REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
August 18, 2026
FROM
NOEL CASTILLO, Director, Department of Public Works - Transportation
SUBJECT
Title
Encroachment Agreement for Construction of Road Improvements on Napa Street
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Encroachment Agreement with UP Trucking and Logistics Solutions, LLC, for the Road Improvements Related to the Speedway Commerce Center II Development is exempt from the California Environmental Quality Act under Title 14 of the California Code of Regulations, Section 15301(c) Class 1 (existing Facilities).
2. Approve Encroachment Agreement, including non-standard terms, with UP Trucking and Logistics Solutions, LLC, for the Road Improvements related to the Speedway Commerce Center II Development, in the amount of $18,950 and with an indefinite contract term.
3. Authorize the Director of the Department of Public Works to execute the Encroachment Agreement and any non-substantive amendments, subject to County Counsel review, including electronically, if applicable.
4. Direct the Director of the Department of Public Works to transmit copies of the executed Encroachment Agreement and any non-substantive amendments, to the Clerk of the Board within 30 days of execution.
5. Direct the Department of Public Works to file a Notice of Exemption in accordance with the California Environmental Quality Act.
(Presenter: Noel Castillo, Director, 387-7906)
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). The established cost for the encroachment agreement was negotiated between UP Trucking and Logistics Solutions, LLC (UP Logistics) and The Speedway Commerce Center II (SCCII) to be $18,950. This cost will be provided to the County by the SCCII development at such time road improvement permits are applied for. SCCII will also be separately responsible for any and all additional costs associated with engineering, permitting, and construction.
BACKGROUND INFORMATION
On October 25, 2022 (Item No. 102), the Board of Supervisors approved the SCCII development. Pursuant to this approval, the development is required to make road improvements on Napa Street to connect with Jimmie Johnson Drive. To accomplish this, SCCII development has made good faith efforts in attaining legal rights of entry and road right of way. UP Logistics is the property owner for 13600 Napa Street, Fontana, CA, 92335 (APN 0229-291-40) and has declined to provide a road right of way dedication that would allow construction of a portion of Napa Street as well as pedestrian access improvements. As an alternative, UP Logistics is offering an indefinite encroachment agreement to the County for the construction, maintenance, and use of a public roadway. This will allow the Department to issue a permit for SCCII development to complete their required improvements and operate the roadway. Delegation of signature authority for the Encroachment Agreement to the Director of Public Works will provide timely support for the progression of the SCCII development by avoiding possible future delays in returning to the Board once signed documents as well as road improvement plans are available.
The Encroachment Agreement is UP Logistics’ standard contract, which contains terms that differ from the County’s standard contract language and omits certain County standard contract terms. The non-standard and missing terms include the following:
1. Indemnification by the County prior to entry on UP Logistics property. The Encroachment Agreement requires, prior to entry on UP Logistics property, that the County agree to release, defend and indemnify UP Logistics from and against any loss, damage, injury, liability, claim, cost or expense incurred by any person, including, without limitation, the County’s employees, or damage to any property or equipment that arises from the presence or activities of the County’s employees or representatives on UP Logistics’ property, except to the extent that any loss is caused by the sole direct negligence of UP Logistics. In addition, any contractor utilized by County and performing work on UP Logistics property must agree to a unilateral indemnity in favor of UP Logistics pursuant to Encroachment Agreement Exhibit C, “Contractor’s Right of Entry Agreement.”
• The County standard contract terms do not include any indemnification or defense owed by the County.
• Potential Impact: By agreeing to indemnify, the County could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time-limited, or expense-limited could be brought against UP Logistics without such limitations and the County would be responsible to defend and reimburse UP Logistics for costs, expenses, and damages, which could exceed the total contract amount.
2. Indemnification by the County related to non-compliance with applicable laws. The Encroachment Agreement requires the County to reimburse and indemnify UP Logistics for any fine, penalty, cost, or charge, including without limitation, attorney's fees, court costs, expenses, and the cost, charge, or expense to UP Logistics to defend any such action, incurred because of any failure by the County to comply with any such federal, state, or local laws, regulations, and enactments affecting the work.
• The County standard contract terms do not include any indemnification or defense owed by the County.
