment to the Water Talent contract for temporary certified T5 operator coverage at the Water Treatment Plant, increasing the total contract amount to $200,000, and authorize the City Manager to execute the amendment; and 2. Authorize the City Manager to execute subsequent extensions or amendments necessary to maintain Water Treatment Plant operational coverage, provided sufficient budget is available. POLICY CONTEXT The City’s Water Treatment Plant (WTP) is regulated by the California State Water Resources Control Board, Division of Drinking Water (DDW), and is classified as a Treatment Grade 5 (T5) facility. DDW regulations require that a certified T5 operat or provide responsible charge and operational oversight of the facility. The City’s Purchasing Policy requires that contracts for professional services exceeding $149,999 receive City Council authorization. Staff are requesting authorization to issue a change order in the amount of $50,001 resulting in a total contract amount of $200,000; therefore, City Council consideration and approval is required. DISCUSSION Background Regulatory Requirements and Operator Certification The WTP is classified as a Treatment Grade 5 (T5) facility, which is the highest level of treatment complexity recognized by the State. DDW regulations require that a certified T5 operator provide responsible charge and operational oversight of the facility. While a T5 operator is not required to be physically present at all times, one must be continuously available to support operations, direct process control decisions, and ensure compliance with regulatory requirements. Failure to maintain appropriate certified oversight would Page 173 of 210 Item 6h place the City out of compliance with State regulations and could result in enforcement actions, operational limitations, or risks to water quality. Critical Nature of Water Treatment Operations The City currently relies on its WTP as the sole source of treated drinking water supply. The WTP operates continuously, 17-20 hours per day, 365 days per year, and is a critical and essential public health facility. Interruptions to treatment operations exceeding approximately 24 hours would significantly impact the City’s ability to deliver potable water, maintain fire protection, and meet basic public health requirements. Current Staffing Condition and Recruitment Status In April 2026, the City’s previous Water Treatment Plant Supervisor (a T5 Operator) provided notice of their separation from the city, necessitating initiation of a recruitment to fill the supervisory position. The pool of T5-certified operators in California is extremely limited, and as a result, recruitment for T5-certified positions is highly competitive and typically requires extended timelines, incentives, and higher-than average recruitment costs. Based on industry conditions and recent recruitment efforts across the state, staff anticipated that filling this position would take several months following posting of the recruitment, resulting in a gap in regulatory coverage by a T5 Operator. To bridge the gap between the departure of the prior WTP Supervisor and the hiring of a permanent replacement, staff contracted with Water Talent, a firm specializing in providing certified water treatment operators, including T5-certified personnel. This approach ensured uninterrupted compliance with DDW requirements while allowing the City sufficient time to complete a competitive recruitment process for a permanent hire. As discussed in the Fiscal Analysis section of this report, funding for this contract position is allocated in the 2026-27 Budget. City of San Luis Obispo Municipal Code Section 3.24.060 states that bid procedures “may be dispensed with, at the discretion and judgment of the purchasing authority as to the best interests of the city” if the purchase meets specified criteria. Therefore, a sole source professional services agreement for a contract T5-certified Water Treatment Plant Supervisor was approved by the Finance Director and City Manager, based on the findings that the action was “reasonably necessary for the preservation or protection of public peace, health, safety or welfare of persons or property” (Municipal Code Section 3.24.060.F). Execution of this agreement and retainment of contract T5 Water Treatment Plant Supervisor services through Water Talent was justified pursuant to these findings and has ensured that the City remained in regulatory compliance with DDW and maintained the preservation and protection of public health and safety related to the City’s drinking water. The extended recruitment for a permanent T5 Water Treatment Plan t Supervisor is culminating in scheduled interviews in October. It is anticipated that if the recruitment and interview process are successful, the selected individual may require time to complete standard employment processes, and depending on the individual selected, relocate to the San Luis Obispo area. As a result, staff anticipate the continuance of the existing contract agreement, and associated need for the City Council’s approval of a change Page 174 of 210 Item 6h order to allow for expenditures beyond the $149,999 purchasing threshold allowed for City Manager approval. If the current recruitment process is not successful, extension of the Water Talent contract would be required to maintain regulatory compliance and ensure safe treatment of the city’s drinking water. Previous Council or Advisory Body Action On June 2, 2026, the Council unanimously adopted Resolution No. 11657, approving the FY 2026-27 Budget and appropriating the allocations presented in the Budget Supplement. The adopted budget included a Utilities Branch Significant Operating Budget Change (SOBC) of $215,000 for temporary contract staffing to provide certified T5 operator coverage at the WTP while the City recruited a permanent WTP Supervisor. Public Engagement The public had an opportunity to provide comment during the June 2026 budget adoption hearing, which included funding for temporary WTP contract services. The current request to issue