TO: LINDA REICH, CITY MANAGER
FROM: HYE JIN LEE, DIRECTOR OF PUBLIC WORKS
SUBJECT
title
Conditionally approve a Covenant Agreement to Annex for sanitary sewer service; and authorize a request to the San Bernardino Local Agency Formation Commission (LAFCO) to provide sanitary sewer service to the property located at the southeast corner of Phillips Boulevard and Pipeline Avenue (4103 and 4257 Phillips Blvd.) for the development of 90 single-family detached homes within the City of Chino’s Sphere of Influence.
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RECOMMENDATION
1) Authorize staff to issue an Ability to Serve Letter for sanitary sewer service to Borstein Enterprises; 2) adopt Resolution No. 2026-063 conditionally approving a Covenant Agreement to Annex for Sanitary Sewer; 3) request approval from the San Bernardino Local Agency Formation Commission for sanitary sewer service for property located at the southeast corner of Phillips Boulevard and Pipeline Avenue (4103 and 4257 Phillips Blvd.) for the development of 90 single-family detached homes within the City of Chino’s Sphere of Influence; and 4) authorize the City Manager to execute all the necessary documents on behalf of the City.
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FISCAL IMPACT
There is no direct fiscal impact to the City’s General Fund. All costs associated with utility connections, plan check, and LAFCO processing will be borne by the applicant.
Upon connection to the City’s public sewer system, the property will be subject to applicable one-time connection fees, including the City’s Sewer Development Impact Fee (DIF) and the Inland Empire Utilities Agency (IEUA) Sewage Facilities Development Fee (SFDF).
Following connection, the property owner will also be responsible for ongoing monthly sewer charges, including the City’s Sewer Maintenance Fee and the Wastewater Treatment Fee, which is collected by the City and passed through to IEUA.
The City will be entitled to a volume of wastewater discharge as recycled water consistent with the IEUA’s Equivalent Dwelling Unit (EDU) calculations.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Responsible Long-Range Planning
• Positive City Image
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BACKGROUND
The subject property, located at 4103 and 4257 Phillips Boulevard at the southeast corner of Phillips Boulevard and Pipeline Avenue, is within the unincorporated area of San Bernardino County and the City of Chino’s Sphere of Influence (SOI), as depicted in Exhibit 1. The property is not contiguous to the City’s boundaries and is currently vacant, except for a small non-habitable structure. The property has a General Plan land use designation of Residential RD 2, which allows a density of 2 dwelling units per acre.
Borstein Enterprises (“Developer”) is currently seeking entitlement approval from the County of San Bernardino for Tentative Tract Map No. 20849 for the proposed Nerio Farms Estates project. The project consists of 90 single-family detached homes on approximately 23.8 net acres, resulting in a residential density of approximately 4 dwelling units per acre.
The City is the sole provider of sanitary sewer service within its SOI; therefore, the Developer is requesting authorization to extend the City’s public sewer system to serve the project and issuance of an Ability to Serve Sewer Letter for submittal to the County as part of the development application process.
City staff evaluated the request and confirmed that the nearest existing City sewer main is located at the intersection of Norton Avenue and Lexington Avenue, south of Francis Avenue. To connect the project to the City’s existing sewer system, the Developer would be required to construct new sewer mains along Pipeline Avenue, Maple Street, and Norton Avenue, as depicted in Exhibit C to the Resolution.
It should be noted that the Developer has proposed extending the sewer main farther north along Pipeline Avenue, beyond the limits necessary to serve the project. This additional extension will provide a broader public benefit by making sanitary sewer service available to adjacent properties along the west side of Pipeline Avenue, providing those properties with the opportunity to abandon their existing septic systems and connect to the City’s public sewer system in the future.
The City’s current policy for sewer connections within its SOI is established by City Council Resolution No. 2025-021 (attached to the Resolution as Exhibit D). Consistent with the policy, staff evaluated the subject request and determined that annexation is not feasible at this time. The property is not contiguous to the City’s boundaries, and establishing logical annexation boundaries would involve several surrounding parcels. Given the number of affected properties and the associated costs, pursuing annexation would be significant and potentially cost prohibitive, with no assurance that an annexation could ultimately be completed.
