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HomeMy WebLinkAboutAgenda Statement 1985/03/19 Item 18 COUNCIL AGENDA STATEMENT Item 18 Meeting Date 3/19/85 ITEM TITLE: Resolution //f 4-Approving the expenditure of $35,000 from Community Development Block Grant funds to San Diego Gas and Electric for the purpose of extending a natural gas line along Otay Valley Road and Maxwell Road in the Otay Valley Road Redevelopment Project Area SUBMITTED BY: Community Development Direc r ( 5ths Vote: Yes No X ) REVIEWED BY: City Manager An Economic Development Revolving Fund has been established in the Community Development Block Grant budget for the purpose of assisting developers with the provision of offsite improvements on a reimbursable basis in the Otay Valley Road area. It is proposed that $35,000 of these funds be used to pay a deposit to SDG&E which is required for the extension of a natural gas line in Otay Valley Road eastward to the intersection of Maxwell Road and then northward along Maxwell Road. This line will serve anticipated development on the north and south sides of Otay Valley Road as well as the Sammis Properties subdivision currently being graded on the west side of Maxwell Road. As new industrial firms hook up to the gas line, deposits they pay to SDG&E will be reimbursed to the City until the City's entire deposit has been reimbursed. RECOMMENDATION: That Council approve the expenditure of approximately $35,000 from the Economic Development Revolving Fund (CDBG budget) to SDG&E as a deposit for the extension of a natural gas line in Otay Valley Road, Maxwell Road, Design Court, and Research Court with the understanding that these funds will be reimbursed to the City as new firms hook up to the gas line. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: Many industrial firms use natural gas for plant and water heating and in manufacturing processes. Even though it is not possible at this time to determine the number of firms which will require this utility, it is an important marketing asset to have in order to attract new businesses to the area. At this time, the natural gas line lies beneath Otay Valley Road, east of I-805 to a point approximately opposite the City of Chula Vista animal shelter. In order to serve proposed industrial subdivisions by Walker Scott on the south side of Otay Valley Road and Sammis Properties north of Otay Valley Road, it is proposed that the gas line be extended approximately 1 ,200 feet eastward to the intersection of Maxwell Road, then north along Maxwell Road providing service to Design Court and Research Court, two new streets serving the Sammis Subdivision. Page 2, Item 18 Meeting Date 3/19/85 In order to extend the gas line, SDG&E will require a deposit of approximately $35,000. This deposit will be reimbursed to the City as new firms tie into the line and pay deposits to SDG&E. While there is no guarantee how many firms will use this utility, it is anticipated that there will be some demand for natural gas from new industrial users as the area develops. The Economic Development Revolving Fund set up in the Community Development Block Grant budget was established on reimbursable basis. Funds expended for offsite improvements are to be reimbursed through assessment districts or other means as the property in the area develops. These funds have already been used to extend a water line along Otay Valley Road in order to provide the necessary fire protection service required by the City. It is also anticipated that Economic Development Revolving Funds will be used for studies for public improvements in the redevelopment area including the widening of Otay Valley Road, and improvements in the floodway. Because the proposed gas line extension will serve not only Sammis Properties but development on Otay Valley Road and the east side of Maxwell Road as well , it is proposed that the City fund this improvement rather than penalize the first developer in the area. The reimbursement agreement with San Diego Gas & Electric runs for a ten-year period within which time the City will be reimbursed as each new user ties into this line. It is anticipated that the Sammis Properties and Walker Scott/Palm Properties will develop well within this time period. Development of the properties on the east side of Maxwell Road are anticipated to take place further in the future. The gas line may eventually be extended further eastward along Otay Valley Road to Nirvana to serve future development and redevelopment within the recycling park. This area is not served by natural gas at this time. FISCAL IMPACT: Funds for the proposed project are available in the Economic Development Revolving Fund of the Community Development Block Grant budget, Account No. 630-6300-BG108. WPC 1448H learrtmcreem-r,-,mm owlosasemaerxseemraseerborenMengellEt '1....t ......................._............._...,.......�..�... Form No. F-229 12/73 CERTIFICATE OF CITY/DIRECTOR OF FINANCE Certification of Unappropriated Balance I HEREBY CERTIFY that the money required for the appropriation of funds for the purpose set forth in the attached resolution is available in the Treasury, or is anticipated to come into the Treasury, and is otherwise unappropriated. Amount $ Fund Purpose Bidder Director of Finance The City of Chula Vista Date By Certification of Unencumbered Balance I HEREBY CERTIFY that the indebtedness and obligation to be incurred by the contract or agreement authorized by the attached resolution can be incurred without the violation of any of the provisions of the Charter of the City of Chula Vista, or the Constitution or the laws of the State of California, that sufficient monies have been appropriated for the purpose of said contract, that sufficient monies to meet the obligations of the contract are actually in the Treasury, or are anticipated to come into the Treasury to the credit of the appropriation from which the same are to be drawn, and that said monies now actually in the Treasury, together with the monies anticipated to come into the Treasury, to the credit of said appropriation are otherwise unencumbered. Amount Not to Exceed $ 35,000.00 Director of Finance The City of Chula Vista egiag. Date 3/19/85 By Fund 630-6300-BG108 Dept./Activity Community Development Purpose Extending a natural gas line along Otay Valley Rd & Maxwell Road \� Bidder San Diego Gas and Electric Certificate No. 35