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June 16, 2026
ITEM TITLE
Consultant Services Agreement: Approve a Consultant Services Agreement with Otay Water District to Provide Water Consumption Data and Sewer Billing Services Report Number: 26-0103
Location: No specific geographic location
Department: Finance
G.C. § 84308 Regulations Apply: No
Environmental Notice : This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3), no environmental review is required.
Recommended Action
Adopt a resolution approv ing a consultant services agreement with Otay Water District to provide water consumption data and sewer billing services.
SUMMARY
The proposed consultant services agreement with Otay Water District ( “OWD”) provides for water consumption data and sewer billing services for parcels served by OWD within the jurisdictional boundaries of the City of Chula Vista, for which OWD has historically performed these services. OWD was selected on a sole-source basis pursuant to Chula Vista Municipal Code Section 2.5 6.070(B)(4), based on its unique qualifications and exclusive access to the data necessary to perform these services. Staff recommends entering into an initial term of five (5) years, with an option to extend for one additional five-year term. All costs associated with this agreement are funded by Sewer funds.
ENVIRONMENTAL REVIEW
The proposed activity has been reviewed f or compliance with the California Environmental Quality Act (CEQA), and it has been determined that the activity is not a project a s defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a government fiscal/ administrative activity which does not result in a physical change in the environment. Therefore, pursuant to Section 15060(C)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
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BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The City administers its sewer billing services in a manner that ensures the accurate calculation of sewer service charges, proper revenue collection, and reliable customer service for all parcels connected to the City’s wastewater system. Sewer service fees are based, in part, on each customer’s metered water use. To perform these functions, the City relies on timely and accurate water consumption data from water agencies serving customers within the City’s jurisdiction.
OWD provides potable water service to parcels located within its jurisdictional boundaries and is uniquely positioned to supply the City with the consumption data required to calculate sewer service charges and to perform sewer billing services on behalf of the City.
To ensure continuity of essential data-sharing, sewer billing functions that support the City’s sewer service program and maintain the long -standing and effective partnership between the City and OWD, staff recommend entering into a new agreement with OWD for the provision of water consumption data reporting, calculation of sewer service charges, and sewer billing services. OWD was selected on a sole -source basis pursuant to Chula Vista Municipal Code Section 2.5 6.070(B)(4), based on its unique qualifications and exclusive access to the data necessary to perform these services.
Services under this agreement include the calculation of sewer service charges using the rates and formulas provided annually by the City, billing sewer charges within OWD’s monthly water utility bills, collect ing payments, and remitting sewer revenues to the City. OWD will also provide customer service support for inquiries related to sewer billing and will provide detailed periodic reporting to the City.
The agreement establishes an initial term of five (5) years, through June 30, 2031. Compensation for the OWD is based on a starting rate of $1.50 per account billed each month within the fiscal year. First year costs are estimated at $590,000. Estimated costs within the 5-year initial term are projected at $3.31 million. An option to extend by an additional five-years may be mutually accepted. Total compensation through June 30, 2036, shall not exceed $7.7 million. This agreement formalizes the ongoing collaboration between the City and Otay Water District and ensures the City continues to provide reliable and accurate sewer billing services to its customers.
DECISION-MAKER CONFLICT
Staff reviewed the decision contemplated by this action and determined that it is not site -specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff are not independently aware and have not been informed by any City Council member of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
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CURRENT-YEAR FISCAL IMPACT
There is no current-year fiscal impact as these services will begin on July 1, 2026.
ONGOING FISCAL IMPACT
The costs associated with this agreement are included in the fiscal year 2026-27 budget in the Sewer Funds.
Ongoing funding for this agreement will be incorporated as part of the annual budget development process in future fiscal years.
The proposed agree ment with OWD would authorize consultant services in the amount not -to-exceed $7,700,000 over the life of the agreement if the five-year extension is exercised. In fiscal year 2026-27, staff projects consultant services at $590,000. Increase are expected in subsequent fiscal years due to increase s in service volume, coupled with annual increases per account billed based on the Consumer Price Index (CPI- U) for San Diego Area . The table below outlines the not -to-exceed amount over the life of the agreement if the five-year extension is exercised.
INITIAL TERM
FY 2026-27 TO
FY 2030-31
YEAR 1
FY 2026-27
YEAR 2
FY 2027-28
YEAR 3
FY 2028-29
YEAR 4
FY 2029-30
YEAR 5
FY 2030-31 TOTAL
$587,433 $621,865 $658,309 $696,884 $737,713 $3,302,204
EXTENSION
FY 2031-32 TO
FY 2035-36
YEAR 6
FY 2031-32
YEAR 7
FY 2032-33
YEAR 8
FY 2033-34
YEAR 9
FY 2034-35
YEAR 10
FY 2035-36 TOTAL
$782,571 $828,312 $876,727 $927,972 $982,213 $4,397,795
ATTACHMENTS
1. Otay Water District Consultant Services Agreement
Staff Contact: Jimmy Vasquez, Revenue Manager
Adrian Del Rio, Director of Finance/ Treasurer