City Council Agenda Report
Meeting Date: April 21, 2026
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Principal Management Analyst Subject
Amendment No. 1 to the Services Agreement with Jacobs Engineering Group Inc.
Recommendation
A. Pursuant to Vernon Municipal Code Sections 3.32.220(B) and 3.32.110(B)(3), find that it is commercially unreasonable to rebid the agreement for environmental compliance services as the current vendor, Jacobs Engineering Group Inc. (Jacobs) has already initiated the lengthy process of revising and updating critical facility permits for the Utility with the South Coast Air Quality Management District (SCAQMD); and
B. Approve and authorize the City Administrator to execute Amendment No. 1 to the Services Agreement with Jacobs for environmental compliance services, in substantially the same form as submitted, to extend the agreement to June 30, 2027 at no additional cost.
Background
Vernon Public Utilities (VPU) serves as an essential resource to the City's business and residential community, providing dependable, high-quality utility services at competitive rates.
VPU offers electricity, water, natural gas, and fiber-optic services to businesses and residents in Vernon at lower costs than neighboring utility providers.
All utility services provided by VPU are regulated and permitted by various agencies, including the South Coast Air Quality Management District (SCAQMD), Los Angeles County Sanitation Districts (LACSD), Los Angeles Regional Water Quality Control Board (RWQCB), California Energy Commission (CEC), the California Air Resources Board (CARB), the U.S. Environmental Protection Agency (USEPA), California State Water Resources Control Board (SWRCB), and the Department of Toxic Substances Control (DTSC).
On June 6, 2023, the City Council approved a Services Agreement with Jacobs for environmental compliance services for a total amount not to exceed $1,465,686. The term of the Agreement between the City and Jacobs is July 1, 2023 through June 30, 2026. In accordance with Vernon Municipal Code (VMC) Section 3.32.080, Jacobs was selected following the City’s purchasing procedures and principles of good governance in contracting.
Jacobs is currently working with staff to revise Station A's permit (Facility 14502) to allow the continued operation of the two 5.75 MW simple-cycle natural gas turbines, known as Gonzales Units. This permit revision must be completed by the end of the calendar year to ensure the Gonzales Units can operate beyond 2026.
Additionally, VPU has implemented improvements to the Gonzales Units, and the permits must be updated to reflect enhanced operational efficiency. Without these revisions, the Gonzales Units may not successfully pass the source test scheduled for November 30, 2026. On March 24, 2026, Jacobs also assisted with a preliminary source test, which will aid in the permit revision process. While staff does not have an estimated processing time from SCAQMD for the permit revision, it is expected to take at least several months.
Therefore, VPU staff recommends approving Amendment No. 1 with Jacobs, which extends the agreement until June 30, 2027, at no additional cost. To date, the City has spent $799,289.37, leaving a remaining balance of $666,396.63. There are sufficient funds available to cover the one-year extension through June 30, 2027.
The City’s special good governance reform contract terms and procedures outlined in Section
3.32.220 (B) of the VMC require that all professional service contracts be rebid every three years unless found commercially unreasonable to do so. Moreover, Section 3.32.110(B)(3) of the VMC indicates that the City Council has the authority to make such findings for contracts that exceed $100,000. Accordingly, City Council approval is required for the proposed amendment as the total value of the contract exceeds $100,000 and the amendment seeks to extend the agreement for one additional year beyond the initial three-year period. Due to the critical work currently underway to update permits for the Gonzales Units and preparation for the upcoming source test, it would be commercially unreasonable to change the vendor mid-process.
Amendment No. 1 has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
There is no fiscal impact associated with this report.
Attachments
1. Jacobs Engineering Group Inc. – Amendment No. 1