REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
March 24, 2026
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
LUTHER SNOKE, Chief Executive Officer, County Administrative Office
SUBJECT
Title
Introduction of an Ordinance to Grant a Revenue Franchise to San Gabriel Valley Water Company
End
RECOMMENDATION(S)
Recommendation
1. Conduct a public hearing to consider the proposed ordinance and franchise agreement, including non-standard terms, granting a revenue franchise to San Gabriel Valley Water Company, for the period commencing on the effective date as defined in the ordinance granting the franchise and terminating 25 years thereafter.
2. Make alterations, if necessary to the proposed ordinance.
3. Approve introduction of the proposed ordinance.
• An ordinance of San Bernardino County, State of California, to repeal Resolution No. 2001-85 and to grant San Gabriel Valley Water Company, its successors and assigns, a franchise for construction, use of property, and to furnish and distribute water.
4. SCHEDULE ORDINANCE FOR FINAL ADOPTION, TUESDAY, APRIL 7, 2026, on the Consent Calendar.
(Presenter: Terry W. Thompson, Director, 387-5000)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Foster Sustainable Development Through Strategic Partnerships.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). This item will allow the County to proceed with the application process to grant a franchise to San Gabriel Valley Water Company (SGVWC), under the calculation formula provided for in the Public Utilities Code section 6231. This action will not impact ratepayers in the County unincorporated area. Revenue to the County General Fund is expected to be approximately $245,000 annually. Franchise Revenue is deposited into the Countywide Discretionary Fund (116 1000).
BACKGROUND INFORMATION
This item introduces a proposed ordinance granting a water revenue franchise (Franchise) and franchise agreement to SGVWC under newly agreed upon terms and conditions, and pursuant to the California Public Utilities Code, Section 6201, et seq. which requires that franchisees be granted by ordinance.
Pursuant to County Code section 14.0701 et seq., the County may grant franchises along and over public roads and rights-of-way within the unincorporated areas of the County for all lawful purposes, upon such terms, conditions and restrictions as deemed necessary and proper. In general, a franchise agreement authorizes a utility to use County rights-of-way to deliver essential services to the community, while ensuring the County retains oversight and receives compensation for that use.
On March 13, 2001 (Item No. 66), the Board of Supervisors approved Agreement No. 01-197 granting SGVWC a 25-year water revenue franchise, which is set to expire on April 13, 2026. SGVWC will continue to operate its pipelines in the County road right-of-way and has made all franchise payments in full and on time.
By way of ordinance, the Franchise terms and conditions permit SGVWC to distribute water within public roads and right-of way within the unincorporated areas of the County. The Franchise agreement also sets forth the compensation for using such right-of-way, as provided for in law, which is currently two percent of Franchisee’s gross annual receipts arising from the use, operation, or possession of the Franchise, derived from the sale of water within the unincorporated areas of the County. While the Franchise terms and conditions continue the insurance requirements from prior Agreement No. 01-197, they are non-standard and differ from the County’s current standard insurance terms identified in County Policy 11-07SP in the following ways:
1. The Franchise terms and conditions require general liability, automobile liability, and Workers’ Compensation coverage with minimum limits of $1,000,000, but do not include all of the standard insurance provisions found in County Policy 11-07SP, including, but not limited to, umbrella/excess coverage, waiver of subrogation, severability of interests, insurance review, or detailed insurer rating and endorsement requirements.
• The County’s standard insurance provisions in County Policy 11-07SP provide for comprehensive insurance requirements, including general aggregate limits in the amount of $2,000,000 and allowance for umbrella/excess coverage. The County’s standard insurance provisions also include other provisions, including, but not limited to, provisions governing waiver of subrogation, severability of interests, insurance review, and detailed insurer rating and endorsement requirements.
• Potential Impact: The Franchise terms and conditions provide insurance coverage consistent with Agreement No. 01-197, but do not include the full range of enhanced protections in the County Policy 11-07SP, particularly due to the absence of umbrella coverage and certain policy conditions.
The Department recommends approval of the franchise agreement, including non-standard insurance terms, in order to establish the governing terms, conditions, and operational requirements for the new franchise. Approval of this item will grant SGVWC a water franchise to operate within the County’s public roads and rights-of-way for a new period of 25 years.
In accordance with Section 6232 of the Public Utilities Code, the Board adopted Resolution No. 2026-21 on February 24, 2026 (Item No. 34), declaring its intent to grant the Franchise and directing the Clerk of the Board of Supervisors to schedule a public hearing on March 24, 2026, to receive community input and consider objections. If approved, the ordinance granting the revenue Franchise will be placed on the April 7, 2026, consent calendar for final adoption and will take effect 30 days thereafter.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Julie Surber, Principal Assistant County Counsel, and Aaron Gest, Deputy County Counsel, 387-5289) on March 19, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9039) on March 19, 2026; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on February 26, 2026; and County Finance and Administration (Erika Rodarte, 387-4919, and Eduardo Mora, 387-4376, Administrative Analysts) on March 5, 2026.
(KD: 655-0430)