ITEM:		ACTION ITEM
10.	CONSIDER APPROVAL OF FUNDS FOR ENGINEERING AND UTILITY OPERATIONS CONSULTANTS IN SUPPORT OF THE PUBLIC’S ACQUISITION OF THE MONTEREY WATER SYSTEM
Meeting Date:			November 18, 2024	Budgeted:	No
From:			David J. Stoldt	Program/	N/A
			General Manager	Line Item:	N/A
Prepared By:			David J. Stoldt	Cost Estimate:	$2,165,000
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

SUMMARY: In December 2023, the District filed an eminent domain action for the public’s acquisition of California American Water Company’s Monterey Water System. The first step in the process will be a bench trial – also known as a “right to take” trial – in which a judge will determine if the taking and the stated reasons in the District’s Resolution of Necessity are in the greater public interest. In support of that proceeding, the District must fully assess the facilities and operations of the Monterey Water System through both the discovery of documents and physical inspection.

Utility Consultant

Since 2019, the District has been working with Craig Close, a utility consultant who was involved in both the City of Missoula, Montana, water system acquisition from Liberty Utilities and the City of Apple Valley, California, attempted acquisition of its investor-owned water system. Mr. Close was HDR Engineering’s Senior Vice President and National Director – Utility Management Services. Previously, he was Vice President – Operations & Engineering for American Water Works’ Cal-Am subsidiary. His initial contract and first amendment was through the District’s General Counsel. For the proposed scope of new work, he should contract directly with the District.

The scope of work includes:

· Discovery and Document Production Requests;

· Operations Assessment and Deficiency Identification; and

· Coordinate and Advise w/ Consulting Engineers

Mr. Close has prepared a list of possible work tasks attached as Exhibit 10-A. Mr. Close has established a budget of $965,000 based on potential hours. It is not expected that the District will require 100% of the tasks listed and some will be shared or assigned to a consulting civil engineer.

Consulting Civil Engineer

The District’s consulting civil engineering and contract operations partner resigned from additional work on the acquisition of the Monterey Water System in December 2023 due to a perceived conflict of interest. Other firms approached in early 2024 also had perceived conflicts. Since early October 2024, the District has approached a handful of firms with a proposed scope of services as shown in Exhibit 10-B attached.

The District has received a proposal with a budget of up to $1,200,000 based on projected hours, and staff hopes to receive one or two more such proposals soon.

RECOMMENDATION: The General Manager recommends the Board approve an amount not to exceed $965,000 for a contract with Close & Associates and direct staff to select the most qualified civil engineering consultant and enter into a contract with an amount not to exceed $1,200,000.

EXHIBITS

10-A Work Tasks – Close & Associates

10-B Proposed Scope of Services – Consulting Civil Engineers

U:\staff\Boardpacket\2024\11182024\Action Items\10\Item-10.docx