a change order for the contract agreement and delegate authority to the City Manager for future contract amendments (subject to adopted purchasing policies) is included on the published City Council agenda, p roviding additional opportunities for public comment before and during the Council meeting. CONCURRENCE DDW has provided the City with concurrence that the contract services is an acceptable means for meeting WTP operational and regulatory needs. The Fin ance and Human Resources Departments were consulted and concur with the approach to the immediate staffing need and current recruitment for a permanent hire. ENVIRONMENTAL REVIEW The proposed action is not a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(b)(5), because it involves organizational or administrative activities of governments that do not result in direct or indirect physical changes in the environment. FISCAL IMPACT Budgeted: Yes Budget Year: 2026-27 Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost Water Fund $200,0001 $200,000 $0 $0 Total $200,000 $200,000 $0 $0 Note: As described below, the approved budget includes $215,000, of which $200,000 is identified for contract services and $15,000 is identified for recruitment incentives. Therefore, $200,000 is shown here. Page 175 of 210 Item 6h The proposed contract amendment requires no additional budget appropriation. On June 2, 2026, following a public hearing, the City Council approved the FY 2026-27 Budget, including $215,000 for temporary Water Treatment Plant contract services and recruitment incentives. Of this amount, $200,000 was allocated for tem porary contract staffing to provide certified T5 operator coverage while the City recruits a permanent Water Treatment Plant Supervisor. The remaining $15,000 is intended for hiring incentives associated with the permanent position. As of September 28, 2026, approximately $94,600 has been expended on the Water Talent contract. Staff request authorization to execute a $50,001 contract amendment, increasing the total contract amount to $200,000. The amendment is fully funded through the existing Water Fund appropriation. Under Section 202B of the City's Purchasing Policy, professional services contracts with a cumulative value of $150,000 or more require City Council approval. Accordingly, staff request that Council authorize the proposed amendment and delegate authority to the City Manager to execute subsequent contract extensions or amendments, subject to available budget. If subsequent contract extensions or amendments are necessary and require an increase in the contracted amount over $200,000, the associated funding would be accommodated from salary savings due to the vacant Water Treatment Plant Supervisor position and savings in other operating budgets (i.e., chemicals, electricity). This flexibility will allow the Water Treatment program to maintain necessary operational coverage and meet regulatory requirements throughout the recruitment process. ALTERNATIVE 1. Deny the contract extension request. The City Council could deny staff’s request to issue a change order and authorize City Manager approval of potential contract amendments. This action would result in delays or gaps in regulatory coverage, and would pose risk to public health and regulatory compliance, as DDW requires oversight of the City’s WTP by a T5 Certified Operator. ATTACHMENTS No attachments. Page 176 of 210 Page 188 of 210 R ______ RESOLUTION NO. _____ (2026 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, DESIGNATING THE CITY MANAGER AS PLAN ADMINISTRATOR FOR DEFERRED COMPENSATION AND DEFINED CONTRIBUTION PLANS WHEREAS, the City of San Luis Obispo (“CITY”) offers its employees participation in deferred compensation and defined contribution retirement plans, (“Plan(s)”), qualifying under relevant sections of the Internal Revenue Code and the California Government Code; WHEREAS, the Plans currently provide that (i) CITY (through the City’s governing body) or (ii) a committee or another person designated by the City will be the administrator and responsible for the administration, assets and investments of the Plans; WHEREAS, currently, the City Council is the administrator and bears the fiduciary responsibilities for the administration, assets, and investments of the Plans; WHEREAS, recent developments in the governmental deferred compensation and defined contribution marketplace have highlighted the importance of clearly identifying oversight and accountability for the City’s retirement plans; and WHEREAS, in order to protect the interests of plan participants, maintain fiduciary standards, and ensure efficient administration, staff recommends that the City Council formally designate a Plan Administrator for the City’s deferred compensation and defined contribution plans; WHEREAS, the City deems it to be in the best interests of the City and the Plans’ participants to designate the City Manager as administrator of the Plans . NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. For any Plans under contract with the CITY, the City Manager, and any City staff they may designate to assist in that role, is designated as the administrator of the Plans (“Plan Administrator”), with responsibility for the administration, assets and investments of the Plans. SECTION 2. The Plan Administrator is hereby authorized to execute all Plan related documents on behalf of the CITY, including, but not limited to, any Plan Amendments, assign or delegate administrative duties as appropriate and take whatever additional actions are necessary for the CITY to administer the Plans and comply with relevant regulations. Page 189 of 210 Resolution No. _____ (2026 Series) Page 2 R ______ SECTION 3. This resolution hereby rescinds and replaces Resolution No. 11603 (2025 Series). Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _______________ 20 26. ___________________________ Mayor Erica A. Stewart ATTEST: ______________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ______________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington City Clerk Page 190 of 210