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AGENDA ITEM NO. 12.
CITY OF HAWTHORNE City Council AGENDA BILL For the meeting of 05/12/2026 Originating Department: Public Works |
City Manager:
Department Head:
SUBJECT:
Approval of Lease Closeout and Transitional Agreement, subject to further negotiations.
RECOMMENDED MOTION:
Staff recommends the City Council to authorize the City Manager to negotiate and execute a Lease Closeout and Transitional Agreement with California Water Service Company, subject to approval as to form by the City Attorney.
DISCUSSION:
On August 9, 2011, the City entered into a lease agreement with Cal Water for the operation and maintenance of the City's water system. The agreement is set to expire August 2026.
Cal Water has formally notified the City of its intent not to renew the lease. As a result, the City has been actively working to transition operations to the City's new operator, Water Workforce.
To ensure an efficient transition, both parties have prepared a Lease Closeout and Transition Agreement outlining responsibilities, financial obligations, and operational procedures leading up to the lease expiration.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
This project supports economic stability by ensuring the continued, reliable operation of the City's water system during the transitional period.
FISCAL IMPACT:
This agreement may result in a financial obligation to the City including reimbursement of verified transitional service costs and payment of verified reimbursable capital improvements. Final costs depend on verification and negotiation outcomes.
NOTICING PROCEDURE:
72 Hours posted notice pursuant to the Ralph M. Brown Act.