REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
December 19, 2023
FROM
DEREK ARMSTRONG, Director, Economic Development Department
SUBJECT
Title
Termination of Operating Covenant Agreement with Ecolab, Inc
End
RECOMMENDATION(S)
Recommendation
1. Terminate Operating Covenant Agreement No.19-786 with Ecolab, Inc. due to its relocation from the unincorporated area of San Bernardino County.
2. Authorize the Economic Development Director to provide notice of termination of Operating Covenant Agreement No. 19-786 to Ecolab, Inc.
(Presenter: Derek Armstrong, Director, 387-4386)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not impact Discretionary General Funding (Net County Cost) as there is no associated cost with terminating the agreement.
BACKGROUND INFORMATION
Ecolab, Inc. (Ecolab) is a global provider of equipment and services for the food service, food processing, hospitality, healthcare, industrial, and oil and gas markets. In 2020, Ecolab established a California sales office at 13277 San Bernardino Avenue, Fontana, California, an unincorporated area of the County.
On December 10, 2019 (Item No. 17), the Board of Supervisors approved Operating Covenant Agreement No. 19-786 with Ecolab, whereby Ecolab would receive an amount equal to 50% of local sales and use tax revenues received by the County as a result of Ecolab’s equipment sales and services, for a term of 10 years. Pursuant to the agreement, Ecolab was to remain at the San Bernardino Avenue location for not less than 10 years.
On September 8, 2022, Ecolab provided a Notice of Intent to Relocate to the County via email and hard copies via Fed Ex were received on September 12, 2022. Ecolab completed the building of a larger facility in the City of San Bernardino and moved on May 1, 2023. Timing of the move and coordination with Economic Development (ED) resulted in the delay in action until now.
Ecolab’s relocation outside of the unincorporated area of the County is a breach of contract under the terms of Agreement No. 19-786, and, therefore, the County has the option to terminate the agreement. ED is recommending approval for the County to exercise its right to terminate the agreement.
PROCUREMENT
N/A
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Dawn Martin, Deputy County Counsel, 387-5455) on November 6, 2023; Finance (Amanda Trussell, Principal Administrative Analyst, 387-4773, and Carl Lofton, Administrative Analyst, 387-5404) on November 27, 2023; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on November 28, 2023.