The Rialto Story

Creating value for the community by improving infrastructure, putting people to work, and providing better services to residents.

Problem: In 2012, Rialto, California, a city of 110,000 residents located 40 miles east of Los Angeles, was facing aging water and wastewater systems in need of major upgrades. However, the recession was affecting Rialto’s ability to deal with the problem. The city did not have the funding to initiate a major infrastructure project, was in need of funding assistance on an economic redevelopment initiative, and was suffering from 14 percent unemployment but desperately didn’t want to file for bankruptcy.

To close its budget gap and responsibly administer to the business of the city without loss of local control (or jobs), Rialto needed a fresh approach.

rialto-calif

Solution: Rialto city leadership turned to Table Rock Infrastructure Partners. Working with the city, Table Rock developed a 30-year partnership agreement and provided $172MM in capital to address the city’s overall objectives and to meet the full needs of the water-wastewater system including CIP, asset management, and all operations, billing, collections, and customer service. Under the agreement, the city retained public ownership of the infrastructure and control over rates, with Veolia NA, operating as Rialto Water Services, LLC providing all services to operate and maintain the facility.

The partnership ensures that the city’s water and wastewater infrastructure is upgraded and run in the most cost-efficient manner, while also laying the groundwork for new economic development.
Mike Story, Rialto City Administrator

“For the first time in my 30 years in Rialto, we have a system that is running efficiently and well. We also put $30 million into a major economic redevelopment effort that is already half paid back in new revenue. We have a partner we can trust.” Ed Scott, Mayor Pro Tem, City of Rialto

The economic development investment made by the Table Rock team into Rialto enabled the city to make necessary storm, street, and sewer improvements to support the redevelopment of their old Airport property. To date, 2,800 new permanent jobs have been created and another 5,650 new permanent jobs are expected by 2019 from these economic development investments.

Rialto Water Services continued the employment of all utility employees, who received pay raises and are union represented. The partnership agreement also allowed the heavily depleted utility to staff 14 necessary positions, and there are an estimated 500 additional direct jobs created by the investments in water, wastewater, stormwater, and road improvements.

Results: A complete preventative maintenance overhaul in the asset management practices and planning of the utility has been put in place over the first four years of the partnership. Table Rock adopted a Progressive Design Build approach for delivery of the major wastewater treatment plant overhaul which is resulting in upfront cost savings of 30% in addition to ongoing operational savings from lower energy and chemical use. Audited annually and evaluated by Fitch Ratings, the Rialto partnership has remained a steady and transparent financial enterprise. The City of Rialto experienced a 27% surplus in its anticipated annual performance dividends in the first 4 years, and was able to defer rate increases last year, fund a conservation program, and add a dedicated Utility Director as a result. Since all upside performance savings and gains from the system are reinvested back to the city, city leaders have been able to rebuild the general fund and make new investments in the community.