I wouldn't concern myself with what is existing. As long as you are upgrading the service, replace the SE cable with a four wire cable,(Two hots, a neutral and a ground) bond the water, the water meter, put in a new electrode, replace the meter can, add a main disconnect and charge the customer for all of it.
Sounds like the existing dates back to mid 1950's or earlier and I'm sure it's not up to today's code anyway.
In michigan, they still allow a 3 wire SE cable but, I know some states no longer do.