Additionally, the proposed development is considered a “sizable project” under the City’s current policy. Accordingly, the request was presented to the Infrastructure and Streets Committee in July 2026, prior to staff recommending that the City Council authorize issuance of an Ability to Serve Sewer Letter. The committee supported staff proceeding with the recommendation to the City Council.
As part of its evaluation, staff also reviewed a sewer study submitted by the Developer, which demonstrated that adequate downstream capacity is available within the City’s sewer system to accommodate the proposed development.
ISSUES/ANALYSIS
Annexation Feasibility
The San Bernardino County Local Agency Formation Commission (LAFCO) would likely require annexation of a broader area beyond the subject property to establish a logical and cohesive service boundary. However, coordinating such an annexation effort would impose an unreasonable administrative and financial burden on a single property owner. The combined cost of LAFCO application fees, together with associated City, County, and construction-related costs, renders annexation cost-prohibitive for the applicant at this time.
Consistent with the City’s adopted policy, the property owner will instead execute an Irrevocable Agreement to Annex (attached to the Resolution as Exhibit B), which commits the property to annex into the City of Chino at a future date when a broader annexation becomes feasible.
General Plan Consistency and Proposed Density
Although the subject property is designated RD-2, which allows a density of 2 dwelling units per acre, the proposed project would result in a density of approximately 4 dwelling units per acre. Staff evaluated the proposed density in the context of the surrounding development pattern and adjacent General Plan designations, including properties designated RD-4.5. The surrounding area is characterized by low-density single-family residential development at densities comparable to that proposed by the project.
Based on this evaluation, staff determined that the proposed development is consistent with the intent of the City’s General Plan with respect to the area’s established low-density residential character. This determination is limited to the City’s evaluation of the request for sanitary sewer service under the City’s Sewer Connection Policy and does not constitute approval of the proposed land use or density. The County of San Bernardino remains the land use authority responsible for review and approval of Tentative Tract Map No. 20849.
As a result, staff determined that the proposed development does not require a deviation from the City’s current policy governing sewer connections within the City’s SOI.
Sewer Connection Policy and Recommended Action
Based on staff’s evaluation, the proposed development meets the criteria established under the City’s current Sewer Connection Policy. Staff recommends that the City Council authorize issuance of an Ability to Serve Sewer Letter (attached to the Resolution as Exhibit E), conditionally approve the Covenant Agreement to Annex, and authorize staff to request LAFCO approval to extend sanitary sewer service to the proposed development. These actions will allow the Developer to proceed with the County’s development review process while ensuring compliance with the City’s requirements for providing sewer service within its SOI.
Upon adoption of Resolution No. 2026-063, the City Manager will be authorized to execute and submit a LAFCO Application for Extension of Services by Contract (attached as Exhibit A). Approval of the Irrevocable Agreement to Annex is contingent upon the following:
1. LAFCO approval of the City’s request to extend sanitary sewer service by contract; and
2. Full reimbursement by the applicant for all costs incurred by the City in the preparation, submittal, and processing of the LAFCO application.
The City Manager shall be authorized to execute the Irrevocable Agreement to Annex on behalf of the City only upon receipt of written confirmation from LAFCO that the service extension request has been approved. If LAFCO denies the request, or if the applicant fails to fully reimburse the City, the agreement shall not be executed, and sanitary sewer service shall not be provided.
As previously stated, Tentative Tract Map No. 20849 is currently undergoing entitlement review by the County, and Borstein Enterprises is in the process of acquiring the subject properties from the current property owner. Accordingly, following the close of escrow, the Irrevocable Agreement to Annex will be executed by Borstein Enterprises and/or the affiliated entity that acquires title to the property and will be recorded against the property as a condition of receiving sanitary sewer service from the City
Attachments:
Exhibit 1 - Vicinity Map
Resolution No. 2026-063
Exhibit A - LAFCO Application for Extension of Services by Contract
Exhibit B - Irrevocable Agreement to Annex
Exhibit C - Sewer Atlas
Exhibit D - City Sanitary Sewer Policy - Resolution No. 2025-021
Exhibit E - Ability to Serve Letter