REPORT TO THE CITY COUNCIL
FROM: JOHN ELLIS, Government Affairs Manager
Office of Mayor & City Manager
SUBJECT
Title
Actions pertaining to professional water lobbying, consulting, and regulatory services:
1. Approve the First Amendment to the Consultant Services Agreement with The Gualco Group Inc., for a period of one year in the amount not to exceed $60,000 annually, plus reimbursable costs incurred under the agreement not to exceed $2,500 per year; and
2. Authorize the City Manager, or designee, the authority to execute the First Amendment and grant the optional one-year extension
Body
RECOMMENDATION
Staff recommends the City Council approve the First Amendment to the Consultant Services Agreement with The Gualco Group Inc. (Gualco), extending the term one year for an amount not to exceed $60,000 annually, plus reimbursable costs not to exceed $2,500 per year with the option of an additional one-year extension for professional water lobbying representation. Reimbursable costs incurred under the Agreement are not to exceed $5,000 over the two one-year extensions, should both be approved.
EXECUTIVE SUMMARY
The Office of the Mayor and City Manager, in conjunction with the City’s Department of Public Utilities (DPU), seeks City Council approval of a First Amendment to a professional Consultant Services Agreement with Gualco. Gualco is the City’s current state water lobbyist, to continue performing professional water lobbying, consulting, and legislative and regulatory services. The City Council previously approved a Consultant Services Agreement effective through July 31, 2024, with the option of two additional one-year extensions. The term of the First Amendment is for one year, through July 31, 2025, with the option of an additional one-year extension. The proposed rate for service in the First Amendment is unchanged from Gualco’s current agreement.
BACKGROUND
The functions of the City related to water are significantly affected by the actions of the state Legislature, the Office of the Governor, and state regulatory agencies. In response to anticipated and unanticipated actions by these entities, the City first retained Gualco in January 2015 to provide professional government relations and advocacy services for the City of Fresno Water Capital Plan. That agreement was effective through September 2015. After issuing an RFQ to provide legislative and regulatory lobbying and consulting services in Sacramento for water-related issues, the City has retained Gualco for professional water lobbying, consulting, and legislative and regulatory services since August 2016. The firm has developed a strong working relationship with the City’s Department of Public Utilities (DPU).
Gualco’s representation has been crucial in helping the City secure more than $500 million in low-interest loans from the State Water Resources Control Board’s Division of Financial Assistance, which has allowed the City to avoid bonded indebtedness. Since 2015, Gualco has been involved with securing over $460 million in funding through the following low-interest SRF Loans and state grants for DPU projects:
$195 million Southeast Surface Water Treatment Facility (2015) - SRF loan
$70.6 million Southwest Recycled Water Distribution System (2015) - SRF loan
$77 million Kings River Pipeline Improvements (2016) - SRF Loan
$76 million Regional Transmission Main Projects (2016) - SRF Loan
$26.5 million Friant Kern Canal Pipeline Project (2016) - SRF Loan
$14 million Northeast Surface Water Treatment Facility 4.5MG Tank (2019) - SRF
Loan
$2.2 million Prop 1 Grant - PCE Groundwater Cleanup (2018) - Grant
$891,500 Prop 1 Grant - TCP Mitigation Feasibility Study (2018) - Grant
$3 million State Water Resources Control Board DWSRF Loan - Daleville Septic-
to-Sewer (2024, staff endorsed to Board for Aug. 6 vote)
The Gualco team were also active participants in the coalition that secured $100 million in the State budget for Fiscal Years 2021 and 2022 for subsidence repair on the Friant Kern Canal and two other major conveyance facilities.
The Gualco team personally communicates weekly with State officials to keep Fresno on their radars and determine the eligibility of proposed DPU projects for anticipated funding opportunities. Gualco is positioning DPU for success once funding opportunities are announced.
Specifically, Gualco arranged to launch the City’s pursuit of renewed significant funding with a round of private visits with all five SWRCB Members this past fall. All have accepted tour invitations to visit the City, as appropriate. The tactical next step was a Gualco-facilitated briefing of the SWRCB Division of Finance leadership by DPU Director and Associate Director in April. We provided general background on several candidate projects and obtained valuable candid guidance on how best to position. This high-level access is rare and much appreciated. This is critical was the State has entered a forecast 3-5 years when funding will be extremely difficult to obtain.
Company President and CEO Jack Gualco has decades of experience and is well known both in the State Capitol as well as in the many state and California-based federal agencies that deal with water and natural resources issues. (He is a former top aide to then-Assembly Speaker Willie L. Brown, Jr.) These connections are critical to the always important water issue, especially at a time when drought, groundwater contamination, a just-approved Conservation As A Way of Life Regulation and the State’s Sustainable Groundwater Management Act (SGMA) are combining to create a complex political landscape. Senior Advisor Robert Gore is one of the few advocates focused on CalEPA and Resources Agency, where for the City he deploys extensive personal contacts and decades of expertise as a top aide to Gov. Schwarzenegger and environmental engineering firm VP.
The California State Legislature, the Office of the Governor and State regulatory agencies continue to actively draft and adopt legislation that affects the City of Fresno’s water operations. The specific areas of concern include, but are not limited to, water conservation and drought regulations, recycling and re-use, drinking water, modifications and alterations to the Sustainable Groundwater Management Act, mandatory water and sewer consolidations between cities and disadvantaged communities, and advance knowledge of, and access to, low-interest loans and grants for water supply, treatment, and distribution projects.
Given the potential financial, operational, and technical impacts associated with proposed water-related legislation, the City has a need to extend Gualco’s services as a legislative, administrative, and regulatory representative for the City on water-related issues, as well as maintaining relationships and monitoring activities of all relevant State agencies and departments.
If approved, Gualco will continue to provide assistance in legislative affairs, intergovernmental relations, grants and program development, and other regulatory and lobbying services related to water at the state level. Gualco will continue to work with State officials to ensure maximum input on water matters of concern to the City as recognized by the consultant and/or instructed by the City. This will include, but is not limited to, the Governor’s Office, state departments and agencies, boards and commissions, and key legislators and individuals.
ENVIRONMENTAL FINDINGS
Approval of the Amendment to the consultant services agreement is not a “project” as defined by California Environmental Quality Act (CEQA) Guidelines Section 15378.
LOCAL PREFERENCE
Local preference was not implemented because this is an Amendment to an existing Agreement.
FISCAL IMPACT
The proposed agreement will not have any impact on the General Fund. Funding has been appropriated in the Water Enterprise Fund for FY 2025 and will be appropriated in future year budgets pending future approvals.
Attachment:
First Amendment with Original Consultant Services Agreement