REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
November 3, 2026
FROM
LUTHER SNOKE, Chief Executive Officer, County Administrative Office
SUBJECT
Title
Forgiveness of American Rescue Plan Act Loan for County Service Area 70 F Morongo Valley - Water Tank Replacement Project
End
RECOMMENDATION(S)
Recommendation
1. Accept the request for forgiveness of the American Rescue Plan Act State and Local Fiscal Recovery Funds forgivable loan submitted by County Service Area 70 F Morongo Valley pursuant to Contract No. 23-442, for the County Service Area 70 F Morongo Valley - Water Tank Replacement Project.
2. Find that the conditions for loan forgiveness under Contract No. 23-442 have been satisfied based upon completion of the Project, verification of eligible Project costs and expenditures, and completion of the County’s applicable American Rescue Plan Act compliance review.
3. Approve forgiveness of the outstanding principal balance owed by County Service Area 70 F Morongo Valley under Contract No. 23-442, in the amount of $595,696.
4. Authorize the County Chief Financial Officer to take any non-substantive administrative actions necessary to document the approved loan forgiveness, complete applicable American Rescue Plan Act State and Local Fiscal Recovery Funds reporting and closeout requirements, and reconcile the Project with the County’s American Rescue Plan Act records, subject to review by County Counsel.
(Presenter: Diana Atkeson, Chief Financial Officer, 387-4378)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). San Bernardino County (County) received a direct allocation of $423.5 million under the American Rescue Plan Act (ARPA) - Coronavirus Local Fiscal Recovery Fund (CLFRF) to bolster the County’s response to the COVID-19 pandemic and its economic impact. The Board of Supervisors (Board) approved an expenditure plan for the use of these funds, known as the County Local Fiscal Recovery Spending Plan on June 8, 2021 (Item No. 121) and amended the plan on August 24, 2021 (Item No. 21).
On May 23, 2023 (Item No. 104), the Board, acting as the governing body of both the County and County Service Area (CSA) 70 F Morongo Valley (District), approved the CSA 70 F Morongo Valley - Water Tank Replacement Project (Project) and Contract No. 23-442. Contract No. 23-442 authorized the transfer of Third District’s ARPA CLFRF funding to CSA 70 F as a forgivable loan for eligible Project costs in an amount not to exceed $600,000.
On November 19, 2024 (Item No. 69), the County Board approved an additional $447,774 from Discretionary General Funding (Net County Cost) for the Project to fund total Project costs, including project management and inspection services, for the construction of the Project.
The Project was completed on November 13, 2025 for a total Project cost of $1,053,811. The District is now requesting forgiveness of the $595,696 loan under Contract No. 23-442.
BACKGROUND INFORMATION
The District provides for the operation and maintenance of 88 water connections, maintains three wells, one booster station, and a reservoir (water tank) that stores approximately 260,000 gallons of water. As part of ongoing maintenance to ensure continuous operation of the water system, it was determined that replacement of the District’s water tank was necessary due to significant leaks that have occurred since 2019, resulting from heavy interior corrosion. Leak investigations determined that the District’s water tank condition was fragile and at risk of potential failure. The water tank is the only source of potable water available to residents of Morongo Valley, further necessitating the need for a new tank.
The Project involved removing the existing potable water storage tank and associated equipment and replacing it with a new bolted steel water storage tank. This water tank replacement was completed pursuant to applicable standards, which will help alleviate future maintenance costs and provide safe drinking water to the District’s customers.
On May 21, 2024 (Item No. 93), the District Board determined the Project was exempt under the California Environmental Quality Act and directed the Department of Public Works - Special Districts (Department) to file and post the Notice of Exemption. On November 19, 2024 (Item No. 69), the District Board approved Contract No. 24-1159 with Superior Tank Co., Inc., in the amount of $640,000 for construction of the water tank.
The Project was completed on November 13, 2025. The completed improvements provide the District with replacement water storage infrastructure necessary to support the continued delivery
of safe and reliable potable water service to the community. Final Project costs have been reconciled, and supporting expenditure and completion documentation is maintained by the Department.
Pursuant to the loan forgiveness provisions of Contract No. 23-442, the District submitted a written request for loan forgiveness from the County of the $595,696 loan on September 28, 2026, prior to the September 30, 2026 deadline established by Contract No. 23-442.
The District requests forgiveness based on the completion of the Project and the use of ARPA loan proceeds for eligible Project costs and expenditures consistent with the purpose for which the Board approved the loan.
The District, as set forth in its loan forgiveness request letter to the County, represents that:
• The CSA 70 F Morongo Valley - Water Tank Replacement Project has been completed;
• ARPA loan proceeds were used for costs associated with the approved Project;
• Discretionary General Funding was also used for costs associated with the approved Project pursuant to Board-approved item No. 69 dated November 19, 2024;
• Total final Project costs were $1,053,811;
• The amount of ARPA funding expended on the Project was $595,696;
• The amount of Discretionary General Funding expended on the Project was $447,774;
• The amount of District funding expended on the Project was $10,341;
• The amount requested for forgiveness is $595,696, which does not exceed the $600,000 authorized under Contract No. 23-442;
• Supporting documentation for Project costs and expenditures has been maintained and is available for County review; and
• The remaining $4,304 of the $600,000 authorized ARPA amount was not expended on the Project and, therefore, is not included in the loan forgiveness request. The unspent balance has been returned to the County in accordance with direction provided by County Finance and ARPA Compliance.
The ARPA funding provided through Contract No. 23-442 enabled the District to complete this necessary capital improvement while avoiding the financial burden that repayment of the Project costs would otherwise place on the District and its limited customer base.
Forgiveness would fulfill the purpose of the forgivable-loan arrangement approved by the County and District Board and allow the Project to proceed toward final financial closeout with the United States Treasury after the ARPA program concludes on December 31, 2026.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Julie Surber, Principal Assistant County Counsel, 387-5455) on October 28, 2026; Auditor-Controller/Treasurer/Tax Collector (Charlene Huang, Auditor-Controller Manager, 382-3035) on October 8, 2026; and County Finance and Administration (Jai Prasad, 387-4227, and Scott Bruckner, 387-4020 Administrative Analysts) on October 22, 2026.