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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: September 17, 2025
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works
Department: Public Works
Subject: Approve the Memorandum of Understanding with the San Bernardino Municipal Water Department for the Total Lease Amount Not to Exceed $354,098 for Water Department
Property (Ward 3)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution 2025-371:
1. Authorizing the City Manager to Execute the Memorandum of Understanding (MOU) with the San Bernardino Municipal Water Department (SBMWD) for the lease of Water Department Property at 333 Chandler Place; and
2. Authorizing the Director of Finance and Management Services to amend the FY 2025/26 Animal Shelter operating budget in the amount of $66,696.00 for the lease of Water Department Property at 333 Chandler Place.
Executive Summary
The City of San Bernardino seeks approval to enter into an agreement with the San Bernardino Municipal Water Department to lease land located directly south of the existing animal shelter at 333 Chandler Place. The lease will provide additional employee parking to accommodate the expansion of animal services and the increase in staff resulting from the City’s Regional Partnership for Animal Services with surrounding cities. The proposed lease area will ensure the animal shelter can continue to serve the public effectively while meeting the operational needs of its growing workforce. For FY 2025/26, the budget will be amended by $66,696 using the General Fund balance. Beginning in FY 2026/27, the annual rent will be budgeted in the Animal Services Fund and transferred to the Sewer Fund. The lease is triple-net with utilities, insurance, and routine maintenance covered by the Animal Services Fund. 2 2
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Background
In 2023, Riverside County Animal Services notified the cities that it would no longer provide shelter services after June 30, 2024. In response, the City of San Bernardino worked to establish a regional partnership agreement to provide shelter services to Colton, Fontana, Rialto, Grand Terrace, and Loma Linda, which is now in effect as of July 1, 2024.
On December 6, 2023, The Mayor and City Council adopted Resolution No. 2023-188 Authorizing the City Manager to take the steps necessary to establish a California Nonprofit Public Benefit Corporation to support the Department of Animal Services Programs and Initiatives Regional Partnership for Animal Services.
On April 17, 2024, the Mayor and City Council adopted Resolution No. 2024-067, approving the allocation of $4,000,000 from the General Fund to support necessary improvements and upgrades to the Animal Shelter facility. Following this adoption, the Cities of Colton, Fontana, Grand Terrace, Loma Linda, and Rialto approved the participation agreements with the City of San Bernardino under the regional partnership agreement with an effective date of July 1, 2024.
As outlined in the Partnership Agreement between the City of San Bernardino and the participating cities, the responsibility for the remaining portion of the Maximum Construction Costs, beyond the $4 million paid by the City, is distributed among the partner cities based on a predetermined percentage formula. The City of San Bernardino is responsible for 53.50% of the Participants’ Share, followed by the City of Fontana at 24.00%, the City of Rialto at 14.00%, the City of Colton at 7.00%, the City of Grand Terrace at 1.00%, and the City of Loma Linda at 0.50%. Together, these contributions total 100% of the Participants’ Share of Maximum Construction Costs.
Per the agreement, each city will remain responsible for any increase in costs, in accordance with the percentage they have already agreed to.
On August 7, 2024, the Mayor and City Council adopted Resolution No. 2024-170, authorizing the City Manager to execute a Good Purchase Agreement with Horizon Structures in the amount of $2,096,324 for the acquisition of modular buildings for the Animal Shelter facility. The City of San Bernardino's share of the cost is $1,111,052, with the remaining $985,272 funded through the regional partnership agreement.
The Mayor and City Council also adopted Resolution No. 2024-151 on August 7, 2024, authorizing the City Manager to execute a Good Purchase Agreement with William Scotsman Inc. in the amount of $406,492 for the purchase of a modular office for the Animal Shelter. The City of San Bernardino's share of this cost is $217,745, with $188,747 covered by the regional partnership.
On October 2, 2024, the Mayor and City Council adopted Resolution No. 2024-209, approving the Lease Agreement with Casa Ramona Inc. For 1543 W 8th Street, San Bernardino California, For an Animal Shelter Supportive Services Center with a total yearly lease expense of $216,656.00.
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Currently construction at the San Bernardino Animal Shelter is centered around the installation of twelve (12) modular buildings that will significantly increase the facility’s operational capabilities. The use of modular construction allows for faster deployment, cost efficiency, and flexibility to adapt to future needs as demand for services continues to grow. The modular buildings will significantly increase the total number of kennels and are intended to support the expanded range of services now required due to the recently established Regional Partnership for Animal Services with the Cities of Colton, Fontana, Grand Terrace, Loma Linda, and Rialto.
The City owns and operates the existing animal shelter located at 333 Chandler Place, San Bernardino, CA 92408. With recent proposed expansions to the shelter’s facilities, combined with the hiring of additional staff, all available land within the shelter property has now been fully utilized. This growth has created the need for additional parking spaces to accommodate employees.
