Adopt Resolution No. 2026-03 UA
Since 1993, the City of Banning has maintained an agreement for the operation and maintenance of the City’s Wastewater Treatment Plant (WWTP). Veolia Water Contract Operations USA, Inc. acquired United Water, the previous contractor, and held that agreement since 2016. Throughout the agreement’s thirty-three-year history, the contractors have reliably operated the City’s wastewater treatment facilities while maintaining compliance with the City’s Waste Discharge Requirements issued by the California Regional Water Quality Control Board.
Under the current agreement, Veolia is responsible for the operation and maintenance of the City's wastewater treatment plant and wastewater lift stations throughout the City. Veolia provides five (5) full-time certified wastewater professionals to staff the facility seven days per week, provides twenty-four (24) hour emergency response coverage, and supplies specialized technical resources for regulatory compliance, preventative maintenance, industrial pretreatment, and capital improvement planning.
The current agreement, as extended through Amendment No. 6 and approved by Resolution No. 2023-09 UA, expires on September 30, 2026. Subsequently, Amendment No. 7 was approved on December 10, 2024, providing additional compensation for the extended contract term at a rate of $78,069.51 per month, or $936,834.15 annually.
It shall be noted that Amendment No. 2 specifies that upon the expiration date, the agreement does not terminate. Instead, it automatically continues for 180 days while the parties negotiate new terms. This clause ensures uninterrupted service after the expiration date and provides both parties with defined timeframes for negotiating any new terms.
Staff recommends approval of the Eighth Amendment to continue Veolia's operation and maintenance services through September 30, 2028, with two optional one-year extensions.
Veolia has consistently demonstrated exceptional performance in operating and maintaining the City's wastewater treatment facilities. Their experienced staff has maintained regulatory compliance, responded effectively to operational challenges, and provided valuable technical expertise supporting the City's wastewater program.
In addition to maintaining reliable operations, Veolia has contributed to the City's continued recognition within the wastewater industry. Most recently, the City received the 2025 CWEA Colorado River Basin Section Small Collection System of the Year Award, recognizing the outstanding performance of the City's wastewater operations team. Veolia's partnership and operational support were instrumental in achieving this distinction.
The City is currently advancing the planning and design of its Wastewater Treatment Plant and Recycled Water Upgrades Project. Once constructed, the upgraded treatment facility will include advanced treatment processes, expanded recycled water production, and additional operational requirements that will significantly change the scope of operation and maintenance services. At that time, staff anticipates preparing and soliciting a new operations contract reflecting the needs of the upgraded facility.
Until the upgraded treatment plant becomes operational, staff believes it is in the City's best interest to continue utilizing Veolia's experienced personnel and institutional knowledge. Extending the existing agreement provides operational continuity, minimizes transition risks, avoids procurement costs during a period of significant capital improvements, and allows staff to focus resources on the successful delivery of the WWTP Upgrade Project.
The Department of Public Works Wastewater Operations Fund, Account No. 680-8000-454.23-38 (Contracted Wastewater Plant Services), will continue to fund this Agreement.
The current annual contract amount for Fiscal Year 2026/2027 is $968,488.13. In accordance with the existing Agreement, compensation will continue to be adjusted annually based on the Consumer Price Index (CPI). Staff estimates future annual adjustments of approximately 3.1%, resulting in the following estimated annual costs:
Fiscal Year Annual Cost
2026/2027 $ 968,488.13
2027/2028 $ 998,511.26 (Estimated)
2028/2029 (Optional) $1,029,465.11 (Estimated)
2029/2030 (Optional) $1,061,378.53 (Estimated)
The costs for this Amendment No. 8 were included in the proposed Operating Budget for Fiscal Year 2026/2027, which was approved by City Council on September 22, 2026. Actual annual adjustments for subsequent fiscal years will be based on the applicable CPI calculation under the Agreement and incorporated into the normal operating budgets.