• Potential Impact: By agreeing to indemnify, the County could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time-limited, or expense-limited could be brought against UP Logistics without such limitations and the County would be responsible to reimburse UP Logistics for costs, expenses, and damages, which could exceed the total contract amount.
3. Indemnification by UP Logistics omitted. The Encroachment Agreement does not require UP Logistics to indemnify the County.
• The County standard contract indemnity provision requires a contractual obligation to indemnify, defend, and hold County harmless from third-party claims arising out of the acts, errors, or omissions of any person.
• Potential Impact: UP Logistics is not required to defend, indemnify, or hold the County harmless from any claims, including indemnification for claims arising from their negligent or intentional acts. If the County is sued for any claim arising out of, or related to, the Encroachment Agreement, the County may be solely liable for the costs of defense and damages, which could exceed the total contract amount.
4. Shifting of costs for work to be performed by UP Logistics. The Encroachment Agreement requires certain work to be performed by UP Logistics at the County’s cost and expense.
• The County standard contract prohibits limitation of a party’s liability and shifting of costs and expenses to County in performance of the contract.
• Potential Impact: Claims for work performed and additional costs and expenses could exceed the estimated contract amount, leaving the County financially liable for additional and excess costs. However, such costs for UP Logistics work will be paid by the SCCII development.
5. Venue and Governing Law. The Encroachment Agreement is silent on venue and governing law.
• The County standard contract requires a venue for disputes in Superior Court of California, San Bernardino County, San Bernardino District, and California governing law.
• Potential Impact: An action may be brought in a jurisdiction other than in the Superior Court of California, San Bernardino County, San Bernardino District. Having a venue in another jurisdiction may result in additional expenses that exceed the amount of the contract. Remaining silent on governing law results in uncertainty over which state’s law will govern the interpretation of the Encroachment Agreement and may lead to ambiguity in the interpretation of the contract terms. UP Logistics is a Delaware corporation, based in Omaha, Nebraska. The Encroachment Agreement could be interpreted under any state law depending on where the claim is brought, including Delaware, Nebraska, or California. Any questions, issues or claims arising under the Encroachment Agreement could require the County to hire outside counsel competent to advise on the applicable state laws, which may result in fees and expenses.
6. Termination for Convenience. There is no termination for convenience.
• The County standard contract gives the County the right to terminate the contract, for any reason, with a 30-day written notice of termination without any obligation other than to pay amounts for services rendered and expenses reasonably incurred prior to the effective date of termination.
• Potential Impact: County can only terminate the contract during the term of an uncured breach. Any attempted termination by County without cause would result in potential payment liability, which could result in payment liability where no funds are available due to the lack of allocation or loss of funding.
7. Insurance. The Encroachment Agreement does not require UP Logistics to meet the County’s insurance standards as required pursuant to County Policy 11-07.
• The County Policy requires agreements with the County to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and set forth in the County standard contract.
• Potential Impact: The Encroachment Agreement does not include the County standard insurance requirements. This means that the County has no assurance that UP Logistics will be financially responsible for claims that may arise from the County’s use of the property which could result in expenses to the County.
8. The Encroachment Agreement provides for an indefinite contract term, remaining in effect for as long as the Encroachment Area remains on UP Logistics' property.
• The County standard contract provides for a definite contract term, unless otherwise specifically authorized by County policy.
• Potential Impact: The County will remain bound by the Encroachment Agreement for an indefinite period unless the agreement is terminated in accordance with its terms. The lack of a defined expiration date limits the County's ability to periodically reevaluate the contractual relationship and negotiate updated terms or discontinue the agreement as operational, legal, or policy considerations evolve. However, because the roadway improvements are intended to remain in place for the life of the public roadway, an indefinite term is necessary to preserve the County's continued rights to construct, maintain, and use the roadway within the Encroachment Area.
The Department recommends proceeding with the Encroachment Agreement, including the non-standard terms, because it allows the County to permit necessary road improvements, which facilitates the orderly progression of the SCCII development.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Aaron Gest, Deputy County Counsel, 387-5455) on August 13, 2026; Risk Management (Arrissia Beaven, Staff Analyst, 386-9030) on June 4, 2026; and County Finance and Administration (Matthew Dalton, Administrative Analyst, 387-5005) on July 31, 2026.