Title
a. Approve a Non-standard Agreement Between Owner and Engineer for Professional Services (Agreement), approved by the U.S. Department of Agriculture (USDA), between the County of Monterey (County) and the Wallace Group, a California Corporation (Wallace Group), for the Pajaro County Sanitation District (PCSD) Sewer Upgrades and Repair Project (Project); and
b. Authorize the Director of Public Works, Facilities and Parks (PWFP) to execute the Agreement and associated documents and act as the Designated Representative for the County in processing all documentation to satisfy USDA requirements for the Agreement on behalf of the County of Monterey.
Report
RECOMMENDATION
It is recommended that the Board of Supervisors:
a. Approve a Non-standard Agreement Between Owner and Engineer for Professional Services (Agreement), approved by the U.S. Department of Agriculture (USDA), between the County of Monterey (County) and the Wallace Group, a California Corporation (Wallace Group), for the PCSD Sewer Upgrades and Repair Project (Project); and
b. Authorize the Director of Public Works, Facilities and Parks (PWFP) to execute the Agreement and associated documents and act as the Designated Representative for the County in processing all documentation to satisfy USDA requirements for the Agreement on behalf of the County of Monterey.
SUMMARY
The United States Department of Agriculture (USDA) obligated a $4,075,000 grant award to the County for disaster relief for the Pajaro County Sanitation District (PCSD). The PCSD Sewer Upgrades and Repair Project (Project) will conduct repairs to the existing sewer mains at approximately 24 locations (spot repairs) in Las Lomas and renovate the aging sewer lift station in Pajaro. As the provider of funding for the Project, the USDA has approved an Agreement between the County of Monterey and the Wallace Group for professional services for this Project. This action authorizes the Director of PWFP to sign the USDA approved Agreement on behalf of the County.
DISCUSSION
The PCSD is a dependent Special District. The PCSD Wastewater System is a County owned system located within the northern unincorporated area of the County. The system includes a wastewater collection system of approximately 16.5 miles of gravity sewer pipe, 6 pump stations, and 2.4 miles of sewer force main. There are approximately 1,050 sewer connections and 1,770 billing units.
The PCSD Wastewater System is solely a collection system that provides no wastewater treatment. Sewage collected in the PCSD System is pumped to the City of Watsonville wastewater treatment plant. The PCSD is charged for its share of treatment costs based on its fraction of total volume of wastewater received at the plant and the quality of the flow received.
In calendar year 2023, USDA Rural Development Service announced funding available under their Calendar Year (CY) 2022 Disaster Relief - In-Kind Water and Waste Disposal Systems for Rural Communities, authorized under the Disaster Relief Supplemental Appropriations Act of 2023. Grant funds were made available to the County to recover from the severe winter storms during the Presidential Declared Disaster (DR-4863-CA), to address existing wastewater system deficiencies to minimize the negative impacts of future severe winter storms and add resiliency to the community sewer collection system, including addressing potential failures of the aging lift station in Pajaro.
On November 7, 2023, the Board of Directors adopted Resolution No. 23-460 authorizing the Director of PWFP to submit a grant application to the USDA under this program. On February 18, 2025, the Board of Directors approved Resolution No. 25-044 accepting a $4,075,000 Financial Assistance grant from the USDA Rural Development Service and authorizing the Director of PWFP to act as agent for the County /PCSD in processing all documentation to secure these funds and satisfy the conditions associated with the grant on behalf of the County of Monterey/PCSD. Today’s action authorizes the Director of PWFP to sign the Agreement Between Owner and Engineer for Professional Services (Agreement) with Wallace Group, a California Corporation.
Professional Services are reimbursable under the USDA grant funding agreement. Grant conditions restrict disbursement of funding until the Project is in construction. Design and preconstruction services, estimated to total approximately $422,000, will therefore be temporarily funded by the PCSD operating account. When the Project begins, pre-construction professional service expenses will be reimbursed by the USDA and the PCSD operating account will be restored. Construction expenses are eligible for immediate reimbursement under the USDA grant.
A second grant application that was submitted to the USDA for relocation/replacement of the force main from the Pajaro Lift Station was not awarded to the County/PCSD. However, this work is now being performed by the Pajaro River Flood Management Agency.
In addition to the 24 spot repairs in Las Lomas covered under this $4,075,000 USDA grant, additional spot repairs in Las Lomas will be funded through a $1,500,000 Fiscal Year 2024 (FY 2024) United States Environmental Protection Agency (USEPA) Community Grant, earmarked for the County/PCSD. A Community Grants application has been submitted, and funding is anticipated to be awarded in 2027.
Professional Services
The Wallace Group will design a construction project to repair the Pajaro Lift Station and conduct spot repairs of the sewer mains in Las Lomas at approximately 24 locations. Design and preconstruction professional services are expected to total approximately $422,000 and will be completed by July 2027. During construction, the Wallace Group will also provide construction management services in accordance with their August 4, 2025 proposal and the Agreement.
OTHER AGENCY INVOLVEMENT
This is a non-standard Agreement required as a condition of the grant funding which incorporates non-standard fiscal/payment provisions. The Office of the County Counsel and County Counsel-Risk Management have reviewed and approved the proposed Agreement as to form, and insurance and indemnification provisions, respectively. The State Engineer of the USDA Rural Development, Community Programs, has reviewed and approved this Agreement.
FINANCING
The $4,075,000 USDA CY 2022 Disaster Relief Grant was obligated with no funding match required from the County. Reimbursement of eligible Project expenses will not begin until construction; therefore, interim funding is needed for pre-construction professional services. These costs will be temporarily funded by the PCSD Fund 1521, Entity 320062, which has sufficient appropriations and unassigned fund balance available in Fiscal Year 2026-27. Upon receipt of USDA reimbursement, the advanced funds will be returned to PCSD Fund 1521. Should funding requirements or commitments change, staff will return to the Board of Supervisors for further direction.
BOARD OF SUPERVISORS’ STRATEGIC PLAN GOALS:
This recommendation advances the Board’s Strategic Plan Goals by supporting mandated public safety activities that protect residents, infrastructure, and environmental resources. The proposed Project ensures compliance with existing permits, MOUs, and regulatory obligations while maintaining the continuity of essential County operations.
X Well-Being and Quality of Life
X Sustainable Infrastructure for the Present and Future
X Safe and Resilient Communities
Diverse and Thriving Economy
Dynamic Organization and Employer of Choice
Prepared by: Thomas Harty, PE, Senior Civil Engineer (831) 759-6603
Reviewed by: Benny J. Young, Management Specialist
Enrique Saavedra, PE, Chief of Public Works
Jessica Cordiero-Martinez, Finance Manager III
Approved by: Randell Ishii, MS, PE, TE, PTOE, Director of Public Works, Facilities and Parks
Attachment A - Agreement for Professional Services
Attachment B - Wallace Group Proposal
Attachment C - USDA Letter of Conditions
Attachment D - USDA - Amendment #1
Attachment E - USDA - Amendment #2
Attachment F - Engineering Report Amendment # 1