In May 2024, City staff met with the Water Department to explore the potential use of a portion of the Water Department’s Water Reclamation Plant (WRP) property as a temporary staff parking facility until a permanent solution could be identified. After a joint evaluation, City and SBMWD staff identified an approximately twenty-seven thousand, seven hundred ninety (27,790) square foot area within the WRP (the “Property”). The site is located directly south of the existing animal shelter, north of West Century Avenue, and east of the Durham School Services bus yard, and was determined to be suitable for temporary parking use.
The intended Property is part of an operational wastewater treatment facility permitted under National Pollutant Discharge Elimination System (NPDES) Permit No.
CA0105392, as well as other regulatory permits. As a result, Water Department staff developed a list of requirements to ensure compliance and operational safety. These requirements have been incorporated into the body and exhibits of the attached Memorandum of Understanding (MOU) that governs the City’s lease of the Property.
Discussion
To facilitate the proposed lease agreement, the Water Department obtained an appraisal of the Property, which was completed on July 29, 2025, by an independent appraiser under contract with the Water Department. The appraisal established the fair market rental value at $0.20 per square foot per month on a triple net (“NNN”) basis.
The Water Department has determined that the Property is not needed for its immediate operational use.
On August 25, 2025, the SBMWD accepted an engineered drawing from the Public Works identifying the planned improvements to be constructed on the Property. The City intends to temporarily develop, construct, and operate an employee parking and dry goods storage area to support the expansion of the animal shelter. The planned improvements include parking, dry goods storage, security fencing, and solar- powered lighting. The City will lease twenty-seven thousand seven hundred and ninety 2 2
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(27,790) square foot from the SBMWD at $0.20 a square foot for a total amount of $5,558.00 per month and an annual lease amount of $66,696.00.
For FY2025/26, the budget will be amended by $66,696 using the General Fund balance. Beginning in FY 2026/27, the annual rent will be budgeted in the Animal Services Fund and transferred to the Sewer Fund. The lease is triple-net with utilities, insurance, and routine maintenance covered by the Animal Services Fund.
The annual lease will be prorated for any partial year. Beginning on the first anniversary of the Commencement Date, and each year thereafter, the lease rate will increase by three percent (3%) annually. Over the five-year term, this results in a total projected rent obligation of $354,098.12. The table below provides a breakdown of the annual rent amounts, reflecting the scheduled 3% increases.
The City shall have one option to extend the Initial Term for an additional five (5) years.
Unless the City provides written notice to SBMWD of its intent not to exercise the option at least one hundred eighty (180) days before the expiration of the then-current Term, the extension will automatically take effect without further action by either party. 2021-2025 Strategic Targets and Goals
Authorizing the execution of this agreement aligns with the Key Target No. 3: Improved Quality of Life. The lease and parking lot improvements will enable the City to serve the needs of both our residents and their pets while engaging the community to assist the Animal Services Department by volunteering, fostering, and adopting pets from the shelter.
Fiscal Impact
Approval of the MOU with SBMWD establishes a five-year lease (with 3% annual escalation) for 27,790 square feet at the Water Reclamation Plant. Year 1 rent is $66,696, with a total obligation of approximately $354,098 over the full term. For FY
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2025/26, the budget will be amended by $66,696 using General Fund balance.
Beginning in FY 2026/27, annual rent will be budgeted in the Animal Services Fund and transferred to the Sewer Fund. The lease is triple-net with utilities, insurance, and routine maintenance covered by the Animal Services Fund.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution 2025-371:
1. Authorizing the City Manager to Execute the Memorandum of Understanding (MOU) with the San Bernardino Municipal Water Department (SBMWD) for the lease of Water Department Property at 333 Chandler Place; and
2. Authorizing the Director of Finance and Management Services to amend the FY 2025/26 Animal Shelter operating budget in the amount of $66,696.00 for the lease of Water Department Property at 333 Chandler Place.
Attachments
Attachment 1 Resolution No. 2025-371
Attachment 2 SBMWD MOU Lease Agreement
Attachment 3 Appraisal Report
Ward:
Third Ward
Synopsis of Previous Council Actions:
December 6, 2023 Mayor and City Council adopted Resolution No. 2023-188 to establish a California Nonprofit Public Benefit Corporation named “The Friends of San Bernardino Animal Services
Foundation” for the Regional Partnership for Animal Services April 17, 2024 Mayor and City Council adopted Resolution No. 2024-067 to Authorize and Appropriate Funding for Animal Services for the preparation of the Regional Partnership Agreements
June 5, 2024 Mayor and City Council adopted Resolution No. 2024-096 to Authorize and Appropriate Funding for Animal Services for the preparation of the Regional Partnership Agreements
August 7, 2024 Mayor and City Council adopted Resolution No. 2024-170 for the Regional Partnership Purchase of Modular Kennel
Buildings for Animal Services with Horizon Structures
August 7, 2024 Mayor and City Council adopted Resolution No. 2024-151 for the Regional Partnership Office Building Purchase for Animal Services with William Scotsman, Inc.
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October 2, 2024 Mayor and City Council adopted Resolution No. 2024-209 approving the Lease Agreement with Casa Ramona, Inc,
regarding 1543 W. 8 th Street, for an Interim Animal Shelter Supportive Services Center (Ward 1)
CC: Eric Levitt, City Manager