LIVE OAK, CA (MPG) - At the Aug. 20 meeting, the Live Oak City Council considered a contract with JC Nelson Consulting for project management of a solar panel project for the city’s wastewater treatment facility.

The city will be receiving $1.69 million in state grant funding toward the project, and City Manager Benjamin Moody explained that much of the work on that grant and the plans for the solar project were headed by former interim public works director Jeff Nelson. A consultant contract with Nelson would allow the plans to continue without any delays.

Moody said, “We’re right at the edge of finalizing the funding agreement” for the grant, so a contact with Nelson is the “most efficient and effective way to move forward.”

The proposed consulting contract would not exceed $80,000, and 75% of the actual cost would be reimbursed through the grant.

“That dollar amount has been budgeted as part of the contract cost for the construction cost for the solar project through this year’s budget,” Moody said.

Councilmember Nancy Santana asked why the city needed a consultant to work as the project manager, and she suggested that the solar company could handle those responsibilities.

Moody said, “The solar company is going to provide a design, but somebody needs to review the design. Somebody needs to submit the invoice, the reimbursements, to make sure that the funding agreement with the state is in place. And the solar company doesn’t do that work. And so, it’s really to coordinate with that contractor, be the liaison for the city to manage that contract.”

Moody said it takes expertise to handle those tasks on the city’s behalf.

Santana remained confused about why the solar contractor couldn’t handle those tasks. So, Moody clarified that it’s best to have a third party representing the city’s interests, in order to hold the solar contractor accountable for providing the services required.

Vice Mayor Aaron Pamma asked about the potential start time for construction on the project.

Moody said the state is in the process of finalizing the funding agreement, and he hopes to bring it to council by October. After officially awarding the construction contract, the solar company could begin in October or November, weather allowing, or by next spring. Total construction is expected to take at least three to four months.

Mayor Jeramy Chapdelaine said that Nelson was the signatory and city representative for the grant application, so changing the project management at this point could cause delays or even jeopardize the funding.

Councilmember Bob Woten agreed that it’s best to maintain continuity on such an important project: “I think we need to have someone in there that’s knowledgeable about what’s going on to make sure we get the best bang for our buck.”

The council approved the consultant contract 4-0, with Councilmember Ashley Hernandez absent.

Next, the council considered writing off past-due water and sewer accounts to be sent to collection.

The city undertakes this process quarterly to recoup a portion of the losses from past-due tenant accounts. For this quarter, the past-due amounts from both funds totaled $3,432.

City Manager Moody explained that the city only receives a discounted portion of the funding through the collection process. In contrast, the city annually sends past-due property owner accounts to the county for collection through the property tax roll, and through that process the city does recover their costs.

The water and sewer funds combined lose approximately $15,000-$20,000 each year to past-due tenant accounts, said Moody. Looking at previous quarters, there are some properties that consistently have tenants with past due accounts.

“Different name, same address,” said Moody. “You see these properties that are allowing bad tenants, and that’s really subsidized by the rest of the utility users.”

Moody suggested a possible code amendment that would shift the ultimate financial responsibility to the property owners. Both the tenants and the property owners would receive the past-due notices. The council could also consider increasing the minimum deposit for service, so more of the losses would be covered in the case of non-payment.

Vice Mayor Pamma said he doesn’t think it’s fair for the property owners to have financial responsibility for their tenant’s past-due accounts. He would prefer a larger deposit for tenants, to ensure there is something to cover the city’s losses.

Councilmember Woten said the landlords are doing this as a business and making a profit. If they had the responsibility to cover nonpayment, “they might be more selective in their tenants, which is beneficial for all of us.”

 “I don’t see why the city should be supplementing these property owners who cannot manage their property and get tenants in there that can pay their bills.” Woten said the city and the other ratepayers “shouldn’t be paying these bills.”

Mayor Chapdelaine recommended that Moody bring back various options at a future meeting for a full council discussion.

The council voted 4-0 to approve the write off of current past-due water and sewer accounts.  

Finance Director James Ramsey submitted a report on the water fund advance, in which council approved a loan to bring the water fund cash deficit to zero.

Ramsey said when the council approved the loan in March, the projected water fund deficit was $3.5 million. At this time, the actual deficit is $3.1 million. So that total amount will be transferred from the water, sewer, and drainage connection fee funds.

The loan amount will be paid back to those funds beginning in 2029-2030, when the city expects the water fund to have sufficient funds for repayment over a five-year period. Interest will be accrued over the full 10 years of the loan, with a rate adjusted each year based on the city’s rate of investment return (with a cap at 5% interest). The interest rate charged for this year will be 3.71%. Projecting from the current interest rate, Ramsey estimated there will be $747,000 accrued in interest over the life of the loan, but the actual amount will depend on the yearly interest charged.

Mayor Chapdelaine said, “We’re just investing in ourselves, so it stays within the city.”

The next meeting of the Live Oak City Council is scheduled for Sept. 3.