Santa Paula: Schedule Changes and Continuing Review of Wastewater Treatment Plant Contract

By Sheryl Hamlin

Item 12D Schedule Change

This seemingly innocuous item on the October 17, 2016 Santa Paula Council Meeting yielded two important results.

The next regularly scheduled meeting of November 7, 2016 is the night before the November 8, 2016 election. Traditionally the council has not met on this evening, particularly in light of the staff’s late night vigil with election returns. It was agreed not to meet on the 7th of November.

However, Council Member Gherardi brought up the unfinished Operations and Maintenance Contract review. Note that this O&M contract has appeared twice before council and has been reviewed here and here. Each time has failed to yield a comparable analysis between the three bidders.

Brian Yanez, former Public Works Director, had suggested the week of October 24th for the next round of analysis, at which time staff would return with an apples-to-apples comparison.

The date for this third attempt to review the O&M contract was set at Thursday, October 27th at 5:00 pm. Assistant City Clerk Blanco will schedule. All council members were available for this date and time.

Open Questions for Wastewater Treatment Facility O&M Analysis


  • There has never been a financial pro forma produced by city staff comparing the “before” and “after” buyout of the Wastewater Treatment Facility. How can council make a decision going forward without understanding where it has been? Based on this analysis, there does not appear to be a significant cost savings.
  • Why was there no analysis of the type of insurance carried by PERC when on page 18 of the 2015 Wastewater Enterprise Revenue Bond Prospectus PERC is required to maintain “commercial general liability”? According to Attorney Cotti, the 2015 spill was considered “pollution” and not covered by PERC, so the city paid the entire cost of the spill totaling about $1.5 million.
  • What are the costs for the consultant on this RFP? Morro Bay is paying $75,000 for this consultant. What is the cost to the Enterprise Funds and how long will this continue?
  • PERC suggested the existing O&M contract could be amended and the buyout fee reduced, to which City Attorney Cotti said the bonds required a new contract. However on pages 2-3 of the Prospectus, the language “the City intends to undertake a bidding process” appears several times. Where is the city directed to create a new contract?
  • Where in the bond prospectus or other documentation is the date of October 31, 2016 given as a date to terminate the PERC contract?
  • Who determined the term of the new contract and what are the cancelation terms?
  • The consultant said that the current RFP process was more of a “professional services” approach. How does this methodology guarantee the city the lowest price?
  • Shouldn’t the council be convened as the Santa Paula Utility Authority when discussing such matters?


To watch the video of the meeting, please click here.


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